INSIDE THIS ISSUE

• Notes & Notices
  
• Financial Stress and Its Impacts on Individuals, Families and the Community.
  
• Jennifer Does Darwin
• Jennifer Does Far North Queensland
  Two Reports on Remote and Regional Services in Queensland and the Northern Territory
  
• The Law Matters:
  1. “Without Prejudice”: Magical Protection?
  2. Many Happy Returns: Lodging a Tax Return When a
      Payment Summary is Unavailable
  
• Suicide and Legal Liability
  
• Bankruptcy Contribution Calculator
  
• The New Numbers Racket: Educational Software
  
• Round-Up
  News, views and information about financial counselling around Australia
  
• In the Media
  Snippets of interest and information found in the media regarding issues around financial counselling 
  

Notes and Notices

Change to Bankruptcy Checklist

Sharkwatch has been asked by Betty Weule, financial counsellor and bankruptcy expert from NSW, to advise that a change should be made to the bankruptcy checklist that was sent out with 'Sharkwatch' last year.

Betty advises us that Personal Injury Claim Debts (Criminal) are provable debts in bankruptcy and are  extinguished. In NSW they are called Victims  Compensation debts which are payable when someone deliberately injures another person and is then required to repay to the State Government the compensation that has been paid to the injured person. Other States have different names for the same debt. Also, Court ordered compensation, unlike court fines, is also provable and extinguishable.

Betty also notes "that the NSW Education Department (DET) are suing for bond debts for scholarships granted for teachers who did not complete their bond period of three years. The amount claimed is pro-rated. This debt is also provable in bankruptcy and extinguished by bankruptcy. There is nothing in the Act, Treasurer's Directions and Public Finance Audit Act, 1983, to prevent the debt being extinguished."

Financial Literacy Report Available

Margaret Kilby, a NSW financial counsellor, sent us the following paragraph regarding the release of The Financial Literacy Australians Understanding Money Report. She says:

“Last week a new publication was launched with the results of a study of Australians Understanding Money and I hope all financial counsellors can get a copy. It needs to be ordered by individuals from Canberra”. The direct email is financial.literacy@treasury.gov.au. You can also email via the website, which is at http://www.understandingmoney.gov.au or you can phone (02) 6263 2111.

CDMA mobile phone network to soon close

Financial counsellors from rural and regional areas should be aware that Telstra intends to close its CDMA network for mobile phones on January 28, 2008. Customers in affected areas will however, be able to keep their existing mobile phone number. As at June 2007, the CDMA network was reported as still servicing about 1.5 million mobile phone users in regional and rural areas of Australia.

In preparation for the closure, Telstra reports that it has been extending the coverage of the Next G network to all areas that were previously covered by CDMA, and recently announced that their Next G coverage would be equal to or superior to CDMA coverage by Mid October, 2007.

Those who have followed developments regarding the CDMA closure will know that some groups have concerns regarding the closure, and have called for it to be postponed. Such a postponement seems unlikely.

We would advise financial counsellors in affected areas to check out what low-cost and pre-paid Next G alternatives are available for their clients. 

Financial assistance for this Project was provided by the New South Wales Government from the Responsible Gambling Fund. The views expressed in this publication are solely those of the authors and do not represent the views of the Responsible Gambling Fund or of the New South Wales Government.

 

 

 

Wesley Community Legal Service gratefully acknowledge the sponsorship of LexisNexis, whose assistance has enabled our solicitors to have  access to the Butterworths Direct Online package.

 

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Financial Stress and Its Impact on Individuals, Families and the Community 

Elizabeth Terry
Financial and Gambling Counsellor
Wesley Counselling Services

In August 2006 a study of the extent and effects of   financial stress on Sydney residents was conducted by Wesley Mission Sydney and a team of social researchers from Urbis Keys Young.

The project involved a telephone survey of a random sample of individuals living in metropolitan Sydney, and was undertaken with the aim of better understanding financial stress and its impact on the individual, the family and the community.

In addition to the telephone survey, Wesley Mission commissioned a financial stress website (found at http://financialimpact.wesleymission.org.au/) which involved a quick poll about how well people feel their financial affairs are managed, as well as a financial fitness test, information about financial stress, a case study and other valuable information.

The findings from the survey were published in November 2006 and the report can be downloaded from the above website. 

The findings

Financial Stress amongst Sydneysiders:

 

• 81% had experienced some financial stress over the past 6 years
•  
• 40% could not afford an unexpected one-off expense of $2,000
  
•  
• 45% are more worried about money than they used to be
  
•  
• Financial stress was greatest in West and South West Sydney
  
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• Links were found between financial stress and:
      - Substance abuse
      - Domestic violence
      - Relationship breakdown
      - Problem gambling
  
•  
• 40% of households have never drawn up a budget
  
•  
• 26% have drawn up a budget but rarely keep to it
  
•  
• People experiencing financial stress rarely seek help.

