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

[2018] AATA 2789

Hettiarachchi and Secretary, Department of Social Services (Social services second review) [2018] AATA 2789 (13 August 2018)

Division:GENERAL DIVISION

File Number(s):      2017/5004

Re:Damian Hettiarachchi

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member Linda Kirk

Date:13 August 2018

Place:Sydney

The Tribunal affirms the decision under review.

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

Senior Member Linda Kirk

CATCHWORDS

SOCIAL SECURITY – disability support pension – whether there is a “special reason” to treat applicant as not being a member of a couple - whether applicant able to pool resources with wife - availability of assets and average cost of living in Sri Lanka relevant factors taken into consideration - decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth), ss 4(11)(a), 4(2)(a), 24(1)(c), 1064(1)(b)

Social Security (Administration) Act 1999 (Cth)

CASES

Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634

Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143

Kazmierczak and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084

Liang and Secretary, Department of Social Services [2015] AATA 275

Purdie and Secretary, Department of Social Services [2013] AATA 743

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Wilson [2011] AATA 554

SECONDARY MATERIALS

Australian Government, Guide to the Social Security Law cl.2.2.5.50

Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991

Sri Lankan Department of Census and Statistics dated October 2017

REASONS FOR DECISION

Senior Member Linda Kirk

13 August 2018

BACKGROUND

1. Mr Damian Hettiarachchi (the Applicant) has been in receipt of Disability Support Pension (DSP) since January 2005. On 7 July 2006 he married Ms Srimathi Kanchana Pahalawatta. On 24 February 2017 the Applicant informed the Department of Human Services (the Department) that he planned to leave Australia and live permanently with his wife in Sri Lanka from 27 March 2017. 

2. On 20 March 2017 the Department determined that the Applicant should be paid DSP at the partnered rate while he was living with his wife in Sri Lanka. The Applicant applied for review and on 30 March 2017 an authorised review officer (ARO) affirmed the decision to pay the Applicant DSP at the partnered rate.

3. The Applicant applied for review of the ARO’s decision by the Administrative Appeals Tribunal, Social Services and Child Support Division (AAT1) which affirmed the decision of the ARO on 1 August 2017.

4. On 4 May 2017 the Applicant applied to this Tribunal for review of that decision.

   ISSUE

5. The issue for the Tribunal is whether the discretion afforded by s 24 of the Social Security Act 1991 should be exercised, namely whether there is a ‘special reason’ not to treat the Applicant as a member of a couple.

   LEGISLATION

6. The relevant legislation is found in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth).

7. Section 24 of the Act sets out the circumstances in which a person who is a member of a couple may be treated as not being a member of a couple. The relevant subsection provides:

   (1)  Where:

   (a)  a person is legally married to another person; and

   (b)  the person is not living separately and apart from the other person on a permanent or indefinite basis; and

   (c)  the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

   the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

   …

8. Section 1064(1)(b) of the Act provides that the rate of a person’s DSP is to be calculated in accordance with Rate Calculator B.  A person’s maximum basic rate differs depending on whether a person is ‘[n]ot member of couple’ or is ‘partnered’.  A person who is not a member of a couple has a higher maximum basic rate than a person who is partnered: Table B 1064-B1.

9. Under the Act, a person is partnered if they are a member of a couple (s 4(11)(a)) and a person is a member of a couple if ‘the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis’ (s 4(2)(a)).

   APPLICATION FOR REVIEW

10. The Tribunal conducted hearings on 5 March 2018 and 2 May 2018. The Applicant appeared in person by phone from Sri Lanka. The hearing on 5 March 2018 was unable to proceed due to communication problems and was resumed on 2 May 2018. The Applicant gave evidence at the hearing and was assisted by a Sinhalese interpreter.

    Applicant’s contentions

11. The Applicant told the Tribunal that his financial circumstances are such that he is unable to maintain himself and his family on DSP at the partnered rate.  He lives with his wife and their adopted daughter aged 16 years in what was formerly the home of his now deceased parents.  He is in a legal dispute with his sister as to his entitlement to remain living at the house.  The matter is before the courts and he expects it will be seven or eight years before it is resolved.

12. The Applicant owns another property which he purchased for the benefit of his son.  He has been trying to sell the property for ten years but has been unsuccessful. The original house on the property was demolished and a new house is currently being constructed.

