Banks and Department of Family and Community Services
[2001] AATA 183
•12 March 2001
DECISION AND REASONS FOR DECISION [2001] AATA 183
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2000/873
GENERAL ADMINISTRATIVE DIVISION )
Re PETER BANKS
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr EK Christie, Member
Date12 March 2001
PlaceBrisbane
Decision The Tribunal affirms the decision under review. This means Mr Banks' application is unsuccessful. Mr Banks was not entitled to age pension at the time his claim was made.
(Sgd) EK CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY - age pension - whether applicant entitled to age pension - whether special circumstances to treat whole or part of compensation payments as not having been made.
WORDS AND PHRASES - "compensation"
Social Security Act 1991 ss 17(2)(b), 1168(1), 1168(3A), 1184(1)
Australian Broadcasting Tribunal v Board & Ors (1990) 94 ALR 11
Banovich v Repatriation Commission (1986) 69 ALR 395
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1996) 40 ALD 541
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Martin and Secretary, Department of Social Security (1993) 30 ALD 637
REASONS FOR DECISION
12 March 2001 Dr EK Christie, Member
This is an application by Peter Banks for a review of the decision of the Social Security Appeals Tribunal ("the SSAT") made on 12 September 2000. The SSAT decided that Mr Banks was not entitled to age pension. The SSAT affirmed the decision of an Authorised Review Officer made on 19 July 2000.
In reaching its decision, the SSAT concluded that the Centrelink decision not to pay Mr Banks age pension, because the rate of his pension had to be reduced to nil due to his wife's receipt of Comcare payments, was correct. (Document T2 Folio 8).
In his reason for application, Mr Banks stated that the finding of the SSAT was wrong in fact and in law (Document T1 Folio 2).
The applicant represented himself at the hearing. The respondent was represented by Mr R McQuinlan, a Departmental Advocate.
At the hearing the Tribunal had in evidence before it documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 – the "T" Documents (Exhibit 1) and the following exhibits:-
Exhibit 2 Report of the Neurosensory Unit: Mr P Banks, 15.11.00; and
Exhibit 3 Bundle of Documents: Mr P Banks, 31.10.00
Facts
The general facts were that Mr Banks applied for age pension on 15 June 2000 and, following the first internal review, Centrelink decided on 11 July 2000 that he was not entitled to age pension. This decision was affirmed on 19 July 2000, following the second internal review.
On the basis of the evidence before it, the SSAT made the following finding of fact:-
that Mrs Banks was in receipt of Comcare payments in respect of a disease or illness diagnosed on 6 February 1984.
Furthermore, in its application of the law, the SSAT concluded that "it was not in dispute that Mrs Banks is in receipt of compensation under the Compensation (Commonwealth Government Employees) Act 1971, in respect of tenosynovitis of flexor pollicus longus, the latter being a disease or illness arising out of her employment with the Australian Federal Police." (Document T2 Folio 6).
Issues to be DecidedThe only issues for the Tribunal to decide were:-
whether Mr Banks was entitled to age pension; and
whether part of the compensation payment received by Mrs Banks could be disregarded in whole or in part because of "special circumstances".
Contentions and submission of the Parties
Mr Banks submitted that:-
"Since June 15, 2000, the respondent's representatives had attempted to obscure the facts of the mishandling of an application by the applicant for the grant of a partial aged pension. The cumulative efforts to conceal bureaucratic incompetence on their parts have multiplied the distasteful issues that have arisen. The situation at the present time has escalated from one of a simple adversarial nature to the publication by Centrelink and associated bodies of gross inaccuracies that clearly misinterpret the law."
Mr Banks submitted that there had been a "malfunction" in Centrelink administration in processing and reviewing his claim for age pension. Mr Banks expressed frustration and concern in terms of what he contended was inconsistent and inaccurate advice he received from a number of Centrelink staff members over time – including statements, he submitted, that challenged his integrity.
Mr Banks said that he had been originally told by a Mr Ward of Centrelink that he would qualify for age pension and that, based on his income, he would be paid $12 per fortnight. Mr Banks contended that he was not made aware by Centrelink that payment of his age pension would be dependent on any information Comcare might provide.
However, a Section 1177 "Preliminary Notice" was issued under the Social Security Act 1991 and sent by Centrelink on 26 July 2000 to Comcare Australia. The notice referred to obligations an insurer may have should compensation be paid to a recipient of social security entitlements.
