Boschma and Secretary, Department of Social Services (Social services second review)

Boschma and Secretary, Department of Social Services (Social services second review) [2018] AATA 300 (20 February 2018)
Division:GENERAL DIVISION
File Number: 2017/4065
Re:Barend Boschma
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg

Date:20 February 2018
Place:Brisbane

The Tribunal affirms the decision under review.
.............................[SGD]...........................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – age pension – date of effect of favourable determination – whether section 43(6) of the Administrative Appeals Tribunal Act 1975 applies – decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975
Social Security Act 1991
Social Security (Administration) Act 1999
CASES
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99
SECONDARY MATERIALS
Guide to Social Security Law (2017, Cth)
REASONS FOR DECISION
Member D K Grigg
20 February 2018
INTRODUCTION

Mr Boschma has been a recipient of the Age Pension since 5 April 2013.[1] The rates at which people (who are not permanently blind) are paid an Age Pension is determined using the Pension Rate Calculator A at the end of section 1064 of the Social Security Act 1991 (Cth) (“Act”) and is affected by, among other things, a person’s income and the value of their assets.[2] The maximum basic rate payable varies depending upon a person’s family situation.[3]
[1] Exhibit 2, Secretary’s Statement of Facts & Contentions dated 16 November 2017, Attachment A.
[2] Section 55(a), Act.
[3] Section 1064-B1, Act.
Unfortunately for Mr Boschma, it has become apparent that, for a period, he was being underpaid his entitlement to the Age Pension, due to an error made by Department of Social Services (“Centrelink”). That an error occurred is not in dispute by the Secretary. The error concerns whether the value of an asset should not have been taken into account in calculating the rate of the Mr Boschma’s Age Pension. Mr Boschma had correctly disclosed all relevant information to Centrelink and was advised by Centrelink that a particular asset had to be taken into account. That information was incorrect and, unfortunately for Mr Boschma, resulted in his being paid a lesser amount of his Age Pension than his entitlement. At the hearing Mr Boschma and the Secretary gave estimates that Mr Boschma has been underpaid by approximately $5,000 to $7,000.
Mr Boschma has been paid some arrears but the issue is whether he can be paid arrears back to the date the calculation error first occurred.
The relevant facts, which are not in dispute, are as follows.
BACKGROUND AND CLAIM HISTORY
On 19 March 2014 Mr Boschma provided Centrelink with information that his wife was, by virtue of becoming a beneficiary of an estate,[4] the owner of a 25% share in a house with a market value of $435,000 (“Property”).[5]
[4]Exhibit 1, T Documents, T4-T5, pages 41-46, Will and Testament of Ms Moroney dated 25 May 1995 and Letter from TK Delaney & Co Solicitors dated 3 December 2013.
[5]Exhibit 1, T Documents, T6, pages 47-52, MODR – Real Estate Details completed by Mr Boschma dated 19 March 2014; T15, page 77, Centrelink records.
Centrelink records indicate that Mr Boschma told a Centrelink officer that Mrs Boschma’s sister had a life interest in the Property and as a result the Property could not be sold and could not generate any income. The Centrelink officer told Mr Boschma the Property would be considered an asset for the purpose of calculating his Age Pension.[6] As a result Centrelink re-calculated the amount of Age Pension payable (based on a total combined asset amount of $451,289.00) taking the property ownership into account. On 24 June 2014 Centrelink wrote to Mr Boschma advising him of his reduced rate of pension. That notice included information that if he did not agree with the decision to contact Centrelink within 13 weeks and that if he requested a review after 13 weeks he may only receive any change in entitlement from the date he requested review.[7]
[6] Exhibit 1, T Documents, T15, page 79, Centrelink record of communications with Mr Boschma on 19 March 2014.
[7] Exhibit 1, T Documents, T7, pages 53-54, Letter from Centrelink to Mr Boschma dated 24 June 2014.
Centrelink re-calculated the amount of Age Pension payable again in February 2015 (based on a total combined asset amount of $451,701.00).[8]
[8] Exhibit 1, T Documents, ST7, pages 17-18, Letter from Centrelink to Mr Boschma dated 25 February 2015.
On 11 March 2015 Mr Boschma’s Age Pension was suspended pending enquiries about his future entitlement because Mr Boschma had informed Centrelink that he and his wife had sold their primary home.[9] Centrelink re-calculated the amount of Age Pension payable again on 12 March 2015 (based on a total combined asset amount of $30,936.00).[10]
[9] Exhibit 1, T Documents, ST8, pages 19-20, Letter from Centrelink to Mr Boschma dated 11 March 2015.
[10] Exhibit 1, T Documents, ST9, pages 21-22, Letter from Centrelink to Mr Boschma dated 12 March 2015.
Centrelink re-calculated the amount of Age Pension payable again on 25 June 2015 (based on a total combined asset amount of $32,112.60).[11]
[11] Exhibit 1, T Documents, ST11, pages 25-26, Letter from Centrelink to Mr Boschma dated 25 June 2015.
