Jennings and Secretary, Department of Families, Housing, Community Sevices and Indigenous Affairs
[2008] AATA 329
•23 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 329
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/0917
GENERAL ADMINISTRATIVE DIVISION ) Re JANET JENNINGS Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member R W Dunne Date23 April 2008
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
R W DUNNE
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Pension Bonus Scheme –accruing member – sick leave – ceases to be non-accruing member – failure to lodge claim for Pension Bonus payment within 13 weeks – claim out of time – decision affirmed.
Social Security Act 1991 s 92Q
Social Security (Administration) Act 1999 ss 21, 22, 23(1), 25
REASONS FOR DECISION
23 April 2008 Senior Member R W Dunne 1. In this matter, the applicant (Ms Janet Jennings) applied to this Tribunal for review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 19 February 2007. The SSAT affirmed a decision of an Authorised Review Officer of the respondent (“Centrelink”) dated 2 January 2007 to reject a claim by the applicant for a payment under the Pension Bonus Scheme.
2. At the hearing, Ms Jennings appeared on her own behalf, while Mr Christian Goldsworthy, a Centrelink advocate, represented the respondent. The Tribunal received into evidence the T documents tendered under s 37 of the Administrative Appeals Tribunal Act 1975 (Exhibit R1), together with a copy of an application by Ms Jennings for Compensation for Detriment caused by Defective Administration (Exhibit A1) and the respondent’s statement of facts and contentions (Exhibit R2)
issue for the tribunal
3. The issue for Tribunal is whether the applicant is entitled to a payment under the Pension Bonus Scheme.
legislation
4. The following provisions of the Social Security Act 1991 (“Act”) and the Social Security (Administration) Act 1999 (“Administration Act”) relevantly apply to the issue before the Tribunal:
Act
“92Q Non‑accruing membership–Secretary's discretion
92Q(1) The Secretary may, by written notice published in the Gazette, declare that, for the purposes of this Part, a specified kind of member of the pension bonus scheme is a non‑accruing member throughout a period ascertained in accordance with the declaration. The period must not begin before the publication of the notice.
92Q(2) The kinds of members that may be specified under subsection (1) include (but are not limited to):
(a)a member who is a participant in the Community Development Employment Program; and
(b) a member who is in gaol (see subsection 23(5)); and
(c) a member who is undergoing psychiatric confinement (see subsections 23(8) and (9)) because the member has been charged with committing an offence; and
(d) a member who is not a participant in the workforce, but whose partner:
(i) is a participant in the workforce; and
(ii)is not a registered member of the pension bonus scheme or of the corresponding scheme under Part IIIAB of the Veterans” Entitlements Act; and
(iii) intends to become a registered member of the pension bonus scheme or of the corresponding scheme under Part IIIAB of the Veterans' Entitlements Act; and
(e)a member who is on sick leave for a continuous period of at least 4 weeks and not more than 26 weeks.
92Q(3)A declaration under this section has effect accordingly”.
Administration Act
“21. General rule
(1)A claim for pension bonus must be made within the lodgment period fixed by this Subdivision.
22. Last bonus period a full‑year period
(1) If a person's last bonus period is a full‑year period, the lodgment period for a claim by the person for pension bonus is the period of 13 weeks immediately following that bonus period. However, this rule does not apply if:
(a)the person is an exempt partnered person for the purposes of section 24 at the end of the person's last bonus period; or
(b) the person's membership of the pension bonus scheme becomes non‑accruing immediately after the end of the person's last bonus period; or
(c) the person is a post‑75 member of the pension bonus scheme and has a post‑75 work period (see subsection 26(2)).
(2) For the purposes of this section, if a person has accrued only one full‑year bonus period, that period is the person's last bonus period.
23. Last bonus period a part‑year period
(1) If a person's last bonus period is a part‑year period, the lodgment period for a claim by the person for pension bonus is:
(a) the period of 13 weeks beginning at the end of that bonus period; or
(b) if the Secretary allows a longer period–that longer period.
However, this subsection does not apply if:
(c)the person is an exempt partnered person (see subsection 24(2)) at the end of the person's last bonus period; or
(d) the person's membership of the pension bonus scheme becomes non‑accruing immediately after the end of the person's last bonus period; or
(e) the person is a post‑75 member of the pension bonus scheme and has a post‑75 work period (see subsection 26(2)).
…
25. Claim where membership has become non‑accruing
If a person's membership of the pension bonus scheme becomes non‑accruing immediately after the end of the person's last bonus period, the lodgment period applicable to the person's claim for pension bonus is the period:
(a) beginning at the end of the person's last bonus period; and
(b) ending 13 weeks after the time when the person's membership of the scheme ceases to be non‑accruing.”
background and evidence
5. The factual background to this case is not in dispute and may be briefly stated from what appears in the decision of the SSAT. At the time of the hearing the applicant was 66 years of age. On 10 January 2004 she became eligible for the Age Pension. On the same day she became an accruing member of the Pension Bonus Scheme. She was working with (and continued to work with) the South Australian Department of Education. On 9 January 2005 she accrued a bonus period of one year. In the period 10 January 2005 to 19 September 2005 she worked enough hours to accrue a second year bonus period. On 19 September 2005, the applicant went on sick leave, which continued until 4 October 2006. During the period she was on sick leave, she had been in regular contact with Centrelink and, with her husband, had met with a Centrelink Financial Information Services Officer (“FISO”) on 8 June 2006. The FISO had been 20 minutes late for the meeting because (as the FISO said) she had not dealt previously with a customer who had so much accumulated sick leave and had to seek advice from a senior officer before the appointment.
