Lada and Secretary, Department of Families, Community Services and Indigenous Affairs
[2007] AATA 1496
•2 July 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1496
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2006/72
GENERAL ADMINISTRATIVE DIVISION ) Re FRANK LADA Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr S. Webb, Member Date2 July 2007
PlaceCanberra
Decision The decision under review is set aside and in place thereof the Tribunal decides that Mr Lada is not to be treated as a member of a couple. The matter is remitted to the Respondent to calculate the rate and amount of Age Pension that is payable to Mr Lada.
..............signed................................
Mr S. Webb, Member
CATCHWORDS
SOCIAL SECURITY - age pension - rate - married couple - ordinary income - pre-marital agreement - separate financial arrangements - meaning of ‘special reasons’ – effect of wife's health condition and annual medical treatment in Austria on applicant – no pooling of resources – decision set aside
Social Security Act 1991 ss 4, 8, 24, 85, 1064, 1072
Social Security (International Agreements) Act 1999 Schedule 10
Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651
Re Secretary, Department of Social Security and Tsimpidaros [1995] AATA 10292
Cocks v Centrelink (2000) 32 AAR 360
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531
Beadle v Director General of Social Security (1985) 60 ALR 225
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Boscolo v Secretary, Department of Social Security (1999) 29 AAR 120
Secretary, Department of Social Security v Le-Huray (1996) 138 ALR 533
Re Croy and Secretary, Department of Social Security (1996) AATA 11083
REASONS FOR DECISION
2 July 2007 Mr S. Webb, Member 1. Frank Lada is in receipt of an Age Pension. He is married to an Austrian woman, Mrs Anna Gusner. However, Mr Lada and Mrs Gusner keep their finances separate. Mrs Gusner uses her Austrian superannuation pension income to cover the cost of obtaining medical treatment in Austria. Centrelink determined to reduce Mr Lada’s pension as a result of her income. Mr Lada is challenging the decision, as affirmed by the Social Security Appeals Tribunal, to reduce his Age Pension.
2. There are three issues for determination.
(a)Is Mr Lada a member of a couple?
(b)If so, in the particular circumstances, are there special reasons why he should not be treated as a member of a couple?
(c)If so, is it appropriate to so determine, for the purposes of the Social Security Act 1991 (‘The Act’)?
3. The relevant facts are not in dispute and, on the documentary and oral evidence, may be shortly stated. Mr Lada (date of birth 23 July 1940) migrated to Australia on 12 October 1966. He was injured at work in 1986 but continued in employment until 1999, when he was made redundant. In 1996 he met an Austrian woman, Anna Gusner, whom he married on 29 August 1999. Before marrying, Mr Lada and Mrs Gusner agreed to keep their finances separate so that she could continue to obtain medical treatment in Austria. Thereafter Mrs Gusner obtained an Australian permanent residence visa and lived with Mr Lada in Canberra for a substantial part of each year. However, each year she returns to Austria for a number of months in order to obtain medical treatment, and maintains a leased apartment in Austria for that purpose. Mr Lada’s evidence concerning the frequency and duration of Mrs Gusner’s annual visits to Austria to obtain medical treatment was not seriously challenged, and I accept it as written in his submission dated 29 May 2007. Since marrying Mr Lada in 1999, Mrs Gusner has spent the following periods in Austria:
10 October 1999 to 6 January 2000
6 November 2000 to 10 January 2001
3 December 2001 to 4 March 2002
3 December 2002 to 17 March 2003
28 July 2003 to 26 November 2003
23 June 2004 to 11 February 2005
26 April 2006 to 16 February 2007
4. The medical treatment Mrs Gusner obtains in Austria includes thyroid monitoring and suppressant medication in consequence of a papilliary thyroid carcinoma which was successfully treated in 1981. She also suffers from diverticulitis (with a perforated diverticulum that required surgery in 2003), early osteoporosis and osteoarthritis of the right hip[1]. Mrs Gusner has private medical insurance in Austria and receives an Austrian superannuation pension[2]. In July 2005 her pension was approximately €23,919 gross per annum.
