Cocks and Department of Family and Community Services - [2001] AATA 550

DECISION AND REASONS FOR DECISION [2001] AATA 550

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2001/47

GENERAL ADMINISTRATIVE DIVISION          )
           Re       JAMES COCKS
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Senior Member W.H. Eyre

Date 19 June 2001
Place Adelaide

Decision      The Tribunal sets aside the decision under review and in substitution decides that under sub-section 24(1) of the Social Security Act 1991, Mr Cocks should, for a special reason, not be treated as a member of a couple for the purposes of that Act.
         (Signed)
  W.H. Eyre
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Age Pension – whether, for a special reason, applicant not to be treated as a member of a couple – applicant's wife and child resident in Philippines - whether applicant entitled to single rate while in Philippines with wife and child
Social Security Act 1991 ss.4, 24
Re Secretary, DSS and Tsimpidaros (AAT 10292, 5 July 1995)
Re Hawkins and Secretary, DSS (1996) 44 ALD 651
Re Galewski and Secretary, DSS (1998) 54 ALD 569
Boscolo v Secretary, DSS (1990) 90 FCR 531

REASONS FOR DECISION

19 June 2001 Senior Member W. H. Eyre

By order made on 5 September 2000, the Federal Court remitted this matter to the Tribunal to determine according to law (Cocks v Centrelink [2000] FCA 1248).
The AAT on 8 May 2000 had set aside a decision of the Social Security Appeals Tribunal, affirming a decision of an authorised review officer made on 29 June 1999, to treat the applicant as a member of a couple and to pay Age Pension at the married rate both during Mr Cocks' absence in the Philippines and while in Australia. The AAT substituted a decision that while Mr Cocks is residing in Australia he be treated as not a member of a couple (and thus entitled to pension at the single rate) but that he be treated as a member of a couple while residing in the Philippines (and thus entitled to pension at the married rate) ([2000] AATA 358). Mr Cocks appealed this decision to the Federal Court.
His Honour O'Loughlin J at paragraph 16 of the Federal Court decision, determined:
"It is not for this court to resolve this matter on the merits. That is the role of the Tribunal. This Court can only interfere when it is able to identify an error of law. However, it is my opinion that the Tribunal, in failing to examine Mr Cocks' personal circumstances when he is residing in the Philippines with his impecunious wife, who is not entitled to any social welfare benefits from the Australian community, erred in law. In coming to this conclusion I consider that I am merely following a line of cases that have earlier been decided by the Tribunal and this Court. …"
The line of cases referred to comprises Re Secretary, DSS and Tsimpidaros, an unreported AAT decision (AAT 10292, 5 July 1995); Re Hawkins and Secretary, DSS (1996) 44 ALD 651; Re Galewski and Secretary, DSS (1998) 54 ALD 569 and Boscolo v Secretary, DSS (1990) 90 FCR 531. His Honour concluded at paragraph 22:
"In my opinion, the Tribunal recognised that Mr Cocks would not benefit from a pooling of resources whilst he was in Australia and his wife was in the Philippines but it failed to recognise that Mr Cocks would likewise not benefit from a pooling of resources during such time as he was residing with his wife and child in the Philippines for she has nothing to contribute to the pool. Having correctly recognised that there existed a special reason in the particular case, the Tribunal failed to recognise that this specialty had the potential to exist just as much when Mr Cocks was living with his wife in the Philippines."
When the matter came back to the Tribunal from the Federal Court, Mr Cocks requested that it be heard in his absence and filed a medical certificate in support. As the result of a telephone directions hearing, and with the parties' consent, it was decided that the matter would be "heard on the papers".
The documents before the Tribunal consist of the T documents filed on 23 September 1999, the transcript of the AAT hearing on 21 January 2000, the respondent's written questions of Mr Cocks dated 18 May 2001; Mr Cocks' answers to those questions dated 24 May 2001, an undated written statement from Jeffrey Pearson received by the Tribunal on 28 May 2001; the respondent's interim written submissions dated 18 May 2001, Mr Cocks' undated written response to those submissions received by the Tribunal on 28 May 2001, the respondent's additional submissions dated 29 May 2001 and Mr Cocks' final submission received on 5 June 2001.
The Tribunal is satisfied that both parties have seen the documents referred to and have had adequate time within which to respond. The Tribunal notes that Jeffrey Pearson is Mr Cocks' brother-in-law. Mr Cocks resides with Mr and Mrs Pearson at Cummins on Eyre Peninsula when he is in Australia.
The Tribunal thinks it appropriate to set out the questions the respondent has asked Mr Cocks for the purpose of this hearing and the answers given:
"Q:Do you send your wife money and if so:
-how much money do you send and how frequently;
-what currency do you send; and
-in what form is it sent (eg, bank cheque, bank transfer, cash)?
A:(1) Yes I send money to my wife – sometimes twice a month
(2) I send all of my pension less some funds for personal
needs & basic necessities of life + medications plus
contributions to return airfare
(3) Money is sent in Aust. Dollars & converted at the Bank
(4)Bank to Bank transfer
Q:What other income support does Mrs Cocks have available to her (ie, welfare in the form of money, welfare in the form of goods, gifts from family)
A:NIL
Q:Is your wife working and if so how much does she earn per
fortnight?
A:NO & NOTHING
Q:What assets does your wife have?
A:Some household goods
Q:If she is not working, is it because:
-she is physically incapable of working;
