Bertram and Repatriation Commission (Veterans' entitlements)

[2017] AATA 25

Bertram and Repatriation Commission (Veterans' entitlements) [2017] AATA 25 (17 January 2017)

Division:VETERANS' APPEALS DIVISION

File Number:           2016/1352

Re:Bruce Bertram

APPLICANT

AndRepatriation Commission

RESPONDENT

DECISION

Tribunal:Senior Member T. Tavoularis

Date:17 January 2017

Place:Brisbane

The decision under review is set aside. Instead, I find the Applicant is not precluded from payment under the Pension Bonus Scheme.

.....................[sgd]......................

Senior Member T. Tavoularis

VETERANS AFFAIRS – PENSION BONUS SCHEME – Applicant was precluded from pension bonus because of Centrelink payment of age pension – decision under review set aside – upon repayment Applicant should be considered eligible

Legislation

Veterans’ Entitlements Act 1986, ss 5Q, 45TB, 45TC, 45TJ, 45TK,

Social Security Act 1991, s 23

Cases

Rodham and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1331

Re Brignell and Secretary, Department of Family and Community Services [2003] AATA 177

Re Aged Care Services 27 (Kirralee) Pty Ltd and Secretary, Department of Health and Ageing [2009] AATA 840

Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority and 4 Seas Pty Ltd (party joined) (2004) 82 ALD 163

Re Winthrop and Smith and Minister for Immigration and Ethnic Affairs (1980) 2 ALD 873

Secondary Materials

Second Reading Speech of the Honourable Philip Ruddock of Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998

Bills Digest no. 179 2008-09: Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009

Pearce, D, Administrative Appeals Tribunal, (4^th ed, LexisNexis Butterworths, 2015)

REASONS FOR DECISION

Senior Member T. Tavoularis

17 January 2017

INTRODUCTION

1. This is an application for review of the decision of a delegate of the Repatriation Commission (“the Respondent”) dated 17 December 2015, which affirmed the decision that Mr Bruce Bertram (“the Applicant”) was ineligible to receive payment of a Pension Bonus or to otherwise continue participation in the Pension Bonus Scheme (“PBS”).

ISSUES

1. The issue before me essentially involves the question of whether the Applicant is entitled to payment of a Pension Bonus pursuant to the PBS even though he appears to breach the provisions of s 45TC(1)(e) of the Veterans’ Entitlements Act 1986 (“VEA”).

1. Specifically, does this Applicant qualify for receipt of the Pension Bonus in circumstances where he has received a social security pension or benefit – albeit a relatively miniscule amount – at any time after his special date of eligibility for an age service pension?

FACTS

1. The Applicant is an eligible veteran under the VEA. Upon attaining the veterans’ retirement age of 60 years on 6 December 2005, he applied to the Department of Veterans’ Affairs (“DVA”) for registration with the PBS in early 2006. On 1 February 2006, a delegate of the Respondent accepted the Applicant’s registration with the PBS. He continued operating his printing business until his retirement in December 2014 when he was 69 years of age.

1. On 22 December 2014, the Applicant lodged an application for payment of a pension bonus with DVA. In a letter dated 9 January 2015, the Applicant was advised that his application for a pension bonus payment had to be lodged in conjunction with a contemporaneous claim for the “service” pension.  He completed the necessary forms to claim the service pension.  Those additional forms (to claim the service pension) were received by DVA on 22 January 2015.

2. There followed two outcomes:

1. the claim for service pension was successful.  On 14 April 2015, the Applicant was granted the service pension with backdated effect from 22 December 2014, which is the date he lodged his application for payment of a pension bonus; and

2. the application for payment of the Pension Bonus was not successful and was rejected due to the purported receipt of a Centrelink “age” pension.   

Legislative Basis for the Respondent’s Decision

1. The Respondent found that pursuant to s 45TB of the VEA the Applicant’s “special date of eligibility” for an age service pension was on his 60^th birthday[1], being 6 December 2005. 

   [1] See – s 5QA(2) of VEA: ‘A man reaches pension age when he turns 60 years.’

1. The Respondent based its decision to render the Applicant ineligible for the Pension Bonus on the provisions of s 45TC of the VEA. That section provides:

   “(1)     A person is qualified for a pension bonus if:

   ……

   (e)  the person has not received:

   (i)a social security pension (other than a carer payment); or

   (ii)a social security benefit;

   …..

   at any time after the person’s special date of eligibility for an age service pension; …..”