[1] T23 refers.
[2] T4 folio 14 and T19 folio 61 refer.
5. On 21 July 2005, in anticipation of his 65th birthday, Mr Lada lodged a claim for Age Pension[3]. On 9 August 2005, Centrelink determined to grant Mr Lada Age Pension for the amount of $95.65 per fortnight from 23 July 2005[4]. When calculating the rate of his pension, Centrelink took into account Mrs Gusner’s Austrian pension and included combined income of $44,986.44[5]. Mr Lada challenged the determination. However, it has been affirmed by successive decision makers[6].
[3] T18.
[4] T7 folio 17; recent rates of pension paid are at Exhibit R2.
[5] T7 folio 17; Mr Lada’s income and assets at that time are set out at T8 folio 19 and T20 folio 65; Mrs Gusner’s monthly Austrian pension amount in Euros is at T19; and her annualised Austrian pension in Australian dollar amounts are set out at T14 folio 30.
[6] T11, T14, and T2.
member of a couple
6. The first matter to deal with is whether Mr Lada is a member of a couple. In Mr Lada’s submission, he and Mrs Gusner live separate lives to the extent that they are not members of a couple for the purposes of the Act.
7. As will appear, I do not agree.
8. The term ‘member of a couple’ is given meaning at section 4 of the Act. Essentially and relevantly, a person is a member of a couple if, in the case of a man such as Mr Lada, he is legally married and is not living separately and apart from his wife on a permanent or indefinite basis (subsection 4(2)(a)). All relevant factors must be considered when determining whether a marriage-like relationship exists between two people (subsection 4(3)).
9. It is not disputed that Mr Lada and Mrs Gusner are legally married. Having regard to all the circumstances of their relationship, and the factors specified at subsection 4(3) of the Act, I am satisfied that they do not live separately and apart on a permanent or indefinite basis. When Mrs Gusner is apart from Mr Lada in Austria, I am reasonably satisfied that she and Mr Lada anticipate her return and their resumption of married life as a couple in the home they have made together in Canberra. It is apparently true that Mr Lada, alone, owns and maintains that home, and pays related expenses. In the context of the separate financial arrangements he and Mrs Gusner agreed prior to their marriage, that is perhaps not surprising. There is no pooling of financial resources. On Mr Lada’s evidence, Mrs Gusner does not contribute to the day-to-day household expenses, relying instead on Mr Lada to pay these costs from his pension payments and from his dwindling savings.
10. Mr Lada gave evidence that “[Mrs Gusner] makes a house a home to me” (oral evidence). On his evidence, he and Mrs Gusner share domestic chores, but when she is in Austria he carries out these tasks alone. Mr Lada asserted that he and Mrs Gusner have separate friends and do not socialise much together – Mrs Gusner has German-speaking friends, but Mr Lada does not speak German; he has English-speaking friends, but Mrs Gusner does not speak much English. Mrs Gusner has family and friends in Austria, but Mr Lada has visited Austria only once and has no contact with her family and friends. He has a brother in Queensland, but there is little contact between them and Mrs Gusner has not met his brother. It appears from Mr Lada’s written submissions that he has a son by a previous marriage (who was not mentioned in evidence during the hearing), but it is unclear whether he and Mrs Gusner maintain any form of relationship with his son.
11. By Mr Lada’s own account, he has an intimate relationship with Mrs Gusner, and they provide each other with emotional support and companionship. As it appears to me they are committed to the indefinite continuance of their marital relationship as a couple and hold themselves out to each other and to others as a married couple. The evidence, scant as it is, reveals that family and friends understand them to be married and living as a couple.
