Dring; Secretary, Department of Social Services and (Social services second review)
[2024] AATA 2717
•2 August 2024
Dring; Secretary, Department of Social Services and (Social services second review) [2024] AATA 2717 (2 August 2024)
Division: GENERAL DIVISION
File Number(s): 2024/3807
Re:Secretary, Department of Social Services
APPLICANT
Michael DringAnd
RESPONDENT
DECISION
Tribunal:Senior Member K. Parker
Date:2 August 2024
Place:Melbourne
The Tribunal ORDERS that the operation and implementation of the decision under review is stayed until the decision of the General Division of the Administrative Appeals Tribunal on this application for review is made and takes effect, or until further order of the Tribunal.
........................................................................
Senior Member K. Parker
Catchwords
Catchwords
PRACTICE AND PROCEDURE – stay application – decision under review concerns the rate of age pension payable to the Respondent under the Social Security Act 1991 (Cth) –Respondent seeking implementation of the decision under review requiring the back payment to him in the vicinity of $30,000 – Applicant concerned there is a real risk he will be unable to subsequently recover this lump sum payment if he is successful in this application for review – Applicant opposes request for the stay – Tribunal satisfied that it is desirable to order a stay – stay application granted – matter referred for an expedited substantive hearing as parties have indicated their readiness and the issues are discrete
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)Cases
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR
Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220
Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143Kazmierczak and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2010) FCA 1084
LED Technologies Pty Ltd v Elecspess Pty Ltd (No 2) [2009] FCA 141
Re Repatriation Commission and Delkou (1985) 8 ALD 454Re Scott and Commission and Superannuation (1986) 9 ALD 49
Secondary Materials
Department of Social Services, Social Security Guide (Guides to Social Policy Law, version 1.316, 20 March 2024)
REASONS FOR DECISION
Senior Member K. Parker
2 August 2024
INTRODUCTION
The Applicant, Secretary, Department of Social Services (‘Secretary’), has sought review by the General Division of the Administrative Appeals Tribunal (‘this Tribunal’) of a decision made on 7 March 2024 by the Social Services and Child Support Division of the Administrative Appeals Tribunal (‘AAT1’) concerning the rate of age pension payments being made to the Respondent, Mr Michael Dring.
Mr Dring was born in Britain and moved to Australia at the age of 6. He has lived in Australia under a permanent residency visa until September 2015 at which time he moved to Thailand and remains living there. He is in receipt of the age pension under the Social Services Act 1991 (Cth) (‘SS Act’). He married Achara Dring. She is a Thai citizen and lives in Thailand. Mr Dring and Achara Dring live in separate residences. An issue has arisen as to whether Mr Dring should be paid the age pension under the SS Act using the “single” or “partnered” rate.
On 7 June 2024, the Secretary has applied for an order by this Tribunal under s 41 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’) that it stay the operation of the decision under review in this proceeding pending the finalisation of review by this Tribunal (‘Stay Application’).
LEGISLATIVE FRAMEWORK
Subsection 41(1) of the AAT Act provides that subject to s 41, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision. However, subsection 41(2) confers a discretion on the Tribunal to make an order or orders staying or otherwise affecting the operation or implementation of the decision under review (or part of it), as the Tribunal considers appropriate for the purposes of securing the effectiveness of the hearing and determination of the application for review. Under this provision, the Tribunal’s discretion is enlivened upon a request being made by a party to the review proceeding and the Tribunal must be satisfied that it is desirable to order the stay after taking into account the interests of any person who may be affected by the review.
The relevant provision under consideration in the substantive application is s 24 of the SS Act:
(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 and indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in that 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.
ISSUES
The issues for consideration in this Stay Application are whether it is desirable to order the stay and if so, what stay order(s) are appropriate for the purpose of securing the effectiveness of the hearing and determination of the substantive application for review.
INTERLOCUTORY HEARING, EVIDENCE AND SUBMISSIONS
An interlocutory hearing took place on 30 July 2024 at which time the Tribunal addressed the parties about the Secretary’s Stay Application.
In support of the Stay Application, the Secretary lodged an “Outline of Submissions” on 19 July 2024 (‘Secretary’s Submissions’). The Secretary also lodged a set of documents under s 37 of the AAT Act on 9 July 2024 (‘T-Documents’) and a supplementary set of documents under s 38AA of the AAT Act on 19 July 2024 (‘Supplementary T-Documents’).