2. The Respondent consequently found that upon the Applicant’s receipt of albeit a relatively small amount of Centrelink’s “age” pension from 11 to 22 December 2014, thus clearly after his “special date of eligibility”, it had the effect of wholly negating his eligibility for the PBS.

10. The Respondent referenced the provisions of s 45TJ of the VEA which provides:

“A person’s membership of the pension bonus scheme begins on the date on which the registration of that membership takes effect and continues until the membership is cancelled under this [VEA] Act.”

11. The Applicant’s membership of the PBS was purportedly cancelled pursuant to s 45TK of the VEA which provides:

“A person’s membership of the pension bonus scheme is cancelled if ….

(b)       in a case where the person is eligible for an age service pension – the person starts to receive:

(i)        a social security pension

….

... at any time after the person’s special date of eligibility for an age service pension”.

12. It is not in dispute that the nature of the payment received by the Applicant from Centrelink after his “special date of eligibility” clearly falls within the prohibitive payments contemplated by s 45TC(1)(e) of the VEA. Section 5Q(1) of the VEA defines a “social security benefit” and “social security pension” as having the same meaning as the Social Security Act. According to s 23 of the Social Security Act 1991 (“the SS Act”) a “social security pension” means: (a) an age pension.

THE APPLICANT’S CONTENTIONS
Acceptance of the DVA’s decision

13.  To his credit, the Applicant says “I accept DVA’s ruling … that the relevant legislation applies and that an 11 day Centrelink payment for the two weeks before my retirement was accepted by me.”[2]

[2] Exhibit 4: T Documents, p 1.

Accident, misunderstanding, misinformation

14.  His primary contentions derive from the present outcome being “the result of accident, misunderstanding and misinformation”. The Applicant contends that DVA failed to exercise caution in the process of his claim for age service pension.  He says:   

“I thought it prudent to maintain both “aged” and “service” pension entitlements in case one failed, and I advised both Departments that I was doing this to avoid any perception that I might be attempting to “double-dip”.

There was no caution from the DVA. In fact, On [sic] my telephone enquiry to the DVA pointing out my dual application process I was advised “No worries” -- should my DVA application succeed, the DVA would liaise with Centrelink over the cancelling of the “age pension” and its replacement with a “service pension”, and Centrelink be reimbursed.

Foolishly, I believed this, thinking the date of retirement was the key. I was not aware that the DVA assurances applied only to the pension and not the PBS, given the length between the pension and the PBS.

I believed on the basis of the verbal assurances of the DVA that my application for the pension and a pension bonus scheme was under the active management of the DVA. But the DVA chose to manage only the “service/age” pension component.

When the DVA opened my file to organise the pay back to Centrelink, perhaps it did not see my application under the PBS, and realise that it was putting this application in jeopardy.”[3]

[3] Exhibit 4, T Documents, T1, pp 2 – 3.

15.  The Applicant further contends he was misinformed by the DVA in terms of its role in the safe and effective processing of his claim for (1) both age related entitlements and payment of the pension bonus and (2) the resolution of any conflict between, or risk arising from, receipt of any payment from Centrelink and his prospects of successfully receiving the pension bonus payment.  He says:

“I was aware that to receive the pension bonus, I was not to receive a government pension payment. However, I believed this prescription ended with my retirement and my application for a pension.  I believed these matters were in the hands of the Government; it was not my decision nor expectation that back-payments would be made. I did not concern myself with the Centrelink payment and back-payment because I believed on [sic] the DVA’s assurances that it would manage the transition between the two Departments should my application for a “service” pension succeed. 

The DVA applied its decision on my ineligibility for the PBS 4 months after I applied yet back-paid the pension to when I applied.  This means I would have received a government “service” pension before the date of determination by the DVA on [sic] my PBS application. This back-pay apparently does not make me ineligible for the PBS yet a Centrelink back-pay did.”[4]

[4] Exhibit 4, T Documents, T1, p 3.

