Kavadas and Secretary, Department of Family and Community Service S
[2004] AATA 74
•29 January 2004
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DECISION AND REASONS FOR DECISION [2004] AATA 74
ADMINISTRATIVE APPEALS TRIBUNAL N° V2003/149
N° V2003/150
GENERAL ADMINISTRATIVE DIVISION
Re: GEORGE KAVADAS AND ANGELIKOULLA KAVADAS
Applicant
And:SECRETARY,
DEPARTMENT OF FAMILY AND
COMMUNITY SERVICES
Respondent
DECISION
Tribunal: M.J. Carstairs, Member
Date: 29 January 2004
Place: Melbourne
Decision:The Tribunal sets aside the decisions to cancel the applicants’ disability support pension and wife pension with effect from 1 January 2002 and substitutes the decisions to suspend disability support pension and wife pension from that date.
The Tribunal affirms the decisions that arrears of disability support pension and wife pension are not payable for the period 1 January 2002 to 16 September 2002.
(sgd) M.J. Carstairs
Member
SOCIAL SECURITY – pensions – cancellation while applicants overseas – notice requiring applicants to give information – applicants did not comply – should pension be cancelled or suspended - whether notice of decision to cancel given to applicants - applicants did not seek review in thirteen weeks of notice
Act Interpretations Act 1901 (Cth) s29
Social Security Act 1991 ss23, 183
Social Security (Administration) Act 1999 ss81, 85, 109, 192, 196, 237
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gidaro v Secretary, Department of Social Security (1998) 83 FCR 139
REASONS FOR DECISION
29 January 2004 M.J. Carstairs, Member
Mr George Kavadas and Mrs Angelikoulla Kavadas (the applicants) have applied for review of decisions made by the Social Security Appeals Tribunal (the SSAT) on 21 January 2003. The SSAT affirmed decisions of a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent) made on 17 December 2001, to cancel disability support pension and wife pension with effect from 1 January 2002, and not to pay arrears of pension between the cancellation date and the applicants return to Australia from overseas in September 2002.
At the hearing the applicants were represented by Mr A. Robinson of counsel, instructed by Richmond and Bennison Lawyers. Mr M. Todd, a Centrelink advocate, represented the respondent.
The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the T-documents) as well exhibits A1-A3 for the applicants and R1 for the respondent. Both the applicants and the respondent lodged Statements of Facts and Contentions and on 17 December 2003, after the completion of the hearing, the applicant filed further written submissions.
BACKGROUND
Mr Kavadas was born on 17 January 1948 and Mrs Kavadas on 17 April 1950. They owned a milk bar business, operated through a trust and a trustee company, Kavadas Nominees Pty Ltd. They have been receiving disability support pension and wife pension respectively, since 20 October 1983 (T3 and T4). On 17 December 2001, Centrelink made the decision to cancel both pensions with effect from 1 January 2002. At the time of this decision, the applicants were in Greece. They had been there since September 2001. They were not aware of the cancellation of the pensions until September 2002 when they returned to Australia.
The computerised record of Mr Kavadas's disability support pension (T3) shows as the reason given for cancellation that he …ftr [failed to return] trust and company data collection*auto. The recorded reason for Mrs Kavadas's pension cancellation was partner not qualified (T4).
The trust and company data collection referred to new legislative provisions which were due to commence in 2002, and would affect social security recipients who, like the applicants, had company and trust arrangements. During 2001, Centrelink collected the information necessary to establish whether the new provisions would affect a person’s payments.
Centrelink sent letters to the applicants (T6 and T7), on 31 January 2001 (the first letters), asking for information about Kavadas Nominees. The applicants did not dispute that they received these letters. The first letters were essentially in the same terms, stating:
The rules relating to the assessment of income and assets for private trusts and small private companies are changing from 1 January 2002. Information available to us indicates that you and/or your partner have, or recently had, an involvement in the following:
503 959 463S Kavadas Nominees Pty. Ltd.
It is important that you read the enclosed Information Booklet which contains information about the changes and what you need to do. You must complete the Private Trust or Private Company forms or tell us why you think you are not involved in a trust or company. We are asking you to provide detailed information about your and/or your partner's private trust or private company.
