Chong and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2009] AATA 690

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 690

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   2008/5548

GENERAL ADMINISTRATIVE  DIVISION		)
Re		LAI HING CHONG

Applicant

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

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date10 September 2009

PlaceMelbourne

Decision The decision under review is affirmed.

(sgd) John Handley
  Senior Member

SOCIAL SECURITY – Pension Bonus – application for registration with Pension Bonus Scheme not made within statutory period – application later made – discretion of Secretary to extend period of registration can be exercised only if applicant had been engaged in work which was gainful – applicant engaged in buying and selling real estate and online share trading – activity did not involve substantial degree of personal exertion – discretion cannot be exercised – circumstances not special – decision affirmed

Social Security Act 1991(Cth) s 9, s 92B, s 92C(c), s 92C(d), s 92H(1), s 92H(3), s 92H(4), s 92H(5) and s 92H(6), s 92N, s 92P, s 92Q, s 92T, s 92U, s 92V, s 92X, s 92Y, s 93 and s 93(2)

REASONS FOR DECISION

10 September 2009 Mr John Handley, Senior Member           

1.      Mrs Chong, the applicant in these proceedings, applies to review a decision of the Social Security Appeals Tribunal (the SSAT) made on 27 October 2008.  The SSAT then decided to affirm a decision previously made by an Authorised Review Officer (ARO) of Centrelink to reject her application for Pension Bonus.

2.      The circumstances of Mrs Chong and the date of the occurrence of certain events are recorded in the following paragraph.  None of those events were in dispute.

3.      Mrs Chong qualified by age for Age Pension on 29 October 2000.  She registered with the Pension Bonus Scheme (P B S) on 13 May 2004.  Between 23 February 2003 and 13 April 2008 she worked on a permanent part time basis with the Village Green Hotel and worked between 9 September 2004 and 31 July 2005 with a shop known as Romancing The Veg.  On 16 April 2008 she claimed Age Pension and has received payment of it subsequently.

4.      The P B S was introduced on 1 January 1998 and permits payment of a Pension Bonus (PB) to persons who continue to remain in the workforce, past the age of qualification for Age Pension, so long as they agree to defer claiming Age Pension for at least one full year and they pass the work test.

5. Qualification for PB is found within Chapter 2 Part 2.2A of the Social Security Act 1991 (the Act).

6.      That section provides that a person qualifies for PB if age pension is received after the time a PB claim is made.  There are other qualifying provisions but relevantly the only provisions that apply in the present application is s 92C (c) ‑ the person is also registered as a member of the P B S and s 92C (d) ‑ the person has accrued at least a one full year bonus period whilst registered as a member of the P B S.

7. However the above provisions can be – and in this case are modified by – the provisions of s 92H(1), namely, if the qualification for age pension occurs after 1 July 1998, the application for registration in the P B S must be lodged within a 26 week period beginning 13 weeks before and 13 weeks after the date of qualification for age pension. If the registration for PB was lodged within that 26 week period, the PB registration takes effect on the date that the person qualifies for age pension.

8.      As may be seen by the above, the applicant did not lodge an application for PB within the period 13 weeks before or 13 weeks after the date of qualification for age pension, because she qualified for age pension on 29 October 2000 and she registered with the P B S on 13 May 2004.

9. Section 92H (3) empowers the Secretary to make a decision to extend the period of lodgement of the PB application and if that decision is made the registration takes effect on the date of application or on another date as the Secretary decides. However, that authority is modified by s 92H(4) which prohibits the making of the decision to extend the period of time to lodge the PB application unless, if it were assumed the person had been a member of the P B S throughout the pre-application period, the person would have also been a non-accruing member for all of the pre application period or would have been an accruing member for some or all of the pre-application period and would have passed the work test for each test period that is applicable to the person.

10. Section 92B, s 92P and s 92Q provides that a person over the age of 75 is a non-accruing member.  In the alternative, a person has accruing membership only prior to the age of 75 years.

11.     The Work Test is found within s 92U. Those provisions will be discussed later.

12. Section 92H(5) provides that the pre application period  is the period commencing on the date that a person qualifies for age pension (29 October 2000) and ending on the date the person lodged the application for registration with the P B S (13 May 2004).

