Kervin and Secretary, Department of Social Services (Social services second review)
[2021] AATA 3411
•24 September 2021
Kervin and Secretary, Department of Social Services (Social services second review) [2021] AATA 3411 (24 September 2021)
Division:GENERAL DIVISION
File Number(s): 2020/6970
Re:Mr Donald Kervin
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Emeritus Professor P A Fairall, Senior Member
Date:24 September 2021
Place:Sydney
The decision under review, being the decision of the AAT1 dated 7 October 2020, is set aside and substituted to extend the lodgement period for the Applicant’s claim under the Pension Bonus Scheme to 10 October 2019.
....................................[sgd]....................................
Emeritus Professor P A Fairall, Senior Member
CATCHWORDS
SOCIAL SECURITY – Pension Bonus Scheme – 13 week period to seek review – whether special circumstances exist to extend the lodgement period for the Applicant’s claim under the Pension Bonus Scheme – applicant not provided with information relevant to his situation – decision set aside and substituted
LEGISLATION
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Bulot and Secretary, Department of Social Services (Social services second review) [2015] AATA 1010
Colley and Secretary, Department of Social Services [2015] AATA 439
Fagen and Secretary, Department of Social Services [2015] AATA 260
Foord and Secretary, Department of Social Services (Social services second review) [2015] AATA 511
Hall and Repatriation Commission (Veterans' entitlements) [2017] AATA 457
Harley and Secretary, Department of Social Services (Social services second review) [2016] AATA 370
Hurry; Secretary, Department of Social Services and (Social services second review) [2016] AATA 94
Kearns and Secretary, Department of Social Services [2014] AATA 126
Kornweibel and Secretary, Department of Social Services (Social services second review) [2015] AATA 519
Lacek and Secretary, Department of Social Services (Social services second review) [2017] AATA 292
Melzer and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 68
Merrett and Secretary, Department of Social Services (Social services second review) [2018] AATA 156
Obst and Secretary, Department of Social Services (Social services second review) [2018] AATA 689 (9 March 2018)
O’Rourke and Secretary, Department of Social Services (Social services second review) [2016] AATA 645
Pender and Secretary, Department of Social Services (Social services second review) [2015] AATA 711
Platt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 912
Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224
Ryan; Secretary, Department of Social Services and (Social services second review) [2020] AATA 4368
Sonter and Secretary, Department of Social Services [2013] AATA 839
Underdown and Secretary, Department of Social Services [2014] AATA 543Vanderwerf; Secretary, Department of Social Services and (Social services second review) [2015] AATA 804
SECONDARY MATERIALS
Social Security Guide
REASONS FOR DECISION
Emeritus Professor P A Fairall, Senior Member
24 September 2021
INTRODUCTION
The Pension Bonus Scheme (the Scheme) commenced on 1 July 1998 as a means of encouraging older Australians who reach retirement age to remain in the workforce.[1] The Scheme provided for the payment of a tax-free lump-sum bonus payment to people who would otherwise qualify for the age pension (AP) but delayed claiming while they, or their partner, remained in employment.
[1] Department of Social Services, Pension Bonus Scheme (7 November 2014) <>
The amount of pension bonus (PB) to which a person was entitled was based on the amount of AP eventually received and the number of years spent in the Scheme. It was paid when the person eventually stopped working and began receiving the AP. It was not an accrued entitlement as such, but contingent upon eligibility at the time of claim. If not claimed, it was not payable. In short, the Scheme paid a tax-free one-off lump-sum bonus payment to people who deferred receipt of AP and continued to work.
According to the 2009 Harmer Review of Pensions, undertaken by the Department of Families, Housing, Community Services and Indigenous Affairs at the request of the Minister, the Scheme was found to be ‘a cumbersome and inefficient mechanism to achieve higher levels of workforce participation’ and ‘complex, inefficient and inflexible’. [2] The Scheme was closed for new registrations in September 2009.
[2] Department of Families, Housing, Community Services and Indigenous Affairs, Pension Review Report (27 February 2009), 87, 95
A number of qualification and claim rules applied under the Social Security Act 1991 (Cth) (‘the Act’), and the Social Security (Administration) Act 1999 (Cth) (‘the Administration Act’). One of those rules is the subject of the present application. The rule allows the period fixed by legislation to make a claim to be extended in ‘special circumstances’.[3]
[3] Centrelink provides online uncluttered advice regarding the claim process.
FACTS
The Applicant was born in 1940. He reached the retirement age of 65 in 2005. On 23 January 2005, he was enrolled by Centrelink in the Scheme.[4] When he finally stopped work, at the age of 79, he had been registered for 14 years. He is the embodiment of the extended workplace participation the Scheme sought to promote. His delayed claim for AP saved the taxpayer many thousands of dollars.
