Linda Guy and Secretary, Department of Social Services
[2013] AATA 943
[2013] AATA 943
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/4371
Re
Linda Guy
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Regina Perton, Member
Date 23 December 2013 Place Melbourne The Tribunal affirms the decision under review.
..............................[sgd]..........................................
Regina Perton, Member
SOCIAL SECURITY – age pension – applicant married – whether a member of a couple for the purposes of the Social Security Act 1991 – whether applicant should not be treated as a member of a couple – total combined income exceeded eligibility requirements – whether superannuation pension should be considered as part of husband’s income – decision affirmed
Social Security Act 1991 sections 4, 8, 9, 24
Lynam v Director-General of Social Security (1983) 52 ALR 128
Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546
Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92
Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164
REASONS FOR DECISION
Regina Perton, Member
23 December 2013
Linda Guy applied for age pension on 15 February 2012. Mrs Guy has been married to Peter Guy for over 30 years. Centrelink, which administers age pension on behalf of the respondent, refused age pension on 16 March 2012 on the basis that the combined income of Mrs Guy and her husband exceeded the allowed threshold for age pension under the Social Security Act 1991 (the Act).
Mr Guy lodged an application for age pension on 8 March 2012. His application was also unsuccessful for the same reason as that of his wife. It was also refused on 16 March 2012.
Following the refusal of the age pension applications, Mr Guy wrote to Centrelink on 21 March 2012 disputing the agency’s calculation of the combined income. In particular, he considered that his superannuation pension should not be assessed as income as he was a self-funded retiree who had contributed his own funds to his retirement income.
On 30 March 2012 a Centrelink officer advised Mrs Guy that her claim for age pension had been reconsidered and the decision remained that she was ineligible due to the level of her and her husband’s combined income. Mrs Guy sought review by an authorised review officer (ARO) of Centrelink on that same day. On 12 June 2012 the ARO affirmed the earlier decision.
On 9 July 2012 Mrs Guy lodged an application for review with the Social Security Appeals Tribunal (SSAT). Amongst other things, Mrs Guy submitted that she and her husband are individuals in terms of their finances; with separate bank accounts and that she receives no financial support from him. Mr Guy also provided a submission. The details of their submissions will be set out more fully later in these reasons for decision. On 11 September 2012, the SSAT affirmed the decision to refuse Mrs Guy age pension due to the combined income of herself and her husband.
On 1 October 2012 Mrs Guy lodged an application with this Tribunal. Mrs Guy submitted that she and her husband should not be considered as a couple.
The issues for the Tribunal in this matter are:
·Is Mrs Guy a member of a couple for the purposes of the Act?
·Whether Mrs Guy should be treated as not being a member of a couple for a special reason?
·If she is a member of a couple and is to be treated as such, should her husband’s superannuation pension be included as part of their combined income?
IS MRS GUY A MEMBER OF A COUPLE?
Section 4 of the Act sets out the criteria for deciding whether a person is a member of a couple as follows:
(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or
….
(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) …, the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage-like relationship
(3A) The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage-like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.
…
(6) A person is not a member of a couple if a determination under section 24 is in force in relation to the person.
Note: section 24 allows the Secretary to treat a person who is a member of a couple as not being a member of a couple in special circumstances.
In determining whether two people are living in a marriage-like relationship under the Act, O'Loughlin J at paragraph 20, in Staunton Smith v Secretary, Department of Social Security (1991) 32 FCR 164 at 170, referred to the list of circumstances in s 4(3) of the Act:
It is not suggested that this list is exhaustive nor will each of these subjects fall to be considered in every case. It must also be emphasised that a particular answer to a single subject will rarely, if ever, supply a final solution. The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators. The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.
French J in Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 dealt with ss 4(2) and 4(3) of the Act in the context of an application for a carer payment. He referred to the decision in Staunton Smith and to the decision of Fitzgerald J in Lynam v Director General of Social Security (1983) 52 ALR 128. He stated that in determining whether a marriage like relationship exists under the Act, the nature of the exercise is much the same as that required under the statutory formula used in Lynam and Staunton Smith. In Lynam, Fitzgerald J said, at 131:
Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
The Full Federal Court, in Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92 (Pelka No. 2) (which followed a rehearing by a differently constituted Tribunal following the 2006 Pelka decision by French J) stated (at paragraph 24):
There is nothing in s 4(3) that requires the relevant decision maker to make a finding of fact as to any of the matters specified in that provision. Rather, the decision maker is required to have regard to all the circumstances of the relationship, including the specified matters, in forming an opinion about the relationship between two people. Having regard to a matter does not require making a finding of fact about that matter…
At paragraph 30 of Pelka No. 2, the Court stated:
The matter to which s 4(3) of the Social Security Act requires a relevant decision maker to have regard is the nature of the commitment of two people to each other. That regard is to include, in particular, four specific matters. Clearly, the Tribunal had regard to those four specific matters in terms. The essential requirement of the provision, however, is that the decision maker must have regard to the nature of the commitment of two people to each other. It is clearly relevant to that matter to have regard to the fact that a commitment that each of those persons has to each other is different from the commitment that each person has to any other person…
Mrs Guy provided written submissions to the Tribunal and gave oral evidence. Mr Guy provided written submissions but did not attend the hearing.