…
You should return the requested information by 2 April 2001 to Centrelink, Trusts and Companies Team, DE2, PO Box 7788, Canberra Mail Centre ACT 2610.
(Highlighting of text by Tribunal)
If you do not provide the requested information, your and/or your partner's payment and/or concessions may be cancelled.
…
The authority to request this information is contained in Section 192 of the Social Security (Administration) Act 1999. This is a notice given under Section 196 of the Social Security (Administration) Act 1999.
…
On 18 June 2001 further letters (T8 and T9) were sent to each of the applicants (the second letters), stating that no response had been received to the request made in the first letters for information about Kavadas Nominees. Once again, s192 was cited as the authority for the request, and the letters invited the applicants to ask for a twenty-eight day extension of the time limit by telephone if they required it. The letters also stated that the pensions might be suspended if there was no contact in that time.
The applicants left Australia for Greece in September 2001. There is no dispute that they advised Centrelink, by telephone and in person, about their proposed overseas travel. They did not give a forwarding address in Greece to Centrelink. They simply asked for their mail to be sent to their Australian address, at the milk bar, during their absence (T10). They asked that pensions be paid to their Australian bank account.
On 18 October 2001 further letters (the third letters) were sent to the applicants asking about their failure to respond to the earlier letters. Again, reference was made to the possibility that pensions would be suspended if there was no response within 14 days. On 17 December 2001 Centrelink wrote to each of the applicants (the fourth letters) (T15 and T17) advising them that their pensions would be cancelled with effect from 1 January 2002.
When the applicants returned to Australia in September 2002 and realised that their pensions had been cancelled in their absence, they asked about the decisions to cancel both pensions, and the decision not to pay arrears of pension between the cancellation and the new claims which Centrelink required from each applicant; that is, the arrears for the period 1 January 2002 to 16 September 2002. On 16 October 2002 an authorised review officer (ARO) affirmed the decisions in regard to both pensions, stating that it was the correct decision not to restore… from 1 January 2002 (T23 and T25). The SSAT agreed, and the applicants sought review with this Tribunal on 6 February 2003. The SSAT expressly stated that it did not look at the issue of whether the decisions to cancel were correctly made, as they decided that the applicants had not sought review in sufficient time to be paid the arrears for January to September 2002..
From the respondent's Statement of Facts and Contentions, dated 11 April 2003, it became clear that there were further issues arising from the decision‑making process. The new claims required by Centrelink affected rights that the applicants previously had as long term recipients of their pensions. Mrs Kavadas was particularly affected, as wife pension could not be paid for a claim made after 1995. Mrs Kavadas was entitled to claim other payments with less favourable assets tests. However, the applicants' assets were reassessed at the end of 2002, and the result was Mrs Kavadas was not entitled to any payment.
The issues at the hearing were, first, the correctness of the decision to cancel the pension; secondly whether arrears can be paid to the applicants from the time of cancellation; and, thirdly, in regard to Mrs Kavadas, whether wife pension can be paid. Although the SSAT had not addressed the decision to cancel the pensions, the Tribunal was satisfied that the decisions were interrelated and all were reviewable by the Tribunal.
EVIDENCE
Mr Kavadas gave evidence that when he received the first letters he asked his accountant, Mr P. Kechayas, to complete the trust and companies information on his behalf. Mr Kavadas said that he does not understand the business arrangements and leaves that to his accountant. Mr Kavadas believed that Mr Kechayas had sent the information to Centrelink and so did nothing further. He said that when he contacted Centrelink’s International Branch in Hobart to tell them about their impending departure overseas, they did not mention the problem. Mr Kavadas said that in addition to telephoning, he and his wife went to Preston Centrelink where they were told they were free to leave the country. Again, no mention was made to them about the outstanding request. Mr Kavadas gave evidence that he and his wife did not receive the second letters. He said that if they had received those letters, he would have ensured that the information was provided to Centrelink, as they had sufficient time prior to their departure in which to do so.
Mr Kavadas said that he received the third letters a year after they were sent, when he returned from Greece, in September 2002, and went to the milk bar to collect the mail. He had asked Mr George Skaltsis, who had taken over the milk bar for the year of the Kavadas’s absence, to hold their mail for them until their return. Mr Kavadas said that the fourth letters advising the cancellation of the pensions were not in the box of mail that Mr Skaltsis gave him on his return.