12. On balance, the periods of time Mr Lada and Mrs Gusner spend apart, the separate financial arrangements they have made, and their separate social activities, point away from a marriage-like relationship. On the other hand, the domestic duties they share in the home they have made together, their intimacy, emotional support and companionship they provide each other, and their evident commitment to their ongoing relationship together, point most strongly to the existence of a relationship that is marriage-like. In weighing these factors, I am reasonably satisfied that Mr Lada and Mrs Gusner are members of a couple. I so find.
special reasons
13. The Secretary asserts that there are no special reasons why Mr Lada should be treated other than as a member of a couple for the purposes of the Act. The Secretary says that Mr Lada and Mrs Gusner chose to keep their financial affairs separate prior to their marriage so that Mrs Gusner could continue to expend her income to obtain treatment of her choice in Austria. In the Secretary’s submission, it is reasonable to expect Mr Lada to benefit from the pooling of resources in his marriage with Mrs Gusner, and the only reason he presently does not is a matter of choice. The Secretary asserts that it is not necessary for Mrs Gusner to obtain medical treatment in Austria under private health insurance, when treatment of an equivalent standard may be obtained in Canberra with the costs covered by Medicare. The Secretary asserts that it is unreasonable to expect the taxpayer to bear the cost of choices Mr Lada and his wife have made for their own purposes. Furthermore, the Secretary asserts that in the circumstances, it is neither reasonable nor appropriate to exercise the discretion not to treat Mr Lada as a member of a couple.
14. As will appear, I do not agree.
15. The rate of Mr Lada’s Age Pension is to be worked out using the applicable Pension Rate Calculator[7]. The rate of pension for a person who is a ‘member of a couple’ is lower than the single rate of pension[8]. Ordinarily it is expected that members of a couple will pool their resources or will provide each other with support, one to the other, if it is necessary and reasonable to do so. O’Loughlin J considered these matters in Cocks vCentrelink (2000)[9]:
“The marriage of a man and woman is taken to mean, in ordinary circumstances, that they will pool their resources, share their expenses, and thereby live more cheaply than if they were two single persons who were living separate and apart. In the case of income earners they would pool their respective incomes. In the case of pensioners they would pool their pensions...”[10]
[7] Sections 55 and 1064
[8] Section 1064-B1.
[9] 32 AAR 360.
[10] Ibid, at [363].
16. Thus, in ordinary circumstances a member of a couple could be expected to benefit from the pooling of resources and the sharing of expenses with his or her partner, and thereby live more cheaply than a single person. However, pooling of resources between members of a couple will not always be possible or productive of savings, and strict application of the rate calculator for members of a couple may, in some special cases, produce an outcome that is unreasonably harsh. Perhaps, in recognition of this, and of the great diversity of circumstances that may pertain in any given case concerning members of a couple, the Act confers a limited discretion on the Secretary, and in those shoes, on this Tribunal, to treat a person who is a legally married member of a couple as not a member of a couple, if there is a special reason to do so (s.24). Examples of circumstances in which ‘special reasons’ may exist are set out in section 2.2.5.50 of the Guide to Social Security Law[11].
[11] Exhibit R1; Department of Families, Community Services and Indigenous Affairs, Guide to Social Security Law (2006) at 19 January 2007.
17. The discretion conferred by s.24 to exclude the assets and income of one member of a couple when determining the rate of pension that is payable to the other is preconditioned by the existence of a ‘special reason’. The term ‘special reason’ is instrumental: “a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened” (Boscolo v Secretary, Department of Social Security (1999)[12]). The term is not defined or given particular meaning under the Act, nor is application of the term “confined by precise limits or rules” (Beadle v Director General of Social Security (1985)[13]). Meaning derives substantially from the context of particular circumstances, whereby relative to that which is commonplace or unexceptional, the particular circumstance or reason is rendered apart from the ordinary course as ‘special’. The importance of maintaining flexibility when determining what constitutes ‘special reasons’ is well established in the settled cases. Exercise of the discretion is not confined to an extremely uncommon or exceptional case (Angelakos v Secretary, Department of Employment and Workplace Relations [2007][14]).
[12] 90 FCR 531, at [535].
[13] 60 ALR 225, at [228]
[14] FCA 25, at [33].