Mr and Mrs Guy were married in 1979 and remain legally married. They share the same house which they own but state that they live there as if they are friends sharing the same dwelling rather than as a couple.
Financial aspects of the relationship
In a submission signed on 28 June 2013, Mrs Guy stated the following:
…
I maintain that I should not be assessed as a member of a couple on the basis of my partner and I have always maintained separate and financial independence. Up until Centrelink breached my partners privacy rights, and sent me his financial details for the SSAT hearing, I had little knowledge of or any desire to know about any of his assets. I do not have any means of accessing any of my partner’s financial assets now or at any time into the future.
…
I will dispute the claim that I am a member of a couple for Centrelink purposes even though I remain legally married and still living in a house jointly owned by my partner and I. A review of taxation Department tax returns will prove that my partner and I have always submitted separate and individual taxation returns throughout our entire working careers. Taxation records will also show banking records only ever in one name. I have never had any access to my partner’s bank accounts nor he access to mine.
As indicated above, Mrs Guy jointly owns the house in which she lives with her husband.
In her oral evidence, she confirmed that until recently, she had no knowledge of his banking, shares or other financial dealings. She said that she and her husband do not share their funds or give each other money. Mrs Guy said that when they were first married, she wanted to open a joint account but her husband demurred. They were both working and each managed his or her own finances. Mrs Guy said that she does not open his mail and vice versa. Therefore she did not know what his financial affairs were until she sought review of the decision to refuse her age pension.
She and her husband agreed on who would pay for what in their household a long time ago. Mrs Guy pays for their shared health insurance payments, the home landline telephone and for oil heating. Mr Guy pays for electricity, property rates and water bills. Mr Guy buys the groceries and vegetables. Mrs Guy buys the meat.
Mrs Guy stated that she no longer has a regular income after losing her employment after 35 years in 2008. She said she is unable to obtain further employment due to a disability arising from her treatment for cancer. She has accessed her superannuation to meet her expenses. At the time she applied for age pension, she had a number of bank accounts that totalled below the assets limit for a single pensioner.
Mr Guy receives a pension from the Commonwealth Superannuation Corporation (Comsuper). He holds shares in a number of blue chip companies and receives dividends on account of those shares. He also holds bank accounts.
The nature of the household
Mrs Guy and her husband live in the same house which they jointly own. They cooperate in relation to the household chores. Mr Guy does the vacuum cleaning and mows the lawn. Mrs Guy does the rest of the gardening and mops the wet areas.
Mrs Guy has a separate bedroom at the other end of the house from her husband. They have separate television sets and prefer to relax in different rooms in the house.
Mrs Guy stated that she and Mr Guy have very different lifestyles. She likes to read, goes to bed early and enjoys gardening. Mr Guy plays sports, builds furniture, likes watching television and goes to bed late. They both cook. The two of them usually eat at the same time in the evening to share costs and they are civil towards each other.
Mrs Guy generally holidays separately from her husband. She has gone to Canada three times without him and he goes on hockey trips regularly without her. They have holidayed together a few times during their marriage. They recently travelled to New Zealand for a relative’s wedding. They travelled on the same flight but each individually paid for the fare.
Mr Guy has a car. Mrs Guy occasionally travels in his car if they are going to a social function to which both are going. She has access to a bus service running close to their house and prefers to use public transport.
The social aspects of the relationship
Mrs Guy and Mr Guy hold themselves out as being married to each other. Their relationship has changed over the decades of the marriage. Mrs Guy said that their friends see them as a couple although there is at least one who is aware of the nature of their living arrangements and their emphasis on individuality.
Mr Guy was described as a keen hockey player. He and Mrs Guy share the same set of friends that they met through hockey. Mrs Guy has become close to some of them. When there are gatherings the women tend to be in a group and the men in another.