13.     The test period as that expression is found within s 92H(4) is defined at s 92H(6) and it provides that there should be an identification of the overall accruing period which is that part of the pre application period if it were assumed that the person was a member of the P B S throughout the pre application period and within that period the person would have been an accruing member.  In those circumstances if the overall accruing period is 365 days or less, that would constitute the only test period.  If the overall accruing period is longer than 365 days, a number of test periods arise being the full year period beginning at the start of the overall accruing period and if there are two or more succeeding full year periods, each of those full year periods will also be a test period.  Additionally the remainder of the overall accruing period shall be a test period.  For the purposes of s 92H (6) the relevant test periods in the pre application period between 29 October 2000 and 13 May 2004 were:

-29 October 2000 to 28 October 2001

-29 October 2001 to 28 October 2002

-29 October 2002 to 28 October 2003; and

-29 October 2004 to 13 May 2004

14.     A full year period is defined at s 92B as a continuous period of 365 days.

15. Section 92T provides that the first bonus period for the purposes of accrual of membership of the P B S commences either on the day that registration of the scheme took effect or the day in which the person became an accruing member and in application to both of these circumstances the date from which the person passed the work test.

16.     The Work Test is found at s 92U and it provides that a person will pass it if in a full year period of accruing membership of the P B S, the person gainfully worked for at least 960 hours of which at least 640 were worked in Australia.  The work test for the purposes of a part year period is discussed at s 92V and it provides that two thirds of the hours gainfully worked during such a period (subject to a provision not applicable in these proceedings) must be worked in Australia.

17.     Gainful Work, defined at s 92X, is work for financial gain or reward either as an employee or in self employment which involves a substantial degree of personal exertion. The Secretary has a discretion to treat activity as gainful work under s 92Y so long as the activity does not consist of voluntary work for a charitable, welfare or community organization. The Secretary does have a power to treat work as being gainful if there are applicable special circumstances.  (In the present case, no circumstances were alleged which would permit me to find that the activities, in which the applicant was engaged – refer later – were special).

18. Subject to the discretion in s 92Y, work consisting of the management or administration of financial investments in which the person has a legal or equitable interest as a member of a family or a family company or Trustee of a family trust is not gainful work.

19. On this issue the respondent argued that the applicant was not engaged in work, within the meaning of s 92U for the whole of the pre application period. The applicant asserted she was acting on her own behalf and for her own benefit. She said that she and her husband had separate bank accounts and he kept his own money for himself.  On closer examination however it appears that the applicant and her husband jointly purchased and sold real estate and they enjoyed the profits.  They held a joint bank account into which monies, received as rental income from those properties, were deposited.  From that account, expenses associated with the maintenance costs and charges over those properties was paid.  The account was also used to meet joint loan repayments, household expenses over their domestic premises and school fees for their daughter.  I am satisfied that this activity amounts to the applicant being engaged in the management or administration of one or more financial investments in which . . . (she) has a legal or equitable interest because she is a member of . . . a family group as defined at s 93(2).

20.     The applicant also engaged in share trading and other online investment activities, over which she said that profits and losses were on her own account and were not shared with her husband nor did he receive benefit from them.

21.     In completing this part I am satisfied that the acquisition of properties gave rise eventually to rental income.  I am also satisfied that the sale of properties gave rise to a capital profit.  The income and capital receipts were paid into a jointly held and managed bank account which contained available money or deposit money which constitutes a financial investment as defined by s 9 and which is the descriptor of the activity referred to at s 93. The activities associated with the buying and selling of real estate fails to meet the work test in s 92U and, more precisely, fails to meet the definition of gainful work at s 92X. This activity, could not be found to be self employment involving a substantial degree of personal exertion.  A similar finding will be made concerning the applicant being engaged in online share trading.

22.     I am not satisfied that the applicant, if it were assumed she was a non accruing member, passed the work test for each test period, in the pre-application period (refer s 92H(4)). The relevant test periods are recorded at paragraph 13 earlier. The work with the Village Green Hotel was probably gainful from 23 February 2003 but the previous activity concerning purchase and sale of real estate and share trading, during other test periods was not.  It follows that the applicant did not pass the work test for each test period in the pre-application period.  The Secretary is therefore prohibited from exercising the decision to extend the period of lodgement of the application.  The applicant cannot, in those circumstances, succeed in this review.

23.     The decision of the Social Security Appeals Tribunal is affirmed.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Mr John Handley, Senior Member

Signed:         Grace Carney Personal Assistant

Date of Hearing  17 June 2009
Date of last written submission          20 July 2009
Date of Decision  10 September 2009
Solicitor for the Applicant                   Self Represented
Departmental Advocate  Mr T de Uray