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

Dormanli and Secretary, Department of Social Services (Social services second review) [2023] AATA 4545 (23 November 2023)
Division:GENERAL DIVISION
File Number(s): 2022/9349
Re:Suel Suman Dormanli
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mr S Evans, Member
Date: 23 November 2023
Date of written reasons: 16 February 2024
Place:Sydney

The reviewable decision is set aside and the matter is remitted to the Secretary with the finding that the Applicant was issued notice of a decision about the rate of his DSP on 15 August 2019 and that he sought review of that notice within 13 weeks such that subsection 109(1) of the Administration Act is satisfied.
...............................[sgd].........................................
Mr S Evans, Member
CATCHWORDS
DISABILITY SUPPORT PENSION (DSP) – ISSUE: Date from which Applicant entitled to DSP arrears to be paid – date of effect of favourable determination – s 109 and 110 of the Social Security (Administration Act) 1999 – seeking review after notification of a decision – private company income – private company cancelled – decision under review set aside and remitted for recalculation from earlier date
LEGISLATION
Social Security (Administration) Act 1999
Social Security Act 1991
REASONS FOR DECISION SYDNEY
Mr S Evans, Member
16 February 2024
INTRODUCTION

Suel Suman Dormanli (the Applicant) was granted Disability Support Pension (DSP) in 2014.[1] The rate at which he was paid DSP was affected by his income. Services Australia (the Agency) recorded the Applicant was receiving income from a private company that was either dormant or had ceased trading during the period he was paid DSP, resulting in him being paid at a lower rate.
[1] Respondent’s Statement of Facts, Issues and Contentions, [12].
The Applicant sought arrears of DSP and an Authorised Review Officer (ARO) at the Agency determined he was entitled to be paid arrears from 1 July 2021.[2] The Applicant- appealed the decision which was affirmed by the Social Services and Child Support Division (AAT1) of this Tribunal on 12 July 2022 (the reviewable decision).[3] The Applicant believes he is entitled to DSP arrears from at least 2015 when his company was cancelled, and now seeks review by the General Division of the Tribunal.
[2] Ibid, [2].
[3] T-Documents, T1, p. 1–3; T2, p. 4–8.
For the reasons that follow, the reviewable decision will be set aside, and the matter remitted to the Secretary of the Department of Social Services (the Secretary) for calculation and payment of DSP arrears from 15 August 2019.
THE ISSUE TO BE DETERMINED
The issue to be determined is the date from which the Applicant is entitled to be paid arrears of DSP.
BACKGROUND
The Applicant lodged a claim for DSP on 20 February 2014 in which he stated he was self-employed.[4] He also provided the Agency with his income tax return for the financial year ending 2013 which recorded an annual income from his business of $9,073.[5] The Agency updated the Applicant’s record to include the net annual income from his business.[6]
[4] Respondent’s Statement of Facts, Issues and Contentions, [4].
[5] T-Documents, T6, p. 138–140.
[6] Ibid, T9, p. 160.
On 8 April 2014, the Agency wrote to the Applicant requesting he complete a MOD PC – Private Company form.[7] The Applicant did not respond to the request and his claim for DSP was rejected on 22 April 2014.[8] That day the Applicant’s partner contacted the Agency on his behalf because the Applicant was overseas. She advised that the Applicant had handed his business over to his son that year and would provide a completed MOD PC form and a proof of ownership claim to confirm this.[9] Neither were provided to the Agency.[10] However, on 12 May 2014 the Applicant contacted the Agency about providing an update in respect of his business and a MOD F (business details) form.[11]
[7] Ibid, T14, p. 325.
[8] Ibid, p. 327.
[9] Ibid, T10, p. 166; Supplementary T-Documents, ST6, p. 397.
[10] Respondent’s Statement of Facts, Issues and Contentions, [8].
[11] Ibid, [9].
The information provided by the Applicant in the MOD F form dated 11 June 2014 was at times contradictory and inconsistent.[12] The Applicant confirmed he was ‘self-employed or a sole trader’. He provided the name of his business along with a profit and loss statement and balance sheet for the company.[13] Though instructed to attach his latest personal income tax return to the form, he did not do so.[14]
[12] Ibid, [34].
[13] Ibid, [11].
[14] T-Documents, T10, p. 148–149.
Where asked if his business was still operating, the Applicant marked the boxes ‘no’ and ‘yes’ and confirmed that his business was no longer operating ‘due to illness and sickness’ as of ‘approximately December 13’. Where asked if he intended to resume trading in his business, the Applicant marked both ‘no’ and ‘yes’ and annotated his answer with the comment ‘in the future when I get well’. Where asked if he had stopped working in his business, the Applicant answered both ‘no’ and ‘yes’. In question 44 – which required a response if a person had not stopped working in their business – the Applicant indicated he would try to work between 2 to 4 hours a week. In response to the question ‘do you intend to resume work in the business?’, the Applicant marked ‘yes’ besides which he wrote ‘in the future when I get well’. Where asked if he is looking for full time work, the Applicant marked ‘no’, besides which he wrote by way of explanation ‘I try to get well to continue my business [sic]’.[15]
