Lambrinos and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 485

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 485

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/4206

GENERAL ADMINISTRATIVE DIVISION		)
Re		ANGELO LAMBRINOS

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date12 June 2008 

PlaceSydney

Decision The decision under review is affirmed. 

......................[Sgd]........................

Ms N Isenberg
  Senior Member

CATCHWORDS

SOCIAL SECURITY – Pension Bonus Scheme – whether Applicant was paid correct rate of pension bonus – Applicant worked till the age of 70 believing he would receive the maximum amount of pension bonus - Tribunal has no discretion - decision under review affirmed.

Social Security Act 1991 – section 93D

REASONS FOR DECISION

12 June 2008	Ms N Isenberg, Senior Member
Decision under review

1. On 22 June 2006, Centrelink granted Mr Lambrinos, the Applicant, a pension bonus of $5,351.40, under Part 2.2A of the Social Security Act 1991 (“the Act”). A review was requested as to the quantity of the bonus and an authorised review officer affirmed the decision on 26 March 2007.

2.      An application was made to the Social Security Appeals Tribunal (“SSAT”) for review of this decision, and the decision was affirmed. Mr Lambrinos now seeks review of that decision.

background

3.      The following facts, which were not disputed, have been noted from the Respondent’s Statement of Facts and Contentions:

1. Mr Lambrinos was born on 5 May 1935. 

2. On 3 December 2002, Mr Lambrinos completed a registration for pension bonus scheme (PBS). 

3. On 24 December 2002, Centrelink sent Mr Lambrinos a letter advising him amongst other things that he has been accepted as a member of the PBS and that he [was] an accruing member from 5 May 2000. 

…

5. On 10 August 2005, Mr Lambrinos lodged his claim for age pension…[and]…an Income and Assets Module where he declared that his [wife] was working 60 hours per fortnight and earning $984.00.  Also on the same day, he lodged a claim for pension bonus. 

6. On 6 September 2005, Mr Lambrinos was granted age pension from 27 July 2005 with an annual rate of $2352.59.  On the same day, Mr Lambrinos was paid a pension bonus in the amount of $5,351.40

issues before the tribunal

4.      The issue before the Tribunal is whether $5,351.40 paid to Mr Lambrinos as pension bonus was correct.

applicant’s submissions

5.      Mr Lambrinos said that he had worked hard all his life and had never asked for any assistance from the government.  Everything he owns is a result of his hard work.  He heard the (former) Prime Minister, Mr Howard, announce that if you worked till the age of 70 then pension bonus of $25,000 would be paid. When he told the Centrelink officer that he was going to continue working the Centrelink officer put his hand on his shoulder and told him he was “a good man [for continuing to work]”. 

6.      He had worked for 37 years in the same factory and would still be working had it not closed down.  (This contradicts what he said to the SSAT: that had he known he would receive such a small amount he would not have continued to work past the age of 65.)

7.      Ms Lambrinos, the Applicant’s daughter, said that the government had misled her father, through advertisement of the scheme, to believe that he would get $25,000. She contended that Centrelink, the Greek international news services and the news stations (especially channel 7) all indicated that anyone who worked till the age of 70 would get that amount. There were no advertised reservations or conditions. She said that her father had been promised “a gift”. The Prime Minister had acknowledged that it was beneficial for older Australians to keep working. 

8.      Ms Lambrinos tendered an internet extract from a Centrelink document about the PBS (albeit in relation to rates effective form 1 July 2007). There it was recorded (with my underlining):

How much Pension Bonus will I get?

The bonus you get is a multiple of 9.4 per cent of your basic Age Pension for each 'accruing' bonus period.

Payment rates appear below as a guide only and are effective from 1 July 2007. Contact your nearest Centrelink Customer Service Centre for a personal assessment. The bonus is paid as a non-taxable lump sum once you claim and get Age Pension.

Maximum Amount of Bonus Payable:

Bonus Years	Single	Partnered (each)
1 year	$1,283.30	$1,071.70
2 years	$5,133.40	$4,286.80
3 years	$11,550.10	$9,645.20
4 years	$20,533.50	$17,147.10
5 years	$32,083.60	$26,792.40

What does the amount of Pension Bonus I get depend on?

The amount of bonus you get depends on:

·the amount of basic Age Pension you are entitled to when you claim it after you leave the workforce

·the length of time you have been an accruing member of the PBS, and

·whether you are single or have a partner during the time you are deferring your Age Pension.

