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

[2017] AATA 873

Brawn and Secretary, Department of Social Services (Social services second review) [2017] AATA 873 (15 June 2017)

Division:General Division

File Number(s):      2017/0256

Re:Harvey Brawn

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Ms A F Cunningham, Senior Member

Date:  15 June 2017                  

Place:Hobart

The decision under review is affirmed.

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Ms A F Cunningham, Senior Member

CATCHWORDS

Social Security – age pension – member of a couple – applicant resides with wife in Vietnam – biannual trips to Australia for medical treatment – no “special reason” to justify exercise of discretion – decision under review affirmed

LEGISLATION

Social Security Act 1991 (the Act) s4. s24 (1), s.55

CASES

Re: Holt and Secretary, Department of Education, Employment and Workplace Relations (2010) AATA 143

Re: Hawkins and Secretary, Department of Social Security (1996) AATA 927

REASONS FOR DECISION

Ms A F Cunningham, Senior Member

1. The applicant, Mr Brawn is in receipt of age pension and resides in Vietnam. He married a Vietnamese citizen on 4 August 2014. The issue in this case is whether Mr Brawn can be treated as not being a member of a couple and paid the age pension at the single rate.

2. Mr Brawn seeks the review of a decision made by the Social Services and Child Support Division of the Administrative Appeals Tribunal (first-tier review) dated 8 December 2016 which affirmed a decision that Mr Brawn was to be paid age pension on the basis that he was a member of a couple as from 9 June 2016.

3. A decision was made by the Department of Human Services (Centrelink) on 13 December 2016 that Mr Brawn’s rate of pension should be assessed on the basis that he is a member of a couple from the date of his marriage on 4 August 2014. Mr Brawn sought a review of that decision but it was affirmed by an Authorised Review Officer (ARO) on 30 January 2015. Mr Brawn then unsuccessfully appealed the decision of the ARO.

4. On 9 June 2016 Mr Brawn applied to have his pension assessed as a single person on the basis that his circumstances had changed in that his savings had decreased significantly. On 22 August 2016 Centrelink decided that Mr Brawn’s rate of age pension should continue to be assessed on the basis that he is a member of a couple. The decision was affirmed by an ARO and by the first-tier reviewer on 8 December 2016. It is this decision that is the subject of the current application for review.

5. The hearing was held at Hobart and Mr Brawn appeared in person. Brian Sparkes appeared on behalf of the Secretary. The T-documents were tendered in evidence pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.  The only other additional evidence tendered was a statement of current weekly income and expenditure prepared by the applicant.

   APPLICANT’S CASE

6. There is no dispute as to the date of Mr Brawn’s marriage and he confirmed that as at the date of the reviewable decision, he was cohabiting with his wife and they pooled their resources.

7. It is the Mr Brawn’s contention that his circumstances justify the exercise of discretion under section 24 of the Social Security act 1991 (the Act). He maintains that his expenditure exceeds the combined income of his wife and himself and that he would suffer extreme hardship if the discretion afforded under section 24 is not exercised. In particular he would be unable to continue to receive appropriate medical treatment for his ailments in Australia. Mr Brawn stated that the medical facilities in Vietnam are inadequate and vastly different from those available in Australia and that his wife would be required to give up her job to take care of him. Mr Brawn maintains that the expense to the Australian government would be significantly greater if he and his wife moved to live in Australia.

   RESPONDENTS CASE

8. Mr Sparkes submitted that section 24 does not apply to Mr Brawn’s circumstances in that there is no special reason in his case to not treat him as a member of a couple. Mr Sparkes contended that the Mr Brawn’s claim of financial hardship is not a sufficient justification for the exercise of the discretion and referred the Tribunal to a number of previous decisions which have considered the provisions of section 24 of the Act. Mr Sparkes submitted that the evidence does not demonstrate that the applicant was suffering financial hardship at the time of the reviewable decision.

   THE EVIDENCE

9. The evidence of Mr Brawn’s financial circumstances that relates to the relevant period is contained in the T-documents at T3 page 19. This document contains details of Mr Brawn’s stated weekly expenditure which totals AUD $616. The combined weekly income of Mr Brawn and his wife of $494 per week comprises Mr Brawn’s pension in the sum of $267 and his wife’s net wage of $177 noted to be after deductions which include tax and medical insurance. The expenditure figures are noted as being averages and there is no corroborating documentary evidence on the file. Whilst not relevant to the decision under review the revised weekly figures provided by Mr Brawn at the hearing detail total weekly expenditure at $590 and total income at $500.