On 25 July 2024, Mr Dring lodged a response to the Secretary’s Submissions (‘Mr Dring’s Submissions’) which attached supporting evidence including hospital bills, a copy of identification relating to his wife and photographs which appear to be taken in a hospital. Mr Dring made further written submissions by emails sent at:
(a)1.36pm on 15 July 2024;
(b)5.47pm on 18 July 2024;
(c)9.38pm on 23 July 2024; and
(d)4.49pm on 26 July 2024.
FACTUAL BACKGROUND
Mr Dring was born on 9 September 1948.[1]
[1] T-Documents, p.502.
Mr Dring commenced receiving the age pension on 9 September 2013, at the “single” rate, under the SS Act.[2]
[2] Ibid, p.466.
Mr Dring married Achara Dring on 15 October 2015.[3]
[3] Ibid, p.45.
There was a delay in Mr Dring notifying Centrelink (now Services Australia) (‘Agency’) about his marriage to Achara Dring. He first gave notice of his marriage to the Agency on 12 July 2018.[4] At the hearing, Mr Dring said he is currently re-paying a debt to the Commonwealth in the amount of approximately $14,000 under a repayment plan. Fortnightly deductions of $15 are being made from his pension payments. Mr Dring confirmed that he does not have any other funds remaining after he meets his fortnightly living expenses, to be able to make any additional repayments towards this existing debt. Mr Dring explained that he has approximately 400,000 Thai Baht in a Thai bank account which he is unable to withdraw as it is required for him to retain a visa to remain in Thailand.
[4] Ibid, p.555.
On 23 September 2019, the Agency decided that Mr Dring and Achara Dring were “members of a couple” as from the date of their marriage (‘Original Decision’). The Agency decided that Mr Dring should be paid the age pension at the “partnered” rate as from 29 August 2019.[5]
[5] T-Documents, p.507.
Mr Dring subsequently completed “Separation Details” forms on 16 and 21 October 2019 stating that he had separated from Achara Dring on 11 February 2016.[6]
[6] Ibid, pp.173-176; 190-193.
Subsequently on 8 November 2019, it would appear that Mr Dring informed the Agency that he separated from Achara Dring due to “ill-health”.[7]
[7] Ibid, pp.204-205.
On 24 November 2019, Mr Dring advised the Agency that the information on the Separation Details forms referred to in paragraph [15] was incorrect because he had never lived with Achara Dring due to an infection, which she had contracted in 2014.[8]
[8] Ibid, p.208.
Mr Dring sought a review of the Original Decision by an authorised review officer (‘ARO’) who, on 9 December 2019, affirmed it (‘ARO Decision’).[9]
[9] Ibid, pp.296-302.
On 4 February 2020, Mr Dring sought review of the ARO Decision by the AAT1. The AAT1 affirmed the ARO Decision on 31 March 2020 (‘First AAT1 Decision’).[10]
[10] Supplementary T-Documents, pp.2-9.
On 1 May 2020, the Secretary sought review of the First AAT1 Decision by this Tribunal.[11] On 26 November 2021, this Tribunal (differently constituted) affirmed the First AAT1 Decision, based on the following findings and conclusions:[12]
(a)Mr Dring and Achara Dring are “members of a couple” under subsection 4(2)(a) of the SS Act and not living separately and apart from each other on a “permanent or indefinite basis”;
(b)they were not an “illness separated couple” within the meaning under subsection 4(7) of the SS Act;
(a)there were no financial or other circumstances warranting the exercise of the Tribunal’s discretion under subsection 24(2) of the SS Act to treat Mr Dring and Achara Dring as not being members of a couple.
[11] Ibid, pp.10-14.
[12] T-Documents, pp.331-345.
Following a request from Mr Dring for a letter setting out when and why his age pension was reduced and a request by the Agency to Mr Dring to provide additional relevant information, the Agency made a new decision on 17 May 2023 to the effect that it did not regard him as “single” under s 24 of the SS Act and would continue to pay him the age pension at the “partnered” rate (‘Section 24 Decision’).[13]
[13] T-Documents, pp.570- 571.
On 27 July 2023, an ARO affirmed the Section 24 Decision (‘ARO Section 24 Decision’).[14]
[14] T-Documents, pp.378-379.
On 3 October 2023, Mr Dring sought review by the AAT1.[15] On 7 March 2024, the AAT1 set aside the ARO Section 24 Decision and decided, in substitution, that Mr Dring should be treated as “single” for social security purposes, his age pension rate adjusted, and that he should receive back payment as from 15 October 2019 (‘Decision Under Review’).[16]
[15] Ibid, pp.397-398.
[16] Ibid, pp.14-16.
