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

[2020] AATA 4263

Hackett and Secretary, Department of Social Services (Social services second review) [2020] AATA 4263 (28 October 2020)

Division:GENERAL DIVISION

File Number(s):      2019/6944

Re:Thomas Ian Hackett

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr I Alexander, Senior Member

Date:28 October 2020

Place:Sydney

The decision under review is affirmed.

.................................[SGD].......................................

Dr I Alexander, Senior Member

CATCHWORDS

SOCIAL SECURITY – Age Pension – whether applicant meets the residence requirements – where applicant’s only property and primary residence is overseas – limited accommodation in Australia – some family relationships in Australia – only superannuation fund and one bank account in Australia – frequent travel outside of Australia – decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 7(2), 7(3), 43

Social Security (Administration) Act 1999 (Cth) s 29, sch 2

REASONS FOR DECISION

Dr I Alexander, Senior Member

28 October 2020

BACKGROUND

1. On 31 May 2017, Mr Hackett purchased a property in Scotland.[1]

   [1] At the hearing, Mr Hackett described the property as a two bedroom “flat” on the first floor of a housing development of 12 flats with four on each floor.

2. In May 2017, at the age of 74, Mr Hackett lodged a claim for Age Pension which was subsequently rejected by Centrelink.

3. On 24 June 2017, Mr Hackett left Australia for Scotland and did not return until 2 March 2018.

4. On 20 April 2018, Mr Hackett lodged a claim for Age Pension.

5. On 5 May 2018, Mr Hackett left Australia for Scotland and did not return until 20 September 2018.

6. On 8 June 2018, Centrelink rejected the claim because the value of Mr Hackett’s “assets was above the allowable limit”. He did not request an internal review of Centrelink’s decision but decided to lodge a new claim. Therefore, this decision is not reviewable by the Tribunal.

7. On 29 October 2018, Mr Hackett lodged a new claim for Age Pension because his assets had changed.

8. On 21 June 2019, Centrelink rejected the claim because he was “not living in Australia on a permanent basis”.

9. On 5 November 2018, seven days after lodging his new claim, Mr Hackett left Australia for Scotland and did not return until 2 May 2019.

10. On 24 June 2019, after having spent only seven weeks in Australia, Mr Hackett departed for Scotland. The Respondent’s Statement of Facts, Issues and Contentions notes that he returned to Australia on 13 February 2020[2] and departed again on 7 July 2020 and has not returned.

    [2] This date is not listed in Centrelink’s Travel Outside Australia summary.

11. On 3 July 2019, an Authorised Review Officer decided that Mr Hackett was not qualified for Age Pension because he was “not a resident of Australia”.

12. In a decision dated 19 September 2019, the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) found that Mr Hackett “does not meet the residency requirements outlined under the Act to be considered an Australian resident for the purpose of claiming the age pension.”

13. In these proceedings Mr Hackett, who is self-represented, seeks review of the decision of the AAT1.

14. In view of the temporary changes with regard to the suspension of face-to-face Tribunal hearings during the COVID-19 pandemic, both parties attended the hearing by telephone.

    ISSUES

15. Section 43 of the Social Security Act 1991 (Cth) (the Act) provides that a person is qualified for Age Pension if they have reached pension age and have 10 years qualifying Australian residence.

16. Section 29 of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) provides that a claim for social security payment can only be made by a person “who is an Australian resident”[3] and “is in Australia”.[4]

    [3] Social Security (Administration) Act 1999 (Cth), s 29(1)(a).

    [4] Ibid s 29(1)(b).

17. Section 7(2) of the Act states that an “Australian resident” is a person who resides in Australia and is either an Australian citizen, or the holder of a permanent visa or a special category visa holder who is a protected SCV holder.

18. Section 7(3) provides as follows:

    (3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:

    (a)       the nature of the accommodation used by the person in Australia; and

    (b)       the nature and extent of the family relationships the person has in Australia; and

    (c)       the nature and extent of the person’s employment, business or financial ties with Australia; and

    (d)       the nature and extent of the person’s assets located in Australia; and

    (e)       the frequency and duration of the person’s travel outside Australia; and

    (f)        any other matter relevant to determining whether the person intends to remain permanently in Australia.

19. Subclause 4(1) of Schedule 2 to the Administration Act provides that if a person makes a claim for a relevant social security payment and the person is not qualified on the day the claim is made, but the person becomes qualified for the payment within the period of 13 weeks after the day on which the claim is made, and the person becomes so qualified within that period, the claim is taken to be made on the first day on which the person is qualified for the social security payment (the qualification period). 