6. The FISO’s record of interview (Exhibit R1, T3 at page 10) relevantly reads as follows:
“Janet reached age pension age on 10 January 2004 and registered for the pension bonus scheme. For the year 10 January 2004 – 9 January 2005 you worked more than 960 hours so satisfied the work test for the year. For the second year, you went on Sick Leave from 19 September 2005 and are still on sick leave till approx 21 August 06, and had taken 67.5 hours of annual leave in April 2005, and had one additional sick leave day on 27 May 2005. You are currently in a non accruing period due to sick leave which pushes your second year of the bonus out to when sick leave finishes. You have accrued enough hours during the period from 10 January 05 – 19 September 05, to get the second year bonus.
When sick leave finishes you have Long Service Leave and anticipate retiring, as Long Service Leave does not count for bonus, you will need to apply for a pension when Sick leave runs out. If you take long service leave and then retire the income is assessable and will result in a much lower bonus being payable. However if you take the leave as a lump sum and resign from work then no income is assessable (apart from deeming on financial investments). (underlining inserted)
…”
contentions of applicant
7. Put simply, Ms Jennings’ contention was that she believed she was entitled to the Pension Bonus after her sick leave had ended. She applied for the payment on 16 October 2006. The FISO had given her incorrect advice, she had suffered loss and she believed she was entitled to be compensated for that loss. She and her husband had anticipated using the Pension Bonus payment to acquire a new bed and other furniture. Although she had been given incorrect advice, she believed Centrelink had an obligation to pay her the Pension Bonus which she would have been entitled to had she been properly advised. The FISO had failed to recognise the critical dates that would apply to the applicant’s circumstances and would affect her eligibility to receive the Pension Bonus payment. It was unfair and unjust for her not to receive the Pension Bonus, given that she had sought and then followed explicit advice that had been provided to her by Centrelink.
consideration and application of the law
8. The Pension Bonus Scheme provides a tax-free lump sum for people who defer claiming Age Pension and continue to work. A participant in the Scheme must register to become an “accruing” member, then pass a flexible “work test” for at least 12 months from the date of registration. A participant will become a “non-accruing” member in certain circumstances, including those circumstances specified in s 92Q(2) of the Act. For example, a person will be a non-accruing member where the person takes a continuous period of sick leave of at least 4 weeks and not more than 26 weeks. Once a person becomes a non-accruing member after the end of the last bonus period, to remain eligible for the Pension Bonus, the participant must lodge a claim (or a further claim) within 13 weeks after the time when the participant’s membership of the Scheme ceases to be non-accruing (s 25 of the Administration Act).
9. The situation with Ms Jennings is most unfortunate. She became an accruing member of the Pension Bonus Scheme on 10 January 2004. Thereafter, she accrued a Pension Bonus of one year and, until 19 September 2005, worked enough hours to accrue a second year bonus period. On 19 September 2005 she went on sick leave and remained a non-accruing member until the end of 26 weeks’ sick leave (that is, 19 March 2006). To remain eligible for the Pension Bonus, she would then have needed to make a claim (or a further claim) within 13 weeks (that is, by 17 June 2006). She met with a Centrelink FISO on 8 June 2006 (that is, before the expiration of the period in which she had to make her claim), but was advised that she needed to make the claim when her sick leave ran out. Based on this information, Ms Jennings did not lodge her claim for the Pension Bonus payment until 16 October 2006, which was more than 13 weeks after she ceased being a non-accruing member of the Scheme.
10. In considering the relevant provisions of the Act and the Administration Act dealing with the Pension Bonus Scheme, the Tribunal notes that a declaration in accordance with s 92Q(1) was signed by the Secretary on 10 July 1998 and Gazetted on 13 July 1998. The Tribunal finds that Ms Jennings became a non-accruing member of the Scheme, pursuant to s 92Q(2)(e), on 19 September 2005 when she commenced sick leave. On 19 March 2006, after 26 weeks of continuous sick leave, she ceased being a non-accruing member of the Scheme. Pursuant to s 25 of the Administration Act, Ms Jennings needed to make her claim for the Pension Bonus payment within 13 weeks of 19 March 2006, namely 19 June 2006. She did not lodge her claim until 16 October 2006, which is clearly outside the 13 week period.
11. The provisions in the Act and the Administration Act dealing with eligibility for the payment of the Pension Bonus are quite clear. As was observed by the SSAT, there is no applicable discretion in the Social Security law to allow a further period within which Ms Jennings may make a claim. The Tribunal notes that a discretion to allow a longer period than 13 weeks for the making of a claim for the Pension Bonus exists in s 23(1)(b) of the Administration Act. However, the exercise of the discretion is only available where the person’s last bonus period was a part-year period. In Ms Jennings’ case, her last bonus period was from 10 January 2005 to 19 September 2005 and, because of the number of hours she worked, amounted to a full-year period. In these circumstances, the discretion in s 23(1)(b) is unable to be exercised in Ms Jennings’ case.
12. The Tribunal observes that, in relation to her claim for the Pension Bonus payment, based upon the information given to her by the Centrelink FISO, she has applied for Compensation for Detriment caused by Defective Administration (Exhibit A1). The Tribunal is unaware of the outcome of Ms Jennings’ application. However, like the SSAT, the Tribunal is of the view that she has suffered financial loss due to defective practice by Centrelink and deserves appropriate compensation.
decision
13. The decision under review is affirmed.
I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne
Signed: .....................................................................................
AssociateDate of Hearing 22 January 2008
Date of Decision 23 April 2008
Advocate for the Applicant In personAdvocate for the Respondent Mr C Goldsworthy
Centrelink Legal Services Branch
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