Kleimeyer and Secretary, Department of Employment and Workplace Relations
[2005] AATA 866
•7 September 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 866
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/264
GENERAL ADMINISTRATIVE DIVISION )
Re FREDERICK KLEIMEYER Applicant
And
SECRETARY, DEPARTMENT
OF EMPLOYMENT AND
WORKPLACE RELATIONSRespondent
DECISION
Tribunal Dr EK Christie, Member Date7 September 2005
PlaceBrisbane
Decision The Tribunal affirms the decision under review. This means Mr Kleimeyer's application for review is unsuccessful. The decision raises the possibility of the application of "The Scheme for Compensation for Detriment Caused by Defective Administration" in the factual circumstances. ...................[Sgd]......................
EK Christie
Member
CATCHWORDS
SOCIAL SECURITY - pension bonus scheme - qualification for pension bonus - exercise of discretion to extend time limit for registration - Scheme for Compensation for Detriment Caused by Defective Administration
Social Security Act 1991 ss 92A, 92E, 92H
Scheme for Compensation for Detriment Caused by Defective Administration
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316REASONS FOR DECISION
7 September 2005 Dr EK Christie, Member 1. This is an application by Frederick Kleimeyer for a review of the decision made by the Social Security Appeals Tribunal (the “SSAT”) on 22 April 2005 that Mr Kleimeyer was not entitled to the pension bonus.
2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) [Exhibit 1] and the various exhibits lodged by the parties.
3. The applicant represented himself at the hearing. The respondent was represented by Ms S Dole, a Departmental Advocate.
Issues Before The Tribunal
4. The only issue for the Tribunal to decide was whether Mr Kleimeyer was entitled to a pension bonus.
The Pension Bonus Scheme
5. The Pension Bonus Scheme commenced on 1 July 1998.
6. The Second Reading Speech (26 March 1998) of the Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 contains the following information about the Scheme:
“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.
The scheme will apply to people who qualify for age pensions or equivalent Veterans’ Affairs payments but who delay their retirement and keep working. Eligible customers will receive a tax-free lump sum bonus payment when they stop working, in addition to commencing to receive their ongoing age pension or Veterans’ Affairs equivalent. By offering people an incentive to keep working, this measure will assist in reducing the ratio of retired people to working people and will increase the financial well-being of older Australians. This will be particularly helpful for women and small family business owners.
The scheme will provide for the payment of a lump sum bonus – the amount of which will increase more than proportionally with the number of years that a person delays claiming age pension.
A person must be registered as a member of the scheme in order to qualify for a bonus payment. Generally, registration will occur when a person qualifies for age pension – currently 65 years for men and 61 years for women – or the relevant Department of Veterans’ Affairs payment. During the registration process potential members will be required to provide information relevant to the operation of the scheme. The objective of the registration process is to ensure that people receive advice about the scheme, allowing them to make an informed choice about whether to participate in the scheme. It will also provide them with information on how to comply with the scheme’s requirements.”
The Tribunal’s Decision-Making Powers
7. “The question for determination of the Tribunal is whether the decision [under review] was the correct one [that is, when there is only one decision] or preferable one [that is, when a range of decisions is available] on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, [per Bowen CJ and Deane J, at 68]”. There is only one decision possible in this application for review: whether Mr Kleimeyer is entitled to a lump sum payment of pension bonus.
8. Administrative decision-makers are generally required to address the evidence before them and not confine themselves to evidence before a prior decision-maker whose decision is being reviewed unless the relevant legislation requires a decision to be based upon the circumstances at a particular point of time: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326. In this application for review, the Tribunal has considered all of the evidence and information before the Tribunal at the date of the hearing.
Factual Evidence
9. Mr Kleimeyer is now aged 80. He was born on 7 July 1925. He turned 65 in July 1990.
10. On the basis of the evidence before it, the SSAT made the following findings of fact:
“(i)On 6 April 2004, Mr Kleimeyer contacted Centrelink about applying for age pension.
(ii)Mr Kleimeyer lodged a claim for age pension on 20 April 2004, and was granted pension with effect from 6 April 2004.
(iii)Mr Kleimeyer lodged a claim for the age pension bonus payment on 21 November 2004.
