Grisancich and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 790

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 790

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0531

GENERAL  ADMINISTRATIVE   DIVISION		)
Re		TERESITA GRISANCICH

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr Egon Fice, Member

Date4 September 2008

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Egon Fice

Member

SOCIAL SECURITY – Special Benefit – qualification – no other pension or benefit payable ‑ long term available funds test – availability of liquid assets in excess of $5,000 – application of policy – whether financial hardship – decision affirmed.

Social Security Act 1991

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Howells and Another v Nagrad Nominees Pty Ltd (1982) 43 ALR 283

REASONS FOR DECISION

4 September 2008 Mr Egon Fice, Member      

1.      Mrs Teresita Grisancich first came to Australia in April 2005 on a temporary spouse visa subclass 820 (provisional).  She married Mr Antonio Grisancich on 18 June 2005.  Mr Grisancich was a pensioner at that time, being some 80 years of age.  Mrs Grisancich was also of pensionable age but clearly not eligible for the pension because she did not meet the residency requirements for the age pension.  Mrs Grisancich made a claim under the Social Security Act 1991 (the Act) for special benefit in May 2007.  Her claim was rejected.  The decision was affirmed on internal review by the original decision maker and then by an authorised review officer (ARO).  Mrs Grisancich sought review by the Social Security Appeals Tribunal (SSAT).  On 8 January 2008 the SSAT affirmed the decision of the ARO.  Mrs Grisancich now seeks review of that decision by this Tribunal.

2.      The issues before me are:

(a)whether Mrs Grisancich satisfies the qualifying criteria under the Act for the grant of a special benefit; and

(b)whether the discretion provided for in the Act should be exercised in her favour to grant a special benefit.

RELEVANT BACKGROUND

3.      Mrs Grisancich came to Australia on 28 April 2005 from the Philippines.  The purpose of her coming here was to marry Mr Grisancich, which she did on 18 June 2005.  Mr Grisancich is 80 years of age and his wife 67 years.  For her first two years of residence in Australia, Mrs Grisancich was subject to the usual two year assurance of support period.

4.      Prior to marrying Mrs Grisancich, Mr Grisancich was receiving the age pension at the single rate.  After notifying Centrelink of his marriage, his pension was reduced because he then received the partnered rate which is a lower maximum basic rate.  Mrs Grisancich lodged a claim for the special benefit on 14 May 2007.  That claim was rejected because Mrs Grisancich and her husband had some $32,227 in available funds and were therefore not considered to be in financial hardship.

5.      Acting on the advice of a Centrelink officer, Mr and Mrs Grisancich invested $20,000 of their savings by purchasing an annuity product, described as a Guaranteed Index Tracked Long Term Income Policy, from the Commonwealth Bank of Australia.  That annuity provided Mr and Mrs Grisancich with a payment of $186.58 per month.  Having taken this action, Mr and Mrs Grisancich believed that they had reduced their liquid assets to below $5,000 thereby making Mrs Grisancich eligible to receive a special benefit.  She then lodged another claim for the special benefits on 20 August 2007.  However, that was also rejected on the basis that she was not considered to be suffering from financial hardship.

6.      On 24 October 2007 an ARO with Centrelink affirmed the original decision to refuse Mrs Grisancich the special benefit.  The decision was affirmed by the SSAT on 8 January 2008.

LEGISLATIVE SCHEME

7.      A person qualifies for a special benefit for a specified period where the Secretary determines, in accordance with s 729(2) of the Act, that a special benefit should be granted to the person for the period.

8.      Section 729(2) of the Act provides:

(2)The Secretary may, in his or her discretion, determine that a special benefit should be granted to a person for a period if:

(a)no social security pension is payable to the person during the period; and

(b)no other social security benefit is payable to the person for the period; and

…

(e)the Secretary is satisfied that the person is unable to earn a sufficient livelihood for the person and the person’s dependants (if any) because of age, physical or mental disability or domestic circumstances or for any other reason; and

(f)the person:

(i)is an Australian resident; or

…

(h)an assurance of support does not apply to the person at any time during the period (see subsection (2C)).

Note 1:for Australian resident see subsection 7(2).

…

(3)The Secretary is not to determine that a special benefit should be granted to a person for a period if the Secretary is satisfied that the benefit is not payable to the person for that period.