Results show that 58 per cent of Sydneysiders claim that financial stress had an impact on themselves, their family or the community, and 81 per cent of respondents reported facing some level of financial stress over the past six years.  

More worrying was that four in 10 households in the Sydney metropolitan area would be unable to draw on their savings if faced with an unexpected one-off expense of $2000. Almost half (45 per cent) worried more about money than they used to. The greatest stress noted was in the west and south-west Sydney.

A significant number of households reported that financial stress contributed to serious social problems such as relationship breakdowns, substance abuse, frequent gambling and violence. Of the total sample:

• 5.8 per cent said worry about money contributed to relationship breakdown
  
• 3.5 per cent said worry about money contributed to substance abuse
  
• 3.3 per cent said worry about money contributed to increased or frequent gambling
  
• 1.3 per cent said worry about money contributed to violence in their relationships.

Following the results of the survey, Wesley Mission held forums to consult a wide range of professionals involved in financial and community issues.  Participants included government and bank officials, community workers, and financial counsellors.

Not surprisingly, many of the issues raised in the consultation meetings were issues that financial   counsellors have found concerning for many years. 

Issues that arose in professional forums

Financial counsellors see clients with financial stress every day, and most are well aware of the ways in which financial stress can impact on the emotional health, physical health and family life of their clients. For this reason, financial counsellors are in a unique position to assist individuals and families experiencing financial stress. 
It was thus disappointing to discover that most survey respondents did not seek any type of professional help when experiencing financial difficulty. 

When this issue was explored in the discussion groups, it was noted that access to financial counsellors can be difficult, with many agencies having long waiting lists. This factor may have further distanced those     experiencing financial stress from potential sources of assistance.

Financial counsellors have also been long aware that financial literacy is a significant factor in assisting people to make good financial decisions, and to financially   survive when things go wrong. Unforseen events such as family breakdown, illness and unemployment (to name but a few) can have a catastrophic effect on the financial well-being of individuals and families. While no one can know what unforeseen event may happen,   developing good money management skills is an important protective factor, and can help lessen the impact and the stress of these events on the individual and the family.

The survey found that such skills are disturbingly absent in many Australians. Almost 40 per cent of households surveyed had never drawn up a budget, and a further 26 per cent who had drawn up a budget rarely kept to it.  Clearly, those 66% of respondents do not have an adequate financial map on which to base their financial decisions.

For those who do not effectively budget, and who are also financially stretched, day to day management of money would probably be difficult, and the financial difficulties that would flow on from negative life events, like unemployment and illness, could be significant, even disastrous to the point of personal bankruptcy.

One practice that financial counsellors have been concerned about for many years is the way that credit is marketed, especially the practice of lenders sending   unsolicited offers of credit or credit increases to       consumers. Many consumers who cannot afford such credit, but who would see this additional credit as a way of ‘keeping the wolf from the door’, are vulnerable to such offers and often find themselves in serious   financial trouble as a result of accepting such offers.

In addition, many consumers believe that “if the lender thinks I can afford the money, then I must be able to” and subsequently accept the additional credit without further examination of whether they can truly afford it. 

Such issues were raised in the forum discussions, with many professionals believing that the marketing of credit in Australia needs to be re-thought, with credit increases being offered on a much different basis.

Another issue that was raised in the discussion groups involved concerns about interest-free offers. Many participants were concerned that such offers are often structured as a line of credit. If the loan is not be paid off in the interest-free period, it may  incur substantial compound interest. 

It was also noted that the checks on whether or not to give credit need to be tightened up and not left to the decision of consumers, many of whom will not put together a comprehensive money plan in order to ascertain whether they can afford to take the credit, and many of whom will be financially vulnerable at the time the credit is offered, and thus predisposed to accept credit whether they can afford to repay it or not. Some representatives of lenders noted that the credit checks at their organisations have improved, but it was agreed by many forum participants that lenders need to take more responsibility in this regard.

Another point raised in the forums related to the fact that most borrowers are unaware that the interest on many loans is calculated and charged daily, and that the minimum payment will not adequately service the debt even though it is the contracted amount. 

Many consumers assess their ability to afford credit on the basis of whether they can afford the minimum payment. This leads to considerable expense, as credit accepted on this basis is rarely repaid, and thus     accrues interest in perpetuity. Such a situation is all too common amongst low-income borrowers, and was generally agreed to be one cause of financial stress. 

It was agreed by many participants that any unsolicited offers of credit (or a credit limit increase) should be accompanied by information on how long it will take to pay a debt when paying only the minimum payment. This information should be supplied in a table form that is easily understood.

One conclusion drawn from the research project was that many consumers need to develop a much broader understanding of the systems that operate in terms of borrowing money. It is not enough to just know about interest rates, fees and charges. It is also important to know how interest is calculated, and how these calculations impact on the borrower’s   ability to repay a debt in a reasonable time, or, indeed, to repay the loan at all.

Wesley Mission is now in the process of completing a White Paper on this research project. This paper will note various concerns regarding financial stress amongst Australians, and will provide a series of    recommendations for government and industry.