16.  The Applicant further contends that he was administratively refused an opportunity to rectify the repercussions of having received an age pension payment from Centrelink between 11 and 22 December 2014.  He says:

“Centrelink advised on February 13 that it would pay a part pension backdated to December 11, 2014.   Centrelink refused to allow me to repay the 11 – day payment saying, verbally, there is no provision for this. In its formal letter, Centrelink said the claim for an age pension could not be withdrawn once it was determined.  Of course, it made no mention of the issue itself, that is, whether I can repay the pension backpaid [sic] for 11 days.   Centrelink’s claim that it was unsuccessful in contacting me is drivel, unless it doesn’t understand answering machines. That description is similar claims by the DVA [sic].

Anyway I contacted Centrelink and was told there was no provision under which the pension could be repaid, a reference was made to the time lapsed, and I was asked whether I still wanted a determination in writing.

The DVA subsequently advised in a letter dated April 14 that the DVA accepted my claim for a part service pension backdated to December 22, 2014, my retirement date and date of application under the PBS, not the date of application for a “service” pension.

At the same time, the DVA advised that my application for access to the PBS dated December 22 was deemed ineligible because the legislative provisions provide that eligibility to participate in the PBS is lost where a person has received a payment of social security since reaching pension age/qualifying age for the bonus.

My ability to repay Centrelink the $54 myself and thereby remove the impediment was further damaged by the time taken in the DVA review processes.    

The DVA took four months to consider my application; Centrelink took two.” [5]

[5] Exhibit 4, T Documents, T1,p 3.

17. The Applicant is clearly of the view that repayment of the inadvertently paid sum he received from Centrelink during the 11 – 22 December period should, for all intents and purposes, remove the legislative impediment imposed on the present factual matrix by s 45TC(1)(e).

18.  He feels aggrieved by the outcome resulting from the decision under review:

“In its rejection of my appeal against its PBS decision, the DVA focuses exclusively and conveniently on the letter of the law. The fact that I was eligible for the PBS when I applied was not addressed; It makes no concession to the confusing nomenclature used in each department’s definitions of their pension services;  no mention is made of the false security afforded by their false claim that they would manage the transition from an “age” pension to a “service” pension; …. no mention is made of their own role in failing to look after my interests with timely advice in line with their boast that they are “Saluting their Service””. [6]

[6] Exhibit 4, T Documents, T1,p 4.

THE POLICY UNDERLYING THE PBS

19.  The Honourable Phillip Ruddock MP, in the Second Reading Speech for the Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 explained the intention of the legislation establishing the PBS thus:[7]

“This legislation gives older Australians a choice – a choice to retire on or before the age of (retirement), if they choose to, or to delay their retirement and to keep working and so build up their nest egg for retirement and ensure a better quality of living in their latter years.”[8]

[8] Mr Ruddock’s second reading speech can be found at:

AUTHORITIES ON THE PROVISIONS DISENTITLING THE RECEIPT OF THE PBS

20.  There is no mention of any authority appearing in either the Respondent’s Statement of Facts and Contentions[9] or the decision under review.[10]  However, the Applicant does refer[11] to the matter of Rodham and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1331.  The issue before my learned colleague, Senior Member Isenberg, involved consideration of a decision to refuse payment of the pension bonus to Mr Rodham because he had previously received age pension payments. 

[9] Exhibit 3.

[10] Exhibit 4, T Documents, T2, pp 9 – 14.

[11] Exhibit 4, T Documents, T1, pp 4 – 5.

21.  In my view, both the factual circumstances and findings of Senior Member Isenberg in Rodham have application and are relevant to the matter before me. The factual analysis and outcome in Rodham comprises:

·     on 8 February 2005, Mr Rodham lodged a  registration application for the PBS;

·     although initially he was told he may not be eligible but was registered for the scheme, on 8 March 2006 he was advised he could not register for the PBS  because he had previously received the age pension;

·     his registration with the PBS was eventually restored, after lodging an for Compensation for Detriment caused by Defective Administration (“CDDA”), and backdated to 19 March 2003;

·     Centrelink, presumably upon notification of the CDDA application, conceded via its letter of 30 October 2006 that it had breached “….. its duty of care owed to [you] …. when you received wrongful advice in February 2003”;

·     the “wrongful advice” occurred in February 2003 when Mr Rodham attended his local Centrelink office to enquire about  the PBS.  He was asked to complete an application for age pension apparently as a means of ascertaining his eligibility for the pension bonus. The application form for age pension was completed and returned to Centrelink with further information. Mr Rodham had no intention of applying for the age pension because he was still working when he completed and lodged the age pension application with Centrelink;

