Heller and Secretary, Department of Families, Community Services and Indigenous Affairs
[2006] AATA 643
•21 July 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 643
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V2005/798
GENERAL ADMINISTRATIVE DIVISION ) Re VALERIE HELLER Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr John Handley, Senior Member
Dr Kerry J Breen, Member
Date21 July 2006
PlaceMelbourne
Decision The decision under review is affirmed. ..............................................
Senior Member
SOCIAL SECURITY – Pension Bonus Scheme – applicant registered – remained employed – was retrenched and claimed age pension – belief pension bonus also claimed – claim not made in writing – invited to claim after age pension payments made – delay by employer in provision of employment details – written claim for pension bonus made beyond permitted time – decision affirmed – poor administration and misleading correspondence and advice – intervention by Secretary or Ombudsman recommended
Social Security Act 1991 (Cth) s 92C(a) and (b) and s 92M
Social Security (Administration) Act 1999 (Cth) s 16, s 17(1), s17(3), s 17(3)(e) and s 17(4)
Administrative Appeals Tribunal Act 1975 (Cth) s 37
REASONS FOR DECISION
21 July 2006 Mr John Handley, Senior Member
Dr Kerry J Breen, Member1. This review concerned a decision made by officers of Centrelink and subsequently affirmed by the Social Security Appeals Tribunal (“SSAT”) to deny payment to Mrs Heller of pension bonus. The circumstances giving rise to the application are very unfortunate. For reasons which follow we have found that strict interpretation of the legislation does disentitle Mrs Heller. However, and also for reasons which follow, we are strongly of the view that a claim for defective administration or intervention by the Respondent Secretary is deserving and warranted.
2. Mrs Heller is presently 67 years of age. She was made redundant by her employer on 15 November 2004 when aged 66 years. She had previously been registered as a member of the pension bonus scheme. She decided to defer receipt of age pension consequent upon retirement by electing to continue to work. In consideration for that decision, she became entitled to a pension bonus calculated by reference to the number of years that retirement has been deferred or delayed. The amount paid as a pension bonus is tax free.
3. The Federal Parliament intended that persons who work beyond the prescribed retirement age would be able to “maximise their retirement nest egg and it will ensure that their later years are as comfortable as possible. That is why we have made an election commitment to deliver a pension bonus scheme” (refer Second Reading Speech of Minister for Family and Community Services, 25 June 1998).
the legislation
4. Section 92C(a) and (b) of the Social Security Act 1991 (“the 1991 Act”) provides that qualification for a pension bonus is dependant upon age pension being paid after the time that a claim for pension bonus has been made and where a person has not previously received an age pension. Section 92M provides that an application for registration is not to be treated as a claim for pension bonus. For the purposes of the present application, registration of the pension bonus scheme was not in issue. In fact registration of the pension bonus scheme was backdated to 18 April 2000 to ensure maximum entitlement.
5. Section 16 of the Social Security (Administration) Act 1999 (“the Administration Act”) provides that a claim for a social security payment must be in writing.
6. Section 17(1) of the Administration Act provides that a claim for pension bonus must be attached to a claim for age pension and both documents must be lodged together with an office of Centrelink. Section 17(3) provides that if a claim for pension bonus is not attached to a claim for age pension, the Respondent must give a written notice “inviting” the claimant to lodge a claim for pension bonus within a period specified in the notice. Section 17(4) provides that if the claim for pension bonus is made pursuant to the “invitation” under sub-section (3), the claimant is deemed to have claimed the pension bonus at the same time as the claim was made for age pension.
the evidence
7. The documents lodged by the Respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) contain letters forwarded to Mrs Heller on 27 August 2002 and 27 August 2003 (T5 and T6) which contain advice that a claim for pension bonus will need to be made at the same time as a claim for age pension. At T10 there is a copy of a memorandum of contact with Mrs Heller on 15 October 2004 where an “age pension new claim pack” and a “pension bonus claim” form were issued. The “pack” was not within the T‑documents however we were advised by Ms Paul who appeared on behalf of the Respondent Secretary, that the “pack” contained information with respect to claiming pension bonus and which specifically recorded that the pension bonus claim is to be made at the same time as the claim for age pension.
8. Subsequent to 15 October 2004, Mrs Heller was interviewed by a financial services officer of Centrelink and certain advice with respect to her financial affairs was given. On 15 November 2004, she was made redundant by her employer and a claim for age pension was made on 3 February 2005 (T15). Centrelink was also provided with a statement from the employer confirming that employment ended on 15 November 2004. On 21 April 2005, Centrelink decided to commence payment of age pension with effect from 2 February 2005.
