BRIAN MURPHY and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2010] AATA 115

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 115

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/3645

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		BRIAN MURPHY

Applicant

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

Respondent

DECISION

Tribunal Mr Egon Fice, Member

Date15 February 2010

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Egon Fice

Member

SOCIAL SECURITY – age pension (partnered) – defined benefit income stream – deductible amount – Centrelink’s obligations – whether increased payment can be backdated – decision under review affirmed.

Administrative Appeals Tribunal Act 1975 (Cth) s 34J

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth) ss 8, 11(1), 27(1), 67, 68, 79, 108, 109(1)

REASONS FOR DECISION

15 February 2010 Mr Egon Fice, Member

1. I have determined this matter under s 34J of the Administrative Appeals Tribunal Act 1975 (the AAT Act) because the parties to this application consented to the matter being determined without a hearing.

2.      Mr Murphy received the age pension (partnered) commencing on 30 December 2004.  This was at a reduced rate because both he and his wife received income from pension funds.  In particular, Mr Murphy was in receipt of a defined benefit income stream from his Officer's Superannuation Fund.

3.      At the time he applied for the age pension, Mr Murphy declared the gross income he received from his defined benefit fund.

4.      In 2007 the Social Security Act 1991 (the Act) was amended such that an amount defined as the deductible amount in relation to a defined benefit income stream for a year was substantially increased.  It came into effect on 1 July 2007.   The deductible amount is subtracted from the amount which is paid under the defined benefits scheme to arrive at the gross income from that source. 

5.      The problem is that Mr Murphy was not informed of the changes to the legislation and only discovered in 2009 that his declared ordinary income had been overstated since 1 July 2007.  On 3 March 2009, following enquiries made at Centrelink, he was informed by a Customer Service Officer (CSO) that he should notify Centrelink formally of the reduction in his ordinary income as a result of being entitled to the increased deductible amount from his Officer's Superannuation Fund.  Centrelink recalculated Mr Murphy's pension but, contrary to his request, would not backdate his entitlement to the age pension at an increased rate from 1 July 2007.

6.      On 4 May 2009 an Authorised Review Officer (ARO) decided that Mr Murphy should receive an increase in the rate of payment of his age pension from 2 February 2009, but not before.  On 7 July 2009 Mr Murphy sought review of that decision by the Social Security Appeals Tribunal (the SSAT) but was unsuccessful.  On 24 July 2009 the SSAT affirmed the ARO’s decision.  Mr Murphy seeks a review by this Tribunal of the SSAT decision.

7.      The issues I need to address are:

(a)whether Centrelink had a responsibility to notify Mr Murphy of the changes in the legislation in July 2007;

(b)if the answer to (a) is in the affirmative, whether Mr Murphy's age pension can be recalculated from 1 July 2007; and

(c)if the answer to (a) is in the negative, the earliest date from which Mr Murphy's age pension should have been adjusted.

centrelink's obligations

8. Centrelink administers the delivery of social security payments, services and customer information on behalf of the Secretary, Department of Housing, Community Services and Indigenous Affairs (the Secretary). However, it does not provide advice to its customers regarding their legal entitlements to a social security payment. Section 8 of the Social Security (Administration) Act 1999 (the Administration Act) provides:

8  Principles of administration 

In administering the social security law, the Secretary is to have regard to: 

(a)the desirability of achieving the following results: 

(i)the ready availability to members of the public of advice and information services relating to income support generally and to the social security payments that are available; 

(ii)the ready availability of publications containing clear statements about income support entitlements and procedural requirements; 

(iii)the delivery of services under the law in a fair, courteous, prompt and cost-efficient manner; 

(iv)the development of a process of monitoring and evaluating delivery of programs with an emphasis on the impact of programs on social security recipients; 

(v)the establishment of procedures to ensure that abuses of the social security system are minimised; and 

(b)the special needs of disadvantaged groups in the community; and 

(c)the need to be responsive to the interests of the Aboriginal and Torres Strait Islander communities and to cultural and linguistic diversity; and 

(d)the importance of the system of review of decisions under the social security law; and 

(e)the need to ensure that social security recipients have adequate information regarding the system of review of decisions under the social security law; and 

(f)the need to apply government policy in accordance with the law and with due regard to relevant decisions of the Administrative Appeals Tribunal and the Social Security Appeals Tribunal. 