10. Mr Brawn submitted no further evidence in support of his application for review and was reluctant to actively participate at the hearing. Mr Brawn rejected the submissions made on behalf of the Secretary but was unable to demonstrate how his circumstances satisfy the provisions of section 24. He rejected the relevance of findings of the decisions referred to by Mr Sparkes and maintained that the discretion should be exercised because he is otherwise unable to manage financially. The Tribunal endeavoured to explain to Mr Brawn that its decision can only be made in accordance with the relevant legislative provisions with guidance as to interpretation from previous decisions. Also of relevance are the provisions of the Social Security Guide relevant extracts of which were annexed to the Secretary’s Statement of Facts and Contentions. In apparent frustration, Mr Brawn departed the hearing prior to its conclusion.

    THE LEGISLATION

11. The law relating to the payment of age pension is contained in the Social Security Act1991. Section 4 provides the circumstances in which a person is regarded as a member of a couple. Mr Brawn was so regarded from the date of his marriage on 4 August 2014 and again on review in 2016. This matter is not in dispute.

12. Section 24 provides the circumstances in which a person may be treated as not being a member of a couple. Subsection 24 (1) reads as follows:

    Person may be treated as not being a member of a couple (subsection 4(2))

    (1)  Where:

    (a)  a person is legally married to another person; and

    (b)  the person is not living separately and apart from the other person on a permanent or indefinite basis; and

    (c)  the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

    the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

    (1A)  If:

    (a) a relationship between a person and another person (whether of the same sex or a different sex) is registered under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; and

    (b)  the person is not living separately and apart from the other person on a permanent or indefinite basis; and

    (c)  the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

    the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

    (2)  Where:

    (a)  a person has a relationship with another person, whether of the same sex or a different sex (the partner ); and

    (b)  the person is not legally married to the partner; and

    (c)  the relationship between the person and the partner is a de facto relationship; and

    (d)  the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

    the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

    (3)  A determination made under subsection (1), (1A) or (2) is not a legislative instrument.

13. Section 55 provides that a person’s age pension rate is worked out using the Pension Rate Calculator  at the end of section 1064. The calculator provides a different and lower rate of payment for a member of a couple.

    CONSIDERATION AND FINDINGS

14. Mr Brawn can only be paid at the single rate if the discretion in section 24 is exercised in his favour. As the Guide states at 2.2.5.50:

    “It is not possible to predict all the situations where section 24 should be applies circumstances of each particular situation need to be considered on a case-by-case basis.”

    And further

    “The discretion to treat a person as NOT being a member of a couple should be exercised ONLY where a full consideration of all the circumstances relevant to an individual’s case would make it unjust or unreasonable not to do so.”

15. When considering the meaning of “a special reason” the Guide states that:

    “In general, the circumstances must be unusual, uncommon, abnormal or exceptional. It is the context which generally determines whether the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

16. The special reasons advanced by Mr Brawn are that his weekly expenses currently exceed the combined income of his wife and himself and that without the discretion being exercised he would be unable to meet the expenses associated with his biannual visits to Hobart to access medical treatment. It was Mr Brawn’s evidence that he suffers asbestos-related infections in his lungs and blocked arteries in his heart which will eventually require a bypass. No medical evidence was tendered in support and nor was there persuasive evidence that such medical treatment is not available in Vietnam.

17. In his stated reasons for appeal Mr Braun stated “For me to live here without the section 24 would be like sentencing me to death as I would have to depend on Vietnamese medication which is mostly not available here. The hospitals are not like the Australian hospitals. You pay for a bed and medication, the only thing you get from the nursing staff is the medication. Food has to be brought into the hospital by your family, trips to the bathroom and toilet must be accompanied by a family member who also has to sleep at the hospital in case of problems during the night.

18. That would mean my wife would have to give up her job and take care of me full-time so the section 24 would not even make up for her loss of wages.”

19. The undisputed evidence regarding the financial circumstances of Mr Brawn and his wife are that in June 2016 his fortnightly age pension rate was $643.70.  Mr Brawn is also in receipt of a foreign pension which the Secretary claims is paid at the rate of $64 per fortnight. In Mr Braun’s financial statement he advises that his English pension is $50 per fortnight.

