Callander v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs

Case [2012] FCA 238

FEDERAL COURT OF AUSTRALIA

Callander v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2012] FCA 238

Citation: Callander v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2012] FCA 238
Appeal from: Callander v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 659
Parties: CALLANDER v SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
File number: WAD 417 of 2011
Judge: BARKER J
Date of judgment: 15 March 2012
Catchwords: ADMINISTRATIVE LAW – question of law – nature of an appeal pursuant to s 44(1) of Administrative Appeals Tribunal Act 1975 (Cth) – overpayment – disability support pension – age pension – calculations pursuant to Social Security Act 1991 (Cth) – application of the formula – failure to provide adequate information to a decision-maker
Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) s 37, s 44(1)
Social Security Act 1991 (Cth) s 8(1A)(e), s 8(1B), s 8(2), s 8(4), s 8(5), s 8(8), s 117(a), s 1064, s 1064-A1, s 1064-A2, s 1064E-1, s 1223(1), s 1237AAD, s 1237A(1)
Social Security (Administration) Act 1999 (Cth) s 100(1), s 180(1)

Federal Court Rules 2011 (Cth) R 33.12(2)(b)
Cases cited: Comcare v Etheridge [2006] FCAFC 27; (2006) 149 FCR 522
Date of hearing: 24 February 2012
Place: Perth
Division:  GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 41
Counsel for the Applicant: The Applicant appeared in person
Counsel for the Respondent: Mr PR MacLiver
Solicitor for the Respondent: Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 417 of 2011


ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:

WILLIAM JOHN CALLANDER
Applicant

AND: SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent

JUDGE:

BARKER J

DATE OF ORDER:

15 March 2012

WHERE MADE:

PERTH

THE COURT ORDERS THAT: 

1.The application be dismissed.

2.        The applicant pay the respondent’s costs of the application to be taxed if not agreed.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 417 of 2011


ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:

WILLIAM JOHN CALLANDER
Applicant
AND: SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent

JUDGE:

BARKER J

DATE:

15 March 2012

PLACE:

PERTH

REASONS FOR JUDGMENT

APPEAL AGAINST AAT DECISION

  1. By notice of appeal filed 10 October 2011, the applicant seeks to appeal from a decision of the Administrative Appeals Tribunal (Tribunal or AAT) made on 23 September 2011.  The AAT set aside a decision of the Social Security Appeals Tribunal (SSAT) made on 24 February 2011, relating to the assessment of the applicant’s disability support pension and age pension to take account of the applicant’s wife’s employment income, and in effect, restored the earlier decision of an authorised review officer (ARO).

    ISSUE

  2. The key issue in this proceeding is whether the AAT correctly applied the statutory formula under the Social Security Act 1991 (Cth)…

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AGLC
Callander v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2012] FCA 238
Case
[2012] FCA 238
Decision Date

