Barnard and Secretary, Department of Social Services (Social services second review)
[2016] AATA 436
•28 June 2016
Barnard and Secretary, Department of Social Services (Social services second review) [2016] AATA 436 (28 June 2016)
Division
GENERAL DIVISION
File Numbers
2015/4918
2015/4919
Re
Secretary, Department of Social Services
APPLICANT
And
John Barnard
Lynette Barnard
RESPONDENTS
File Numbers
2015/5931
2015/5932
2015/59342015/5935
Re
John Barnard
Lynette Barnard
APPLICANTS
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Deputy President J W Constance
Date 28 June 2016 Place Sydney 1. The following decisions of the Social Services & Child Support Division of the Administrative Appeals Tribunal made 14 August 2015 in reviews number 2015/S082022 and 2015/S082077 will be set aside:
· “the decisions to cancel Mr Barnard and Mrs Barnard’s seniors health cards on 31 October 2014 were correct”;
· “there are no energy supplement debts for the period 20 September 2012 to 20 September 2014”.
2. The decisions referred to in the preceding paragraph will be remitted to the Secretary, Department of Social Services for reconsideration in accordance with these reasons for decision.
3. The decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal made 14 August 2014 affirming the rejection of Mr and Mrs Barnard’s claims for seniors health cards on 14 February 2015 will be affirmed.
.............[sgd]........................................
J W Constance
Deputy PresidentCATCHWORDS
SOCIAL SECURITY - seniors health card - energy supplement payment - cancellation of card where applicant does not meet income test - whether cards automatically cancelled by force of section 106A - debt arising due to overpayment of benefit - whether debt should be waived by reason of special circumstances - decision set aside and remitted
SOCIAL SECURITY - seniors health card - whether application for card should be rejected - where there has been a change in legislation - where applicant unaware of change in legislation - decision affirmed
LEGISLATION
Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB
Evidence Act 1995 (Cth) s 16(1)
Social Security Act 1991 (Cth) ss 1061ZG, 1071, 1223(1), 1236, 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 6A(1), 86, 104, 105, 106A, 123(2)Social Security Legislation Amendment (Concessions Cards) Act 2001 (Cth)
CASES
Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115
Groth v Secretary Department of Social Security [1995] FCA 1708
Ivor Biddlecombe and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 451Transport Accident Commission v Treloar (1992) 1 VR 447
SECONDARY MATERIALS
D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) 62-3
REASONS FOR DECISION
Deputy President J W Constance
28 June 2016
INTRODUCTION
On 20 September 2012, and for some time prior to that date, Mr and Mrs Barnard each held a seniors health card issued in accordance with the provisions of the Social Security Act 1991 (Cth), (“the Social Security Act”).
Between 20 September 2012 and 20 September 2014, Mr and Mrs Barnard each received from Centrelink a seniors supplement in respect of their energy bill. This supplement was payable to them as holders of the cards. The payments were made at quarterly intervals.
In October 2014 Mr and Mrs Barnard received a letter from Centrelink advising them that their 2012/2013 combined annual adjusted income may have exceeded the maximum allowable for qualification for the cards.
On 31 October 2014 Mr and Mrs Barnard met with a Centrelink officer and discussed their situation. They were informed that their cards would be cancelled as their combined income exceeded the qualifying income limit and that, as a consequence, action to recover the overpayment of the energy supplement would be considered. The Secretary made a decision purporting to cancel both cards as of that day.
On 26 January 2015 Mr and Mrs Barnard each lodged a claim for a seniors health card. Both claims were rejected on 14 February 2015.
On 10 February 2015 Centrelink raised a debt against each of Mr Barnard and Mrs Barnard in the amount of $1862.65, being the amount of the energy supplement paid to each of them between 20 September 2012 and 20 September 2014.
THE DECISIONS UNDER REVIEW
On 14 August 2015 the Social Services and Child Support Division of the Tribunal made the following decisions:
(a)“the decisions to cancel Mr Barnard and Mrs Barnard’s seniors health cards on 31 October 2014 were correct”;
(b)“the decisions to reject Mr Barnard and Mrs Barnard’s claims for seniors health cards on 14 February 2015 were correct”; and
(c)“there are no energy supplement debts for the period 20 September 2012 to 20 September 2014”.[1]
[1] Exhibit R1 p.2.
The Secretary has applied to the Tribunal to review the decisions referred to in paragraphs 7(a) and 7(c) above. These applications are the subject of matters 2015/4918 (in respect of Mr Barnard) and 2015/4919 (in respect of Mrs Barnard).