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Jennifer Does Darwin

The National Financial Counsellors’ Resource Service (NFCRS) Coordinator, Jennifer Gracie, appreciates the opportunity she had to visit the financial counsellors in the Northern Territory in May/June for training and supervision. As funding is always tight, it is an opportunity that does not come along very often. The Territorians also appreciate the chance for face-to-face training and supervision as funding doesn’t always   permit them to attend State Conferences in South Australia.

Jennifer hadn’t had the opportunity to visit the   Northern Territory before and found it to be a wonderful place to see, with down-to-earth and      delightful workers. She had the chance to see (at her own expense) Litchfield National Park as well as Nitmiluk (Katherine Gorge). What a fascinating part of Australia this is.

 

During the NT visit, both Commonwealth Financial Counselling (CFC) funded and non-funded services were visited, with training provided to all.

Somerville Community Services is a CFC funded service and Jennifer spent a day in training with Serena Staines, who works from the Palmerston Office, and Tony Kostonis, who works from the   Wagaman Office. Serena is currently completing an innovative financial literacy programme with the Year 10 class at the local High School. The students who are taking part in the course are so enthusiastic they are staying after school hours to participate. The programme is called ‘Cashed Up’.

Jennifer was also involved in a day of training provided by the Insolvency and Trustee Service Australia (ITSA) for financial counsellors from      Anglicare Darwin and Katherine and the Somerville workers. The ITSA trainer was Arthur Michaloudakis,

who is a very experienced worker and a great supporter of the financial counsellors in NT.

Jennifer was also able to visit Tricia Ross and Heather Keen at the Anglicare office at Ludmilla. Heather is an experienced financial counsellor originally from Victoria and Tricia has been very pleased to work with her while Heather lives in Darwin. It is not often that any agency is able to obtain the services of someone with Heather’s experience and Tricia will be sad to see her go in 12 months or so.

The Anglicare financial counsellor at Katherine, Kelli Mullins, is taking 12 months leave and a new worker, Nina Clements, has come across from the Money   Business program. Nina is hoping to be able to visit the indigenous communities in NT during the dry season so she can meet people and let them know that she is available. Anglicare hopes to be able to keep Nina on when Kelli returns as they would both be very valuable to the agency.

To complete the trip, Jennifer flew to Alice Springs to see both the CFC funded worker, Leigh Shacklady, from Tangentyere Council, and the non-CFC funded counsellor, Dee Entwistle, from Anglicare. Leigh took Jennifer for a drive around Alice Springs and visited a number of town camps. He also spent some time talking about his service and the work he does with the Indigenous people in the area.

Dee Entwistle works as a Financial and Gambling   Counsellor with Anglicare in Alice Springs. She has a wealth of life experience coming originally from the UK and spending many years in Africa before coming to Alice Springs. Although she is new to financial counselling, Dee is taking on the work with skill and enthusiasm.

 

 

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Jennifer Does Far North Queensland

The National Financial Counsellors' Resource Service (NFCRS) received a small amount of funding under the Sugar Industry Reform Package (SIRP) to supervise, train, support and mentor financial counsellors in Queensland who also received funding under SIRP.

As part of that service, the Coordinator of the NFCRS, Jennifer Gracie, visited each of the SIRP funded services in Queensland during May 2007.

She missed the Sunshine Coast, as the SIRP worker was away, and so the first stop was Lifeline Maryborough, where Jennifer spent the day with Ross Elgar and the new financial counsellor, Tessa Evans (see story in Sharkwatch, Vol 8. No 2). Tess has spent a number of years in retail and business management but has always been interested in counselling and was looking forward to beginning her training as a financial counsellor. She will be working part-time in the Maryborough Lifeline office.

After Maryborough, Jennifer travelled to Bundaberg to meet with the Lifeline financial counsellors. David   Lawson is the SIRP worker and he has been training two new financial counsellors, Pat Lake and Andrew Armstrong for general work. It was interesting to note that David is still receiving calls from people in the sugar industry needing to talk about their situation. Both the Bundaberg and Sunshine Coast areas have had the greatest call for financial counselling for sugar industry workers.

As part of supervision and training, Pat presented the  difficult case of a small business forced into bankruptcy by creditors. Both Pat and Andrew have significant life experience and are very enthusiastic about financial counselling. David expects them to keep him on his toes with training and supervision.

The area around Bundaberg was lush and green, which was in direct contrast to the country south of Rockhampton, which was the next port of call. This land was barren with ‘dust devils’ spinning across the paddocks. There appeared to be nothing for the cattle to eat.

Margaret Clements is the financial counsellor for the Central Queensland Financial Counselling Service. She has been able to employ Catherine Beavan under the SIRP programme one day per week.

Catherine also works as a part-time financial counsellor at Relationships Australia. The SIRP funds have enabled Margaret to establish a 1800 number which is used by consumers across Queensland. These clients are then   referred to an appropriate service in their area.