[4] T5/29.
There is no dispute about the validity of his registration as a member of the Scheme. He was an accruing member from 2005. He received letters annually confirming his ongoing registration,[5] the most recent dated 9 January 2019.[6] He was, by statutory definition, a post-75 member.[7]
[5] See T8/33-48. The certificates are issued under the Social Security Act 1991 (Cth), section 93B.
[6] T17/48.
[7] The Act, section 92S.
It is agreed that on 10 October 2019 he made a valid claim for AP and PB,[8] and that this date was more than seven months after he stopped working and therefore some four months outside the statutory period of 13 weeks specified by subsection 26(1) for a post-75 member.
[8] T18/50.
On 7 October 2020, the Administrative Appeals Tribunal on first review (AAT1) affirmed the decision by Centrelink to disallow the PB claim (while approving the pension), on the basis that it was out of time. The applicant believes that the decision made by AAT1 is wrong.[9] He therefore sought a second merits review from the Tribunal, as he is entitled to do.
[9] T2/7.
RELEVANT LEGISLATION GOVERNING THE CLAIM PROCESS
The qualification requirements for the AP and the PB are set out in the Act (in Parts 2.2 and 2.2A respectively).
The claim process is governed by the following provisions of the Administration Act.
·Section 16 of the Administration Act sets out the general rule applicable to all claims, while section 17 sets out a special rule relating to the PB Scheme.
·Paragraph17(1)(a) states that a claim for PB must be attached to a proper claim made by the person for AP and lodged together with that claim for AP.
·Subsection 17(2) states that a claim for PB may be made even though it is not certain whether the person will start to receive an AP at or after the time when the person makes the claim. The claim has effect as a claim that is contingent on the person receiving an AP.
·Subsection 21(1) provides that a claim for PB must be made within the lodgment period fixed by this Subdivision.
·Subsection 23(1) provides that if a person’s last bonus period is a part-year period, the lodgment period for a claim is the period of 13 weeks beginning at the end of that bonus period, and if the Secretary allows a longer period – that longer period.
·Subsection 26(1) provides that if a post-75 member of the PB scheme has a post-75 work period, the lodgment period for a claim by the person for PB is the period of 13 weeks beginning at the end of the period nominated in the claim as the person's post-75 work period. Section 92S of the Act provides that a person's membership of the PB scheme is post-75 at all times after the person reaches age 75.
·Subsection 21(2) provides that the Secretary may in special circumstances allow a person a longer period to make a claim than the period fixed by this Subdivision. If the Secretary does so, the lodgment period for the person's claim is the period allowed by the Secretary.
·Section 92C provides that a person is qualified for a PB if…the person starts to receive an AP at or after the time when the person makes a claim for the PB…
THE TRIBUNAL HEARING
The Applicant was self-represented at the hearing, which took place on 19 May 2021 and 23 July 2021. The Respondent was represented by Dr Thompson.
The Applicant gave the following evidence to the Tribunal. He owned a business which provided gravel for the construction industry. He drove the excavator that extracted the gravel and worked on his own. He had operated the company for more than twenty years. He stopped working on or about 28 February 2019.[10] He says that on 28 February 2019 he went to Port Macquarie to meet with his financial planner, who was associated with his long term accounting firm PDD. He told him that he had retired and wanted to apply for the AP and PB. The planner did not know what paperwork Centrelink required and suggested that he should visit the Centrelink office, which was across the road. As to what he says happened when he attended the Centrelink office, I refer to an extract of the transcript below.[11]
[10] Transcript of Proceedings (19 May 2021) 18.
[11] Transcript of Proceedings (23 July 2021) 44 et seq.
THE APPLICANT: I checked it in at the counter, they’ve got a check‑in counter there. I was given to wait for a financial advisor, and they took me in to do the interview, but then I find out she said I didn’t have the right paperwork, that I would have to wait and come back with the proper paperwork. They said they’d send it in the mail, it didn’t come. So I put it down to defective administration. (Indistinct) ‑ ‑ ‑
SENIOR MEMBER: But when you left the (indistinct) ‑ ‑ ‑
THE APPLICANT: The financial planner didn’t know what Centrelink wants I found out later and that’s why he sent me to Centrelink. But I didn’t know, it took me four or five interviews with him before he even told me that they didn’t know what they wanted. Because I was a company and they had to have a F form, which I found out [when I] went to Kempsey Centrelink in October.
SENIOR MEMBER: Yes.