18. The purposes of the Act must be kept in mind. The purpose of the Age Pension is to provide income support to those people above pension age (who are otherwise qualified) and thereby to enable them to live without great hardship. The general policy is that when calculating the rate of Age Pension for a member of a couple, the combined ordinary income and assets of both people will be taken into account. Merely failing to satisfy the expectation underlying the rate calculator (that there will be some pooling of resources between members of a couple) is not a ‘special reason’ to enliven the discretion conferred by s.24. The reasons for the failure may be rendered ‘special’ by the particular circumstances, for example, if the failure results from something out of the ordinary that is beyond the control of those concerned. An inability to pool resources, at least, is required. Without fettering the discretion, it seems to me that it may be appropriately exercised if it is not reasonable for an applicant member of a couple to seek the support of the other, or if it is not reasonable for that other member to provide such support.
19. I note that it is Mr Lada who is the pension claimant seeking the benefit of the discretion conferred by s.24 of the Act. It is therefore to his position that attention must be directed (Boscolo v Secretary, Department of Social Security (1999)[15]).
[15] 29 AAR 120, at [125].
20. Mr Lada’s unchallenged evidence is that he and Mrs Gusner do not jointly own any assets, and have no joint liabilities. There is no pooling of resources. He and Mrs Gusner do not have joint bank accounts or credit facilities (including credit cards). They keep all of their finances completely separate. Mrs Gusner does not contribute to Mr Lada’s day-to-day living expenses whether or not she is in Australia. Mr Lada’s evidence is that his day-to-day living costs are substantially the same, whether or not Mrs Gusner is absent, and include electricity, gas, telephone, house insurance, car insurance, land tax and food; all of which he pays from his pension and savings. I accept this evidence and so find.
21. Mr Lada’s income and assets are not extensive. His main source of income is the Age Pension. He derives some minor income from interest on his savings, presently approximately $50,000. In July 2005 his assets included investments and savings totalling approximately $60,000 and 1205 shares in the Insurance Australia Group (as a result of the demutualisation of the NRMA)[16]. He owns the house in which he lives with Mrs Gusner (when she is in Australia), and he owns a car (a 2000 model Toyota Corolla). Mr Lada gave evidence that he suffered a back injury in his previous employment as a mechanic in 1986, and is unable to work as a result. His evidence is that he suffers ongoing pain as a result of his back condition. He also suffers from asthma and hearing loss. Mr Lada has a brother in Queensland and a son by a previous marriage, but no other immediate family in Australia. There is no evidence that Mr Lada has a close relationship with either family member, nor that he supports or obtains support from them.
[16] T4 folio 14.
22. In July 2005 Mrs Gusner had a pension income of approximately €23,919 gross per annum[17]. After the hearing, Mr Lada filed written submissions (dated 29 May 2007) in which he set out details of Mrs Gusner’s medical treatment and related expenses in Austria. By Mr Lada’s account she expends approximately €19,000 per annum obtaining medical treatment in Austria, and maintaining a leased apartment in Austria for that purpose (which remains unoccupied when she is not in attendance), as follows:
Private health insurance €2,600 (including monthly deduction[18])
[17] T19 folios 61-63.
[18] T19 folio 63.
Medication €1,500
Rent in Austria €9,800
Living expenses in Austria €3,500
Airfares €2,000
Travel within Austria €500
23. Mr Lada asserted that Mrs Gusner has either no money or very little money remaining after travelling to Austria for medical treatment each year. By his account it appears that Mrs Gusner may have up to €5,000 (approximately $7,900) remaining after obtaining medical treatment in some years. I note, however, that Mrs Gusner’s Austrian pension is subject to income tax. The annual tax liability in 2005, which is deducted from her pension payments, was approximately €4,750[19]. Thus it can be seen, on Mr Lada’s figures, that Mrs Gusner is unlikely to have any substantial amount remaining from her pension once medical treatment costs and tax are deducted. I note in passing that there is scant evidence concerning Mrs Gusner’s assets, liabilities and income other than her pension income.
[19] Ibid.
