GRAHAM AND MARGARET CUNNOLD and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2012] AATA 866
•7 December 2012
[2012] AATA 866
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/1019, 2012/1020
Re
GRAHAM AND MARGARET CUNNOLD
APPLICANTS
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Ms K Hogan, Member
Date 7 December 2012 Place Perth The Tribunal sets aside the decision under review and instead decides that the applications for pension bonus should be accepted out of time and remits the matter to the Secretary to calculate the amount of the entitlement of the applicants.
…………[sgd]…………
Ms K Hogan, MemberCatchwords
Social Security – Pension bonus scheme – Non-accruing time limitation – Claim lodged outside applicable time frame – Special circumstances – Failure to notify
Legislation
SocialSecurity Act 1991
Social Security (Administration) Act 1999
Social Security (Pension Bonus Scheme – Non-Accruing Members) Declaration 2007Cases
Re Drake and Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Manis and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 691
Mann and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 412Whiting and Repatriation Commission [2011] AATA 526
Secondary Materials
Guide to Social Security Law (12 November 2012) Department of families, Housing, Community Services and Indigenous Affairs <
REASONS FOR DECISION
Ms K Hogan, Member
7 December 2012
HISTORY
Mr Cunnold registered for the pension bonus scheme on 9 July 2007 when he reached age pension age. Mrs Cunnold’s registration for the pension bonus scheme was initially incorrectly rejected by Centrelink. However, on review Mrs Cunnold’s registration was accepted from 20 September 2008 which is when she reached age pension age.
The applicants lodged claims for pension bonus payments on 25 October 2011. On 25 November 2011 a Centrelink officer rejected the applicants’ claims for pension bonus payments.
The applicants sought a review of the decisions and on 22 December 2011, a Centrelink authorised review officer (ARO) reviewed Centrelink’s decisions and affirmed them.
On 10 January 2012, the applicants lodged an application for a review of the ARO’s decisions with the Social Security Appeals Tribunal (SSAT) which affirmed the decisions under review on 20 February 2012.
The applicants appealed to this Tribunal.
THE ISSUE
The issue to be considered by the Tribunal in this case is whether pension bonus payments are payable to the applicants.
EVIDENCE
The Tribunal was provided with a number of documents including:
(a) the section 37 documents;
(b) written submissions from the respondent.
The Tribunal heard oral submissions on behalf of the parties.
Supplementary submissions were filed by both parties after the hearing.
THE LEGISLATIVE FRAMEWORK
The legislation relevant to this decision is contained in the Social Security Act1991 (“the Act”) and the Social Security (Administration) Act1999 (“the Administration Act”).
Section 92A of the Act provides a simplified outline of the Division of the Act dealing with pension bonus. The outline explains that a person who qualifies for an age pension but defers claiming that pension may be able to get a lump sum pension bonus subject to certain requirements, including a work test.
Section 92U of the Act requires a person, or their partner, to work for at least 960 hours during a 12 month bonus period in order to satisfy the work test.
Section 92Q of the Act makes provision for the Secretary to declare certain members to be non-accruing. The Social Security (Pension Bonus Scheme – Non-Accruing Members) Declaration 2007 (“the Declaration”) expands this list. Relevantly, sub-clauses 5(e) and (f) of the Declaration refer to members and partners of members of the scheme who are on paid or unpaid leave of any kind from gainful work and who would not pass the work test for a bonus period during which any part of the leave is taken.
Clause 6 of the Declaration limits the period of leave for which a person can be considered to be a non-accruing member to 26 weeks.
Sections 21, 22 and 23 of the Administration Act set out the manner and timing of making claims for pension bonus. An application for pension bonus must be made within 13 weeks of ceasing the type of employment allowed under the pension bonus scheme. Subsection 21(2) of the Administration Act allows for a longer period for lodgement of a claim in “special circumstances”.
The Guide to Social Security Law (“the Guide”) is used by Centrelink officers to assist them apply the relevant legislation. With respect to claims for pension bonus that are late the Guide states at paragraph 3.4.7.80:
Reason to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.
The reasons for acceptance of a late claim are different to those that apply to late PBS registrations.