THE APPLICANT: They give me the run around in there and said I couldn’t put a claim in because I was a company and hadn’t been shutdown, and they given me the run around.
SENIOR MEMBER: So when you went to the Port Macquarie Centrelink, you ‑ ‑ ‑
THE APPLICANT: I shouldn’t have went there in the first place.
SENIOR MEMBER: You say you went there in February, is that correct?
THE APPLICANT: Yes, 28 February. I did the same interview with the financial planner. He was across the road and he said go over to Centrelink, which was across the road from their office there, Port Macquarie.
SENIOR MEMBER: Yes. Yes.
THE APPLICANT: I should have waited and come home to Kempsey, because when I went to the Kempsey one, it went straight through.
SENIOR MEMBER: If I understand you from last time and from this time, after going into Centrelink at Port Macquarie, you were told that you had to be put in the system. Am I right in that? You were told you had to be put in the system and they didn’t put you in the system at that point, but they told you come back with the necessary documents, is that correct?
THE APPLICANT: That’s correct. They said I had to get the right documents, but they didn’t put me in the system. I didn’t know at the time, yes. I was waiting for them to come in the mail.
SENIOR MEMBER: Then, yes ‑ but you went to see the financial advisor immediately leaving the Centrelink office, is that right?
THE APPLICANT: Well, he said he logged into MyGov account, but I never got nothing back from there for ages, yes.
SENIOR MEMBER: Right.
THE APPLICANT: I went to see him three or four times, but he just give me different stories. Then I went and seen the accountant, and she said she couldn’t do nothing till he sorted it out, yes. But they charged me for it. I’m not much good at talking (indistinct), I’m a bit hard of hearing as it is, yes.
SENIOR MEMBER: No, it is rather difficult over the telephone, I know that. This matter is just a little complicated because of the ‑ ‑ ‑
THE APPLICANT: Yes, it’s complicated all right. I had the accountant mate do me letters because I wasn’t any good at writing them, you know. But they sent me into Centrelink to log it in again, but they didn’t know what they wanted. Well, I didn’t know at the time either. It was the first time I’ve ever been in there. I’ve heard the same rumour about Port Macquarie again. There’s a few other people. Yet Centrelink here at Kempsey, they were great. They put me straight in and said they never logged me in for the claim. That’s all I’m arguing about. About the defective administration at Port Macquarie Centrelink.
I checked in at the counter, they give you a number there, and there’s a video surveillance camera there. I was in there between 9, and I think it was, half past 11, I was there.
…
SENIOR MEMBER: But you did understand that when you left that office, the application at that point was not complete. Is that correct? Because they wanted (indistinct) ‑ ‑ ‑
THE APPLICANT: Well, I didn’t know. I didn’t know and no one said nothing. They said I would receive the proper paperwork in the mail. Never came.
SENIOR MEMBER: And what’s the purpose of that other paperwork (indistinct)?
THE APPLICANT: I think (indistinct) in the system it give you a paper trail.
SENIOR MEMBER: The purpose of that other paperwork was to enable you to make an application, is that correct?
THE APPLICANT: Well, I had to wait for the paperwork to come back to come in again, yes. I’ve been given the run around, I can tell you that much.
SENIOR MEMBER: Yes, I understand that you feel frustrated by this, but I’m just trying to understand when exactly it can be said that your application was actually complete.
THE APPLICANT: Well, it didn’t get complete till I went to Kempsey in October.
SENIOR MEMBER: Yes.
THE APPLICANT: Only because of the run around. So I get it from the accountant saying ‑ or the financial planner, I should say, said the tax hadn’t been done for that year and they couldn’t do nothing and they giving me the run around. And I even went in there personally to talk to him again and he refused to talk to me. So on the dates of all the times I’ve visited him so I could have a go at him. But he ‑ the secretary said they only do paper trails, yes. Didn’t even put it in the system. Only in January. The first interview I had with him, yes. And the accountant ‑ ‑ ‑[12]
[12] Transcript of Proceedings (23 July 2021) 44-46.
The applicant gave similar evidence to the Tribunal at the first hearing in May, he said:
So you went in to Centrelink on 28 February 2019?---That’s right, yes, in Port Macquarie and they didn’t log me in. I checked in at the counter, I waited to see the financial adviser and they worked on the computer. I have no idea of the computers, and she said she would put me in the (audio malfunction) but then she said I never had the right paperwork for the pension. I showed her the certificates for the Bonus Scheme and she said I had to bring back other documents but they didn’t tell me what I had to get. They said I’d be notified in the mail, which never happened.[13]
[13] Transcript of Proceedings (19 May 2021) 5.