In addition, a "Compensation Advice Notice" had been sent by Centrelink on 27 June 2000 to Mrs Banks, his wife.
The status of the "Compensation Advice Notice" and the "Preliminary Notice" had been subject to internal review with the final decision being made by an Authorised Review Officer ("ARO") on 18 December 2000. The ARO decided that there was no lawful authority to issue either notice and that they be set aside. Mr Banks submitted that the issue of these notices was another example of malfunction in Centrelink administering and processing his claim for age pension. The decision of the ARO was now subject to an application for review by his wife in separate proceedings before the Tribunal (Q2000/1198).
It was Mr Banks' contention that the ARO had erred in law in finding that the income replacement payments paid to his wife were periodic payments of compensation within the meaning of the Social Security Act (Document T37 Folio 131).
Mr Banks submitted that the outcome of the inaccurate and inconsistent Centrelink advice and review of his claim was that he incurred personal distress, anxiety and inconvenience.
Mr Banks further submitted that the failure of Centrelink personnel to understand and to apply the Social Security legislation, in all his circumstances, had adversely affected his age pension interest.
Mr McQuinlan, for the respondent, submitted that an "income and investments" form lodged on 15 June 2000 (Document T6 Folio 59) indicated that the applicant's wife was a Commonwealth superannuant receiving $876.19 per week. A letter from Comcare dated 6 July 1999 (Document T6 Folio 69) was also lodged and this indicated that Mr Banks' wife was receiving compensation of $398.19 per week.
In addition, Mr McQuinlan referred to a letter (Document T15) sent to Mr Banks on 11 July 2000 advising him that his claim for age pension had been rejected as his wife's Comcare payments were to be treated as a direct deduction. Because the compensation of $796.38 per fortnight exceeded the maximum age pension rate of $325.70 per fortnight, no pension was payable.
Mr McQuinlan submitted that the following reasoning, adopted in rejecting Mr Banks' claim, was the correct application of the statutory regime:-
"…although your combined income is under the threshold of $47229 you do not qualify for an Age Pension. Periodic compensation payments in some circumstances are not treated as ordinary income, but as a direct deduction. Therefore the amount of compensation (Comcare) received by a member of a couple reduces the pension rate dollar for dollar. As the Comcare amount of $796.38 per fortnight exceeds the maximum pension rate of $325.70 per fortnight, this means that no pension is payable." (Document T15 Folio 93)
In response to a Tribunal question, the applicant acknowledged that their financial circumstances were not straitened.
The respondent referred to the fact that following Mr Banks' claim for age pension, Centrelink became aware of further income information –
a Comcare letter (19 June 2000, Document T9 Folio 77) that indicated Mrs Banks, at that time, received a compensation entitlement of $387.37 per week; and
a Comsuper letter (17 July 2000, Document T21 Folio 104) that indicated Mrs Banks was receiving fortnightly incapacity benefits under subsection 131(4) of the Safety Rehabilitation and Compensation Act 1988 and that this was for lost salary and wages due to her compensable injury.
It was the respondent's contention that if a finding was made by the Tribunal that the compensation payments made to Mrs Banks were compensation for the purposes of the Social Security Act 1991, and that those payments exceeded the fortnightly rate of age pension, the inevitable conclusion was that Mr Banks was not entitled to age pension, by virtue of the reduction that applied under subsection 1168(3A). Accordingly, it followed that Centrelink had correctly rejected his claim for age pension.
Furthermore, the respondent stated that, whilst Section 1184 of the Act ameliorated the compensation legislation by providing a discretion to regard some or all of a compensation payment. However, he stated that if strict application of these provisions resulted in an outcome that was unfair, unintended or unjust, the application of such a discretion was not justified in Mr Banks' case. In addition, because the level of combined income received by Mrs Banks (Comcare, Comsuper) exceeded $45,000 per annum, severe financial hardship could not be construed as a "special circumstance" in their case. Accordingly, it was the respondent's contention that there were no special circumstances which would warrant disregarding some or all of the compensation payments made to Mrs Banks pursuant to Section 1184 of the Social Security Act 1991.
Consideration of the IssuesThe objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times.
