Danaro and Secretary, Department of Social Services (Social services second review)

[2022] AATA 4571

Danaro and Secretary, Department of Social Services (Social services second review) [2022] AATA 4571 (23 December 2022)

Division:GENERAL DIVISION

File Number(s):      2021/2549

Re:Antonio Danaro

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

Decision

Tribunal:Emeritus Professor P A Fairall, Senior Member

Date:23 December 2022

Place:Sydney

The decision under review is affirmed.

....................................[sgd]....................................

Emeritus Professor P A Fairall, Senior Member

Catchwords

SOCIAL SECURITY – Age pension – Italian Agreement – whether contributions recognised under Article 2 – decision affirmed

Legislation

Administration Arrangement Implementing the Agreement on Social Security between Australia and Italy

Agreement on Social Security between Australia and The Republic of Italy

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Social Security (International Agreements) Act 1999 (Cth) ss 5, 25, sch 2

Cases

Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634

Secondary Materials

Social Security Guide

REASONS FOR DECISION

Emeritus Professor P A Fairall, Senior Member

23 December 2022

INTRODUCTION

1. Under the terms of an agreement between Italy and Australia (‘the Italian Agreement’) residents of each country enjoy a variety of reciprocal social security entitlements. The Italian Agreement is a scheduled international agreement and therefore forms part of Australian social security law.[1] This case concerns access to the age pension in the context of such an agreement.

   [1] Social Security (International Agreements) Act 1999 (Cth) ss 5, 25, sch 2.

2. The age pension is subject to a qualifying period of 10 years qualifying residence.[2] Under the Italian Agreement, periods of credited contributions in Italy are treated as periods of qualifying residence.

   [2] Social Security Act1991 (Cth) s 7(5).

3. Mr Antonio Danaro (the Applicant) is an Italian citizen currently residing there. His application for the age pension has been rejected. He lived in Australia from 15 September 1967 to 28 May 1971, and therefore has 44 months (3 years 8 months) of Australian residence. After returning to Italy, he contributed to two funds, the INPS and the INPDAP. It is common ground that if his contributions to both funds are treated as periods of qualifying residence, he satisfies the 10-year residential requirement.

4. On 24 August 2020, his claim for age pension was rejected by Services Australia on the basis that he did not satisfy the residency requirement. On 28 October 2020, an authorised review officer (ARO) affirmed the decision. He therefore made an application for review to the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1). On 26 March 2021, the AAT1 affirmed the ARO’s decision. On 22 April 2021, Mr Danaro sought merits review of the AAT1 decision.

5. The Applicant filed submissions on 22 April 2021 alongside his application for review. The Respondent filed a Statement of Facts and Contentions (SFIC) on 7 December 2021, and Mr Danaro filed a Reply on 27 January 2022. An initial hearing before the Tribunal took place on 9 March 2022, but the matter was ultimately adjourned to allow further submissions relating to the matter. The Respondent provided an amended SFIC on 12 April 2022. Mr Danaro filed a Reply on 26 April 2022.

6. The hearing resumed on 14 October 2022. Mr Danaro appeared by videoconference from Italy. He was represented by his son Mr Domenico Danaro and assisted by an Italian interpreter. The Respondent was represented by Ms Navaratnam, a government solicitor from the Litigation Branch of the Respondent.

   CONSIDERATION

7. Italy's social security system includes various pension funds. The main fund is known by the acronym INPS (Istituto Nazionale della Previdenza Sociale).  The Social Security Guide (the Guide) also identifies four schemes for the purposes of the Italian Agreement. The INPS is included but not the INDPAP.[3]

   “10.4.5.30 Transfer of Contributions – Agreement with Italy

   Transfer of contributions

   Only credited contributions to INPS, ENPALS, INPGI and INPDAI can be used for totalisation purposes. When a person makes credited contributions to a non-specified fund, only the periods of contributions to the specified fund should be used for totalisation purposes.

   Note: INPDAI was abolished on 1 January 2003. All contributions in INPDAI were transferred to and are now paid from INPS.”

   [3] See Respondent’s Amended SFIC dated 12 April 2022, Annexure C.