9. It should be apparent that the provisions in s 8 of the Administration Act only require Centrelink to provide general advice and information to the public about the availability of income support and social security payments. Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment. If a claimant believes Centrelink has made an incorrect decision regarding either a claim for a social security payment or the rate at which a payment is calculated, the claimant has a right to have that decision reviewed. However, it is essentially left to the claimant to make a claim for a social security payment. This is clear from s 11(1) of the Administration Act which provides:

11  General rule 

(1)Subject to subsection (2) and Subdivision B, a person who wants to be granted: 

(a)a social security payment; or 

(b)a concession card; 

must make a claim for the payment or card in accordance with this Division. 

10.     In other words, Centrelink is not responsible for informing any member of the public at large that he or she may be entitled to a social security payment.  The onus is on persons to make a claim.  Only then does Centrelink become responsible for correctly processing that claim.

11. Centrelink must determine that a claim for a social security payment should be granted to a claimant if it is satisfied that the claimant is qualified for the social security payment and that the social security payment is payable (s 37(1) of the Administration Act). To make those assessments, Centrelink relies on information provided by the claimant. In fact, the Secretary may require, by notice given in writing to a claimant, that the person notify Centrelink of any change in circumstances which might result in that person either becoming ineligible for the payment or entitled to a different rate of payment (s 67 and s 68 of the Administration Act). A failure to notify Centrelink of a change in circumstances which would result in either ineligibility or a varied payment might result in the person who continues to receive social security payments becoming liable to repay a debt to the Commonwealth. In other words, it is not Centrelink's responsibility to ensure that a claimant is eligible for the payment or that the person is receiving the correct rate of payment. That is left to the claimant.

12.     In fact, from time to time, Centrelink sends to recipients of social security payments letters indicating the exact payments they are receiving and the information used to calculate the rate of those payments.  Those letters go on to state that Centrelink must be notified of any changes to income, assets or if the person receives any compensation.  They also set out other reporting requirements.  Again, this emphasises the fact that it is the social security recipient's responsibility to ensure that they are receiving the correct rate of payment.

13.     Therefore, Mr Murphy’s submission that Centrelink had a duty to inform him of the legislative changes regarding deductible amounts from defined benefit income streams is incorrect.  Centrelink had no such duty.  Therefore, contrary to what Mr Murphy has said about Centrelink being negligent and deficient in its administration of his age pension, that cannot be correct.

backdating of increase in payments

14.     Mr Murphy first contacted Centrelink about the deductible amount regarding his defined benefit income stream on 3 March 2009.  A record of that conversation indicates he told the CSO that he had a Schedule which indicated his tax free component was some $904.68 per fortnight.  The CSO told Mr Murphy that this amount was deductible for pension purposes.

15. Mr Murphy's telephone conversation followed receipt of a letter from Centrelink dated 2 February 2009 in which Centrelink informed Mr Murphy of the basis upon which his current age pension rate was calculated. Therefore, Mr Murphy's contact with Centrelink on 3 March 2009, which was treated as a request for review, was within 13 weeks of the letter of 2 February 2009. The significance of that is apparent when one examines the provisions in s 109(1) of the Administration Act. It provides:

109  Date of effect of favourable determination resulting from review 

(1)  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)within 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; 

the favourable determination takes effect on the day on which the determination embodying the original decision took effect. 

16.     The expression favourable determination is defined in s 108 of the Administration Act and it means a determination under section 78, 85 or 85A.  Section 78 deals with a rate increase determination; s 85 deals with the resumption of payment after cancellation or suspension; and s 85A deals with a rate increase determination following rate reduction for non-compliance with a notice relating to rent assistance. Centrelink has, properly in my opinion, treated the letter of 2 February 2009 as a notice under s 79 of the Administration Act. Therefore, applying s 109 (1) of the Administration Act, the decision to pay Mr Murphy's age pension at a rate which reflected his reduced income from his defined benefits superannuation was correctly backdated to 2 February 2009. It could not, under the Administration Act, be backdated any further.

conclusion

17.     As I have explained above, it is the responsibility of the recipient of a social security payment to ensure that he or she is receiving the correct rate of payment.  It is not Centrelink's responsibility or duty to inform a recipient of social security payments about changes to legislation which may affect the rate of payment of a recipient.  In that sense, it does not owe the recipient of social security payments a duty of care. 

18.     In my opinion, the decision made by the SSAT on 24 July 2009 affirming the decision of an ARO to increase the rate of Mr Murphy's age pension from 2 February 2009 was correct.  I therefore affirm that decision.

I certify that the eighteen [18] preceding paragraphs are a true copy of the reasons for the decision herein of  

Mr Egon Fice, Member

(sgd) Mya Anumarlapudi

Clerk

Hearing on the Papers                 15 December 2009

Date of Decision  15 February 2010
Self-represented Applicant          Mr B Murphy
Advocate for the Respondent       Mr T de Uray