He also said:
When I went into Centrelink to complain that I hadn't received the paperwork, I - it was probably my fault for being so long, but I have been to the accountant or the financial planner three or four times, and he kept giving me the run-around, that I was a company and it couldn't be done, yes? Then the accountant said the same thing, and then I went into Centrelink and they give me all the right information and everything was done on 10 October.[14]
[14] Transcript of Proceedings (19 May 2021) 23.
The effect of the Applicant’s evidence is that he apparently believed that he was ‘in the system’ as a result of his visit to the Centrelink office in February, but that in order to complete his application for the PB he had to fill out further forms that would be sent to him. He had to wait for those forms to come and then put in all the paperwork together.[15] He apparently believed that he had applied under the Scheme, even though he needed more documents to complete the AP application.[16]
[15] Transcript of Proceedings (19 May 2021) 21.
[16] Transcript of Proceedings (19 May 2021) 22.
The Applicant provided a letter (drafted by his accountant) as part of his original application,[17] and a further submission filed on 10 November 2020, in which he stated:
I had genuinely thought that by attending the Centrelink office in Port Macquarie in February 2019 to start the application process with a Centrelink representative, and to find out what additional information, forms and timeframes were required for the process that I was doing the right thing. I feel that the failures of the Port Macquarie representative to record the meeting, submit the initial claim details to the Centrelink system, and the failure to send the required forms to me for completion (rather than providing me with hard copies of the forms immediately as was done by the Kempsey representative) have led to the failure of my application being assessed appropriately. Had the initial meeting of February 2019 been recorded correctly and noted as the start date of my claim process, I would have satisfied all requirements of the required time periods for the claim to be successfuI.
The denial of this claim has and will continue to detrimentally affect my financial position, and the severe impact this claim process has had both on my physical and mental wellbeing.
I implore the tribunal to consider the complexities of the claim process involved in the application for both the age pension and the pension bonus scheme, and the failures of the representative of the Port Macquarie Services Australia office to provide me with the necessary information to complete the application by the relevant time periods. At all times through my working life I have operated with integrity and due regard for all timeframes and lodgement requirements. Undertook the same approach to my Centrelink application (which is why I physically attended a Centrelink branch for assistance) and feel that the outcome is not representative of the actions I undertook due to the failure of the Centrelink representatives to assist me correctly. Had the initial meeting of February 2019 been recorded correctly and noted as the start date of my claim process as I was led to believe, I would have satisfied all requirements of the required time periods for the claim to be successful.
I thank you for taking the time to review my submission as part of the Administrative Appeals Tribunal review case.
[17] T25/305.
I note that his accounting firm sent him an invoice for $440.00 for ‘Preparation of interim financial statements to 31 December 2018 to assist with Centrelink AP application’.[18]
[18] Tax Invoice dated 28 February 2019.
WHEN WAS THE APPLICATION MADE?
Centrelink has no record of a visit to the Port Macquarie branch on 28 February 2019. However, Dr Thompson accepted that the Applicant probably did visit Centrelink in February. I note that there is a file note dated 10 October 2019, in somewhat vague terms, that is consistent with the Applicant’s claim that he visited the Centrelink office at some earlier point than October. It states:
Have advised customer we have a claim on the Txt: system but this was a cancelled claim that has not been finished. [19]
[19] T26/310.
This file note is important, in that it corroborates the Applicant’s account that he attempted to make an application under the Scheme sometime before his successful application in October.
Having read his account and listened to his evidence, I am satisfied that he attended the Centrelink office in February 2019 to progress his application for AP and PB, but did not complete a valid application prior to October 2019.
At the hearing some time was spent on his state of knowledge regarding the 13 week time period commencing from the time he stopped work. He said that he knew he had 13 weeks to get the application in and that is why he went to see Centrelink on 28 February. Having reviewed the transcript and considered the manner in which this matter was explored, I am uncertain as to what he knew about the timelines involved, or the consequences of a late application. It is after all a complex scheme. He did not seem to understand that the PB application had to be made at the same time as the application for AP. [20]
[20] Transcript of Proceedings (19 May 2021) 4.
I accept that for one reason or another he was thwarted in his attempt to complete his application. He appears to have had some difficulty communicating with his financial planner. This impasse was not resolved until he filed his application in October 2010. He said that the firm did all the paperwork.[21]
[21] Transcript of Proceedings (19 May 2021) 25.
I therefore find that he did not make a valid application under the Scheme within the necessary 13 week application period from the time that he stopped work on 28 February 2019.
SPECIAL CIRCUMSTANCES
I turn to consider whether there are special circumstances such that the application period should be extended to 10 October 2019, when he made a formal application for AP and PB.