-she surrendered her employment to care for her child;
-she surrendered her employment to care for you: or
-any other reason (please specify)?
A:Surrendered her job in 1992 to return to her province to help her ailing parents and family
Q:What assistance is given to your wife by her family in the Philippines (eg, housing, food, clothes, childminding)?
A:Mrs Cocks while staying with her parents pays all utilities eg Electricity – Gas – Water – TV charges & some maintenance in lieu of rent for her room – paid from money sent by me
Q:How much do you pay for board while you are living with your sister? If you pay your sister nothing, do you contribute by way of paying for items such as food or utility bills and if so, how much do you contribute?
A:Have been advised not to answer as these questions have been answered orally & in writing several times
Q:How many visits have you made to the Philippines since you married and what was your reason for making those visits?
A:New passport issued in Sept. 98 shows 3 visits till March 2001 – old passport expired & destroyed in 98. However I estimate since marriage in 1997 no. of trips to be 5 or 6."
The respondent sees the issues as "What constitutes pooling of resources for a member of a couple?" and "Is there a special reason why Mr and Mrs Cocks should be treated as not being members of a couple during any time that they are living together?" (The respondent "does not seek to revisit the issue in relation to those times when Mr Cocks is living in Australia").
facts
Mr Cocks, born 21 October 1930, has been in receipt of pension since 1992 and had initially been paid Age Pension at the single rate. His daughter, Christine, was born in July 1996. On 25 February 1997 he married Thelma Munez, Christine's mother, in the Philippines (T3). In August 1998 he advised Centrelink of his marriage (T4) and was concerned he might have been overpaid. On 10 September 1998 a delegate of the respondent decided to treat him as a member of a couple and reassessed Mr Cocks' entitlement as being the married rate (T6). That decision was reviewed and set aside by an authorised review officer on 24 September 1998 (T9). The authorised review officer referred to Re Tsimpidaros and Re Hawkins, accepted that Mr Cocks was unable to "enjoy the benefits of a pooling of resources", accepted Mr Cocks' ill-health and found that he "should for a special reason in the particular case, not be treated as a member of a couple" under sub-section 24(1) of the Social Security Act 1991 ("the Act").
On 16 June 1999 a delegate of the respondent decided that Mr Cocks was restricted to the married rate, while overseas in the Philippines and while in Australia (T15). On review, the authorised review officer referred to policy Guidelines and concluded that "section 24 would NOT apply if the couple ARE living together overseas" (T16/46), apparently taking the view that the Guidelines confined the discretion to cases where the pensioner's partner was "not residentially qualified or was subject to a new arrival residents waiting period". The Social Security Appeals Tribunal affirmed this decision. The AAT, as stated above, effectively varied it with the effect that Mr Cocks was entitled to single rate while in Australia, but confined to married rate while in the Philippines. It concluded at paragraph 17 that "whilst he is overseas, residing with his wife and child, resources are pooled, and he should be treated as being a member of a couple". The Federal Court held the AAT had been in error in that it "failed to recognise that Mr Cocks would likewise not benefit from a pooling of resources during such time as he was residing with his wife and child in the Philippines for she has nothing to contribute to the pool" (paragraph 22).
The Tribunal finds that the maximum period Mr Cocks can stay in the Philippines, because of onerous Philippine requirements, is 6 months (transcript, p.12). At that previous AAT hearing Mr Cocks' evidence (transcript, p.12) was that he has stayed there "for periods of 3 months, 5 months, 6, up to 6, sometimes only 2 months … I live in Australia and I visit the Philippines to go to my family". The Tribunal notes and accepts that between September 1998 and March 2001, Mr Cocks made three trips to the Philippines. The Tribunal notes that on 2 June 1999, Mr Cocks apparently intended to be in the Philippines for "10-12 months" with his return date "unknown" (T10/29). The Tribunal cannot resolve this possible inconsistency on the material before it but does not consider it need do so -- no issue is taken regarding Mr Cocks' entitlement in terms of residence; nor is there material before the Tribunal to warrant a finding that Mr Cocks in fact stays in the Philippines for longer periods than he told the AAT at the previous hearing.
The Tribunal finds that Mr Cocks' health is poor and accepts the evidence he gave at the previous AAT hearing about this.
The Tribunal finds that Mr Cocks has no assets to speak of and accepts the evidence given at the previous AAT hearing that these, including his golf clubs and a painting, were sold to pay for his air fares. O'Loughlin J understood that Mr Cocks resided "free of board" with his sister at her farm in Cummins.
Mr Pearson, Mr Cocks' brother-in-law, has written to the Tribunal that he advised Mr Cocks that there should be no need to answer the respondent's questions 7 & 8 that concern payment of board and contribution to them while Mr Cocks is with them. Mr Pearson says:
"I take very strong exception to any reference to 'assistance' that my wife and I may provide to Mr Cocks. We have in fact provided the same hospitality to Mr Cocks' late mother and indeed to his sister, both of whom received aged persons' entitlements. Is it a suggestion that my wife and I should provide evidence of those situations. I fail to see that what we choose to provide by way of a 'home' to Mr Cocks could or would or should be of relevance to the question."

