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

[2018] AATA 1343

Dickinson and Secretary, Department of Social Services (Social services second review) [2018] AATA 1343 (25 May 2018)

Division:GENERAL DIVISION

File Number(s):      2017/7032

Re:Noel Dickinson

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Ms A F Cunningham, Senior Member

Date:25 May 2018

Place:Hobart

The Tribunal affirms the decision under review.

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

Ms A F Cunningham, Senior Member

CATCHWORDS

SOCIAL SECURITY – age pension – member of a couple – applicant and wife reside in Thailand – exercise of discretion to treat applicant as not being a member of a couple – no special reason to justify exercise of discretion – decision under review affirmed.

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth), s 37
Social Security Act 1991 (Cth), ss 4, 24, 55, 1064

Social Security (Administration) Act 1999 (Cth)

CASES

Boscolo v Secretary, Department of Social Security [1999] FCA 106
Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634
Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Wilson [2011] AATA 554

SECONDARY MATERIALS

Department of Social Services, Guide to Social Security Law

REASONS FOR DECISION

Ms A F Cunningham, Senior Member

25 May 2018

1. The applicant, Mr Dickinson, has been in receipt of age pension since 11 February 2003 and partnered since April 1989. Since July 2004 the applicant and his wife have resided together in Thailand. The applicant contends that due to his circumstances, he should be paid the age pension at the single person rate.

2. For the purposes of this appeal, the decision under review is that of the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) made on 20 October 2017. This affirmed the Department’s decision that the applicant was a member of a couple from 13 September 2016 and that s 24 of the Social Security Act 1991 (Cth) did not apply to his circumstances. The history of the previous decisions that have been made regarding the rate of the applicant’s age pension is set out in the AAT1 decision, specifically at paragraphs 1-7.

   ISSUE

3. The issue for this Tribunal to determine is whether the discretion afforded by s 24 of the Social Security Act 1991 (Cth) should be exercised. That is, whether there is a ‘special reason’ not to treat the applicant as a member of a couple.

   LEGISLATION

4. The relevant legislation is found in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth).

5. Section 24 of the Act sets out the circumstances in which a person who is a member of a couple may be treated as not being a member of a couple. Subsection 24(1) reads as follows:

   (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.

6. Section 55 of the Act provides that a person’s age pension rate is worked out using the Pension Rate Calculator at the end of s 1064. The calculator provides a different and lower rate of payment for a member of a couple.

7. Under the Act, a person is partnered if they are a member of a couple (s 4(11)(a)) and a person is a member of a couple if ‘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’ (s 4(2)(a)).

   CONSIDERATION AND FINDINGS

8. Both parties agreed that the hearing of this application for review should be determined ‘on the papers’ that is, on the basis of the evidence submitted by the parties.

9. In support of his application for review, the applicant included a written submission dated 26 November 2017. On 14 March 2018 the applicant forwarded a medical certificate and accompanying letter advising that his health ‘has been going downhill for more than a year now’ and that he had been admitted to hospital in Bangkok. The medical certificate listed his medical conditions and stated that he was admitted to hospital on 7 March 2018 and advised to rest from 7 to 13 March 2018.

   The respondent filed a Statement of Facts and Contentions dated 15 February 2018 together with attachments including: a list of authorities, relevant legislation and excerpts from the Guide to Social Security Law (the Guide), and comparative cost of living figures for Australia and Thailand. The Tribunal accepted the T documents pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth).

   Applicant’s Contentions

10. The applicant contended that he should be paid at the single rate of pension on account of his financial situation which he said has now reached a critical stage. He maintained that whilst he has some $30,000 in a bank account in Thailand, this cannot be classified as a resource because it is held as ‘an immigration requirement to allow me to retire in Thailand’. This money has been held in the account for 13 years ‘and will stay untouched until the day I die in Thailand’. Accordingly, he contends that these monies cannot be regarded as a pooled resource.

11. The applicant stated that the balance of his accessible savings is in the order of $11,240 and that these are being depleted at the rate of $800 each month to cover living expenses. The applicant calculated that the balance of their life savings ‘will be all gone, sometime in the year 2018’. The applicant stated that he is 82 years of age and that his wife is 62 years of age, that neither of them have any income, saleable assets, resources to pool or term deposits in Australia or Thailand. He contended that he needs to be paid the single rate of age pension before their life savings ‘run out altogether’.

12. The applicant argued that by residing in Thailand, he and his wife had saved the Australian government approximately $182,000 and if he was paid the single rate of pension the government would ‘still be saving $11,000 a year forever’. He did not provide any details for these calculations or a breakdown of his expenditure.

    Respondent’s Contentions

13. In its Statement of Facts and Contentions, the respondent referred to clause 2.2.5.50 of the Guide which sets out the rationale for the lower rate that is paid to a member of couple as being that a pooling of resources is usually available and living expenses are lower when two people reside together. The Tribunal accepts that the applicant and his wife reside together and satisfy the provisions of s 4 to be regarded as a member of a couple.

14. In order to enliven the discretion provided in s 24 of the Act, there must be a special reason for not treating the person as being a member of a couple. The respondent referred the Tribunal to the two-stage decision-making process recognised by the Federal Court of Australia in Boscolo v Secretary, Department of Social Security [1999] FCA 106 where, at paragraph 19, the court stated:

    [T]he decision-making process under s 24 is notionally in two stages. First, is the assessment whether there is a special reason in the particular case for which the Secretary is satisfied that the person … should not be treated as a member of a couple. There follows the determination that the person is not to be treated as a member of a couple. The latter determination involves the exercise of discretion although as a practical matter assessment and determination will tend to be rolled up as one decision.

15. The respondent contends that, on the evidence before the Tribunal, there is no proper basis to afford the applicant the benefit of s 24.