Taken at the highest, the special circumstances are as follows:
·He was registered to the scheme from 2005;
·His period of deferral of AP was substantially greater than 5 years;
·His age is a significant factor;
·He was a single person and lacked support;
·His literacy is a significant factor;
·He operated as the sole shareholder and employee of a private company which he wholly owned. It was a gravel extraction business. The business was in the process of being wound up when he stopped work in 2019.[22]
·He relied upon his accountant to file his AP application in a timely way (the AAT1 was very critical of his professional advisers;
·He physically attended a Centrelink office in February 2019 with a view to making a claim for AP and PB (Centrelink has no record on the meeting but the respondent concedes that it took place);
·When he left the Centrelink office he believed that he had made a valid application for PB. While he was aware of the 13 week application period for PB, he did not appreciate that the PB application had to be made with the AP application, and therefore did not appreciate that the window of opportunity to receive PB was rapidly closing;
·He should have received some follow up from Centrelink after the first consultation;
·He relied on others to write letters and interact with Centrelink;
·There is no evidence of any steps taken to dilute or dispose of assets so as to defeat the asset test.
[22] T19/288.
I note Part 3.4.7.80 of the Social Security Guidelines (‘the Guide’) indicates when it may be appropriate for the Tribunal to exercise its discretion under subsection 21(2).
Reasons to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.
Examples may include cases where a member:
• has poor numeracy or literacy skills,
• was ill,
• was located in a remote area,
• performed irregular work that made it difficult for the member to determine the lodgement period,
• was helping a close family member suffering from a serious illness,
• has experienced the death of a close family member,
• had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member's partner moved into a nursing home),
• was-unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).
The list above is not a full list of acceptable reasons to accept a late claim.
Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay)… (emphasis added)
The Respondent’s Statement of Facts, Issues and Contention refers to one decision of the Tribunal in relation to the discretion to extend the application period: Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224. The Tribunal decided not to exercise the discretion under circumstances where the Applicant had sought a financial advantage by delaying an application. The Tribunal stated:
After some research, I was able to locate the reason why the period of 13 weeks was selected for the purposes of ss 22 and 23 of the Administration Act as being the time limit within which, after the last bonus period, a claim must be made. In a report prepared by the Senate Community Affairs Legislation Committee dated May 1998, the committee provided the following reasons for the 13 week limit…’The 13 week limits were included to minimise the capacity of people to disperse or reduce their retirement savings following the cessation or reduction in work.’ [23]
Mr and Mrs Polchow seem to fall into that category of applicants for the age pension and pension bonus which the Senate Community Affairs Legislation Committee explained was the reason for the 13 week limit. That is, the limit was inserted to minimise the capacity of people to disperse or reduce their retirement savings following the cessation or reduction of work. No doubt that also extends to disposal of assets which might lower or even preclude the age pension being paid. I therefore find that there are no special circumstances in Mr and Mrs Polchow’s case which would allow a longer period within which to make claim for the pension bonus.
[23] The Report referred to by the Tribunal may be found at:
Polchow suggests that the discretion should be tightly constrained so as to avoid this sort of manipulation. But this principle does not govern the present circumstances. There is nothing to suggest any such improper motivation on the part of the Applicant. While it may be that the deferral of the start date of the aged pension may result in a higher pension in some cases, the evidence in the present case is that the Applicant was motivated to obtain the pension as soon as he quit work.
I also note that there are other safeguards against financial abuse. As noted by the Minister in introducing the Bill:
The scheme reflects the principles already contained in the current provisions of the Social Security Act 1991 relating to preclusion periods. Accordingly, where a person has disposed of assets in excess of the disposal limits or where a lump sum compensation payment is made to the person, the person will not be able to accrue a bonus for the relevant preclusion period. Similarly, a person cannot accrue a bonus if the person receives carer pension or an equivalent Veterans' Affairs payment or in certain other limited situations. At the end of any of these preclusion periods the person will again be able to accrue bonus periods.[24]
[24] Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 (Cth), Second Reading Speech.
These safeguards exist in the Scheme quite independently of the strict 13 week application period. However, it may be that by deferring an application for AP for a period of time, a preclusion period would no longer apply, with a beneficial outcome in terms of the bonus payment. Whether this would be advantageous in all circumstances is by no means clear.[25]
[25] ‘If this person registers for the Pension Bonus Scheme and defers the Age Pension for five years, on claiming the pension, they would receive the maximum Age Pension, along with a lump sum pension bonus of $34,344.30 (the maximum amount of pension bonus for five years’ deferral by a single person). However, if this person had chosen to claim Age Pension while continuing to work, a part rate pension and employment income of around $25,341 each year would have been payable—a total of $121,833 over five years. That is the person would be $22,422 better off by claiming the Age Pension while working instead of registering for the Pension Bonus Scheme.’
