Hooper and Secretary, Department of Family and Community Services
[2004] AATA 1327
•14 December 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1327
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2004/176
Nº V2004/177GENERAL ADMINISTRATIVE DIVISION
Re:HENRY RUSSELL HOOPER AND
REBEKAH JOYCE HOOPER
Applicants
And:SECRETARY,
DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal: G.D. Friedman, Member
Date: 14 December 2004
Place: Melbourne
Decision:The Tribunal affirms the decision under review.
(sgd) G.D. Friedman
Member
SOCIAL SECURITY ‑ pension bonus scheme ‑ lack of knowledge of scheme ‑ exercise of discretion to extend time limit for registration
Social Security Act 1991 s 92C, 92H, 92K, 92N, 92S, 92U, 92V, 92Y, 93
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
REASONS FOR DECISION
14 December 2004 G.D. Friedman, Member
1. This is an application by Henry Russell Hooper and Rebekah Joyce Hooper (the applicants) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 6 January 2004. The SSAT affirmed a decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 25 July 2003 to refuse an application for payment under the pension bonus scheme (the scheme) because the applicants did not register for payments.
2. At the hearing on 23 September 2004 Ms D. Rasheva of counsel represented the applicants and Mr S. Meehan, a Centrelink advocate, represented the respondent.
3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T33), and six exhibits (Exhibit A1‑A6) lodged by the applicant.
BACKGROUND
4. Mr Hooper was born on 23 June 1932 and became eligible for age pension on his 65th birthday on 23 June 1997. Mrs Hooper was born on 15 August 1927 and became eligible for age pension on her 61st birthday on 15 August 1988. The applicants were involved in farming in various parts of Victoria from 1956 to 1992. On 23 June 1992 they purchased a beef farm in northern Victoria (Yambuna), 25 kilometres east of Echuca. As a result of financial losses, following a prolonged drought in the late 1990s, the applicants decided to subdivide and sell Yambuna, and the last subdivision was settled in December 2002.
5. On or about 18 December 2002 the applicants ceased work and on 24 June 2003 they applied for age pension and sought to register for payments under the scheme. On 25 July 2003 Centrelink refused the claim because the applicants had not registered within the prescribed time limit. On 9 September 2003 an authorised review officer affirmed the decision.
6. On 30 October 2003 the applicants sought review of the Centrelink decision by the SSAT. Following the SSAT decision, the applicant lodged an application with the Tribunal on 13 February 2004 for review of the decision.
7. The issue before the Tribunal is whether the applicants should be granted an extension of time in which to lodge their application for registration under the scheme.
EVIDENCE
8. Mr Hooper gave oral evidence that he and his wife purchased Yambuna in 1992 with a view to becoming self‑funded retirees. He said that they experienced a prolonged period of drought in the mid‑1990s, which resulted in failed crops and depleted pastures, forcing them to sell their cattle. He noted that they experienced personal and financial difficulties and struggled to maintain loan repayments on various farm loans before subdividing the farm and selling each subdivision.
9. Mr Hooper stated that he and his wife were not aware of the scheme when it commenced on 1 July 1998, as they were living in isolated conditions in rural Victoria. He said that their attention was drawn to the scheme in August 1999 through a brochure The Age Pension (Exhibit A1) produced in June 1999 by their local Federal Member of Parliament, the Honourable Sharman Stone MP. He said that the brochure contained no reference to the need to register for the scheme. Mr Hooper also stated that the local newspaper, the Kyabram Free Press, did not refer to the scheme between 1997 and 2000, and he could recall no newspaper or other advertisements for the scheme.
10. Mr Hooper told the Tribunal that he and his wife relied on the brochure, so they were not aware of the need to register for the scheme. He explained that in June 2001 he contacted Centrelink in relation to age pension, but did not inquire about payments under the scheme until he and his wife applied for age pension on 24 June 2003, when they were informed by Centrelink that pre‑registration was a requirement.