    Consideration

16. The Guide is a relevant consideration in the review of administrative decisions and should be followed unless there are cogent reasons not to do so: Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634.

17. Clause 2.2.5.50 of the Guide states:

    Section 24 is intended to be the option of last resort, and should only be applied when all other reasonable means of support have been explored and exhausted.

18. The Guide provides that the discretion to treat a person as not being a member of a couple should only be exercised when full consideration of all the circumstances relevant to the individual’s case ‘would make it unjust or unreasonable not to do so’. The circumstances must also be, to some degree, outside the person or couples’ control and unable to be changed. If it is reasonably within the person or couples’ control to improve their circumstances without requiring the exercise of s 24, this should generally be explored first.

19. Clause 2.2.5.50 of the Guide lists three questions that need to be considered as part of the assessment while looking at the full circumstances of the case:

    Is there a special reason to be considered in this couple’s circumstances?

    Is there a lack of being able to pool resources for the couple as a result of the circumstances?

    Is there financial difficulty as a result of the couple’s circumstances?

20. The term ‘special reason’ in the context of s 24 has been considered on numerous occasions by the Tribunal and the Federal Court. In Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143 (Holt) the Senior Member stated that ‘special reason’ should be interpreted consistently with the scope and purpose of the Act. At paragraph 32, she referred to the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 which states:

    … there is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together. This justification is based on the premise that the unpartnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as a unpartnered person.

21. The Federal Court in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084 approved of the above observations made in Holt. The Court noted that the inability to pool resources informed the policy reason for the insertion of s 24 and at paragraph 41, referred to the particular focus under the Act ‘on the practical ability of the resources of the partner being available for pooling with the resources of the person holding the pension’.

22. The Tribunal referred to the relevant policy considerations in the Guide in its decision in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Wilson [2011] AATA 554 (Wilson). At paragraph 29, the Tribunal described the two defined situations in which the ‘special reason’ discretion has been exercised as those:

    (a)where the claimant is unable to pool resources with his or her partner, and secure the benefits – the economies of scale – of living as a couple; and

    (b)where, either in concert with the pooling issue in (a) above or separately, the couple find themselves in financial hardship.

23. The Tribunal in Wilson went on to state that the main ways in which the benefits of pooling resources are not possible are where either the claimant and partner have been forced to live separately (but remain members of a couple), or where the partner of the claimant is unable to contribute to the pooled resources, or both (paragraph 32). The result of this would be to create a situation where there was no practical benefit to the claimant from being a member of a couple.

24. When considering the meaning of a ‘special reason’ the Guide states that:

    [i]n general, the circumstances must be unusual, uncommon, abnormal or exceptional. It is the context which generally determines whether the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.

25. The special reasons advanced by the applicant in this case are that his weekly expenses currently exceed the age pension income and that the couple need to draw down on their life savings in order to meet their expenditure deficit.

26. No further detail was provided by the applicant with regard to his financial circumstances. He did not dispute the findings recorded in the AAT1 decision at paragraphs 19-24, which summarised his evidence regarding his bank savings and expenditure. The AAT1 reviewer accepted that the applicant’s monthly expenses far exceed his current pension payment however she noted that there was little information available as to how the applicant and his wife spend their money.

27. On the basis of the evidence available, the AAT1 reviewer concluded that the couple’s current savings of approximately $13,000 should be sufficient to cover the shortfall in their expenditure for another ten years. Whilst the applicant disputed the AAT1 reviewer’s findings, he provided no further evidence to this Tribunal to dispute their conclusions. The AAT1 reviewer was not persuaded that the applicant and his wife are in financial hardship or that the applicant’s wife had no financial resources to pool. She noted that Mrs Dickinson has joint assets in the form of property and a bank account which are pooled to finance their lives in Thailand.

    Findings

28. The above findings were not disputed and no further evidence was submitted by the applicant to contradict them. Whilst the applicant maintains that his bank account savings of $11,240 (recorded by the AAT1 reviewer to be in the order of $13,000) will be depleted by the end of 2018, there is simply no evidence to support this contention. It is also notable that at the time of the Department’s decision in 2016, the applicant conceded that his available savings were $30,000.

29. On this basis alone there is evidence that the applicant had significant pooled resources available to supplement his shortfall in income for some time into the future. The Tribunal concludes that on 13 September 2016, the date from which the Department determined the applicant was to be paid at the partnered rate, there was persuasive evidence that the applicant had access to considerable savings which were pooled in order to meet the living expenses of himself and his wife. Thus it could not be concluded that the applicant was in financial hardship of the sort that is required for the exercise of the s 24 discretion. On the available evidence the Tribunal is satisfied that this is still the case.

30. The Tribunal also accepts the evidence provided by the respondent regarding the comparative incomes and living expenses for persons residing in Thailand. The applicant is in receipt of the same amount of age pension in Thailand as he would have received if residing in Australia but he has considerably different outgoings and living expenses.

31. Accordingly, the Tribunal is unable to conclude that there was a ‘special reason’ constituting circumstances which either prevented the applicant from pooling resources or from being able to enjoy the economies of shared living costs. Whilst the applicant claims that he suffers a serious financial situation, there is no corroborative evidence to support his claims. In any event, the authorities make it clear that financial difficulty alone does not constitute a ‘special reason’ to justify the exercise of the discretion in s 24 of the Act. It is not uncommon or unusual for the expenses of recipients of social security benefits to exceed their income from time to time.

    DECISION

32. For the reasons outlined above, the Tribunal affirms the decision under review.

I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham, Senior Member

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Associate

Dated: 25 May 2018

Date(s) of hearing:	Hearing on the papers
Applicant:	In person
Solicitors for the Respondent:	Mr Brian Sparkes, FOI and Litigation Branch, Department of Human Services