CONSIDERATION
The Secretary appropriately identified the relevant factors the Tribunal should consider when deciding this Stay Application. Those factors include:[17]
(a)whether this review application would be rendered nugatory if the stay is not granted;
(b)the prospect of success or otherwise of the substantive application;
(c)any prejudice to a party if a stay is granted or not granted;
(d)the interests of any persons affected by the review; and
(e)the public interest.
[17] Secretary’s Submissions, [26].
Whether the review application would be rendered nugatory
The Secretary contends that it is “well established” by the decisions in LED Technologies Pty Ltd v Elecspess Pty Ltd (No 2) [2009] FCA 141, and Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, that the courts “will ordinarily grant a stay where the appeal would otherwise be rendered nugatory”.
The Secretary also refers the Tribunal to the following observation of Dawson J in the decision in Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220, at 223:[18]
... where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed.
[18] Secretary’s Submissions, [31].
The Secretary contends that if a stay order is not granted in this matter and the Decision Under Review is implemented, Mr Dring's rate of age pension will be redetermined on the basis of the “single” rate as from 15 October 2019.[19] At the hearing, the Secretary’s representative informed the Tribunal that the “partnered” rate of age pension is $1,116.30 per fortnight, and the “single” rate of the age pension is $841.40 per fortnight. This equates to a difference of $274.90 per fortnight. Back payment of this difference since 15 October 2019 will be in excess of $30,000.
[19] Ibid, [32].
The Secretary contends that if his application is successful, the back payments will become overpayments and the Commonwealth will be required to raise a debt against Mr Dring to recover this amount to the Commonwealth.[20] This is because those sums will be overpayments made to Mr Dring to which he is not entitled.
[20] Ibid.
The Secretary contends there is a real risk that he would not be restored to his original position if he is successful in this application, because although the debt amounts may be recoverable at law, it is not guaranteed that any recovery action against Mr Dring would be successful, particularly given Mr Dring resides in Thailand. [21] The Secretary contends that the “possible difficulty in recovering monies paid” weighs in favour of the Tribunal making a stay order and he refers to the decision in Re Repatriation Commission and Delkou (1985) 8 ALD 454 in support of this contention.[22]
[21] Ibid, [33].
[22] Ibid, [34].
Mr Dring responded to those contentions by stating that he is currently repaying a debt owed to the Commonwealth which shows that if a future additional debt is raised, he is likely to re-pay it.[23] The Tribunal acknowledges that Mr Dring is slowly repaying the existing debt, however, it is clear from the evidence he is only able to afford to do so at the rate of $15 per fortnight. The Tribunal specifically asked Mr Dring whether this rate of repayment was established because he was unable to afford higher repayments. Mr Dring confirmed this was the case. Mr Dring gave evidence about his current cost of living pressures and that he is required to pay rent for both his own residence and the residence that his wife is living in. He also gave evidence about needing to pay off debts relating to his wife’s recent hospital bills and her oxygen equipment.
[23] Secretary’s Submissions, 2.
The Tribunal is satisfied that there is a real risk that the further debt in the vicinity of $30,000 (which would need to be raised against Mr Dring in the event the Secretary is successful in the application for review), is unlikely to be repaid immediately or within a reasonable time frame if there was a repayment arrangement entered into between Mr Dring and the Agency. The Tribunal finds that Mr Dring is unable to afford to make any repayments on a new debt if raised, because if he was able to do so, his current instalments in respect of repayments of his current debt would have been increased to a higher amount. The Tribunal is satisfied that stay orders are required in order to secure the effectiveness of the hearing and determination of the substantive application for review. This factor weighs in favour of granting the Stay Application.
Merits of the substantive application
It is appropriate for the Tribunal to endeavour to gain a preliminary impression as to the merits of the substantive application. As explained at the hearing, it is not appropriate for the Tribunal to delve into a detailed analysis as to the merits at this preliminary stage in the proceeding. If the Tribunal is satisfied that the Secretary’s prospects of success are good, this will weigh in favour of granting the Stay Application and vice versa, if those prospects are poor.
Section 24 of the SS Act is set out above in paragraph [5]. The Secretary refers the Tribunal to the policy guidance as contained with the Social Security Guide. This policy guidance should be taken into account by the Tribunal, but if it is inconsistent with the operative legislative provisions, the Tribunal is not bound to follow it.
