Lombardi and Secretary, Department of Social Services (Social services second review) - [2018] AATA 3044

Lombardi and Secretary, Department of Social Services (Social services second review) [2018] AATA 3044 (24 August 2018)
Division:GENERAL DIVISION
File Number(s): 2018/1537
Re:Nino Lombardi
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member B J Illingworth
Date:24 August 2018
Place:Adelaide

The application for review in this matter is dismissed.
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Senior Member B J Illingworth
CATCHWORDS
SOCIAL SECURITY – Age pension – Overseas applicant – Application to dismiss – Whether any reasonable prospects of success – Whether any special circumstances – Whether any discretion – Whether Respondent required to provide notice of change to legislation – Application for review dismissed
LEGISLATION
Social Security Act 1991 – ss 1220A, 1221
Social Services and Other Legislation amendment Act 2014 – sch 4(1) - (5), 6(4)
Social Security (International Agreements) Act 1999
CASES
Re Burrell; Secretary, Department of Social Services and (Social services second review) [2017] AATA 299
Re Dobson and Secretary, Department of Social Services [2015] AATA 892
Re Weiss and Secretary, Department of Social Services (Social services second review) [2018] AATA 1280
SECONDARY MATERIALS
Explanatory Memorandum, Social Services and Other Legislation Amendment Bill 2013.
REASONS FOR DECISION
Senior Member B J Illingworth
24 August 2018
INTRODUCTION

