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Accident Compensation Cases

Nicholl v Chief Executive of the Department of Work and Income (HC, 06/03/01)

Judgment Text

This is an appeal by way of case stated from a decision of the Social Security Appeal Authority (“the Authority”), pursuant to s 12Q, of the Social Security Act 1964. The appellant had been receiving a special benefit between 1991 and 1997 at varying rates. It was cancelled by the Director General. As a result of the appellant's appeals to the Authority, the special benefit was reinstated and fixed at $30 per week, to be paid only from the period 1 October 1997 to 31 March 1998. So the appeal succeeded to a limited extent. 
The appeal by way of case stated records the background facts. The appellant, consequent upon a back injury, received Accident Compensation payments, as well as an independence allowance, and was paid a special benefit from the Income Support Service up until 24 March 1997. For the present case, the facts are as stated by the Authority in the case stated, as follows: 
The appellant appealed the decision and on 22 December 1997 the Social Security Appeal Authority (‘the Authority’) reinstated the special benefit and backdated the period of entitlement from 1 October 1997 to 31 March 1998 when it was cancelled again. 
At appeal the appellant's special benefit was calculated from his income as follows: 
Weekly ACC assistance of 
$301.34 net 
Independence allowance per week 
Accommodation supplement 
Resulting in a special benefit of $30 per week. 
The Authority included the appellant's ACC Independence Allowance in the assessment of the special benefit. 
The Authority found that the special benefit is not intended to be a permanent benefit. ”
Questions of law posed in the case stated, on which this Court's determination is sought are: 
“Whether the Authority made an error of law in its assessment under s 61G of the appellant's financial circumstances by including the independence allowance as part of his income. 
Whether the Authority, in determining whether a special benefit should be cancelled, was permitted to consider that a special benefit is intended only to be temporary assistance. ”
Statutory Provisions 
Section 61G of the Social Security Act 1964 gives to the then Director-General (now Chief Executive) a wide discretion to fix an entitlement to a special benefit to any person, within ministerial directions given by the Minister of Social Welfare. The Director-General was required to act within the general principles or guidelines of the ministerial directions. 
Section 61G provides: 
Special Benefit— 
Subject to s 68A of this Act, the Director-General may, in the Director General's discretion, fix a special entitlement to a special benefit in respect of any person, whether or not that person is receiving any other benefit under this Act … if the Director-General is satisfied that, after taking into account all of that person's financial circumstances and commitments, including any benefit payable under this Act … such a special entitlement is justified. ”
Section 5 required the Director-General to comply with the ministerial guidelines which set out a number of matters that, apart from particular financial circumstances of an applicant, the Director General was required to consider in the exercise of this discretion. The considerations are broad having as their base foundation financial difficulties to an extent that, without the special benefit, the applicant would suffer financial hardship. But it is quite clear that the Minister expects the Director-General to exercise a broad discretion because clause 9 of the guidelines provides: 
“That nothing in this part of this direction requires you to grant a special benefit, or a special benefit at any particular rate, if, in your discretion, you determine that in the circumstances of the particular case, such grant ought not to be made. ”
The benefit is not an Income-tested benefit as defined in s 3(1) of the Act, and the granting of it, and the level at which it is fixed, if granted, is not indexed as against any income of the applicant. 
The Chief Executive is to have regard to the particular financial circumstances and commitments of the applicant, which may include items of income and capital. Although the guidelines say that the special benefit “should not normally be granted unless the applicants deficiency of income over his or her expenditure and commitments is reasonably substantial,” nevertheless that is not a jurisdictional bar to the granting of the benefit in other circumstances. Obviously questions of income and expenditure, as well as the ability to remedy that situation, and to the availability of capital funds or payment, and other financial benefits which broadly are applicable to the circumstances of an applicant, may be relevant. Undoubtedly the discretion is very wide to meet special circumstances; Director General of Social Welfare v L [1997] NZFLR 379, per Ellis J at 383. In Ankers v Attorney-General [1995] 2 NZLR 595 (HC), Thorp J summarises extensively the place that special benefits have under the scheme of benefits provided for in the Society Security Act 1964. There are benefits to which a person is entitled, if they meet certain criteria. There are “add on” or supplemental benefits to meet specific needs of low income earners (for example, and as was the case here, with the accommodation supplement). 
It is clear from the Authority's decision that in determining whether it should, on the appeal, grant the special benefit, it looked at all the sources of income or revenue or financial support being received by the appellant. It took into account the ACC Independence allowance as an item relevant to determining whether financial hardship would be suffered without the special benefit. Whilst it said that the appellant's income included the independent allowance, in truth it was looking at the total financial support being received by the appellant. An independent allowance for ACC purposes originated from circumstances in which a person, before the Accident Rehabilitation and Compensation Insurance Act 1992, would have justified an award of lump sum compensation under the earlier legislation. Such lump sums clearly would have been regarded as capital. I suspect that that may be why the Independence allowance, as an annuity in lieu of capital, is excluded, in s 3 of the Social Security Act 1964 as coming within the definition of “income”. Section 3(f)(ix) provides: 
“Income in relation to any person— 
does not include— 
any money received by way of an independence allowance under s 54 of the Accident Rehabilitation and Compensation Act 1992. ”