In regard to mail deliveries in the area, Mr Kavadas said that in the past he has received other people’s mail at the shop and had to return it, and mail had gone astray. He said that an arrangement for their niece to collect mail had not eventuated. The niece had also been asked to update the bankbooks into which the pensions were paid but she did not do this. Mrs Kavadas’s evidence essentially confirmed that of Mr Kavadas. Neither applicant knew that the pensions had been cancelled while they were overseas, as they were living on money from the sale of the milk bar stock.
The applicants’ niece, Ms V Kavadas, said that she did not collect mail from the milk bar. She said that the only letters that she received for the applicants were those where they had organised delivery to her own mailing address.
Mr Skaltsis gave evidence that he managed the shop for a year when the applicants went to Greece. He said he was asked by the applicants to keep any personal mail for them until they returned to Australia. He did not open the mail, but stored it in a cardboard box. Mr Skaltsis said that there was a lot of mail for the applicants. Mail was delivered through a slot in the door of the shop, and not to a letterbox. He said sometimes he found the mail outside on the ground rather than inside the shop. He also said that letters outside could have blown away. He said there were occasions when mail was delivered to the milk bar in error.
Mr Kechayas, certified accountant, said that he has acted for the applicants for about twelve years. He said that during 2001 he had several clients who were affected by the trust and companies legislation and for whom he was preparing answers to Centrelink. As there was significant lobbying about the proposed changes to the legislation, he decided that it was better to wait to provide the information in respect of all his clients. He said that he waited until December 2001 to send the information, and then had the task of submitting information for about twenty clients. Mr Kechayas said that he did not know that the applicants’ pensions had been cancelled until their return, when Mr Kavadas came to his office with the third letter, the original of which he still had on file (exhibit A1).
Mr Kechayas produced a copy of his covering letter, dated 26 December 2001 (exhibit A2), which accompanied the applicants' completed (but unsigned) forms. Mr Kechayas produced his accountancy practice’s mail-out records, confirming that the material was sent on that date (exhibit A3). His covering letter was addressed:
The Manager
Trust & Companies SectionCentrelink
…
Mr Kechayas said that he was not aware of any other of his clients’ forms not arriving at Centrelink, though he said that one client had hand-delivered the forms and these were subsequently misplaced by Centrelink.
CONSIDERATION OF THE ISSUES
The legislation applying in this matter is to be found in the Social Security (Administration) Act 1999 (the Administration Act). The Administration Act, which came into effect in 2000, deals with general provisions in regard to the different categories of payments made under the Social Security Act 1991 (the Social Security Act). These include claims, notices, decisions made about dates of effect, and decisions about cancellations and suspension. Of particular relevance in this matter are s 81, s 85 and s 109 of the Administration Act. Section 81 provides:
81.(1) If:
(a)a person who is receiving a social security payment (other than a newstart allowance) has been given:
(i)…
(ii)a notice embodying a requirement under Division 1 of Part 5; and
(b)the person does not comply with the requirement of the notice;
the Secretary may determine that the payment is to be cancelled or suspended.
Section 85 of the Administration Act provides:
85.(1) If:
(a)a social security payment ceases to be payable to a person under section 93 or the Secretary cancels or suspends a person’s social security payment under section 80, 81 or 82; and
(b) the Secretary reconsiders the decision; and
(c)as a result of the reconsideration, the Secretary is satisfied that, because of the decision:
(i)the person did not receive a social security payment that was payable to the person; or
(ii)the person is not receiving a social security payment that is payable to the person;
the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.
Section 109 of the Administration Act allows for different dates of effect for a favourable determination (s108) made under s85. The dates depend on findings about whether the person received notice of the decision under s81 of the Administration Act, and on whether review was sought within the statutory time frame of 13 weeks.