Section 25 of the Administrative Appeals Tribunal Act 1975 provides the Tribunal with the jurisdiction to review decisions made by the SSAT. Section 43 of the Administrative Appeals Tribunal Act enables the Tribunal to affirm, vary or set aside the decision under review and make a decision in substitution for the decision so set aside. The width of the Administrative Appeals Tribunal's function was put succinctly by the Full Federal Court in Banovich v Repatriation Commission (1986) 69 ALR 395:-
"The task of the Administrative Appeals Tribunal, in reviewing a decision relating to an application for a pension, is to make the decision which the primary decision-maker ought to have made upon the basis of the evidence before the Tribunal. Subject to any change in the relevant law, the Tribunal should put the applicant in the position in which he or she was entitled to be put at the time of the primary decision."
However, as Mason CJ of the High Court of Australia explained in Australian Broadcasting Tribunal v Bond and Others (1990) 94 ALR 11 at p 23, the meaning of "decision under review" must be more narrowly construed. The Chief Justice was considering the nature of a reviewable decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth). He said at p 23:
"To interpret 'decision' in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process.
The policy arguments do not, in my opinion, call for an answer different from that dictated by the textual and contextual considerations. That answer is that a reviewable 'decision' is one for which provision is made by or under statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment."
and
"…To interpret 'decision' in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process."
Applying the common law principles to the statutory provisions for the review of a decision by the Administrative Appeals Tribunal, it is quite clear that the decision that must be the subject of Mr Banks' application for review is the decision of the SSAT that he was not entitled to age pension. The assessment of Mr Banks' application for age pension and internal review procedures were the steps in a course of reasoning leading to the final decision that is determinative of the issue of fact falling for consideration.
In the Second Reading Speech of the Social Security Bill 1990, the Minister for Community Services and Health stated that the Part dealing with "Review of Decisions" was being introduced into Social Security legislation by the Social Security (Review of Decisions) Act 1988. In the Second Reading Speech of the latter Bill, the Minister for Social Security said:-
"The Bill marks a new stage in Social Security administration in this country…..It provides for all levels of administrative review, both internal and external….This Bill marks an important step in development of the Department of Social Security's own decision making. It codifies and more precisely defines the Department's powers and duties to review decisions and establishes the office of 'authorised review officer'. A determinative first tier external review tribunal [the Social Security Appeals Tribunal] will provide a greater contribution to administrative efficiency and effectiveness in achieving legislative policy objectives by providing consistent guidance in the proper exercise of statutory powers by departmental decision makers." [House of Representatives, Hansard, 29 September 1988]
The Minister's Second Reading Speech makes it quite clear that the SSAT has determinative powers with respect to reviewable decisions.
The Tribunal finds that the reasoning process used by the SSAT, where the relevant facts are applied to the questions of law prescribed by the Social Security Act 1991 in relation to Mr Banks' eligibility for age pension, is correct (Document T2 Folios 6, 7, 8).
Centrelink had information before it which indicated that Mrs Banks received compensation payments from Comcare (see paragraphs 19, 20) and these payments affected his eligibility for age pension;
Section 17(2) of the Social Security Act defines "compensation" to mean:
"For the purposes of this Act, compensation means:
(a) …..(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)…..;
The Tribunal has considered the meaning of "compensation". In Re Martin and Secretary, Department of Social Security (1993) 30 ALD 637, the Tribunal stated:
"The question whether particular payments are 'income' or 'compensation' for the purpose of deciding qualification for, and payability of pensions under the Act is to be determined objectively having regard to the factual circumstances in which those payments were made and to the relevant provisions of the Act: Secretary, Department of Social Security v Dellis (unreported, Federal Court of Australia (Neaves J), 7 September 1990)…
In this case the payments were made to the applicant under the Workers' Compensation and Rehabilitation Act 1981 (WA) solely by reason of her being unfit for work as a result of her work-related injury."; [Tribunal emphasis]The Tribunal agrees with the finding by the SSAT in applying common law principles to the statutory regime. That is, Mrs Banks' Comcare payments were compensation within the meaning of the Social Security Act. The disease or illness arising out of her employment with the Australian Federal Police resulted in her receiving Comcare payments "solely by reason of her being unfit for work as a result of her work-related injury";
The Comcare payments Mrs Banks receives were "periodic compensation payments" and these were now paid to her under the Safety Rehabilitation and Compensation Act 1988; and
Under subsection 17(1) of the Social Security Act, age pension is defined as a "compensation affected payment". Accordingly, Mr Banks has claimed a compensation affected payment.
