Gagliardi and Secretary, Department of Family and Community Services - [2002] AATA 958

DECISION AND REASONS FOR DECISION [2002] AATA 958

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2001/351

General Administrative DIVISION         )
           Re      BENITO GAGLIARDI
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Senior Member J. A. Kiosoglous MBE

Date21 October 2002
PlaceAdelaide

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975 the Tribunal affirms the decision under review.
  (Signed)
  J. A. KIOSOGLOUS
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – age pension – overseas claim – agreement between Australia and Italy – dates of payment – payment made by cheque in pounds sterling or US dollars – applicant had to bear cost of currency conversion and bank commission – whether applicant could recover these costs from respondent.

Social Security (Administration) Act 1999 ss.44, 45, 47, 48, 50, 52, 55

REASONS FOR DECISION

21 October 2002 Senior Member J. A. Kiosoglous MBE

This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 13 September 2001 (T2). This decision affirmed as correct a delegate's decision dated 5 January 2001 (T8), as affirmed by an Authorised Review Officer (ARO) on 5 June 2001 (T10), that the applicant received his correct age pension entitlement for the period he was overseas.
The Tribunal received in evidence the documents lodged by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T1-T13), together with eight exhibits, five tendered by the applicant (Exhibits A1-A5) and three by the respondent (Exhibits R1-R3). The applicant represented himself but was assisted in presenting his case by Mr Piero Merrendi, a NAATI accredited interpreter. The respondent was represented by Mr J. Underwood, a departmental advocate.
In issue before this Tribunal is whether or not the applicant received his correct age pension entitlement for the period he was overseas. The relevant legislation to which the Tribunal has given consideration are the relevant sections of the Social Security (Administration) Act 1999 ("the Act").
At the outset of the hearing the Tribunal, as was the SSAT, was satisfied that Mr Gagliardi was very concerned about these issues, and that he held a deeply held conviction that the procedures used by Centrelink to pay pensioners in Italy were unfair and unjust. Likewise this Tribunal accepts that Mr Gagliardi is a caring person who raised these issues not so much for monetary benefit for himself, but to raise an issue of equity and justice which he felt passionately about.
Mr Benito Gagliardi, the applicant, was born in Italy on 19 February 1933, and is currently sixty-nine years of age. At the time of the hearing he had been in receipt of an age pension for quite some time. For part of the period for which he received the age pension he was living in Italy. He expressed to the Tribunal his concern with the manner in which he received his age pension payments. He was concerned that the payments did not correspond to correct payment periods, and that as a result of this he may not have received his correct entitlement. Also, the Tribunal is concerned with payments made from about 25 April 2000, being the date on which Mr Gagliardi went overseas, until 17 November 2000, being the date when he returned to Australia.
Mr Underwood told the Tribunal that the payment is always paid at the end of a 14 day period meaning that the money is paid in arrears. He stated that where a pensioner is located in Australia then the payment is paid into the pensioner's nominated Australian Bank account on a fortnightly basis in Australian dollars. However, where the pensioner is outside of Australia a problem arises due to the fact that a direct credit facility does not exist with banks overseas. This causes a procedural problem with actually arranging for the transfer of the data to the overseas bank. This is provided for by subsection 52(2) of the Act. The payment of age pension outside of Australia is provided for by subsection 52(1) of the Act.
Subsection 52(2) of the Act provides:
"If a person who is receiving a social security payment to which this section applies outside Australia, instalments of the payment are to be paid to the person at such times as the Secretary determines for the purposes of this section."
As a result of the provisions of subsection 52(2) of the Act the Secretary can determine the dates of payment. Hence he could direct payments to be made fortnightly, four-weekly, six-weekly, eight-weekly, and any other period as the Secretary decides. In fact the Secretary decided that payments would be made four-weekly on dates he stipulates (T4/50).
Mr Gagliardi's concern in actual fact commences from this point. By virtue of section 55 the Secretary is directed to pay the age pension benefit into an Australian Bank account but only in relation to sections 44, 45, 47, 48 and 50 of the Act. It does not cover section 52. As a result there is no directive in the social security legislation as to how payments are to be paid for customers overseas, outside Australia.
