Allen and Secretary, Department of Social Services (Social services second review)

[2016] AATA 95

Allen and Secretary, Department of Social Services (Social services second review) [2016] AATA 95 (23 February 2016)

Division	GENERAL DIVISION
File Number	2015/0774
Re	Barry Allen
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member A C Cotter
Date	23 February 2016
Place	Brisbane

The decision under review is set aside. The Tribunal remits the matter for reconsideration with the direction that the applicant was registered for the Pension Bonus Scheme from 26 May 2010.

.........................[Sgd]...............................................

Senior Member A C Cotter

CATCHWORDS

SOCIAL SECURITY – pension bonus scheme – registration for pension bonus scheme – whether period for lodgement should be extended – discretion to extend period for lodgement – date registration takes effect if period for lodgement extended – reasonable basis for extension - period for lodgement extended – decision under review set aside

LEGISLATION

Social Security Act 1991 (Cth) ss 92C, 92D, 92E, 92G, 92H, 92J
Social Security and Other Legislation Amendment (Pension Reform and other 2009 Budget measures) Act 2009 (Cth) Schedule 9

CASES

Kondos and Secretary, Department of Family and Community Services (2005) 42 AAR 119

SECONDARY MATERIALS

Guide to Social Security Law

REASONS FOR DECISION

Senior Member A C Cotter

23 February 2016

1. On 28 October 2008, Mr Barry Allen turned 65 years, reaching the age when he qualified for the Age Pension. He was employed at the time, and continued to work after reaching his 65^th birthday.

2. Some 18 months later, the work he had been doing dried up, and he contemplated then applying for the Age Pension. He made an appointment to see a Financial Information Service Officer (“FISO”) at Centrelink.

3. The FISO told him about the Pension Bonus Scheme (“PBS”), of which he was not previously aware. From what the FISO told him, Mr Allen understood that if he joined the scheme and continued to work until he turned 70, he may be entitled to a lump sum Pension Bonus of up to $40,000.00. As he was in good health and enjoyed working, he decided to join the scheme. He says that at his next meeting, the FISO brought the necessary paperwork, which he completed. He understood that was all that he needed to do, and that when he decided to retire, he should contact Centrelink which had his details.

4. Almost four years passed. During that time, the PBS was closed to new members, with no new registrations permitted after 1 July 2014.[1]

   [1] Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 (Cth), Schedule 9.

5. On 1 August 2014, Mr Allen lodged a Claim for Age Pension and Pension Bonus Scheme form with Centrelink. In response to the question whether he was a member of the PBS, Mr Allen ticked “Yes”. Later in the form, he indicated that he was claiming a bonus on the basis of his work; he provided details of his employment history between 2010 and 2014.[2]

   [2] Exhibit 1, T Documents, T 7, pages 18, 37 and 38, Mr Allen’s Claim for Age Pension and Bonus Pension.

6. On 14 August 2014, the Department wrote to Mr Allen, advising him his claim for Age Pension had been granted from 31 July 2014.[3] On the same date, he was advised of the decision not to pay him Pension Bonus on the basis that he was “not eligible due to not being registered prior to 1 July 2014”.[4]

   [3] Exhibit 1, T Documents, T 9, pages 60-62, Department’s letter to Mr Allen dated 14 August 2014.

   [4] Exhibit 1, T Documents, T 13, page 77, Department’s electronic file note dated 14 August 2014.

7. Mr Allen disputed that he had not registered for PBS before the scheme closed, providing a statutory declaration about his meetings with the FISO in May 2010.[5] However, the Department could find no physical evidence of the application for registration; nor was there any record of Mr Allen having been registered, or of his applying for late registration, for the PBS.[6]

   [5] Exhibit 1, T Documents, T 6, pages 16-17, Mr Allen’s statutory declaration declared 18 August 2014.

   [6] See Exhibit 3, Secretary’s Statement of Facts and Contentions dated 21 January 2016, paragraph [10].

8. Despite reviews by both an Authorised Review Officer,[7] and later by the then Social Security Appeals Tribunal (“SSAT”),[8] the decision to reject the Pension Bonus claim remained unchanged. Still dissatisfied, Mr Allen has applied to this Tribunal for a review of the SSAT’s decision.

   [7] Exhibit 1, T Documents, T 11, pages 64-67, decision of the Authorised Review Officer dated 12 November 2014.

   [8] Exhibit 1, T Documents, T 2, pages 3-6, SSAT’s decision and reasons for decision dated 20 January 2015.