Subsections 1168(1) and 1168(3A) of the Social Security Act further apply to the question of Mr Banks' eligibility for age pension.
"1168(1) Subject to subsection (4), (5), (6) and (7), if:
(a)a person, or the person's partner, receives a series of periodic compensation payments; and
(b)the person receives or claims a compensation affected payment for the periodic payment period; and
(c)the person was not, at the time of the event that gave rise to the entitlement of the person, or the person's partner, to the compensation, receiving a compensation affected payment referred to in paragraph (b);
the rate of the person's compensation affected payment is to be reduced, in accordance with this section.
1168(3A) If:
(a) a person is a member of a couple; and(b)the person's partner does not receive or claim a compensation affected payment, or a compensation affected pension under the Veterans' Entitlements Act;
the person's fortnightly rate of the compensation affected payment is reduced by the fortnightly rate of periodic compensation."
The Tribunal finds that Mr Banks' factual situation satisfies all subsections of subsection 1168(1). Accordingly, Mr Banks' claim for age pension is affected by Section 1168 – in particular, the rate of age pension as prescribed in subsection 1168(3A):
Mr Banks is a member of a couple; and
Mrs Banks does not receive an age pension or a "compensation affected payment".
Accordingly, the Tribunal concludes that Mr Banks' fortnightly rate of age pension ("compensation affected payment") would be reduced by Mrs Banks' fortnightly rate of "periodic compensation".
The Tribunal concludes that the correct application of Mr Banks' case to the statutory regime imposed by the Social Security Act is that the SSAT decision not to pay Mr Banks' age pension was correct. That is, the rate of his pension would be reduced to nil due to his wife receiving Comcare payments.
Section 1184 of the Social Security Act provides:
"1184(1) For the purposes of this part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case."There is no statutory definition of "special circumstances" for the purpose of Section 1184 of the Act and the Tribunal has consistently adopted the approach applied in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 which referred to circumstances which, in their context, are "unusual, uncommon or exceptional". Financial hardship is, of course, a relevant factor but, before it can constitute "special circumstances", it must be unusual or exceptional hardship in the context of the Act – that is, legislation whose object is to provide benefits for persons who will normally be in straitened financial circumstances: Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 at 699-700.
Mr Banks has acknowledged that their financial circumstances are not straitened (see paragraph 22). The Tribunal concludes, in having regard to all of the circumstances of Mr Banks' situation and the object and policy of the Social Security Act, that "special circumstances" do not apply such that whole or part of Mrs Banks' compensation payments can be treated as not having been made.
Furthermore, the effect of Mrs Banks receiving "periodic compensation payments" has the same affect on Mr Banks' eligibility for age pension as it does on other persons in the assessment of their entitlement to age pension, under the statutory regime. The outcome for Mr Banks is not one unintended by the Social Security Act and so does not warrant the description of "special circumstances" – see Groth v Secretary, Department of Social Security (1986) 40 ALD 541.
Many of Mrs Banks' claims, in terms of mal-administration, have little application to the decision under review. Rather, these issues would have been relevant if Mr Banks had actually been paid an age pension (e.g. $12 per fortnight). The findings by the Tribunal indicate that if this had occurred then Mr Banks would have incurred an overpayment and the Commonwealth would have no alternative other than to recover the debt owed to it. In such a situation, Mr Banks' claims in terms of mal-administration would have to be considered in terms of waiver of the debt under the "administrative error" provisions of the Social Security Act. However, Centrelink's internal review processes prevented an overpayment being made so that this situation did not arise.
In addition, Mr Banks' claims in relation to the validity of the "Preliminary Notice" and the "Compensation Advice Notice" do not affect the finding that he was not entitled to age pension. These Notices dealt with compensation provisions and rights and obligations for Mrs Banks and an inter-departmental notice on the implications of lump sum compensation payments for social security entitlements (including preclusion periods) respectively. However, Centrelink had financial data available on which to determine Mr Banks' age pension entitlement quite independent of these two notices (see paragraphs 19, 20 and 21).
For all of the above reasons, the Tribunal affirms the decision under review. Mr Banks was not entitled to age pension at the time his claim was made.
I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Emma Oettinger
AssociateDate/s of Hearing 13.2.01
Date of Decision 12.3.01
Rep. for the Applicant Applicant appeared in person
Solicitor for the Respondent Mr R McQuinlan
1
2
0