In such case there is no particular limit or constraint on how the money is paid. It becomes a matter of what the bureaucracy can do to get such payment to the person concerned. Hence the Department has to find a convenient way of paying the age pension to recipients overseas. Mr Underwood submitted that this has to be in a manner that is at no cost initially to the customer, but at the same time there is some safety attached to the payment in order to ensure there can be some certainty that the payment will arrive. Payment on the four-weekly pension is made by way of cheque.
Centrelink, being conscious that the customer must be able to use that money had decided to adopt payment outside of Australia by only two currencies. They are Pounds Sterling and the American dollar. It was submitted that the reason for the two currencies is that a significant number of Australian pensioners who are overseas are in England.
It was further submitted that the reason for using American dollars is based around the world economy and the attitudes of various countries towards acceptable currency which is more readily exchangeable than the Australian dollar. In addition it was also submitted that Centrelink proceeded in this way to assist in trying to reduce its own administration costs. For this reason Centrelink has chosen to stay with the two currencies of Pounds Sterling and the American dollar.
In the case of Mr Gagliardi and for other individuals living in Italy, Centrelink draws cheques against an American bank in US dollars. The cheque is issued in Australia and then sent by Centrelink. The conversion of the Australian dollar to a cheque in US dollars is subject to the Australia-US exchange rate. Mr Underwood assured the Tribunal that this part of the process being the Australia-US conversion is at no cost to the customer. The Tribunal has no reason to reject this submission and is satisfied this is correct. The cheque which goes to the customer is in American dollars.
At this point the Tribunal should indicate that Mr Gagliardi has pursued what he has perceived to be a wrong done to him and that by virtue of the method of payment he is prejudiced and suffers a loss. It became apparent and clear to the Tribunal that Mr Gagliardi feels that he should be compensated for the loss suffered. The Tribunal was able to ascertain from him that the loss he suffers is in the conversion of the cheque made out in US dollars to Italian lira. The Tribunal is satisfied that this is the case and so finds.
Mr Underwood in his submissions agreed with this stating that upon receipt of the cheque in Italy the customer then can convert it into local currency. It was not disputed that Mr Gagliardi loses out on two fronts. Firstly, he loses the rate for the conversion, and secondly, the converting bank retains an amount by way of commission for the exchange.
Mr Underwood submitted that the legislation unfortunately does not have any compensation provisions attached for such exchange conversion rates and commission costs. He further submitted that it is one of the things that a person on leaving Australia must plan for when they decide to travel outside of Australia.
When asked by the Tribunal if a customer prior to leaving Australia and notifying Centrelink of the impending departure, whether of not Centrelink advised such customer of the problem of a loss as a result of the conversion, Mr Underwood stated that a person does not get paid by cheque overseas automatically. Such only applies if the customer is going to be away for a period of longer than six months. If the customer is away for less than six months then payment is made into the Australian bank account unless they elect otherwise. For long term absences the customer will be told that the payment will be made by cheque. Mr Underwood also stated that whilst the customer will be told this it is unlikely that the customer will be told of any reduction as a result of conversion and commission.
The situation as indicated by Mr Underwood applied to Mr Gagliardi in the 2000 calendar year, at the time when he was overseas, namely April 2000 to November 2000. Mr Underwood referred the Tribunal to a letter dated 5 June 2001 (T10) to Mr Gagliardi from an ARO relevant to these issues. The ARO stated (T10/87), inter alia,
"Customers who live in countries with Automated Clearing House (ACH) facilities (that is full electronic banking ability) and that includes Austria, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Netherlands, Norway, Portugal, Singapore, Spain, Sweden, Taiwan, United Kingdom and USA (Greece plans to install ACH facilities in May 2002), will soon be able to have their payments made by direct deposit either into an overseas bank account or into a Australian bank account that they can access overseas. This will improve the service for about 34000 out of our 55000 existing overseas customers. Not all countries will come onto this system at once, some will commence before the end of 2001, and it is planned that we will progressively add them until, by early 2002, all will be able to have access. Additional countries will be added when they have ACH facilities.