9. Before I address the issues raised in this proceeding, it is important to reflect on the key legislative provisions relevant to my considerations.

   THE LEGISLATIVE FRAMEWORK

10. The PBS, which closed to new applications from 1 July 2014, offered a tax free lump sum payment for registered members who deferred claiming Age Pension and who had stayed in paid work after reaching their relevant age for Age Pension. In order to qualify for a Pension Bonus, a person had to accrue between one and five bonus periods (each generally running for a year) while deferring their claim for Age Pension. To accrue a bonus period, the person had to pass the work test for the period, which meant that they, or their partner, were required to work gainfully for at least 960 hours that year. The amount of the bonus payable depended on the number of accrued bonus periods and the person’s annual rate of Age Pension; a person could obtain a larger bonus by accruing more bonus periods.

11. As at the time relevant to this proceeding (26 May 2010, being the date Mr Allen contends he applied for registration of the PBS), s 92C of the Social Security Act 1991 (Cth) (“Act”) set out the requirements for a person to qualify for a Pension Bonus. For present purposes, the relevant requirements were that the person: started to receive Age Pension at or after the time when they made a claim for the Pension Bonus; had not received Age Pension at any time before making a claim for the bonus; was registered as a member of the PBS; and, had accrued at least one full-year bonus period while registered as a member of the scheme.

12. Section 92D of the Act provided that a person may apply for registration as a member of the PBS. The application was required to be in writing and to be in accordance with a form approved by the Secretary.[9] It was required to be lodged at an office of the Department, at a place approved by the Secretary, or lodged with a person approved by the Secretary.[10] Section 92J provided that if an application were made in accordance with the Subdivision, the Secretary must register the applicant as a member of the scheme.

    [9] S 92E Social Security Act 1991 (Cth) (‘Act’).

    [10] Ibid s 92G.

13. Section 92H of the Act dealt with the timing of the application and registration. In particular, s 92H(1) provided that if a person’s date of qualification for Age Pension occurred on or after 1 July 1998 (as was the case for Mr Allen), they were required to lodge an application during the period that began 13 weeks before that date and ending 13 weeks after that date. If registration occurred as a result of an application lodged within that period, the registration took effect on the date of the person’s date of qualification for Age Pension. Section 92H(3) provided that the Secretary could extend the period for lodging an application. In that event, registration was to take effect from the date on which the application was lodged, unless the Secretary decided it should take effect on another date.

    ISSUES FOR THE TRIBUNAL

14. It is common ground that Mr Allen was not registered for the PBS in the Department’s records. It is equally clear that even if Mr Allen had applied for registration on or about 26 May 2010 as he contends, that application would have been late (under s 92H(1) of the Act) and he would have required the Secretary to extend the time for lodgement of the application under s 92H(3) of the Act.

15. The issue I have to determine is whether Mr Allen was qualified to receive a payment under the PBS. That gives rise to two sub-issues, namely:

    (a)Whether Mr Allen applied for registration for the PBS on or about 26 May 2010; and

    (b)If so, whether the period for lodgement of the application should be extended to that date.

16. I deal with each of these issues below.

    CONSIDERATION

    Did Mr Allen apply for registration for the PBS on or about 26 May 2010?

17. Mr Allen gave sworn evidence at the hearing. He recounted the circumstances which led to him contacting Centrelink in May 2010.  He had been working for John Holland Pty Ltd, but the company had run out of work for him on the project on which he had been working. He therefore contacted Centrelink, as he decided to retire.

18. From the Department’s electronic file note, it appears that the initial contact with Centrelink was by telephone on 11 May 2010, at which time an appointment was made for Mr Allen to see a specialist FISO at the Centrelink office in Ayr the following week, on 19 May.[11] I was told by Mr Allen’s lawyer that the Ayr office was not fully or permanently staffed, and was only visited on a weekly basis by an officer from Townsville.

    [11] Exhibit 1, T Documents, T 12, page 68.

19. It appears from the Department’s records that following that initial contact, two letters were sent to Mr Allen on 11 May. The first confirmed his 19 May appointment and mentioned that he bring with him details of his income and investments,[12] while the second confirmed Mr Allen’s “intention to claim a payment and a concession card”.[13] 

    [12] Exhibit 1, T Documents, T 4, page 13, Department’s letter to Mr Allen dated 11 May 2010.

    [13] Exhibit 1, T Documents, T 5, page 14, Department’s letter to Mr Allen dated 11 May 2010.