20. There is no dispute that Mr Hackett satisfied section 43 of the Act and that on 29 October 2018, he was in Australia when he lodged his claim for Age Pension.

21. The Respondent, however, contends that, on the date Mr Hackett lodged his claim for Age Pension and in the subsequent 13 weeks, Mr Hackett was not residing in Australia.

22. Therefore, the definitive issue in this matter is whether, during the qualification period, Mr Hackett was an Australian resident for the purposes of the Act.

    What is the nature of the accommodation used by Mr Hackett in Australia?

23. At the hearing, Mr Hackett confirmed that he owns no property in Australia and when he is in Australia, his accommodation is a combination of house sitting and the rental of a granny flat from his friends. He pays $200 per week for the granny flat but has no formal rental agreement.

24. Mr Hackett also confirmed that, when he is in Australia, his property in Scotland remains vacant because “it is his home” and he “doesn’t want strangers living in it”.

    What is the nature and extent of the family relationships Mr Hackett has in Australia?

25. Mr Hackett told AAT1 that his son and daughter had been raised in Australia but that, after visiting Scotland as backpackers, they ended up settling there with each of them meeting partners and having children. He also said that because his children had moved to Scotland, he decided to spend half his time in Australia and half his time in Scotland and that is what led him to purchasing a property in Scotland.

26. At the hearing, Mr Hackett explained that the “flat” he purchased was in a new development close to where both his children lived and had fortuitously “cropped up for sale”.

27. Mr Hackett confirmed that he now had four grandchildren, all girls.

28. In a written statement dated 17 March 2020, Mr Hackett stated that he has “2 brothers and 2 sisters here, 8 nephews and nieces and 7 great nephews and nieces [who reside in Australia].”

29. He explained that when he returns to Australia, he visits and spends time with the various members of his family and attends family barbecues and other functions.

    What is the nature and extent of the person’s employment, business or financial ties with Australia?

30. Mr Hackett worked in Australia from about September 1965 until he retired in October 2012.

31. At the hearing, Mr Hackett confirmed that he has a superannuation account with the Commonwealth Bank which currently holds about $353,000, and which is his main income stream. He explained that he accesses his funds with online banking and international money transfers.

32. Mr Hackett also has an account with the Credit Union of South Australia which currently holds between $6,000 and $7,000.

33. Apart from an Australian mobile phone account, Mr Hackett has no other business or financial ties with Australia.

34. Mr Hackett’s overseas funds include an account with the Bank of Scotland which currently holds an equivalent of about $18,000 and a recently purchased capital guaranteed Premium Bond valued at an equivalent of $110,000.[5]

    [5] Mr Hackett explained that he withdrew money from his superannuation account to purchase the Premium Bond.

35. When asked why his superannuation account had his address in Scotland as the residential address, Mr Hackett stated that “he needed a place of residence” and would not want his correspondence to be sent to his friends in Adelaide.

    What is the nature and extent of the person’s assets located in Australia?

36. Apart from the account noted above, Mr Hackett has no other assets located in Australia.

    What is the frequency and duration of the person’s travel outside Australia?

37. In his written statement, Mr Hackett stated that he decided to buy a flat in Scotland that was very close to his adult children because “it was affordable and cheaper than Adelaide” and his children could “keep an eye on it, collect my mail etc” while he spent time in Australia. He emphasised that it was never his intention to live full time in Scotland but “spend 50/50 with Adelaide”.

38. Perusal of Mr Hackett’s Travel Outside Australia Summary[6] revealed that on 24 June 2017, about one month after having purchased the flat, he departed from Australia and travelled to Scotland.

    [6] Section 37 Documents, page 109.

39. In the next three years, Mr Hackett returned to Australia three times and stayed in Australia for about five and a half months with the remainder of the time approximately being resident in Scotland.

40. Since Mr Hackett purchased his flat in Scotland, in May 2017, he has resided in Scotland for about 75% of the time.

    Are there any other matters relevant to determining whether the person intends to remain permanently in Australia?

