Jones and Secretary, Department of Family, Housing, Community Services and Indigenous Affairs

[2008] AATA 413

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 413

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  2007/6292

GENERAL ADMINISTRATIVE DIVISION		)
Re		PHILLIP JONES

Applicant

And SECRETARY, DEPARTMENT OF FAMILY, HOUSING, COMMUNITY SERVICES and INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal R G Kenny, Member

Date20 May 2008

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

...............[Sgd]...............................

Member          

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits and Allowances – pension bonus scheme – backdating of registration as a member of the scheme – completion of five full‑year bonus periods – assistance with legal claim against employer while on leave after ceasing work does not constitute gainful work – time limits for claiming pension bonus not complied with – pension bonus not payable to applicant – decision under review affirmed.

Social Security Act 1991 ss 92A, 92C, 92P, 92Q, 92T, 92X
Social Security (Administration) Act 1999 ss 21, 22, 23, 25
Social Security (Pension Bonus Scheme – Non-accruing Members) Declaration (No 1) 1998 s5(2)

Guide to Social Security Law s 1.1.A.20, 3.4.7.70

REASONS FOR DECISION

20 May 2008  RG Kenny, Member

Application

1.      On 5 July 2005, Phillip Jones lodged a claim for age pension and the pension bonus.  Age pension was granted but, on 17 August 2007, an authorised review officer with Centrelink affirmed a decision made on 23 July 2005 which determined that he was not qualified to receive the pension bonus which is provided for in the Social Security Act1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).  That decision was affirmed by the Social Security Appeals Tribunal on 21 November 2007. 

Issues and Legislation

2.      The pension bonus Scheme (the Scheme) was introduced to enable people who stay in remunerative employment after reaching the relevant age for payment of the age pension, but who defer claiming the age pension, to receive a single-sum pension bonus[1]. Its operation is governed by provisions in the Act and the Administration Act and explained in provisions of the Guide to Social Security Law (the Guide), extracts of which were in evidence. The Guide is published by the respondent. It is well established that the Tribunal, whilst not bound to apply policy guidelines of the kind in the Guide, may do so and will usually apply the guidelines unless there are cogent reasons in a particular case for not doing so[2].  In this case, there is no material before the Tribunal to indicate that the Guide should not be applied. 

[1] Social Security Act 1991 s 92A

[2] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 639-645and Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82 at 86.

3. Mr Jones attained the relevant age for age pension in 1996. As he was required to do in accordance with s 92C of the Act, he registered as a member of the Scheme. He did this on 22 June 2001 and the respondent accepted this registration with effect from the date of commencement of the Scheme’s operation on 1 July 1998. Section 92C of the Act also requires accrual of at least one full‑year bonus period while registered as a member of the Scheme. This requires satisfaction of the work test which, under s 92T of the Act, is met where the person gainfully worked in that year for at least 960 hours. The basic rule for assessing gainful work is set out in s 92X of the Act which reads:

“s92X Gainful work–basic rule

92X.(1)  For the purposes of this Part, gainful work is work for financial gain or reward, whether as an employee, a self‑employed person or otherwise, where:

(a) the work involves a substantial degree of personal exertion on the part of the person concerned; and

(b) the work is carried on within or outside Australia.”

4. It is not disputed that Mr Jones accrued 5 such years ending 30 June 1998, 1999, 2000, 2001, 2002 and 2003, respectively, when he undertook gainful work as a customer services officer with Qantas. He last worked for Qantas on 28 January 2003 but had already completed the requisite 960 hours for that year. In accordance with s 93E of the Act, 5 years is the maximum that may be counted as bonus periods.

5. The Scheme distinguishes between accruing membership and non-accruing membership. Under s 92N of the Act, the former applies unless a categorisation for non-accrued membership under ss 92P or 92Q of the Act applies. The Guide provides a definition of accruing membership. It is when a member is, by passing the work test, accruing a bonus period[3]. 

[3] The Guide s 1.1.A.20

6. For non-accruing membership, s 92P of the Act refers to persons subject to a disposal preclusion period, a compensation preclusion period or a carer preclusion period at a particular time. It is not disputed that none of those descriptions apply to Mr Jones. Section 92Q of the Act enables the Secretary, by legislative instrument, to declare that a person is a non‑accruing member. This is of potential relevance in this matter because s 92Q(2)(e) of the Act nominates a situation where a person is on sick leave, for a continuous period of at least 4 weeks and not more than 26 weeks, as a situation where non-accruing status may be granted. After ceasing work with Qantas in January 2003, Mr Jones took various forms of leave, including sick leave, until June 2005. At the time of Mr Jones’ claim, the relevant declaration by the Secretary was the Social Security (Pension Bonus Scheme – Non-accruing Members) Declaration (No 1) 1998[4].  However, it imposed a maximum period of 26 weeks during which a person could be a non-accruing member[5].

