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

Grech and Secretary, Department of Social Services (Social services second review) [2022] AATA 2831 (31 August 2022)
Division:GENERAL DIVISION
File Number:2021/9810
Re:Edward Grech
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Member D Mitchell
Date:31 August 2022
Place:Brisbane

The decision under review is affirmed.
.................[SGD].............................
Member D Mitchell
CATCHWORDS
SOCIAL SECURITY – rate of age pension – where value of assets exceed minimum threshold – where Centrelink made an error in calculating rate of pension which was subsequently corrected – decision under review affirmed
Legislation
Social Security Act 1991 (Cth)

Cases
Secretary, Department of Social Security v Garvey (1989) FCA 496
REASONS FOR DECISION
Member D Mitchell
31 August 2022
Introduction

Mr Edward Grech (the Applicant) has been in receipt of the age pension since

10 March 2012.[1]
[1] Exhibit 1, T Documents, T18, page 66, Centrelink Mainframe - Pension History Status.
In December 2018, the Respondent having received a ‘Details of income stream product for Centrelink or DVA’ form[2] incorrectly amended the Applicant’s asset details and removed the financial asset entries, replacing them with a single financial asset total, being an income stream with a value of $50,001.[3]
[2] Exhibit 1, T Documents, T6, page 26, LGIA Income Stream Statement.
[3] Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachments F and G.
Prior to this coding error the Applicant’s total financial assets were recorded by the Respondent as being valued at $455,285 and consequently he was receiving a reduced rate of age pension.[4]
[4] Exhibit 2, Secretary’s Statement of Facts & Contentions, Attachments A-E.
Consequently, as the Applicant’s recorded assets decreased his rate of age pension increased significantly from approximately $22-$23 per fortnight in October to December 2018 to approximately $750 per fortnight from late December 2018 onwards.[5]
[5] Exhibit 1, T Documents, T18, page 68, Centrelink Mainframe – Payment Summary.
Between 23 April 2021 and 8 July 2021, in response to information being sought by the Respondent,[6] the Applicant provided details of his superannuation holdings.[7] The Applicant had closed his income stream in September 2020 and had retained his superannuation product.
[6] Exhibit 1, T Documents, T7, pages 27-30, Correspondence from Centrelink – Request for information about your income stream/s; T8, pages 31-32, Correspondence from Centrelink – Request for information; T11, pages 39-41, Request for Information; and T19, page 93, Centrelink file note.
[7] Exhibit 1, T Documents, T9, pages 36-37, Response to request for information, enclosing LGIA Superannuation Benefit quote; T12, pages 42-53, Response to request for information enclosing LGA Superannuation Statements; and T19, page 92, Centrelink file note.
On 9 July 2021, the Respondent processed the information provided by the Applicant restoring the previously advised financial assets to the Applicant’s overall asset value.[8] This had the effect of decreasing the Applicant’s age pension rate from approximately $773 per fortnight to between $33 and $43 per fortnight.[9]
[8] Exhibit 1, T Documents, T19, page 94, Centrelink file note.
[9] Exhibit 1, T Documents, T18, pages 68-69, Centrelink Mainframe – Payment Summary.
On 9 July 2021, the Respondent notified the Applicant that his rate of age pension had been reduced due to the value of his assets having increased. The Respondent advised the Applicant that his rate of age pension had been calculated on the basis that he had a total asset amount of $519,810.[10]
[10] Exhibit 1, T Documents, T13, pages 54-55, Correspondence from Centrelink – Your Age Pension.
On 12 July 2021, the Applicant contacted the Respondent seeking review of the debt that resulted from the coding amendment.[11] This request was deleted as no debt had been raised at that time.[12] It is noted that up until the date of Hearing of this matter the Respondent had not made a decision in relation to any potential overpayment or debt in relation to the increased rate of age pension the Applicant received in the period of December 2018 to July 2021.[13]
[11]    Exhibit 1, T Documents, T19, page 95, Centrelink file note.
[12]    Exhibit 1, T Documents, T19, page 97, Centrelink file note.
[13]    Exhibit 2, Secretary’s Statement of Facts & Contentions, page 3, paragraph 24. It was further confirmed by the Respondent at Hearing that this position was correct.
On 12 July 2021, the Applicant sought review of the decision to reduce his age pension rate.[14]
[14] Exhibit 1, T Documents, T19, page 97, Centrelink file note.
On 27 August 2021, the decision was reviewed by an Authorised Review Officer (ARO), who affirmed the decision.[15]
[15] Exhibit 1, T Documents, T15, pages 58-61, Decision and notes of ARO.
On 10 September 2021, the Respondent wrote to the Applicant providing him with an Income Statement that shows the information it holds about him.[16]
[16] Exhibit 1, T Documents, T16, pages 61-62, Correspondence from Centrelink – Income Statements.
On 15 September 2021, the Applicant sought review of the decision to reduce his age pension rate by the Social Services and Child Support Division of this Tribunal (SSCSD).[17]
[17] Exhibit 1, T Documents, T17, pages 64-65, Request for Statement.
On 10 November 2021, the SSCSD affirmed the decision under review.[18]
[18] Exhibit 1, T Documents, T2, pages 5-6, Decision of the SSCSD.
Following this, the Applicant sought a second-tier review of this matter by the General Division of this Tribunal, by way of an application dated 10 December 2021.[19] The Applicant outlined that he claims that the decision was wrong because “Not knowing much about ‘Social Services’ I took ’Centrelink’, for until they realised, that they made a ‘Big Mistake’”.[20]
[19] Exhibit 1, T Documents, T1, pages 1-4, Application for Review.
[20] Exhibit 1, T Documents, T1, page 2, Application for Review.
On 26 August 2022, a Hearing was held for this application. At the Hearing, the Applicant appeared in person, was self-represented and gave evidence under affirmation.
issues
The issue before the Tribunal is what was the Applicant’s correct rate of age pension of

