Director General of Social Security v Harris, A.I
[1982] FCA 236
•08 NOVEMBER 1982
And: AMELIA IRENE HARRIS (1982) 63 FLR 284
No. VG 167 of 1981
Administrative Law - Social Security
FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Fox(1), Northrop(2) and Ellicott(3) JJ.
Administrative Law - social security - age pension - payments made to recipient which should not have been made - recovery - method of calculation of overpayments to be deducted from future payments of aged pension.Administrative Appeals Act 1975 s.44
Federal Court of Australia Act 1976 ss.19, 20
Social Security Act 1947 ss.6, 12-15, 18, 21, 24A, 28, 28A, 30, 37, 39-46, 135W, 138, 140.
Social Security - Age pension - Overpayment of pension - Recovery of overpayment - Calculation of overpayments - Deduction from future payments of pension - Social Security Act 1947 (Cth), ss. 6, 12, 13, 14, 15, 18, 21, 24A, 28, 28A, 30, 37, 39, 40, 41, 42, 43, 44, 45, 46, 135, 138, 140.
The respondent had been receiving an age pension under the Social Security Act 1947. In October 1979 it was decided under s. 140(2) that certain overpayments of pension received by the respondent after 13th October, 1977, should be recovered by means of periodic deductions from future payments of her pension. The Administrative Appeals Tribunal set aside this decision and directed that the amount of the respondent's repayment be calculated on the basis of her income derived in the years ending 28th April, 1978, 28th April, 1979, and 28th April, 1980, less the deductions specified in s. 28(2)(a) of the Act.
On appeal,
Held: Per Fox and Northrop JJ. - (1) The total of the amounts of pension so overpaid should be calculated by reference to the correct amounts of pension that would have been paid if the respondent had complied with the provisions of s. 45(1) of the Act and notified her relevant income to the applicant.
(2) The calculation of amount of overpayment of pensions should be based on the amounts of fortnightly payments of pension that were in fact paid and those which should have been paid if the s. 45(1) notifications had been given at the end of each appropriate fourteen days of grace referred to in that subsection.
"Per Ellicott J. dissenting - The phrase "annual rate of income of the claimant" in s. 28(2) means the income which the claimant or pensioner actually receives over the pension year.
Melbourne, 1982, July 5-6; November 8. #DATE 8:11:1982
APPEAL. The applicant, pursuant to s. 44(1) of the Administrative Appeals Tribunal Act 1975, appealed on a question of law from a decision of the Administrative Appeals Tribunal.
The facts appear from the headnote and judgment of Northrop J.
M.E.J. Black Q.C. and A.J. Myers, for the applicant.
A.R. Castan Q.C. and S.R. Morris, for the respondent.
Cur. adv. vult.
Solicitor for the applicant: B.J. O'Donovan, Commonwealth Crown Solicitor.
Solicitor for the respondent: Fitzroy Legal Service.
T.J. Ginnane
1. The decision of the Administrative Appeals Tribunal dated 28 August l982 be set aside.2. The matter be remitted to the Applicant to enable him to calculate, in accordance with the reasons for judgment of Fox and Northrop JJ., the total of the amounts paid by way of age pension to the Respondent which should not have been paid to her by reason of her failing to give appropriate notifications under s.45(1) of the Social Security Act 1947.
3. No order as to costs. Orders accordingly.
This is an appeal on a question of law from a decision of the Administrative Appeals Tribunal. The hearing comes before a Full Court (see s.44(3) of the Administrative Appeals Tribunal Act 1975) because the case is regarded as involving questions of importance concerning the meaning and operation of certain sections of the Social Services Act 1947.The facts and relevant statutory provisions are set out in the judgments of Northrop and Ellicott JJ. The problem to which the debate has mostly been directed is the method of calculation of overpayments sought to be deducted from future payments under s.140(2) of the Social Services Act 1947. The pension in question is an age pension, and the problem relates to payments made in ignorance of the receipt of amounts of income by the pensioner. There are I think a variety of possible solutions, and the two argued before us can both be justified by reference to the constuction of the Act. Moreover, depending upon fortuitous circumstances, and not related to any matter of principle, both solutions can work variously for and against a pensioner, and for and against the Commonwealth. It may therefore be said that the proper view is a broad one, perhaps that there should be no recovery under sub-section (2) in such cases, or that the matter should be left as one of a fair exercise of administrative discretion.
I have, however, concluded that there is a proper legal solution manifested by the terms of the Act.
A first step, in the present case, is to see whether the amounts paid "should not have been paid" (s.140(2)). In a corresponding place in s.140(1), which deals with recovery at law, the phrase is "would not have been paid". The latter suggests an examination of a factual position which would comprehend discretion, the former a regulated or mandated position. The distinction is of relevance because the operation of the Act, in relevant respects, depends upon discretionary determinations, and future estimates. Section 28(1), for example, says that "the rate of an age or invalid pension shall in each case be a rate determined by the Director-General as being reasonable and sufficient . . .". Section 28(2) requires a compulsory deduction:
'(2) The annual rate at which an age or invalid pension is determined shall, subject to sub-section (2AA), be reduced by one-half of the amount (if any) per annum by which the annual rate of the income of the claimant or pensioner exceeds -
(a) in the case of an unmarried person - $1,040 per annum; or
(b) in the case of a married person - $897 per annum.'
The pension is payable after the determination, so that the determination is prospective in operation. In the first instance, at least, income must be estimated, and s.28(2) applies to the estimate.
It is not disputed on either side that pensions can be varied from time to time at the instance of the Director-General, or of the pensioner. Section 44 enables the Director-General to obtain at any time from a pensioner information respecting his income. More, s.45 required notification of income by the pensioner once it has reached a certain average level over a period of eight consecutive weeks. The notification may lead to a re-determination. Section 46(1) is as follows:
'(1) If -
(a) having regard to the income of a pensioner;
(b) by reason of the failure of a pensioner to comply with either of the last two preceding sections; or
(c) for any other reason,
the Director-General considers that the pension which is being paid to a pensioner should be cancelled or suspended, or that the rate of the pension which is being paid to a pensioner is greater or less than it should be, the Director-General may cancel or suspend the pension, or reduce or increase the rate of the pension, accordingly.'
The phrase 'it should be' is interesting. It seems to me to include both discretion (s.28(1)) and prescribed means test (s.28(2)). This is the sense in which I understand 'should' to be used in s.140(2). In some cases further or other statutory provisions may fall to be considered.