24. Nevertheless, in the ordinary course, if Mr Lada is treated as a member of a couple, as in fact he is, Mrs Gusner’s income must be taken into account. I note in passing that there is in force an Agreement between Australia and the Republic of Austria on Social Security[20], however that agreement does not have any effect on the rate of Mr Lada’s pension. Mrs Gusner’s Austrian pension is to be treated as ordinary income for Australian social security purposes. By applying the appropriate rate calculator, Mr Lada is not entitled to the single rate of pension ($476.30 per fortnight in July 2005), or the full partnered rate ($397.70 per fortnight in July 2005) as a result of his wife’s Austrian pension income. However, he is entitled to a reduced rate of pension. While the precise amount varies in relation to the rate of exchange for Euros, the initial rate of grant was $98.55 per fortnight. I accept that this amount is not sufficient for Mr Lada to live on without continuing to draw down his financial reserves. To that extent he is in straitened financial circumstances.
[20] Social Security (International Agreements) Act 1999, Schedule 10.
25. Many are those couples in which one member’s pension rate is reduced as the result of the other member’s income. In ordinary circumstances, one could reasonably expect that pensioners such as Mr Lada and Mrs Gusner would pool their resources and live more cheaply together than they would as separate individuals living apart. However, that expectation is not realised in this case. It is not realised because Mrs Gusner obtains medical treatment she requires in Austria and substantially expends her Austrian pension for that purpose.
26. The Secretary asserts that Mr Lada’s case is distinguished from those of Re Hawkins and Secretary, Department of Social Security (1996)[21] and Re Secretary, Department of Social Security and Tsimpidaros [1995][22] (to which my attention was drawn). In those cases no pooling of resources was possible because Mr Hawker’s wife and Ms Tsimpidaros’ husband were in a state of extreme impecuniosity for reasons beyond their control - they were prohibited from earning income or from receiving social security benefits in Australia. Mr Lada’s wife is not impecunious and has a regular income in Austria. The impecuniosity that was found in Hawker and Tsimpidaros was extreme and was not a matter of choice, resulting from factors beyond the control of those concerned. The respective partners in Hawker and Tsimpidaros were not legally able to earn income or to obtain income support in Australia. In both cases the Tribunal found special reasons that enlivened the s.24 discretion. In Cocks v Centrelink,[23] special reasons were found to exist because the applicant husband was not able to benefit from any pooling of resources with his wife. She was a resident in the Philippines in impecunious circumstances, without entitlement to an Australian pension, and Mr Cocks could not afford to bring his wife and child to Australia. The Tribunal found special reasons not to treat Mr Cocks as a member of a couple during periods when he was apart from his wife in Australia. O’Loughlin J found that the Tribunal had fallen into error because it “failed to recognise that [the special reasons] had the potential to exist just as much when Mr Cocks was living with his wife in the Philippines.”[24]
[21] 44 ALD 651
[22] AATA 10292
[23] (2000) 32 AAR 360, supra n 10.
[24] Ibid, at [365].
27. The important point in all these cases is that the respective applicants were unable to benefit from any pooling of resources with their spouses. Impecuniosity and other factors beyond their control were operative in each case. In Mr Lada’s case neither he nor his wife are impecunious, although that prospect may eventuate for Mr Lada once his financial reserves are exhausted. Nevertheless, Mr Lada is not able to access Mrs Gusner’s Austrian pension income or to benefit from any pooling of resources involving that income. While the reasons for the inability to pool resources in Mr Lada’s case may be different than those found in Hawker, Tsimpidaros and Cocks, the effect is the same.
28. In the Secretary’s submission, Mrs Gusner is simply choosing for her own purposes to obtain medical treatment in Austria and Mr Lada’s case should be rejected on that basis. Mrs Gusner steadfastly believes that her future health and very life depends on continuing the medical treatment in Austria[25]. However, that belief is not supported by medical evidence. Nevertheless, she expends most if not all of her pension income obtaining medical treatment in Austria. That is not a matter over which Mr Lada has any control. The decisions and choices of the individuals concerned must be carefully considered when determining whether an applicant should not be treated as a member of a couple (Boscolo v Secretary, Department of Social Security[26]). I am satisfied that Mr Lada has no real choice concerning the arrangement of his wife’s medical treatment. That is something she has decided, and it is something that has a substantial effect on Mr Lada.