The Rockhampton service is well-established and Margaret provides an amazing service to consumers across Central Queensland. She has cases that are often completely different to anyone else in Australia. One of the biggest concerns is the number of clients with mental health issues and serious financial problems that the service deals with. Both Margaret and Catherine have found that the support they are able to give each other enhances their work with clients.

From Rockhampton, Jennifer flew to Mackay to visit the Mackay Region Financial Counselling Service which is based at the George Street Neighbourhood Centre. Carol Wakefield services the entire Mackay Region and has been assisted under the SIRP programme by Ann Lee. The SIRP funding has helped increase community knowledge and expectations regarding the financial counselling service.

The mining boom west of Mackay has created new problems in the area, with a major increase in the cost and availability of housing and other necessities impacting on the local community. The financial counselling service is under greater pressure than ever.

The next stop was Townsville and the camera-shy Saskia Ten Dam is the financial counsellor at Townsville Community Legal Centre. Unfortunately, the SIRP funded financial counsellor, Warren Rowles, had taken another position by the time Jennifer arrived in Townsville. Saskia tries to provide community education in the Townsville area, but this becomes more difficult when she has to choose between face-to-face client work and financial  literacy work. Saskia is a very experienced and            knowledgeable worker and comes from a social work background. She is an enthusiastic supporter of professionalism in the financial counselling industry.

Jennifer arrived in Cairns on the weekend and was able to enjoy a pleasant trip (at her own expense) to the Atherton Tablelands and Cairns area. The next two days were spent on training and supervision with the three workers at Lifeline Cairns.

Susan Cook is the Coordinator of the service and Tania Buck has been providing the SIRP work. They have enjoyed the assistance of Olwyn King as a budget counsellor. Unfortunately, Olwyn’s funding finished at the end of June. Susan and Tania deal with clients from the top of Cape York to the Atherton Tablelands and down to Innisfail.

Susan was able to obtain permission to take Jennifer and the workers to the Yarrabah Aboriginal Community as she had a client there and also needed to visit the local services. The community is located in a beautiful coastal area, but is difficult to get to, as there is a long trip over a high mountain road. Neither Tania nor Olwyn had visited the community before, so it was a worthwhile trip for them too.

Regional and remote financial counsellors have a lot of difficulty obtaining training and most supervision is done by telephone. So, to be able to obtain face-to-face    training and supervision is greatly appreciated by these workers. It also assists the NFCRS Coordinator to be able to visit the workers in their agencies and to meet with management and other workers. The complexity of casework and day-to-day difficulties faced by workers can be better understood and supported when seen on the ground. Jennifer appreciated the opportunity provided by the SIRP funding to make this visit. (This visit was in addition to the SIRP conferences that NFCRS provided in 2004 in Cairns and 2006 in Mackay. These conferences were attended by SIRP workers and other remote financial counsellors from across Australia.) Many remote workers are unable to attend State conferences because of distance and a lack of funding. The NFCRS workers would love to be able to provide a conference for these workers every couple of years if funding was available.

 

The Law Matters

Richard Brading
Principal Solicitor
Wesley Community Legal Service

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The Law Matters

“Without Prejudice”: Magical Protection?

The words “Without Prejudice” are found on all sorts of letters.  Some people just put it on every letter they write in the belief that it is some sort of magical protection, or perhaps to intimidate the recipient. Others never use these words.  What does it mean and when can “without prejudice” provide some assistance?

“Without Prejudice” is used to protect things that might be said in a letter or conversation from later being used as admissions in a dispute.  The purpose for providing this protection is to encourage disputing parties to    resolve their differences without going to court.  In order to come to a settlement, parties may say or write things that could be damaging to their case. Putting the words “Without Prejudice” on a letter used in           settlement negotiations is saying:

“This letter is written for the purpose of trying to settle the dispute, and things that might be conceded to try to come to a settlement will not necessarily be conceded if we don’t come to a settlement and end up in court.”

The words should be used where a client wants to dispute liability but is willing to make some offer or concession to try to resolve the dispute.

In most States there is legislation to reinforce this approach, such as s.131(1) Evidence Act (Cth) which provides that a communication that is made between persons in dispute in connection with an attempt to negotiate a settlement of the dispute, is not allowed in evidence if the dispute later comes to court.  However, there are a lot of exceptions to the protection for settlement communications, including:

• If the parties to the dispute consent;
  
• If the communication contradicts evidence that has been provided to the court about attempts to settle the dispute;
  
• Enforcement of a settlement arising from the communication;
• To determine issues of costs of legal proceedings;
  
• To contradict or qualify evidence that is before the court.

It is not necessary to use the words “Without Prejudice” in order to get the protection. The words help clarify your intention that the communication  contains a settlement offer. However, as long as the communication obviously contains a settlement offer, then it is protected whether or not the words “Without Prejudice” are used.