9. On 22 April 2005, the day after age pension payments commenced, an officer of Centrelink wrote to Mrs Heller and forwarded to her a claim form for pension bonus and requested information from the employer described as the “work test”. That information was sought within 14 days. Eventually the information sought was provided on 13 May 2005, outside the period of 14 days, by three or four days only. The claim for pension bonus was denied. That decision has given rise to these proceedings.
submissions
10. Ms Paul on behalf of the Respondent Secretary contended that the claim for pension bonus was not ever made until it was lodged on 13 May 2005. It was submitted that the claim must be in writing to comply with s 16 of the Administration Act. It was submitted that advice had been given on a number of occasions that the pension bonus claim must be made at the time of the claim for age pension. Only in the circumstances contemplated by s 17(4) of the Administration Act could pension bonus be paid if the written claim form was lodged after age pension had been claimed.
11. Additionally, it was submitted that pension bonus cannot be paid because at the time that the claim for it was eventually lodged, Mrs Heller was in receipt of age pension. Accordingly, she was precluded from receipt of pension bonus by the operation of s92C(b) of the 1991 Act.
12. Mrs Heller who appeared without representation but with the assistance of her husband, submitted that a “claim” for pension bonus was made at the time the claim was made for age pension. Mr Heller said that at an interview with an officer of Centrelink at Glen Waverley by the name of “Ann”, discussions were concerned with pension bonus entitlement and by those discussions it was understood that Centrelink were on notice the claim for pension bonus had been made. Mr Heller said that the discussions involved advice to Mrs Heller of entitlement to that benefit and advice to him of entitlement to carer’s allowance by reason of him having to cease his employment to care for his wife. (At February 2005 Mrs Heller had undergone laminectomy in the previous month, was about to be admitted for hip replacement. She also had early signs of Parkinson’s disease). Mr Heller said that he had no doubt that Centrelink was aware that a pension bonus “claim” had been made and that his wife was entitled to it.
13. At T17 is a letter of 9 February 2005 which records that a pension bonus claim form was enclosed and a request was made that it be returned, with some other documents, to Centrelink. Mr and Mrs Heller said they have no recollection of that letter.
14. Consistent with the belief that a “claim” for pension bonus had been made, a memorandum of 6 April 2005 (T21) records a telephone conversation between Mrs Heller and a Centrelink officer concerning an enquiry made by her as to the status of her claim for age pension and pension bonus. The advice given was that there were delays “with these claims”. T22 records a memorandum of 21 April 2005 where Centrelink was “awaiting (i) PDB claim and (ii) Proof of satisfying PDB work” (PDB was understood to be Pension Deferred Bonus).
15. 21 April 2005 was the date that advice was given to Mrs Heller that she qualified for age pension but on 22 April 2005 a letter was forwarded in the following terms (T‑documents, page 72):
Dear Mrs Heller
The purpose of this letter is to gather information to help us make the right decision about your claim for Claim for Pension Bonus.
Would you please provide the following:
(1) The attached form: “Claim for Pension Bonus” – completed, signed and dated by you
(2) Proof that you satisfied the Pension Bonus Scheme work test from 18 APR 2000 to 15 NOV 2004
Please mail any information we have requested to this office or personally bring it to your nearest Centrelink Office. Original documents can be returned by registered mail at your request.
The authority for this request is under social security law.
If you would like to talk about this letter or are unable to provide the requested document please phone us on the number at the top of this letter. You need to contact us or supply the document within 14 days after the day on which this letter is given to you to avoid possible rejection of your claim for Claim for Pension Bonus.
16. That letter was apparently received on 26 April 2005 being the next working day after 22 April 2005 (the weekend and Anzac day intervening) as evidenced by a memorandum at T25 where Mrs Heller apparently sought, and received, advice with respect to the “work test” and consequent information needed from the employer. Mr and Mrs Heller advised us that approximately five telephone calls were made to the employer and discussions were held with three different persons before information was made available on 10 May 2005 (T28) confirming that Mrs Heller had previously been employed in a “40 hour week”.