Mr Nino Lombardi (“the Applicant”), who has resided in Italy since 1999, has applied to this Tribunal to review a decision of the Social Services and Child Support Division (first-tier review) dated 20 February 2018, which affirmed a decision of Centrelink to reduce his age pension payment to the proportional rate of 340/420.
The Respondent subsequently filed an application for dismissal on the grounds the application for review has no prospects of success. The Respondent’s application was heard on 9 July 2018. The Respondent was represented by Mr Oliver Morris of counsel. The Applicant was represented by his daughter.
BACKGROUND
The Applicant was granted the Australian age pension from 21 October 2012 under the provisions of the Social Security Agreement between Australia and the Republic of Italy. The Applicant had lived in Australia for more than 28 years and he was granted the maximum rate of age pension based on his Australian working life residence of 340 months.
Prior to 1 July 2014, age pensioners living overseas who had resided in Australia for at least 25 years (300 months) during their working life (from age 16 to age pension age) would be entitled to the full means-tested rate of Age pension.
On 1 July 2014 the Social Services and Other Legislation Amendment Act 2014 (“Amendment Act”) Schedule 4 commenced and changed the period in which a person was required to live and work in Australia to 35 years (420 months) in order to be entitled to the full rate.
For pensioners who are outside Australia, and receive an Australian social security payment, the Social Security (International Agreements) Act 1999 was also amended to increase the base Australian working life residence from 25 years to 35 years.
However, if a pensioner is outside Australia immediately before 1 July 2014 and receiving the full rate aged pension, they are exempt from the changes and will continue to receive the full rate as long as they do not return to Australia on or after 1 July 2014 and remain for a continuous period of more than 26 weeks.
If the pensioner was to return to Australia on or after 1 July 2014 and remain for a continuous period of more than 26 weeks, then the amendments apply and the new Australian Working Life Residency rate is invoked.
The Applicant arrived in Australia on 7 July 2016 and remained continuously for 189 days or 27 weeks until his departure on 12 January 2017. On 14 August 2017 a decision was made by the Department of Human Services – Centrelink to reduce his age pension payment to the proportional rate of 340/420.
On 16 November 2017 the Applicant applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (“AAT1”) for an independent review of the decision. A hearing was held on 20 February 2018. The Tribunal affirmed the decision under review.
On 21 March 2018 the Applicant applied to the General Division of the Administrative Appeals Tribunal to review the decision by the AAT1 dated 20 February 2018.
Mr Morris, on behalf of the Secretary, subsequently made an application that the application for second tier review should be dismissed by the Tribunal pursuant to s 42B(1)(b) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) on the grounds the application has no prospects of success.
STATUTORY FRAMEWORK
The legislation relevant to this review is found in the Social Security Act 1999 (“the Act”).
The Applicant is entitled to indefinite portability which means he can be paid the age pension indefinitely whilst living outside Australia. However his entitlements are limited by s 1220A of the Act. The age pension rate for those who have lived overseas for a period longer than 26 weeks must be calculated pursuant to the Pension Portability Rate Calculator found at the end of s 1221 of the Act. Overall, a person’s age pension is calculated by their Australian working life residence as proportional to the applicable residence factor.
The section relevant to calculating the Applicant’s applicable residence factor is provided in s 1221-C2 of the Act:
Residence factor (period of Australian working life residence under 35 years)
1221-C2if a person’s period of Australian working life residence is less than 420 months (35 years), the person’s residence factor is:
Person’s period of Australian working life residence
420
The legislative changes were introduced through the Amendment Act.
Schedule 4, subclauses (1) – (5) of the Amendment Act amended s 1221 of the Act to increase the Australian working life residence from 300 months to 420 months.
Schedule 4, subclause 6(4) of the Amendment Act provides:
Presence outside Australia immediately before 1 July 2014
(4)If:
(a)immediately before 1 July 2014 a person was outside Australia and was receiving a pension referred to in section 1220A, 1220B or 1221 of the Social Security Act 1991; and
(b)on or after 1 July 2014 the person returns to Australia; and
(c)immediately before returning to Australia the person is receiving that pension; and
(d)the person leaves Australia on a day (the departure day) that is before the end of the period of 26 weeks beginning on the day the person returned to Australia; and
(e)on the departure day the person is receiving that pension
then, subject to subitem (5), the amendments made by items 1 to 5 do not apply in relation to the person’s period of absence from Australia starting on the departure day.
The effect of this legislative scheme was to increase the Australian working life residence to reflect contributory systems that operate overseas. The Explanatory Memorandum to the 2014 Amendment Act provides:
The change recognises that Australia’s social security system differs markedly from the contributory systems that operate overseas, and that payments are made from general tax revenue and based on the concepts of residence and need. Other countries generally require 35 to 45 years of pension contributions to receive a full pension.
The legislation does not grant a discretion to extend the period of 26 weeks for any reason. This is unlike other legislative provisions such as s 10(2) of the A New Tax System (Family Assistance) (Administration) Act 1999 which grants the decision maker a discretion to extend the claim period if the decision maker is satisfied special circumstances exist. No similar provision can be found in the legislation relating to this matter.
RESPONDENT’S SUBMISSIONS
The provisions of s 42B(1) of the AAT Act provides as follows:
(1)The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:
(a)      is frivolous, vexatious, misconceived or lacking in substance; or
(b)      has no reasonable prospect of success; or
(c)      is otherwise an abuse of the process of the Tribunal.
The Respondent’s submissions with respect to the application to dismiss are as follows:
(a)The Applicant’s application for review does not have any prospect of success;
(b)The Applicant lived and worked in Australia for 340 months. He returned to live in Italy in 1999. Prior to 1 July 2014 those living overseas receiving a pension were entitled to the full means-tested rate if their Australian working life residence was over 300 months. However post 1 July 2014 the Applicant’s Australian working life residence of 340 months remained, but should he return to Australia for a continuous period of over 26 weeks his pension was then to be calculated at a 340/420 ratio.