In applying the sub-section in a case such as that of Mrs. Harris, who failed to notify her income, one can go to what should have happened, in order to see what should have been paid. This means a retrospective adjustment, in the light of the later knowledge. What she should have done was to give notice under s.45. The period of eight weeks there referred to is in my opinion a 'rolling' one, in the sense that one is always looking back to the immediately preceding period of eight consecutive weeks. The words in sub-section (1) (see also sub-section (2)) 'is higher than the average weekly rate of the income last specified ...' means that pointless repetition is avoided. There is a period of two weeks allowed for the notification. In the ordinary course, the Director-General would then apply s.46, or consider its application. Put shortly, he is given an opportunity to re-examine the last estimate of income. In a case where there has been no notification he can be treated as making his determination under that section immediately he would in the ordinary course have received the notification. What is required under s.46 is however a fresh determination, which may, where appropriate, include cancellation or suspension. The Director-General can, at the same time, take into account factors which go to increase the pension. The fact, as we are told, that the Director-General always exercises his discretion to allow the maximum pension, for which s.28(1A) provides (which is then subject to the application of s.28(2)) does not of course provide a guide in arriving at the meaning and operation of these and other sections of the Act.
In a retrospective determination, there can, theoretically, be complications and complexities, but in practice these are unlikely to be great, because the Director-General can take into account the facts as he then known them.
Emphasis was placed by the appellant on the fact that s.28(1) and s.28(2) refer to 'rate' and not 'amount'. This is relevant in understanding the operation of the Act, but I am not able to give it particular weight in resolving this dispute between the parties. It seems to me perfectly natural that in a pension scheme where the pension may be varied on a number of grounds and sometimes at short notice, and where the period of the pension is indeterminate, that no other approach would be feasible. Similarly, the reference to annual rate is natural; in the present context a rate must be related to time. The fact that it is a year says nothing as to the period in relation to which it will operate. In this connection, it is also to be borne in mind that, in considering increased income, a fresh determination may be necessary not only for calculating overpayment, but also for establishing future payments, and may be made in the course of a 'pension year'.
In my view, the decision of the Administrative Appeals Tribunal should be set aside, and the matter referred back to the applicant for determination in accordance with the reasons of Northrop J. and myself, which I understand to be in substantial agreement. There should be no order as to costs.
The Director-General of Social Services, 'the Applicant', appeals from a decision of the administrative Appeals Tribunal, 'the A.A.T.', made on 28 August 1981. The Tribunal was constituted by Messrs. R.K. Todd, Senior Member, W.B. Tickle, Member, and M.J. Cusack, Member, none of whom was a presidential member of the A.A.T. The appeal is brought to the Federal Court on a question of law, s.44(1) and (3) Administrative Appeals Tribunal Act l975, as amended, and is within the original jurisdiction of the Federal Court, s.l9 Federal Court Act l976, as amended. Under s.20 of the Federal Court Act, the original jurisdiction of the Court is exercised, except as otherwise provided by that Act or any other Act, by a single judge. Section 44(3) Administrative Appeals Tribunal Act otherwise provides and in this appeal, the mandatory provisions of that sub-section and the mandatory provisions of s.20(2) Federal Court Act not being applicable, the Chief Judge of the Federal Court, in the exercise of the discretion conferred by s.44(3) Administrative Appeals Tribunal Act directed that the appeal be heard by a Full Court of the Federal Court exercising original jurisdiction.At all material times Amelia Irene Harris, 'the Respondent', has been receiving an age pension under the Social Security Act l947, as amended, 'the Act'. Prior to l July l982, the Act had been named the Social Services Act l947. In October l979 an officer in the Department of Social Security, apparently in the exercise of powers delegated to him under s.l2 of the Act, purported to exercise powers conferred by s.l40 of the Act and determined that overpayments of pension received by the Respondent be recovered by means of periodic deductions from future payments of pension. The amount of the overpayments had been calculated on the basis of a certain formula. Under s.l5 of the Act, the Respondent appealed to the Applicant who had power to 'affirm, vary or annul the determination'. In fact, the appeal was decided by Mr. W. Wryell, a Deputy Director-General of Social Services, pursuant to powers delegated to him under s.l2 of the Act. As a first step the appeal was referred to a Social Security Appeals Tribunal, 'S.S.A.T.'. The S.S.A.T. is constituted within the Department of Social Security. It is not constituted pursuant to any statute or regulation. It is an advisory body having no statutory basis and its powers and functions are not defined. It makes a recommendation to the person who is to exercise the powers under s.l5 of the Act but that person is not bound to accept that recommendation, generally see Director-General of Social Services v. Chaney (l980) 47 F.L.R. 80, especially per Northrop J. at pp.84-88 Despite its nebulous basis, the existence of the S.S.A.T. is accepted and recognised by the Administrative Appeals Tribunal Act and in fact forms a compulsory step in the procedures to be followed before a decision under the Social Services Act can be reviewed by the A.A.T. Prior to l April l980, the A.A.T. did not have a general power to review decisions under the Social Services Act. Pursuant to powers conferred by the Administrative Appeals Tribunal Act, Part XXlVA was inserted into the Schedule to that Act, see s.26 of that Act and Statutory Rule l980 No. 62, and came into operation on l April l980. That part is set out:
'24A. (l) Where the Director-General of Social Services -
(a) has, in pursuance of section l4 or l5 of the Social Services Act l947, affirmed, varied or annulled a determination, direction, decision or approval of an officer under that Act, being a determination, direction, decision or approval that has been reviewed by a Social Security Appeals Tribunal; and
(b) has so affirmed, varied or annulled that determination, direction, decision or approval otherwise than in accordance with the decision of the Social Security Appeals Tribunal in relation to that determination, direction, decision or approval,
an application may be made to the Administrative Appeals Tribunal for a review of the decision of the Director-General so to affirm, vary or annul that determination, direction, decision or approval.
(2) A person is not entitled to appeal to the Director-General of Social Services under section l5 of the Social Services Act l947 against a decision in respect of which an application may be made to the Administrative Appeals Tribunal for review by virtue of sub-clause (l)."
In the present case the S.S.A.T. recommended that the amount of the overpayment of pension received by the respondent was recoverable and recommended that overpayments did not commence until 24 November l977, being eight weeks plus fourteen days after she received income for working as a nurse while receiving an age pension. The S.S.A.T. was of the opinion that the requirement that the Respondent notify the applicant under s.45 of the Act that she was receiving the income did not arise until fourteen days after the eight week period referred to in that section had expired. The appeal was decided by Mr. Wryell on 9 April l980. He did not accept the recommendation of the S.S.A.T. but determined that the overpayments commenced on l3 October l977.