He also has commented "What we have done and will continue to do is to provide support and sustenance in what is no more nor less than to be found in any family situation".

The Tribunal can understand Mr Pearson's irritation and puzzlement. It appears from the evidence given at the previous AAT hearing that Mr Cocks' sister has in fact "lent" him at least $2,500 to assist with his airfares. The Tribunal considers there is little prospect of re-payment. The Tribunal concludes that Mr Cocks simply cannot afford the $3,500 to bring his family to Australia and provide accommodation.
The Tribunal makes that finding on the evidence given previously to the AAT and accepting Mr Cocks' statement of 24 May 2001 that he sends money to his wife "sometimes twice a month" and this comprises "all of [his] pension less some funds for personal needs & basic necessities of life + medications plus contributions to return airfare".
As to Mrs Cocks' financial circumstances, the Tribunal finds she has no assets and no income. It accepts that she is not able to work by reason of caring for her ailing parents in her home province (about 400 miles or a "2 day bus ride" from Manila – transcript, p. 9-10), caring for her 4 year old child, lack of education and lack of employment opportunities. When Mr Cocks met her and formed a relationship with her in about 1992, she was working as a nanny and cleaner in a tiny Chinese grocery near Manila (transcript, p. 9-10). The respondent submits that "the reason for Mrs Cocks having no income appears to be related to the level of unemployment in the Philippines and her decision to leave her job during her pregnancy, rather than any problem with her ability to work. Although she has no work it is not by virtue of any physical incapacity on her part". The Tribunal deals with the respondent's submissions below but indicates here that it does not see that it is relevant that Mrs Cocks is not physically incapacitated from working. The Tribunal accepts that Mrs Cocks cares for her ailing parents and child in circumstances where there is virtually no prospect of her gaining employment. It also adds that it surmises that if Mrs Cocks were living in South Australia, even more so if living on Eyre Peninsula, it would appear to be extremely unlikely that Mrs Cocks would find paid employment.
The Tribunal finds that Mrs Cocks has no assets and is impecunious. Her income, on the material before the Tribunal, is that part of Mr Cocks' single rate pension that he is able to send to her while he is in Australia and what he provides from the married rate while in the Philippines. The Tribunal finds Mrs Cocks has nothing to contribute to any pooling of financial resources. On the material before it, the Tribunal finds that Mr Cocks is the only spouse who makes, and is able to make, financial contribution to the family and that his financial contribution is limited to his pension payments.
respondent's submissions
The respondent submits that "The resources of a relationship are more than simply the income and assets that each person contributes". It says "The pooling of resources requires a broader consideration of what each person can contribute by way of income, assets and labour, the last heading encompassing a variety of tasks such as childcare, cleaning and cooking. On a less easily measured level, other resources might be available to the other person by way of emotional support, friendship or physical security".
The respondent submits there is no reason to treat Mr and Mrs Cocks as not being members of a couple while they are living in the Philippines. It says Mrs Cocks at all times cares for their child and keeps their home in the Philippines. It says Mrs Cocks cooks and cleans for her husband when they are together, provides assistance to him with his medical condition and provides emotional support and other care for him. Mr Cocks, the respondent says, provides immediate emotional support to his wife and more effectively fulfils his role as a father when he is in the Philippines.
The respondent submits that Mr Cocks incurs expenses for his accommodation while in Australia and that while living with his wife assumes those expenses do not exist and that his resources can be more fully directed to his wife and child. It says "At the least, living with his wife allows a more effective use of Mr Cocks' income."
As to Mrs Cocks' situation, the respondent emphasises that the fact that Mrs Cocks has no work is not due to any physical incapacity on her part. It says she provides for her own welfare in Mr Cocks' absence, including using whatever money Mr Cocks gives her. The same support mechanism is available for Mr Cocks when he lives with his wife. The respondent says "It is not withdrawn simply because Mr Cocks is present".
The respondent concludes:
"In the circumstances there is a complete marital relationship at any time that Mr and Mrs Cocks are living together. They enjoy the advantages of mutual association and are able to provide for each other whatever they are able to give. Although there is apparently only one income, that is no different to any other marriage where one person has chosen to forego participation in the workforce in order to provide full-time child care".