11. Mr Hooper estimated that, in respect of the subdivision of Yambuna, from 1999 one‑third of the time was spent farming and the remaining time was devoted principally to the preparation of the land for sale, such as making improvements to irrigation and roads. He referred the Tribunal to spreadsheets, based on their records and purporting to set out an assessment of the days they had worked in the relevant period (Exhibits A5 and A6), as proof that he and Mrs Hooper engaged in gainful work for the purposes of the Act.
12. Under cross‑examination Mr Hooper said that he did not see the need to seek any additional information from Centrelink or Dr Stone about the scheme, even though nearly four years had elapsed since he had obtained information from the brochure.
CONSIDERATION OF THE ISSUES
13. Section 92C of the Social Security Act 1991 (the Act) provides:
92C. A person is qualified for a pension bonus if:
…
(c)the person is registered as a member of the pension bonus scheme…
Section 92H of the Act provides for the timing of an application for age pension and registration for the scheme:
Age pension qualification date on or after 1 July 1998
92H.(1) If a person’s date of qualification for the age pension occurs on or after 1 July 1998:
(a)the person must lodge an application during the period that begins 13 weeks before the person’s date of qualification for the age pension and ends 13 weeks after that date; and
(b)if registration occurs as a result of an application lodged within that period—the registration takes effect on the person’s date of qualification for the age pension.
Age pension qualification date before 1 July 1998
92H.(2) If a person’s date of qualification for the age pension occurs before 1 July 1998:
(a)the person must lodge an application during the period that begins on the commencement of this section and ends 13 weeks after 1 July 1998; and
(b)if registration occurs as a result of an application lodged within that period—the registration takes effect on 1 July 1998.
Late applications
92H.(3) The Secretary may extend the period within which a person must lodge an application. If registration occurs as a result of an application lodged during an extended period, the registration takes effect:
(a)on the date on which the application is lodged; or
(b)if the Secretary decides that it should take effect on another date—on that other date.
92H.(4) The Secretary must not make a decision to extend the period within which a person must lodge an application unless, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period:
(a)the person would have been a non-accruing member for all of the pre-application period; or
(b)both:
(i)the person would have been an accruing member for some or all of the pre-application period; and
(ii)the person would have passed the work test for each test period that is applicable to the person.
92H.(5) For the purposes of this section, the pre-application period is the period beginning on:
(a)in the case of a person whose date of qualification for the age pension occurs on or after 1 July 1998—the person’s date of qualification for the age pension; or
(b)in the case of a person whose date of qualification for the age pension occurs before 1 July 1998—1 July 1998;
and ending on the date on which the person lodged the application.
92H.(6) For the purposes of this section, to work out what is a test period:
(a)identify the overall accruing period, which is that part of the pre-application period for which, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period, the person would have been an accruing member of the scheme;
(b)if the overall accruing period is 365 days or less—the overall accruing period is the only test period;
(c)if the overall accruing period is longer than 365 days—each of the following periods is a test period:
(i)the full-year period beginning at the start of the overall accruing period;
(ii)if 2 or more succeeding full-year periods are included in the overall accruing period—each of those full-year periods;
(iii)the remainder (if any) of the overall accruing period.
…
14. Ms Rasheva submitted that the brochure was an official Government document, that the applicants had relied upon that document, and that they had acted in good faith by working beyond the age when they qualified for age pension. She said that the brochure made no comment about the need to contact Centrelink for more information about the scheme, and contained no reference to a requirement for pre‑registration. She said that in November 2003 Mr Hooper obtained a copy of the March 2003 brochure which had been updated to include the availability of further information from Centrelink and the requirement to register for the scheme.
15. Ms Rasheva submitted that the Tribunal should exercise the discretion in s 92H(3) of the Act to extend the lodgement period in the applicants’ favour. She referred to the Guide to the Social Security Act (the Guide) and said that a decision should be made in the individual circumstances of the case. She noted that the applicants were not aware of the initial Budget announcement, they had not seen any advertisements for the scheme or references to it in local newspapers and they were not aware that registration was required. She stated that the discretion in s 92H(3) of the Act to extend the time for registration is unfettered, apart from the prerequisites of satisfying the gainful work test and the qualifications for age pension.
