KUNNEL and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2010] AATA 697
•27 July 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 697
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/5436
GENERAL ADMINISTRATIVE DIVISION ) Re NEVILLE THOMAS KUNNEL Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms Regina Perton, Member Date27 July 2010
PlaceMelbourne
Decision For reasons given orally at the hearing, the Tribunal affirms the decision under review.
(sgd) Regina Perton
Member
SOCIAL SECURITY – age pension – pension bonus scheme – registration for scheme – application for payment of bonus – gainful work – Secretary’s discretion to accept late application – policy guidelines – decision affirmed.
Social Security Act 1991 ss 23(5A), 43(1), 92A, 92C, 92H, 92J, 92X, 93
Social Security (Administration) Act 1999 ss 21, 22, 23
Drake v Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634
Re Muir and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 644
REASONS FOR DECISION
14 September 2010
Ms Regina Perton, Member
1. The Tribunal provided oral reasons for its decision at a hearing of this application on 27 July 2010. On 25 August 2010, Neville Thomas Kunnel requested written reasons for the decision. They are set out below.
2. Mr Thomas Kunnel qualified for age pension on 11 May 2004. On 20 July 2004, Mr Thomas Kunnel registered for the pension bonus scheme. That scheme provided a bonus to be paid to a person who continued to work after reaching the age at which he was eligible to be paid a pension. There are complex rules about the payment including strict time limits on registration for the scheme and applying for payment once the eligible person had stopped working.
3. Mr Thomas Kunnel worked for the Victorian Department of Human Services (DHS) during the period from 11 May 2004 until 11 January 2007. After that, he traded shares. On 15 May 2009, shortly after his 70th birthday, Mr Thomas Kunnel lodged his claim for the pension bonus.
4. Centrelink, which administers the pension bonus scheme for the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (the Secretary), advised Mr Thomas Kunnel on 1 June 2009 that he was not eligible for the pension bonus. The pension bonus was refused because he did not lodge his claim within the allowed period. Centrelink advised Mr Thomas Kunnel that he should have applied within 13 weeks of stopping work, namely within 13 weeks of resigning from DHS. Mr Thomas Kunnel believed that he was still in employment while trading shares, having relied on advice from Centrelink that share broking was an allowable occupation for the purposes of the pension bonus scheme. However, Centrelink’s decision was that trading shares where you are your only client, is not a permissible activity for pension bonus purposes.
5. The decision that Mr Thomas Kunnel was not entitled to the pension bonus because he applied too late was affirmed by an authorised review officer of Centrelink on 23 July 2009 and by the Social Security Appeals Tribunal on 13 October 2009. Mr Thomas Kunnel lodged an application for review with this Tribunal on 13 November 2009.
6. The issue in this matter is whether Mr Thomas Kunnel’s late application for a pension bonus payment should be accepted.
Relevant Legislation
7. Section 43(1) of the Social Security Act 1991 (the Act) states that a person qualifies for age pension when the person reaches pension age. Subsection 23(5A) states that a man reaches pension age when he turns 65.
8. Section 92A of the Act states that a person who qualifies for age pension but defers claiming that pension may be able to get a lump sum pension bonus (s 92J(1)). There is a requirement that a person register as a member of the pension bonus scheme within a 26 week period, namely 13 weeks before reaching pension age and 13 weeks after (s 92H).
9. Section 92C of the Act sets out the criteria for payment of pension bonus.
A person is qualified for a pension bonus if:
(a) both:
(i)the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and
(ii)that age pension is received otherwise than because of a scheduled international social security agreement (see section 5 of the Social Security (International Agreements) Act 1999 ); and
(b)the person has not received an age pension at any time before making a claim for the pension bonus; and
(c) the person is registered as a member of the pension bonus scheme; and
…
10. Following registration, a person must be engaged in gainful work during the accrual period. Gainful work is defined in s 92X of the Act as follows:
(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.
11. However, s 93 of the Act sets limits on certain types of work being considered as gainful work which would qualify a person for pension bonus:
93 Management of family financial investments does not count as gainful work
(1)Unless the Secretary otherwise determines, work undertaken by a person is taken not to be gainful work for the purposes of this Part to the extent to which the work consists of the management or administration of one or more financial investments in which any of the following has a legal or equitable interest:
(a) a member of the person’s family group (see subsection (2));
…
(2) In this section:
…
family group, in relation to a person, means the group consisting of the person and the family members of the person. If the person has no family members, the person is taken to be a family group in his or her own right.
…
12. Sections 21, 22 and 23 of the Social Security (Administration) Act 1999 (the Administration Act) set out the manner and timing of making claims for the pension bonus. In effect, the application must be made within 13 weeks of ceasing the type of employment allowed for under the pension bonus scheme. However, s 21(2) of the Administration Act allows for a longer period than 13 weeks for lodgement of a claim in special circumstances.
13. Centrelink has issued guidelines in relation to the meaning of special circumstances when it comes to acceptance of late pension bonus applications. The Tribunal is not bound by the guidelines but would generally take them into account of them where there is no inconsistency with the legislation (Drake v Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634).
14. Section 3.4.7.80 of the Guide to Social Security Law (the Guide) is as follows:
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.
The reasons for acceptance of a late claim are different to those that apply to late PBS registrations.
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).
DOES MR THOMAS KUNNEL QUALIFY FOR PENSION BONUS?
15. Mr Thomas Kunnel applied for pension bonus on 20 July 2004 which was within 13 weeks of his 65th birthday. He therefore met the registration requirements. He applied for age pension and pension bonus on 15 May 2009.