Mr and Mrs Barnard have applied to review the decisions referred to in paragraphs 7(a) and 7(b) above. Mr Barnard’s applications are the subject of matters 2015/5931-5932. Mrs Barnard’s applications are the subject of matters 2015/5934 – 5935.
For the reasons which follow, the purported decision to cancel the seniors health cards on 31 October 2014 will be set aside on the basis that the cards had been cancelled by force of law prior to that date. As a consequence of this decision, the decision that there are no energy supplement debts payable by Mr and Mrs Barnard will also be set aside. The decisions rejecting their applications for seniors health cards will be affirmed.
WERE THE DECISIONS MADE ON 31 OCTOBER 2014, TO CANCEL THE SENIORS HEALTH CARDS ISSUED TO MR AND MRS BARNARD, CORRECT?
The application of section 106A of the Administration Act
It is not in dispute that at a time prior to 20 September 2012, both Mr and Mrs Barnard were qualified for a seniors health card.
Subsection 123(2) of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”) provides:
(2)A determination that a person is qualified for a concession card continues in effect until:
(a)a further determination under subsection 76(1B) or 77(1B) or section 86 or 87 takes effect; or
(b)the person ceases to be qualified under section 104 or 105.[2]
[2] Subsection 6A(1) defines “concession card” to include a seniors health card.
It is also not in dispute that neither Mr Barnard nor Mrs Barnard was qualified for a seniors health card on 31 October 2014. Section 1061ZG of the Social Security Act provides the rules for qualification, which include the requirement that the person “satisfies the seniors health card income test”. This test is set out in section 1071 of the Social Security Act. Neither Mr Barnard nor Mrs Barnard satisfied this test on 31 October 2014.
Subsection 86 of the Administration Act provides:
Cancellation--person not qualified
(1)If the Secretary is satisfied that a person to whom a concession card has been granted is not qualified for the card, the Secretary is to determine that the card is to be cancelled.
Note: The Secretary must cancel a seniors health card in certain circumstances if the Secretary makes a request under subsection 75(2) or (3) of the holder (about providing tax file numbers): see subsections 76(1B) and 77(1B).
(2)Subsection (1) does not authorise the Secretary to make a determination if:
(a)the card has been cancelled by the operation of another provision of the social security law; and
(b)the determination would take effect at or after the time at which the cancellation referred to in paragraph (a) would take effect.
On the basis that Mr and Mrs Barnard’s combined income exceeded the 2014 seniors card income limit and therefore they did not satisfy the rules set out in section 1061ZG, the Social Services and Child Support Division decided that the decision of the Centrelink officer to cancel the cards on 31 October 2014, was correct.
However, the decision that cancellation took place on 31 October 2014 does not appear to have taken into account the effect of subsection 86(2) referred to above. This subsection contemplates that a card may have been cancelled previously by operation of another provision of the social security law. In that circumstance the Secretary is not authorised to determine that a card has been cancelled.
Section 106A of the Administration Act provides:
Automatic cancellation on cessation of qualification
If a person who is the holder of a concession card ceases, otherwise than by virtue of section 104 or 105, to be qualified for the card, the card is cancelled by force of this section on the day on which the person ceases to be so qualified.
Counsel for the Secretary argued that section 106A is inconsistent with sub-section 123(2). Section 123(2) provides for the continuation of a determination that a person is qualified for a concession card until certain specified events occur, including cancellation by the Secretary under sections 86 and 87. Cancellation by force of section 106A is not included in sub-section 123(2).
If subsection 123(2) is interpreted as setting out an exclusive list of the circumstances in which a person’s qualification for a concession card ceases, section 106A has no effect. I do not accept that this was the intention of Parliament when section 106A was enacted, despite the existence of section 123 at the time.
Section 15AA of the Acts Interpretation Act 1901 (Cth) provides:
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
Subsection 15AB of the same Act provides in part:
Use of extrinsic material in the interpretation of an Act
(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
…
(b) to determine the meaning of the provision when:
…
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
The Administration Act was amended by the insertion of section 106A in 2001.[3] The Explanatory Memorandum accompanying the amending legislation refers to section 106A as follows:
Item 15 – Automatic cancellation on cessation of qualification
This item inserts proposed section 106A that deals with automatic cancellation when a person ceases, otherwise than because of section 104 or 105 of the Social Security (Administration) Act 1999, to be qualified for the concession card.
[3] The amendment was made by the Social Security Legislation Amendment (Concessions Cards) Act 2001 (Cth).