It is not necessary to actually offer payment to obtain the protection.  Statements made about the strengths and weaknesses of the client’s case will be protected if made in the context of settlement negotiations.

Problems arise for those who put “Without Prejudice” on communications that do not relate to settlement negotiations. Such communications are not protected and may be used in evidence.  It is best to put an offer of settlement in a separate letter to other matters.  So where the client is seeking particulars of a creditor’s claim, this should be requested in a separate letter to an offer of settlement.  However, both can be sent in the same envelope.

Communications that relate to settlement negotiations but make obvious statements of liability are hazardous, as they may end up being used to contradict or qualify evidence that is later put before a court.

In summary, the following principles apply:

• Communications relating to settlement negotiations are generally protected from being used as admissions of liability;
  
• However, the protection is not absolute, so settlement letters should not include obvious statements of liability;
• Use of the words “Without Prejudice” simply identify the author’s intention that the communication be protected as a settlement        negotiation.

Examples:

Settlement Offer that cannot be used in court proceedings

“Without Prejudice”
I am the financial counsellor for Ms Miser. My client would like to resolve this dispute without it ending up in court.  She has authorised me to make the following offer on her behalf:  payment of the amount of $2000 in full satisfaction of your claim by 10 monthly instalments of $200, commencing on the 1st December.

Settlement communication that is protected even though no money is offered

“Without Prejudice”
I am the financial counsellor for Ms Miser. My client admits that she owes the debt but cannot afford to make any payments. She asks that you waive the debt or she will declare herself bankrupt.

Not a settlement communication so not protected

“Without Prejudice”
I am the financial counsellor for Ms Miser.  My client admits that she signed the loan documents but denies that she owes the money as the debt is statute barred.

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Many Happy Returns:

Lodging a Tax Return When a Payment Summary is Unavailable

What can you do if a client is unable to provide a Payment Summary that is needed to lodge their tax return? 

This common problem occurs when the Payment Summary has been lost or destroyed, or where the employer has gone out of business, can’t be found, or is angry with a former employee and refuses to provide their Payment Summary.

The Australian Taxation Office has a Statutory Declaration which it will accept in lieu of a payment summary, if the client has unsuccessfully tried to obtain one.  Clients must explain why they couldn’t get the payment summary (e.g. “Payer is very angry with me because I owe him money”). In addition, the client should provide what details they can about themselves  and the payer that can be obtained from old tax returns and records. 

An estimate of the amount earned and net payments withheld can be made using payslips or the client’s recollection. 

If the client later receives a payment summary from their employer, the client is required to notify the ATO that the payment summary has now been received.

The relevant form is numbered NAT 4135 and can be downloaded from the ATO website at www.ato.gov.au. If you type ‘payment summary’ into the search engine at the top right hand corner of the ATO homepage, the first option that is displayed should be a link to the NAT 4135 form.

Alternatively, the form can be currently accessed at:
http://www.ato.gov.au/content/downloads/NAT4135-06.pdf.

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Suicide and Legal Liability

Richard Brading
Wayne Warburton

Suicide creates a whole range of unhappiness for family, friends and the general community, and a common reaction is to seek to blame some person or institution.

Where a person commits suicide, then the right of the family to claim compensation from those who might be considered responsible is extremely restricted.

Prisoner known to be suicidal

In the English case of Reeves v The Commissioner of Police of the Metropolis [2000] 1 AC 360, a prisoner in a police station committed suicide after making 2 previous unsuccessful attempts, one on the same day.  The police were held liable to compensate the widow.  Police have a duty to protect prisoners whom they know to be suicidal from committing suicide.  However, suicidal prisoners in custody are a rare example of a legal duty to protect other persons from causing harm to themselves.

Depression following an accident and court case

There is no liability to compensate relatives where a person commits suicide who is not known to have suicidal intentions.  In the case of AMP v RTA [2001] NSWCA 186, Mr Boxsall was an employee of the NSW Roads and Traffic Authority and was injured in a work accident in 1993.  He never worked again and suffered the ongoing humiliation of being photographed by insurance investigators and examined by insurance    doctors.  Four years later he decided to commence a common law claim for damages against his employer.  He suffered such stress as a result of being cross-examined during the hearing that he developed          depression and committed suicide 8 days after the first hearing.  His widow suffered nervous shock when she found his body and sued the RTA for compensation.

The NSW Court of Appeal decided against the widow for a number of reasons.  The judges said that it was not the work accident that caused the depression that led to the suicide, but rather the treatment Mr Boxsall received while being cross-examined in court. The cross-examination was described as “forceful and searching” and at some points “a hectoring-type cross-examination which didn’t permit Mr Boxsall to answer.  He was cut off on a number of occasions when he was in the middle of answering questions.”  However the judges considered this to be acceptable behaviour.  They said: “Litigation can generate              
disappointment, outrage, distress, worry, anxiety, anger and shame in persons of normal fortitude, but these reactions are qualitatively different from psychiatric illness or suicide”.  So, the barrister was entitled to be as nasty as he liked because no-one knew at the time of cross-examination that Mr Boxsall would be likely to take his own life as a result.