RELEVANT DECISIONS
Although the Tribunal is not bound by other decisions of the Tribunal, consistency is a desirable feature of administrative decision-making. As far as possible, like cases should be treated alike, although it is obviously true that the circumstances of the individual case are front and centre in each decision. Each case should be considered on its merits. It is, however, useful to consider other decisions for a better understanding of the discretion in subsection 21(2).
The Tribunal’s own research suggests that decisions over the past ten years relating to the discretion under subsection 21(2) are relatively plentiful and almost evenly divided. The claim period was extended in nine cases;[26] in eleven cases it was not.[27] The cases reveal a wide range of circumstances going well beyond the sort of financial manipulation dealt with in Polchow.
[26] Decisions where the discretion to extend was exercised: Ryan; Secretary, Department of Social Services and (Social services second review) [2020] AATA 4368; Lacek and Secretary, Department of Social Services (Social services second review) [2017] AATA 292; Vanderwerf; Secretary, Department of Social Services and (Social services second review) [2015] AATA 804; Bulot and Secretary, Department of Social Services (Social services second review) [2015] AATA 1010; Kornweibel and Secretary, Department of Social Services (Social services second review) [2015] AATA 519; Foord and Secretary, Department of Social Services (Social services second review) [2015] AATA 511; Sonter and Secretary, Department of Social Services [2013] AATA 839; Melzer and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 68; Platt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 912.
[27] Decisions where the discretion to extend was not exercised: Hall and Repatriation Commission (Veterans' entitlements) [2017] AATA 457; O’Rourke and Secretary, Department of Social Services (Social services second review) [2016] AATA 645; Hurry; Secretary, Department of Social Services and (Social services second review) [2016] AATA 94; Obst and Secretary, Department of Social Services (Social services second review) [2018] AATA 689; Merrett and Secretary, Department of Social Services (Social services second review) [2018] AATA 156; Harley and Secretary, Department of Social Services (Social services second review) [2016] AATA 370; Pender and Secretary, Department of Social Services (Social services second review) [2015] AATA 711; Colley and Secretary, Department of Social Services [2015] AATA 439; Fagen and Secretary, Department of Social Services [2015] AATA 260; Underdown and Secretary, Department of Social Services [2014] AATA 543; Kearns and Secretary, Department of Social Services [2014] AATA 126.
I note that in Ryan; Secretary, Department of Social Services and (Social services second review) [2020] AATA 4368, Deputy President Melick AO SC noted that the discretion was a wide discretion and said:
[49] Having considered all of the evidence, I am satisfied that Centrelink had, within its possession, information that from 16 April 2010 Mr Ryan was not employed. However, despite that information, when his registration as a member of the PBS was accepted on 25 May 2010, he was not advised that the time period for making his claim to the PBS was already limited by the fact of him ceasing employment. Although not given incorrect information, I find that Mr Ryan was not provided with information relevant to his situation despite there being opportunities for the Secretary to so do. It is all very well to submit that Mr Ryan should have been aware of the law, but I consider the law in this area to be very difficult for a layman and the letters sent to him confusing, bearing in mind that the Secretary was well aware that he had already made an unsuccessful claim for an age pension in 2010.
[50] In fact, the letters were not only confusing but were, in reality a nonsense, as far as Mr Ryan’s situation was concerned. This is because the first letter dated 19 July 2010 came some 14 days after the expiration of the time in which he could apply for the pension bonus .
[51] The intention of the PBS is to encourage people of pension age to keep working rather than claiming an age pension as soon as they qualify. Mr Ryan continued to work for more than five years after he would have qualified for the age pension if his wife had not been working; and, accordingly, was the type of person that the scheme was intended to benefit.
[52] I do not accept that to allow Mr Ryan the extension requested would be unfair to those who complied with the time limits or had claims rejected because they failed to comply with such limits.
[53] There was no evidence before me of any other case with similar circumstances to those present in Mr Ryan’s matter; and there was also no evidence of any deleterious effects upon the scheme, or those within it, should Mr Ryan’s claim be accepted.
[54[ In my view, …this is an exceptional case; which justifies exercising a wide discretion in Mr Ryan’s favour in order to give effect to the intentions behind the legislation creating the scheme, bearing in mind the confusion referred to above created by the letters sent to Mr Ryan in July each year.