The conditions precedent referred to in Part XXlVA to the Schedule of the Administrative Appeals Tribunal Act having been satisfied, the Respondent sought a review by the A.A.T. of the decision of Mr. Wryell. By a majority, Messrs. Todd and Cusack, the A.A.T. decided to set aside the decision of Mr. Wryell and remitted the matter for reconsideration by the Applicant in accordance with the direction that:
'The amount of the repayment should be calculated by ascertaining the applicant's total income derived in the years ending 28 April l978, 28 April l979 and 28 April l980 respectively. From these figures should be deducted the amount specified in s.28(2)(a) of the Act in respect of each year. The resulting figure when halved will represent the extent of overpayment of pension for the pension year in question. The total of these figures will represent the amount which should not have been paid to the applicant in terms of s.l40(2) of the Act.'
The questions of law raised by the appeal to this Court involve the construction and application of a number of sections of the Act and are of importance and of general application. Before referring to those sections, it is desirable to make brief reference to the particular facts of the matter before the Court.
The Respondent was born on 28 November l9l0. On 6 April l976 she made a claim for an age pension. The claim was made in accordance with s.37 of the Act. On 6 April l976 she completed a form, apparently approved by the Applicant. The claim was for an age pension, subject to means test. Since she was divorced she was treated as being unmarried. In the claim form she disclosed amounts of money invested in bank accounts and also other amounts invested in other forms of securities. Under the section of the claim form headed 'Income' she stated her gross earnings during the last twelve months as being $4,6l7, that she had been employed by the Bay View Hospital at Sandringham and that she had ceased her employment on ll April l976. She stated that she was not employed. It is necessary to amplify on this part of the claim form. It is within that part of the claim form relating to income, but, in particular, income from earnings. There are two columns set out on the form. The first column requires details of the gross amount of earnings before tax received by the claimant over the previous twelve months. A notification states that the first column is to be filled in only if the claimant is still employed. The second column requires details of the gross amount of earnings before tax per week at present being received by the claimant. Presumably, because the Respondent filled in the claim form five days before she ceased her employment at the Bay View Hospital, she filled in the first column by showing the amount of $4,6l7. In the second column she inserted the word 'Nil'. She declared that the information contained in the claim form was true and correct. She lodged her claim with the appropriate Registrar on 21 April l976. On 29 April l976 she made a declaration in a form headed 'Evidence in support of claim'. Included in the declaration were the following statements:
'I have no income since ceasing work on ll.4.l976 ... my assets are shown on my claim form.'
On l4 May l980 the Victorian Director notified the Respondent that she had been granted an age pension. The notification stated that she was not entitled to supplementary assistance because the value of her assets exceeded the permissible limit. The age pension commenced from 29 April l976. The notification contained the following paragraph:
'YOUR RATE IS BASED ON YOUR MEANS AS ASSESSED, CALCULATED AS $490.00, WHICH IS DERIVED FROM YOUR ASSETS. THE ITEMS OF ASSETS TAKEN INTO ACCOUNT ARE BONDS $400.00, INVESTMENTS $4,200.00, BANK CREDITS $700.00. IF THE VALUE OF YOUR ASSETS INCREASES, OR YOU RECEIVE INCOME, YOU SHOULD NOTIFY THE DEPARTMENT WITHIN 28 DAYS OF RECEIVING THE INCREASE.'
The date 29 April l976 is of importance since that is the commencement of the first of what is referred to as 'the pension year' of the Respondent, see direction of the A.A.T.
On 9 September l977 the Applicant commenced employment on a casual basis as a nursing aide at a nursing home but she did not notify the Department of the fact that she was receiving income, see extract from notification set out above and s.45 of the Act. Section 45, in its present form, had come into operation on 25 November l976, see Act No. lll of l976, s.l3 and s.2(2). Prior to that date s.45 had been in a form which, for present purposes, was the same as the new s.45. Her employment ceased on 2 September l979. The gross amount she had received as wages during that period was $3,276.62 but it was received in irregular amounts. Except for the period 29 October l978 to 7 January l979 and for three fortnightly periods shortly prior to 2 September l979 the Respondent received wages every fortnight but the amount varied from $35.63 to $23l.l6. During the period of her casual employment the Respondent continued to receive income by way of interest on her bank deposits and other investments.
In the exercise of powers conferred by s.44 of the Act, in a form headed 'Entitlement Review' dated l9 July l979 and presumably being a form approved by the Applicant, the Applicant sought a statement by the Respondent relating to her income. The Respondent completed the form and returned it to the Applicant who received it on 25 July l979. In it she disclosed the income which she had been receiving from her employment and from her investments. Thereafter her pension was reduced with effect from 30 August l979. When she ceased her employment on 2 September l979 her pension was increased to the maximum standard rate as from 13 September 1979.
Section l40 of the Act makes provision for recovery of overpayments of pensions, allowances, entitlements and benefits. For present purposes s.l40(2) is directly relevant but it is desirable that sub-sections (l) and (2) be set out, in full. Sub-section (3) is not relevant for present purposes:
'140.(1) Where, in consequence of a false statement or representation, or in consequence of a failure or omission to comply with any provision of this Act, an amount has been paid by way of pension, allowance, endowment or benefit which would not have been paid but for the false statement or representation, failure or omission, the amount so paid shall be recoverable in a court of competent jurisdiction from the person to whom, or on whose account, the amount was paid or from the estate of that person, as a debt due to the Commonwealth.
(2) Notwithstanding anything contained in this Act (other than sub-section (3) of this section), where, for any reason, an amount has been paid by way of a pension, allowance, endowment or benefit which should not have been paid, and the person to whom that amount was paid is receiving, or entitled to receive, pension, allowance or benefit under this Act (other than a funeral benefit under Part lVA), that amount may, if the Director-General in his discretion so determines, be deducted from that pension, allowance or benefit."
The question of law raised by the appeal in this Court relates to the method of calculating an amount of overpaid pension, or, to use the words of sub-section (2), the method of calculating the amounts that can be recovered where an amount has been paid by way of pension '... which should not have been paid'. In sub-section (l) the corresponding words are '... which would not have been paid but for the false statement or representation, failure or omission'. In sub-section (l) the condition precedent is stated to be dependent upon an amount having been paid by way of pension 'in consequence of a false statement or representation, or in consequence of a failure or omission to comply with any provisions of this Act'. This would include a false statement or representation contained in a claim form under s.37, in an entitlement review form under s.44 or in a notification under s.45(l), as well as a non-compliance by the pensioner of the requirements of s.45(l) of the Act. In any of those circumstances the amount of overpayment is recoverable in a court of competent jurisdiction as a debt due to the Commonwealth. In sub-section (2) the amount of payment is dependent upon an amount having been paid by way of pension 'for any reason'. In the present case, it was not argued that an overpayment by reason of non-compliance with s.45(l) of the Act did not come within sub-section (2). In those circumstances, where the person to whom that amount was paid is entitled to receive a pension, that amount may be deducted from future payments of pension.