16. Mr Thomas Kunnel worked full time for DHS for more than a decade. He ceased working for DHS on 11 January 2007. His work for DHS met the requirements of gainful work for pension bonus purposes.
17. Mr Thomas Kunnel gave evidence that he sought Centrelink’s advice about whether work as a self-employed share broker would meet the employment requirements for pension bonus. He told the Tribunal that he had been told such work would meet requirements and that he should keep a diary to show that he had worked for the necessary 960 hours per annum. He kept a diary showing he spent a significant part of each week day was spent on share related activities. He said that he had undertaken research including reading relevant material on the internet.
18. Mr Thomas Kunnel conceded that he could not recall if he had mentioned to the Centrelink officer from whom he sought advice, that he would be undertaking share activities only on his own behalf using solely his own funds. He believed the advice was obtained when he attended Centrelink’s Dandenong office. He could not recall its timing but believed it would have been in the first half of 2007. He could not remember if he had been asked his name or date of birth by the Centrelink officer. He pointed out that the primary purpose of his visit had been to obtain information about share trading as relevant employment. It was his view that Centrelink should have alerted him when he sought advice about the exclusionary provisions of s 93 of the Act. He pointed out that he would obviously otherwise have applied earlier.
19. Mr Thomas Kunnel said that he had wanted to keep working for as long as he could rather than claiming age pension. Centrelink’s records show that he contacted the agency on 31 October 2007 asking if the agency could help him find work. Mr Thomas Kunnel said that the share trading was not generating as much income as he had hoped it would which led to him contacting Centrelink for assistance. He told the Tribunal he was referred to a local job agency but there was nothing available. He believed his age was a significant reason for his lack of success in finding alternative employment.
20. Unfortunately, Mr Thomas Kunnel’s share trading coincided with a financial downturn which has resulted in significant losses and his having to raise the mortgage on his home.
21. Mr de Uray, Centrelink’s advocate, did not dispute that Mr Thomas Kunnel had been given general advice that working as a share broker could be considered gainful work. However, Mr de Uray disputed that Mr Thomas Kunnel had been given specific advice that trading shares for himself only would meet the definition of gainful work.
22. There is no documentary evidence in Centrelink’s records of Mr Thomas Kunnel seeking advice about share broking as appropriate employment or more specifically, share trading with himself as the only client. The Tribunal is satisfied that he sought Centrelink’s advice about share broking in general terms but is not satisfied that he sought specific information about his own circumstances, namely doing so with himself as the sole client.
23. Mr Thomas Kunnel has always been open in agreeing that his share trading was only on his own behalf. He lives alone and manages only his own finances. The Tribunal finds that s 93 of the Act applies to Mr Thomas Kunnel. He managed financial investments in which he had an interest and meets the definition of family group which sets out that if there are no family members, the single person is considered to be a family group. Hence, Mr Thomas Kunnel’s share trading does not count as gainful work for the pension bonus scheme.
24. Mr Thomas Kunnel’s work for DHS met requirements for pertinent employment for the pension bonus scheme. He finished his DHS employment on 11 January 2007. He applied for the pension bonus on 15 May 2009.
25. Mr de Uray submitted that the phrase special circumstances is given a broad meaning in relation to some aspects of social security legislation but limitations are suggested in relation to a late application for pension bonus. He cited Re Muir and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 644 as being an appropriate decision for the Tribunal to follow. In that matter, the applicant missed out on pension bonus because he was managing family financial investments and hence was found not to be engaging in gainful work. Mr Muir, like Mr Thomas Kunnel, had registered for pension bonus as required several years before seeking to obtain the amount to which he believed he was entitled.
26. The Tribunal is satisfied that it is appropriate to take into account section 3.4.7.80 of the Guide. Mr Thomas Kunnel’s conceded that his circumstances do not coincide with any of the examples in the Guide (see paragraph 14). The Tribunal is satisfied that he undertook share trading following his resignation from DHS mainly because he wished to remain self-reliant. His predicament has arisen because he was not aware of specific provisions of the pension bonus scheme. The Tribunal believes the comments made in Re Muir at paragraph 20 are appropriate in this matter:
A consistent line of authority is important, and the Tribunal will usually apply the Guide unless there are cogent reasons for not doing so…. Mr Muir’s reasons for not lodging an application within 13 weeks of June 2003 are both understandable and commendable. He did not lodge his application for pension bonus then because he intended to remain financially independent through his own endeavours, and at that time he had no intention of claiming any type of social security benefit. As Mr Muir was still earning money sufficient to support himself, he did not turn his mind to applying for either the pension or pension bonus at that time. Whilst I consider Mr Muir's circumstances most unfortunate, I do not consider that a lack of understanding of the law is a sufficient reason to warrant the exercise of the discretion.
27. Mr Thomas Kunnel applied for pension bonus more than two years after terminating his eligible employment. The Tribunal finds that he fails to qualify because he applied more than 13 weeks after ceasing gainful work and that his circumstances do not amount to special circumstances.
DECISION
28. The Tribunal affirms the decision under review.
I certify that the twenty eight [28] preceding paragraphs are a true copy of the reasons for the decision of:
Ms Regina Perton, Member
(sgd) Mya Anumarlapudi
Clerk
Date of hearing: 27 July 2010
Date of decision: 27 July 2010
Advocate for applicant: Self-representedAdvocate for respondent: Mr T. de Uray, Centrelink Legal Services Branch
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