In Bulot and Secretary, Department of Social Services (Social services second review) [2015] AATA 1010 at [1] the Tribunal noted that the administration of the PBS “was affected by highly technical rules and short timelines for applying for the bonus following the attainment of retirement age.”
In Sonter and Secretary, Department of Social Services [2013] AATA 839 at [18] the Tribunal noted:
18. I find that the Applicant was duly registered pursuant to the Pension Bonus Scheme and that he satisfied the work test to entitle him to the bonus for five years of work after he was otherwise entitled to claim the age pension. He did not claim the bonus within the time prescribed by the Act, but otherwise satisfied all the other requirements entitling him to payment of the bonus. I find that he did not do so but that he falls within the provisions of s 21(2) of the Act, and that special circumstances exist in his particular case so that the discretion to allow his claim lodged on 28 June 2012 should be exercised in his favour. The special circumstances include the support of himself for a prolonged period by depletion of his savings, the consequent saving to the government of a substantial amount of pension payments, the requirement for care of his immediate family members and his inadequate understanding of the requirements of the scheme. I find that the Applicant at all times acted in good faith and without a motivation to gain benefit by delay in making his claim.
In Platt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 912 at [51] the Tribunal noted:
I agree with the Secretary’s contention that ignorance of itself does not constitute special circumstances. Ignorance of the scheme however is not the only ground relied upon by Mr Platt. As noted he claims and I accept, that it was only towards the end of 2010 that he came to realise that his plan of financial independence throughout retirement had been thwarted by the diminution of his asset position as the consequence of the global financial crisis and its impact on the antique business. It was only at this point that he turned his mind to the type of benefits that might be available under the social security law. While Mr Platt would not be alone in finding, on the eve of his retirement, that his financial position had been altered as a consequence of the global financial crisis, as Katzmann J noted in Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2010] FCA 441; (2010) 185 FCR 52 at 65 there is no requirement that the asserted special circumstances be unique to the individual - circumstances might be special although they apply to more than one person or to a class of persons, provided they are not of universal application.
While as the Secretary points out the ground advanced by Mr Platt is not one listed by the Guide (at 3.4.7.80) as an example of “special circumstances”, that list of course is not exhaustive.
In a slightly larger number of cases, eleven in all, the Tribunal found no basis for extending the time period. In many cases there was a lack of understanding or knowledge of the rules, for example, in Obst and Secretary, Department of Social Services (Social services second review) [2018] AATA 689 (9 March 2018) there was no special circumstances based upon misunderstanding of import of the deprivation rules.
Interestingly, In Merrett and Secretary, Department of Social Services (Social services second review) [2018] AATA 156 at [35] there were no special circumstance where the Applicant delayed claiming for the AP because he was looking for work. The Tribunal stated:
35. Mr Merrett contended that the discretion should be exercised because he had acted on a misunderstanding and had always thought he would obtain work again. Mr Merrett told the Tribunal that on his calculation, based on what he receives by way of the aged pension, his not claiming the aged pension when he could have had saved the Government approximately $400,000.
36. The Tribunal sympathises with Mr Merrett. This is not a situation where Mr Merrett has tried to shirk responsibility for his own actions, deliberately lodged his claim late or sought to allocate the blame to Centrelink. It is simply a situation where Mr Merrett feels, understandably, deserving of receiving the bonus because he elected not to claim the aged pension when he could have and instead continued to work and pay taxes for a further 12 years. However, this does not constitute a special circumstance. Further, this is not a situation where Mr Merrett’s claim was lodged only a short time after the 13 week period. His claim was not lodged for over 12 months after that time limitation expired. His reasons for the delay were that he always hoped and thought he would find enough work to meet the work test requirement. However, he did not. Mr Merrett made a mistake based on his best intentions to hopefully find sufficient employment to continue satisfying the work test. The Tribunal finds that this does not constitute something which is unusual, exceptional or out of the ordinary and therefore does not constitute a special circumstance.
37. On the available evidence, the Tribunal finds that no “special circumstances” occur to allow a longer period of time to lodge the claim for the PB.
No doubt on fuller analysis themes may emerge from these decisions, but I am satisfied that the discretion is not a narrow one and should be exercised in accordance with the intention of the enabling legislation.
The intention of the Parliament is well described by the Minister’s second reading Speech in introducing the Bill.
By introducing the pension bonus scheme, this bill fulfils another government election commitment. This scheme, which complements other government measures for the aged, is designed to provide an incentive for older Australians to remain in the work force. The scheme is voluntary and each person can choose to enter the scheme based on their particular circumstances and preferences. By choosing to work longer, people can add to their individual savings for retirement.[28]
[28] Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 (Cth), Second Reading Speech.