9.      In addition to the legislation, the Department of Families, Housing, Community Services and Indigenous Affairs (the Department) has developed a policy for the payment of special benefits.  The policy is set out in the Guide to Social Security Law (the Guide).  Paragraph 1.2.6.10 of the Guide provides that the objective of the special benefit is to provide income support for people who, due to reasons beyond their control are:

(a)in financial hardship; and

(b)unable to earn a sufficient livelihood for themselves and their dependants.

10.     There are two categories of special benefit: short term and long term.  As paragraph 3.7.1.50 of the Guide indicates, before a funds test is applied, a delegate must decide whether the customer is likely to be dependent on the benefit in the short or the long term.  The short term category applies to persons who are likely to depend on the benefit for less than 13 weeks; and the long term category to persons who are likely to depend on the benefit for more than 13 weeks. 

11.     Given her age, Mrs Grisancich is likely to fall into the long term category.  Therefore, it seems appropriate that the long term available funds test should apply to her.  Paragraph 3.7.1.70 of the Guide provides that the available funds tests are primarily about liquid funds.  Therefore, if a customer has available liquid funds of more than $5,000, then the special benefit is not payable regardless of marital status or the number of dependants.  However, if the customer’s available liquid funds are $5,000 or less then the special benefit may be payable. 

STATUS OF DEPARTMENTAL GUIDELINES

12.     Where the application of a statutory provision requires the decision-maker to exercise discretion, it is not unusual for either the Minister responsible or the Department to develop guidelines to assist in fair and consistent decision-making by the person exercising that discretion.  As Brennan J said in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639:

Inconsistency is not merely inelegant: it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice.

13.     Brennan J also made the following points at 640-641:

(a)Decision-making is facilitated by the guidance given by an adopted policy;

(b)the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy;

(c)policy can diminish the inconsistencies which might otherwise appear in a series of decisions;

(d)a policy must be consistent with the statute. It must allow the Minister to take into account the relevant circumstances, it must not require him to take into account irrelevant circumstances, and it must not serve a purpose foreign to the purpose for which the discretionary power was created;

(e)discretion cannot be so truncated by a policy as to preclude consideration of the merits of specified classes of cases;

(f)policy must leave the Minister free to consider the unique circumstances of each case;

(g)the policy must not be applied so rigidly as to reject an applicant without hearing what he has to say; and

(h)The applicant is entitled to put forward reasons urging that the policy should be changed, or setting out reasons why it should not be applied to him or her.

14.     A useful observation regarding the application of policy was also made by the Federal Court in Howells and Another v Nagrad Nominees Pty Ltd (1982) 43 ALR 283 where it said, at 307:

Where the power given relates to the consideration of individual cases, it is not to be denied that the predominant aspect must be the consideration of the particular case. The merits of that case must be considered genuinely and realistically; there must always be a readiness to depart from policy. The policy does a dis-service to those who have to measure it against the individual situation if it is expressed in dogmatic or mandatory terms.

Applying the views of the Courts referred to above, it seems to me that although the guidelines set out in the Guide are consistent with the statute in that they establish an objective basis for determining the level of liquid assets above which the special benefit is not payable, they are not designed to be read dogmatically without a genuine consideration of an applicant’s particular circumstances.  I must also take into account Mrs Grisancich’s reasons put forward why the long term available funds test set out in the Guide should not apply to her.

DOES MRS GRISANCICH QUALIFY FOR A SPECIAL BENEFIT

15.     There is no question about the fact that Mrs Grisancich does not qualify for the age pension.  Although she is above the minimum age for the age pension, she has not been an Australian resident for at least 10 years which is a minimum qualification.  She is now outside the two year assurance of support period.  Also, I accept that no Social Security pension will be payable to Mrs Grisancich for a substantial period in the future and that no other Social Security benefit would be payable to her in the future until she qualifies for the age pension.  Given her age, I am satisfied that she is unable to earn a sufficient livelihood to keep herself.  I am therefore satisfied that she qualifies for the special benefit. 