·     Mr Rodham was paid age pension from 19 March 2003 until 20 November 2003;

·     despite its comments in its concession letter of 30 October 2006, Centrelink maintained that although his registration with the PBS had been restored, his eventual claim for the Pension Bonus would ultimately fail due to his previous receipt of age pension;

·     Senior Member Isenberg accepted the submission made on behalf of Mr Rodham that the payment of age pension was as a result of Centrelink’s mistake. The “mistake” in that case being that at no time did Mr Rodham intend to apply for age pension;

·     the learned Senior Member accepted the proposition put forward in Re Brignell and Secretary, Department of Family and Community Services [2003] AATA 177 such that Mr Rodham’s receipt of age pension could be nullified by its repayment and thus Mr Rodham was not precluded from payment under the PBS.

APPLICATION OF THE DECISION IN RODHAM TO THE PRESENT CASE

22.  I consider the factual circumstances in Rodham are akin to and just as unfortunate as those of the Applicant in the present case. If anything, the evolution of the factual circumstances in this case is perhaps clearer and more clinical than those in Rodham.  Both matters, however, involve a fundamental mistake or error by the supervising administrative authority in the processing of an application for primary benefit (age or service pension) with a resulting adverse impact on a secondary entitlement (pension bonus payment).

23.  In the present matter, the Applicant was accepted for registration with the PBS on
1 February 2006 upon his attaining the age of 60 years. He continued working until late 2014 when he reached the age of 69 and chose to retire and claim his age based entitlements and pension bonus payment.

24.  He then did the following things, each of which were done with due caution and with the best of intentions:

1. upon ceasing work, he made an application to Centrelink for the “age” pension thinking this was the sole mechanism for activation of age based payments;

2. he almost simultaneously applied for payment of the Pension Bonus with DVA, for which he had been registered since February 2006;

3. upon being told by the DVA that to activate the Pension Bonus via the DVA it was necessary for him to effectively repeat the process of application for age pension with the DVA. He was informed the Centrelink entitlement was the “age” pension and the identical entitlement paid via DVA was the “service” pension;

4. he understandably thought it prudent to maintain both “age” and “service” pension entitlements “in case one failed”;[12]

5. crucially, he notified both Centrelink and the DVA of the concurrent applications.  He did so to (a) eliminate any imputation of fraud or “double-dipping” and (b) to ensure a safe and trouble-free processing of the respective applications for age – related pension entitlements and the Pension Bonus;

6. he sought and obtained DVA’s assurance that “no worries”:

   ·     his application for service pension with DVA would be the application that would be ultimately processed; and

   ·     DVA would liaise with Centrelink about (a) removing his application for age pension, and (b) reimbursing Centrelink for any amount of age pension paid to him during the 11 day period between 11 December 2014 (the date of the application to Centrelink) and 22 December 2014 (the date of the application for the Pension Bonus with DVA).

   [12] Exhibit 4, T Documents, T1, page 2.

25.  In Rodham, the “mistake” by Centrelink involved an erroneous payment of age pension in circumstances where Mr Rodham’s application for age pension was accepted when he neither intended to apply for it nor did his circumstances qualify him to receive it. Here, in the matter before me, the “mistake” occurred when the Applicant lodged claim his Application for Pension Bonus payment and notified DVA of his “age” pension application with Centrelink filed barely two weeks prior. In my view, the specific mistake here arises from DVAs failure to advise the Applicant that:

1)    his application with Centrelink for “age pension” would cause him to become ineligible for the Pension Bonus; and

2)    he should immediately withdraw his application for age pension with Centrelink and instead apply for service pension with DVA.

Instead, DVA advised the Applicant that “no worries” they would liaise with Centrelink regarding which pension payment the Applicant qualified for and additionally assured him of the smooth processing of his service pension and Pension Bonus, to both of which he was otherwise fully entitled.  

