CJFN and Secretary, Department of Social Services (Social services second review)
[2015] AATA 853
•6 November 2015
CJFN and Secretary, Department of Social Services (Social services second review) [2015] AATA 853 (6 November 2015)
Division
General Division
File Number
2015/0231
Re
CJFN
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Egon Fice, Senior Member
Date 6 November 2015 Place Melbourne The Tribunal affirms the decision of the Social Security Appeals Tribunal dated 12 December 2014 which decided that a decision of a delegate of the Respondent dated 3 September 2014 to reject the Applicant's application for a low income health card was correct because the Applicant had received, in the 8 week period prior to lodgement of his claim, income in excess of the maximum allowable.
............................[sgd]............................................
Egon Fice, Senior Member
Catchwords
SOCIAL SECURITY – application for low income health care card – receipt of weekly compensation payments – qualification period – change in circumstances – decision under review affirmed
Legislation
Social Security Act 1991 (Cth) ss 8, 1061ZO, 1071A-1, 1071A-2, 1071A-4
Secondary Materials
Bruce Moore (ed), The Australian Concise Oxford Dictionary (Oxford University Press, 3rd ed, 1997)
REASONS FOR DECISION
Egon Fice, Senior Member
6 November 2015
CJFN is a New Zealand citizen who holds a New Zealand special category visa. He has resided permanently in Australia for a period exceeding two years (104 weeks) and therefore satisfies the residency requirement for a Health Care Card (HCC) (s. 1061ZO(2)(b) of the Social Security Act 1991 (the Social Security Act)).
CJFN first applied for a Low Income Health Care Card (LIC) on 3 August 2009. At that time, a LIC remained valid for a period of six months subject to maximum income requirements. After September 2014, the holder of a LIC was reassessed every 12 months. At the end of the validity period, a LIC expires and if an application has been made for renewal of the card and the applicant qualifies, a new LIC is issued. Applicants for renewal of a LIC are ordinarily able to complete a renewal online because they are already registered with Centrelink. First-time applicants for the LIC must complete a paper application form and lodge it with Centrelink.
I had in evidence an email prepared by Mr P Dixon, who describes himself as the Office Coordinator, Litigation Team within the Department of Human Services. Mr Dixon set out the history of CJFN’s LIC applications, grants and cancellations. The significant activity recorded by Mr Dixon, as far as this application is concerned, is as follows:
·6 September 2013: CJFN lodged an online LIC renewal application;
·18 October 2013: CJFN’s renewal application was processed and he was issued with a new LIC;
·29 October 2013: Centrelink took into consideration CJFN’s periodic compensation payments payable by Victorian WorkCover Authority (CGU Melbourne) which put him over the income limit to be eligible for the LIC and it was cancelled taking effect from 8 March 2013; and
·24 March 2014: CJFN lodged an online claim for a LIC which was rejected because he was over the income cut-off limit.
A Compensation Management Summary obtained by Centrelink from CGU records that from 12 October 2013, CJFN received or was entitled to receive weekly payments by way of compensation in the gross amount of $618 per week. This information was recorded on Centrelink computer records on 17 October 2013.
Centrelink computer records disclose the following entry which has a receipt date of 6 September 2013 but which states: ANNOTATE BY D3Y ON 29 OCT 2013:
As per DOC dated 17.10.2013 Customer is receiving weekly compensation payment of $618 per week and ongoing. Periodic payment screen has been updated on 29.10.2013 by the compensation team.
PLEASE NOTE: That when LIC/NCL was granted on the 18.10.2013 periodic compensation payments were not CODED by the LIC processing team.
PLEASE ALSO NOTE: That when compensation NIL charge was completed on 17.10.2013 there was NO started LIC/NCL activity on benefit status line and therefore the compensation team is not required to code weekly compensation.…
I accessed on 29.10.2013 after receiving phone call from FOI officer Leila Jenkins… and I noticed that LIC/NCL had been processed. Therefore I corrected the errror [sic].
Reference to the above entry is confirmed by a computer entry bearing the receipt date of 17 October 2013.