Examples may include cases where a member:
·has poor numeracy or literacy skills;
·was ill;
·was located in a remote area;
·performed irregular work that made it difficult for the member to determine the lodgement period;
·was helping a close family member suffering from a serious illness;
·has experienced the death of a close family member;
·had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member’s partner moved into a nursing home);
·was unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).
The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).
The Tribunal is not bound by law to apply Centrelink policy as set out in the Guide, but provided the policy is consistent with the legislation, it must have regard to it and in the ordinary course of things to follow it (Re Drake and Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409) unless there is a cogent reason not to do so (Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634).
CONTENTIONS
APPLICANTS
The evidence of the applicants was that:
·Mrs Cunnold manages the paperwork;
·Mr Cunnold intended to work for 5 years after he turned 65;
·in 2007 they attended a Centrelink office and were advised that Mr Cunnold could take a break from work and the period of the break would be added to the end of the five year period;
·they were not aware of a requirement to apply for a pension bonus payment within 13 weeks of Mr Cunnold ceasing work;
·they went overseas on a holiday in March 2011, to assist their daughter to settle into her new home and work in America;
·prior to going overseas they had travelled in their caravan up north and had unsuccessfully looked for work;
·whilst overseas they contacted Centrelink in relation to their seniors health card;
·when they returned from America they contacted Centrelink to reactivate their seniors health card and were advised that they had lost their entitlement to claim the pension bonus scheme. They appealed that decision.
Mr Cunnold's evidence in relation to retirement was:
·I was not ready to retire sort of thing. I’m 70 now and I’m still working and I have no intentions for the foreseeable future to retire. (Transcript page 6),
- But in my – my – I hadn’t stopped work. I come back to work, and since – for the first three years there was no breaks, that the total amount of hours I had to work in four years – five years, was 4800 hours. In the first three years, rounding it up, it was – well, 6976 hours. (Transcript page 7),
·When I come – since I’ve been back at work, I’ve – I’ve totalled up 8246 hours since – for the five years.(Transcript page 7),
·I had no intention of retiring, ... I’m not retired.(Transcript page 8).
Whilst Mr Cunnold conceded that he did not read the paperwork which had been sent to him (Transcript page 12), and that he had "made a mistake by not reading"(Transcript page 7) the paperwork, he contended that Centrelink made many mistakes and that he should not be penalised if he also made a mistake.
Mrs Cunnold contended that the wording of the letters she received was "not clear" (Transcript page 13).
RESPONDENT
The respondent's primary contention is that the applicants are not entitled to a pension bonus payment because:
(a)Mr Cunnold ceased to satisfy the work test on 8 July 2010;
(b)the applicant’s claims for the pension bonus were lodged more than 13 weeks after Mr Cunnold ceased to satisfy the work test;
(c)there were no circumstances to justify accepting the claims as late claims.
As a consequence of Mr Cunnold declaring on his claim form that he was on a period of unpaid leave from 11 July 2010 to 7 October 2011 (T10, p64), the respondent contended that if he had been on unpaid leave he may have been a non-accruing member of the pension bonus scheme which in turn may have affected the date by which he would be required to lodge the form.
Whilst the respondent did not concede that Mr Cunnold took unpaid leave (as opposed to retirement), the respondent argued that even if the Tribunal were to find that Mr Cunnold did take unpaid leave, clause 6 of the Declaration provides that the period of leave during which a person can be a non-accruing member is limited to 26 weeks. Mr Cunnold’s alleged period of unpaid leave was greater than 26 weeks, therefore he was not a non-accruing member at the time he applied for the pension bonus (and therefore Mrs Cunnold was also not a non-accruing member).
The respondent contended that if the Tribunal were to find that Mr Cunnold was a non- accruing member during the period of "claimed" leave that neither Mr nor Mrs Cunnold claimed the pension bonus within 13 weeks of Mr Cunnold ceasing to be a non-accruing member and therefore they were not eligible for a pension payment.