Mr Robinson submitted that both the authorised review officer and the SSAT referred to the applicants’ pensions being restored. He submitted that restore implies that what was previously in place was reinstated. He said Centrelink's actions, when the applicants returned to Australia and were required to reclaim the payments, meant that their previous benefits was not restored. He submitted that if the pensions were restored then the applicants should be paid the pensions that they were entitled to at departure, leaving only the question of the arrears for the period January to September 2002. Referring to s29 of the Act Interpretations Act (Cth) 1901 (the Interpretation Act), Mr Robinson submitted that the applicants received no notice of decisions until their return to Australia. He said that the applicants could establish that the notice of decision was not delivered in the normal course of business and therefore they were entitled to arrears.
Mr Todd submitted that no arrears could be paid, as the applicants had not sought review in the 13‑week period from the cancellation decision. He also submitted that while disability support pension could be paid to Mr Kavadas with effect from 16 September 2002, Mrs Kavadas’s wife pension could no longer be paid, as claims for wife pension ceased in 1995.
The Tribunal reached its decision taking into account the oral and written evidence and submissions. It is clear from the documents that there was no impediment to the applicants’ pensions being paid while they were overseas as Mr Kavadas was assessed as severely disabled and his disability support pension was fully portable. Both applicants remained qualified for their payments while overseas. The cancellation only occurred because of the failure to provide requested information. Section 81(1) of the Administration Act allows for either a cancellation or a suspension where a person has not complied with a notice under Division 1 of Part 5 of the Administration Act. Both the first and second letters referred to s192 of the Administration Act, which is in Division 1 of Part 5. To be valid notices the letters had to comply with a number of provisions set out in s196. The Tribunal was satisfied that the first letters met these requirements and were valid notices under s192,. The second letters do not comply with the requirement in s196 to set a period for giving the information. The third letters were only reminder letters and did not refer to s192 and s196 of the Administration Act.
The applicants do not dispute that they received the first letters. They failed to respond, making the question of the receipt or non-receipt of any other letters less material. The applicants were obliged to comply with the notices. This was their personal responsibility, not Mr Kechayas's, and the notes accompanying the forms set this out explicitly. The Tribunal was satisfied that Mr Kechayas did not comply when he took the action of sending the forms to Centrelink on 26 December 2001. If the forms had arrived at Centrelink, they may well have been accepted, despite their late arrival, and the cancellation may not have taken effect. However, the forms did not arrive. It was a requirement of s192 that information be given. The Tribunal was satisfied that Mr Kechayas' letter was not addressed correctly. Section 29 of the Interpretation Act sets out that service …shall be deemed to be effected by properly addressing prepaying and posting the document as a letter where it is necessary to establish that something is given when it is sent in the mail. Mr Kechayas’ letter has no street or post office box for Centrelink and is not addressed to the address given in the first letters as the address for service.
Because the first letters were valid notices under the Administration Act and the Tribunal was satisfied that the applicants received those letters and failed to respond to them, the Secretary was entitled under s81 of the Administration Act to consider whether the pension should be cancelled or suspended.
MrTodd submitted that the correct decision was to cancel payment. Mr Robinson submitted that there were special circumstances that should have led the decision-maker to suspend rather than cancel. He referred to Gidaro v Secretary, Department of Social Security (1998) 184 ALR 550 as authority for the proposition that there is a need for careful consideration to be given to the choice between cancellation and suspension of a pension.
Section 81 of the Administration Act allows for discretion when considering whether to cancel or suspend. The Tribunal agrees with the applicants’ submission that careful consideration should be given to all the circumstances when exercising that discretion. The applicants were at fault in that they assumed, without checking, that Mr Kechayas had responded to the request for information. Their arrangements about their Centrelink mail while they were overseas were casual to the point of being reckless. They made no arrangement with Mr Skaltsis to examine the content of mail coming to the milk bar. They made no checks at all about their payments in their absence. As long term recipients of pension they should have been aware that they needed to remain in contact with Centrelink and they did not make any arrangements that enabled this to occur.
Balanced against this, the applicants remained qualified for the pensions, which they have received for some twenty years. Prior to his departure Mr Kavadas had been assessed as severely disabled. Their pensions were fully portable and so there was no bar to their travel for this length of time. They informed Centrelink about their departure and there is some merit to the point made that if the non-return of the forms had been raised when they went to see Centrelink, they could have dealt with it. Centrelink could have carried out further checks, such as contacting Mr Kechayas, who has dealt with these matters for them, before taking the step to cancel the pensions, when it was evident from the applicants’ records that they were not in Australia. The applicants left the country with the innocently misguided belief that they had done all that they had to do in regard to Centrelink.