Because none of the lawyers in his compensation case ever listened to him properly, they didn’t know that he was functionally illiterate.  Instead, the RTA’s lawyer made him out to be a liar because he claimed to have never read anything about compensation claims.  The cross-examination was extremely humiliating for Mr Boxsall, in that the defence barrister had made him look like a fool.  He said to his daughter “I was so scared… I thought I was an idiot.  I couldn’t understand what I was reading.”  He believed he would lose the case and would have to sell the family home that he had built with his own hands in order to pay the legal bills.

There was evidence that Mr Boxsall was not depressed prior to the court case.  He had previously suffered depression but was considered to have improved.  Neither the RTA nor the lawyer had any actual     knowledge that he might commit suicide. This timing is critical, because, in legal terms, it is the defendant’s  knowledge at the time of the relevant incident (i.e., at the time of the accident in this case), rather than later knowledge, that is relevant. For this reason, the RTA had no possible legal liability. At the time of the injury 4 years before, Mr Boxsall was a happy man.  It was only afterwards that he became depressed. So there was no direct link of causation between the workplace injury or the cross-examination and the suicide.

Liability for psychiatric illness

The situation is similar where a person suffers a psychiatric illness but does not complete a suicide.  In Morgan v Tame [2000] NSWCA 121, the plaintiff developed a psychotic depressive illness after the police mixed up her paperwork after a car accident and she was wrongly accused of drink-driving. 

The judges in that case found that the police were not liable to compensate the plaintiff because they had no actual knowledge that she was particularly susceptible to developing a psychotic depressive illness.  The   police were entitled to assume that she was a person of normal fortitude who would not have been affected in the circumstances.

Such a finding is particularly odious when one considers that it is well established in the psychiatric literature that stressful situations of this type are a common cause of a first psychotic episode.

Implications for counsellors

Although a number of these examples relate to cases where there is no legal responsibility for the suicide of another, there are also clear legal implications for counsellors in terms of their own duty of care.

1. A counsellor may have a legal responsibility to take reasonable steps to protect a client who is known to be suicidal. Apart from being a legal responsibility, this is also enshrined in most codes of practice, including those of peak organisations for counsellors and psychologists, and those of licensing bodies, such as state   registration boards.
2. The duty to notify others of a client’s suicidal ideation (i.e., duty of care) is a clear exception to the duty of client confidentiality. However, where possible, any such notification needs to be done with the  client’s consent . If consent is not available or refused, information should only be released with great care (e.g., only to those with a clear need to know, such as a mental health crisis team, Police etc.).
3. All states and territories have provisions for the ‘involuntary’ admission of those considered to be at immediate risk of harm to themselves or others to specified facilities within the public hospital system.
4. If a counsellor is in a situation where they believe they need to take such an action for the client’s own safety, they should keep clear records that include a justification for their actions and the behaviours/symptoms/comments from the client that formed the basis for assessing that there was an imminent risk that warranted this intervention.
5. If a counsellor is concerned about a client’s safety, but judges that an extreme intervention is not warranted, they should still keep clear records  regarding any decisions made. Such records should include a list of the options considered for that client, what options were decided on, and the reasons for taking any course of action. Steps for the client’s safety should be considered, including. releasing the client into the care of a family member, taking steps to ensure they will not be alone when they go home, providing emergency assistance information (e.g., the Lifeline number), suggesting they see their GP, suggesting alcohol abstinence, and taking any other steps thought necessary to maximise the client’s safety.
6. Good suicide training (e.g., the ASIST course) will help counsellors to assess degree of suicide risk.
7. Generally, the higher the suicide risk, the greater the number of persons to be notified (e.g., mental health crisis team; family; case workers/doctors; Police if client is intoxicated or a threat to others).
8. Claims for compensation by relatives of those who commit suicide, against those who may have contributed to the person becoming suicidal, will only succeed in exceptional circumstances.

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Using the Bankruptcy Contribution Calculator

Step 1. Select appropriate column

Use the column for the correct amount of dependents

Step 2. Obtain gross income.

Calculate the client’s gross income.

Step 3. Calculate net income

Calculate the Tax Payable and the Medicare Levy using the guidelines in the tables at the bottom of the page, and work out how much child support or maintenance the client is paying (if applicable). Subtract those amounts from the gross income to obtain net income.

Step 4. Calculate assessable income (B)

Add assessable income items that would increase the net income, such as fringe benefits, and calculate the client’s assessed income for bankruptcy contribution purposes.

Step 5. Calculate income in excess of Actual Income Threshold Amount (AITA) (C)

Subtract the AITA amount (A) from the clients assessable income (B)

Step 6. Calculate likely contribution towards bankruptcy.

ITSA will take 50 cents in the dollar of any excess above the AITA. Divide the income in excess of AITA amount (C) by two. This will give the amount of the contribution towards the bankruptcy that ITSA is likely to ask for.