9 July 2021. To determine that issue the Tribunal must determine what the value of the Applicant’s assets were at that date.
The Law
The relevant law in assessing a person’s eligibility to and rate of payment of age pension is found in the Social Security Act 1991 (Cth) (the Act). Following is a summary of the key requirements which relate to the Applicant’s application.
There is no question that the Applicant was at the relevant time qualified for age pension. Age pension, however, is not payable if the pension rate is nil.[21]
[21] Section 44 of the Act.
Section 55 of the Act sets out that a person’s age pension rate (where the person is not permanently blind) is worked out using Pension Rate Calculator A at the end of section 1064 of the Act.
Section 1064(1) of the Act relevantly, provides that the rate of age pension is to be calculated in accordance with the Rate Calculator at the end of that section.
Section 1064-A1 of the Act provides the overall rate calculation process as follows:
Method statement
Step 1.   Work out the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 1B. Work out the energy supplement (if any) using Module C below.
Step 3.   Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).
Step 4.   Add up the amounts obtained in Steps 1, 1A, 1B and 3: the result is called the maximum payment rate.
Step 5.   Apply the ordinary income test using MODULE E below to work out the income reduction.
Note:             Module F contains provisions that may apply to working out the ordinary income of a person, and the ordinary income of a partner of the person, for the purposes of disability support pension.
Step 8.   Take the income reduction away from the maximum payment rate: the result is called the income reduced rate.
Step 9.   Apply the assets test using MODULE G below to work out the reduction for assets.
Step 10. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 11. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.
Step 12. The rate of pension is the amount obtained by:
(a)     subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and
(b)     if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and
(c)     adding any amount payable by way of remote area allowance (see Module H).
The calculation method means that the rate of a person’s age pension is calculated by having regards to both the assets and income of the person. The asset and income tests are applied and it is the lower rate that is applied.
As of 9 July 2021, if a person as a single homeowner had assets exceeding $270,500 their rate of pension would be reduced by $3 per fortnight for every $1,000 above that amount.
Section 11 of the Act defines asset to mean property or money, including property or money held outside of Australia.
Section 9 of the Act defines a financial asset to mean a financial investment or deprived asset and a financial investment to mean:
(a) available money; or
(b) deposit money; or
(c) a managed investment; or
(d) a listed security; or
(e) a loan that has not been repaid in full; or
(f) an unlisted public security; or
(g) gold, silver or platinum bullion; or
(h) an asset‑tested income stream (short term); or
(i) an asset‑tested income stream (long term) that is an account‑based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
(j) an asset‑tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection (1EA);
but does not include a designated NDIS amount.
consideration
At Hearing the Applicant gave evidence under affirmation. The Tribunal considers that the Applicant was open and honest with his answers to the questions he was asked and was forthcoming in providing his evidence.
The Respondent contended that on 9 July 2021 the Applicant held assets for the purposes of social security law which included cash, household contents, managed investments, real estate and shares, to an accumulated value of $519,810.[22]
[22] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 4, paragraphs 29-30.
At Hearing the Applicant told the Tribunal that:
·His knowledge and understanding of Social Services and all of the paperwork is limited.
·Every time Centrelink has asked him for information, he has gone to a Centrelink office and taken in what they have asked for.
·His experiences with the Wynnum shopfront were not positive, however, the Valley shopfront were more interested and helpful.
·He was told by a Centrelink person at Wynnum that he had been overpaid but it was their fault not his.
·His money goes in and out of a debit card account, so unless he gets and looks at a bank statement, he does not follow what is going on.