In November 2015 Centrelink re-calculated the amount of Age Pension payable again (based on a total combined asset amount of $641,853.02).[12]
[12] Exhibit 1, T Documents, T9, pages 57-58, Letter from Centrelink to Mr Boschma dated 19 November 2015.
On 23 June 2016 Centrelink re-calculated the amount of Age Pension payable again (based on a total combined asset amount of $644,177.08).[13]
[13] Exhibit 1, T Documents, ST13, pages 29-30, Letter from Centrelink to Mr Boschma dated 23 June 2016.
On 27 June 2016, Centrelink re-calculated the amount of Age Pension payable again (based on a total combined asset amount of $651,063.08).[14]
[14] Exhibit 1, T Documents, ST14, pages 31-32, Letter from Centrelink to Mr Boschma dated 27 June 2016.
On 10 October 2016 Centrelink re-calculated the amount of Age Pension payable again (based on a total combined asset amount of $598,258.86) and informed Mr Boschma in the notice that if he did not agree with the decision to contact Centrelink within 13 weeks and that if he requested a review after 13 weeks he may only receive any change in entitlement from the date he requested review.[15]
[15] Exhibit 1, T Documents, T10, pages 59-60, Letter from Centrelink to Mr Boschma dated 10 October 2016.
On 4 December 2016 Centrelink re-calculated the amount of Age Pension payable again (based on a total combined asset amount of $598,258.86).[16]
[16] Exhibit 1, T Documents, ST15, pages 33-35, Letter from Centrelink to Mr Boschma dated 4 December 2016.
Mr Boschma told the Tribunal that in December 2016 he was discussing his Age Pension with friends and family and he became aware that his wife’s sisters’ share of the Property was not being included as an asset in the calculation of their benefit payments. As a result, on 30 December 2016 Mr Boschma queried the 10 October 2016 decision to calculate his Age Pension with reference to his wife’s share in the Property.[17] Centrelink told Mr Boschma to lodge an appeal.
[17] Exhibit 1, T Documents, T51, page 91, Centrelink record.
In January 2017 Mr Boschma’s matter was assessed by a Complex Assessment Officer who determined that the Property should not have been taken into account in the calculation of Mr Boschma’s Age Pension. The Property has been disregarded in the calculation of Mr Boschma’s Age Pension since 3 January 2017.[18]
[18] Exhibit 1, T Documents, T51, page 92, Centrelink record.
The matter was then referred to an Authorised Review Officer (“ARO”).[19] The appeal to the ARO was partially successful in that the ARO determined that Mr Boschma was entitled to a higher rate of age pension from 10 October 2016 and would receive arrears for the period 10 October 2016 to 2 January 2017.[20]
[19] Exhibit 1, T Documents, T51, page 92, Centrelink record.
[20]Exhibit 1, T Documents, T11, pages 61-65, Authorised Review Officer’s Decisions and Notes dated 23 February 2017.
On 8 March 2017, Mr Boschma lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[21] The SSCSD affirmed the ARO’s decision on 27 June 2017.[22]
[21] Exhibit 1, T Documents, T12, page 66-67, Letter from SSCSD dated 8 March 2017.
[22] Exhibit 1, T Documents, T2, pages 7 – 10, SSCSD’s Decision and Reasons for Decision dated 27 June 2017.
Mr Boschma has sought a review of the SSCSD’s decision by this Tribunal.[23] Mr Boschma contends that it was Centrelink’s error that resulted in his being underpaid his entitlement to the Age Pension and that he should receive arrears back to 19 March 2014.[24]
[23] Exhibit 1, T Documents, T1, pages 1 – 6, Application for Second Review of a Decision dated 4 July 2017.
[24] Exhibit 1, T Documents, T51, page 92, Centrelink record.
ISSUES FOR DETERMINATION
The following issues have to be determined:
(a)whether Mr Boschma requested a review of the decision before 10 October 2016;
(b)whether Mr Boschma can be paid an increased rate of Age Pension earlier than 10 October 2016;
(c)if Mr Boschma did not request a review of the relevant decision prior to 10 October 2016, whether the Tribunal’s discretionary power to otherwise order, contained in section 43(6) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) permits the Tribunal to backdate the effect of its decision to a date prior to that determined by the date effect provisions contained in the Social Security (Administration) Act 1999 (“Administration Act”); and, if yes
(d)whether the discretionary power should be exercised.
DATE OF EFFECT OF FAVOURABLE DETERMINATION RESULTING FROM REVIEW
Pursuant to section 123(3)(a) of the Administration Act, when a determination is made about the rate of a social security payment, such as the Age Pension, that determination continues in effect until, relevantly here, a further determination is made under section 78. Section 78 provides that if the Secretary is satisfied that the rate at which a social security payment is being, or has been, paid is less than the rate provided for, the Secretary must determine that the rate is to be increased to the rate provided for by the Social Security law and specify the rate in the determination.[25] A determination made under section 78 is referred to in the Administration Act as a “favourable determination”.[26]
[25] Section 78, Administration Act.
[26] Section 108, Administration Act.
Pursuant to section 109(2) of the Administration Act, which is relevant here, favourable determinations take effect on the day on which an application for review of the decision is made if:
