AYSE ERGENEKON and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING COMMUNTIY SERVICES AND INDIGENOUS AFFAIRS

[2012] AATA 275

[2012] AATA 275 

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/5001
Re	AYSE ERGENEKON
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING COMMUNTIY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT

DECISION

Tribunal	Senior Member C R Walsh
Date of Decision	18 April 2012
Date of Written Reasons	8  May 2012
Place	Perth

Decision Summary

1. On 18 April 2012 the Tribunal in an oral Decision affirmed the decision of the Social Security Appeals Tribunal made on 2 November 2011.      

2. The Applicant has requested written reasons for the Tribunal’s Decision.

3. The written reasons are attached.

.(sgd) C R Walsh.............

Senior Member C R Walsh

Catchwords

Social security – age pension – whether applicant’s age pension should have been cancelled by Centrelink – rate of age pension - portability rate – meaning of “working life residence” considered – savings clause not applicable to applicant – applicant in Australia immediately before 20 September 2000 and for a continuous period of 26 weeks or more since that date -  decision under review affirmed

Legislation

Social Security Act 1991- section 43 - section 44 – section 1214 – section 1217 – section 1220A – section 1221-A – section 1221-B – Clause 28 of Schedule 1A

Cases

Nil

Secondary Materials

Nil

REASONS FOR DECISION

Senior Member CR Walsh

8 May 2012

INTRODUCTION

1. Mrs Ergenekon, represented by her son, Mr Ergenekon, seeks a review by this Tribunal of the decision of the Social Security Appeals Tribunal (SSAT) dated 2 November 2011, which decision affirmed the decision made by a Centrelink Authorised Review Officer to cancel Mrs Ergenekon’s aged pension effective 13 March 2011. 

2. It is not disputed that Mrs Ergenekon was qualified for age pension pursuant to section 43 of the Social Security Act 1991 (Act).  The issue for consideration by the Tribunal in this application is whether Mrs Ergenekon’s age pension should have been cancelled effective 13 March 2011. 

   RELEVANT FACTS

3. The relevant facts in this application, which Mr Ergenekon confirmed before the Tribunal are not in dispute, are set out in paragraphs 3 to 23 of the Secretary’s “Statement of Facts & Contentions”, dated 17 February 2012, as follows:

   “ …

   3.On 25 April 1981 Mrs Ergenekon arrived in Australia aged 66 years of age and intending to remain on a permanent basis [T4:p.35, T13:p.82]

   4.Mrs Ergenekon was granted widow pension from 1 May 1986 and was transferred to age pension five years later on 10 May 1991 after gaining 10 years Australian residence [T4:p. 30-36, T13:p.90].

   5.On 7 August 1991 she went to Turkey, intending to live there permanently. A decision was made by the Department of Social Security, now Centrelink, that her pension payments would continue to be paid to her at the same rate minus the amounts for pharmaceutical allowance and rent assistance [ST1:p.1-3,].

   6.On 7 March 1998 Mrs Ergenekon returned to Australia [T13:p.81

   7.Mrs Ergenekon visited Turkey from 21 April 1999 to 25 November 1999. Her pension payments continued to be paid to her at the same rate minus the amounts for pharmaceutical allowance and rent assistance [T13:p.80, ST2::p.4-6].

   8.On 20 September 2000 new portability rules for age pension were introduced. Whilst age pension remains portable on an unlimited basis, a person’s rate of pension after 26 weeks of absence from Australia becomes dependent on their period of Australian working life residence. Recipients with a working life residence of less than 300 months (25 years) have their rate of age pension reduced in proportion to the amount of their working life residence.

   9.On 6 June 2001 she was notified that her age pension would be cancelled if she remained overseas after 11 October 2011[T7:p.37-38, T9:p.48].

   10.Her age pension payments were cancelled on 12 October 2001 as she had been overseas for 26 weeks and restarted from her return to Australia on 4 November 2001 [T9:p.47, T13:p.92].

   11.On 2 July 2002 Mrs Ergenekon was notified that her age pension would be cancelled if she remained overseas after 21 January 2003 [T9:p.39-40].

