Kornweibel and Secretary, Department of Social Services (Social services second review)

Kornweibel and Secretary, Department of Social Services (Social services second review) [2015] AATA 519 (16 July 2015)

Division GENERAL DIVISION

File Number(s)

2014/6450

Re

Janette Kornweibel

APPLICANT

And

Secretary, Department of Social Services

RESPONDENT

DECISION

Tribunal
Mr S. Webb, Member

Date 16 July 2015

Place Perth
The decision under review is set aside and remitted to the Secretary with the direction that the Pension Bonus Scheme claim Ms Kornweibel lodged on 6 March 2014 was not made out of time and is to be assessed in accordance with these reasons.

....(Sgd) S. Webb....................................................................
Mr S. Webb, Member
SOCIAL SECURITY – pension bonus scheme – meaning of non-accruing member – work test - requirement for consecutive bonus periods not met – claim time limits – incorrect advice - discretion to extend time exercised – decision set aside
Legislation
Social Security Act 1991 ss 92B, 92N, 92R, 92P, 92Q, 92T, 92U, 92V, 92Y, 92X
Social Security (Administration) Act 1999 ss 21
Secondary Materials
Social Security (Pension Bonus Scheme – Non-accruing Members) Declaration (No. 1) 1998
Guide to Social Security Law Pt 3.4.7.70
REASONS FOR DECISION
Mr S. Webb, Member
16 July 2015