Mr Guy has an identical twin brother. However Mr Guy has little or no contact with his family. There has been a family dispute with his sister and he does not see her. In terms of her family Mrs Guy has visited her cousins and aunt in Canada without her husband. Her mother, who is in a nursing home interstate, was originally Canadian.
Any sexual relationship between the people
Both Mrs Guy and her husband have stated that there is no longer a sexual relationship between them and there has not been for many years.
The nature of the people’s commitment to each other
Mrs Guy has been married to the same person for more than three decades. She is not intending to divorce Mr Guy despite the changes in their relationship over the years.
Asked whether she intended to keep living in the same house as Mr Guy, Mrs Guy said that she could not afford to live by herself. Mrs Guy said that had been quite a few times that she thought about moving elsewhere but she does not have the money to do so. She said her husband is not a violent or nasty person and they have worked out trade-offs over the years. Mrs Guy said that her husband is generous with other people but tended to be less so with her.
Mrs Guy said that her husband tends not to discuss personal things with her. She said that she sometimes becomes aware of things about him when talking to other people.
Asked how other people would describe the relationship with her husband, Mrs Guy said that most people think that they get on well. One of those friends who knows the real state of their relationship is a Minister to whom she has spoken about the real situation. That friend is also a friend of her husband’s and is not judgemental.
When she was undergoing cancer treatment, it was usually one of her girlfriends who took her to hospital.
Assessment of the relationship
Factors leaning towards a finding of Mr Guy and Mrs Guy being members of a couple include their joint ownership of the family home and the payment of rates, telephone, health insurance and groceries by one of them on behalf of both. They live in the same house and share management of the household with each having designated tasks. There was no evidence given of them being separated during their 30 plus years of marriage.
Those factors leaning towards them not being a couple include their individual financial affairs in terms of bank accounts, the payment by each of them of their own medical expenses as well as Mrs Guy’s lack of awareness of her husband’s financial circumstances until she received the paperwork relating to the SSAT application. They have separate interests and maintain fairly independent lifestyles.
This case is one where the Tribunal must consider a relationship which commenced well over thirty years ago. Relationships often change over time and that of Mrs Guy and her husband appears to meet that often cited comment. The Tribunal gives considerable weight to Mrs Guy and Mr Guy’s decision to remain married and to continue to live in the jointly owned residence. They share the cost of the household and the household duties. They both appear to have valued their independence from the early days of their marriage despite being a married couple, whether in relation to financial matters or in terms of their personal interests. Mrs Guy conceded that apart from one or two friends, most people would view them as being a couple. Overall, on the balance of probabilities, for the purposes of social security law, the Tribunal finds that Mrs Guy is a member of a couple.
IS THERE A SPECIAL REASON NOT TO TREAT MRS GUY AS A MEMBER OF A COUPLE?
There is provision in the Act to not treat a person as a member of a couple in some limited circumstances.
24 Person may be treated as not being a member of a couple (subsection 4(2))
(1) Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
Both Mrs Guy and Mr Guy have submitted that Mrs Guy should not be treated as a member of a couple in relation to age pension. In her submission, Mrs Guy stated:
…
I have paid taxes as an individual all of my working career and should be entitled to an individual age pension assessment. Since contracting cancer in 2004 and loss of employment in 2008 I have a disability that has prevented me from obtaining any full time employment and thus, the assumption that I have an annual income for my income assessment is incorrect. I have proved that I am still capable of undertaking certain types of employment but Centrelink employment support through scope was unsuccessful.
…
Without any disability pension or Centrelink support …I have relied (since becoming unemployed) on a very small superannuation payout or savings to maintain my personal esteem and financial independence. As part of my ethical beliefs I have always felt an obligation to make an equitable financial commitment to my living arrangements…
…
I maintain a need to remain financially and socially independent. I am not and never will be an appendage any male as Centrelink is now dictating. I will not subject myself to the prospect of financial abuse.
My only means of financial independence is a small amount of savings and without access to work, age or disability pension assistance I will have no means nor need for survival.
In his submission signed on 28 June 2013, Mr Guy states that Centrelink should not be a law unto themselves and should have to abide by other applicable Commonwealth and State laws and legislation. He submits that the decision to treat his partner is a member of a couple rather than an individual in her own right is a form of discrimination. He also states that Centrelink had breached his privacy rights.
…
4. As stated above, under Human Rights Legislation and not Social Security laws, my partner has a right to be treated as an individual and not to be discriminated against because she is married. My partner also has a life-time disability (as a result of her cancer treatment) and should be entitled to a disability pension in her own right, not link to my self-funded pension and income.