THE CORRECT OR PREFERABLE DECISION

26.  It is the well-known role of the Tribunal to make the correct or preferable decision.    Emeritus Professor Dennis C Pearce AO, cites[13] a distinction between the two formulae discussed in Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority and 4 Seas Pty Ltd (party joined) (2004) 82 ALD 163 at 194 where the distinction was brought into sharper focus:

“The Tribunal may conclude that there is only one decision that is correct on the facts it has found on the evidence and according to the law that it must apply.  It then makes its decision accordingly.  In other circumstances, it may conclude that more than one decision may correctly be made. If that is so, the role of the Tribunal is to determine which decision is the preferable decision and so the correct and preferable decision.”

[13] Pearce, D, Administrative Appeals Tribunal, (4^th ed, LexisNexis Butterworths, 2015), p 290 at [16.4].

27.  As was also observed by Emeritus Professor Pearce, “…. Since the AAT is acting as part of the executive, it must exercise any discretion after the fashion of an administrator and not as if the decision-making power were vested in a Judge”.[14]
[my underlining]

[14] Ibid, page 291 citing the following cases as authority for that proposition:

Re Winthrop and Smith and Minister for Immigration and Ethnic Affairs (1980) 2 ALD 873; and

Re Aged Care Services 27 (Kirralee) Pty Ltd and Secretary, Department of Health and Ageing [2009] AATA 840.

28.  It is apposite to remind oneself of the stated purpose of the Pension Bonus Scheme which is to offer a positive incentive incentive to persons to extend their working life, to encourage greater self-provision, to promote continued participation in the workforce and also to achieve some Budget savings.[15]

[15] See Schedule 9 – Pension Bonus Scheme, of Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009, which can be found at:

29.  I therefore cannot accept that this otherwise prudent, well-meaning and deserving Applicant should thus be denied receipt of the Pension Bonus on the basis of 11 days’ worth of age pension inadvertently paid to him from 11 - 22 December 2014. 

30.  I recall some discussion from the hearing about the Applicant possibly having an opportunity to secure his Pension Bonus by means of an application for CDDA. In rejecting a suggestion put to her along those lines in the Rodham matter, my colleague, Senior Member Isenberg, observed:

“As I pointed out, [at the hearing] that [ie the suggested CDDA application] left his entitlement to the pension bonus entirely at the discretion of a CDDA delegate which would not be reviewable if it were not in his favour.  His only remaining avenue for complaint would be the Ombudsman”.[16]

[16] Rodham and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1331 at [13].

31.  I accept and endorse Senior Member Isenberg’s remarks for present purposes. Refusal of this Application would result in an unfair denial of the Pension Bonus to this Applicant in circumstances where he has not derived any benefit from his inadvertent receipt of the age pension.  To my mind, affirming the decision under review does not comprise the correct or preferable decision for this Tribunal, in circumstances where the Applicant’s other avenue for recourse is an application for CDAA with a resulting unreviewable decision, and at best, a residual grievance with the Ombudsman. 

32. To my mind, it is incongruous with the stated policy and intention behind the PBS to deny this Applicant his Pension Bonus on the basis of a comparatively miniscule amount of inadvertently paid age pension benefit. The Applicant contends the quantum was $54,[17] and the Respondent asserts it was $895.63.[18]  In any event, there is confirmation that the sum of $895.63 has been repaid to Centrelink from the arrears owed to the Applicant when granted the service pension.[19]  I am of the view that the exercise of the discretion, as described below, would be consistent with “the fashion of an administrator” and thus result in the preferable decision given the unfortunate circumstances surrounding denial of the Pension Bonus to this Applicant.

[17] Exhibit 1:  Applicant’s Statement of Response, pages 4 and 8.

[18] Exhibit 4:  T Documents, T2, p 14.

[19] Exhibit 4:  T Documents, T2, p 14

33.  I therefore adopt the approach of this Tribunal in Brignell, as followed by Senior Member Isenberg in Rodham. Given the confirmed repayment of Centrelink’s age pension payments to this Applicant, I consider him to be no longer precluded from payment under the PBS.

DECISION

34.  The decision under review is set aside. Instead, I find the Applicant is not precluded from payment under the Pension Bonus Scheme.

I certify that the preceding 34 (thirty-four) paragraphs are a true copy of the reasons for the decision herein of
Senior Member T. Tavoularis

.......................................[sgd].............................................

Associate

Dated: 17 January 2017

Date of hearing:	21 September 2016
Applicant:	In person
Advocate for the Respondent:	B. Williams, Department of Veterans' Affairs