Bersee and Secretary, Department of Family and Community Services

[2003] AATA 201

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 201

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2002/341

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Marie Bersee

Applicant

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal Mr D.J Trowse (Member)

Date28 February 2003

PlaceAdelaide

Decision The decision under review is affirmed.

Mr D.J Trowse
     (Signed)
     Member

CATCHWORDS – SOCIAL SECURITY – applicant in receipt of Dutch pension – applicant made compulsory contributions to a fund established by the Netherlands government for the purpose of receiving age pension when she attained age of 65 years – whether her contributions to the overseas fund should be deducted from the Dutch pension in the assessment of her income means test – definition of “income stream” – decision affirmed

Social Security Act 1991; ss8, 9(1), 1072
Superannuation Industry (Supervision) Act 1993
Retirement Savings Accounts Act 1997
Life Insurance Act 1995

REASONS FOR DECISION

28 February 2003 Mr D.J Trowse (Member)  

1.      This is an appeal by Mrs Marie Bersee (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 5 September 2002 which affirmed a decision of a delegate of the respondent dated 5 November 2001, which, in turn, had been affirmed by an authorised review officer on 6 June 2002. The matter to be addressed is whether, for the purpose of assessing the applicant’s entitlement to the Australian age pension, an amount of overseas pension being received by her can be adjusted to allow for the contributions she made towards the payment of that pension.

2. At the request of the applicant, the Tribunal has proceeded to a decision based on the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.

3.      Before migrating to Australia in 1963, the applicant resided in the Netherlands where, during the period 1957 to the time of her departure, she made compulsory contributions to a fund established by the Government of the Netherlands. The purpose of the fund was the provision of aged pensions for all citizens upon their attainment of 65 years of age. Notwithstanding her ongoing presence in Australia, the applicant continues to receive the pension from the Netherlands (the Dutch pension), which is payable at the annual rate of 4015 Euros.

4.      The applicant maintains that part of the Dutch pension being received represents her own contributions being returned to her and, on that basis, that portion should not be regarded as income for Australian pension purposes. Examples demonstrating similar situations where deductions have been permitted for the purchase price, that is, the contributions made, have been cited by the applicant who sees the denial of her claim as being discriminatory. The appeal to this Tribunal was lodged in the hope that the legislation could be interpreted in her favour or, that by persistent appeals from affected parties, the legislation may be amended.

5. The definitions of income and ordinary income as the appear in section 8 of the Social Security Act 1991 (the Act) confirm that the Dutch pension constitutes an income amount earned, derived or received by the applicant. Furthermore, the provisions of section 1072 of the Act state that a reference to a person’s ordinary income is a reference to a person’s gross ordinary income from all sources without any reduction, other than a reduction under Division 2 or 3 which relate to business income and income from income streams. In the current circumstances, the Tribunal is satisfied that no reduction is permissible unless it can be shown that the Dutch pension arises from an arrangement that meets the criteria of being an income stream. In that event, a reduction calculated on the foundation of amounts contributed and the applicant’s life expectancy will ensue.

6.      The phrase “income stream” is defined in subsection 9(1) of the Act in the following terms –

“income stream means:

(a) an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or

(b) an income stream arising under a public sector superannuation scheme (within the meaning of that Act); or

(c) an income stream arising under a retirement savings account; or

(d) an income stream provided by a life insurance business (within the meaning of the Life Insurance Act 1995); or

(e) an income stream provided by a friendly society; or

(f) an income stream designated in writing by the Secretary for the purposes of this definition, having regard to the guidelines determined under subsection (1E);

but does not include any of the following:

(g) available money;

(h) deposit money;

(i) a managed investment;

(j) a listed security;

(k) a loan that has not been repaid in full;

(l) an unlisted public security;

(m) gold, silver or platinum bullion.”

7.      The Tribunal makes the following findings as to the arrangement whereby the applicant received the Dutch pension –

(a)  bearing in mind the overseas location of the payer, the arrangement is not regulated by the Superannuation Industry (Supervision) Act 1993.

(b)  the Dutch pension does not arise under a public sector superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993.

(c)  cognizant of the meaning given to a retirement savings account in subsection 9(1) of the Act and the referral to the Retirement Savings Accounts Act 1997, the receipt of the Dutch pension does not arise under a retirement savings account.

(d)  mindful of the definitions of a life insurance business within the meaning of the Life Insurance Act 1995 and a friendly society in subsection 9(1) of the Act, the monies being received from the Netherlands are not being provided either by a life insurance business or a friendly society.

8.       As to the authority contained in part (f) of the definition of income stream, the Tribunal accepts the advice that no instrument has been determined under subsection 9(1E) of the Act and, thus, the ability to designate is not currently available to the Secretary.

9.      It is the conclusion of the Tribunal that the receipt of the Dutch pension does not answer the description of an income stream and, for that reason, no reduction for contributions made is allowed in the assessment of the applicant’s ordinary income test. Also, the Tribunal has considered the terms and conditions of an agreement between Australia and the Kingdom of the Netherlands on the subject of Social Security, and it is unable to detect any provision in that document which authorises a reduction of the kind being sought by the applicant.

10.     Unfortunately for the applicant, the legislation as it stands appears to disadvantage those citizens who have made overseas contributions towards their ultimate receipt of retirement pensions. This position can only be rectified by a change in the legislation.

11.     For the reasons enunciated, the Tribunal affirms the objection decision under review.

I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of Mr D.J Trowse (Member)

Signed:         .......................................................................................
  Associate

Date/s of Hearing  13 February 2003
Date of Decision  28 February 2003
Counsel for the Applicant         In person
Solicitor for the Applicant          -
Counsel for the Respondent     Mr J Underwood
Solicitor for the Respondent     Centrelink