41. In his application for review to AAT1 dated 16 July 2019, Mr Hackett stated, inter alia, as follows:

    I moved to Scotland to live in June 2017 …  My daughter viewed the flat and I made the purchase from Adelaide. Prior to this purchase I was a self funded retiree in a rented flat in Adelaide however was in receipt of a small Centrelink age pension for several months when I retired in October 2012. This was cancelled about 2013/2014 when alterations were made to the assets testing of pensions. Once I bought the flat I then became eligible based on the assets test for a pension as the flat was intended to be my principal place of residence once I packed up my goods and moved to Scotland …   Prior to me making this life changing decision I had at least 3 maybe 5 conversations between 2012 and 2016 with a Financial Services Information officer with Centrelink about my eligibility for an age pension if I moved to Scotland. I was told on each occasion ….that I would be eligible in light in light of the longevity of my work history in Australia. If I thought for one minute that I would not be eligible for an age pension I would never have made the decision to move to Scotland…    I moved to Australia in August 1965, started work in September 1965 and retired in October 2012 at 69 years of age and 47 years of working life in Australia ….As you can imagine it was a big wrench for me to leave Australia as by June 2017 I had been there for 52 years and have an established network of friends, hobbies and social pursuits in Australia. I am not eligible for a UK pension …..Based on my assets any current age pension would be quite modest, but as my capital diminishes with time, and potential volatility of my market linked income stream reduces the balance, effectively I will run out of money and have nil income.

    To put it simply I would never have left Australia if I knew what was going to happen and feel that I have been misled by the Financial Service Officers I spoke to ….If I do not become eligible for age pension now, I will probably have little option but to reverse my decision, and move back to Australia. The market risk and longevity risk makes my position untenable. This seems very unfair to me and my family in Scotland.        

42. At the hearing, when asked why he decided to buy a property in Scotland, Mr Hackett said he wanted a permanent place to live as he got older that was best for himself and his children. He said that it was a difficult decision but a similar property in Adelaide was too expensive and his cost of living was lower in Scotland so that he would have more capital to fund his travelling to and from Australia. 

    Consideration

43. The Tribunal acknowledges that Mr Hackett has maintained a strong and continuing relationship with Australia over many years and that when he purchased his property in Scotland, his intention was to split his time evenly between both countries.

44. The Tribunal also acknowledges that Mr Hackett believes that his failure to obtain the Age Pension was unfair and that he had been misled by Centrelink officers.

45. However, the specific issue before the Tribunal is whether Mr Hackett was qualified for Age Pension during the qualification period, in particular, whether he was an “Australian resident” at that time.

46. The difficulty for Mr Hackett is that, in my view, on 29 October 2018 or in the subsequent 13 weeks, the weight of evidence before the Tribunal supports a conclusion that he was not an “Australian resident” for the purposes of the Act.

47. On 31 May 2017, Mr Hackett purchased his flat in Scotland which is his only property and which he has acknowledged is his primary residence.

48. In June 2017, about three weeks after having purchased the flat, Mr Hackett departed for Scotland and did not return to Australia until March 2018, about eight months later.

49. About two months later in May 2018, Mr Hackett returned to Scotland where he stayed for about four months and returned to Australia on 20 September 2018.

50. On 29 October 2018, Mr Hackett lodged his claim for Age Pension.

51. Seven days later, on 5 November 2018, Mr Hackett returned to Scotland where he stayed for about six months before returning to Australia on 2 May 2019.

52. Seven weeks later, on 24 June 2019, Mr Hackett returned to Scotland and did not return until 13 February 2020. He returned to Scotland on 7 July 2020 and has not returned.

53. It is clear that, since purchasing his flat in Scotland, Mr Hackett has primarily resided in Scotland with only four relatively short visits to Australia.

54. In Scotland, Mr Hackett’s immediate family live nearby, he owns no property in Australia apart from his superannuation fund and one bank account, he has no other assets in Australia and he has no permanent accommodation in Australia. 

55. On balance, I am satisfied that on 29 October 2018 and in the following 13 weeks, Mr Hackett was not an “Australian resident” for the purposes of the Act.

56. It follows that Mr Hackett did not satisfy section 29 of the Administration Act and, therefore, was not qualified for Age Pension.

    Decision

57. For the reasons set out above, the Tribunal is satisfied that, during the qualification period, Mr Hackett was not an “Australian resident” in accordance with the Act and, therefore, did not satisfy section 29 of the Administration Act and did not qualify for Age Pension.

58. The decision under review is affirmed.

I certify that the preceding 58 (fifty eight) paragraphs are a true copy of the reasons for the decision herein of Dr I Alexander, Senior Member

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Associate

Dated: 28 October 2020

Date of hearing:	12 October 2020
Applicant:	Self-represented
Solicitors for the Respondent:	Services Australia