20. Mr Brawn’s wife is in employment and at the relevant time was in receipt of approximately AUD$986 per month. The Secretary contends that this amount is well in excess of the average wage in Vietnam. The Secretary calculates the combined (and pooled) income at $1082 per fortnight which is equivalent to $28,132 per annum. Further it is maintained that the cost of living and average wages are substantially lower in Vietnam. Mr Brawn and his wife purchased a residence for $45,000 in Vietnam with a gift of $20,000 from Mr Brawn’s sister. It is estimated that the mortgage will be repaid in approximately 2 to 3 years’ time.

21. At the time of the earlier decision in 2015 the evidence was that Mr Brawn had $18,000 in cash in hand which he now advises has been expended. No details of the expenditure have been provided. It is the loss of these funds that Mr Brawn contends is a change in his circumstances justifying his application for review.

22. In order for the discretion in section 24 to be exercised the Tribunal must be satisfied that there is a special reason not to treat Mr Brawn as a member of a couple. The discretion has been exercised in previous cases in circumstances where the couple have been forced to live separately and apart for a period, where they have been unable to pool their resources, where the applicant’s spouse is prevented from earning a living or is not in receipt of a separate income and such circumstances are largely beyond the couple’s control.

23. As the Tribunal noted in Holt and Secretary, Department of Education, Employment and Workplace Relations (2010) AATA 143:

    “32 .The expression must, however, be interpreted in context, consistent with the scope and purpose of the Act. That context and purpose was explained in the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 which stated (at 17):

    “There is justification in paying a higher rate to one partnered person than 2 members of a couple if both members of the couple are living together. This justification is based on the premise that the un-partnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as a none partnered person.”

    33. “This justification was elaborated in Re Hawkins  and Secretary, Department of Social Security:

    The evident policy behind the relevant legislative provisions is that ordinarily couples should be expected to pull their resources and practice economies of scale; that those expectations should not apply to couples who are separated by illness or imprisonment set; but that there would have to be some special reason not to apply those expectations to members of other couples.

    34. These extracts indicate two reasons for the partnered rate: that the economies of scale in 2 people living together; and that because there has been a pooling of resources, the two persons are better off financially because they pool their joint income and assets.

    …40. Nor is financial hardship on its own a sufficient “special reason”, although hardship is a consideration. There must be other circumstances, in addition to the fact that there was no pulling of assets or other monies in the case of Mr and Mrs Holt, to justify the favourable exercise of the discretion. In particular, since Mrs Holt is able to work, but chooses to be a full-time housewife and homemaker, though circumstances or special reasons must explain why it would be unreasonable to deny Mr Holt the benefit of the exercise of the discretion in section 24.”

24. The special reason advanced by Mr Brawn as to why the discretion should be exercised in his case is that his finances have been depleted due to the cost of his biannual trips to Hobart for medical treatment which is ongoing. As pointed out by the ARO in his decision dated 22 August 2016 Mr Brawn made the decision to live in Vietnam with the knowledge that he would travel to Australia twice a year. It was his decision not to use Vietnamese hospitals or medications and that Mr Brawn should have anticipated these expenses when he made the decision to live in Vietnam.. The ARO did not consider that the circumstances constituted a special reason within the meaning of section 24.

25. Whilst the Tribunal accepts Mr Brawn’s evidence that currently his expenses exceed the combined income of himself and his wife, this alone does not constitute a special reason to justify not treating him as a member of a couple. It is certainly not uncommon or unusual for the expenses of recipients of Social Security benefits to exceed their income from time to time. Nor does the Tribunal consider that the evidence presented regarding Mr Brawn’s choice to travel to Hobart on a biannual basis for medical treatment constitutes a special circumstance within the meaning of section 24 when considered in the context of all of his circumstances. Mr Brawn continues to cohabit with his wife who is in receipt of an income from paid employment in Vietnam which is well in excess of the average household income in Vietnam where the living costs are significantly lower than Australia. The parties are able to pool their resources which includes their living costs and repayment of the mortgage on their home which they own. Another relevant factor is that the combined and pooled income of Mr Brawn and his wife is in the approximate sum of $28,132 per annum. The income of a pensioner couple living in Australia is about $33,350 per annum and for a pensioner/allowee couple approximately $29,000 per annum.

26. For all of the above reasons the Tribunal determines to affirm the decision under review.

I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham, Senior Member

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Administrative Assistant

Dated:   

Date(s) of hearing:	30 May 2017
Applicant:	In person
Solicitors for the Respondent:	Mr Brian Sparkes, FOI and Litigation Branch