(c)He returned to Australia on 7 July 2016 and departed on 12 January 2017 staying a total of 27 weeks. As a consequence the Department was obliged to recalculate the Age Pension. This lead to a reduction in his rate of pension.
(d)There is no discretion to waive the effect of the relevant legislation or to extend the 26 week period. The Department was obliged to recalculate the Applicant’s rate of Age Pension under the present rules.
(e)The Applicant sought to review the decision on the basis of special circumstances, namely the Applicant came to and remained in Australia to support his daughter who was suffering from breast cancer. However it is well settled the Tribunal must stand in the shoes of the original decision maker. The original decision maker was obliged to apply the relevant legislation regardless of any special circumstances. There was no discretion in the Tribunal to find otherwise.
(f)The Respondent therefor submits the application for review is misconceived and has no reasonable prospects of success and should be dismissed pursuant to s 42B(1)(b) of the AAT Act.
APPLICANT’S SUBMISSIONS
The Applicant accepts that he remained in Australia for longer than 26 weeks, namely 27 weeks. It is also accepted that the Applicant’s Australian working life residence is 340 months.
The Applicant engaged a lawyer and obtained legal advice. In summary, the Applicant argued that on compassionate grounds the decision of Centrelink as confirmed by the AAT1 should be set aside and the Applicant’s previous pension entitlement be reinstated for the following reasons:
(a)the Applicant only travelled to and remained in Australia to care for his daughter who was suffering from breast cancer at the time;
(b)the Applicant remained only 6 days beyond the 26 week period;
(c)the Applicant was not notified of the legislative change; and
(d)the new pension rate means the Applicant now suffers financial hardship.
The Applicant submits he never received the notice of the change to the legislation from the Department. If he had known about the change to legislation or received any notice he would have departed Australia within the 26 week period.
The Tribunal notes the Respondent filed within the T documents evidence of the notice. The form of the notice tendered was not in letter format only in electronic storage format, but confirmed the existence of a letter to the Applicant detailing the legislative change. It is not clear from the format of the document whether the letter was sent by post or otherwise.
The notice does include the Applicant’s current address in Italy. All previous notices and letters tendered contain the same address. The notice contains the following statement:
If you return to Australia after 1 July 2014 and stay for longer than 26 weeks, on your next departure the rate of payment you are entitled to receive will be calculated under the new rules.[1]
[1] T10, p 33.
The Applicant submits that considering he did not receive notice of the change of legislation and the special circumstances of the case, the original decision was wrong and the Tribunal should exercise, on compassionate grounds, a ‘special circumstance’ discretion.
Further, the Applicant referred the Tribunal to an “Aged Pension Guide” that indicates an expectation that people should be informed about legislative changes, which it was said, further supports a basis for hearing the application. The Tribunal adjourned the hearing and ordered that the Applicant file any further relevant material in support of that submission, including the Aged Pension Guide. No fresh or relevant material was provided.
SPECIAL CIRCUMSTANCES
There is no special circumstance provision contained within the Act or Amendment Act that enlivens a discretion to waive the operation of the provisions.
Despite this, the question of whether the failure of a Department to notify a person about a change in legislative framework enlivens the “special circumstance” discretion has been considered. In Burrell; Secretary, Department of Social Services and (Social services second review) [2017] AATA 299 at [23] the Tribunal said:
The secretary is not required to notify recipients of changes to legislation. This is well established at law: Secretary, Department of Social Services and Cannon [2015] AATA 1028; Dann and Secretary, Department of Social Services [2016] AATA 196. It is the responsibility of individuals to inform themselves as to their current legal obligations at any time. It follows that the Respondent’s lack of knowledge regarding the change in legislation cannot be a “special circumstance” which justifies a wavier of the application of legislation.
I make no finding as to whether the Respondent provided notice to the Applicant or not. The material provided is not conclusive evidence of proper service.
Regardless of whether the Respondent took positive steps to notify the Applicant of the change, I find this does not enliven any special circumstance discretion. In Dobson and Secretary, Department of Social Services [2015] AATA 892 at [20] - [21] the Tribunal said:
Although the Department did take steps to notify Mr Dobson and other likely recipients of the benefit of the change in the law, there is no obligation on it to do so. The principle has been previously stated by the Tribunal in Milroy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 488.
I note that even if the relevant legislation in this case provided for a special circumstance provision, I would find the circumstances of the case do not warrant the exercise of such discretion.[2]
[2] See Re Weiss and Secretary, Department of Social Services (Social services second review) [2018] AATA 1280; the Tribunal held there was no obligation on the Department to notify the applicant of the change in the legislation. There were no special circumstances which prevented the applicant from claiming FTB and thereby enlivening the exercise of the discretion to extend the time for the lodging of the claim.
CONCLUSION
In light of the above reasons I find the Tribunal has no discretion to waive the operation of the Act or Amendment Act, nor does it have any ‘special circumstance’ discretion.
I find there was no obligation on the Department to notify the Applicant of the change in legislation. It is of no consequence whether the Department attempted to or succeeded in notifying the Applicant.
I find this application for review has no reasonable prospects of success.
DECISION
The application for review in this matter is dismissed.

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member B J Illingworth

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Administrative Assistant - Legal
Dated: 24 August 2018

Date of hearing: 9 July 2018

Advocate for the Applicant: Relative by telephone

Advocate for the Respondent: Oliver Morris, Department of Human Services

Date of hearing:	9 July 2018
Advocate for the Applicant:	Relative by telephone
Advocate for the Respondent:	Oliver Morris, Department of Human Services