20. The Department’s electronic file note of the 19 May meeting is brief, it recording that the interview was held at 12 noon that day. It contains a notation that the customer had been made redundant and “had some questions re super”.[14] At the hearing, Mr Allen elaborated upon that meeting. He said the FISO asked him how old he was and if he was fit, to which he responded that he was. The FISO then told him about the PBS, of which Mr Allen was not previously aware. In particular, the FISO told him that if he continued to work until he was 70 years of age, he could get up to $40,000.00 as a Pension Bonus. Mr Allen responded that he might as well keep working. The FISO did not have the forms with him, and so an appointment was made for the following week, on 26 May, for the purpose of completing the necessary paperwork.

    [14] Exhibit 1, T Documents, T 12, page 68.

21. According to the Department’s electronic notes, the next meeting was held at Ayr on 26 May. Again, the note is brief, simply recording “redundancy”.[15] Mr Allen gave evidence of his recollection of what transpired. While he could not be certain, he thought that he signed “two or three” forms at the meeting. During cross-examination, he said that he was “almost 100% sure” they were to do with the PBS, although he was not certain what they were. When asked to describe them, he said he thought they were green at the top, and a couple of pages long; he had to sign two or three times. Once the forms were signed, the FISO said that he would have to take them to Townsville so that they could be “put in the system”, as he could not do that at the Ayr office. He gave Mr Allen a card with Centrelink phone numbers on it, and told him to ring Centrelink when he was ready to retire as they would have his particulars. Mr Allen kept the card, which he produced at the hearing. He said that as far as he was concerned, everything was completed at the meeting and he did not have to do anything else.

    [15] Ibid.

22. Mr Allen says he continued to work, as he enjoyed what he was doing. He obtained some other work, and was later offered a different role at John Holland, in which he worked until he finally retired at the end of July 2014, some nine months after his 70^th birthday.

23. As I mentioned earlier, there is no physical evidence of the application on the Department’s file. It is therefore not surprising that there is no evidence on the Departmental file of any Centrelink notification having been sent to Mr Allen confirming his registration for the PBS. Asked during cross-examination whether he thought it curious that he had not received anything from Centrelink, Mr Allen said that he thought everything was right, and repeated what the FISO told him, namely to keep the card he had been given and to bring  it back with him when he was ready to retire.

24. There is no dispute that Mr Allen met with the FISO on at least two occasions, and had an earlier conversation with a Centrelink officer on 11 May. Unfortunately, the notes of those conversations are, as I mentioned earlier, very brief. That is itself surprising, considering the personal and financial implications of what was being discussed and any recommendations that might have been made. The FISO was not called to give evidence, and therefore Mr Allen’s evidence of the discussions during the meetings was not contradicted.

25. For the Secretary, it was noted that Mr Allen was giving evidence some four or five years (in fact, longer than that by the time of the hearing) after the Centrelink interviews and therefore, his recollection would not be as good as it would have been soon after the interviews. Reliance was placed on Mr Allen’s inability to identify or give a reliable description as to what documents he says he signed, and the fact that he had told the SSAT  he was “under the impression” after the second meeting that he was registered.[16] It was also contended that, having regard to Centrelink’s standard practices and the seniority of the officer, it was most unlikely that such a discussion occurred without some relevant notation having been made.

    [16] Exhibit 3, Secretary’s Statement of Facts and Contentions dated 21 January 2016, paragraph [52] and Exhibit 1, T Documents, T 2, pages 3-6, SSAT’s decision and reasons for decision dated 20 January 2015, paragraph [11].

26. While I fully appreciate the obvious difficulties in giving evidence on particular events after such a long period of time, I nevertheless found Mr Allen to be an honest and credible witness. Although he did not recall the fine detail of the forms he signed (which I think is understandable given the passage of time), he had a clear and firm recollection of the main matters discussed with the FISO on 19 and 26 May 2010, and what he was told. On matters of fine detail about which he was not certain, he did not overreach; rather, he gave qualified answers.

27. Significantly, Mr Allen’s account is consistent with a number of objective or accepted facts. Mr Allen’s account offers a reasonable explanation as to why there were two meetings rather than one, where presumably simple queries could have been readily addressed. Most tellingly, one of the Department’s letters of 11 May confirmed (consistent with Mr Allen’s evidence) his initial intention “to claim a payment and a concession card”. Following Mr. Allen’s discussion with the FISO and becoming aware of the PBS, he did not at that stage proceed with his claim for payment (presumably Age Pension). Further, Mr Allen’s recollection of relevant dates and the sequence of meetings is not only consistent with the Centrelink file, but corroborated by the appointment card that was given to him by the FISO and which he has kept safe since the 2010 meetings; he obviously (albeit naively) placed significant importance on the card, based on what the FISO told him at the time.