The Secretary refers to “Instruction 2.2.5.40” which provides that the reference to “special reason” in subsection 24(1)(c) of the SS Act applies only in “very limited cases when all other reasonable avenues have been explored and exhausted and deals with inequitable and/or unjust situations”.[24] The Secretary highlights that “Generally, the circumstances must be unusual, although not necessarily unique, compared to most cases to be considered a special reason”.[25] The Secretary also refers to “Instruction 2.2.5.40” in suggesting that consideration be given to whether there is an inability for the couple to pool resources because of their circumstances and if there is “financial difficulty” due to the couple’s circumstances.[26]
[24] Secretary’s Submissions, [37].
[25] Ibid.
[26] Ibid, [38].
The Secretary relies upon a decision of the Federal Court of Australia in Boscolo v Secretary, Department of Social Security (1999) FCA 106 where French J held that the s 24 discretion “… is not lightly to be enlivened… There must be something ‘unusual or different’ but ‘not extremely unusual, uncommon or exceptional” (at [18]).[27]
[27] Ibid, [38].
The Secretary contends that the focus should be on whether a couple is able to pool resources – not whether they do, in fact, pool resources. The Secretary contends that a determination under subsection 24(1) of the SS Act should not be made if a couple has “the power to improve their financial situation but choose not to”.[28]
37.The Secretary refers to the following observations by Barker J in a decision of the Federal Court of Australia in Kazmierczak and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2010) FCA 1084:[29]
41. The case law canvassed by Senior Member Creyke in Holt’s case confirms, in my view correctly, that there is a 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. This fundamentally derives from s 1064-A2 of the Act which provides that where two people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis.
42. It stands to reason that if for some legal or other practical reason the partner member of the couple cannot be treated as sharing income and assets then there is a ground for exercising the discretion under s 24 so as not to treat the holder of the pension as a member of a couple who are capable of sharing resources. In that regard, in effect, the s 1064-A2 expectation that there will be pooling is negative.
[28] Ibid, [40].
[29] Secretary’s Submissions, [42].
The Secretary highlights that Mr Dring has submitted that he and Achara Dring are living separately because Achara Dring cannot use the stairs. Mr Dring has also submitted that she does not work and they do not pool their resources due to this reason. However, the Secretary contends that subsection 24(1) is not “enlivened” in these circumstances.[30] Instead, the Secretary states that this Tribunal (differently constituted) had previously determined that there was insufficient evidence to satisfy s 24 of the SS Act (that is, the First AAT1 Decision).[31] The Secretary suggests that the Tribunal should be reluctant to “make a decision which is inconsistent with its own previous decision” as it will “adversely affect that process”. He contends the arguments “to be advanced are substantially the same as those advanced in the previously case” (relying upon the decision in Re Scott and Commission and Superannuation (1986) 9 ALD 49).[32]
[30] Ibid, [45].
[31] Ibid, [46].
[32] Ibid, [47].
The Tribunal does not accept this contention in the circumstances of this matter because Mr Dring has lodged new evidence with the Tribunal which was not before this Tribunal when the First AAT1 Decision was made. The Secretary contends that there is no evidence that Achara Dring is unable to work and to pool her resources with Mr Dring, and even if this were so, it would be insufficient for the Tribunal to satisfy s 24 (relying upon previous AAT decisions in Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143, where the Tribunal found that a lack of income and assets held by the Applicant’s wife was not considered to be a “special reason” why they should not to be treated as a member of a couple).[33]
[33] Secretary’s Submissions, [51].
The Secretary acknowledges that Mr Dring has lodged new evidence but he highlights certain concerns about this evidence. In response, Mr Dring lodged further new evidence in his emails referred to in paragraph [9] above. The Secretary contends that Mr Dring has not provided corroborating evidence of a “special reason” for the Tribunal’s discretion under s 24 of the Act to be enlivened, and that the AAT1 in the Decision Under Review did not have reasonable basis to warrant departure from the First AAT1 Decision.[34]
[34] Ibid, [52].
The Tribunal considers that one significant part of this case will involve a consideration as to whether the Tribunal’s discretion under s 24 of the SS Act has been enlivened under the circumstances of Mr Dring’s case and if so, whether it should be exercised so as to treat Mr Dring and Achara Dring as if they are not members of a couple despite the fact they are married at law. This Tribunal must carry out this task based on reasonable grounds, however, there is always the possibility that two different Tribunal members acting reasonably may come to a different view about how to apply s 24 in Mr Dring’s circumstances. Indeed, this has already taken place with one Member considering that there are grounds to apply the “single” rate to Mr Dring’s age pension and another Member considering that the “partnered” rate should be applied. It is also the case that new evidence has been tendered which will require consideration.