13. The Applicant’s wife resigned from work due to back pain in 2009 and she can no longer work. She has no income and does not receive a pension or any other benefits. He has attempted unsuccessfully to sponsor her to obtain a visa to join him in Australia.

14. The Applicant told the Tribunal that he has many living expenses, including medical expenses.  In two years’ time he will need a new hearing aid which he will need to purchase in Australia and will cost him AUD3,800 of which he will receive a rebate of approximately 50%.  His car is 15 years old and costs 30,000 rupees per year to maintain.  He cannot afford to buy a new car but he needs a car to drive in the area where he lives. 

    Respondent’s contentions

15. The Respondent argued that while the Applicant is living overseas with his wife he is entitled to be paid DSP at the partnered rate unless there is a determination made under subsection 24(1). Such a determination may be made under subsection 24(1) to treat the Applicant as not being a member of a couple on the basis that there is a ‘special reason’ in his case to do so.

16. The Respondent contended that a substantial focus in considering section 24 is the ability of the parties to pool their resources. There is no barrier to the Applicant and his wife pooling their resources now that they are living together in Sri Lanka. Despite the Applicant’s claims, there is no evidence of his wife’s inability to work or to access any employment based pension, social security or similar benefits in Sri Lanka. Independent evidence indicates that such pensions and other allowances are potentially available to the Applicant’s wife.

17. The Respondent argued that even if the Applicant’s wife does not have access to any funds in Sri Lanka, there is not a ‘special reason’ to treat the Applicant as not being partnered, or alternatively that the discretion should not be exercised to make a section 24 determination. It pointed to the rent free occupancy of the Applicant and his family in his deceased parents’ house and the ownership by the Applicant of the property on which a house is presently being constructed. The availability of this asset weighs substantially against there being a ‘special reason’ to treat the Applicant as not being partnered.

18. The Respondent submitted that the fact the cost of living in Sri Lanka is considerably cheaper than in Australia is a relevant consideration in the exercise of the discretion under s 24. It provided the Tribunal with information from the Sri Lankan Department of Census and Statistics dated October 2017 which shows the mean and median nominal household expenditure per month in the Applicant’s local district (Gampaha). It argued that the amount of DSP paid to the Applicant, whether at the single or partnered rate, would go much further in Sri Lanka than it would in Australia.

19. The Respondent submitted that even if there were no ability to pool resources, the case for the exercise of the discretion is not made out, for reason that the Guide to the Social Security Law (the Guide), refers to the need for significant financial hardship.  When the DSP partnered rate received by the Applicant is converted into Sri Lankan rupees and this is compared with the mean or median rate of household income in the Gampaha district, the DSP is double this amount. Accordingly, the Applicant falls well short of demonstrating any significant financial hardship. 

20. In conclusion, the Respondent argued it would be contrary to the intent of the legislation to exercise the s 24 discretion in this case.

    CONSIDERATION AND FINDINGS

21. The Guide is government policy and should be followed by the Tribunal unless there are cogent reasons not to do so: Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634.

22. In the explanation of the discretion to treat a person as not being a member of a couple for a special reason, clause 2.2.5.50 of the Guide states:

    [s]ection 24 is intended to be the option of last resort, and should only be applied when all other reasonable means of support have been explored and exhausted.

23. The Guide provides that the discretion to treat a person as not being a member of a couple should only be exercised when full consideration of all the circumstances relevant to the individual’s case ‘would make it unjust or unreasonable not to do so’. These circumstances must also be, to some degree, outside the person or couple’s control and unable to be changed. If it is reasonably within the person or couple’s control to improve their circumstances without requiring the exercise of s 24, this should generally be first explored.

24. Clause 2.2.5.50 of the Guide lists three questions that need to be considered as part of the assessment while looking at the full circumstances of the case:

    ·Is there a special reason to be considered in this couple’s circumstances?

    ·Is there a lack of being able to pool resources for the couple as a result of the circumstances?

    ·Is there financial difficulty as a result of the couple’s circumstances?

25. In Purdie and Secretary, Department of Social Services [2013] AATA 743, Deputy President Hack questioned whether subsection 24(1) poses three questions. In the Deputy President’s view the section poses only one question – is there a special reason to treat the applicant as not being a member of a couple? [14] In Liang and Secretary, Department of Social Services [2015] AATA 275, Senior Member Taylor agreed with the views of the Deputy President at [29].