(a)a decision (the original decision) is made in relation to a person's social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review.
Was Mr Boschma Given Notice of the Decisions Made between March 2014 and October 2016: section 109(2)(b)?
Between March 2014 and October 2016 Mr Boschma’s rate of age pension was adjusted taking into account, among other things, the Property. Where the rate of payment has been adjusted in this way, pursuant to subsection 109(2)(b) of the Administration Act, Mr Boschma is deemed to have been given notice of the determination and the adjusted rate.
Mr Boschma does not dispute that he received the notices from Centrelink, however, he pointed out to the Tribunal that the notices provide no breakdown or indication of how the Age Pension has been calculated, other than to set out the combined asset and income total. However, there is no statutory obligation for Centrelink to do so. The mechanism that is in place is, as set out in section 129, for a person to make an application for a review of a decision.
Therefore, section 109(2)(b) of the Administration Act is satisfied.
Date Mr Boschma applied for a review of a decision?
The Secretary submits Mr Boschma first requested a review of a decision on 30 December 2016.[27] This is not disputed by Mr Boschma. Mr Boschma explained that he had no reason to query the calculations made by Centrelink until December 2016 (see paragraph 15 above).
[27] Exhibit 2, Secretary’s Statement of Facts & Contentions dated 16 November 2017, paragraph 31.
While it is completely understandable that Mr Boschma was unaware that his Age Pension had been incorrectly calculated since June 2014, this does not assist him.
Pursuant to section 109(2) of the Administration Act, the request for a review of Centrelink’s decision regarding the rate of pay, was:
(a)more than 13 weeks after the date the first decrease took effect in June 2014; and
(b)within 13 weeks after the last determination made on 10 October 2016.
Conclusion
Therefore, pursuant to section 109(2) of the Administration Act, the decisions made regarding the rate of Age Pension payable to Mr Boschma continued in effect under subsection 123(3) of the Administration Act until the date the ARO made the favourable determination.
This means that, pursuant to section 109(2)(d) of the Act, subject to the Tribunal’s discretionary power considered below, Mr Boschma cannot be paid arrears of Age Pension to a date earlier than 10 October 2016.
THE TRIBUNAL’S DISCRETIONARY POWER
The only possible way in which Mr Boschma can be paid arrears back to 2014 is if the Tribunal has the power to make a different order under section 43(6) of the AAT Act.
SECTION 43(6) OF THE AAT ACT
Pursuant to section 43(1) of the AAT Act, the AAT has the power to affirm, vary, set aside, make a decision in substitution of, or remit a decision under review. The AAT “stands in the shoes of the decision-maker and, on the material before it, makes the ‘correct or preferable’ decision”.[28].
[28]See Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419 per Bowen CJ and Deane CJ.
The Full Federal Court in Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99 said at 106:
‘When reviewing an administrative decision under s 43(1) the AAT stands in the place, and is empowered to exercise all of the relevant powers and discretions, of the decision-maker in respect of the decision under review. The AAT hears the matter de novo in the light of the evidence placed before it.’ (my emphasis)
Section 43(6) of the AAT Act then goes on to provide for what happens if a decision of a decision-maker is varied or substituted:
(6) A decision of a person as varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a person, shall, for all purposes (other than the purposes of applications to the Tribunal for a review or of appeals in accordance with section 44), be deemed to be a decision of that person and, upon the coming into operation of the decision of the Tribunal, unless the Tribunal otherwise orders, has effect, or shall be deemed to have had effect, on and from the day on which the decision under review has or had effect.(my emphasis)
Standing in the “shoes of the decision-maker”, the ‘correct or preferable’ decision was made.
Section 43(6) of the Act only applies where the Tribunal is:[29]
(a)varying a decision; or
(b)substituting a decision.
[29] See Thompson and Secretary, Department of Social Services [2017] AATA 1638, at [21]-[22].
As the decision under review was correct under the legislation, there is, in effect, no discretion to vary or substitute. Therefore, section 43(6) of the AAT Act does not apply here.
DECISION
The decision under review is affirmed.

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.............................[SGD]...........................................
Associate
Dated: 20 February 2018

Date9 of hearing: 7 February 2018

Applicant: In person

Advocate for the Respondent: Ms Jacky Vetter

Solicitors for the Respondent: Department of Human Services

[2018] AATA 300

20 February 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Procedural Fairness

Statutory Construction

Date9 of hearing:	7 February 2018
Applicant:	In person
Advocate for the Respondent:	Ms Jacky Vetter
Solicitors for the Respondent:	Department of Human Services