In the present case, the Respondent failed to comply with the requirements of s.45(l) of the Act. She has received overpayments of pension. She is entitled to receive a pension and the Applicant has determined that the amount of overpayment be deducted from future payments of pension. The question of law for decision is to determine how the amount of that overpayment is to be calculated. The answer to that question involves a detailed reference to a number of provisions of the Act.
At the outset it is important to note that the Act makes provision for many different types of pensions, allowances, entitlements and benefits other than age pensions. These include invalid pensions, wives' pensions, supplementary assistance, widows' pensions, supporting parents' pensions, funeral benefits, child endowment, orphans' pensions, handicapped child's allowances, unemployment and sickness benefits and sheltered employment allowances. In addition to specific provisions of the Act making provision for those pensions, allowances and entitlements, a number of sections of the Act, including s.l40, are framed in a general form to apply to all types of pensions, allowances and entitlements. In the present case particular reference is made to the age pension, but in so doing a number of the general sections of the Act may be relevant, particularly in relation to their application to age pensions.
Section 6 of the Act contains definitions applicable to words contained in the Act. Reference is made to the definitions of the following words, namely 'claim', 'Deputy Director-General', 'Director', 'Director-General', 'officer' and 'Registrar'. Part ll of the Act, sections 7-l7A inclusive, is headed 'Administration'. Provision is made for a number of offices, and under s.l2 a power of delegation is conferred upon the Director-General. Section l3 imposes a duty on the Director-General to determine all claims, but the power to so determine claims may be delegated under s.l2. Section l4 empowers the Director-General (or his delegate under s.l2) to review decisions under the Act, while s.l5 empowers him (or his delegate under s.l2) to determine appeals against decisions under the Act.
Part lll of the Act is headed 'Age and Invalid Pensions'. It consists of ten Divisions comprising sections l8-53 inclusive. Division l of Part lll, sections l8-20 inclusive, is headed 'Preliminary'. Section l8 contains a number of definitions to be used for the purposes of Part lll. Reference is made to the definitions of the following words in s.l8, namely 'income', 'pension', 'pensioner' and 'unmarried person'.
Division 2 of Part lll, sections 2l and 22, is headed 'Qualifications for Age Pensions'. The relevant parts of s.2l are set out:
'2l.(l) Subject to this Part, a person who is not receiving an invalid pension and - ... being a woman, has attained the age of sixty years; and
(b) is residing in, and is physically present in, Australia on the date on which he lodges his claim for a pension ...
shall be qualified to receive an age pension.'
Division 4 of Part lll, sections 28-30 inclusive, is headed 'Rate of Pensions'. Section 28(l) empowers the Director-General to determine the rate of age pensions:
'28.(l) Subject to this Part, the rate of an age or invalid pension shall in each case be a rate determined by the Director-General as being reasonable and sufficient, having regard to all the circumstances of the case, but shall not exceed the maximum rate fixed by or in accordance with sub-section (lA), (lAAA), (lAA), (lB), (lC), (lD), (lEA) or (lF).'
In passing, it is noted that this power to determine the rate of pension is capable of being delegated to an officer, s.l2 of the Act. Sub-sections (lA) to (lF) inclusive, specify the maximum rate of pensions applicable in different circumstances. For present purposes, reference is made to that part of sub-section (lA) which provides that the maximum rate of age pension in the case of the Respondent is $2,766.40 per annum. Section 28(A) provides for automatic variation of the maximum rate of age pensions based on cost of living variations. The Court was informed that in practice, an officer, in exercising the power conferred by s.28(l), always determines the age pension at the maximum rate fixed in accordance with sub-sections (lA) to (lF) inclusive. Any deductions from that rate then became a matter of calculation as hereinafter appears.
Section 28(2) is of crucial importance. It is used within the Department to reduce the rate of age pension, subject to means test, where the pensioner is in receipt of income in excess of the amounts referred to in that section. The relevant parts of the sub-section are set out:
'(2) The annual rate at which an age ... pension is determined shall, ... be reduced by one-half of the amount (if any) per annum by which the annual rate of income of the claimant or pensioner exceeds -
(a) in the case of an unmarried person - $l,040 per annum;'
In passing, two matters are noted. First, under sub-section (2AB) a claimant or pensioner who has attained the age of seventy years and is in receipt of or is qualified to receive an age pension does not have his age pension reduced under sub-section (2). Section 45 of the Act makes reference to a rate of income 'higher than $20 per week'. That rate of income per week is the equivalent of the rate of income per annum referred to in sub-section (2).
Division 7 of Part lll, s.37, is headed 'Claims for Pensions'. The relevant parts of s.37 are set out:
'37. A claim for an age ... pension -
(a) shall be made in writing in accordance with a form approved by the Director-General;
(b) shall be supported by such declaration as is approved by the Director-General;
(c) shall be lodged with the Registrar whose office is nearest to the place of residence of the claimant ...'
As has been said, in the present case the Respondent's claim in writing was dated 6 April l976, was lodged with the appropriate Registrar on 2l April l976 and was supported by a declaration made on 26 April l976.
Division 8 of Part lll, sections 39-43 inclusive, is headed 'Payment of Pensions'. The Act does not by express terms confer upon a person an entitlement to receive an age pension. Likewise, the Act does not by express terms impose upon the Commonwealth a duty to pay an age pension to any person. Under s.2l, a person may be qualified to receive an age pension. A claim for age pension is made under s.37. Under s.l3 the Director-General (or an officer to whom that power has been delegated under s.l2) is required to determine that claim. If it is granted, the rate of age pension is determined by the Director-General (or his delegate) under the powers conferred by s.28(l). The rate of pension as so determined is reduced under s.28(2) where that sub-section has application. When an age pension has been granted it shall be paid in fortnightly instalments, the amount of each instalment being ascertained by dividing the annual rate of pension by twenty-six, see s.4l of the Act. The pension is to be paid to the pensioner in such manner as the Director-General (or his delegate) determines, s.40. It may be paid into an account at a bank, credit union or building society, see s.l35W of the Act which contains its own definition sub-section. The pension is to be paid from date determined by the Director-General (or his delegate) in accordance with s.39. It is noted that neglect or default on the part of the claimant in supplying necessary information may result in the date of commencement of payment of pension being deferred.