26. The term ‘special reason’ in the context of s 24 has been considered on numerous occasions by the Tribunal and the Federal Court. In Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143 (Holt) Senior Member Creyke stated that ‘special reason’ should be interpreted consistently with the scope and purpose of the Act. At paragraph 32 of her reasons, she referred to the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 which states:

    … there is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together. This justification is based on the premise that the unpartnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as a unpartnered person.

27. The Federal Court in Kazmierczak and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084 at [39] approved of the observations of Senior Member Creyke in Holt. The Court noted that the inability to pool resources informed the policy reason behind s 24 and the particular focus is ‘on the practical ability of the resources of the partner being available for pooling with the resources of the person holding the pension’ at [41]).

28. The Tribunal referred to the relevant policy considerations in the Guide in its decision in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Wilson [2011] AATA 554 (Wilson).  The Tribunal at [29] described the two defined situations in which the ‘special reason’ discretion has been exercised:

    (a) where the claimant is unable to pool resources with his or her partner, and secure the benefits - the economies of scale – of living as a couple; and

    (b) where, either in concert with the pooling issue in (a) above or separately, the couple find themselves in financial hardship.

29. The Tribunal in Wilson noted that the main circumstances in which the benefits of pooling resources are not available are where either the claimant and their partner have been forced to live separately (whilst remaining members of a couple), or where the partner of the claimant is unable to contribute to the pooled resources, or both: [32]. The result of this is to create a situation where there is no practical benefit to the claimant from being a member of a couple.

30. There is no dispute that the Applicant and his wife are married or that they are not living separately and apart from each other on a permanent or indefinite basis.  The sole question is whether there is a ‘special reason’ to justify the exercise the discretion in s24 to treat the Applicant as not being a member of a couple.

31. The Applicant argues that they are not able to pool their resources because his wife has no resources to contribute as she does not work and has no access to a pension or entitlement to welfare or social security benefits.  The Applicant provided no corroborative or objective evidence to support his claim that his wife is unable to work, that she has no entitlement to a pension, nor that she has no access to a government supported allowance or other benefits. The Tribunal is unable to make a finding that the Applicant’s wife does not have any access to funds in Sri Lanka and therefore cannot contribute to their pooled resources. 

32. Even if the Applicant’s wife is unable to contribute to their pooled resources, there is not a ‘special reason’ to treat the Applicant as not being partnered.  Whilst the Applicant contends that his financial circumstances in Sri Lanka are difficult, he has not provided any objective evidence regarding his expenses, including those of his wife and their daughter.  The Tribunal was accordingly unable to undertake a thorough assessment as recommended in the Guide.  In any event the authorities outlined above make it clear that financial difficulty alone would not constitute a ‘special reason’ to justify exercise of the discretion in s 24 of the Act.

33. The undisputed evidence is that the Applicant and his family are living rent free in his deceased parents’ house and they will continue to do so at least until the dispute with his sister is settled. The fact that the Applicant does not have to meet rental or mortgage repayment expenses and the prospect that following the resolution of the dispute with his sister he will retain at least partial if not full legal ownership of the property or receive compensation in lieu, weighs against there being a ‘special reason’ to treat him as not being partnered.  In addition, the Applicant’s evidence is that he owns another property on which a new dwelling is being built which has the potential to be sold. Should the Applicant and his family be required to move from their home, they could relocate to the house once completed or sell the property and use the proceeds to pay for their living expenses.

34. The Tribunal accepts the evidence provided by the Respondent published by the Department of Census and Statistics regarding the mean and median household income and expenditure in Sri Lanka, particularly for those residing in the Gampaha District.  These figures indicate that the Applicant’s DSP income, whether at the partnered or single rate, is more than double the average income in his District.  Furthermore, the Applicant’s living expenses are considerably less in Sri Lanka by virtue of the cost of living differential with Australia, and consequently the DSP at both the partnered and single rate would go further in Sri Lanka towards meeting the Applicant’s living expenses.  

35. For these reasons, the Tribunal finds that there is no ‘special reason’ to justify the exercise of the discretion in s 24 of the Act.

    DECISION

36. The Tribunal affirms the decision under review.

I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Linda Kirk

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

Dated: 13 August 2018

Date(s) of hearing:	5 March 2018 and 2 May 2018
Applicant:	By telephone
Solicitors for the Respondent:	Department of Human Services