17. Mr and Mrs Heller understood the letter of 22 April 2005 (refer earlier) to indicate that the claim for pension bonus and the employer information was to be provided simultaneously. Accordingly, the claim form for pension bonus was not returned until the information was made available by the employer. By that time the 14 day period imposed by the author of the letter of 22 April 2005 had expired. The claim form and the employer information was lodged with Centrelink on 13 May 2005 being either three or four days after the expiration of the 14 day period (dependent upon whether the 14 day period commences on, or the day after, the date that the letter of 22 April 2005 was received).
decision and reasons for decision
18. Strict application of the legislation has satisfied us that Mrs Heller cannot qualify for pension bonus. The chronology clearly points to a “claim” within the meaning of s 16 of the Administration Act being made after payments of age pension had commenced (refer s 92C of the 1991 Act). By reason of the “claim” for pension bonus being made beyond the period of 14 days as prescribed by the letter of 22 April 2005, Mrs Heller is unable to comply with s 17(4) of the Administration Act.
19. Accordingly, the decision under review must be affirmed.
observations and recommendations
20. In making the previous findings and in making the observations and recommendations that follow, we are satisfied that Mr and Mrs Heller are persons of truth who did not seek to exaggerate or embellish their evidence.
21. Subsequent to the ending of employment, Mrs Heller has been seriously ill and has been admitted to hospital on a number of occasions. In January 2005, she had a laminectomy and in April 2005, she had hips replaced. At, or about that time, Mrs Heller’s adult son who suffers from cystic fibrosis endured a number of hospital admissions and was on a waiting list for a lung transplant.
22. Between January and April 2005, most of the representations to Centrelink were made and the correspondence relevant to this review was also received.
23. We are satisfied that prior to the claims for age pension, Mrs Heller did receive advice from Centrelink that a claim for pension bonus must be made at the same time as a claim for age pension (refer letters of 27 August 2002 and 27 August 2003). Additionally, we are satisfied that an “age pension new claim pack” and a “pension bonus claim” was provided on 15 October 2004.
24. We are also satisfied that Mrs Heller was at all relevant times registered with the pension bonus scheme. But as this application has demonstrated there is a significant difference between “registration” and “claiming”. Indeed, as was learnt at the hearing, a “claim” for any type of social security benefit must be in writing (refer s 16 of the Administration Act).
25. Mr and Mrs Heller understood that a “claim” for pension bonus had been made by reference to discussions held with Centrelink officers. However, a “claim” in writing, for pension bonus, was not ever made until it was lodged on 13 May 2005 (T27). Mr and Mrs Heller agreed that they had not completed a pension bonus claim form before 13 May 2005.
26. We are satisfied that the letter from Centrelink of 9 February 2005 addressed to Mrs Heller was received. We are also satisfied that Mr and Mrs Heller, whilst advising us at the hearing that they had no memory of the letter, were probably then both focussed on the surgery that Mrs Heller had undertaken in the previous month, the proposed surgery in April and the concern as to the health of their son.
27. We are concerned with the content of a number of documents which we will discuss as follows.
28. Consistent with the belief that Mr and Mrs Heller had of a claim for pension bonus having been made, enquiry was made by her on 6 April 2005 concerning the status of the claim for age pension and pension bonus (T21). The recorded advice given was that delays were being experienced at the Glen Waverley office of Centrelink. No advice was then given to Mrs Heller that a claim for pension bonus had not been received. If that advice had been given and or advice had been given that the claim needed to be in writing, we are confident that such a claim form would have been completed and lodged and Mrs Heller would have then qualified.
29. The letter of 22 April 2005, and what followed it, has caused us considerable concern. We strongly recommend that a letter of that type, if routinely issued, should be reviewed.
30. The first paragraph of the letter refers to “your claim for claim for pension bonus”. Despite the obvious grammatical error it may be assumed by the opening paragraph that a claim for pension bonus had been made. Mr and Mrs Heller believed, at that time, that a claim had been made. As discussed earlier, such a claim had not been made.
31. The consequences of failing to supply the documents requested within 14 days would be the “possible rejection of your claim”. The word “possible” suggests discretion. No such discretion was exercised in this application. Indeed the decision made to refuse pension bonus was by reason of the documents being lodged beyond the 14 day period. An internal memorandum of 13 May 2005 (T29, page 83) refers to the consequences of not lodging within 14 days as a “warning”. No such interpretation is possible from the letter of 22 April 2005. If the consequences of failing to comply with the 14 day period were as fatal as was apparently intended, the letter should not contain the word “possible” and should be more mandatory or prescriptive as to consequence.