Division 9 of Part lll, sections 44-46 inclusive, is headed 'Review of Pensions'. It is to be remembered that in this Division, as in the other Divisions within Part lll, unless a contrary intention appears, and it is not necessary to determine in this case whether there is a contrary intention appearing, the word 'pension' means a pension or allowance under Part lll of the Act and the word 'pensioner' means a person in respect of such a pension, s.l8 of the Act. Section 44 has been referred to earlier. The relevant parts of that section are set out:
'44. A pensioner ..., shall, whenever so required by the Director-General, furnish to such officer, and within such time, as the Director-General specifies, a statement, in accordance with a form approved by the Director-General, relating to the income of the pensioner ...'
It will be remembered that it was under the procedures specified in this section that the Respondent first disclosed to the Director-General the income by way of earnings received by her while she was receiving payments of age pension.
Section 45 has been referred to earlier. The relevant parts of s.45(l) are set out:
'45.(l) Where the average weekly rate of income, other than pension, received in any period of eight consecutive weeks by the pensioner who -
(a) is not married, ...
is higher than $20 per week and is higher than the average weekly rate of the income last specified by him in claim, statement or notification under this Part, the pensioner shall, within 14 days after the expiration of that period, notify a Director of the amount of the income received by him in that period.'
The words 'claim, statement or notification' must refer to a claim under s.37, a statement under s.44 and a notification under s.45 respectively. It follows therefore that at all times a claimant for an age pension or an age pensioner has disclosed to the Director-General his weekly rate of income, including earnings, other than pension. It is on this material that a calculation can be made of the amount of fortnightly pension to be paid to a pensioner taking into account the rate of pension determined under s.28(l) and, where applicable, s.28(2). The obligation imposed upon a pensioner by s.45(l) arises only where the average weekly rate of income is higher than $20 per week and (emphasis added) is higher than the average weekly rate of income last specified by him in a claim, statement or notification under Part lll of the Act. The nature of the provisions contained in s.45(l) will be discussed in greater detail later in these reasons, but a further possibility appears not to be covered by the express provisions of the Act. This can be illustrated by two examples. In the first case a pensioner is receiving income higher than $20 per week, but less than the amount which would disentitle that pensioner to payment of any pension. That income ceases. The second example is where a pensioner receives income higher than $20 per week and higher than the cut-off figure, thereby disentitling the pensioner to the payment of any amount of pension. In both of these cases if the income ceases to be received there is no obligation on the pensioner or a former pensioner respectively to notify the Director-General of the change. In theory, in either of those events a new pension claim form may need to be completed by the person involved. Alternatively, it appears from the material before the Court that a notification of reduction of income is sufficient to enable the Director-General (or his delegate) to vary the rate of pension, cf. s.l4 and s.46(l). This particular problem does not arise in this case, but it is noted again that when the Respondent ceased to receive income by way of earnings, and presumably upon notification of that fact to the Director-General, she thereafter received the maximum rate of pension payment.
Section 46 confers a power on the Director-General (or his delegate) to cancel or suspend a pension, or reduce or increase the rate of a pension. Section 46(l) is set out in full:
'46.(1) If -
(a) having regard to the income of a pensioner;
(b) by reason of the failure of a pensioner to comply with either of the last two preceding sections; or
(c) for any other reason,
the Director-General considers that the pension which is being paid to a pensioner should be cancelled or suspended, or that the rate of the pension which is being paid to a pensioner is greater or less than it should be, the Director-General may cancel or suspend the pension or reduce or increase the rate of the pension, accordingly.'
This section illustrates another apparent deficiency in the provisions of the Act. Once an age pension is being paid to a pensioner, the Director-General (or his delegate) is empowered to vary the rate of pension having regard to the income of the pensioner. There is no equivalent power conferred upon the Director-General in determining a claim by a person for an age pension. Counsel for the applicant contended that s.28(2) applies of its own force, but if that is the case, why is the express power conferred by s.46 in cases where a person is receiving an age pension? This problem is not raised by this appeal since the Respondent, in her claim form, stated that she was unemployed and was receiving no income by way of earnings. Her income from investments did not exceed the rate of $20 per week. Nevertheless, at the time her claim for an age pension was being determined, the Director-General (or his delegate) must have given consideration to this matter if for no other reason than the amounts of fortnightly payment of pension had to be calculated and the computer operates or calculates only on information given to it by an officer who has made a decision or determination. Presumably, it was pursuant to s.46 of the Act that the Director-General (or his delegate) reduced the amounts of fortnightly pension payments to the Respondent during the period 30 August l979 to l3 September l979. Likewise, it must have been pursuant to s.46 that the Director-General (or his delegate) increased the amounts of fortnightly pension to the maximum standard rate as from l3 September l979.
It is necessary to consider how the policy of the Act is implemented in practice. An amount of age pension is paid to the pensioner each fortnight. The amount of pension so paid is calculated by reference to the rate per annum of pension the pensioner is qualified to receive. The fact that the calculation by which that amount is determined is done by a computer tends to obscure the true nature of what in fact happens each fortnight. Each fortnight, information relating to a pensioner receiving an age pension subject to the means test includes the maximum statutory annual rate of pension applicable to that pensioner, s.28(l) and s.28A, and the annual rate of income, other than pension, of that pensioner, s.28(2). The last-mentioned piece of information is taken from the last claim, s.37, statement, s.44, or notification, s.45, supplied by the pensioner. It is probable that the information may be taken from other sources, for instance, from information supplied by the pensioner other than pursuant to a claim, statement or notification or from information supplied from other sources. In any event all this information is given to the computer by an officer and thereupon the computer, as a matter of mechanics, calculates the actual amount of the fortnightly payment of pension to that pensioner. This is repeated each fortnight. Where there is no change in the information given to the computer, the computer will calculate the same amount on each fortnightly pension payment date. Any change in the information given to the computer, of necessity, depends upon a decision or determination of an officer acting on material supplied to him either by the pensioner or from other sources, for example, under s.28A.
Once a claim for an age pension has been granted, the only obligations imposed upon a pensioner to give information to the Director-General are obligations imposed by sections 44 and 45. It would be prudent for a pensioner to give information to the Director-General when that information could be used for the financial benefit of the pensioner. In those circumstances the Director-General would be expected to vary the rate of pension in favour of the pensioner, see for example, s.46(l)(a) when, in the light of the new information, the rate of pension applicable to the pensioner should be increased.