For further assistance, there are actual examples in Sharkwatch Vol. 5 No. 4 - November 2004. This issue can be found at: www.wesleymission.org.au/centres/creditline/sharkwatch.asp

# Disclaimer: Sharkwatch cannot guarantee these figures are correct at time of printing. Call ITSA to verify calculations.

Bankruptcy Calculator

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The New Numbers Racket:
Educational Software

Richard Brading
Principal Solicitor, Wesley Community Legal Service

What price do you put on your children’s education?  Do you want your child to be left behind?  Try this government-approved product!  Free introductory lesson!  Try our test.  Move over encyclopaedias and vacuum cleaners, educational software is here!

Yes, for only $7,997 (with easy payment plan), your child can be top of the class in maths.  Sound familiar?  You bet.  It’s the door-to-door sales product of the decade.

Purchasers respond to saturation marketing on TV, radio and in shopping centres.  Not to mention the “telephone survey”.  A sales person comes to their home to provide a free test or demonstration tutorial and hits them with 2 hours of hard sell.  People sign the contract just to get them out of the door. 

The price range is $5,000 to $8,000 for computer software you operate on your home computer, plus back-up from a “tutor”, usually via email but   sometimes by phone.  Some support contracts are renewable annually, some are “lifetime”. 

Satisfaction with these educational software packages varies widely from those who swear by it to those who feel ripped off.  It should be noted though, that educational experts are generally unimpressed with the products on offer.

For those who can’t afford the price, a payment plan is offered. For example monthly payments with an interest rate of between 19% and 24%.  For example, the Mathemagic Computer Tutor can be bought for $8,000 with finance offered by the sales person at 19.99% through Lombard Finance. 

In Western Australia, the Department of Consumer and Employment Protection has charged one company with offences under the Door to Door Trading Act and the Fair Trading Act.  It is alleged that the company took full payment when they were not entitled to, supplied services inside of the mandatory ten day cooling off period, and misled customers into believing that they had no right to cancel their contracts. 

Lawyers have raised concerns about the effectiveness of door-to-door sales laws, which are being avoided by companies that sign up consumers at home, but don’t actually provide the educational software until after the cooling-off period has expired.

The Brisbane Times (17/10/07) reported on one case in which the consumer signed up to buy maths software at home on finance.  At the time of signing the finance agreement, the consumer was not provided with information showing the total amount of interest charges nor the total amount payable under the finance agreement.  Failure to provide this information is a breach of the Consumer Credit Code and would have enabled Fair Trading to prosecute the company.

If you are interested in this topic, go to:
http://gorey.com.au/archives/1809#more-1809
for a fun discussion between consumers, marketers and sales representatives.

Clients who are having difficulties making payments on the finance plans, or who are dissatisfied with their products, should complain to their local Department of Fair Trading or Consumer Protection. Such clients may also benefit from legal advice, as there are likely to have been misrepresentations made during the high pressure sales presentation.

New National Insurance Hotline

A new nationwide service has begun which offers legal advice to consumers about issues related to insurance. This service does not advise insurers or businesses.

Apart from legal advice, the service can also assist with drafting correspondence and out-of-court advocacy.

It should be noted that while the service advises on insurance related to home building, pleasure craft, small business, strata title and public liability, they do not advise on either workers compensation or         superannuation.

The phone number is 1300 663 464; the web address is http://www.cclcnsw.org.au/content/view/110/84/.

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Round Up

National Financial Counsellors’ Resource Service — What Jennifer and Wayne are up to

In September, Wayne was awarded his PhD and the Vice Chancellor’s Commendation for Academic Excellence  for his thesis on factors that contribute to the development of aggressive patterns of thought. Wayne gave the graduand’s address, (which can be viewed at http://www.psy.mq.edu.au/pdf/graduation_speech09_07.pdf) and this was very well received. Wayne has also been involved in counsellor training at Gosford, West Ryde and Sydney, as well as representing the interests of     consumers on the Council of the Telecommunications Industry Ombudsman.

Jennifer has been involved with Christian Community Aid at West Ryde in providing training for new financial counsellors with the FCAN (Financial Counsellors’ Assn. of NSW) Training Package. The course commenced with 28 trainees, and at the beginning of the third week there are 24 trainees still involved. The new workers will be based at Christian Community Aid, Wesley Counselling Services, St Vincent de Paul, Lismore and District Financial Counselling Service, Gosford and other areas.

Apart from the trips to North Queensland and the Northern Territory mentioned earlier, Jennifer was privileged to attend the FCRC Conference in Victoria. While in Victoria, Jennifer was able to visit with the financial counsellor at Bendigo, Loretta Andrew.

Jennifer is currently working on some education, in conjunction with St George Bank and Randwick Council, for people whose employment or businesses have been affected by the equine flu.

There has also been some discussion with NSW Aboriginal Health Services regarding training in financial awareness for Aboriginal Health Workers across NSW.