Clearly it was the intention of Parliament to add automatic cancellation (in the circumstances set out) as a means by which a person’s qualification for a concession card ceases to be in effect. Section 106A should be interpreted in accordance with the ordinary meaning of the words used and in the context in which they are used, to give effect to the intention of Parliament. This is so, notwithstanding the provisions of section 123.
This interpretation also accords with the principle stated by Professors Pearce and Geddes that “as a general principle, the courts have pointed out that they are not at liberty to consider any word or sentence as superfluous or insignificant. All words must prima facie be given some meaning and effect …… This principle is more compelling if the word (or phrase) in question has been added by amendment: Transport Accident Commission v Treloar [1992] 1 VR 447 at 462 per Brooking J”.[4]
[4] D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) 62-3.
If there was a cancellation by force of law prior to 31 October 2014, the purported cancellation on that date was of no effect.
WERE THE SENIORS HEALTH CARDS CANCELLED BY FORCE OF SECTION 106A OF THE ADMINISTRATION ACT PRIOR TO 31 OCTOBER 2014?
Sections 104 and 105 are not relevant to this application. It is necessary therefore to determine whether Mr and Mrs Barnard’s seniors health cards were cancelled by force of section 106A prior to 31 October 2014.
The Secretary did not argue that Mr and Mrs Barnard’s cards were automatically cancelled by reason of any factor other than their exceeding the combined income limit.
The test for determining whether a person satisfies the income test for a seniors health card is set out in section 1071 of the Social Security Act. It provides in part:
Seniors Health Card Income Test Calculator
Satisfying the seniors health card income test
1071-1This is how to work out whether a person satisfies the seniors health card income test at a particular time (the test time).
Method statement
Step 1. Work out the amount of the person’s adjusted taxable income for the reference tax year.
Step 2. Work out the person’s seniors health card income limit using point 1071-12
Step 3. Work out whether the person’s adjusted taxable income for the reference tax year exceeds the seniors health card taxable income limit.
Step 4. If the person’s adjusted taxable income for the reference tax year is less than the person’s seniors health card taxable income limit, the person satisfies the seniors health card taxable income test.
Step 5. If the person’s adjusted taxable income for the reference tax year is equal to or exceeds the person’s seniors health card taxable income limit, the person does not satisfy the seniors health card taxable income test.
Reference tax year
1071-2(1) In the ordinary case, a person’s reference tax year is:
(a)if the person has received a notice of assessment of his or her taxable income for the tax year immediately preceding the tax year in which the test time occurred – that immediately preceding tax year; or
(b)Otherwise – the tax year immediately preceding the tax year applicable under paragraph (a).
The “test time” is not confined to any period and thus can be applied on any day.
The only evidence before me as to the assessment of Mr and Mrs Barnard’s income is for the year ended 30 June 2014.[5] Their combined income for that financial year exceeded the limit for qualification for the seniors health card.
[5] Exhibit A1 pp.61 and 62.
Subsection 160(1) of the Evidence Act 1995 (Cth) provides that:
(1) It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted.
Assuming that the notices of assessment were posted to Mr and Mrs Barnard on 15 August 2014 (being the day after they were dated), it is presumed that they were received on 20 August 2014.
Applying section 1071 of the Social Security Act at any “test time” from and including 21 August 2014 until 30 June 2015, the “reference tax year” would have been the year ended 30 June 2014. On this basis, on the evidence before me, the earliest date on which I can be satisfied there was an automatic cancellation of Mr and Mrs Barnard’s cards was 21 August 2014, as it was only on 20 August 2014 that they are taken to have received their individual notice of assessment.
If in fact Mr and Mrs Barnard’s combined income exceeded the limit for qualification in years prior to the year ended 30 June 2014, it may be that the automatic cancellation occurred at some earlier time. The determination of an earlier date of cancellation will depend upon establishing when they received the relevant tax assessments and then determining the earliest “test time” at which they ceased to satisfy “the seniors health card income test”. As I do not have this information available to me I propose to remit these matters to the Secretary for reconsideration.
ARE THERE ANY ENERGY SUPPLEMENT DEBTS PAYABLE BY MR AND MRS BARNARD?
Subsection 1223(1) of the Social Security Act provides:
1223 Debts arising from lack of qualification, overpayment etc.
(1)Subject to this section, if:
(a)a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain the benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
As I have found that there was an automatic cancellation of the cards no later than 21 August 2014 there was an overpayment for the period at least from 21 August 2014 until 31 October 2014 when payments ceased. Whether there were additional overpayments will depend upon the determination of whether the automatic cancellation occurred at an earlier time.
SHOULD THE DEBTS BE WRITTEN OFF?