8. This information is repeated on a government website created by the Department of Social Services, according to which the Italian Agreement covers four schemes: INPS, ENPALS (a fund for employees in the entertainment industry); INPGI (a fund for employees in the print media); and INPDAI (a fund for managers in industry).[4]

   [4] For a general description of the Agreement, see the Department of Social Services website: <>

   The question for determination in these proceedings is whether the scheme to which Mr Danaro made the bulk of his Italian contributions, the Istituto Nazionale Previdenza e Assistenza Dipendenti Administrazione Pubblica (INPDAP) should be recognised in calculating his notional residence. If so, he is eligible to receive an Australian age pension.

9. I accept the Respondent’s contention that the policy in the Guide should be applied in the absence of cogent reasons not to follow it. The Guidelines do not form part of the legislative framework, but should be applied by decision-makers unless there are sound reasons not to do so.[5]

   [5] Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634, 645.

10. Ms Navaratnam informed the Tribunal that Centrelink had contacted its counterpart in Italy to inquire as to the status of contributions paid by Mr Danaro. On 16 August 2021, the INPS Central Pensions Office replied by email in Italian. The reply was translated by a NAATI Certified Advanced Italian Translator:

    “In an email dated 21/6/2021 Services Australia asked INPS if Italian contributions paid under the public service employees scheme can be counted for the purpose of an entitlement to the Australian pension under the bilateral social security agreement between Italy and Australia. In this regard we note that when INPDAP ceased operating (under article 21 para. 1 of law 201 of 6/12/2011, as amended by law 214 of 22/12/2011) INPS assumed all aspects of their operation and all services previously delivered by INPDAP are now delivered by INPS (Inps/Public Servants).

    With regard to contributions paid by public servants, they are not paid into the General Compulsory Contributions Fund but continue to be deposited in the former INPDAP fund now managed by INPS.

    In view of the above our office is of the opinion that as the special pension scheme for public servants is not included in the schemes listed under article 2 item B of the Bilateral Agreement between Italy and Australia, Italian contributions paid under the aforementioned pension scheme cannot be counted for the purposes of the bilateral agreement.”

11. In his Reply dated 26 April 2022, Mr Danaro asserts:

    “This opinion is not mandatory. The sender of this email was: The office Analysis and Application of International Pensions. This document is not digitally signed not registered with regular and official number of protocol. In Italy the hierarchy of norms and rules are:

    1) Laws of Constitution

    2) Ordinary rules of Parliament

    3) Regulations

    4) Policies of Institution

    The rules (decisions) (policies – point 4) must be notified in the institutional web site. The function of these rules MUST BE compliant with superior rules (law ordinary and principle of the Constitution). The functions of these policies emitted by internal Offices are to implement in a proficient way the services, not to decide the Strategy Function that his of the Parliament. It is not specified if this opinion is mandatory.”

12. Mr Danaro argues that his contributions to INPDAP should be taken into account, and that the INPS assumed responsibility for managing INPDAP from 1 January 2012.

13. The legislative scope of the Italian Agreement is set out in Article 2 thereof:

    ARTICLE 2

    Legislative Scope

    1. Subject to paragraph 2, this Agreement shall apply to the following laws, as amended at the date of signature of this Agreement, and to any laws that subsequently amend, supplement or replace them:

    (a) in relation to Australia: the Social Security Act 1991 in so far as the Act provides for, applies to or affects the following benefits:

    (i) age pension…

    (b) in relation to Italy: the legislation in force at the date of signature of this Agreement and any legislation that subsequently amends, supplements or replaces that legislation,  concerning the compulsory general insurance scheme for employees in regard to invalidity, old age and survivors; special insurance schemes for self-employed persons and other categories of workers; family benefits for dependants of pensioners and unemployment insurance and, in particular, the following benefits:

    (i) old age pensions;

    (ii) seniority pensions;

    (iii) anticipated pensions;

    (iv) invalidity allowances;

    (v) inability pensions;

    (vi) privileged invalidity allowances;

    (vii) privileged inability pensions;

    (viii) invalidity attendance allowance;

    (ix) survivors’ pensions;

    (x) family benefit for dependants of pensioners; and

    (xi) unemployment allowances.