It is in this context that s.45(l) is of crucial importance. The Act does not require a pensioner to notify a Director of every change in the rate of income, apart from pension, received by him. The section is framed on the basis that the specified information has been given to the Director-General, or his delegate. A time factor is introduced, namely 'any period of eight consecutive weeks'. This carries the connotation of a rolling concept, not that of discrete periods of eight weeks which do not overlap. Of necessity, any one period of eight consecutive weeks will overlap with other periods of eight consecutive weeks. The policy behind this provision is to make provision for varying amounts of income being received by a pensioner in different weeks and an average taken. The section refers to the 'average weekly rate of income'. This is to be determined by taking the total of the amounts of income, other than pension, received over any period of eight consecutive weeks and dividing that total amount by eight. That rate is then compared with the average weekly rate of income disclosed in the information previously supplied If the new rate is higher than $20 per week and is higher than the rate previously supplied, s.45(l) imposes an obligation upon the pensioner to notify a Director accordingly. This obligation is to be carried out within fourteen days after the end of the relevant period of eight consecutive weeks. This is in the nature of a period of grace. For the purposes of s.45, a week is to be identified on the basis of pension payment days. The period of fourteen days may overlap a pension payment day but does not necessarily do so. A failure to comply with the requirements of s.45 constitutes a criminal offence under s.45. Likewise, a failure to comply with the requirements of s.45(l) places a pensioner in danger of having his pension cancelled, s.46(l)(b). Likewise, a failure to comply with the requirements of s.45(l) may constitute a step in the recovery by the Commonwealth of overpayments of pension under s.l40(l). The giving of false or misleading information may place the pensioner in danger of having committed a criminal offence under s.l38.
In the present case the Respondent failed to comply with the requirements of s.45(l). While receiving an age pension subject to means test, she commenced employment on a casual basis as a nursing aide. Thereafter, in addition to her pension she received income by way of interest on her investments and by way of wages in the nature of earnings. Under s.45(l), on the completion of the first period of eight consecutive weeks thereafter in which her average weekly rate of income exceeded $20, she was under an obligation to notify a Director accordingly. She had fourteen days of grace to give that notification. Thereafter, if during any subsequent period of eight consecutive weeks her average weekly rate of income became higher than that specified in the first notification, s.45(l) imposed a new and separate obligation upon her to notify a Director accordingly. Likewise, she had fourteen days in which to give that further notification. The Respondent did not give any notification under s.45(l).
If the Respondent had performed the obligation imposed upon her by s.45(l), the Director-General, or his delegate, would have received new information which he would have given to the computer to enable the amount of the fortnightly pension payments to be determined in accordance with the Act. On the facts of this case the supply of information would have resulted in a reduction of the amount of pension payments, but in determining that matter the Respondent should have the benefit of the fourteen days of grace.
Section l40(2) empowers the Director-General to take action on the facts of this case. The Respondent's failure to give notice under s.45(l) was a reason why she received amounts by way of pension which should not have been paid to her.
The method by which the amount of overpaid pension is to be calculated becomes clear. During the hearing of the appeal, much debate took place concerning the meaning of the words 'amount' and 'rate' In the relevant sections of the Act the words are used correctly. The word 'rate' is used to describe an amount measured by reference to a period or recurring period, in some cases weekly and in others yearly. The word 'amount' is used to describe the actual sum of money constituting a pension payment, s.28((2). In s.28(2) the word 'amount' is used correctly to describe the amount referred to in a 'rate'. The whole policy of this part of the Act is directed to the payment each fortnight of particular amounts by way of pension to persons qualified to receive the pension. The amount to be so paid depends upon complex calculations made in accordance with the provisions of the Act. Computers make the actual calculation relatively simple. The calculations are based on rolling periods of eight consecutive weeks plus fourteen days and are designed to protect the revenue from the payment of amounts of pension in excess of the amounts properly payable. In this case the Respondent received amounts of pension which should not have been paid and she received them by reason of the fact that she failed to perform the obligations imposed upon her by s.45(l). The total of the amounts of pension so overpaid should be calculated by reference to the correct amounts of pension that would have been paid if she had complied with the provisions of s.45(l). By way of parenthesis if in making those calculations the figures disclose that for any period she should have received greater amounts if she had given relative information to the Director-General, she should be given the benefit of those amounts. This calculation involves the application of the concept of the rolling periods of eight consecutive weeks plus fourteen days. The amounts of income received have been established. Calculations only are required to be done. This may appear to be an extremely difficult exercise, but with the use of computers the mechanics are made simple.
During the hearing of the appeal much reliance was placed upon the fact that s.28(lA) referred to a pension of '$2,766.44 per annum' and the expressions 'annual rate of income' and '$l,040 per annum' contained in s.28(2) as supporting the view that a pension year should be used as a basis for determining amounts of overpayment of pensions. In my opinion, the submissions based on those provisions should not be accepted. The effect of the relevant provisions of the Act is to provide for amounts of age pension to be paid each fortnight. For the purposes of the Act, a year is treated as comprising fifty-two weeks. Payments of amounts of pension are made fortnightly and the amounts of payment are calculated by dividing the annual rate of pension by twenty-six, s.4l. The Director-General is empowered to determine the rate of pension and this is done by reference to an amount per annum. Section 28(lA) refers to a maximum rate of '$2,766.44 per annum' but that rate is not the actual amount paid to a pensioner in any one year whether a pension year, a financial year or a calendar year, see effect of s.28A and s.28(2). Section 45 refers to 'an average weekly rate of income' being higher than $20 per week. That corresponds to a rate of income of $l,040 per annum, s.28(2), if the year is treated as being of fifty-two weeks' duration. The only effective way of calculating the amount of pension paid to an age pensioner in any one year, whether a pension year, financial year or calendar year, is to calculate the sum of the amounts of the twenty-six payments of age pension paid during that year. The application of s.45(l) as described above supports the view that the calculation of amounts of overpayment of pensions should be based on the amounts of fortnightly payments of pension that were in fact paid and those which should have been paid if the s.45(l) notifications had been given. This construction avoids the difficulty inherent in making annual calculations that may involve large sums of money operating to the detriment of either the . pensioner or the Commonwealth and based upon amounts which are not prescribed in the Act as amounts paid to a pensioner.
The application of the relevant sections of the Act are summarized. Under Part lll of the Act, the Respondent was qualified to receive an age pension subject to means test, s.20 and s.28(2AB). The pension was to be paid to her in fortnightly instalments, s.40(l) and s.4l(l). The amount of each fortnightly instalment was to be ascertained by dividing the annual rate of the pension by twenty-six, s.4l(2). The annual rate of the pension was determined by the Director-General, s.28(l) As at l November l980 the annual rate was not to exceed $2,766.40 per annum, s.28(lA). The annual rate could vary from time to time within any one discrete year, whether a calendar year, a financial year or a pension year. Cost of living adjustments under s.28A had that effect. The annual rate was to be reduced where the circumstances specified in s.28(2) applied. The reduction in the annual rate of pension was effected automatically. Any reduction in the annual rate of pension, of necessity, caused a reduction in the amount of the fortnightly instalment which should have been paid next. To enable the annual rate of pension to be ascertained correctly, and thus to ensure that the correct amount of fortnightly instalment of pension was paid, the Director-General had to be given current and accurate information. To this end, s.45 is of crucial importance. That importance is illustrated by the legal consequences provided by the Act for non-compliance. If, as a result of non-compliance, the amounts of fortnightly pension paid to the Respondent under s.40(l) and s.4l(l) were greater than the amounts that should have been paid to her under those sections, it can be said truly that the difference between those amounts were amounts by way of pension which were paid to her and 'which should not have been paid', s.l40(2). The amounts of pension which should not have been paid are to be ascertained by subtracting from the amounts which were paid the amounts which should have been paid. The amounts which should have been paid are to be calculated on the figures which are now known and on the basis that the Respondent had given the appropriate notifications under s.45(l) at the end of each appropriate fourteen days of grace referred to in that sub-section.