Janette Kornweibel worked well past pension age. She registered for the Pension Bonus Scheme (PBS) and claimed payment of a Pension Bonus when she claimed the Age Pension on retirement. Her PBS claim was rejected by primary determination and on review. She is unhappy with this result.
Facts
On 9 April 2003, Ms Kornweibel reached pension age.
On 5 June 2003, she registered for the PBS. She was provided with a Centrelink booklet about the PBS.[1]
[1] Exhibit A1.
Ms Kornweibel has professional skills and experience working in the information technology industry.
On 8 January 2004, Centrelink confirmed that Ms Kornweibel was an accruing member of the PBS and that she had gainfully worked more than 960 hours in the period from 9 April 2003 to 21 September 2003.
In 2003, she undertook contract employment with Centrelink and subsequently with the Department of Immigration and Multicultural and Indigenous Affairs in Canberra. This employment came to an end in mid-March 2004.[2]
[2] T15 folio 71.
Ms Kornweibel referred to the PBS booklet and calculated that she required 24 or 25 weeks working at 40 hours per week to meet the full year work test requirements. She did not consult Centrelink about this.
Ms Kornweibel then spent some months travelling overseas. She returned to Perth in mid-August 2004 and spent 10 or 11 months seeking employment.
It is accepted that she telephoned Centrelink on two occasions during this period of unemployment, even though no records of these contacts exist. It is now also accepted that she enquired about her continuing membership of the PBS, and she was twice told that “everything was OK”. Her evidence of these conversations was not challenged or disputed.
She resumed paid employment on 24 July 2005. And she continued in employment until 2014.
On 26 March 2009, Centrelink sent Ms Kornweibel a letter about her membership of the PBS and said –
“This letter is just to let you know that you are still registered as a member of the Pension Bonus Scheme. Your registration commenced from 9 April 2003.
Even if you are not yet ready to claim Age Pension, you might find it helpful to confirm at the end of each working year that you are still “on track” with this Scheme. If you would like to do this, please phone us on 13 1021 to make an appointment. You will need to show us your work record and documents to verify the work you have done. We can then issue you with a letter – an “Evidentiary Certificate” – which confirms that you have met the Scheme’s requirements for the year.
You don’t have to get an Evidentiary Certificate from us each year, but if you do, it will make it much easier to claim the bonus when you eventually claim Age Pension.
When you are ready to claim Age Pension you will need to claim the bonus at the same time. Please remember that you will need to lodge your bonus claim within 13 weeks of ceasing work, or within 13 weeks from the date you no longer meet the work test. (You can find out more about the work test by reading the Pension Bonus Scheme booklet…)
…” [3]
[3] T4 folio 16.
On 3 April 2009 and 11 May 2009, Ms Kornweibel contacted Centrelink about the PBS.
On 29 May 2009, she attended an appointment with Centrelink to discuss the PBS. The Centrelink records of this discussion include –
“cus confirmed employment record for period april 2005 to present time – working over 960 hrs per year during this time and continuing @ 32 hrs wk. cus also satisfied work test april 2003 –april 2004 but then has a 12 mth non accrual period, and then a further 4 yr accrual period so now has accrued 5 accrual yrs in pdb scheme.”[4]
[4] T21 folio 109.
On the same day, Centrelink issued certificates recording Ms Kornweibel’s membership of the PBS annually from 9 April 2005 to 8 April 2009.[5]
[5] T5.
Records of Mr Kornweibel’s subsequent employment are in T6, T7 and T8 – she ceased employment on 22 January 2014.
On 6 March 2014, she lodged a claim for Age Pension and for payment under the PBS.[6]
[6] T12 and T13.
On 14 April 2014, her claim under the PBS was rejected – “We cannot pay you a Pension Bonus because you did not claim within the allowed period.”[7]
[7] T16 folio 72.
This decision was subsequently affirmed by an Authorised Review Officer and by the Social Security Appeals Tribunal.
Issues
The issue for determination is whether Ms Kornweibel can be paid a Pension Bonus under the PBS. For this purpose it is necessary to determine when she was required to lodge a PBS claim and
(a)in respect of the period from 9 April 2004 to 8 April 2005,
(i)whether she was a ‘non-accruing member’ of the PBS; and if, not
(ii)whether she met the ‘work test’; and for that purpose,
(iii)whether there are special circumstances to enliven the discretion to treat her activities while seeking employment as ‘gainful work’; and if not
(b)whether there are grounds to exercise discretion to extend the period in which she may lodge a claim.
Non-accruing member
The provisions governing the operation of the PBS are set out in Part 2.2A of the Social Security Act 1991 (the Act). Under s 92N, a person’s membership of the PBS is accruing at a particular time unless the person is a non-accruing member or over the age of 75 at that time.
The term ‘non-accruing member’ is given meaning by operation of ss 92B, 92P and 92Q of the Act. In effect, a person is only deemed to be a non-accruing member if he or she meets the tests set out in s 92P of the Act, none of which presently apply, or if the person is a kind of member covered by a formal declaration of the Secretary for the purposes of s 92Q of the Act. The applicable declaration in 2004 is the Social Security (Pension Bonus Scheme – Non-accruing Members) Declaration (No. 1) 1998 (the Declaration).
The declaration provides, relevantly –
4.        Kinds of non-accruing members
A member of the pension bonus scheme who is a member of any of the following kinds is a non-accruing member:
(a)       a member who is a participant in the Community Development Employment Program;
(b)       a member who is in goal, within the meaning of subsection 23(5) of the Act;
(c)       a member who is undergoing psychiatric confinement, within the meaning of subsections 23(8) and (9) of the Act, because the member has been charged with committing an offence;
(d)       a member who is not a participant in the workforce, but whose partner:
(i)        is a participant in the workforce; and
(ii)       is not a registered member of the pension bonus scheme or of the   corresponding scheme under Part IIIAB of the Veteran’s Entitlements Act; and
(iii)      intends to become a registered member of the pension bonus scheme or of the corresponding scheme under Part IIIAB of the Veteran’s Entitlements Act;
(e)       a member who is on sick leave for 4 weeks or more;