28. The fact that more fulsome notes of the meetings were not taken is, as I said earlier, surprising. That is particularly so given there were two meetings a week apart without any indication as to why the second meeting was required. Equally, it is surprising that no notation was made about what forms were completed. That silence, however, does not evidence that forms were not completed by Mr Allen and taken by the FISO for processing on his return to the Townsville office. That said, I am conscious of the fact that the meetings took place at a “visited” office, seemingly without the full resources of a permanent office. As the FISO was presumably working within those limitations, it is perhaps not surprising that there may not have been the same level of adherence to internal procedures as say, in a fully serviced and resourced Centrelink office. Unfortunately, the FISO, who may have been able to explain his work practices, particularly at “visited” offices, was not called as a witness. 

29. For the above reasons, I am satisfied, on the balance of probabilities, of Mr Allen’s version of events, and in particular, that he completed an application for PBS registration, that the form was taken by the FISO, and that Mr Allen was told that he had done everything that was required of him in respect of applying for the PBS. If that were the case, Mr Allen would, in normal circumstances, have been entitled to registration under the scheme by reason of s 92J of the Act.

30. Unfortunately for Mr Allen, his circumstances were not “normal”.

31. No matter what the FISO told Mr Allen at their meetings, it is clear that his application was not subsequently processed. The only inference that can be drawn is that the form was lost or misplaced.

32. If, as I have found, Mr Allen applied for registration in May 2010, such an application would clearly have been outside the period within which it was required to be lodged, as provided under s 92H(1) of the Act (namely the period 13 weeks on either side of his 65^th birthday, 28 October 2008). On my calculation, that period expired on 27 January 2009. In those circumstances, any registration would not have been valid unless the time for lodging the application was extended pursuant to ss 92H(3) and (4) of the Act. It is accepted that no such application for extension was made at the time. That leads to the next question: whether Mr Allen’s circumstances would justify an extension of the time for lodgement of the application.

    Should the date for lodgement be extended?

33. As mentioned earlier, the Secretary may extend the period within which a person may lodge an application for registration. If registration occurs as a result of an application lodged during an extended period, the registration takes effect on the date on which the application is lodged, or if the Secretary decides it should take effect on another date, on that other date. Therefore, the Secretary has two separate discretions: the first is concerned with the extension of the application period for registration (which is subject to s 92H(4) of the Act); the second (which is contingent on the first) concerns the date on which registration takes effect if the extension is granted.

34. Both parties accepted that the terms of the discretion are broad. In that context, the Secretary’s lawyer referred me to the Guide to Social Security Law, which provides some guidance to delegates in the exercise of the discretions.[17]

    [17] See paragraph 3.4.7.20 of the Guide.

35. While I agree that the discretion to extend the period for the lodgement of the application for registration is wide, it is equally clear that the exercise of that discretionary power is not unfettered. Section 92H(4) of the Act obviously provides some restriction. Further, in exercising the discretion it has to be borne firmly in mind that there needs to be some reasonable justification for departing from the general rule prescribed by the legislation. In Kondos and Secretary, Department of Family and Community Services,[18] Member Webb considered the exercise of the discretion to extend time after reviewing a number of authorities concerning analogous provisions conferring a discretion to extend statutory time limits. He succinctly captured the position as follows:

    While the terms of the discretion are broad, the exercise of the discretionary power so conferred is not unfettered. It is subject, in the first part, to the limits imposed by subs 92H(4), and otherwise may only be validly exercised on a reasonable basis that is fair and equitable for the purpose intended by the legislature (Malcolm CJ in West Australian Field and Game Association v Pearce (1992) 27 ALD 38 at 45-48). The onus is on the applicant to show that his case ‘…is a justifiable exception to the rule that the welfare of the State is best served by the limitation period…’and that ‘…the justice of the case requires that extension…’ (McHugh J in Brisbane South Regional Health Authority v Taylor… (1996) 186 CLR 541 at 554). Relevant considerations may include but are not limited to matters such as whether the person has a reasonable explanation for the delay in making the application, any action taken by the person to inform the respondent of his or her intentions, any prejudice to the respondent, the relative merits of the application, any unsettling of other persons or established practices, and considerations of fairness between the applicant and other persons in a similar position and the public interest ( Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176…).[19]

    [18] (2005) 42 AAR 119.