Victoria

FCRC Conference (3rd and 4th September 2007)

The FCRC Annual Conference was held at the beautiful town of Lorne on The Great Ocean Road. The setting at the Cumberland Resort was spectacular and the NFCRS Coordinator, Jennifer Gracie, was able to attend for the first time.
There were 110 delegates and they enjoyed an interesting two days of conference speakers and networking.

Dr David Cousins, Director of Consumer Affairs Victoria gave the Keynote Address on Monday. Jan Pentland and David Morawetz talked about “What Works in Counselling” with Paul Gillett and Celia Tikotin from the Consumer Action Law Centre following.

Dinner on Monday night had a Fancy Dress Theme of “Surfing the Debt” and there were some very interesting interpretations of the theme with the prize going to the shark costume.

On Tuesday, Cate McKenzie provided information about “Applying to the VCAT Credit List”. David Tennant, Chairperson of AFCCRA was the Keynote Speaker and he talked about “Conflict of Interest” in financial counselling. This was followed by concurrent sessions on the “Update on Practice Issues” by Greg Galle from ITSA and Garry Rothman talked about “Working With Clients Who Have D&A Issues.”

Carmen Watson, the FC Liaison Officer from GE gave an overview of the Hardship Program and how GE can work better with financial counsellors.

Queensland

Proposed changes to the Uniform Consumer Credit Code legislation

The Uniform Consumer Credit Code (CCC) is state legislation. The states and territories agree on the exact wording of the code, which is enacted by Queensland, the lead state, and automatically adopted by the other states and territories. Some states have minor differences in their own credit legislation. So, to find a section of the code, you go to the Consumer Credit Code under Queensland Consolidated Acts on www.austlii.edu.au.

The rise in fringe lenders, and increasingly creative ways of operating outside the Code, mean that the CCC laws need frequent upgrading in order to keep ahead of unscrupulous lenders. Sharkwatch readers should know that the Queensland Government is considering a number of changes to this end.
They have produced draft changes to the legislation (The Consumer Credit Code Amendment Bill, 2007, and the Consumer Credit Amendment Legislation, 2007) and are calling for comment. A copy of the drafts can be downloaded from the CCC website at www.creditcode.gov.au.

Comments can be submitted up to close of business on Friday 21 September 2007, either by email to consumercredit@dtftwid.qld.gov.au or by mail to:

Fringe Credit Project
Fair Trading Policy Branch, Policy Division
Department of Tourism, Fair Trading and Wine Industry Development
GPO Box 3111
Brisbane QLD 4001

Northern Territory

Comings and goings

Somerville Community Services in Darwin report that Tony Kostonis, the financial counsellor from Wagaman has left to take up a position with a superannuation  company. Somerville will miss Tony, who has provided an important service to the community as a financial counsellor for several years.

Tony’s position is being filled by Lucia English.

There is also a new financial counsellor, Jenny Dunne, commencing work at Somerville’s Palmerston Office. Serena Staines, the current financial counsellor at Palmerston, is taking on the position of Coordinator and Gambling Financial Counsellor for both the Wagaman and Palmerston centres.

Serena will be providing training for both of the new workers, and is looking forward to the challenge. Serena will be working with the National Financial Counsellors’ Resource Service to give the new workers the best start possible.

Serena advises us that her financial literacy programme for secondary school students, ‘Cashed Up’, (see page 6) is going to be used at the local High School in Katherine.

New South Wales

There are currently a number of job vacancies in NSW for financial counsellors. Most jobs are part time, generally ranging from 3 days to 4 days per week. There are advertised vacancies at Bankstown, Surry Hills, the Northern Beaches, Narara (Gosford) and Kingswood to name a few. For more information, contact FCAN (Terry Harvey, President, on 0439 519 190 or Lynda Johns, Secretary,  on 02 8204 1332).

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In the Media

Proposed law to rein in mortgage brokers

“Finance and mortgage brokers who issue high-risk loans could be exposed to tough new penalties including criminal fines.
“State and federal officials involved in the Ministerial Council on Consumer Affairs are finalising a draft consultation bill to regulate the $165 billion consumer credit industry.
“It is believed to include a single licensing regime, allowing brokers to operate across state borders.
“The Australian Financial Review reports [that] the bill is also likely to be extended to capture the $1.5 billion reverse mortgage market.
“Although the bill will be presented as a state-based  regime, it could also provide a blueprint for a new federal system should the state governments agree to hand powers regulating credit over to the                 commonwealth.
“The new regime would require brokers to assess the capacity of individuals to repay loans.
“This would also address the problem of predatory lenders, who lend amounts they know a borrower could not possibly service or repay.
“The bill would not impose interest rate caps.
“Brokers would be required to meet education requirements and disclose commissions and the nature of links with credit providers.
“The Australian Financial Review reports brokers who fall foul of the key provisions in the proposed national framework could face criminal fines, infringement notices and administrative penalties such as losing their licence.”

Sydney Morning Herald, September 28, 2007

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