It points, in its additional submissions, again to Mrs Cocks' lack of income being due to her decision to leave employment and emphasises that it is by her own actions that she lacks an income to pool. It says that unemployment due to a lack of jobs is unfortunately common and therefore is not a special reason.

The respondent, in its additional submissions, comments that Mr Cocks has made upwards of five visits to the Philippines in four years and "is obviously able to reserve the money necessary to travel at will to be with his wife and child, satisfy his own needs and still provide his wife and child with money for their support".
applicant's submissions
The Tribunal does not intend to recount Mr Cocks' submissions in detail. Suffice it to say Mr Cocks argues that the respondent's submissions about looking at the resources to be pooled as extending beyond financial resources lack validity and reality. Both Mr Cocks and Mr Pearson query why this matter is being pursued by the respondent in the light of the Federal Court decision by O'Loughlin J.
the law and the tribunal's conclusions
Section 4 of the Act defines a member of a couple as follows:
"4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a)the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or
…
4(6)A person is not a member of a couple if a determination under section 24 is in force in relation to the person."
Section 24 of the Act provides discretion to not treat a person as a member of a couple in the following terms:
"24(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."
There is no dispute and the Tribunal finds that paragraphs (a) and (b) of sub-section 24(1) are met in Mr Cocks' case. The Tribunal has considered the authorities referred to by O'Loughlin J (see paragraph 4 above). It is clear from those cases that each involved consideration of the financial resources available for pooling – not intangible resources such as emotional support, nor resources on which it is difficult to place a realistic monetary amount (such as cooking and housekeeping, child minding). For example, in Re Galewski at p.572, the Tribunal, comprising Senior Member Muller, held:
"11. The question of whether or not the relief allowed for in s 24(1) should be applied to situations in which the pensioner's spouse is extremely impecunious and has no ability to earn income, has been fully explored in the cases of … Tsimpidaros … and Re Hawkins … There is no point in repeating what was said by the tribunals in those cases. In Mr Galewski's case, the tribunal will follow and adopt the reasoning in the cases of Tsimpidaros and Hawkins.
12. The tribunal determines that the usual advantages of pooling of resources for married couples do not apply in Mr Galewski's case because of his wife's lack of resources, income and prospects. Those factors constitute special reasons, within the meaning of that term in s 24(1), to treat Mr Galewski as not having been a member of a couple for the purposes of the Social Security Act 1991, since the date of his marriage on 3 October 1995."