CaseChat Overview and Summary

The applicant, Callander, was granted a disability support pension under the Social Security Act 1991 (Cth), which was later transferred to an age pension. Following a review by the Australian Taxation Office, it was determined that the applicant had been overpaid his disability support pension and age pension due to discrepancies in his wife's declared income. The matter was reviewed by the Administrative Appeals Tribunal (AAT), which set aside the decision of the Social Security Appeals Tribunal (SSAT) and substituted its decision. The key issue was whether the AAT correctly applied the statutory formula under the Social Security Act for the payment of the relevant pensions. The AAT reviewed all the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) by the respondent and considered fresh calculations provided to the AAT in the respondent's statement of facts and contentions. The AAT found that the applicant had been overpaid and that the overpayments were debts due to the Commonwealth. The AAT also determined that the recovery of the debts should not be waived or written off. The court found that the AAT correctly applied the statutory formula for the calculation of the applicant's pension entitlement under the Social Security Act. Therefore, the application was dismissed, and the applicant was ordered to pay the respondent's costs of the application to be taxed if not agreed.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondent’s costs of the application to be taxed if not agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The key issue in this proceeding is whether the AAT correctly applied the statutory formula under the Social Security Act 1991 (Cth) (SS Act) for the payment of the relevant pensions. OUTLINE OF FACTS The applicant was granted a disability support pension under the SS Act which was transferred to an age pension on 3 July 2008. On 29 January 2010 a review was conducted by the Australian Taxation Office (ATO) which indicated that the applicant’s wife’s taxable income was in fact in excess of her declared earnings. This is not in issue. On 28 September 2010 a delegate of the respondent found that the applicant had been overpaid for his disability support pension in the sum of $457.67 for the period 14 May 2008 to 2 July 2008, and overpaid for his age pension in the sum of $4,756.70 for the period 3 July 2008 to 23 September 2010. The applicant was informed of the corresponding debts raised against him. On 5 October 2010 the applicant requested a review of the decision to raise and recover the debts. On 17 December 2010, a Centrelink ARO varied the decision and increased the disability support pension debt to $549.20 but waived the recovery of $203.85, and reduced the age pension debt to $3,404.28, with the full amounts to be recovered from the applicant. The period for which the disability support pension debt was calculated by the ARO was 6 April 2008 to 2 July 2008. The ARO apparently also determined that, based on the earnings amounts declared for his partner, the applicant had been underpaid the age pension by $232.25 from 24 September 2010 to 16 December 2010. On 17 January 2011 the applicant lodged an application for review of the ARO’s decision with the SSAT. On 24 February 2011, the SSAT affirmed the decision to raise a disability support pension debt of $549.20 and recover part of this debt. The SSAT however varied the ARO’s decision with respect to the age pension debt, and extended the amount of the debt to $4,756.70, and set aside the decision to pay arrears of age pension of $232.25 for the period 24 September 2010 to 16 December 2010. On 14 March 2011 the applicant applied to the AAT for a review of the SSAT decision. On 23 September 2011, as explained further below, the AAT set aside the SSAT decision under review, substituted its decision, and published written reasons for its decision. THE AAT’S DECISION The AAT considered the applicant’s evidence and made the following findings of fact: ·On 29 January 2010 a review was conducted due to information obtained from the Australian Taxation Office which showed that the applicant’s wife’s taxable income of $44,554 on 21 July 2009 exceeded her declared earnings of $29,868. A letter was sent to the applicant identifying the discrepancies and inviting him to contact Centrelink.·On 9 February 2010 applicant spoke to the Centrelink Customer Support Officer (CSO) to review his payments. The CSO recorded in its database that the procedure was explained to the applicant, the applicant was advised to notify Centrelink if his wife’s wages varied in the future, and the applicant was aware that his wife’s employer would be contacted. The applicant’s wife’s income continued to fluctuate over the succeeding months. ·After contacting the wife’s employer, a delegate for the respondent decided that the applicant had been overpaid $457.67 and $4,756.70. ·Before and during the debt period (14 May 2008 to 23 September 2010) Centrelink sent the applicant notices to notify Centrelink if his or his partner’s income changes.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On 23 September 2011, as explained further below, the AAT set aside the SSAT decision under review, substituted its decision, and published written reasons for its decision. THE AAT’S DECISION The AAT considered the applicant’s evidence and made the following findings of fact: ·On 29 January 2010 a review was conducted due to information obtained from the Australian Taxation Office which showed that the applicant’s wife’s taxable income of $44,554 on 21 July 2009 exceeded her declared earnings of $29,868. A letter was sent to the applicant identifying the discrepancies and inviting him to contact Centrelink.·On 9 February 2010 applicant spoke to the Centrelink Customer Support Officer (CSO) to review his payments. The CSO recorded in its database that the procedure was explained to the applicant, the applicant was advised to notify Centrelink if his wife’s wages varied in the future, and the applicant was aware that his wife’s employer would be contacted. The applicant’s wife’s income continued to fluctuate over the succeeding months. ·After contacting the wife’s employer, a delegate for the respondent decided that the applicant had been overpaid $457.67 and $4,756.70. ·Before and during the debt period (14 May 2008 to 23 September 2010) Centrelink sent the applicant notices to notify Centrelink if his or his partner’s income changes. At [15]-[17] the AAT considered the following key issues for determination: ·Whether the applicant been overpaid disability support pension for the period 6 April 2008 to 2 July 2008 and age pension for the period 3 July 2008 to 16 December 2010. ·If so, whether the overpayments are debts due the Commonwealth.·If so, whether the recovery of the debts, or any part thereof, should be waived or written off. The AAT reviewed all the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) by the respondent. The AAT also considered fresh calculations provided to the AAT in the respondent’s statement of facts and contentions filed 3 June 2011. At [4.10]-[4.12] of the statement the respondent stated that the overpayment was recalculated to assist the AAT and the applicant, and showed the maximum rate of pension, which was broken up into columns of dates for each concluding fortnight, explained as follows: The first row provides the maximum rates of pension, rent assistance and pharmaceutical allowance and gives a total maximum payment rate. Under the heading ‘Income test’ the income thresholds, the associated taper rates and the cutoff limit at which pension is no longer payable, less any reductions, such as working credits [R1 pp. 1-22].The personal affecting income is the amount of income that is reduced by applying the taper per dollar in excess of the maximum rate of AP. However, as Mrs Callander’s earnings and other income were over the amount previously declared, Mr Callander was only entitled to a part of the payment of the pension at a rate less than he had received (as shown in ‘Debt Report’ section of the calculations- see below). The amounts as shown under the part ‘Debt Report’ shows the amounts Mr Callander was entitled to receive in the same date columns. The following row headed ‘Paid’ is the amount of pension that was paid to Mr Callander for each fortnight. The final heading – ‘Overpaid’ provides an itemised list of the debt components and total amount overpaid. Page 274 to 276 provides a list of Mrs Callander’s income which was taken from the verified earnings presented by her employer [R3: pp.52-71] (Emphasis in original)

