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

[2010] AATA 742

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 742

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/2839

GENERAL ADMINISTRATIVE DIVISION		)
Re		Johan Hagedoorn

Applicant

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

Respondent

DECISION

Tribunal Senior Member Jill Toohey

Date of Decision  10 September 2010

Date of written reasons       29 September 2010

PlaceSydney

Decision The decision under review is affirmed.

...............[sgd]...............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Age pension – Dutch pension – applicant’s age pension reduced on account of income from Dutch pension – applicant overpaid Dutch pension due to administrative error – Dutch authorities recovered overpayment by withholding Dutch pension – applicant sought arrears of age pension to take account of fact that his Dutch pension was less than originally advised – Centrelink paid arrears to date that applicant advised of his changed circumstances – whether discretion to backdate adjustment - no discretion available – decision under review affirmed

Social Security (Administration) Act 1999

Social Security Act 1991

REASONS FOR DECISION

29 September 2010 Senior Member Jill Toohey           

1.      Mr Johan Hagedoorn seeks review of a decision by Centrelink concerning the effect of a pension he receives from the Netherlands on his Australian age pension.

2.      The facts and the sequence of events are quite complex but there is no dispute of any substance about them between the parties. 

3.      On 1 July 2005, Mr Hagedoorn became entitled to a Dutch pension.  At the time, he was receiving an Australian disability support pension which, on 1 September 2005, converted to an age pension.

4.      On 16 March 2007, Mr Hagedoorn advised Centrelink that he was receiving the Dutch pension and his Australian age pension was reduced accordingly. 

5.      Meanwhile, in June 2006, Mr Hagedoorn’s wife had become entitled to a supplementary pension from the Netherlands.  She did not receive payment until 2007, when she received a lump sum payment in arrears.  Because a couple’s combined income affects the rate at which each is paid a pension, the effect of the arrears payment was that Mr Hagedoorn had now been overpaid his Australian age pension for that period.  Accordingly, Centrelink raised a debt of $1,107.91 against him.

6.      Mr Hagedoorn has no argument with Centrelink up to this point.  However, what happened next is that, in June 2008, the Dutch authorities advised him that his wife’s pension affected his own and he had been overpaid the Dutch pension.  They recovered the overpayment of 8,513 euros by withholding Mr Hagedoorn’s pension from September 2008.

7.      On 4 August 2008, Mr Hagedoorn advised Centrelink by telephone that his Dutch pension was to be withheld on account of the overpayment.  Centrelink accepts that, although he did not give written notice of his changed circumstances until 10 December 2008, he should be taken to have given notice on 4 August 2008. 

8.      The effect of all that had happened was that Mr Hagedoorn’s Australian age pension had been reduced on the basis of a greater income from his Dutch pension than he actually received for the relevant period. 

9.      Mr Hagedoorn asked Centrelink to adjust his Australian age pension to reflect his actual income from the Dutch pension and to pay him arrears.  The total amount that he sought was approximately $3,048.

10.     On 19 December 2008 Centrelink advised Mr Hagedoorn that was entitled to arrears of $648.39 from 4 August 2008 onwards but that the provisions of the Social Security Act 1991 (the Act) precluded payment for any earlier period. On 29 May 2009, the Social Security Appeals Tribunal (SSAT) affirmed that decision.

11.     Mr Hagedoorn makes three arguments:

(i)that, during the period his Dutch pension was withheld to recover the overpayment, he had no income from that source and his Australian age pension should have been paid in full;

(ii)that his Australian age pension should be adjusted, and he should be paid arrears, for the entire period to reflect his actual income from the Dutch pension; and

(iii)any arrears should be calculated using currency exchange rates as at the date that his Dutch entitlements are converted into Australian dollars.

12.     In relation to Mr Hagedoorn’s first argument, even though he did not actually receive the Dutch pension while it was withheld to recover the overpayment, it was nevertheless income for the purposes of the Act (see s 8 of the Act).  Had he been able to, he could have repaid the debt in full from savings, for example, in which case he would have continued to receive the Dutch pension as usual.  In effect, it was paid to him and then paid back against the debt.

13.     In relation to Mr Hagedoorn’s second argument, there is no question that he has been disadvantaged to the extent of approximately $2400 through no fault of his own.  Through an administrative error, he received more Dutch pension than he was entitled to.  His Australian age pension was reduced accordingly.  He has now repaid the debt to the Dutch authorities but finds his Australian age pension cannot be adjusted to reflect his actual income for the full period.

14.     Unfortunately for Mr Hagedoorn, I am bound to agree with the decision of Centrelink and the SSAT. 

15. Section 110 of the Social Security (Administration) Act 1999 (the Administration Act) deals with the date on which a favourable determination takes effect. It states:

(1)Subject to subsections (1A) to (11) (inclusive), if a favourable determination is made following a person having informed the Department of the occurrence of an event or change of circumstances, the determination takes effect:

(a)  on the day on which the person so informed the Department; or
   (b)  on the day on which the event or change occurred;

whichever is the later.

16.     The legislation is clear.  Its effect is that 4 August 2008, when Mr Hagedoorn notified Centrelink of his change in circumstances – being that he had been overpaid the Dutch pension, is the earliest date to which he can be paid arrears.  There is no discretion in the Act, for example, on the basis of special circumstances. 

17. In relation to Mr Hagedoorn’s third argument, s 1100 of the Act specifies how rates of payment are to be calculated taking into account exchange rates. As it applies to Mr Hagedoorn, s 1100(2) provides:

… the value in Australian currency of the amount received is to be calculated using the appropriate market exchange rate for the foreign currency on the fifth business day before the calculation day.

18. Depending on the circumstances, the appropriate market exchange rate on a particular day for a foreign currency may be calculated according to different sources but in any event is to be calculated on the fifth business day before the calculation day. The calculation day is the first business day for each month: s 1100(6).

19.     I am satisfied that Centrelink has applied to correct exchange rate when calculating the amount of Mr Hagedoorn’s Dutch pension for the purposes of his age pension.

20.     Although the legislation results in disadvantage to Mr Hagedoorn, the provisions are clear and there is no discretion to decide otherwise.  I affirm the decision under review.

I certify that the 20 preceding paragraphs are a
true copy of the reasons for the decision
herein of Senior Member Jill Toohey

Signed:         ......................[sgd].........................................................
           Diana Weston  Associate

Date of Hearing  10 September 2010

Date of Decision  10 September 2010
Date of Written Reasons  29 September 2010

ApplicantSelf-represented

Representative for the Respondent:               Ms Jennifer Maclean, Centrelink Advocacy Branch