Hai Jun Li and Secretary, Department of Social Services

[2013] AATA 724

[2013] AATA 724

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2013/3203
Re	Hai Jun Li
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member Jill Toohey
Date	9 October 2013
Place	Sydney

The decision under review is affirmed.

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

Senior Member Jill Toohey

CATCHWORDS

SOCIAL SECURITY – benefits – special benefit – assurance of support – Chinese pension directed to wife in China – ordinary income test – direct deduction income test – whether direct deduction income test should apply – decision under review affirmed

LEGISLATION

Social Security Act 1991 ss 729, 746

CASES

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

SECONDARY MATERIALS

Guide to Social Security Law 3.1.7.80

REASONS FOR DECISION

Senior Member Jill Toohey

9 October 2013

BACKGROUND

1. Mr Hai Jun Li is a 62-year old citizen of China.  He came to Australia in 2011 on an Assurance of Support from his daughter and her husband that they would support him for ten years.  The effect of an Assurance of Support in that the assuror undertakes to repay the amount of any social security payments made to the assured person during the term of the assurance.

2. In March 2013, following an argument about the sale of Mr Li’s property in China, his son-in-law assaulted him.  The police were called and Mr Li was taken to hospital where he spent five days recovering.  Medical records document the extent of his serious injuries.  The relationship with his daughter and son-in-law has not recovered and Mr Li has been without a permanent home since.

3. Mr Li is not entitled to receive any social security payment until 27 November 2013, when he will have been in Australia as a permanent resident for two years. On 19 April 2013, Centrelink granted him Special Benefit which is a discretionary payment available to a person to whom no other pension or benefit is payable and who is unable to earn sufficient livelihood for herself or himself because of age, physical or mental disability or domestic circumstances, or for any other reason: s 729 of the Social Security Act1991 (the Act). 

4. Centrelink decided that Mr Li’s Special Benefit should be subject to the direct deduction income test, the effect of which is to reduce his payment by the amount of a pension he receives in China.  His Chinese pension is currently approximately equivalent to $AU420 per month.  The effect of Centrelink’s decision was to reduce Mr Li’s Special Benefit payment and rent assistance to approximately $360 a fortnight.

5. Mr Li seeks review of Centrelink’s decision.  He does not dispute that he receives a pension in China but says he is unable to derive any benefit from his pension because his wife, who lives in Beijing, needs it for her own survival and to help support his elderly mother.

6. On 27 November 2013, Mr Li will be entitled to newstart allowance subject to the ordinary income test.  Under that test, his Chinese pension will be taken into account but he will be considerably better off than under the direct deduction income test currently being applied.  He submits that the ordinary income test should be applied while he is receiving Special Benefit, rather than the direct deduction income test.

   HOW IS SPECIAL BENEFIT CALCULATED?

7. Special Benefit is unique in that it is a discretionary payment.  It is paid at a rate determined by the Secretary, the only proviso being that it cannot exceed the rate of newstart allowance, youth allowance or austudy payment that the person would otherwise be entitled to: s 746 of the Act.  As Mr Li would otherwise be entitled to newstart allowance, the rate of Special Benefit payable to Mr Li is calculated by reference to the rate of newstart allowance that would be payable to him.

8. Unlike most other social security payments, a direct deduction income test applies to Special Benefit.  This means that all personal income, whether earned or unearned, reduces the rate payable by a dollar for dollar amount.  Unlike most other payments, there is no allowable income-free area and no taper: Guide to Social Security Law (the Guide) at 3.7.1.80.

9. After the income test has been applied, the value of any regular in kind support the person receives on a continuing or indefinite basis, such as free food, clothing, board and accommodation, must be determined and taken into account: the Guide at 3.1.7.80.  The rate at which in kind support is to be deducted is discretionary.

10. The Guide is government policy.  It is well-settled that the Tribunal should apply government policy unless there are cogent reasons not to do so.  It may be a cogent reasons if an injustice were to result: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

    MR LI’S CHINESE PENSION

11. Mr Li is paid a pension equivalent to approximately $AU420 per month.  He receives none of it.  His second wife, whom he married in November 2010 and who is much younger than he, lives in his apartment in Beijing.  She withdraws his pension each month and uses it for living expenses and to help support Mr Li’s elderly mother.  His mother receives a small pension herself which Mr Li says is not enough for her to live on.  Neither his wife nor his mother has any money left at the end of the month.  Mr Li gave evidence that his wife, who is originally from Sichuan province, has no income of her own and is not permitted to work in Beijing.  She is not eligible for a pension of her own.  Mr Li says it is not an option for her to return to Sichuan because she has no housing or family there, and she would not be able to get work.  Under the terms of his visa, she cannot join him in Australia for five years.