16. Ms Rasheva stated that the applicants’ circumstances place them within the policy and operation of the scheme. She noted that they remained employed beyond pension age; they were unaware of the scheme at the relevant time so they could not benefit from information held by Centrelink; and an extension would in no way undermine the validity or operation of the scheme. She also stated that the applicants would have passed the work test in s 92U and s 92V of the Act for all the relevant periods from 1999 to 2002.
17. Ms Rasheva said that the applicants undertook gainful work in the period from 1 July 1998 in that they were involved in beef farming as a means of achieving a self-funded retirement and that this activity was not management of financial investments for the purposes of s 93 of the Act. Ms Rasheva submitted that the activity also involved a substantial degree of personal exertion. Ms Rasheva stated that because of special circumstances such as financial and personal hardship, consistent with the aims of the scheme and the spirit of the Act, the Tribunal should exercise the discretion to treat the activity as gainful work.
18. Mr Meehan submitted that the applicants’ pre-application period for the scheme is set out in s 92H(5)(b) of the Act, and began on 1 July 1998 and ended on 24 June 2003 when they lodged their application for age pension. He said that the overall accruing period is set out in s 92H(6)(a) of the Act and is the period of the pre-‑application period for which, if it were assumed that the person had been a member of the scheme throughout the pre‑application period, the person would have been an accruing member of the scheme, which is defined in s 92N of the Act. Mr Meehan stated that Mr Hooper was an accruing member of the scheme from 1 July 1998 to 24 June 2003, and Mrs Hooper was an accruing member from 1 July 1998 to 15 August 2002 (the date on which she turned 75 years).
19. Mr Meehan said that the test periods for the applicants are defined in s 92H(6)(c) of the Act, and for Mr Hooper are 1 July 1998 to 30 June 1999, 1 July 1999 to 30 June 2000, 1 July 2000 to 30 June 2001, 1 July 2001 to 30 June 2002, and 1 July 2002 to 24 June 2003. She said that for Mrs Hooper the relevant dates are 1 July 1998 to 30 June 1999, 1 July 1999 to 30 June 2000, 1 July 2000 to 30 June 2001, 1 July 2001 to 30 June 2002, and 1 July 2002 to 14 August 2003. Mr Meehan stated that s 92K of the Act provides that to pass the work test for a full period of the person’s accruing membership the person must have performed at least 960 hours of gainful work in the period or the person’s partner had to have performed at least 960 hours of gainful work in the period, while the partner was an accruing member or post 75 member of the scheme.
20. Mr Meehan noted that, under s 92V of the Act, to pass the work test for a part‑year period of the person’s accruing membership the person must have performed at least the pro-rated number of hours of gainful work in the period, or the person’s partner must have performed at least the pro-rated number of hours of gainful work in the period, while the partner was an accruing member or post 75 member of the scheme. He said that under s 92V(2) of the Act the pro‑rated number of hours is calculated using a formula: 960 multiplied by the number of days in the period divided by 365. So that for Mr Hooper the pro‑rated number of days between 1 July 2002 and 24 June 2003 is 941 (960 x 358÷ 365). Mr Meehan said that for Mrs Hooper the pro‑rated number of days in the period 1 July 2002 to 14 August 2002 is 115 (960 x 44÷ 365).
21. In respect of post‑75 membership of the scheme Mr Meehan noted that s 92S of the Act provides that a person’s membership of the scheme is post‑75 at all times after the person reaches 75 years, so that Mrs Hooper was a post‑75 member after 14 August 2002. Mr Meehan stated that s 92X of the Act defines gainful work as work for financial gain or reward, whether as an employee, a self-employed person or otherwise, and requires a substantial degree of personal exertion on the part of the person. He submitted that the discretion in s 92Y of the Act to treat an activity as gainful work in the special circumstances of the case should not be exercised in this instance.