In all the circumstances, the decision of the A.A.T. should be set aside and the matter remitted to the Applicant to enable him to calculate, in accordance with these reasons for judgment, the total of the amounts paid by way of age pension to the Respondent which should not have been paid to her by reason of her failing to give appropriate notifications under s.45(l) of the Act.
The facts and questions relevant to this appeal are set out in the judgment of Northrop J. and I have no need to repeat them. Nor is there need to repeat the various provisions of the Social Services Act 1947 ('the Act') to which his Honour refers.As the reasons delivered by the Tribunal in this matter indicate, the appeal raises basic and difficult questions as to the proper construction of the Act. I do not propose to analyse the relevant provisions in detail. It is, I think, sufficient to set out what, in my view, are the basic propositions relevant to age pensions which emerge from a close consideration of those provisions.
A person qualified to receive an age pension under s.21 of the Act is entitled to have it determined and paid in accordance with the provisions of the Act, particularly ss.28, 28(A), 37 and 39-43 (inclusive).
The rate of pension in each case is to be determined by the Director-General. Under s.28(1) it is to be at a rate determined by him as 'being reasonable and sufficient having regard to the circumstances of each case' but it is not to exceed the maximum rate fixed in accordance with s.28(1)(A) to (F) (inclusive).
Section 28(1) is a provision which governs the exercise of the Director-General's discretion not only when he first grants a pension but at any subsequent time when he is considering whether to vary it. Although not bound to do so under the Act, the Director-General, in practice, as a matter of policy, does not fix a pension whether originally or by way of variation at a rate less than the maximum permissible rate.
Section 28(1) is subject to the provisions of s.28(2) which provide (inter alia) that the annual rate at which an age pension is determined shall be reduced by one-half the amount (if any) per annum by which the annual rate of the income of the claimant or pensioner exceeds, in the case of an unmarried person such as the respondent, $1040.
It will be noticed that this section operates of its own force to reduce automatically the annual rate determined by one-half of a specified amount (if any). It is not dependent on the exercise of any discretion. It is an amount which should be capable of ascertainment on enquiry, for instance in proceedings before a court.
The difficulty which this sub-section poses is due to the known circumstance that a pensioner's income is likely to vary from time to time and that in many cases it will not be known, with certainty, even if past income continues what the pensioner will in fact receive within the ensuing twelve months.
Once the rate of pension is determined under s.28(1) there is no difficulty in expressing that as an annual rate. It will represent the amount which the pensioner would receive if paid at that rate over the ensuing year and no other variations in circumstances occurred. In practice it is known that in the ordinary course it will be varied by reason of the provisions of s.28(A) which indexes pensions to rises in the cost of living. However, it does not matter that the annual rate might vary over the ensuing year because it is reduced by the amount specified in s.28(2) and provided the latter amount can be determined, the resultant effect on the annual rate determined under s.28(1) can be precisely ascertained.
The difficulty in s.28(2) is the phrase 'the annual rate of the income of the claimant or pensioner.'
It will be noted first that this phrase refers to the income of 'the claimant or pensioner'. This indicates, I think, that it operates not only initially, when the pension is first granted, but subsequently through the life of the pension and it assumes that from time to time the annual rate of the income of the pensioner can be ascertained in order to bring about what could be described as a statutory reduction in the annual rate of pension determined under s.28(1).
Obviously, before the Director-General directs payment of the pension initially, he must have regard to s.28(2). He will need to ascertain what is 'the annual rate of the income' of the claimant in order to decide whether s.28(2) has had the effect of reducing the annual rate fixed under s.28(1) and thereby the fortnightly payments which the claimant will be entitled to receive under s.41. Indeed, for claimants under 70 the effect of s.28(2) may have been to disentitle the claimant to receive any payment at all.
Here the difficult question arises. Does the phrase mean the income which the claimant has been receiving over the previous twelve months? Is it arrived at by assessing what the claimant is likely to receive over the year ahead based on information obtained or supplied and opinions formed as to the likelihood of the continued receipt of income or the receipt of new sources of income? Does it mean the amount of income which the claimant will in fact receive over the first twelve months of the pension and therefore require an assessment to be made of that amount which may or may not turn out to be accurate? There may be other possible interpretations but these are the three considered in argument.
Neither party contended for the first. In the absence of clear words to the contrary, it seems to me to be inconsistent with the object and purpose of the Act, which is to provide income maintenance for pensioners, to reduce their pension by an amount referable to income received in the previous year.
The second view is that which, in essence, is contended for by the appellant in this case. It will be noted that s.28(2) does not make its operation or the determination of the amount of the reduction in pension it brings about dependent on the exercise of a discretion on the part of the Director-General or his officers. Whatever it means the Act assumes that 'the annual rate of income' is an amount which is capable of objective determination, e.g. by a tribunal or a court. In the light of this objective approach, I think it is difficult to adopt as its true meaning 'the amount assessed from time to time in the light of circumstances to be the annual rate of income'. It would make its operation dependent on opinions and assessments about the future. Had this been intended I think Parliament would have conferred a discretion on the Director-General in relation thereto. The definition of 'income' in s.18 in its essential parts leaves no discretion to the Director-General. The income of a person means 'any personal earnings, moneys, valuable consideration or profits earned derived or received etc.' It refers in other words to amounts actually earned derived or received not to anticipated receipts.
In the circumstances, although not without its own difficulties, I prefer the construction that interprets the phrase as meaning the income which the claimant or pensioner actually receives over what can be termed 'the pension year'. It seems to me that this interpretation is more consistent with the objective approach adopted in s.28(2) and the object and purpose of the Act.
There is a clear indication in the Act, in relation to each type of pension, though not in relation to all other benefits, to treat them on an annual basis even though they shall be payable fortnightly. For example, the maximum rates fixed under s.28 are amounts 'per annum'. Section 28 (1EA) refers to the circumstance where the rate of income exceeds an amount 'per annum'. See too s.30(A), dealing with supplementary assistance, which refers to the rate of the person's income being less than an amount 'per annum'.