When all the circumstances are taken into account, the preferable decision was to suspend the pensions under s81 of the Administration Act, rather than cancel them, and the Tribunal so decides. This means that the payments of disability support pension and of wife pension should have been reinstated when the applicants returned to Australia, rather than the applicants having to lodge new claims.
On the question of whether wife pension could be paid after being suspended, Schedule 6 of the Social Security (Parenting Allowance and Other Measures) Legislation Amendment Act 1994 (Act N° 174 of 1994) provides that wife pension was not to be granted after 30 June 1995. The Schedule also inserted into the Social Security Act a provision that where a partner’s disability support pension is suspended and subsequently reinstated, the wife pension may also be reinstated (s4 - inserting s183 into the Social Security Act). Section 183 of the Social Security Act has since been repealed by the Social Security (Administration and International Agreements)(Consequential Amendments) Act 1999 (Act N° 192 of 1999). However, this amending Act was part of a series of provisions that brought the Administration Act into operation in 2000.
Prior to the enactment of the Administration Act, cancellations and suspensions were dealt with within the specific provisions for each of the pensions and benefits in the Social Security Act. With the implementation of the Administration Act, these specific provisions were incorporated as general provisions, usually applicable regardless of the specific payment a person was receiving. The repeal of the specific provision, which allowed a suspended wife pension to be reinstated when a partner’s suspended disability support pension was reinstated, does not mean however that a wife pension now cannot be reinstated. The power to do so now is found in the general provision in the Administration Act, that is, in s85. Section 85 refers to the Secretary determining that a social security payment, previously cancelled or suspended, continues to be payable. Social security payment is defined in s23 of the Social Security Act as including a wife pension. This means that it is possible to restore the wife pension that Mrs Kavadas was receiving until 1 January 2001. The Tribunal decides, under s85, that wife pension was payable to Mrs Kavadas from 16 September 2002. It is notable that while s137 of the Administration Act prevents a cancelled social security payment being reinstated, it does not prevent a suspended social security payment being reinstated.
On the same basis, disability support pension payable to Mr Kavadas was that suspended on 1 January 2002. That is, Mr Kavadas did not need to make a new claim, and whatever rights attached to his existing disability support pension, subject to any specific legislation to the contrary, should remain in place.
On the issue of whether arrears of pension can be paid to the applicants for the period from 1 January to 16 September 2002, the Tribunal accepts the respondent’s submission that the notice of the decision to cancel was given to the applicants in the fourth letters. The Tribunal was satisfied, under s237 of the Administration Act that the notices were correctly addressed to the last mailing address given to Centrelink. There was evidence given about the erratic pattern of the mail delivery at the milk bar. However, the evidence taken as a whole did not satisfy the Tribunal that the letters were not delivered. The evidence of non-receipt of the fourth letters does not satisfy the requirement in s237 of the Administration Act and s29 of the Interpretation Act, that proof of non-delivery has to be established: Fancourt v Mercantile Credits Ltd (1983) 154 CLR.
The applicants did not seek review of the decision to cancel (suspend) their pensions within the 13 weeks allowed after a notice of a decision was given. Section 109(2) of the Administration Act applies to set the date from which the suspended disability support pension and wife pension became payable as 16 September 2002, when the applicants sought review of the decisions.
DECISION
The Tribunal sets aside the decisions to cancel disability support pension and wife pension with effect from 1 January 2002 and substitutes the decisions to suspend disability support pension and wife pension from that date. The Tribunal affirms the decisions that arrears of disability support pension and wife pension are not payable for the period 1 January 2002 to 16 September 2002.
I certify that the thirty‑ nine [39] preceding paragraphs are a true copy of the decision of:
M.J. Carstairs, Member
(sgd) Catherine Thomas
Clerk
Dates of hearing: 15 April 2003, 9 December 2003
Date of decision: 29 January 2004
Counsel for applicants: Mr A. Robinson
Solicitor for applicants: Richmond and Bennison Lawyers
Advocate for respondent: Mr M. Todd, Centrelink
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