So, for the purpose of that Act an independent allowance is not “income” but, as I have said, a special benefit is not an income tested benefit. It is a wholly discretionary third tier of grant to cover special circumstances. However it might have been loosely described by the Authority, the fact remains that the appeal was allowed, to the extent that it reinstated the benefit. The short point is that the Director-General must have regard to individual circumstances of the person who seeks the special benefit and the recommendations and guides still remain guides, subject to a consideration of an applicants overall situation and financial circumstances which may include income and capital gains and expenditure. I do not think it could be said to be an error of law for the Authority when granting the independence allowance, to take into account as part of all the financial circumstances of an appellant (in order to see whether granting of a special benefit was justified) revenue that whilst not “income” is nevertheless relevant to the issue of hardship. Of course, as I have said, the Authority found the granting of a special benefit was justified. It did not decline relief. It is quite impossible to say it erred in law in so doing. 
Howsoever one categorises or describes a financial benefit (whether income, capital or otherwise in terms of statutory definitions) such financial benefit may, in the discretion of the Director-General, be taken into account in assessing whether or not, in the exercise of his or her discretion, a special benefit should be granted. If it were otherwise the case then the Director-General would be required to ignore any capital sums received by the applicant in the assessment of his/her overall financial circumstances. When considering the unique and special nature of the special benefit, this cannot, and in my view is not, the correct approach as a matter of law. 
Thereafter the assessment of the amount of special benefit, likewise, remains within the overall and wide discretion of the Director-General. Guidelines for assessing the level are no more than that as was made clear in Ankers v Attorney-General (supra). The level, at which the benefit is fixed, remains squarely within the wide discretion of the Director-General. The exercise of that discretion cannot, of course, be exercised capriciously, but if, in terms of s 61G the decision-maker properly takes into account all of that person's “financial circumstances and commitments” and finds a state of “financial difficulty hardship”, then any rigid rules that limits the exercise of the discretion in fixing the amount to which redress or relief is to be afforded in my view cannot be imposed by law. 
This case is quite different to that of Bramwell v Director-General of Social Welfare (High Court, Auckland Registry, AP28-SW00, 28 June 2000) where I held that payments of weekly compensation to a surviving dependent were income so as to lead to an abatement of the level of an unsupported child's benefit paid to the dependant's care-giver. Such a benefit is an income tested benefit and the weekly payments were part of the annual income, other than personal earnings of the child. In the present case although by the legislative provision the allowance is not “income”, so as to abate an income tested benefit, it still forms part of the overall financial circumstances of an applicant which may be considered in the granting or otherwise of this discretionary special benefit. 
As a consequence the answer to the first question is: No. 
Concerning the second question. I have no doubt at all that legislative scheme intended, and it has been so held on a number of occasions, that a special benefit is to be regarded as a discretionary and temporary relief. It is a matter on which I was required to rule in Stemson v The Director-General of Social Welfare (High Court, Auckland Registry, 23-SW00, 28 June 2000). It is abundantly clear from the nature of legislative provisions, and the wide discretion given to the Director-General under s 88 to review from time to time any benefit to ascertain whether the beneficiary remains entitled to receive it, that this discretionary benefit is intended to be a stop-gap measure, although on a continuing basis, nevertheless generally to apply in the short term so as to provide some relief (but not necessarily remedy) a deficiency that an applicant is unable to meet from his or her own resources, whatever those resources might be and is to alleviate hardship. A finding, or observation by the Authority that the special benefit is not intended to be “permanent” was not erroneous in law. 
It needs to be said that the appellant himself does not, and did not make any submissions or contentions that the tribunal erred in law. What he did say and what his real grievance is, that the Director-General, through the department, erred in the exercise of the discretion by making erroneous conclusions of fact. His grievance is that false (he says) factual information was given to, and acted upon by the Department. He says the department was mistaken and misled in the way in which his entitlement to, and the amount of a special benefit was assessed. He presented extensive submissions and analysis of factual matters. I mean him no disservice by not dealing with those matters but they are factual matters, outside the ambit of the case stated. As I explained to him this Court cannot entertain an appeal on matters of fact or answer questions outside the case stated by the Authority. However in the end the appellant's grievance on matters of fact ought really be put to one side because the Authority allowed his appeal and reinstated the special benefit. Of course it was reinstated only for a limited period but that was fully within its discretionary powers and did not involve any assessment on matters of fact. So too the amount at which it fixed the benefit was, as I have already said, within its discretionary power and was not dependent on any incorrect assessment of fact. Although the appellant's grievances are genuinely felt they concern matters of fact which fall far outside the matters of law, and the accepted facts, contained in the case stated. They can have no influence on the outcome of this appeal. 
For the following reasons I answer the questions stated in the case as follows: 
Did the Authority make an error of law in its assessment under s 61G of the Social Security Act 1964, of the appellant's financial circumstances by including the Independence allowance as part of his “income”
No, because it may consider all of the financial circumstances (whether income, capital, compensation, grants, gifts or howsoever) of an applicant. 
Was the Authority, in determining whether a special benefit should be cancelled, permitted to consider that a special benefit is intended only to be a temporary assistance? 
There being no error of law on the part of the Authority it follows the appeal must be dismissed. There will be no order as to costs. 

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