22. Mr Meehan submitted that the applicants did not register for the scheme until 24 June 2003, so their registration was not effective under s 92H(2) of the Act, and that the discretion under s 92H(3) to backdate the registration should not be exercised. Mr Meehan submitted further that the brochure was a summary guide prepared by Dr Stone and could not be considered to be a comprehensive guide to social security law. He said that the applicants had ample opportunity to contact Centrelink for information regarding the scheme, and they failed to do so.
23. He said under s 93H(4) of the Act backdating may occur if a person is an accruing member for some or all of the pre‑application period and pass the work test for each applicable test period. He said that the applicants did not pass the work test for any period as they were not undertaking gainful work during the test periods. He stated that even if the work undertaken by the applicants in farming and preparing Yambuna for sale was gainful work, then activity after the sale was not gainful work, and the applicants could not demonstrate that they passed the work test for every test period.
24. In reaching its decision the Tribunal takes into account the oral and written evidence and submissions made at the hearing and, at the Tribunal’s request, after the hearing.
25. The Tribunal finds that the applicants failed to register for the scheme within the prescribed time limit.
26. In respect of the discretion under s 92H(3) of the Act the Tribunal notes that in part 3.4.7.20 of the Guide examples of the use of the discretion include situations where a person:
·was overseas,
·lives in a remote area,
·speaks little or no English,
·saw the original Budget announcement (which did not indicate a requirement to register) and thought they did not have to register, or
·did not see advertising of the scheme and based on their knowledge of the local advertising coverage, the delegate considers the customer’s claims to be reasonable.
Although the Tribunal is not bound by the Guide, in ReDrake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 Brennan J held that departure from the Minister’s policy should be made cautiously and sparingly.
27. The Tribunal finds that the applicants lived in a rural area which was within 30 kilometres of Echuca and Kyabram, and 70 kilometres from Shepparton, so they were not in a remote area. They speak English and did not see the original Budget announcement about the scheme. The Tribunal accepts the applicants’ evidence that they relied on the brochure, which was prepared in June 1999 by their local Member of Parliament as a guide to the age pension. In a letter to constituents contained in the brochure Dr Stone states: I hope you find this guide useful. Should you require any further information please do not hesitate to contact Centrelink or my office on free call 1800 633 421. In the brochure, section 1.3 Pension Bonus Scheme consists of three paragraphs and no details of the scheme or the criteria are provided, other than an outline of the scheme and a table showing the amounts payable at the single rate and the married rate.
28. The Tribunal takes into account the contents of Dr Stone’s letter and the style and format of the brochure and its overall appearance. The Tribunal concludes that the brochure could only be considered as an information sheet and not a definitive statement of, or a detailed guide to, the operation of the scheme. The Tribunal accepts the submission from Mr Meehan that the brochure did not contain exhaustive or complete information, and that it referred readers to Centrelink for further information. The Tribunal notes that Mr Hooper visited Centrelink on 13 September 2001 but did not make inquiries about the scheme or whether any changes had occurred since 1999.
29. The Tribunal agrees with Mr Meehan that in the period of almost four years, from August 1999 when they became aware of the scheme, until June 2003 when they visited Centrelink to apply for the age pension, the applicants took no action to verify their eligibility for the scheme or to confirm that payments under the scheme were still available. They had ample opportunity to contact Centrelink or Dr Stone’s office. The Tribunal does not accept Mr Hooper’s evidence, that he saw no need to do so, as justification for the discretion to be exercised.
30. For these reasons the Tribunal finds that the discretion in s 92H(3) of the Act to extend the time for lodgement of the registration for the scheme should not be exercised. Consequently, there is no need for the Tribunal to consider the matters raised in relation to s 92H(4), 92H (5) or 92H (6) of the Act.
DECISION
31. The Tribunal affirms the decision under review.
I certify that the thirty-one [31] preceding paragraphs are a true copy of the reasons for the decision of:
G.D. Friedman, Member
(sgd) Olympia Sarrinikolaou
Clerk
Date of hearing: 23 September 2004
Date of decision: 14 December 2004
Counsel for applicants: Ms D. Rasheva
Solicitor for applicants: Victoria Legal Aid
Advocate for respondent: Mr S. Meehan, Centrelink
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