[25] Exhibit A1.
[26] Supra n 16, at [125].
29. I am reasonably satisfied that it is not a matter of medical necessity for Mrs Gusner to obtain follow up medical treatment in Austria. The evidence of Dr J. Rodgers, Mrs Gusner’s general practitioner in Canberra, which I accept, is that it is reasonable for her to travel to Austria annually for follow up treatment, even though medical treatment of equivalent international standard is available in Canberra, with costs covered under Medicare[27].
[27] T23 folio 71.
30. The prospect of Mrs Gusner being forced to wait for treatment in Australia as a public patient was ventilated as a reason for her to continue obtaining treatment in Austria. However, these arguments have little merit in my opinion. Dr Rodgers reported that Mrs Gusner could expect to wait 18 to 24 months if she required a total hip replacement under Medicare as a public patient[28], however he was unable to clearly state when such an operation would be necessary. Mrs Gusner stated that she will need a hip replacement in the near future[29]. I accept that she may, although what ‘in the near future’ means is far from clear. While anticipation of the possibility of an event or occurrence in the future cannot be ruled out as a special reason, the power conferred by s.24 is exercisable as and when appropriate circumstances exist to attract the discretion (Secretary, Department of Social Security v Le-Huray (1996)[30]).
[28] Ibid.
[29] Exhibit A1.
[30] 138 ALR 533 at [540].
31. There is no evidence to support Mr Lada’s assertion that Mrs Gusner would be placed on a waiting list if she chose to obtain medical treatment in relation to her thyroid condition in Canberra. It appears on Dr Rodgers’ evidence Mrs Gusner’s diverticulitis is amenable to self-management and “No ongoing assessment or medical supervision is required unless she becomes symptomatic or has complications”[31]. I accept Dr Rodgers’ evidence that there is no “medical necessity or advantage [for her to obtain follow up treatment in Austria] other than her personal choice and trust and confidence in the doctors who have managed her conditions in Austria in the past”[32].
[31] T23 folio 70.
[32] T23 folio 71.
32. Nevertheless, as it appears to me, Mrs Gusner’s decision in relation to her medical treatment is reasonable, and it is reasonable for her to continue to obtain medical treatment in Austria. She trusts and has confidence in her Austrian doctors. She is confident conversing with them in her native language and would have difficulty conversing with doctors in English. She has suffered from a life-threatening cancer and fears that it may return, and requires annual medical treatment to prevent that occurrence. It is not surprising that she places great stock in the therapeutic relationship she has built over many years with her treating doctors, nor is it surprising that she would want to continue to obtain treatment from doctors with whom she can converse in her native language. Since marrying Mr Lada she has had two operations and “numerous tests and treatments”[33], all of which have been carried out by her treating doctors in Austria. She pays approximately €2,600 per year in health insurance premiums in Austria and obtains treatments under that cover without any significant delay, whereas she has no health insurance cover in Australia.
[33] Exhibit A1.
33. The section of the Guide to Social Security Law to which my attention was drawn states that “If the income of a person is not available for the use or benefit of their partner, it may be appropriate to treat them as NOT being members of a couple,” and gives the following example:
“Example 2: The partner is ill and their income is required to be used to meet their medical expenses.”[34]
[34] Department of Families, Community Services and Indigenous Affairs, supra n 12.
This is just such a case.
34. The Secretary asserts that the pre-marital arrangement between Mr Lada and Mrs Gusner is not a special reason to treat Mr Lada other than as a member of a couple. I agree. The informal pre-marital agreement Mr Lada made with Mrs Gusner is one factor to be considered, but is not, of itself alone, a ‘special reason’ sufficient to enliven the discretion conferred by s.24 (Re Croy and Secretary, Department of Social Security (1996)[35]). It is not clear to me that Mr Lada understood or even considered the effect of such an arrangement on his entitlement to Age Pension. There is simply no evidence on this point.