(f)        a member who is the surviving member of a couple, if the member:
(i)        is undergoing a period of bereavement; and
(ii)       is unable to pass the work test under Subdivision A of Division 5 of Part 2.2A of the Act.
5.        Period for which member is non-accruing member
(1)       A member of the pension bonus scheme to whom paragraph 4 (a), (b), (c) or (d) applies is a non-accruing member throughout the period during which the member is a member of that kind.
…
Ms Kornweibel does not satisfy these tests. She was not a ‘non-accruing member’ in the period from 9 April 2004 to 8 April 2005.
I understand that she may have misconstrued the meaning on ‘non-accruing member’ in reference to the PBS booklet and that her misconstrual was not corrected by Centrelink officers she consulted in or about September 2004, January 2005 and April 2009. But this does not mean that she can be treated as a non-accruing member when she does not meet the applicable legislative tests.
Work test
In order to accrue ‘bonus periods’ for the purposes of the PBS, a person must meet the ‘work test’. A ‘bonus period’ is a full year or a part year period under the terms set out in s 92T of the Act in which the person satisfies the ‘work test’. Bonus periods are required to be consecutive. A part year bonus period must follow a full year period, and it must be the final bonus period.
The ‘work test’ is set out in s 92U of the Act in respect of a full year and in s 92V of the Act in respect of a part year.
For a full year, the person must undertake ‘gainful work’ of 960 hours or more. And for a part year the person must undertake a pro rata number of hours.
The term ‘gainful work’ is given meaning by s 92X within the Act –
Gainful work--basic rule
92X (1) For the purposes of this Part, gainful work is work for financial gain or reward, whether as an employee, a self-employed person or otherwise, where:
(a) the work involves a substantial degree of personal exertion on the part of the person concerned; and
(b) the work is carried on within or outside Australia.
…
In the period from 9 April 2004 to 8 April 2005, Ms Kornweibel does not meet this test. She was not working for financial gain or reward in any direct capacity. From April 2004 to August 2004 she was travelling and not working at all. Thereafter, she actively sought employment, whether on a contract or permanent basis, in the information technology industry in Perth.
I am not persuaded that seeking employment in this manner is consistent with the conception of ‘gainful work’ in ordinary terms – the connection between the activity undertaken (seeking employment) and the requirement for financial gain or reward is prospective, indirect and too remote.
Gainful work discretion
Ms Kornweibel urged me to use discretion and accept that her activities seeking contract employment or any other employment of a full-time basis from August 2004 should be treated as ‘gainful work’.
The discretion to treat an activity as ‘gainful work’ conferred by s 92Y of the Act is to be exercised according to its terms and in a manner that is consistent with the objects and purposes of the legislation.
Secretary's discretion to treat activity as gainful work
92Y (1) If a person satisfies the Secretary that:
(a) the person, or the person's partner, has engaged in a particular activity; and
(b) the activity involves a substantial degree of personal exertion on the part of the person or the person's partner, as the case may be; and
(c) the activity does not consist of voluntary work for a charitable, welfare or community organisation; and
(d) because of special circumstances, the activity should be treated as gainful work;
the Secretary may determine that this Part has effect as if the activity were gainful work .
(2) The determination has effect accordingly.
I accept, and it is not disputed, that Ms Kornweibel engaged in employment-seeking activities as she asserts. I also accept that she undertook these activities with a substantial degree of personal exertion. Plainly enough, her efforts were not voluntary work of the kinds captured by s 92Y(1)(c) of the Act.
The central question is whether her activities should be treated as ‘gainful work’ because of special circumstances.
I am satisfied that no special circumstances exist to enliven the discretion. Ms Kornweibel was like any other unemployed person seeking employment. Her age at the time was a factor that may have impeded her obtaining employment to some extent, but no evidence of express age discrimination has been adduced in support of any such proposition. Rather, the proposition is put in general terms, and generalities of that kind are not consistent with and do not establish the existence of special circumstances in her particular case.
Issues of Ms Kornweibel’s understanding of the PBS requirements as described in the booklet on which she relied in Exhibit A1 do not give rise to a special circumstance of the kind that might be relevant to treat employment seeking activities as ‘gainful work’.
The examples cited in the section 3.4.7.70 of the Guide to Social Security Law do not suggest any different conclusion. I accept that there are some similarities between the example of a person in business preparing tenders and her efforts preparing resumes and job applications. I also accept that there are some similarities between an individual operating as a sole trader or contractor tendering for contracts, and an individual seeking a contract of employment. But there is a significant difference – a sole trader tendering for contracts is operating in the context of a business, whereas a person seeking employment, albeit on a contractual basis, is not.
It follows that Ms Kornweibel does not meet the work test in respect of undertaking the requisite amount of gainful work in the period from 9 April 2004 to 8 April 2005.
I note in passing that even if I accepted that Ms Kornweibels’ employment-seeking activities were to be treated as gainful work for the purposes of the work test, which I do not, it would not greatly assist her case. The present evidence, at the highest, does not establish that she met the minimum full year requirement of 960 hours in the year from 9 April 2004 to 8 April 2005. And in respect of a part of that year, setting aside the time she spent holidaying, even if she was found to meet the pro rata time requirement, the part year would be treated as her final bonus period and the subsequent years in which she worked would not be counted as additional accrued bonus periods for the purposes of the PBS.
Ms Kornweibel satisfied the work test in respect of the period from 9 April 2003 to 8 April 2004, but she did not meet the work test in the subsequent year in which she was not a non-accruing member of the PBS.
