Hewitt and Secretary, Department of Family and Community Services

[2005] AATA 1240

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1240

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1914

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JOHN HEWITT

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date16 December 2005

PlaceSydney

Decision The decision under review is affirmed.  

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

Ms N Bell
  Senior Member  

SOCIAL SECURITY – Aged Pension – Pension Bonus Scheme – Director’s Fees Originally Assessed As Income – Respondent Proceeded to Vary its Decision Pursuant to Section 180(1) of the Social Security (Administration) Act 1999 – Director’s Fees Not Assessed As Income – Applicant Paid Arrears Amounting to Receipt of Age Pension at Maximum Rate and Pension Bonus at Maximum Rate – Applicant Pursued Further Arrears, Interest and Costs – Further Arrears Not Payable – Tribunal Has No Jurisdiction to Award Interest and Costs – Decision Under Review Affirmed

Social Security (Administration) Act 1999, section 180(1)

Social Security Act 1991

Administrative Appeals Tribunal Act 1975

REASONS FOR DECISION

16 December 2005 Ms N Bell, Senior Member

1.Mr Hewitt was granted age pension from 9 April 2003, the day on which he claimed the pension.  At that time he was a Director of Betta Brick Laying Pty Limited.  Prior to his claim for age pension, Mr Hewitt had registered for the pension bonus scheme.

2.The decision originally sought by Mr Hewitt to be reviewed by the Tribunal was a decision of the Social Security Appeals Tribunal (the SSAT) to affirm the decision of a Centrelink delegate of the Respondent to assess Mr Hewitt’s director’s fees as income and to therefore reduce his rate of age pension and the amount of his pension bonus.

3.At the first date for hearing of Mr Hewitt’s application, Mr Lozynsky, for the Respondent undertook to analyse a large body of financial information provided by Mr Hewitt with a view to revisiting the question of whether Mr Hewitt’s director’s fees should be assessed as income in relation to his rate of age pension and the calculation of his pension bonus. He also undertook to revisit the question of whether Mr Hewitt satisfied the work test under the pension bonus scheme. Pursuant to section 180(1) of the Social Security (Administration) Act 1999, the Respondent varied its decision so as to not treat Mr Hewitt’s director’s fees as income and to find the work test satisfied.  This had the following practical effect:

(a)Mr Hewitt’s age pension was calculated at the maximum rate from the date of claim, 9 April 2003;

(b)Arrears of age pension amounting to $5,071.40 were paid to Mr Hewitt in two instalments of $1,030.83 (paid on 17 March 2005) and $4,040.57 (paid on 22 March 2005), and;

(c)Mr Hewitt’s pension bonus was increased to reflect his maximum rate of age pension so that his bonus amount went from $10,384.30 to $24,545.35.  An amount of $14,161.05 was paid to Mr Hewitt on 22 March 2005.

4.Mr Hewitt had therefore, in effect, been substantially successful in his application.  It is this decision, as varied, that is now under review.

5.Mr Hewitt wished to pursue a number of other matters concerning the varied decision.  Those matters were canvassed on a second hearing day.  Mr Hewitt contended he is entitled to:

(a)a further amount of arrears of age pension;

(b)a further amount of pension bonus;

(c)interest on the amounts of arrears of age pension and pension bonus paid to him; and

(d)costs.

arrears of age pension

6.Mr Lozynsky, for the Respondent explained that the amount of age pension Mr Hewitt was entitled to between 9 April 2003 and 28 July 2004, when he began to receive the maximum rate, was $19,309.01.  That amount is comprised of payments at the maximum rate.  The amount actually received by Mr Hewitt between 9 April 2003 and 28 July 2004 was $14, 237.61.  Given the Respondent’s decision now to pay Mr Hewitt at the maximum rate, from the date of his claim for pension, a shortfall of $5,071.40 was left – exactly the amount paid in arrears to Mr Hewitt in March of this year.

7.Mr Hewitt was unable to point me to a particular shortfall other than some 6 initial payments made to him immediately after he claimed.  However, when all the payments are taken as a total, at the maximum rate and at the rate initially paid to Mr Hewitt, it is clear that, with the arrears he has received, he has now been paid at the maximum rate for the whole period.  There are no more arrears due to Mr Hewitt.

pension bonus

8.The pension bonus scheme which commenced on 1 July 1998 is designed to reward those who defer claiming age pension and remain in the workforce beyond pension age. The scheme is governed by the provisions of Part 2.2A of the Social Security Act 1991 (the Act).  The amount of pension bonus paid to a person will depend on the number of bonus periods accrued before ceasing work and claiming the pension and on the rate of the person’s age pension.  A bonus period is generally 365 days and a person may accrue up to 5 bonus periods. 

9.There is no dispute that Mr Hewitt registered for the pension bonus scheme, that he deferred claiming age pension until 9 April 2003 and that he ceased work on 9 April 2003.  He was therefore an “accruing member” of the pension bonus scheme for 4 years and 282 days.  This falls some days short of the maximum of 5 years and had he deferred ceasing work and claiming the age pension until 1 July 2003 he would have accrued that maximum.

10.Mr Hewitt contended that the reason he ceased work and claimed the pension on 9 April 2003 rather than on 1 July 2003 was that he was advised to “give 13 weeks notice” by Centrelink publications and by an officer of Centrelink.  Mr Hewitt drew my attention to a pamphlet published by Centrelink and titled “Pension Bonus Scheme” in which the following words appear:

“You must claim the bonus together with your Age Pension within 13 weeks of the following events:

You stop meeting the work test, or

A period of non-accruing membership ends.”

11.In a letter to Mr Hewitt from Centrelink, dated 6 February 2003, these words appear:

“Please remember that you’ll need to lodge your bonus claim within 13 weeks of ceasing work, or within 13 weeks from the date you no longer meet the work test.”

12.I consider the ordinary meaning of these words to be that, after ceasing work, a person has 13 weeks in which to claim the bonus.  The words do not require a person to give 13 weeks notice.

13.Mr Hewitt was unable to recall the name of the officer who, he says, advised him that he must give 13 weeks notice.  In any event, the provisions of the Act do not allow for any discretion to be exercised in the calculation of the length of part bonus periods or to disregard the dates on which work was ceased or age pension claimed.  However, Mr Hewitt was made aware by the Respondent’s representative that he could make a claim for compensation for defective administration in respect of any advice he received from a Centrelink officer that gave rise to loss.

interest and costs

14.There is no power under social security legislation to make a payment of interest on amounts paid by Centrelink as the result of a varied decision or on amounts paid in arrears.   Similarly I have no power under either the Social Security Act 1991 the Social Security (Administration) Act 1999 or under the Administrative Appeals Tribunal Act 1975 to award costs to an Applicant for review of a decision.

decision

15.The decision under review is affirmed.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member

Signed:         ....[Linda Blue].......................................
  Associate

Dates of Hearing  8 December 2004, 5 December 2005
Date of Decision  16 December 2005 
Solicitor for the Respondent     Centrelink, Legal Services