16.     However, qualification for the special benefit does not necessarily mean that the discretion should be exercised in her favour.  The assets and income tests provided for under the Act generally apply to all forms of Social Security payments.  This clearly evidences an intention by the Legislature to limit access to Social Security payments to those persons without sufficient assets or income to be able to provide for themselves.  This will necessarily mean that some person must establish a maximum level of income or assets beyond which citizens of this country are not eligible for Social Security payments.  In other words, the citizens of this country are required and expected to provide for themselves unless they fall below the income and asset limits prescribed for a particular payment.  In the case of the special benefit, those figures have been prescribed in the Guide.  Although the figure of $5,000 seems like a low maximum figure, if it is applied uniformly to all applicants, the result will be fair, provided that each individual’s unique circumstances have been taken into account.

17.     In this case, Mrs Grisancich came to Australia for the purpose of marrying Mr Grisancich at a time in both of their lives where they could be described as elderly.  Although Mr Grisancich was at that time in receipt of the age pension at the single rate, after he married Mrs Grisancich, his age pension was reduced to the partnered rate.  While that clearly was not foreseen by him, it does quite plainly cause an additional financial problem for the couple.  Because Mrs Grisancich is not eligible for the age pension, Mr Grisancich has suddenly found himself in a position where he has to provide for two people on an age pension which is less than he was receiving to keep himself.  Clearly, Mrs Grisancich is at an age where any future employment is simply out of the question.  It therefore seems to me to be quite obvious that, in the not to distant future, and quite possibly before Mrs Grisancich becomes eligible for the age pension, some additional financial support will need to be provided by the Australian community.  However, the question is whether these circumstances result in Mrs Grisancich being treated differently to other Australian residents who find themselves in a similar financial position.  Unfortunately, in my view, to treat Mrs Grisancich differently to others who might be in similar circumstances would create an injustice to others. 

18.     I have also taken into account the submissions made by Mr Grisancich regarding the $20,000 which was used to purchase the Commonwealth Bank annuity.  Mr Grisancich submitted that these monies were being saved for the purpose of providing for his and, probably subsequently, his wife’s funerals.  While I understand Mr Grisancich’s concerns about providing for his and his wife’s funerals, that does not appear to be a relevant consideration for the purposes of the Act.  I am therefore of the view that putting aside money for the purposes of funeral expenses does not alter the fact that Mrs Grisancich’s assets exceed the maximum level for the payment of the special benefit.

19.     I have also taken into account the fact that Mr Grisancich receives a small pension from Italy and also one from Slovenia.  While these are relatively small, they clearly assist in covering living expenses.  Further, Mr Grisancich confirmed that it was possible to cash-in the annuity although that would be at a small financial penalty.  Nevertheless, it does result in Mrs Grisancich having access to liquid funds in excess of the maximum permissible. 

CONCLUSION

20.     Although this is a most unfortunate set of circumstances for Mr and Mrs Grisancich, and the circumstances are quite unusual, I am of the view that although Mrs Grisancich qualifies for the special benefit payment, the discretion should not be exercised in her favour due to her access to liquid funds in excess of $5,000.  I must therefore affirm the decision made by the SSAT on 8 January 2008.

21.     Although I have concluded that Mrs Grisancich is not entitled to a special benefit payment, I am concerned about the fact that Mr Grisancich’s age pension has been reduced as a result of his marriage to Mrs Grisancich.  While that decision clearly does not form part of the decision which is before me for review, I am conscious of the hardship it has caused this couple.  I am also conscious of the fact that s 24 of the Act provides that, in the circumstances that Mr and Mrs Grisancich find themselves, the Secretary may determine, in writing, that Mr Grisancich is not to be treated as a member of a couple for the purposes of the Act.  I am not aware that Mr Grisancich has sought the exercise of that discretion under s 24 of the Act although in his material which was before me, he suggested that he was not allowed to appeal that decision.  In my view, this seems to be an appropriate case for the exercise of the discretion under s 24 of the Act and, although I have no power at all to direct the Secretary to exercise that discretion, I would urge the Secretary to examine that possibility. 

I certify that the twenty‑one [21] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

Signed:          Olympia Sarrinikolaou

Clerk

Date of Hearing  29 May 2008
Date of Decision  4 September 2008

Advocate for the applicant           Mr A. Grisancich

Advocate for the respondent        Ms A. Bramley, Centrelink Legal Services Branch