32. It was learnt at the hearing that the documents were not lodged within 14 days because of delay on the part of the employer. It was additionally learnt that had the claim form been returned with advice that there was delay in provision of the employer documents, the claim for pension bonus would have been regarded as having been made within time. That is not apparent by the letter. Mr and Mrs Heller did not contact Centrelink between receipt of the letter of 22 April and 13 May 2005 when both documents were ultimately lodged. Five telephone calls were made to the former employer and discussions were held with three different persons before the required information was obtained. We are confident that had they been aware that entitlement to pension bonus would have been achieved by lodging the pension bonus claim form only within 14 days that they would have done so. The letter should have included this type of advice.
33. The last paragraph of the letter of 22 April 2005 suggests that Mrs Heller had a choice of either contacting a Centrelink officer or supplying the requested documents within 14 days, to avoid rejection of the claim. That is to say, on one interpretation of the last paragraph, contact with the Centrelink officer in the absence of supply of documents within 14 days would not have resulted in rejection of the claim.
34. Of considerable concern, and this touches upon the consequences of failing to comply with the 14 day period referred to earlier, is that period of time is determined by a Centrelink officer. It is not a period of time found within the Administration Act. (The 1991 Act prescribes that in order to secure registration under the pension bonus scheme, requested information must be given within 14 days after receipt of a notice. No such provision exists in the Administration Act with respect to claims for pension bonus). Section 17(3)(e) refers to an “invitation” to claim pension bonus in circumstances where the pension bonus claim form is not attached to an age pension claim form. The notice and for these purposes we are satisfied that the “notice” is the letter of 22 April 2005 is to define the period in which the claim for pension bonus is to be made after the lodgement of the claim for age pension. It was learnt at the hearing that the 14 day period prescribed in the present case was consistent with the Centrelink Guide. Whilst such a period of time might be administratively convenient, there should in our view be some flexibility in permitting a discretion to be exercised if compliance with that period of time has not been possible, or specifically advising by the “notice” that if compliance is not possible, a request should be made for a greater period in order to comply. It is, in our view, misleading to describe that period as having “possible” adverse consequences when internally that period of time is regarded as being a “warning” (refer pages 83 and 94).
35. In concluding this part, we note that the author of the letter of 22 April 2005 who referred to “possible rejection” made the primary decision to reject in a letter of 23 May 2005. He advised that rejection had occurred “because the claim form was not lodged within 14 days of it being issued”.
36. Another matter of concern to us is the decision made by the authorised review officer (T32). At page 98, the officer decided that the claim for pension bonus was rejected because the claim was not lodged within 14 days of the forms being issued (refer letter 22 April 2005) and because the claim for pension bonus was not lodged with the claim for age pension. That latter decision was not made previously. It is wrong for the authorised review officer to record in an authorised review that that was a reason for rejection of the claim. If it was, it should have been recorded in the primary decision.
37. Mrs Heller has deferred collection of age pension for many years in legitimate expectation of receiving the pension bonus. Such an entitlement exists under the legislation and would be consistent with not only the spirit of the legislation but the intent of the Parliament as evidenced by the various Speeches, no less the relevant Minister, when the Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill was introduced in 1998. Pension bonus is not only the retirement “nest egg” as intended by the Minister, but a reward for deferred payment of age pension. It is true, and we have found as a fact, that there was previous advice to Mr and Mrs Heller of the need to make a claim for pension bonus. Such a claim was not made until 13 May 2005. But for the written claim being lodged three or four days earlier, entitlement to pension bonus would have been cured, despite the earlier payment of age pension, by the provisions of s 17(4) of the Administration Act. The letter of 22 April 2005 was misleading and it was deficient. A more thoughtful and or comprehensive explanation of rights should have been given. Additionally, a discretion should be available to the Respondent Secretary when prescribing the period within the notice under s 17(3)(e) or a period greater than 14 days should be provided to ensure that delays in provision of information by other persons will not cause the claim to be delayed and therefore denied. Alternatively, the “notice” under s 17(3)(e) should specifically provide that if information cannot be provided (from an employer, for example) within the period of notice, that the claim form should be lodged pending provision of the other information.
38. Additionally, advice should have been given on 6 April 2005, when Mrs Heller enquired of Centrelink, that a pension bonus claim form had not been received (refer paragraphs 14 and 28 earlier).
39. We recommend that a review of the decision to deny compensation for defective administration be undertaken and or there be intervention by the Respondent Secretary. In the alternative, intervention on behalf of Mr and Mrs Heller by the Ombudsman would be warranted.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior Member and
Dr Kerry J Breen, MemberSigned: .....................................................................................
Personal AssistantDate of Hearing 18 July 2006
Date of Decision 21 July 2006
Solicitor for the Applicant Self Represented
Departmental Advocate Ms K Paul
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