Parliament seems to have considered it desirable, in the interest of ironing out the effect of variations in circumstances, to have regard to the pension, additional benefits and the income qualifications in relation to them, on an annual basis.
The effect of the construction I place on s.28(2) is that when a claim for a pension is made, the annual rate at which it is determined or, in other words, the amount payable to the claimant in each year by way of pension as a result of the determination or any variation therof is reduced in each pension year by an amount equal to half the amount by which the actual income of the claimant during that year exceeds $1040.00. Put in more colloquial terms, it means that a pensioner can earn up to $1040 in each year without affecting his or her pension. This, I think, is what Parliament intended.
It is true that this amount by way of statutory reduction will not be known precisely until the end of a year but for that matter neither will the annual rate at which an age pension is determined because many variations can occur between the date from which the pension is first made payable and the first anniversary thereof, e.g. S28A.
Nor does it mean that the Director-General is bound to pay a claimant the maximum rate of pension without any deduction on account of income that might be received derived or earned by the claimant. Section 28(2) operates, of its own force, on all age pensions. The exact effect of that operation will not be known until the end of the pension year. However, on account of that operation and in anticipation of the exact effect of it becoming known, the Director-General for the protection of the revenue is, in my view, when first granting a pension, entitled to deduct from the maximum annual rate which would otherwise have been determined, an amount calculated in accordance with the formula in s.28(2) but being in effect his assessment, based on information supplied and opinions formed, of what the claimant is likely to receive over the first year. Being an assessment only it would be subject to appeal. However, unless the claimant could demonstrate an error he or she would not ordinarily be in a position to establish it was wrong until the end of the pension year. As I have said, it is an assessment only and in the end result it may or may not be accurate. If not accurate, it may be excessive or it may be an under-estimate.
Furthermore, circumstances may arise in the course of the year which show that the previous assessment is erroneous. Division 9 of Part III of the Act deals with the review (inter alia) of age pensions and ss.44 and 45, contained with it, require the supply of information by the pensioner to the Director-General about his or her income. Section 44 obliges the pensioner to furnish a statement, when required, as to income. Section 45 places an obligation on the pensioner to supply such information when there is an increase in income, in the circumstances therein mentioned, over a period of eight consecutive weeks. Section 45, in my view, is not laying down a formula for determining the annual rate of income. It is a provision inserted by Parliament to ensure that the Director-General is kept informed about changes in income so that he might protect the revenue by altering the rate at which the pension is paid.
Section 46 enables the Director-General to reduce or increase the rate of pension if, having regard to the income of a pensioner, he considers that the rate of pension which is being paid is greater or less than it should be. This, it will be noted, is a reference to the rate 'which is being paid'. This is different, it seems to me, to the rate 'at which the pension is determined' under s.28(1) for obviously the rate as so determined is not necessarily the rate at which it will be paid (e.g. by virtue of s.28(2)). And this is so not only in respect of the amount payable over a period of one year but also, because of s.41, in respect of the times when the pension will in fact be paid, i.e. fortnightly.
In my opinion, s.46 is drawn to fit in with the scheme whereby the revenue is protected and Director-General is empowered to make an assessment of whether, having regard to the income currently being received, the rate of pension being paid is greater or less than it should be. This could involve in a given case a decision that the annual rate of income was likely to be higher or lower than previously anticipated and this reassessment could affect the rate at which the pension is paid.
This however does not render the construction I have placed on s.28(2) unacceptable. Division 9 of Part III is directed to enabling a review by the Director-General of pension payments and it leaves untouched the over-riding operation of s.28(2), that is to say as a provision which in effect dictates on a statutory basis that each pension year the annual rate of pension is reduced in accordance with the stated formula.
Counsel for the respondent claimed that s.140(2) of the Act operated automatically to entitle the Director-General in the case of an over-payment, that is to say, in the case of more income having been received than was in fact contemplated, to deduct that amount from future payments of the pension. The difficulty I have with this argument is that it depends on finding that an amount 'should not have been paid'. As I interpret it, the Act depends on the making of a decision by the Director-General that a pension at a particular rate be paid. Section 46 operated in this context as does the initial decision by the Director-General when he determines that a pension be paid at a particular rate.
Section 14 provides that whenever it appears to the Director-General under the Act that sufficient reason exists for reviewing a determination, direction, decision or approval of the Director-General, the Director-General may review it and may affirm, vary or annul it. In my opinion this provision is wide enough to enable the Director-General to vary a previous decision under which he had, as it turned out, wrongly assessed what would be the amount of income which the claimant would receive earn or derive during the ensuing year. If this assessment was an under-estimate, he would be entitled to review any determination that was dependent on that under-estimate. When so reviewed and varied it could then be said that the amount that had been paid 'should not have been paid' and s140(2) would be applicable.
Likewise, if the assessment of income had been excessive, as events turned out, the pensioner would be entitled, in my view, to require the discretion under s.14 to be exercised in his or her favour so that the previous determination would be varied upwards in accordance with the facts as known and he or she would be entitled to an additional amount not previously paid.
The interpretation I have adopted applies not only to the initial year of a pension but also to subsequent pension years. The concept of a 'pension year' is not expressly adopted by the Act. However, the words used in the Act require a meaning to be given to the word 'annual' in relation to 'rate of pension' and 'rate of income'. The only period of one year which seems appropriate is a year from the date from which the pension is payable under s.39 or a year from any anniversary of that date. The calendar year or financial year seem quite in appropriate. On this basis, at the end of each such year, a reassessment should be made of the effect of s.28(2) on pensioners' pensions in the light of actual income during that year. The pensioners may, as a result, receive further payments on account of that year or be liable to refund amounts on the basis that they should not have been paid. It can obviously cause hardship to pensioners if refunds have to be made. This however only emphasises the importance of the review provisions and of the need to have accurate current information.
Some reliance was placed by the appellant on the use of the word 'rate'. It was said that this indicated what was in mind was a genuine assessment of the future income of the pensioner over a period of one year. Although it supports this construction I do not think it is in any sense conclusive. For instance, I think the phrase 'the annual rate' is quite capable of meaning the amount or total amount paid or received over a period of one year. When applied to income it might suggest the averaging out of several years of income to arrive at an 'annual rate of income' but this is a construction of the provision which I think is clearly wrong.
It follows from what I have said that only in a limited respect did the Tribunal err in law in their interpretation and application of the Act. In my opinion it was wrong only in so far as it did not hold that the Director-General must, in a case such as this, vary his determination pursuant to s.14 in the light of actual income received each pension year before applying the provisions of s.140(2) of the Act.
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