11. In response to these findings of fact by the SSAT, Mr Kleimeyer stated that he agreed that findings (i) and (ii) were correct. However, he qualified finding (iii) by stating that he had written a letter to Centrelink on 24 May 2004 (T8, Folio 47) in which he had raised a query about whether the pension bonus could be paid to him retrospectively to 1998 i.e. some 6 months before lodging his claim for the age pension bonus payment.
§ Evidence of Frederick Kleimeyer
12. Mr Kleimeyer’s evidence was that he continued to work in his business – a Foundry and Machinery shop, after turning 65 years of age in July 1990. He believed that the scope of his company’s operations could be applied to the needs for producing light armaments and munitions for Australia and for the future safety of Australia – given the ongoing involvement of Australian troops in military operations, overseas. The fact that his business also maintained the stability of employment for his staff was another factor which led to his decision to continue working beyond the age of 65.
13. Mr Kleimeyer acknowledged, in completing his Age Pension Claim in May 2004 (T7, 28 May 2004), that in answering Question A2 (Folio 28): “Do you wish to REGISTER for the Pension Bonus Scheme”, that the “No” box had been marked. He said that his Age Pension Claim had been completed in conjunction with his accountant. He said that the reason “No” was marked was because his accountant had advised him that the pension bonus scheme had nothing to do with the Age Pension Claim and “did not really come into it”. He followed his accountant’s instructions and “signed on the dotted line”.
14. Mr Kleimeyer stated that he did receive information about the Pension Bonus Scheme in documents sent to him with his Age Pension Claim form in 2004. He stated that he had raised a query with the Ipswich Centrelink office around this time about the Pension Bonus Scheme, but could not now recall the details of these discussions.
15. In response to the following notation he had written on his Registration for the Pension Bonus Scheme (T27, 20 November 2004, Folio 78) with respect to reasons for registering (Question 23):
“I had not registered as I was only informed by ‘word of mouth’ and thought at the time an application just would not go through,”
Mr Kleimeyer said that he could not remember the exact year that he had been informed by word of mouth from a colleague [a person with a shared interest in growing orchids] – but stated that it was not 1998, but closer to the “last couple of years”.
Statutory Requirements
16. The relevant provisions of the Pension Bonus Scheme are contained in section 92 of the Social Security Act.
17. Section 92A sets out a simplified outline of the Scheme. The first two steps are relevant in this case:
“. A person who qualifies for an age pension but defers claiming that pension may be able to get a single lump-sum pension bonus.
. A person who wants to get a pension bonus must register as a member of the pension bonus scheme…” [Emphasis added]
18. Section 92C sets out the requirements for qualifying for a pension bonus. Section 92C(b) is relevant in this case:
“(b)the person has not received an age pension at any time before making a claim for the pension bonus; and
…”
19. Section 92E sets out the requirements that the form application for registration for the Pension Bonus Scheme should take. That is, it “must be in writing and in accordance with a form approved by the Secretary”.
20. Section 92H(3) provides for an extension in the time period within which a person must lodge an application for registration for the pension bonus. However, Section 92H(4) restricts the circumstances in which such discretion can be exercised:
“The Secretary must not make a decision to extend the period within which a person must lodge an application unless, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period:
….
(b) both:
(i)the person would have been an accruing member for some or all of the pre-application period [in Mr Kleimeyer’s case the pre-application period commenced on 1 July 1998]; and
(ii)the person would have passed the work test for each test period that is applicable to the person.”
21. Chapter 3.4.7.20 of the Guide to the Social Security Law provides policy guidance in the exercise of this discretion. The Guide notes that the delegate must consider the individual circumstances of the customer when determining whether to exercise the discretion in section 92H(4). Examples of circumstances where the discretion may be exercised include where the customer:
o Was overseas;
o Lives in a remote area; and
o Did not see advertising of the scheme and the delegate considers the customer’s claims to be reasonable based on their local knowledge.
Submissions And Contentions Of The Parties
22. Ms Dole, for the respondent, submitted that Mr Kleimeyer did not qualify for a pension bonus payment because:
(a)he received payments of age pension before he lodged a claim for the pension bonus on 21 November 2004; and
(b)the application of the Social Security Act (section 92C) precluded Mr Kleimeyer from receiving a pension bonus payment in these circumstances.