[35] AATA 11083, at paragraph 7.
35. The Secretary asserts that the separate financial arrangements Mr Lada agreed with Mrs Gusner prior to their marriage were simply a matter of choice and convenience, and that it would not be reasonable, in those circumstances, to expect the taxpayer to provide Mr Lada with additional support, beyond his ordinary entitlement as a member of a couple. I accept that the arrangements to which Mr Lada agreed before marrying Mrs Gusner in 1999 were shaped by personal choice. For Mrs Gusner, it was important to ensure that her ongoing medical treatment in Austria would not be displaced by marrying a man in Australia, and for Mr Lada, the prospect of married life for some if not most of each year was important to him, after 20 years of living alone.
36. In sum, the reason Mrs Gusner obtains medical follow up treatment in Austria and expends a substantial part of her income is not a matter of medical necessity but is a matter of reasonable choice. That is not a ‘special reason’ to exclude her income when calculating Mr Lada’s rate of Age Pension. However, it is not the fact of Mrs Gusner’s medical treatment in Austria that renders this case special, it is the effect of those apparently immutable arrangements on Mr Lada that render this case from the ordinary. Those circumstances are beyond his control and render him unable to benefit from any pooling of resources with Mrs Gusner. Importantly, it is her choice to expend her income obtaining medical treatment in Austria and not Mr Lada’s. That was a non-binding precondition she imposed on her marriage to Mr Lada, which he chose to accept in 1999.
37. I am satisfied that, since July 2005 and presently, Mrs Gusner’s arrangements for medical treatment are beyond the control of Mr Lada. He cannot force his wife to provide him with support, nor can he decide that she is to obtain medical treatment in Australia and forgo the therapeutic relationship with her treating doctors in Austria. In the face of Mrs Gusner’s steadfast intention to continue to obtain the medical treatment she requires in Austria[36], those are matters over which he is not able to exercise choice. The choice confronting Mr Lada in 1999 was whether to marry Mrs Gusner on her terms, which he did. Had he not, he would, in all likelihood have been entitled to an Age Pension at the single rate when he reached pension age. Mr Lada informed me that the only choice he can exercise in the present circumstances is to choose between continuing his marriage to Mrs Gusner, with the prospect of becoming impecunious when his savings are exhausted and, therefore, an uncertain future, or ending his relationship with her, in which case he may be entitled to Age Pension at the single rate, but will suffer the loss of her companionship and emotional support in the years to come. That is not a real or reasonable choice to expect a person to make for the purposes of the Act.
[36] See Exhibit A1.
38. It is important to record that Mrs Gusner is not entitled to an Australian pension and her decision to obtain medical treatment in Austria rather than in Australia represents a saving to the Australian taxpayer. She pays her taxes and health insurance premiums in Austria.
39. Presently, Mr Lada is unable to live on the reduced rate of pension to which, in the ordinary course as a member of a couple, he is entitled, and is reliant on drawing down his savings to cover day-to-day living expenses. He is unable to work to support himself as the result of an injury. He informed me that he had considered utilising the pension loan scheme administered by Centrelink, but decided against it. It is not for the Commonwealth to drive a claimant such as Mr Lada into a state of penury or destitution.
40. The reasonable expectation underlying the pension rate calculator that there will be some pooling of resources between members of a couple, or that one member will provide support to the other if it is necessary to do so, should not lightly be dispensed with. Nor should the discretionary power conferred by s.24 be too lightly exercised. However, for a ‘special reason’ to exist for the purposes of s.24 it is not necessary for the particular case to be extremely unusual, uncommon or exceptional (Boscolo v Secretary, Department of Social Security (1999)[37]).
[37] Supra n 16, at [125].