[15] Respondent’s Statement of Facts, Issues and Contentions, [11]; T-Documents, T7, p. 151.
Despite the confusing and unclear responses provided, the completed MOD F form was sufficient for the purposes of granting the Applicant DSP. When the Agency received the completed MOD F form on 16 June 2014, the Agency granted the Applicant DSP with effect from 6 February 2014.[16] There is no indication that the Agency sought clarification as to whether the Applicant’s company continued to operate and whether he continued to receive any income from the company.
[16] Ibid, [11] – [12].
CONSIDERATION
The Applicant argues that he was underpaid DSP owing to mistakes made by the Agency. He submits that he completed and supplied the documents that were required of him by the Agency.[17] He maintains that when he was asked to report his income, he did so. He completed a tax return every year and claims to have regularly provided a copy of his tax return to the Agency.
[17] Ibid, [22].
If the Agency concluded that his business was still operating on the basis of the MOD F form, he argues he had notified the Agency he was not receiving income from the company. Further, his partner had confirmed the business was transferred to his son when she called the Agency on 22 April 2014, after which the business remained dormant until the ABN was cancelled from 1 January 2015.[18]
[18] T-Documents, T10, p. 166, 207.
The Secretary does not dispute being advised by the Applicant’s partner that the business had been transferred to his son. However, the Secretary contends that annotations to the marked answers in the MOD F form indicated the Applicant was still trying to maintain his business at that time until his health improved - albeit at a significantly reduced level. The Secretary does not accept that the Applicant’s responses in the MOD F form constitute him advising the Agency that he had ceased running the business.[19] The Secretary also notes that the Applicant was required to inform the Agency when he cancelled his company’s ABN but did not do so until December 2021.[20]
[19] Respondent’s Statement of Facts, Issues and Contentions, [34].
[20] T-Documents, T2, p. 7; T10, p. 208.
Regarding the Applicant’s compliance with the reporting requirements, the Secretary acknowledges he reported his income on several occasions and the earned income of his partner. However, the Secretary submits that the Agency could not have known his business was not generating income.
Irrespective of what caused or contributed to the error, the parties agree that the rate at which the Applicant was paid DSP was affected by the Agency recording him receiving income from a private company that was not operating from 1 January 2015.
The Applicant does not dispute having been sent notice on 26 June 2014 confirming grant of DSP and the information used for calculating his regular payment, including the Applicant having a combined annual income of $9,187.68 and ‘Combined Regular Fortnightly Earnings’ of $1,534.86. [21]
[21] Ibid, T14, p. 331; Respondent’s Statement of Facts, Issues and Contentions, [7], [12] - [13].
The notice also stated in part:
You must tell us within 14 days (28 days if residing outside Australia) if any of the changes listed below happen or are likely to happen to you and/or your partner (if you have one). If you get a fortnightly Reporting and Income Statement, report your earnings or changes in circumstances on your reporting day.
…
Business: Net profit from sole trader or business operation, private company or trust that you control; director’s fees, dividends and distributions; or any new involvement or changes to your involvement in a business, company or trust.[22]
[22] Ibid, T14, p. 332.
Further notices advising the Applicant of the information used for calculating his regular payment were issued between grant of DSP and September 2019.[23]
[23] Respondent’s Statement of Facts, Issues and Contentions, [13].
From when is the Applicant entitled to arrears?
On 1 July 2021 the Applicant contacted the Agency to advise he was not receiving income from his business. An Agency record of that contact records the Applicant advised his ‘business had ceased’. [24] The officer recorded that an ‘ABN lookup shows that the Business ceased from 01 Jan 2015’, and the officer decided to ‘zero off’ income. It is recorded that the Applicant ‘was upset because he states that he notified at the time the business ceased’. This information was not entered on the Applicant’s record until 2 December 2021, and arrears was calculated from that date.[25]
[24] T-Documents, T9, p. 161; Respondent’s Statement of Facts, Issues and Contentions, [16].
[25] Ibid, T10, p.207; T9, p. 161.