When did anyone ever state that being married would be an impost to receiving an age pension? My belief was always that if I saved and made extra superannuation contributions my quality of life would be enhanced in retirement. My partner was never given the same opportunity, essentially because she was discriminated against as a female and was not able to make contributions to superannuation until 1992 when the government changed legislation to make superannuation payments compulsory.
…
7. Of particular consideration for the Tribunal in this instance is the state of my partner’s health. My partner has suffered mentally and physically in recent times and suffered considerable loss of self-esteem. Loss of employment and ongoing cancer treatment, have resulted in significant mood swings and depression. My partner is fighting for her life and a deep-rooted need to maintain her financial and independent existence. Centrelink and the Tribunal need to carefully consider the ramifications of an adverse assessment for my partner who was sought and received considerable medical and psychological advice in recent times.
While the Tribunal can understand the basis for the sentiments expressed above concerning independence and discrimination on the basis of marital status, the Tribunal must consider the relevant legislation and case law. In assessing whether there is a special reason not to treat Mrs Guy as a member of a couple, the Tribunal is of the view that it needs to be able to distinguish her situation from that of others who are members of a couple to whom the legislative provisions concerning a combined income also apply.
While Mrs Guy may wish to depend entirely on her own resources, she is in a situation where her husband has the financial resources to assist her if it becomes necessary to do so. Mrs Guy still had a considerable amount in her bank accounts at the time of the claim for age pension which she could also access if she had to. Anyone who is married or living with a partner is affected in the same way as Mrs Guy is in so far as their husband’s or wife’s income being taken into account in relation to qualifying for age pension, newstart allowance or most other social security benefits.
The Tribunal determines that there is no special reason to treat Mrs Guy as if she was not a member of the couple.
IS MR GUY’S SUPERANNUATION PENSION PART OF THE COMBINED INCOME?
Mr Guy submitted that his Comsuper superannuation income should not be taken into account in calculating the combined income of himself and Mrs Guy. In his submission dated 28 June 2013, he stated:
…
6. My ComSuper superannuation is a defined benefit scheme, which in essence, is my money being returned to me. I am required to pay tax on this amount and then further tax on the accumulated value of my other investments and rightly or wrongly I do not believe my defined benefit should be counted as income for age pension assessment, but rather assessed only as an asset. The Centrelink deemed calculations for income are totally unrealistic compared to my annual taxable income.
The definitions of income in the Act differ from those calculated for taxation purposes. They are set out in sections 8 and 9 of the Act. Income is defined in section 8 as an income amount earned, derived or received by the person for the person's own use or benefit as well as gifts and other moneys. Income amount is defined in section 8:
"income amount" means:
(a) valuable consideration; or
(b) personal earnings; or
(c) moneys; or
(d) profits;
(whether of a capital nature or not).
Earned, derived or received is further defined in section 8(2) of the Act:
(2) A reference in this Act to an income amount earned, derived or received is a reference to:
(a) an income amount earned, derived or received by any means; and
(b) an income amount earned, derived or received from any source (whether within or outside Australia).
Section 8(8) of the Act states that certain amounts are not income for the purposes of calculation in relation to pensions. Superannuation is excluded but only until the person reaches pension age or starts to receive a pension or annuity from the fund.
(8) The following amounts are not income for the purposes of this Act:
(a) a payment under this Act;
(b) any return on a person's investment in:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a deferred annuity; or
(iv) an ATO small superannuation account;
until the person:
(v) reaches pension age; or
(vi) starts to receive a pension or annuity out of the fund;
Section 9(1) of the Act defines an income stream as:
"income stream" means:
(a) an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 ; or
(b) an income stream arising under a public sector superannuation scheme (within the meaning of that Act); or
(c) an income stream arising under a retirement savings account; or
(d) an income stream provided as life insurance business by a life company registered under section 21 of the Life Insurance Act 1995 ; or
…
There is a complex methodology set out in the Act for working out the deductible amounts from income streams. The Tribunal will not go into the detail of those calculations and what the deductible amounts should be in these reasons for decision. That is because Mr Guy’s and Mrs Guy’s combined income at the time the claim was lodged was quite a bit higher than the maximum allowed for Mrs Guy to qualify for age pension. Mrs Guy, at the behest of Mr Guy, was querying whether his Comsuper pension should be considered as a part of their combined income. The Tribunal is satisfied that it should be.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Regina Perton, Member ..............................[sgd]..........................................
Associate
Dated 23 December 2013
Date of hearing 27 September 2013 Date final submissions received 31 October 2013 Applicant In person Advocate for the Respondent T Noonan Solicitors for the Respondent Legal Services Division, Department of Human Services
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