Subsection 1236 of the Social Security Act provides, in part:
1236Secretary may write off debt
(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
There is no evidence to suggest that any of the conditions set out in subsection 1236(1A) are met. I am not satisfied that the debts should be written off.
SHOULD THE DEBTS BE WAIVED BY REASON OF “SPECIAL CIRCUMSTANCES”?
Subsection 1237AAD of the Social Security Act provides:
1237AAD Waiver in special circumstances
The secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)The debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.
In Groth v Secretary Department of Social Security[6] the Federal Court said:
… The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss… it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied...
[6] [1995] FCA 1708.
Mr and Mrs Barnard argued that they were not made aware of the change in legislation which caused them to become ineligible to hold concession cards. It was not until September 2014 that they were notified by Centrelink that “there may be a problem”. During the time the Secretary claims they were ineligible, Centrelink continued to issue them with cards on an annual basis. They were aware of the need to advise Centrelink of any change in their circumstances, but by reason of their ignorance of the law they were unaware that their circumstances had changed in a manner relevant to their entitlement to hold the cards.
Unfortunately for Mr and Mrs Barnard there is nothing which takes their situation out of the “usual or ordinary case”. The gravamen of their complaint is that the system failed to notify them of the change in the law. However, ignorance of the law is not an uncommon situation and frequently causes people to be disadvantaged. I will refer to some decisions in this regard later in these reasons.
WAS THE DECISION TO REJECT MR AND MRS BARNARDS CLAIMS FOR SENIORS HEALTH CARDS CORRECT?
Mr and Mrs Barnard lodged their claims for new seniors health cards on 26 January 2015. It is not in dispute that at that time neither of them met the income requirement set out in section 1061ZG referred to earlier in these reasons. They accept that their combined income for the financial year ended 30 June 2014 was above the prescribed limit.
At the hearing before me Mr and Mrs Barnard confirmed the evidence they had given to the Social Security and Child Support Division. That evidence was summarised in the decision under review as follows:
At hearing Mr Barnard and Mrs Barnard explained that they formed the intention in early December 2014 to lodge further claims for the seniors health card. However, as they were very concerned about the potential of further energy supplement debts, they were abundantly cautious in collating the necessary paperwork to support their claims. There was also a considerable delay in Mrs Barnard’s workplace providing documentary evidence regarding her reduction in work hours. Mr Barnard and Mrs Barnard stressed that had they been advised by Centrelink at any time that holders of seniors health cards on 31 December 2014 would not be subject to a strict income test from 1 January 2015, they would have ensured that they had lodged their claims before 31 December 2014.[7]
I accept the further evidence of Mr and Mrs Barnard that at the time they applied for the cards they understood that it was their taxable income, and not their adjusted taxable income, that would determine their entitlement to the cards.
[7] Exhibit A1 p.5.
There is no provision in the Act to permit an application for a card to be backdated. This means that the law as it stood at 26 January 2015 must be applied.
Although Centrelink usually goes to considerable lengths to advise those in receipt of Commonwealth benefits of any changes in the law applicable, I accept that neither Mr nor Mrs Barnard was aware of the change and that had they been so aware, they would have lodged their applications in December 2014. Unfortunately, this does not assist them.
I agree with earlier decisions of this Tribunal[8] that “Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment”.[9]
[8] Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115; Ivor Biddlecombe and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 451.
[9] Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115 at para.17.
In this case it is clear that Mr and Mrs Barnard did not meet the requirements of the social security law so as to qualify them, or either of them, for the issue of a seniors health card.
The decision of the Social Security and Child Support Division in this regard will be affirmed.
CONCLUSION
(1) The following decisions of the Social Services & Child Support Division of the Administrative Appeals Tribunal made 14 August 2015 in reviews number 2015/S082022 and 2015/S082077 will be set aside:
·“the decisions to cancel Mr Barnard and Mrs Barnard’s seniors health cards on 31 October 2014 were correct”;
·“there are no energy supplement debts for the period 20 September 2012 to 20 September 2014”.
(2) The decisions referred to in subparagraph 50(1) will be remitted to the Secretary, Department of Social Services for reconsideration in accordance with these reasons for decision.
(3) The decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal made 14 August 2014, affirming the rejection of Mr and Mrs Barnard’s claim for seniors health cards on 14 February 2015, will be affirmed.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance. ...............[sgd]............................................
Associate
Dated 28 June 2016
Date of hearing 31 March 2016 Date final submissions received 31 March 2016 Counsel for the Applicant S Thompson Solicitors for the Applicant Sparke Helmore Respondent In person
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Procedural Fairness
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Statutory Construction
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Appeal
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Jurisdiction
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