Ratio Decidendi

Legal Principle Established

In the circumstances I consider that, in substance, the applicant has raised a question of law concerning the proper application of the formula for the calculation of his pension entitlement, under the SS Act, but not otherwise. So only the first ground of appeal relied upon will be considered, the other grounds not raising any relevant questions of law. CONSIDERATION As identified by the AAT, the following legislative provisions are relevant. Section 117(a) of the SS Act provides that the rate of disability support pension for a person who is not permanently blind, and has not turned 21 years of age, is worked out using the pension rate calculator A at the end of s 1064 of the SS Act. Section 1064 of the SS Act provides that a person’s pension is calculated using the pension rate calculator contained in s 1064-A1 of the SS Act. Section 1064-A1 of the SS Act provides a method statement for working out a person’s maximum rate of pension, as follows: Module A—Overall rate calculation process Method of calculating rate 1064‑A1The rate of pension is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only). Method statement Step 1.Work out the person’s maximum basic rate using MODULE B below. Step 1A.Work out the amount of pension supplement using Module BA below.Step 3.Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b). Step 4.Add up the amounts obtained in Steps 1, 1A and 3: the result is called the maximum payment rate. Step 5.Apply the ordinary income test using MODULE E below to work out the income reduction. Note:Module F contains provisions that may apply to working out the ordinary income of a person, and the ordinary income of a partner of the person, for the purposes of disability support pension.Step 8.Take the income reduction away from the maximum payment rate: the result is called the income reduced rate. Step 9.Apply the assets test using MODULE G below to work out the reduction for assets. Step 10.Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.Step 11.Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.Step 12.The rate of pension is the amount obtained by:(a)subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and(b)if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and(c)adding any amount payable by way of remote area allowance (see Module H).Note 1:if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 1129 and 1130). Note 1A:If a person’s rate is, or is to be, an income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 1133AA to 1144).Note 2:Section 1210 deals with the application of income and assets test reductions.Note 3:the rate calculation for a member of a couple is affected by the operation of points 1064‑A2 and 1064‑A3.Note 4:in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.Note 5:a person’s rate may also be reduced because the person or the person’s partner receives compensation (see section 1173) or because the person or the person’s partner is receiving a foreign pension (see scheduled international social security agreements at section 1208).Note 7:Clause 146 of Schedule 1A may affect the provisional annual payment rate in step 11.