Barratt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 207

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 207

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No 2007/1179    

GENERAL ADMINISTRATIVE DIVISION		)
Re		PETER BARRATT

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Ms Robin Hunt, Senior Member

Date18 March 2008

PlaceSydney

Decision The decision under review that Mr Barratt does not qualify for the pension bonus is affirmed.

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

Ms Robin Hunt
  Senior Member

CATCHWORDS

SOCIAL SECURITY – Pension Bonus Scheme – requirements for registration as a member of the Pension Bonus Scheme – applicant did not meet requirements when registered as a member – applicant received age pension before making claim for payment of pension bonus – applicant did not accrue at least one year bonus period while registered – applicant does not qualify for the pension bonus – decision under review affirmed 

Social Security Act 1991 ss 92C, 92H, 92T, 92V

Social Security (Administration) Act 1999 sub-s 23(1)

REASONS FOR DECISION

18 March 2008 Ms Robin Hunt, Senior Member   

Summary

1.     Mr Peter Barratt registered for the Pension Bonus Scheme on 24 November 1999.  When he came to claim payments under the scheme in September 2006 he was told he did not qualify. After considering Mr Barratt’s circumstances and the timing of events related to the bonus claim, I have come to the unfortunate conclusion that Mr Barratt does not qualify for the pension bonus. This means his review is unsuccessful.

Issue

2.     The issue for decision is whether Mr Barratt is qualified to receive payment of the pension bonus.

Background

3.     Broadly speaking, the pension bonus scheme provides a lump sum payment to people who qualify for an age pension but defer claiming the pension and continue to work. The pension bonus is paid when they stop work and claim the age pension and bonus. However, there are several pitfalls which may prevent an otherwise suitable recipient from qualifying for the bonus.

4.     Mr Barratt believes he is entitled to the payment. As he was born on 1 January 1930, he reached the qualifying age for the age pension on 1 January 1995.  A chronology of relevant events is set out in the respondent’s facts and contentions. Mr Barratt does not dispute these occurrences except that he says he stopped working on 18 September 2000 whereas the Secretary says he stopped working on 1 September 2000 for pension purposes as his paid leave ended on that date. He also disputed the nature of his request for a review on 8 December 1999, saying he was querying the qualification period whereas the delegate treated his query as concerning the commencement date of his registration.

5.     Mr Barratt applied to register as a member of the pension bonus scheme on 24 November 1999. When Mr Barratt registered for the pension bonus scheme, he was working for North Sydney Council and had been since 3 April 1991.  Mr Barratt was unwell for some time before he stopped working. On 30 August 2000, the council wrote a letter confirming that he had been absent from his workplace since 30 March 2000 because of a frozen shoulder.  Although he could no longer perform his duties, Mr Barratt continued to work for North Sydney Council until 18 September 2000, according to the certificate from the council which he furnished.

6.     The applicant did not seek payment of the age pension until 11 September 2000 because he was still employed up to around that time.  Although a certificate from his employer shows he was working until 18 September 2000 and a letter addressed to Centrelink shows he was paid up to 1 September 2000, Mr Barratt’s application for the age pension, lodged on 11 September 2000, was granted and backdated to 31 August 2000. Mr Barratt applied for payment of the pension bonus on 13 September 2006, over six years later. On 20 October 2006, Centrelink wrote and advised him that his bonus claim was rejected.

Consideration of evidence and findings

7.     Mr Barratt is a person who kept working beyond pension age and who registered for the pension bonus thinking he would be entitled to it for this reason. The rules that regulate the pension bonus are not easy to understand and sometimes adversely affect people who would be eligible for the bonus if they had understood and observed all the requirements. 

8.     Mr Barratt received a letter from Centrelink saying he was registered but, when he came to claim payment six years later, he found that he should never have been registered as a member of the pension bonus scheme as he applied outside the statutory period.  An authorised review officer later decided Mr Barratt’s registration should be backdated despite his late application for registration but Mr Barratt still faced other hurdles.

9.     Mr Barratt gave oral evidence at the hearing that he heard about the pension bonus scheme from an acquaintance and decided to register for it in 1999. He was annoyed that he never received any further information about the scheme although the Centrelink officer with whom he spoke said he would be sent a seniors’ magazine and other information. He gave evidence that he never received any information or any magazine. He did receive a letter dated 25 November 1999 advising he was registered as a member of the scheme from his date of application.  He also received a reply to his request for a review which confirmed his date of registration as a member on 24 November 1999 although he said that was not what he wanted reviewed. He had wanted to know if he satisfied the qualifying period. When he requested review on 8 December 1999 of his registration, the delegate treated his query as concerning the commencement date of his registration.

10.   Mr Barratt said he continued to work until 18 September 2000, in the sense that he was still employed, although he could no longer put in work hours because of his frozen shoulder. He said he used up his sick leave, annual leave and long service leave entitlements before his employer ceased payments to him in September 2000.

11. The provisions relating to pension bonus are set out in Part 2.2A of Chapter 2 of the Social Security Act 1991 (the Act).   Section 92C sets out the criteria for qualification for a pension bonus. Section 92H deals with the time requirements for registration as a member of the scheme.