23. Ms Dole further submitted that Mr Kleimeyer did not apply to register as a member of the Pension Bonus Scheme until 21 November 2004 because:
(a)this was the first time an application had been made in writing and in the correct form; and
(b)Mr Kleimeyer’s letters of 24 May 2004 did not constitute an application for registration as it was not in the correct form prescribed by statute.
24. Finally, Ms Dole contended that the period for registration for the pension bonus in Mr Kleimeyer’s case could not be extended, because:
(a)Mr Kleimeyer knew of the Pension Bonus Scheme and chose to do nothing about it; and
(b)that he did not fall within any of the Policy Guidelines for which discretion could be exercised.
25. Mr Kleimeyer submitted that he believed he was entitled to the pension bonus because he had rigorously followed the purpose of the scheme in accordance with the reasons the Commonwealth Government had introduced it. But now, because of a harsh interpretation of the legislation, he was penalised for his past industriousness.
Consideration Of The Issues
26. The first issue for the Tribunal to decide is the credibility of Mr Kleimeyer as a witness. I find him to be a witness of truth who freely answered all questions asked of him with regard only to the answers being correct – regardless of the effects on his application for review.
27. A strict and literal interpretation of the factual situation of Mr Kleimeyer in relation to the relevant provisions of the Social Security Act can only lead to the following conclusions:
(a)That Mr Kleimeyer received age pension entitlements before making a claim for the pension bonus.
(b)According to the SSAT and the internal decisions made by Centrelink Authorised Review Officers, Mr Kleimeyer lodged his Age Pension Claim on 20 April 2004. However, during the hearing, Ms Dole (for the respondent) conceded that there is no record of a claim being lodged on this date! The first file record of the Age Pension Claim being filed is 20 May 2004 – a date 6 months prior to registering for the pension bonus.
(c)That Mr Kleimeyer did not register as a member of the Pension Bonus Scheme, in writing and in the proper form, until 21 November 2004.
(d)That there is no statutory basis for extending the time period for registration of the pension bonus in Mr Kleimeyer’s case as he acknowledged that he was provided with documentation on the pension bonus at the time be received his age pension application form. In this regard two factors counter-balanced each other to produce the situation Mr Kleimeyer has now found himself:
§ he relied on his accountant’s advice when he completed his Age Pension Claim and consequently had incorrectly answered the question dealing with registration for the pension bonus; and
§ he had raised a query with Centrelink’s Ipswich office in relation to the Pension Bonus Scheme around this time – but cannot recall the details of this discussion.
28. Given the above findings, the Tribunal has no option other than to conclude that Mr Kleimeyer is not entitled to receive a single lump sum pension bonus under the statutory provisions of the Social Security Act.
29. Whilst this decision may seem harsh, it would probably be more appropriate to describe the outcome as unfortunate. There is no discretion provided in the legislation to deal with the factual circumstances of the applicant in any other way.
30. At the end of the hearing, the respondent raised the possibility of whether the Commonwealth Policy: “The Scheme for Compensation for Detriment Caused by Defective Administration” had any application. Clearly, this is an issue for Mr Kleimeyer to consider whether such a claim may be warranted and might be pursued.
31. Under the “Scheme for Compensation for Detriment Caused by Defective Administration”, each Minister, or any official authorised by the Minister for the purpose, has the administrative discretion to determine whether gratuitous compensatory payments should be made to claimants for the effects of defective administration by Commonwealth agencies. Payments under this scheme fall outside the scope of statutory entitlements, Government approved programs and payments by the Commonwealth under legal liabilities.
32. This scheme is therefore a method of Commonwealth agencies providing compensation to persons who have been adversely affected by the maladministration of such agencies, but who have no legal means to seek redress, such as a legal claim against the Commonwealth.