   12.Her age pension was not cancelled because she returned to Australia on 17 January 2003 and therefore had spent less than 26 weeks overseas [T9:p.46, T13:p.80].

   13.On 14 November 2003, 21 May 2005 and 19 May 2006 Mrs Ergenekon left Australia without advising Centrelink so was not notified that her age pension would cancel after 26 weeks absence overseas. In the event she returned to Australia within 26 weeks of each absence and so her pension payments were not cancelled [T13:p.80].

   14.On 13 May 2008 Mrs Ergenekon advised Centrelink that she was going overseas from 27 May 2008 and was sent a letter that same day notifying her of the cancellation of her pension from 25 November 2008 if she remained overseas on that date [T10:p.51-52, T11:p.71].

   15.Mrs Ergenekon returned to Australia on 1 November 2008, within 26 weeks of her departure from Australia and so her age pension was not cancelled [T11:p.71, T13:p.80].

   16.On 26 April 2010 Mr Ergenekon, as nominee, made enquiries about the portability rules for Turkey [T11:p.63].

   17.On 12 September 2010 Mrs Ergenekon travelled to Turkey without advising Centrelink [T13:p.80].

   18.Her age pension payments were suspended then cancelled from 13 March 2011 because she had been overseas for more than 26 weeks [T11:p.62].

   19.Mr Ergenekon queried the suspension action and requested a review of the decision by an authorised review officer (ARO) [T13:p.60-62].

   20.On 3 June 2011 an ARO reviewed and affirmed the decision to cancel Mrs Ergenekon’s age pension from 13 March 2011 [T14:p.97-104].

   21.On 2 November 2011, after discussing the situation with Mr Ergenekon, the Social Security Appeals Tribunal (SSAT) affirmed the cancellation decision [T2:p.3-7].

   22.On 23 November 2011 Mr Ergenekon appealed to the Administrative Appeals Tribunal (AAT) on his mother’s behalf [T1:p.1-2].

   23.On 17 January 2011 Mr Ergenekon lodged a claim for Compensation for Detriment caused by Defective Administration (CDDA), which to date has not been finalised.”

   as well as in paragraphs 1 to 5 of the SSAT’s decision, dated 2 November 2011, as follows:

   “…

   1.Mrs Ergenekon, who was born on 1 August 1915 in Turkey, came to Australia on 25 April 1981 when she was 65 years old and was granted citizenship on 29 April 1986.

   2.Mrs Ergenekon has been widowed in Turkey in November 1972. She applied for, and was granted, an Australian widow pension from May 1986. She was transferred to age pension on 23 May 1991.

   3.Mrs Ergenekon left and returned to Australia a number of times between 1991 and 2008. The periods she was out of the country varied between four and seven months.

   4.Mrs Ergenekon travelled overseas on Sunday 12 September 2010 and has not returned to Australia. On Sunday 13 March 2011 she had been out of Australia for more than 26 weeks.

   5.On 28 March 2011 the rate of Mrs Ergenekon’s age pension was reduced to nil and stopped, effective from 13 March 2011.”

   LEGISLATION

4. The legislation relevant to this application is set out in paragraph 24 and paragraphs 26 to 31 of the Secretary’s “Statement of Facts & Contentions”, dated 17 February 2012, as follows:

   “…

   24.The legislation relevant to this decision is contained in the Social Security Act 1991(the Act) and the Social Security (Administration) Act 1999 (the Administration Act)

   …

   Legislation

   26.Section 44 of the Act states that age pension is not payable if the rate would be nil and section 80 of the Administration Act provides that a payment must be suspended or cancelled if it is not payable.

   27.Section 1214 of the Act provides that there are no limitations to the amount of time a person can remain overseas and still be paid certain social security payments.

   28.Section 1217 of the Act states that age pension is a payment that has no limitation as to the period of time a person can spend outside of Australia.

   29.Commending 20 September 2000, section 1220A of the Act was introduced which provides that the rate of age pension for a person who stays overseas for more than 26 weeks is calculated based on their working life residence.

