Julien and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1596

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1596

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q 200600934

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Archie Julien

Applicant

And Secretary, Department of Employment and Workplace Relations

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe

Date27 July 2007

PlaceBrisbane (heard in Mackay)

Decision The decision under review is affirmed.

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SENIOR MEMBER

CATCHWORDS

STATUTORY INTERPRETATION – United States social security benefit – whether akin to Australian superannuation guarantee – lump sum was backpayment of pension – no exclusion of payment in assessment of Australian entitlement

SOCIAL SECURITY – Pensions, Benefits and Allowances – debt raised – no waiver

Social Security (International Agreements) Act 1999

Social Security Act 1991

REASONS FOR DECISION

27 July 2007 Senior Member Bernard J McCabe         

1.      Dr Archie Julien receives a regular social security benefit from the United States. He received a lump sum payment after the processing of his application was delayed. He also receives Newstart allowance in Australia, where he resides. When he told Centrelink about the lump sum payment from the United States, a decision was made to recover part of his Newstart payments made during the period to which the lump sum payment from the United States relates. Dr Julien says that payment should not be taken into account when calculating his entitlement to Newstart in this country.

2.      This case requires me to consider the interpretation and effect of the international social security agreement between Australia and the United States. That agreement was entered into pursuant to the Social Security (International Agreements) Act1999 (the Act). The terms of the agreement have the force of law in this country: s 6 of the Act.

3.      For reasons I will explain, I am satisfied the lump sum payment of retirement benefits to Dr Julien should be taken into account for the purpose of calculating his entitlement to Newstart. It follows the decision under review should be affirmed.

Background facts

4.      Dr Julien is originally from the United States. He worked there as an engineer for many years. He says he made contributions along with his employer into the government-run social security fund. He married an Australian woman and moved to this country a few years ago. He has been in receipt of Newstart payments since April 2004.

5.      He says he decided to apply for retirement benefits paid by the United States Social Security Administration (the Administration) as he approached his 62^nd birthday. His application was lodged but processing was delayed. When his application was finally approved, he was advised by letter from the Administration (document T7) that he would be paid arrears of $3950 in respect of the period 1 December 2005 and 30 April 2006 with ongoing payments of $790 per month. The letter describes the payments as Social Security.

6.      Dr Julien says he asked Centrelink about the affect of any lump sum payments upon his entitlement to benefits in Australia. The question had arisen some time ago when he and his wife became entitled to a lump sum payment from his mother-in-law’s estate. He was provided with an extract from a Centrelink policy document that provided advice to staff about how to deal with lump sum payments. He was not given the whole document at the time; it is not clear why he was given any part of the document at all. After reading the document, he says he formed the view a lump sum paid by the Administration in the United States would be exempt – that is, it would not be taken into account when calculating his entitlement to Newstart. He says he took that view because the portion of the policy document he received suggested superannuation lump sum payments would not be taken into account. He surmised that his lump sum payment from the United States was the equivalent of a superannuation payment in this country. He assumed the payment he received was therefore exempt.

7.      Centrelink takes a different view. It says the lump sum payment must be taken into account when calculating the applicant’s entitlement to Newstart. Centrelink’s calculations suggest Dr Archie Julien was overpaid Newstart benefits in the amount of $3021.50 during the period 1 December 2005 to 30 April 2006. There was no suggestion the calculation process was in error if Centrelink’s central contention about the lump sum payment is right. I therefore accept the calculation.

the social security agreement: what is its effect?

8.      Australia and the United States entered into an agreement regulating the payment of social security benefits to persons like Dr Julien who might have an entitlement to payments from the social security systems of either or both countries. The agreement is apparently intended in part to prevent double-dipping. It is also presumably intended to prevent people being dealt with unfairly because of differences between the two systems. The agreement helps to avoid misunderstandings.

9.      The agreement regulates the payment of benefits. That expression is defined in the agreement as follows:

“…in relation to a Party, a benefit, pension or allowance for which provision is made in the laws of that Party, and includes any additional amount, increase or supplement for which a beneficiary is qualified but, for Australia, does not include any benefit, payment or entitlement under the law concerning the superannuation guarantee.”

10.     The last part of that definition excludes, in relation to Australia, benefits, payments or entitlements under the law concerning the superannuation guarantee. The Australian superannuation guarantee laws in question are expressly identified in Article 2(1)(b)(ii).

11.     It must be said at this juncture that the lump sum payment received from the Administration in the United States was not paid under one of the identified Australian superannuation guarantee laws. Dr Julien says the payment – a retirement benefit – is of the same nature as the payments under the Australian superannuation arrangements. He says Social Security payments of this kind in the United States are not like Australian social security payments, which are really welfare payments.

12.     Dr Julien may be right in his description of the similarities between Social Security in the United States and superannuation in Australia, but that is beside the point. The Agreement defines benefits to include a range of payments made under the United States Social Security Act (Article 2(1)(a)). Retirement benefits paid by the Administration fall into this category. They may be functionally similar or even identical to superannuation, but they are not paid pursuant to the Australian laws as required by the definition section in the agreement. Those benefits are taken to be income within the meaning of s 8 of the Social Security Act 1991. The respondent is required to take account of the applicant’s income when calculating entitlement to income-affected payments like Newstart. If those calculations show the applicant has received more in Newstart payments than he was entitled to receive when one takes into account the benefits received from the United States, the respondent is permitted to recover the amount of any overpayment as a debt due to the Commonwealth: Article 17(2).

13. I am satisfied there is a debt due to the Commonwealth in the amount of $3021.50: s 1223 of the Social Security Act1991.

14.     The applicant says the debt should be waived if he was overpaid because the debt is attributable solely to an administrative error on the part of the Commonwealth. He referred me to the extract of the policy document he was provided. It is a pity he was provided with part of what is in reality an internal advice designed to educate Centrelink’s officers. Dr Julien noticed the document referred at page 9 to examples of lump sum payments that might be included in the category of exempt payments. He noted that superannuation payments were cited as examples. Since his retirement benefits were analogous to superannuation benefits, he reasoned the payments were exempt.

15.     Dr Julien was in error when he assumed his retirement benefits were analogous to superannuation payments. While it was unfortunate he was provided with an extract of the document without a proper explanation of its contents, he nonetheless made an unwarranted assumption about his position. It follows that even if Centrelink was in error in providing him with the document, Dr Julien was also in error. While I accept the error was made in good faith, it means he is unable to claim a waiver pursuant to s 1237A. Since I was not provided with any evidence suggesting Dr Julien’s case was affected by special circumstances, I decline to waive the debt pursuant to s 1237AAD.

Conclusion

16.     The decision under review is affirmed.

I certify that the 16 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed:         .....................................................................................
  Associate:     Stephen O’Grady

Date of Hearing  10 July 2007
Date of Decision  27 July 2007
The applicant represented himself at the hearing.

The respondent was represented by Mr Hamilton, a departmental advocate.