Centrelink’s computer records record that CJFN contacted Centrelink on 29 January 2014 complaining about his LIC. The details of the complaint are recorded as follows:
Customer lodged a letter of complaint [dated 16 January 2014] about his Low Income Health Care Card. The customer was granted the card however compensation was not coded onto the record. When this was identified, the card was cancelled. The customer is upset about the decision to cancel the card.
CJFN sought to have his LIC reinstated. However it appears that Centrelink again had difficulty contacting him to tell him that Centrelink was unable to change its decision to cancel the LIC.
It appears from Centrelink’s computer records that under the date 30 January 2014, CJFN’s record was annotated on 13 February 2014 when he was contacted by Centrelink regarding his LIC. That entry records that the Centrelink officer explained to CJFN why his LIC was not current and a renewal document would not be sent to him. That LIC expired on 7 March 2014. This was explained to CJFN because the cover letter enclosing his LIC stated that when that card expired, he would be sent a renewal form just before it expired. As long as his income was under the income limit to qualify for a LIC, he would be sent a new card. Centrelink’s computer record then records:
The customer states he is not receiving any compensation and maintains the case is still being heard with the lawyers. directed [sic] customer to discuss this with his lawyer as CGU have provided notification the customer is on weekly payments and unless this is verified as not being correct by CGU he would not be eligible for the LIC HCC.
An entry made by a Centrelink officer on 24 February 2014 records that CJFN contacted Centrelink on that day complaining about the cancellation of his LIC. According to that entry, CJFN said he was not receiving income from CGU and believed he was entitled to the LIC. That entry also records that CJFN sent a letter to Centrelink stating he had not received any payments from the insurer and had not received anything in the past eight weeks. According to the report, CJFN attached bank statements to prove he had not received any payments from CGU. However the officer noted that he had not provided anything to verify that he was not receiving compensation payments. In written submissions received from CJFN after the hearing of this matter had concluded, which I had authorised, CJFN said that CGU had provided false information and that it failed to explain this material (whatever was meant by that) when he asked them to do so.
CJFN lodged a new claim for the LIC/HCC on 24 March 2014. On that claim he noted that he was receiving workers compensation for an injury which occurred on 6 October 2007. He stated that the payment was $618 per week. This claim was automatically rejected by Centrelink because his income was in excess of the maximum permitted for the issue of the LIC. According to the ARO, the income test limit for the
eight week period preceding CJFN’s application was $519 per week or a total of $4,152 over the eight week period immediately prior to lodging his claim.
CJFN sought a review of the ARO decision by the then Social Security Appeals Tribunal (SSAT) (now a division of the AAT). On 12 December 2014 the SSAT affirmed the ARO’s decision. CJFN then sought review of the SSAT decision by this Tribunal (now described as the second review).
Although in his written submissions lodged following the hearing of this matter, CJFN canvassed many areas about which he was dissatisfied with Centrelink’s performance of its duties, including Freedom of Information requests, with respect to CJFN, much of that is not relevant for the purposes of reviewing the SSAT decision. The only issue I am required to determine is whether CJFN’s income in the eight weeks prior to lodging his claim, which includes compensation payments, exceeded the maximum allowable limit at that time.
DETERMINATION OF INCOME
Given that CJFN lodged his claim on 24 March 2014, the eight week period immediately prior to lodgement was between 27 January 2014 and 24 March 2014.