12. Despite his very difficult circumstances, Mr Li has not asked his wife to pay him any of his Chinese pension.  He says it is only enough for one person to live on and, if he were living in Beijing with her, he would probably have to get part-time work to supplement his pension and support them both.  He does not want to ask his wife to send him money because he believes she needs it for herself and to help his mother.  Up until May this year, his mother was living with his wife but she is blind and has dementia and had moved to what I understand is a care facility nearby.  His wife visits her, and Mr Li’s siblings visit her.  His siblings help his mother financially but Mr Li says they do not like his wife and will not help her.

    MR LI’S CURRENT CIRCUMSTANCES

13. There is no question that Mr Li is in very difficult circumstances indeed.  For a time after he left this daughter’s house, he was entirely dependent on emergency assistance and charitable organisations for accommodation and food.  He now rents a room in a private house for which he pays $240 a fortnight.  After paying for the train to attend English language classes every day, his phone, and basic medical supplies, he has about $30 each fortnight for food and all other expenses.  He eats lunch at his class each day and takes home bread for his evening meal.  He has no lunch on the weekends or if he misses his language class for any reason.  He says, and I accept, that he has fainted from hunger sometimes.

14. Mr Li was seeing a psychologist to help him with the trauma and distress he suffered following the assault by his son-in-law.  A report from his clinical psychologist shows that he presented with symptoms consistent with Post-Traumatic Stress Disorder and Major Depressive Disorder, and severe anxiety and stress associated with his financial difficulties.  Medicare met the cost of ten consultations but that funding has now ceased.  Mr Li’s psychologist says it would be in his best interests to continue treatment given the strong rapport they have built and the therapeutic work they have done already to which Mr Li had responded well.

15. Mr Li says he cannot return to China.  He is still suffering from the assault and needs to stay in Australia for treatment.  He says he would not get the same standard of care in China.  He also does not wish to return to China because he does not want his wife to see him as he is now; she is younger and he worries that she will leave him.

    CONSIDERATION

16. The Act and the Guide make clear that wide discretion can be applied when determining whether a person should receive Special Benefit and, if so, how much.  It is within the Tribunal’s power to apply the ordinary income test, as Mr Li asks, or to disregard his Chinese pension altogether (although he is not asking for that).

17. There is no question that Mr Li finds himself in very difficult circumstances through no fault of his own.  He could not have foreseen, when he came to Australia in November 2011, that his relationship with his daughter and son-in-law would turn out as it has.

18. I am not persuaded, however, that the ordinary income test should be applied instead of the direct deduction income test.  There is no question that Mr Li’s Special Benefit is insufficient at the rate it is currently paid to cover the most basic costs of living, including eating each day.  However, he has a Chinese pension that he could use to supplement his Special Benefit.  I understand his reluctance to ask his wife to send him money but the fact is that she has the benefit of his entire pension.  However difficult he might find it to ask her to share the pension with him, I am not satisfied that he is unable to obtain the benefit of that money.

19. Centrelink submits that the effect of applying the ordinary income test in place of the direct deduction income test is that the Australian taxpayer is supporting Mr Li’s wife.  There is considerable force in that argument, especially when there is no evidence about her circumstances before the Tribunal other than Mr Li’s claim that she cannot afford to be without his pension, and when he has not asked her if she will help him.

20. For Mr Li it is submitted that any money paid to him will be recoverable in any event from his daughter and son-in-law under the Assurance of Support.  By all accounts, they are both employed full time and own more than one property (apparently subject to mortgages) and there would appear to be reasonable prospects of recovering the amount of any Special Benefit paid to him.  It is submitted that no burden will fall on the Australian taxpayer if the ordinary income test is applied rather than the direct deduction income test.

21. I understand, but do not accept, that argument.  Whether Mr Li should be paid Special Benefit has to be determined on its own merits.  Whether or not any money paid to him is recoverable is not to the point.

22. I appreciate that it means that Mr Li will continue in very real financial hardship until 27 November 2013 but, for the reasons I have given, I am satisfied that Mr Li’s Special Benefit should continue to be subject to the direct deduction income test, and I affirm the decision under review.

I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member Jill Toohey

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

Associate

Dated 9 October 2013

Date of hearing	20 September 2013
Solicitor for the Applicant	Ms K Wrigley, Welfare Rights Centre
Solicitor for the Respondent	Ms B Anniwell, Legal Services Division, Department of Human Services