12.      The closing date for registration in Mr Barratt’s case was 13 weeks after 1 July 1998 as he qualified for the age pension in 1995. Mr Barratt lodged his application for registration on 24 November 1999, which is outside the specified period. However, there is some discretion available and, on 30 November 2006, the review officer backdated Mr Barratt’s registration to 1 July 1998 and the Social Security Appeals Tribunal (SSAT) agreed with the decision. Although Mr Larcombe for the Secretary argued that the discretion to extend the time for registration was not sufficiently broad to backdate Mr Barratt’s registration in 1999, I do not find the SSAT’s decision was wrong in this respect. I agree with the SSAT’s decision that, as Mr Barratt’s circumstances fall within subsection 92T(a)(ii), the first bonus period began on 1 July 1998 and concluded on 30 June 1999.  This means, in my view, that Mr Barratt does satisfy paragraph (d) of section 92C.

13.      However, Mr Barratt still did not qualify for a pension bonus because of additional requirements under section 92C. In order to qualify, a person must satisfy all the paragraphs of section 92C (a) to (f). Mr Barratt satisfies some of these paragraphs but fails others.

14.      Mr Barratt, in consequence of his application on 11 September 2000, was granted the age pension with payments backdated to 31 August 2000. This means that when he applied for payment of the pension bonus on 13 September 2006, he already had been receiving the age pension for approximately six years. Section 92C, paragraph (b), provides the person must not have received the age pension at any time before making a claim for the pension bonus. As I have already said, it is clear Mr Barratt had been receiving the age pension for about six years before he claimed the bonus. He definitely infringes paragraph (b).

15.      Mr Larcombe defended the Centrelink officer who arranged payment of the age pension to Mr Barratt, saying that, as Mr Barratt had no income upon ceasing work, he needed the pension. It seems that the bonus was not discussed at the time but, if it had been, Mr Barratt’s registration date at the time was 24 November 1999 and he had not accrued at least one full-year bonus period while registered, which is required by s 92C, paragraph (d).  This was because Mr Barratt applied for the age pension in September 2000, less than 9 months after registration.

16.       When a review officer again looked at Mr Barratt’s situation, in November 2006, the officer decided that the registration should be backdated to 1 July 1998. By this time, it may have been considered too late to remedy the previous non-compliance with section 92C paragraph (d). By operation of subsection 92T(1) paragraph (a), Mr Barratt’s first full year bonus period then began on 1 July 1998 and concluded on 30 June 1999.

17.      Although Mr Barratt had not met the accrual requirement at the time of application for the bonus payment, having been registered on 24 November 1999, the later review decision backdating his registration would enable a backdated decision that he had actually accrued at least one full-year bonus period when he applied for the age pension in September 2000. Mr Barratt ceased work in March 2000 although he was still paid by his employer until September 2000. This means he was still performing qualifying work for over one year after his backdated registration on 1 July 1998.

18. The SSAT found, on the other hand, that Mr Barratt was excluded from qualifying by subsection 23(1) of the Social Security (Administration) Act 1999 (the Administration Act). For his second pension bonus period to accrue, he had applied too early, according to the SSAT, because the lodgement period for a claim by the person for pension bonus is the period of 13 weeks beginning at the end of that bonus period. His last bonus period commenced on 1 July 1999 and he ceased to perform work duties before 1 July 2000. I further note, however, that under subsection 23(1) paragraph (b) of the Administration Act, if a person's last bonus period is a part‑year period, the Secretary may allow a longer period. This discretion was not exercised. The SSAT instead examined the work test.

19.      Under subsection 92V(1) of the Act, a person passes the work test for a part‑year period of the person's accruing membership of the pension bonus scheme if the person meets certain tests, including the requirement that he or she demonstrate that the total number of hours gainfully worked by the person during that period was at least the pro‑rated number of hours. Mr Barratt may not meet this test as he was on leave rather than gainfully employed for the period. Still, in my opinion, Mr Barratt did accrue at least one full year bonus period while registered as a member of the pension bonus scheme before he applied for the payment as this accrued between July 1999 and July 2000.

20. I have not further explored the effect of subsection 23(1) of the Administration Act and subsection 92V(1) of the Act on section 92C paragraph (d) of the Act because, in any event, Mr Barratt still did not comply with section 92C, paragraph (b), as he had been receiving the age pension for six years at the time of his claim for payment of the pension bonus. As Mr Barratt had been receiving the age pension for approximately 6 years, he does not qualify for the pension bonus.

21.      The SSAT recommended consideration be given to making Mr Barratt payment under the scheme for compensation for detriment caused by defective administration. According to the Secretary’s facts and contentions, Mr Barratt was advised on 11 October 2007 that such a compensation claim was unsuccessful. The Secretary advised he will forward another claim if the present review is unsuccessful.

Conclusion

22.      The present review is unsuccessful as I have found Mr Barratt was receiving the age pension before he applied for the pension bonus. This occurred although he had been registered as a member of the scheme since 1 July 1998, continued to work in gainful employment until March 2000 and was paid wages by his employer until September 2000.  Mr Barratt sought review of his registration date or qualifying period on 8 December 1999. He obtained the result he had hoped for as to the qualifying period or registration date on 30 November 2006 when an authorised review officer found it should be backdated although rejecting his claim on another basis. The SSAT agreed but I have found that Mr Barratt did meet the test required by subsection 92C paragraph (d) once his registration was backdated. This means he only fails the tests in section 92C because he had been receiving the age pension for some years. In these circumstances, it may be that an act of grace payment is warranted. This is not up to me to decide.

Decision

23.      The decision under review that Mr Barratt does not qualify for the pension bonus is affirmed.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Robin Hunt, Senior Member

Signed:.......................[Sgd]..............................
  Jennifer Wong, Associate

Date of Hearing        15 February 2008
Date of Decision        18 March 2008
Solicitor for the Applicant                Self-represented

Solicitor for the Respondent          Mr James Larcombe, Centrelink Legal Services Branch