In his claim, CJFN said that he did not earn any income from work in the eight weeks preceding lodgement of his claim. However, under the section dealing with compensation, CJFN described the compensation as a workers’ compensation claim for an injury dated 6 October 2007; the payer being Victorian WorkCover Authority (CGU Melbourne). As to the amount, he simply wrote $618.00 Weekly. On the face of it, this entry on his claim form does not make it clear whether he was entitled to $618 per week or whether he had been paid $618 per week in the eight week period preceding his claim. Nevertheless, this figure accords with the Compensation Management Summary obtained from CGU Melbourne. That document lists the payment of $618 weekly commencing on 12 October 2013. In fact, that document lists the following payments:
12 October 2013 – [blank] – $618 – weekly
10 October 2012 – [blank] – $618 – weekly
6 October 2012 – 11 October 2013 – $591 – weekly
3 March 2012 – 5 October 2012 – $572 – weekly
26 November 2010 – 2 March 2012 – $532 – weekly
10 October 2010 – 25 November 2010 – $561 – weekly
I did not have any objective evidence before me which contradicted or questioned the accuracy of the Compensation Management Summary. This is despite the fact that CJFN insisted that, when told in October 2013 that he was receiving weekly payments, this was news to him. CJFN described the information given to Centrelink by CGU as false. In a letter dated 18 February 2014 to the Department of Human Services, CJFN said:… my income for the past eight weeks has been zero dollars (See attached bank statement)….
In that letter CJFN also said that even if he was entitled to receive compensation ($618 weekly), he was still below the maximum income limit because he was entitled to exceed his figure by 25% without losing entitlement. By his calculation, he was entitled to earn $621.25 without losing his entitlement. However, CJFN has quoted the incorrect figure regarding the maximum income allowable at the time of his application in March 2014. The maximum allowable payment at the time of his application was $519 weekly. A 25% allowance would raise that figure to $648.75 per week. Therefore, according to CJFN, he nevertheless was under the maximum limit.
Unfortunately, CJFN has not correctly stated the way in which the maximum limit is calculated. The Health Care Card Income Test Calculator is found in s. 1071A-1 of the Social Security Act. It provides:
This is how to work out whether a person claiming a health care card satisfies the health care card income test on the day on which the person claims the card, whether or not the person is the holder of a health care card at that time.
The method statement then requires the person to work out the amount of their ascertained income for the period of eight weeks ending on the day on which the person lodged the claim. The amount of the person’s allowable income for the period is then worked out. Then, if the ascertained income for the period is less than the person’s allowable income for the period, the person satisfies the health care card income test. The additional 25% allowance does not apply to a person making a claim for the card whether or not the person is the holder of a health care card at the time. The 25% allowance is only taken into account where there has been a change in circumstances. Section 1071A-2 provides:
This is how to work out whether a person who holds a health care card satisfies the health care card income test at a particular time where there has been a change in circumstances.
The method statement then sets out the following:
Step 1. Work out the amount of the person’s ascertained income for the period of 8 weeks ending on the day on which the change of circumstances occurred.
Step 2. Work out the amount of the person’s allowable income for the period.
Step 3. If the person’s ascertained income for the period is less than 125% of the person’s allowable income for that period, the person satisfies the health care card income test.
Step 4. If the person’s ascertained income for the period is 125% or more of the person’s allowable income for that period, the person does not satisfy the health care card income test.
There has been no change of circumstances while CJFN held a valid HCC. On the day on which CJFN made his application for a LIC, which was on 24 March 2014, he was required to have had a maximum income of $519 per week in the eight weeks preceding lodgement of the claim. On his application form, he correctly indicated he was entitled/or possibly was receiving $618 per week. Plainly, CJFN was outside the maximum income test for the grant of a LIC.
While CJFN said that he had received no income whatsoever in the 8 week period immediately preceding his claim, the evidence discloses two payments made into his National Australia Bank account. On 20 February 2014, $4,472 was deposited and on 24 February 2014, a further $2,236 was deposited. Those deposits came from CGU Workers Comp. There can be no question whatsoever that those sums, having been received in the eight week period prior to lodgement of his claim, are relevant in determining his maximum income level for that period.
Section 1071A-4 defines ascertained income in the following way:
ascertained income, in relation to a period, means:
(a)in relation to a person who is not a member of a couple – the income of the person in respect of that period; and
(b)in relation to a person who is a member of a couple – the income of the person and his or her partner in respect of that period.