There is a cost for this service, but this will be borne by Centrelink, however payments will still be four-weekly, to minimise the cost. Currency conversions will only need to be done once, by the Reserve Bank in Australia, and the deposit will be made into the customers [sic] bank account in the local currency, in Euros, in pounds sterling, or in American dollars as the customer chooses. This will ensure that the customer gets the maximum benefit and, of course there will be no cheque fees. This will be a real improvement for out many overseas customers."
This facility was not available to the applicant in the period April 2000 to November 2000, and as a result there was no benefit to him for that period. Fortunately, this problem no longer exists for Mr Gagliardi, who seeks the loss incurred as a result of the rate conversion and commission for that period.
Mr Gagliardi proved himself to be a person whose credibility was not in question and satisfied the tribunal that he genuinely considered himself to be hard done by in this case. The Tribunal found that although he felt aggrieved he was understanding of the explanation given him by the Tribunal and of the effort to attempt to resolve this matter. He raised a number of matters before the Tribunal all of which were dealt with notwithstanding that most were not relevant to these proceedings. However, he strongly felt that he had been discriminated against at that time. On the facts before it the Tribunal was satisfied that there was discrimination present due to the fact that the only method available for cheque payment was in Pounds Sterling and US dollars, which methods were chosen on the basis that the majority of pensioner customers overseas were in England. Although the Tribunal understands the reasoning behind this it is satisfied that such would have disadvantaged non-English speaking customers in a non-English speaking country such as Italy. Whilst the new procedure now helps people like Mr Gagliardi it is unfortunate that such process was not available in April 2000 to November 2000, causing him to suffer the loss due to rate conversion and payment of commission.
Mr Gagliardi also raised the issue of the Reciprocal Agreement between Australia and Italy. Whilst this agreement has proven to be highly beneficial for Australians in Italy and vice versa it nevertheless does not cover the issues raised by him and hence offers him no relief. The reciprocal agreement provides, among other things, that if a customer is outside Australia then their Australian pension shall be calculated according to Australian Social Security law. One of the clauses provides that a benefit payable under the agreement shall be paid without deduction for government administrative fees and charges for processing and paying the benefit. Hence no government administrative fees or charges apply so as to reduce that payment. The Tribunal notes with interest that even in such agreement there is no stipulation that says the money must be paid in a particular manner or in a particular currency. The method of payment, therefore, comes down to an administrative procedure.
It is to Centrelink's credit that it is aware of a lot of the issues raised by Mr Gagliardi in this matter and as a result it has been trying to modify such. Unfortunately, such modifications and improvements do not help him. The Tribunal recognises that Centrelink in making payments ensures that a customer does not suffer any loss but it cannot control the payments applicable as a result of exchange rates.
For the reasons outlined the Tribunal is satisfied that Centrelink's payment arrangements do not go beyond the reciprocal agreement. Also the Tribunal is satisfied that the Mr Gagliardi was paid his correct entitlement for the relevant period by Centrelink whilst he was in Italy and any loss suffered by way of conversion rate and commission payments when converting to the Italian lira was not through any fault of Centrelink.
Accordingly, the Tribunal affirms the decision under review.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J. A. Kiosoglous MBE.
Signed:         .....................................................................................
  John Howell, Associate
Date/s of Hearing   5 April 2002
Date of Decision   21 October 2002
Counsel for the Applicant         In person
Solicitor for the Applicant          -
Counsel for the Respondent    Mr J. Underwood
Solicitor for the Respondent    Advocacy and Administrative Law Team,
Centrelink