33. Criteria under which claims under the Scheme are considered, and which may be applicable to Mr Kleimeyer’s circumstances, include:
“. a specific and unreasonable lapse in complying with existing administrative procedures that normally would have applied to the claimant’s circumstances;
.giving advice to (or for)a claimant that was, in all the circumstances, incorrect or ambiguous; or
.an unreasonable failure to give to (or for) a claimant, the proper advice that was within the official’s power and knowledge to give (or was reasonably capable of being obtained by the official to give).”
34. Under the Scheme, detriment is the amount of quantifiable financial loss that a claimant can demonstrate that he/she has suffered despite having taken reasonable steps to minimise or contain the loss or, if this is impracticable, can reasonably be assumed to have suffered; and non-financial damage, such as pain and suffering, inconvenience or other “qualitative” elements of that nature.
35. The Tribunal considers that the following facts may be relevant considerations in relation to the three criteria specified in “The Scheme for Compensation for Detriment Caused by Defective Administration” (see paragraph 33):
(a)An acknowledgement by the advocate for the respondent that there was no record of an Age Pension Claim being lodged on 20 April 2004 as specified in the decision of the SSAT – who, presumably, would have acted on information contained in internal Departmental reviews. Such an omission can only create uncertainty with respect to ensuring the correct administrative decision as having been made.
(b)The first file record of an Age Pension Claim being lodged by Mr Kleimeyer – as can be adduced from Exhibit 1 (T7, Folio 46) was signed by Mr Kleimeyer on 20 May 2004 and filed with Centrelink on 28 May 2004. However, 4 days before this claim was filed with Centrelink (24 May 2004), Mr Kleimeyer raised the following query with Centrelink (T8, Folio 47):
“For the Reasons given below I formerly [sic] make Retrospective Application for the [Pension] Bonus which is apparently provided by the Government.”
(c)Such a query could be construed as indicative of a step taken by Mr Kleimeyer to register for the pension bonus.
(d)Some 2 months later, a response to this query was made on 30 July 2004 and stated, in part:
“This letter is to inform you that we have read your letter about the Pension Bonus Scheme. You have requested that you be paid the Bonus from previous years.
To be eligible [sic] for the Pension Bonus, you must apply for registration of the Bonus Scheme prior to claiming Age Pension. You have never applied for registration.
For this reason you are unable to be paid any Pension Bonus.
I have enclosed the Pesion [sic] Bonus booklet.
This is an information notice given under the social security law.” [T15, Folio 58)
This notice verifies that the information Mr Kleimeyer sought was available at the time his query was made on 24 May 2004 - but not provided until 30 July 2004.
(e)The delay in responding to a written query about eligibility for pension bonus, made by Mr Kleimeyer 4 days before the Age Pension Claim was filed, may be a relevant consideration. That is, in terms of whether there may have been an “unreasonable failure to give [Mr Kleimeyer] the proper advice that was within the official’s power and knowledge to give (or was reasonably capable of being obtained by the official to give)”. Alternatively, whether there has been an “unreasonable lapse in complying with administrative procedures that normally would have applied to [Mr Kleimeyer’s] circumstances”.
(f)The SSAT, and the earlier tiers of internal review, have appeared to proceed on an inference that Mr Kleimeyer was aware of the Pension Bonus Scheme when it was introduced in 1998. However, there is some ambiguity in how this date has been adduced by earlier decision-makers. Mr Kleimeyer’s oral evidence to the Tribunal was that he only became aware of the Pension Bonus Scheme in the “last couple of years” and could provide a “time peg” which could substantiate this time period (see paragraph 15).
36. The Tribunal makes the further observation that it has no power, whatsoever, to give effect to this Scheme. Rather, the Tribunal emphasises that it cannot order that the Scheme for Compensation for Detriment Caused by Defective Administration be made applicable to Mr Kleimeyer’s factual circumstances. The procedure is for Mr Kleimeyer to make a claim to the respondent and to request that his claim be assessed under the specified eligibility criteria. The final authority to give effect to the Scheme does not rest with the Tribunal, but the Minister or their appointee.
37. For all of the above reasons, the Tribunal affirms the decision under review.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Jeff Mills
Legal Research OfficerDate/s of Hearing 18 August 2005
Date of Decision 7 September 2005
The Applicant appeared in person
For the Respondent Ms S Dole, Departmental Advocate
3
0