    [19] Ibid 122-3 at [20].

1. Returning to Mr Allen’s position, there is no dispute that the requirements under s 92H(4) were satisfied. It is clear that Mr Allen would have been an accruing member for some or all of the pre-application period and would have satisfied the relevant work test for each work test period applicable to him.[20]

   [20] See email from Ms Shelley Johnston to Mr Rick McQuinlan dated 11 August 2015: Exhibit 3, Annexure 2.

2. The question therefore remains whether the exercise of the discretion to extend the lodgement period in this instance would be considered to be on a reasonable basis that is fair and equitable for the purpose intended by the legislature. The onus is on Mr Allen to show that his situation is a justifiable exception to the general rule.

3. For Mr Allen, two reasons were advanced as to why the discretion should be exercised in his favour to extend the lodgement period. First, it was said that at the relevant times he resided in a remote part of Australia, explaining why he was not aware of the PBS earlier. Second, it was contended that, having regard to the circumstances, it would be unjust to Mr Allen to deprive him of registration where he acted on the FISO’s advice and, in reliance on it, continued to work in the expectation that he would qualify for the bonus.

4. There is no dispute that Mr Allen’s application for registration was particularly late, it coming more than 18 months after his 65^th birthday, during which time he had continued working. His engaging in ongoing work was of his own choosing; enjoying working, he did not require any incentives to keep him working after he reached pension age.

5. From Mr Allen’s evidence, it appears that he was unaware of the existence of the PBS until his 19 May meeting with the FISO. There was no suggestion that he was unaware of the scheme because of some good reason, such as ill health, illiteracy or language difficulties or because he was overseas. The only explanation offered was that he lived in a remote part of Queensland, Nebo, approximately one hour’s drive south-west of Mackay. While there is no doubt that Nebo is in regional Queensland, there was nothing to suggest that it is located in a remote area such that he was particularly disadvantaged in terms of communications or contact with the wider community, which would have prevented Mr Allen of learning of the PBS a year and a half earlier. He had no difficulty in contacting Centrelink (albeit at a “visited” office) in 2010 and meeting with the FISO on two occasions in May of that year. Absent further evidence on that point, I am not satisfied that it represented a reasonable excuse for the delay in lodgement.

6. The second ground is more compelling. Mr Allen went to Centrelink in May 2010 with the intention of retiring and claiming Age Pension. However, he changed course during his initial discussion with the FISO, after learning of the PBS. Acting on the advice he received, he completed the necessary paper work. As far as he was concerned, that paper work was lodged with the Department and he had nothing further to do, apart from continuing to work and notifying Centrelink when he ceased. There was no indication or hint that his application might be out of time; indeed, all the indicators suggested otherwise. Based on that not unreasonable understanding, Mr Allen continued to work for the next four years. Absent any competing consideration, it would be unfair to deprive him of the bonus solely on the ground that his application was lodged out of time.

7. In exercising the discretion, I also need to bear in mind other competing considerations, such as ensuring that the decision is not inconsistent with the legislative intent; whether any prejudice might be caused to the Secretary as a result of the exercise of the discretion; and the desirability for consistency in approach. There was no evidence before me concerning any prejudice (other than having to meet a claim for the bonus) that might be suffered by the Department as a result of the exercise of the discretion in this instance. Nor was there evidence to suggest that the exercise of the acknowledged broad discretion would be inconsistent with the attitude adopted in previous instances. In the interests of consistency with the legislative intent, my inclination would be to extend the period for lodgement of the application to the date of the second and final meeting, 26 May 2010; there is no justification to warrant the selection of an earlier date.

8. Having regard to those matters, I consider that the time for lodgement of Mr Allen’s application for registration should be extended to 26 May 2010.

   CONCLUSION 

9. For the reasons outlined above, I find that Mr Allen applied for registration for PBS on or about 26 May 2010. Having regard to the circumstances of Mr Allen’s case, the time for lodgement of the application for registration for the PBS is extended to 26 May 2010.

10. It therefore follows from what I have said that Mr Allen was qualified to receive a payment under the PBS.

11. Accordingly, the Tribunal sets aside the decision under review and remits the matter for reconsideration with the direction that Mr Allen was registered for the PBS from 26 May 2010.

I certify that the preceding 46 (forty -six) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter

..........................[Sgd]..............................................

Associate

Dated 23 February 2016

Date of hearing	27 January 2016
Applicant	In person
Solicitors for the Respondent	Department of Human Services