[4] Gazette No. S 355 13 July 1998.

[5] See s 5(2)

7. The Scheme imposes strict time limits within which claims for pension bonus must be made. These are provided in subdivision E of the Administration Act and s21(1) thereof provides that a claim for pension bonus must be made within the lodgment period fixed by that subdivision. Relevant provisions read:

“s22 Last bonus period a full‑year period

s22 (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)).

s25 Claim where membership has become non‑accruing

s25 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.”

8.      The issue in this matter is whether Mr Jones’s claim was made within the applicable time-frame.

Evidence

9.        Mr Jones gave the following evidence.  He was employed by Qantas for more than 40 years.  He expected to be offered a redundancy package when workplace changes were made at Coolangatta airport in 2003.  This offer did not eventuate and he last worked for Qantas on 28 January 2003.  He then continued to receive payments from Qantas because of accruals of long service, annual and sick leave.  In the meantime, he commenced industrial proceedings against Qantas and an agreement was reached in October 2004 pursuant to which redundancy procedures would be applied.  Qantas breached the agreement.  Qantas dismissed him in June 2005 on the basis that his leave accruals had expired.  He commenced legal proceedings against Qantas for unlawful dismissal and, pursuant to an agreement reached in the Federal Court, continuous sick leave of more than 26 weeks was recognised and he received compensation of $56,000 in June 2006.  He was reinstated by Qantas but immediately retired.  

10.      From January 2003 until June 2006, much of Mr Jones’ time was spent in pursuing his actions against Qantas.  He was legally represented but did as much as he could to assist in the preparation of his case.  He considered that he occupied more than 960 hours each year in these endeavours. 

Submissions

11. Mr Flintoft submitted that Mr Jones ceased to be an accruing member of the Scheme at the end of the last of his pension bonus years which ended on 30 June 2003. As such, he submitted that Mr Jones was required to make his claim for pension bonus within 13 weeks of 1 July 2003 and that, as he did not claim until 5 July 2005, he did not satisfy the time limits in the Administration Act. He also submitted that, if Mr Jones was considered to be a non-accruing member because of his period of sick leave after 28 January 2003 or even after 30 June 2003, the maximum period of non-accruing membership attributable to him was 26 weeks. Mr Flintoft submitted that, if time began to run 13 weeks after either of those periods, his claim date of 5 July 2005 was still well out of time.

12.      Mr Jones submitted that he continued to meet the work test after January 2003 and until at least 2005 while he was assisting his lawyers to prepare material for his legal proceedings.  For that reason, he submitted that the 13 week time limit should not begin on 1 July 2003 but in 2005 and that, accordingly, his claim was made within the relevant time-frame. 

Consideration

13. Mr Jones was registered for the Scheme and would have received the pension bonus if his claim had been made within the time-frame set out in the provisions, noted above, in the Administration Act. I am satisfied that he ceased work with Qantas on 28 January 2003 and that he ceased to be an accruing member of the Scheme on 30 June 2003. I do not accept that the activities in which he engaged to assist with his legal proceedings constitute gainful work. His evidence was that his efforts assisted to defray some of the costs that he would have otherwise incurred and that he was not officially engaged, in a remunerative sense, by his legal advisers. I accept that Mr Jones perceived that he was working to advance his cause. This was voluntary activity on his part and s3.4.7.70 of the Guide expressly provides that under no circumstances is voluntary work to be considered to be gainful work. I am satisfied that Mr Jones was not working for financial gain or reward after 28 January 2003 as required by s 92X of the Act.

14.      Mr Jones’ last pension bonus year ended on 30 June 2003 and I am satisfied that, for a valid claim to have been made for pension bonus by him, it was required to have been made within 13 weeks of 1 July 2003.  This was not done as his claim was not made until 5 July 2005.  I have noted the concession made by Mr Flintoft to give effect to the sick leave entitlements that continued after Mr Jones ceased his work with Qantas.  However, I also accept his submission that the maximum recognition for this is 26 weeks and that, even on that basis, Mr Jones’ claim for pension bonus was out of time.

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 Mr RG Kenny, Member

Signed: ………………[Sgd]……………………………………
  Elizabeth Young, Research Associate

Date/s of Hearing  8 May 2008
Date of Decision  20 May 2008
The Applicant was not represented

For the Respondent Mr P Flintoft, Departmental Advocate