If you are not entitled to basic Age Pension, you cannot be paid a bonus. Basic Age Pension does not include extra benefits such as Rent Assistance, Pharmaceutical Allowance, and Remote Area Allowance. If you are entitled to 75 per cent of the basic rate of Age Pension when you retire, your bonus will be 75 per cent of the amounts in the table.

You must be an accruing member for at least one year to be paid a bonus. A maximum of five years accruing membership can be taken into account for your bonus. Work after age 75 cannot be included.

CONSIDERATION OF THE EVIDENCE AND FINDINGS

9. I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act1975 ("the T-documents"), which I took into evidence. The other documents that were tendered at the hearing include the Centrelink internet extract referred to above and a copy of a diagram entitled “Pension Bonus Calculation”.

10. In order to calculate the amount of pension bonus, section 93D(1) of the Act provides the following test (“pension bonus test”):

(a)work out which of the person’s bonus periods count as qualifying bonus periods (see section 93E);

(b)work out the person’s overall qualifying period (see section 93F);

(c)work out the person’s pension multiple (see section 93G);

(d)work out the person’s annual pension rate (see section 93H);

(e)apply the appropriate formula in section 93J.

11. Determination of the first step also requires that sections 92T and 93E of the Act be considered. Section 92T of the Act defines how to calculate the accrual of bonus periods and section 93E(7) states that for the purposes of calculating the qualifying bonus periods:

if:

(a)a person has accrued more than 5 bonus periods; and

(b)the last bonus period is a part‑year period;

each of the 5 most recent full‑year bonus periods are qualifying bonus periods.

12. Pursuant to sections 93D(1)(a), 92T and 93E(7) of the Act, Mr Lambrinos qualified for the following bonus periods:

05/05/2000 to 04/05/2001

05/05/2001 to 04/05/2002

05/05/2002 to 04/05/2003

05/05/2003 to 04/05/2004

05/05/2004 to 04/05/2005

13. Section 93F(1) of the Act states that “if a person has only one qualifying bonus period, that period is the person’s overall qualifying period”. This section is required for the purposes of the second step of the pension bonus test. Therefore, in accordance with sections 93D(1)(b) and 93F(1), Mr Lambrinos’ overall qualifying period is from 5 May 2000 to 4 May 2005.

14. Determination of the third step requires consideration of section 93G of the Act, which provides that a person's pension multiple is worked out using the formula:

0.094 × No. of years in the person’s overall qualifying period

15.     Therefore, in Mr Lambrinos’ case the pension multiple is: 0.094 x 5 = 0.47.

16.     There had been some confusion about the appropriate multiple because in the internal review the authorised review officer had, in reproducing the formula written “0.94”, although the actual calculation used the correct figure 0.094.  “0.94” is clearly a typographical error.

17.     As I explained to Ms Lambrinos and her father at the hearing, the formula is set by the legislation, and this must be applied to Mr Lambrinos’ circumstances. The law does not afford the decision-maker any discretion.

18.     There was no dispute that Mr Lambrinos’ rate of age pension at 10 August 2005 was $2,277.19.  In reaching that figure Centrelink had, properly, taken into account Mr Lambrinos and his wife’s combined income of about $46,000, and their assets of about $337,000.

19. In order to calculate the total pension bonus as required by section 93D(1)(e) of the Act, section 93J(1) provides the following formula:

Annual pension rate × Pension Multiple × No. of years in the person’s overall qualifying period

20.     In Mr Lambrinos’ case the formula is to be applied as follows:

$2,277.19 (annual pension rate) x 0.47 (pension multiple) x 5 (number of years in his overall qualifying period) = $5,351.40.

21.     This amount of $5,351.40 was the amount calculated by Centrelink and affirmed on internal review and by the SSAT.

22.     I appreciate that Mr Lambrinos considers it “unjust” not to obtain the total amount of $25,000 which he had expected to receive, but only receive 20% of that amount. However, as mentioned I have no discretion.

23.     It must be noted that the Centrelink information that was tendered by Ms Lambrinos refers only to the “maximum” amount of the pension bonus payable. The amount of the bonus is affected by the basic age pension to which a person is entitled. As Centrelink contended, the “maximum” pension bonus (married) of $24,299.47 was only payable in circumstances where the rate for age pension (married) was $10,340.20 per annum. Age pension at that rate is only payable if the couple have very little in the way of assets. Since this was not the case here, the maximum pension bonus cannot be applied.

DECISION

24.     The decision under review is affirmed.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member

Signed:         ………[Sgd]………………
  Associate

Date  30 May 2008
Date of Decision   12 June 2008

Appearance for the Applicant        Ms Anastasia Lambrinos

Solicitor for the Respondent          Ms Hannelore Schuster, Centrelink Legal

Services