The word income is also defined in the following way:
income, in relation to a person, means ordinary income and, to the extent that they are not ordinary income, includes:
(d)…
(e)payments of compensation, including compensation within the meaning of the Military Rehabilitation and Compensation Act;…
The expression ordinary income is defined in s. 8(1) of the Social Security Act and it means income that is not maintenance income or an exempt lump sum. The word income is defined to mean:
income, in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person’s own use or benefit; or…
Given the two deposits into his account in February 2014, I should also refer to the definition of the expression periodic amount, which is defined in s. 8(11A) of the Social Security Act as follows:
An amount is a periodic amount if it is:
(a)the amount of one payment in a series of related payments, even if the payments are irregular in time and amount; or
(b)the amount of the payment making up for arrears in such a series.
In accordance with the definition of a periodic amount, the two lump sums which were deposited in CJFN’s account in February 2014 must necessarily be regarded as periodic payments or a periodic amount. They were payments making up for arrears of the series of such payments.
As the Secretary submitted, while the receipt of periodic compensation is not counted as ordinary income for the purposes of the Social Security Act, there is one exception, and that is for the purposes of s. 1071A-4 (that is, when determining ascertained income). It necessarily follows that the amounts of $4,472 and $2,236 must be treated as periodic amounts when determining ascertained income.
The Secretary also submitted that there is no legislative provision regarding whether a person must have been entitled to, or actually received, payment of compensation for the purposes of s. 1071A. That is because of the definitions set out in ss. 8(1A and 1B). Respectfully, I disagree. Section 8(1A) deals with employment income. Plainly, periodic compensation payments are not employment income. In fact, s. 8(1A)(d) expressly excludes the payment of compensation in relation to a person’s inability to earn, derive or receive income from remunerative work. Section 8(1B) is inapplicable because it refers to income which was in fact earned, derived or received by the partner of the person.
In my opinion, the definition of income in s. 8(1) of the Social Security Act refers to any income amount earned, derived or received by the person for the person’s own use or benefit because the word income has, for the purposes of the Social Security Act, a broad meaning which includes periodic payments of compensation. However, compensation is neither earned nor derived by the recipient. Hence the use of the disjunctive received in the definition of income to cover such payments. The ordinary meanings of the word receive include: 1 take or accept (something offered or given) into one’s hands or possession (The Australian Concise Oxford Dictionary, 3rd ed, p. 1125).
It follows, in my opinion, that compensation payments must be received by a person when determining that person’s ascertained income for the purposes of the Health Care Card Income Test.
Despite that, it cannot be argued that in the 8 week period immediately preceding the lodgement of his claim for the LIC on 24 March 2014, CJFN in fact received the total sum of $6,708. Also, there can be no question that the total sum received by CJFN in February 2014 was payment in arrears of compensation calculated at $618 per week. Those payments are properly described as periodic amounts even though they are obviously irregular in time and amount. CJFN’s entitlement at that time is clearly set out in the Compensation Management Summary which was in evidence. At his entitled weekly rate, that amounts to a total of $4,944.
When the income test limit ($519 per week) is calculated over the eight week period preceding lodgement of the claim, the maximum payment must not exceed $4,152 in that period. Plainly, at the time he lodged his application on 24 March 2014, CJFN was over the maximum income limit for receipt of the LIC.
CONCLUSION
I have found that CJFN received the total amount of $6,708 in the eight week period immediately preceding his lodging a claim for the LIC. The two payments which make up that sum appear to be arrears payments calculated at the rate of $618 per week. Because the maximum allowable income for a recipient of the LIC at that time was $519 per week, CJFN exceeded the maximum amount and hence did not satisfy the income test for the issue of that card.
It necessarily follows that I find the decision made by the SSAT on 12 December 2014 was the correct decision. I affirm that decision.
I certify that the preceding 35 (thirty -five) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member ..........................[sgd]..............................................
Associate
Dated 6 November 2015
Date of hearing 21 August 2015 Date final submissions received 30 September 2015 Applicant In person Advocate for the Respondent Ms M. Pandurevic Solicitors for the Respondent Sparke Helmore
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Income Test
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Qualification Period
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Decision Under Review
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