The issue before the Tribunal in reality relates to the rate of Mr Cocks' entitlement while he is living in the Philippines with his lawfully married wife and their young daughter. In the Tribunal's view there is no logical basis, notwithstanding the respondent's submissions to the contrary, for extending the concept of "resources" beyond financial resources. This is not a case where the issue is whether there is a marriage-like relationship; nor is it a case where, in the Tribunal's view, it is necessary or appropriate to try and specify what non-financial contribution each married person makes to the relationship.
It needs to be remembered that the Tribunal is looking at whether Mr Cocks should, for a special reason, not be treated as a member of a couple – ie, Mrs Cocks' circumstances are relevant so far as they affect Mr Cocks. The Tribunal finds that Mrs Cocks lacks resources, income and prospects. Mr Cocks cannot afford to bring his wife and child to Australia and to accommodate them here. (Possibly there are other reasons too why that course is unlikely to eventuate but speculation does not form a basis for this decision). Mr Cocks cannot live with them year round in the Philippines. Mrs Cocks makes no financial contribution and is unable to make any such contribution in her circumstances.
The Tribunal finds that there is no financial benefit or beneficial financial effect that flows to Mr Cocks from staying with his wife and child in the Philippines. The Tribunal thinks the need to pay for airfares is a factor that affects Mr Cocks adversely, rather than indicating that because he finds money to do this that fact weighs against there being a "special reason" as the respondent implies.
The Tribunal also finds that the fact that Mrs Cocks is not resident in Australia with their child is also relevant to the question of whether there is a "special reason". In the appeal decision, O'Loughlin J observed (paragraphs 13-15):
"13.     It is quite clear that she does not receive any Australian welfare benefit that she can contribute to the pool and, as I have said, it seems as if the department is satisfied that she has no income or other benefit to pool. Mrs Cocks, of course, is not entitled to receive any social welfare benefits from Australia for so long as she remains a Filipino national, living in the Philippines. As she, in her present circumstances as a non-Australian resident, is not entitled to the benefits in our social welfare system it seems to me to be illogical to recognise her status as the wife of an Australian citizen for the purpose of diminishing welfare benefits that would otherwise have been available to her husband but for his marriage, the more so when the department accepts the Tribunal's decision that there is to be no diminution while the couple are physically separated.
14.      It is said on behalf of the department that the Australian taxpayer should not be forced to bear the costs of Mr and Mrs Cocks' personal choices. That submission, in my opinion, is not justified and there is an element of parsimony in it. If Mrs Cocks and the child were to migrate to Australia an immediate benefit of $112 per fortnight would be available for the child and, after the expiration of 104 weeks, Mrs Cocks would have the potential to be entitled to the married rate of benefit.
15.      Far from disadvantaging the Australian taxpayer, Mr Cocks' proposition that he be paid at the single rate - an increase of only $30 or so per week – is a positive saving to the Australian taxpayer for so long as Mrs Cocks and the child remain in the Philippines. That very important factor, which I identify as a material consideration, was not taken into account by the Tribunal in its reasons."
The Tribunal is satisfied that special reasons exist in this case by reason of the lack of financial resources Mrs Cocks brings to the marriage, the lack of financial prospects available to her, the lack of financial benefit experienced by Mr Cocks when he is living with his wife and child in the Philippines and the fact that the present situation is – compared to the residence of Mr Cocks' wife and child in Australia - a benefit rather than dis-benefit to the Australian taxpaying community.
Mr Cocks' case is clearly unusual. The Tribunal would like to add (although it is not relevant to the decision) that, in its view, Mr Cocks has acted responsibly and properly in maintaining his impecunious wife and the young child of their relationship in the Philippines. He has struggled financially to do this in circumstances where it believes many would not have bothered.
The Tribunal is thus satisfied that Mr Cocks should, for a special reason, in the particular case not be treated as a member of a couple and determines that Mr Cocks is not to be treated as a member of a couple for the purposes of the Act. The Tribunal therefore sets aside the decision under review and in substitution decides that under sub-section 24(1) of the Social Security Act 1991, Mr Cocks should, for a special reason, not be treated as a member of a couple for the purposes of that Act.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member W.H. Eyre
Signed: .....................................................................................
Personal Assistant