As noted earlier, the Applicant is an embodiment of the original purpose of the scheme, having delayed his retirement for more than 14 years. He was registered in the Scheme from 2005. The period of delay in question is approximately 4-5 months. I note that in a number of cases the Tribunal has allowed an extension of years rather than weeks or months.
I am satisfied that the Applicant attended the Centrelink office on 28 February 2019 for the purpose of advancing his AP and BP claims. I note that it was his very first visit to a Centrelink office, and that he was a person of advanced years. He was 79 years old and in his own words, somewhat illiterate. He needed help in completing the process, and if necessary, a follow up call to ensure that it was on track within the 13 week window of opportunity. Centrelink had after all written to him every year since 2008 saying that he was on track to receive his bonus.[29] Given his age and social disadvantage (as illustrated by his poor education and literacy skills) the conspicuous lack of follow up by Centrelink is a significant factor in this case.
[29] T5/29.
I consider that the general approach of the Tribunal in Ryan; Secretary, Department of Social Services and (Social services second review) [2020] AATA 4368 at [49] is relevant here. Deputy President A G Melick AO SC considered it significant that the Applicant in that case was “not provided with information relevant to his situation despite there being opportunities for the Secretary to so do”.
I also note the comment by AAT1:
12. The balance of the evidence is that the primary cause of the delay between the time that the Applicant ceased work and later submitted the claim for pension bonus payment was the lack of attention to the matter by his financial advisor. Had action been taken when instructions were given by the Applicant in late February or early March 2019, there would undoubtedly have been a record of contact prior to 10 October 2019. It is apparent from the evidence given by the Applicant that there was a complete lack of attention to the matter by his financial advisor. In such circumstances it may be in his interests to seek advice.[30]
[30] T2/9.
Although I have some sympathy for the finding by AAT1 that the principal cause of the delay should be laid at the door of his financial advisor rather than Centrelink, I do not think that the possibility of a remedy against his financial planner or accountant should be a reason that the Tribunal should turn him away. He should not be made at his age to carry the risk and burden of litigation.
Moreover, I am reluctant to make any adverse comment in these proceedings about the Applicant’s financial planner or his accounting firm, who did not appear before the Tribunal. It is not clear whether the firm was tasked with progressing his claim for a PB alongside his claim for AP, and what action if any was taken by the planner or his accountant to follow up on his claim within the narrow window of opportunity provided by the Scheme. I simply note that his affairs were not of great complexity. The accounting firm had been doing his accounts for years. He was a long standing client, and heavily reliant on their professional services. The fact that he had operated as a one man company during the registration period was a factor. It made the process slightly more complicated. It should not have been difficult for the firm to provide this information within the 13 week period from the time he stopped working in late January or early February 2019.
There are said to be good reasons for the strict timelines. It is to stop people ‘rorting’ the system by delaying a claim to obtain a tactical advantage, for example, by avoiding a preclusion period, or the gifting rules, or more crudely, by disposing of assessable assets. There is nothing to suggest any such motivation or conduct on the part of the Applicant. Cases like Polchow do not apply here. I am satisfied that the Applicant has acted with integrity throughout the process. There is no evidence that he sought to delay his application for financial gain.
Overarching all these factors is the frailty and age of the Applicant. As a proud man in his eighties, without the advantage of a life partner and wholly reliant upon paid professionals, he was let down. He did not rest on his rights. He sought to find out what was going on but was defeated by the complexity of the system. Many members of the community have elderly parents and will be sympathetic to this point. It is simply unfair to visit this disappointment on him at such an advanced age, after having worked so long and in the spirit of the legislation. Moreover, he said that he was handicapped by illiteracy, and this is the very first factor mentioned in the Guide as a basis for exercising the discretion.
I am therefore satisfied that there are solid grounds other than sympathy alone for extending the period under subsection 21(2), and therefore extend the period to 10 October 2019.
DECISION
The decision under review, being the decision of the AAT1 dated 7 October 2020, is set aside and substituted to extend the lodgement period for the Applicant’s claim under the Pension Bonus Scheme to 10 October 2019.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Emeritus Professor P A Fairall, Senior Member
..................................[sgd]......................................
Associate
Dated: 24 September 2021
Date(s) of hearing: 19 May 2021 & 23 July 2021 Applicant: Self-Represented Solicitors for the Respondent: Dr Stephen Thompson, Sparke Helmore Lawyers
< of Families, Housing, Community Services and Indigenous Affairs, Pension Review, Background Paper (August 2008)
Australia, When to claim (9 April 2021)
< Department of Families, Housing, Community Services and Indigenous Affairs, Pension Review Report (2009), at p 95.
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