41. This is a difficult case in which the particular circumstances in which Mr Lada presently finds himself may change with the passage of time or as the result of decisions he and Mrs Gusner make. Nevertheless, it is not appropriate to determine this matter on the basis of what may possibly occur in the future.
42. Carefully considering all of the circumstances and the evidence before me, I am reasonably satisfied that the particular circumstances of Mr Lada’s case set it apart from the ordinary course. Even though Mr Lada is a member of a couple with Mrs Gusner, I am satisfied that he is not able to benefit from any pooling of resources with Mrs Gusner during the periods each year when she is obtaining medical treatment in Austria. On Mr Lada’s evidence concerning Mrs Gusner’s expenses, there may be an amount of her Austrian pension income remaining after her annual medical treatment has been obtained. To that extent at least it may be reasonable to expect Mr Lada to benefit from some pooling of resources during periods when they are together in Australia. However, if Mrs Gusner has any money left over from her annual pension after travelling to Austria each year for medical treatment, it appears to me on the available evidence that the amount remaining would be small and insignificant in terms of any pooling of resources with Mr Lada. Thus, I accept that the reason by which Mr Lada’s case is rendered ‘special’ during the periods when he and Mrs Gusner are apart, also applies during the periods when they are together.
43. Finally, if one could compare Mr Lada and Mrs Gusner’s circumstances with a similar couple, in the absence of Mrs Gusner’s choice to obtain necessary medical treatment in Austria each year, that similar couple would be in a position where it would be reasonable to expect them to pool resources together on the basis that the wife obtained treatment as a public or a private patient in Australia. Thus, it would not be reasonable or appropriate in those circumstances to find for Mr Lada – the effect of Mrs Gusner’s ill health on Mr Lada in those circumstances would not present a special reason to treat him other than as a member of a couple. Alternatively, if the similar couple chose to obtain medical treatment for the wife overseas without any reasonable or compelling reason to do so, as a simple matter of preference, those circumstances may not give rise to a ‘special reason’. However, as can be seen, Mrs Gusner has good reasons to obtain medical treatment in Austria and has done so for many years. She trusts her Austrian doctors, with whom she can converse in her native language, and she obtains medical treatment under a private health insurance policy. She considers that any change in her medical arrangements could endanger her life[38]. She expends her pension income to continue obtaining medical treatment in Austria, and in that regard, it appears, her decision is immutable, and it has a direct and detrimental effect on Mr Lada’s circumstances. He is unable to pool resources with his wife and is forced to rely on his diminishing savings to live day to day. Nevertheless he has committed himself to a relationship with her on that basis. His only choice is to leave the relationship, in which case the taxpayer would bear the cost of his increased Age Pension entitlement and he would lose the companionship, emotional support and other intangible benefits he presently obtains from his relationship with Mrs Gusner.
[38] Exhibit A1.
44. Weighing the various factors, the fact that Mrs Gusner obtains medical treatment in Austria and substantially expends her pension income to do so, thereby not enabling Mr Lada to benefit from any pooling of resources with his wife, is a special reason to treat him not as a member of a couple. I so find. Furthermore, I am not persuaded by the Secretary’s submissions that it is not appropriate to exercise the discretion conferred by s.24 in the circumstances.
45. Thus, the decision under review is set aside. In the circumstances, Mr Lada is to be treated not as a member of a couple for the purposes of calculating the rate of his Age Pension. Of course, if Mr Lada’s circumstances change in the future, as well they might, it will be for the Secretary to consider the circumstances then pertaining and decide whether any special reason continues to exist pursuant to s.24 of the Act.
decision
46. The decision under review is set aside and in place thereof, the Tribunal decides that Mr Lada is not to be treated as a member of a couple for the purpose of calculating the rate of his Age Pension. The matter is remitted to the Respondent to determine the amount of Age Pension that is payable to Mr Lada.
I certify that the 46 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member
Signed: Jane Gribble
AssociateDate of Hearing 16 May 2007
Date of Decision 2 July 2007
Representative for the Applicant Self
Solicitor for the Respondent Ms Jillian Furner
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