Giastzi and Secretary, Department of Family and Community Services

[2004] AATA 411

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 411

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2003/28

GENERAL ADMINISTRATIVE  DIVISION		)
Re		IRFAN GIASTZI

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Associate Professor B W Davis AM  (Part-time Member)

Date23 April 2004

PlaceHobart

Decision

(a)    The decision under review is affirmed.

(b)   The matter of pension reduction is remitted to Centrelink for further          consideration, with a view to redress or compensation under CDAA guidelines.

[Sgd B W Davis]

Part-Time Member

CATCHWORDS

Social Security - resident of Greece - working life Australia - age pension - amendments to law - portability - reduction - saving provisions - SSAT

Social Security Act 1991 – clause 128, Schedule 1A

Social Security Administration Act 1999 No 74 of 2000

Social Security and Veterans’ Entitlement Legislation Amendment (Miscellaneous Matters) Act 2000

Australian Pension News, October 2000

Re Quinn and Secretary, Department of Family and Community Services (2002) AATA 81

Re Secretary, Department of Social Security and Kershaw (unreported decision No G190 of 1987), Sydney 28 march 1988

REASONS FOR DECISION

23 April 2004 Associate Professor B W Davis AM (Part-time Member)   

Decision Under Review

1.      The decision under review is a decision made by a delegate of Centrelink on 21 October 2002 to reduce the applicants’ rate of Australian age pension because they (Irfan and Vasiliki Giastzi) were not subject to the saving provisions relating to portability of social security payments taking effect on 20 September 2002.

Issue

2. Did the applicants’ stay in Australia for a period in excess of 26 weeks preclude them from the saving provisions in Clause 128, Schedule 1 of the Social Security Act 1991 (“the Act”)?

Standard of Proof

3.      The standard of proof is on the balance of probabilities and to the reasonable satisfaction of the Tribunal.

Background

4.      Mr and Mrs Giastzi reside in Greece and have been in receipt of Australian age pension since 22 April 1982.   They visited Australia between 9 March and 17 September 2002 and then returned to Greece.   Their pension rates were reduced to 220/300 and 106/300 of the normal rates respectively from 21 October 2002.

5.      Mr and Mrs Giastzi sought review, but the original decision-maker affirmed the decision on 7 November 2002.   The decision was further affirmed by an authorised review officer (ARO) on 8 November 2002, whereupon the Giastzi’s sought review by the Social Security Appeals Tribunal on 19 November 2002.

6.      The following reasons for reduction of age pension were stated by the ARO:

“(a)the couple were receiving Australian age pension in Greece under portability rules, but these rules were changed by the Australian government from 20 September 2000.

(b)Section 1220A of the Social Security Act 1991 provides that once a person has been absent from Australia for 26 weeks, their rate of pension must be reduced if they have less than 25 years residence in Australia.

(c)Mr Giastzi had 18 years, 4 months residence and Mrs Giastzi had 8 years and 10 months residency in Australia prior to their initial return to Greece. Before 2000 a person could go overseas for 12 months before their pension was affected and in some cases it was not affected at all. However the new Clause 128 I Schedule 1A of the Act provides that if a person returns to Australia for more than 26 weeks, they are subject to current portability rules which means their pension is payable at a reduced rate.

(d)The ARO noted a claim by the Giastzi’s son and daughter that Centrelink had failed to advise their parents of the new rules and they had inadvertently overstayed the 26 weeks limit by 10 days.

(e)The ARO considered that all age pension recipients residing overseas should have been aware of the changes, which were explained in at least three consecutive editions of the “Australian Pension News”, including a front-page item in October 2000.

The SSAT Hearing

7.      As the Giastzi’s could not travel to Australia for the SSAT hearing, they requested a decision on the papers.   The hearing was conducted in Hobart on 17 January 2003, with the applicant’s daughter providing information on behalf of her parents.

8.      After considering the factual evidence available to it, including Centrelink records, information provided by Victoria Giastzi on behalf of her parents and relevant statutory provisions, the SSAT concluded Centrelink’s decision to reduce Mr and Mrs Giastzi’s pension was lawful and correct.   However, the Tribunal also decided that defective administration may have occurred and therefore some compensation could be granted under CDDA guidelines (Compensation for Detriment Caused by Defective Administration).   The applicants therefore sought review by the Administrative Appeals Tribunal.