The respondent argued that Mr Cunnold could not be considered to be on unpaid leave on the basis of the Tribunal decisions of Mann and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 412 (3 July 2012) and Whiting and Repatriation Commission [2011] AATA 526 (29 July 2011), contending that such cases found that for there to be an unpaid leave, there needs to be an ongoing employment relationship of some kind between the person and the employer.
The respondent contended that the 2009 publication on the pension bonus scheme said in relation to unpaid leave “this can be any type of leave and any combination of leave types”. The respondent contended that this still required some form of ongoing employment relationship with an employer.
The respondent contended that Mr Cunnold was not on unpaid leave as the evidence suggested that he left his employment with Recruit West on 4 July 2010 and that there is no suggestion that he retained any ongoing employment relationship with that company.
The respondent argued that if Mr Cunnold was not on unpaid leave from 11 July 2010 to 7 October 2011, it follows that he was not a non-accruing member of the pension bonus scheme and the relevant timeframe for making the pension bonus claim would be 13 weeks from when he ceased to satisfy the work test.
The respondent argued that if the Tribunal accepts that Mr Cunnold was not on unpaid leave, it was not necessary to consider whether the claim was lodged within time. However if the Tribunal found that Mr Cunnold was on unpaid leave, the respondent contended that the applicants lodged their claim for the pension bonus outside the relevant timeframe as clause 6 of the Declaration states that a person may only be a non-accruing member for a period of 26 weeks.
The respondent contended that no special circumstances applied to invoke sub-section 21(2) of the Administration Act which allows the Secretary to extend the time period within which a person may make a claim for the pension bonus if special circumstances apply. The respondent contended that the applicants were overseas from 9 March 2011 to 5 October 2011 (A1, p1-2) which according to their evidence was four months longer than they intended. It appears that the applicants always intended to be overseas when the 13 week time limit expired and could have made a claim in the eight weeks between the applicant ceasing to be a non-accruing member (should the Tribunal find so) on 9 January 2011 and when they went overseas on 9 March 2011.
The respondent contended that the applicants had notice of the requirement to make a claim for the pension bonus scheme within 13 weeks of becoming a non-accruing member but conceded that Mr Cunnold had not been provided with any notice that specifically informed him that if he was on unpaid leave he may have been a non-accruing member of the scheme and that he could be a non-accruing member for a maximum period of 26 weeks.
The respondent contended that this was immaterial as Mr Cunnold was not on unpaid leave but argued that even if the Tribunal were to find otherwise, that the Tribunal should find that the applicant did not directly suffer detriment as a result of the failure to give notice in relation to unpaid leave and the maximum non-accrual period because the information that he was provided specified an earlier time for providing information. The respondent contended that the letters to the applicant of 25 June 2008, 25 June 2009 and 25 June 2010 contained information about timeframes for claiming the pension bonus relative to when he ceased to satisfy the work test.
The respondent contended that the applicants were notified of the need to claim the pension bonus within 13 weeks of ceasing to be a non-accruing member in the 2007 information booklet.
CONSIDERATION OF THE ISSUE
Evidence, findings of fact and application of law
It was not in dispute and the Tribunal accepts:
(a)The applicants were each registered for pension bonus;
(b)Mr Cunnold satisfied the work test and accrued full year bonus periods for 9 July 2007 to 8 July 2008, 9 July 2008 to 8 July 2009 and 9 July 2009 to 8 July 2010;
(c)The applicants' lodgements for pension bonus payments were made on 25 October 2011.
The Tribunal noted Centrelink sent letters to Mr Cunnold on 25 June 2008, 25 June 2009 and 25 June 2010 all of which included the following instructions:
Please remember you will need to lodge your bonus claim within 13 weeks of ceasing work or within 13 weeks from the date you no longer meet the work test. (You can find out more about the work test by reading the Pension Bonus Scheme booklet. Please phone ... for a copy,...).
The Tribunal accepted the applicants did not understand they needed to lodge their application for pension bonus within 13 weeks of ceasing to work or ceasing to be a non-accruing member.
The Tribunal was satisfied however that the applicants were provided with information about the pension bonus scheme that was sufficient to enable them to understand the need for them to claim a pension bonus payment within 13 weeks of Mr Cunnold ceasing work or ceasing to be a non-accruing member.