The Applicant sought review of the decision to pay arrears from 2 December 2021. On 11 April 2022, the ARO changed the original decision on the basis that the Applicant contacted the Agency to notify non-receipt of business income on 1 July 2021.[26]
[26] Respondent’s Statement of Facts, Issues and Contentions, [17] – [19].
Section 110 of the Social Security (Administration) Act 1999 (the Administration Act) provides the date of effect of a favourable determination:
Date of effect of favourable determination
(1) …if a favourable determination is made following a person having informed the Department of the occurrence of an event or change of circumstances, the determination takes effect:
(a) on the day on which the person so informed the Department; or
(b) on the day on which the event or change occurred;
whichever is the later.
Subsection 110(1) has the effect that should a favourable determination be made, it will take effect on the day it occurred or the day the Agency was informed by the person, whichever is the latter. The first occasion the Applicant contacted the Agency regarding the rate of DSP was a phone call made on 22 October 2019 to discuss the amount he was receiving in his regular fortnightly DSP payments.[27]
[27] T-Documents, T10, p. 187; Respondent’s Statement of Facts, Issues and Contentions, [15].
Section 109 of the Administration Act has the effect that an appeal against a decision relating to benefits must be lodged within 13 weeks. If an application for review is made within 13 weeks of a decision being made and notified to an applicant, a favourable determination can be backdated to the date of the original decision.
Date of effect of favourable determination resulting from review
(1) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) a notice is given to the person informing the person of the original decision; and
(c) within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d) the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.
If an application for review is made more than 13 weeks after notice is given, a favourable determination takes effect on the day on which the application for review was made.
(2) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) a notice is given to the person informing the person of the original decision; and
(c) more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d) the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the application for review was made.
Regardless of the reason for the delay in seeking review more than 13 weeks after notification of a decision made by the Agency, the Tribunal cannot order back payment to a date earlier than the date on which the person sought review.
The Applicant does not dispute being notified of the decision to grant DSP or that he would have received the notice dated 26 June 2014 which set out the information used for calculating his regular payment.[28] He understood the reference to combined annual income in the notice to be an estimate of his annual rate of DSP. He gave evidence that when his daughter asked him about the annual income cited on a notice from the Agency, he realised he had misinterpreted the notice which prompted him to contact the Agency.[29]
[28] T-Documents, T14, p. 331.
[29] Ibid, T2, p. 6.
On 15 August 2019 the Agency issued the Applicant with a notice regarding his DSP. The Secretary accepts the notice constitutes a decision about the Applicant’s rate of DSP and the giving of notice.[30]
[30] Ibid, T14, p. 346; Respondent’s Statement of Facts, Issues and Contentions, [45] - [47].
The parties agree that the first time the Applicant contacted the Agency regarding the rate of DSP was a phone call he made on 22 October 2019, which was within 13 weeks of the 15 August 2019 rate notice. The Applicant was at that time entitled to have the business income removed, which the Secretary accepts constitutes a favourable determination.[31]
[31] T-Documents, T10, p. 187; Respondent’s Statement of Facts, Issues and Contentions, [23], [45] – [49].
As subsections 109(1)(a) to (d) are met, the Applicant is entitled to be back paid arrears of DSP from 15 August 2019.
DECISION
The reviewable decision is set aside and the matter is remitted to the Secretary with the finding that the Applicant was issued notice of a decision about the rate of his DSP on 15 August 2019 and that he sought review of that notice within 13 weeks such that subsection 109(1) of the Administration Act is satisfied.

I certify that the preceding 29 (twenty – nine) paragraphs are a true copy of the reasons for the decision herein of Member S. Evans

…............................[sgd].......................................
Associate
Dated: 16 February 2024

Date(s) of hearing: 23 November 2023

Applicant: Self-represented

Solicitors for the Respondent: C. Sullivan, Services Australia

[2023] AATA 4545

23 November 2023

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Procedural Fairness

Standing

Statutory Construction

Date(s) of hearing:	23 November 2023
Applicant:	Self-represented
Solicitors for the Respondent:	C. Sullivan, Services Australia