   30.Section 1221-A of the Act sets out the method of calculating a person’s portability rate using working life residence and section 1221-B of the Act defines working life residence as being the number of months a person has been an Australian resident between the time the person turns 16 and age pension age.

   31.Clause 128 of Schedule 1A of the Act exempts a person from the provisions of section 1220-A and 1221-B of the Act if the person was absent from Australia before 20 September 2000 and has not returned to Australia for a continuous period of 26 weeks or more since that date.”

   as well as in paragraphs 9 to 17 of the SSAT’s decision, dated 2 November 2011, as follows:

   “…

   The legislative framework

   9.The legislation relevant to this decision is contained in the Social Security Act 1991 (the Act).

   10.Provisions relating to whether a person is qualified for age pension and whether age pension is payable to the person are contained in Part 2.2 of the Act.

   11.Provisions relating to overseas portability are contained in Part 4.2 of the Act. The term ‘overseas portability’ refers to whether a Centrelink payment can continue to be paid if the recipient is overseas.

   ……………..

   12.Section 43 of the Act sets out that a person is qualified for age pension once they reach pension age.

   13.Section 44 of the Act sets out that age pension is not payable if the pension rate is nil.

   14.Section 1217 of the Act sets out that age pension has an unlimited portability period which means it can continue to be paid indefinitely when a person is overseas.

   15.Section 1220A of the Act sets out that the rate of age pension is to be calculated using the Pension Portability Rate Calculator at the end of the section 1221 of the Act if the person has been continuously absent from Australia for a period of more than 26 weeks.

   16.The Calculator uses a ‘residence factor’ which is determined by dividing a person’s notional working life – the number of months the person lived in Australia between their sixteenth birthday and their retirement age – by 300. This means:

   ·If a person lived in Australia for at least 25 years before reaching retirement age, then their notional working life is 25 x 12 = 300 months. Dividing the number of months by 300 gives a residence factor of 1. This means that while overseas they would be paid 100% of the pension they would be paid if they were in Australia.

   ·If a person lived in Australia for, say, 10 years before reaching retirement age, then their notional working life is 10 x 12 = 120 months. Dividing the number of months by 300 gives a residence factor of 0.4. This means that while overseas they would be paid 40% of the pension they would be paid if they were in Australia.

   17.Schedule 1A of the Act sets out savings and transitional provisions that were put in place in relation to changes made on 20 September 2000 to a number of social security payments including age pension. Clause 128 of the schedule sets out a saving provision that related to portability rules as they affect rates of pension, and sets out that this saving provision applies to people who were outside of Australia when the new legislation was introduced. The application of the saving provision means that recipients of age pension could continue to receive their pension while overseas under the old legislation if certain conditions were met.”

5. Of particular relevance to this application is that, commencing 20 September 2000, section 1220A was introduced into the Act, which section broadly provides that the rate of aged pension for a person who stays overseas for more than 26 weeks is calculated based on their “working life residence”.

6. Section 1221-A of the Act sets out the method of calculating a person’s portability rate using “working life residence” and section 1221-B of the Act defines “working life residence” as being the number of months a person has been an Australian resident between the time the person turns 16 and age pension age.

7. Clause 128 of Schedule 1A of the Act exempts a person from the provisions of sections 1220A and 1221-B of the Act if the person was absent from Australia before 20 September and has not returned to Australia for a continuous period of 26 weeks or more since that date.

8. Clause 128(1) of Schedule 1A of the Act states:

   “(1)Despite the amendments of sections 1213A, 1215, 1216, 1220A, 1220B and 1221 of this Act made by the Social Security and Veterans’ Entitlements Legislation Amendment (Miscellaneous Matters) Act 2000, if:

   (a)a person was absent from Australia immediately before 20 September 2000;  and

   (b) at a time (the post-start time ) after 20 September 2000, the person had not returned to Australia for a continuous period of 26 weeks or more since 20 September 2000;

   those provisions continue to apply to the person at the post-start time as if those amendments had not been made.’

   ANALYSIS

9. Before the Tribunal, Mr Ergenekon confirmed that his mother was in Australia immediately before 20 September 2000 and for a continuous period of 26 weeks or more after that date. Consequently, the Tribunal finds that savings clause 128 of Schedule 1A of the Act cannot apply to Mrs Ergenekon.