On the basis of the above, the Tribunal considers that each party has an arguable case to put before the Tribunal in this application for review. Each party has an equal prospect that it may be successful. This is based on a superficial review of the evidence before the Tribunal. Accordingly, this factor neither weighs for nor against the Tribunal granting the Stay Application.
Any prejudice to a party if a stay is granted or not granted
Mr Dring contends that he will suffer prejudice if the stay is granted because he will not have access to the back payment which he considers he is entitled to have. He explained his adverse financial circumstances and cost of living pressures and how he would benefit from having this sum of money to assist his financial position, particularly having just paid off debts for the hospital bills and for his wife’s oxygen equipment.
The Secretary contends as follows:[35]
55. The Secretary submits he will be prejudiced in the event a stay is not granted by the Tribunal. As noted above, should the Secretary be successful in the substantive application, any age pension payments that may be paid to the Respondent at the single rate on the basis that the discretion exercised under section 24 of the Act, would become a debt due to the Commonwealth.
56. The Secretary would be exposed to the administrative impost of recouping that debt over an extended period, alongside the additional complexity and cost in recouping the debt from Thailand, where the Respondent currently resides.
[35] Secretary’s Submissions, [55]-[56].
Consistent with the Tribunal’s findings above, the Tribunal is satisfied that the Secretary may be prejudiced if the Stay Application is not granted for the reasons set out in paragraphs [28]-[31]. The Tribunal understands Mr Dring may be temporarily prejudiced if the stay order is made by not having access to the back payment immediately, however, if this matter proceeds expeditiously and Mr Dring is successful in this application for review, he will receive the lump sum in due course and hopefully, in the not too distant future.
On balance, the Tribunal considers the prejudice that would be suffered by the Secretary if the stay is not granted, outweighs the prejudice that Mr Dring would suffer if the stay was granted by there being a delay in his access to the back payment lump sum to a later point in time. Accordingly, the Tribunal considers that this factor weighs in favour of granting the Stay Application.
Public interest
The Secretary submits that the public interest would be best served by granting a stay order as it will avoid the risk of the Agency expending time and expense in recalculating the Respondent's entitlement to age pension until it is clear whether such a recalculation is necessary.[36] At the hearing, Mr Dring contended that this can be easily and quickly carried out as it was when the Commonwealth calculated the debt that he owed to it. There is no evidence before the Tribunal confirming positively or negatively how easy it would be to perform those obligations. The Tribunal does not accept that this is a good reason in and of itself, which should weigh in favour of granting the Stay Application.
[36] Secretary’s Submission, [57].
The Secretary refers again to the need to avoid the risk of monies being paid to Mr Dring, which may subsequently need to be recovered by the Agency should the Tribunal set aside the Decision Under Review. The Secretary contends that there is a public interest in “protecting Government revenue by ensuring that public monies are not paid to recipients of Centrelink payments who are not lawfully entitled to them”.[37] At the moment, there exists a decision ordering that Mr Dring be paid the age pension at the “single” rate. If it could be demonstrated that recovery of the back payment is not likely to be an issue if the Secretary succeeds in the substantive application, it would not be inappropriate for Mr Dring to be paid those monies and to have them paid to him now awaiting the outcome of this application.
[37] Ibid, [58].
The Tribunal does not consider that this factor weighs in favour of granting the Stay Application.
CONCLUSION
The Tribunal concludes that on balance, it is desirable to grant a stay order in this proceeding. The Tribunal will stay the Decision Under Review in its entirety to secure the effectiveness of the hearing and determination of this application for review because there is a real risk that the Secretary will be unable to recover the back payment lump sum from Mr Dring immediately or within a reasonable time frame, in the event that the Secretary is successful in the substantive application for review.
The Tribunal notes that this is a relatively simple application in that the issues are discrete and that it is rather advanced in the preparation of the evidence for the substantive hearing. The set of documents under s 37 of the AAT Act have been lodged[38] and new evidence was gathered and lodged by Mr Dring for the purpose of this stay hearing. The Tribunal has decided to refer this matter to the Registry to be listed for an expedited substantive hearing so that this application may be finalised quickly. The parties both agreed there was no reason why this application should not be timetabled speedily for a substantive hearing.
[38] The T-Documents were lodged on 9 July 2024.
I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Senior Member K. Parker
...........[SGD]...........
Associate
Dated: 2 August 2024
Date of Hearing: 30 July 2024 Solicitors for the Applicant: Mr Matt Gauci, Hunt & Hunt Lawyers Respondent: Self-represented
0
4
0