Time limit on lodging a claim
The time limit for lodging a claim under the PBS is to be worked out under the provisions set out in Subdivision E of Part 3 the Social Security (Administration) Act 1999 (the Administration Act). This requires working out whether the person’s last bonus period is a full year or a part year, or the person is a member of a certain kind.
As Ms Kornweibel ceased work in Mid-March 2004 and then did not satisfy the work test in the subsequent year to 8 April 2005, her first full year bonus period must be treated as her last bonus period for the purposes of s 92T of the Act and s 22 of the Administration Act. In those circumstances, the time in which she was required to lodge a PBS claim was 13 weeks after 8 April 2004.
She did not lodge a claim within this time.
Discretion to extend the time for lodging a claim
The discretion conferred by s 21 of the Administration Act to extend the time in which a person may lodge a claim must be exercised according to its terms and in a manner that is consistent with the objects and purposes of the Administration Act and the Act.
General rule
21(1) A claim for pension bonus must be made within the lodgment period fixed by this Subdivision.
(2) However, 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.
(3) Subsection (2) does not apply in relation to a claim for which the lodgment period is fixed by subsection 23(1).
Section 23(1) applies only in respect of a PBS member who’s last bonus period is a part year. This does not apply to Ms Kornweibel.
Once again, the central question is whether special circumstances exist to allow Ms Kornweibel a longer period than 13 weeks in which to lodge a PBS claim.
In effect, she wants the period extended to the date she lodged a claim – 6 March 2014. This would necessitate an extension of more than nine years. And it is on this ground that the Secretary robustly resists exercise of the discretion. Furthermore, in the Secretary’s submission, there are no special circumstances that would render it appropriate to extend the period to this extent.
The difficulty with this, as I see it, on the evidence before me, is that Ms Kornweibel was given incomplete, incorrect or ambiguous information by Centrelink officers on at least three occasions. She accepted that incorrect information or her uncorrected understanding of ambiguous information as true and she proceeded to make decisions and plans on that basis. I have scrutinised the contents of the PBS booklet on which she also relied, and there are sufficient ambiguities of drafting that a lay person, acting reasonably and without guile, might construe it in the manner Ms Kornweibel did. Her understanding of the meaning of ‘non-accruing member’ and the time limit on lodging a claim was not correct. The difficulty for Ms Kornweibel came to a point when she encountered difficulty obtaining employment after taking an extended holiday from April to August in 2004. Had she succeeded in obtaining employment and working 960 hours before 8 April 2005, she would have recovered. But this did not occur. In September 2004 and January 2005, she consulted Centrelink about her PBS membership and, on her unchallenged account, she was informed that she would recommence accruals under the Scheme when she found employment. It appears that the information she was given by Centrelink officers reinforced her mistaken understanding of the PBS. Had she been provided with accurate information about non-accruing membership and the work test at that time, she may have been able to recover by seeking the discretionary grant of a short extension of time in which to lodge a PBS claim. But this did not occur and she proceeded on the information she was given by Centrelink, understanding that her PBS accruals would resume when she found employment.
She was given no further information or notices by Centrelink about her membership of the PBS until March 2009. And then, in an appointment with a Centrelink manager, she was again given incorrect information, which I have recorded above. Furthermore, she was given certificates, purportedly to assist her when she came to make a PBS claim on retirement. Once again, she relied on this information. Later, when she made a PBS claim within 13 weeks of retiring, she was surprised that it was rejected.
To my mind, these are special circumstances of a relevant kind that enliven the discretion to extend the time for lodging a claim, albeit by more than nine years.
A citizen acting properly and in good faith should be able to rely on the information provided by an officer of the Commonwealth in performance of his or her duties, albeit that the information is not complete or not accurate or ambiguous. Ms Kornweibel was entitled to rely on the information she was given by Centrelink officers. And that is what she did.
The fact that Ms Kornweibel misconstrued the requirements of the PBS as set out in the booklet she was provided is unfortunate for her. It means that she did not satisfy the work test in the year from 9 April 2004. And from that she cannot recover. But her misconstrual of the PBS requirements does not excuse the incorrect advice she was subsequently given by Centrelink officers, on which she relied. And to my mind it does not change the character of the circumstances that I am satisfied are special for the purposes of s 21 of the Administration Act.

For this reason, in the special circumstances of her case, it is appropriate to extend the time in which she may lodge a PBS claim such that she can obtain the benefit of the bonus period she accrued.
Decision
The decision under review is set aside and remitted to the Secretary with the direction that the Pension Bonus Scheme claim Ms Kornweibel lodged on 6 March 2014 was not made out of time and is to be assessed in accordance with these reasons
I understand that this decision may not satisfy Ms Kornweibel, who claims five bonus periods under the PBS. But, unfortunately for her, she does not meet the legislative tests to obtain that result.

I certify that the preceding 55 (fifty -five) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member
..(Sgd) A Tran......................................................................
Administrative Assistant
Dated 16 July 2015

Date(s) of hearing 8 July 2015

Applicant

Representative for the
Respondent

In person

Mr D Carroll

Solicitors for the Respondent Australian Government Solicitor

[2015] AATA 519

16 July 2015

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Procedural Fairness

Remedies

Standing

Statutory Construction

Division	GENERAL DIVISION
File Number(s)	2014/6450
Re	Janette Kornweibel
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

Tribunal	Mr S. Webb, Member
Date	16 July 2015
Place	Perth