10. The Tribunal agrees with the Secretary’s contentions, as set out in paragraphs 35 to 38 of its “Statements of Facts & Contentions”, which are, broadly, as follows. When Mrs Ergenekon resided overseas at various times for more than 26 weeks, her rate of pension was affected by her “working life residence”. Since Mrs Ergenekon arrived in Australia for the first time aged 66 years of age she had no Australian “working life residence” (i.e. as she was not an Australian resident prior to age pension age). Using the calculation process set out in section 1221-A(1) of the Act, Mrs Ergenekon’s “working life residence” is nil and age pension is not payable to her after she has spent 26 weeks outside of Australia: section 1220A of the Act. Accordingly, Mrs Ergenekon’s age pension should have been cancelled effective 13 March 2011.

11. Before the Tribunal, Mr Ergenekon contended that his mother had not been properly informed of the impending 20 September 2000 changes to the Act by Centrelink. That is, had she been informed, she would have moved permanently to Turkey before 20 September 2000, and so has been disadvantaged. In his written submissions to the Tribunal, dated 9 February 2012, Mr Ergenekon stated, among other things:

    “Our big argument now is that why we were not correctly and appropriately informed of the possible changes to the new legislation before it was introduced on 20 September 2000.  If we received all those explanations before that date, my mother would have left Australia before 20 September 2000 and only would come back and visit Australia under the requirement period.  Therefore today, my mother would still be receiving her pension.  We were never informed of the changes, so that legislation before the changes came about, and we perceive that my mother is now trapped. 

12. Centrelink’s computer records indicate that prior to his mother leaving Australia for Turkey on 12 September 2010, Mr Ergenekon (as ‘nominee’ for Mrs Ergenekon) rang the international services branch of Centrelink, on behalf of his mother, for advice about the current portability rules.  Accordingly, the Tribunal considers that Mrs Ergenekon, through her son, was advised of the new portability rules which applied from 20 September 2000, and was aware of their effect on her rate of pension prior to leaving Australia on 12 September 2010.  In his written submissions to the Tribunal, dated 9 February 2012, Mr Ergenekon said:

    “My mother came to Australia in 1981.  At that time, immigration laws required that persons who came to Australia must be 60 years or over and should not be working.  However, the current laws only apply to people who lived here during their working ages, but my mother did not have any working life, which now disadvantages her.  Now that two laws are in opposition to each other, what rights were given to her at that time, 1981, is lost.  Today with new laws, we are trying to get it back.” 

13. In addition, Mr Ergenekon submitted:

    “However, we still believe that Centrelink and Australian Government would never try to trap its citizens.  Also, we still believe that Australian laws, justice and human right are fair for everyone.  As everyone knows, on one hand, full human and animal live activists are given their fights to save the lives of the whales in the oceans.  On the other hand, there is my mother, now 96 years old, is an Australian citizen, one foot already in the grave, got dementia, heart failure, high blood pressure, is wheelchair bound, has no income and is not well enough to travel to Australia”. 

14. Unfortunately for Mrs Ergenekon, the Tribunal has no control over changes Parliament makes to its immigration laws or social security laws.  The Tribunal can only apply the law, as enacted by the government of the day, to the facts before it and reach the correct and preferable decision.  Mr Ergenekon’s grievances about his dealings with the immigration department and Centrelink, on his mother’s behalf, are not a matter for this Tribunal.  This Tribunal can only consider the decision under review.  However, it is open to Mrs Ergenekon, through her son, to pursue a claim for Compensation for Detriment caused by Defective Administration (CDDA) by a government body if she so chooses. 

15. For the reasons just given, the Tribunal affirms the decision of the SSAT dated 2 November 2011 to stop paying aged pension to Mrs Ergenekon effective 13 March 2011.

I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision herein of C R Walsh, Senior Member .

..(sgd) T Freeman...........

Associate

Dated 8 May 2012

Date(s) of hearing	18 April 2012
Advocate for the Applicant	Mr K Ergenekon
Advocate for the Respondent	Mr P Maishman