    2. Notwithstanding the provisions of paragraph 1, and unless otherwise specified in this Agreement, the legislation of Australia and Italy shall not include any laws made at any time for the purpose of giving effect to any agreement on social security.

    3. The competent authorities of the Parties shall advise each other of legislation that amends, supplements or replaces the legislation within the scope of this Agreement promptly after the first-mentioned legislation is enacted.

14. Article 19 of the Italian Agreement provides for administrative arrangements and Article 20 provides for the exchange of information. Article 20 imposes an obligation upon competent authorities and institutions to exchange relevant information. This extends to communicating to each other any necessary information ‘with regard to the determination or payment of any benefit under this Agreement or under the social security laws of either Party as if the matter involved the application of their own legislation’. (Emphasis added)

15. According to the information provided by the INPS Central Pensions Office, contributions paid by public servants are not paid into the General Compulsory Contributions Fund but continue to be deposited in the former INPDAP fund now managed by INPS. This supports the Respondent’s contention that the INDPAP does not fall within the purview of Article 2. There is nothing to suggest that the INDPAP is a compulsory general insurance scheme for the specified purposes. Nor does it appear to fall under any of the other categories.

16. Mr Danaro has not provided any evidence to counter the information received from the INPS Central Pensions Office by the Department on 16 August 2021, other than to suggest that the view expressed is not ‘mandatory’. I accept his observation that the email of 16 August 2022 lacks a signature. As to the extent to which views expressed in the email bind the Tribunal in making its decision, it accepts merely that there is credible evidence that the INDPAP is not recognised by Italian authorities for the purposes of the Agreement.

17. I also note an unreported 2014 decision of the Social Security Appeals Tribunal referred to by the Respondent:

    The applicant was born in Italy to which she returned after residing in Australia for a period of eight years. She was residing in Italy when she made a claim for age pension. Centrelink rejected the claim because the applicant had less than the 10 years qualifying residence required by section 43 of the SS Act.

    An agreement between Australia and Italy in respect of certain income support payments forms Schedule 2 to the Social Security (International Agreements) Act 1999 (the Agreement) and allows for periods of contribution to certain insurance institutions in Italy to be deemed to be a period when that person was an Australian resident for the purposes of meeting the minimum qualifying period for age pension. The applicant had contributed to the fund Istituto Nazionale di Previdenza e Assistenza per i Dipendenti dell’amministrazione Pubblica (INPDAP) which is not covered by the Agreement. The applicant contended that the period of her contributions to INPDAP was deemed residency because administration of the INPDAP had been transferred to the Istituto Nazionale della Previdenza Sociale (INPS) which is covered by the Agreement.

    The SSAT rejected the applicant’s contention. The Agreement permitted the parties to make administrative arrangements to implement it but those arrangements did not assist the applicant. The critical requirement was the “period of credited contributions” to a scheme covered by the Agreement. As INPDAP was not so covered, the period of contributions to it were not deemed residency for the purpose of meeting the qualifying period for age pension. The SSAT affirmed the decision to reject the claim.[6]

    [6] Referred to in the 2014/15 Annual Report.

18. I accept Mr Danaro’s observation that this decision is not binding on the Tribunal. It is however salient to the matter under review.

    CONCLUSION

19. In determining the key question in these proceedings, I find that Mr Danaro’s period of contributions to the INPDAP fund are not to be recognised in calculating his notional residence.

20. Consequently, I find that Mr Danaro’s total qualifying residence is 91 months (7.5 years), made up of his actual residence in Australia, and 46 months (3 years 10 months) of notional residence, based on contributions to a recognised fund (the INPS).

21. This falls short of the requirement of 10 years qualifying Australian residence under subsection 7(5) of the Social Security Act 1991 (Cth), as qualified by the Italian Agreement.

22. I therefore affirm the decision of the AAT1 dated 26 March 2021.

I certify that the preceding 23 (twenty -three) paragraphs are a true copy of the reasons for the decision herein of Emeritus Professor P A Fairall, Senior Member

......................................[sgd]..................................

Associate

Dated: 23 December 2022

Date(s) of hearing:	9 March 2022, 14 October 2022
Advocate for the Applicant:	Mr D Danaro
Solicitors for the Respondent:	Ms C Hammerton and Ms S Navaratnam, Services Australia