Analysis

9.      The Tribunal is required to stand in the shoes of the original decision-maker, examining the issue anew, noting all available evidence, statutory provisions and any relevant case determinations.

10. The legal situation is quite clear. The law relating to portability of pensions is contained in s1220A and Schedule 1A of the Act, and in particular Clause 128 of the Schedule, which does contain a saving provision. Section 1220A says that the rate of pension must be calculated using a rate calculator, if a person has been absent from Australia for 26 weeks or more. The rate calculator has regard to a residency factor based on a person’s working life residence, using a period of 300 months or 25 years as baseline.

11.     Mr and Mrs Giastzi left Australia on 10 June 2000 and at the time they returned to Australia in 2002, had been in Greece for more than 26 weeks.    Their visit to Australia lasted 26 weeks and 10 days, therefore their period in the country exceeded the limit after which a reduction in pension applied, using the rate calculator.    As Mr Giastzi spent 220 months in Australia before qualifying for Australian age pension, his pension was reduced to 220 divided by 300 of the normal rate.   In the case of Mrs Giastzi, her period of residency was 106 months, resulting in 106 divided by 300 of the normal rate.

12. Clause 128 of Schedule 1A does provide a saving provision, meaning that the new rule which came into effect in September 2000 may not apply to all cases. In effect this provision says that if a person was absent from Australia immediately before 20 September 2000 and had not returned for a continuous period of more than 26 weeks, the rules which applied at the time of their original departure would continue to apply.

13.     Unfortunately the Giastzi’s situation does not meet this criterion; they left Australia on 10 June 2000 and did not return until 9 March 2002, leaving again on 17 September 2002.   This means they stayed longer than 26 weeks and therefore the saving provisions cannot apply.   The Tribunal therefore finds Centrelink’s decision to reduce the applicant’s age pension was lawful and correct.

14.     There remains the issue of whether defective administration occurred in this case.   Victoria Giastzi, on behalf of her parents, informed the SSAT that when she had called at Centrelink in March 2002, advising them her parents would be coming to Australia, nobody had notified her of changes in the law or if they stayed longer than 26 weeks they would be penalised.   There were also problems with the Greek post and when her parents had received a ‘second request’ letter dated 19 December 2002, they had not received any ‘first request’ (dated 23 October 2002).   Ms Giastzi said Centrelink should have known there were problems with the Greek post and phoned them.   Without this their pension rate was not merely suspended, awaiting their response, but immediately reduced.   Clearly Centrelink had been at fault and the matter should be reviewed.

15. The SSAT concluded that although Centrelink had met its general responsibility to provide information to overseas residents through the ‘Australian Pension News’, an issue existed as to how far individual customers should be advised of their situation. A direct contact with a Centrelink office in Australia should result in complete and accurate information being transmitted, which does not appear to have occurred in the Giastzi case. Overseas communication can prove more difficult, but it did not constitute maladministration to rely upon written information, rather than phone. The SSAT considered that the Giastzi’s had failed by such a small margin (10 days) to meet the saving provisions of Clause 128, that the subsequent outcome of reduced pensions appeared unreasonable and unfair in the circumstances.

16.     Appreciating that CDDA is a payment of last resort, the SSAT could only recommend that Centrelink take all factors into account and make some form of compensation payment to make up for the losses Mr and Mrs Giastzi will suffer as a result of the reduction of pension rates.     How Centrelink would achieve this was left to the agency to resolve.

17.     The Tribunal has examined all evidence anew and agrees with the determination made by the SSAT.   The Administrative Appeals Tribunal is bound by law and finds that the reduction in pensions was lawfully made, nonetheless errors in communication by Centrelink appear to have occurred and the penalty for the applicants has been severe.    The Tribunal remits the matter to Centrelink for consideration of compensation payment using CDAA guidelines, or some other form of redress of pension reduction if available.

Decision

18.     (a)       The decision under review is affirmed.

(b)The matter of pension reduction is remitted to Centrelink for further consideration, with a view to redress or compensation under CDAA guidelines.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor B W Davis AM (Part-time Member)

Signed:  (K L Miller, Administrative Assistant)

Date/s of Hearing  Matter decided on the papers.
Date of Decision  23 April 2004