This Tribunal has previously considered cases of late lodgement. For example, in Manis and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] AATA 691 at [24]-[28] the member wrote:
24. The Applicant has stated that he was distracted for most of 2009 and gave three reasons for the late claim:
(1)that he was not aware of the requirement to claim within 13 weeks of ceasing work;
(2)the applicant’s wife required care after having corrective surgery on her right foot in February 2009; and
(3)the applicant’s daughter was diagnosed with a brain tumour in February 2009.
25. I will first consider the oral submission of the applicant that he was not aware of the requirement to lodge the claim.
26. At the time of registration for the pension bonus scheme, the applicant was put on notice that payment of a pension bonus was conditional, the registration form advising:
...Before you complete this form, please read the brochure Pension Bonus Scheme (PR773), as conditions apply ...
27. Following the registration, the applicant was sent notices advising that he had signed an acknowledgement of his rights and obligations under the Pension Bonus Scheme and confirming that he had received a booklet that set out the details of the scheme. The notices also instructed him to contact Centrelink if he needed to know more about the scheme.
28. I do not consider that a lack of understanding of the rules of the scheme is of itself a special circumstance ...
The Tribunal accepts Mr Cunnold's evidence that he had not intended to retire on 4 July 2010 and that he has not retired. His oral evidence was consistent with the Centrelink records reproduced in the section 37 documents.
The Tribunal is unable to conclude that Mr Cunnold had retired when he left the employ of Recruit West on 4 July 2010.
The Tribunal is unable to conclude that Mr Cunnold failed to meet the work test from 5 July 2010 and that therefore the applicants were required to lodge their pension bonus payment claim within 13 weeks of that date.
The Tribunal distinguishes the previous decisions of Mann and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 412 (3 July 2012) and Whiting and Repatriation Commission [2011] AATA 526 (29 July 2011), regarding whether the applicant was on unpaid leave and therefore was a non-accruing member of the scheme. In the Mann decision the applicant had not taken up continuing employment because of ill-health and in the Whiting decision the applicant had quit work because of the serious illness of his mother. In the present case the applicant's consistent evidence was that he had not retired and that he was taking a period of unpaid leave from his working life. Mr Cunnold's employment between 24 April 2006 and 4 July 2010 (Section 37 Documents page 62) was with four different employers. The nature of his employment contracts is distinguishable from those in the Mann and Whiting cases.
The Tribunal finds that Mr Cunnold commenced unpaid leave on 11 July 2010 and was therefore a non-accruing member of the pension bonus scheme.
The Tribunal finds that the applicants were required to claim the bonus within 13 weeks of the end of the 26 week non-accruing time limitation, that is by 10 April 2012, and that they failed to so do.
The Tribunal is satisfied however that the applicants were not notified that the non-accruing period is limited to a period of 26 weeks.
The Tribunal considers the failure of the respondent to so notify the applicants constitutes "special circumstances" within the meaning of section 21(2) of the Administration Act. The failure to notify the applicants distinguishes the current facts from the Manis decision where the applicants had been notified of, but failed to comprehend, their responsibilities.
In providing for the acceptance of late claims, the Guide distinguishes between acceptance of late claims from members "who have not been able to lodge a claim within the time limits due to special circumstances" and acceptance of late claims from members "who deliberately claim late in order to get a higher bonus".
It was not suggested that the applicants lodged a late claim in order to get a higher bonus.
The Tribunal having considered the law and relevant interpretations of the law, and the facts in this case determined it was able to exercise the discretion made available to it to extend the period open to the applicants for them to lodge claims for pension bonus and in doing so, to accept the applications lodged on 25 October 2011.
DECISION
The Tribunal sets aside the decision under review and instead decides that the applications for pension bonus should be accepted out of time and remits the matter to the Secretary to calculate the amount of the entitlement of the applicants.
I certify that the preceding 51 (fifty one) paragraphs are a true copy of the reasons for the decision herein of
(SGD) T Freeman...........................................................
Associate
Dated 7 December 2012
Date of hearing 6 August 2012 Applicants In person Advocate for the Respondent Ms Ladhams
0
4
0