·He is disappointed in Centrelink as he has always done the right thing and everything he had ever been asked to do.
·When asked if he agreed that on 9 July 2021, the recorded value of each asset that made up the total of $519,810 were correct, that he is not 100% sure however, it would be pretty close – he does not check accounts and values every day.
·He has sold the property listed in his assets, it was land and he agreed with the value that was included for it on 9 July 2021.
·The value of his superannuation has since decreased.
·His health both physically and mentally has been getting worse over the last two years.
The Tribunal notes that based on the Applicant’s evidence, it does not appear as though he disputes that the value of his assets on 9 July 2021 was in the vicinity of $519,810.
The Tribunal also notes that in a superannuation statement dated 6 May 2021, the Applicant is recorded as having an amount of $404,629.54 accessible at any time[23] in his accumulation account.[24]
[23] Exhibit 1, T Documents, T9, pages 33-37, Response to request for information enclosing LGIA Super Benefit Quote.
[24] Exhibit 1, T Documents, T10, page 38, LGIA letter to Applicant.
The Respondent contended that the Applicant’s asset amount of $519,810 had been correctly applied from 9 July 2021 in working out the relevant asset-based reduction to his overall age pension rate calculation. As such the age pension rate paid to the Applicant from that date is his correct entitlement on the basis of his recorded assets as at that date.[25]
[25] Exhibit 2, Secretary’s Statement of Facts & Contentions, page 5, paragraph 39-40.
The Applicant did not put any evidence before the Tribunal to refute the value of his assets recorded by the Respondent on 9 July 2021. The Tribunal considers that, this is in part because he did not dispute the overall value assigned to his assets at that time.
It should be noted that the Applicant has acted honestly throughout his dealings with this matter, he has not tried to say that his position was different to that which was recorded by the Respondent. Rather he expressed how upset and disappointed he was that the Respondent had made an error. The Tribunal made it clear that it is not in contention that the change to his rate of pension in December 2018 was not a result of anything he had done and there was no suggestion that he had not acted honestly.
The Tribunal understands the Applicant’s difficult position in relation to this matter, however, the calculation of a person’s rate of age pension is set out clearly in the Act.
Based on the evidence before it, the Tribunal finds that the Applicant’s cash, household contents, managed investments, real estate and shares all constitute assets for the purposes of the Act. This was not disputed.
Consequently, there is no finding that the Tribunal can make other than that, as of
9 July 2021, the value of the Applicant’s assets were $519,810 and as such his rate of age pension on that date should be calculated using that asset value. There is no discretion available in the Applicant’s circumstances to pay him a higher rate of age pension.
This outcome is consistent with the purpose of the age pension provisions of the Act which were explained by the Full Federal Court in Secretary, Department of Social Security v Garvey (1989) FCA 496 at [19] as follows:
The purpose of the relevant part of the Act was very clear, namely, to maintain a basic level of income for those who were unable to receive sufficient income to provide for themselves.
The Tribunal notes that if the Applicant’s financial circumstances have changed since July 2021, it is open to him to provide further details of this to the Respondent at any time so that his age pension rate can be adjusted.
Conclusion
Based on the evidence before the Tribunal it is clear that as of 9 July 2021 the Applicant held assets to the value of $519,810 of which should have been taken into consideration when calculating his age pension rate.
Accordingly, the decision under review is affirmed.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell

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Associate
Dated: 31 August 2022

Date of Hearing: 26 August 2022

Applicant: In Person

Solicitors for the Respondent:
Mr Andrew Summers
Services Australia

[2022] AATA 2831

31 August 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction

Date of Hearing:	26 August 2022
Applicant:	In Person
Solicitors for the Respondent:	Mr Andrew Summers Services Australia