Macduff and Secretary, Department of Social Services (Social services second review)

[2019] AATA 149

Macduff and Secretary, Department of Social Services (Social services second review) [2019] AATA 149 (14 February 2019)

Division:GENERAL DIVISION

File Number(s):      2018/1783

Re:Helen Rachel Macduff

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Deputy President B W Rayment OAM QC

Date:14 February 2019

Place:Sydney

The reviewable decision is affirmed.

.........................[SGD]...............................................

Deputy President B W Rayment OAM QC

CATCHWORDS

SOCIAL SECURITY – age pension ­– whether date of favourable determination resulting from review ought to be altered – Scheme for Compensation for Detriment caused by Defective Administration – decision under review affirmed

LEGISLATION

Social Security (Administration) Act 1999 (Cth), s 109

SECONDARY MATERIALS

Department of Finance, RMG-409: Scheme for Compensation for Detriment caused by Defective Administration, November 2018

REASONS FOR DECISION

Deputy President B W Rayment OAM QC

14 February 2019

1. The applicant has applied for a second-tier review of a decision of the Social Services and Child Support Division (AAT1) of this Tribunal.

2. The claim before that Division was that the Secretary ought to have made an alteration to the applicant’s pension retrospectively to a date prior to 29 December 2016, which the Secretary had refused to do on her original application to that effect and on internal review. The decision of AAT1 was that the application for review be dismissed and the decision of the Secretary be affirmed.

3. Each decision maker took the view that s.109 of the Social Security (Administration) Act 1999 (Cth) precluded the grant of the relief claimed by the applicant. Section 109 provides (so far as relevant) as follows:

   1  If:

   (a)a decision (the original decision ) is made in relation to a person's social security payment; and

   (b)a notice is given to the person informing the person of the original decision; and

   (c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

   (d)the favourable determination is made as a result of the application for review;

   the favourable determination takes effect on the day on which the determination embodying the original decision took effect.

   2If:

   (a)a decision (the original decision ) is made in relation to a person's social security payment; and

   (b)a notice is given to the person informing the person of the original decision; and

   (c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

   (d)the favourable determination is made as a result of the application for review;

   the favourable determination takes effect on the day on which the application for review was made.

   …

   4If:

   (a)a decision (the original decision ) is made in relation to a person's social security payment; and

   (b)the person is given a notice informing him or her of the original decision; and

   (c)the Secretary reviews the decision under section 126 without any application under section 129 for review of the decision having been made; and

   (d)as a result of the review, the favourable determination is made within 13 weeks after notice of the original decision was given to the person;

   the favourable determination takes effect on the day on which the determination embodying the original decision took effect.

   5If:

   (a)a decision (the original decision ) is made in relation to a person's social security payment; and

   (b)the person is given a notice informing him or her of the original decision; and

   (c)the Secretary reviews the decision under section 126 without any application under section 129 for review of the decision having been made; and

   (d)as a result of the review, the favourable determination is made more than 13 weeks after notice of the original decision was given to the person;

   the favourable determination takes effect on the day on which the review was begun by the Secretary.

   6This section does not apply to determinations to which section 109A or 110A apply.

   7For the purposes of this section, if:

   (a)the Secretary makes a decision constituted by a determination made under section 78 to increase the rate at which a social security payment is being, or has been, paid; and

   (b)the determination is made because an amount has been indexed or adjusted by the operation of Part 3.16 of the 1991 Act;

   then:

   (c)each person whose rate of social security payment is, or was, affected by the determination is taken to have been given notice of the determination and of the increased rate; and

   (d)the notice is taken to have been given on the day on which the amount was so indexed or adjusted.

4. Section 109 limits the power of the Secretary (and therefore also of this Tribunal) to grant the relief sought by the applicant. Its limitations are precisely applicable to this proceeding and the AAT1 was right to reject the claim on that basis.

5. In a series of decisions of this Tribunal starting shortly after the establishment of this Tribunal in cases where the law clearly did not permit recovery of a just claim, the Tribunal made a recommendation for an ex gratia payment to be made to applicants whose claim the Tribunal was bound to dismiss as a matter of law.

6. At the present time the Department of Finance administers a Scheme for Compensation for Detriment caused by Defective Administration (CDDA) and the parameters for use of that scheme are described in Resource Management Guide No. 409. If it is decided that there is no meaningful prospect of the Commonwealth being found to be legally liable, the CDDA scheme may be applicable.

7. The supplementary T documents in this matter include at pages 269-307 documents received by the Department on 26 May 2014, which were used to calculate the applicant’s pension entitlement. Correspondence ensued between the Department and the applicant.  The Department considered a loan which the applicant had made to her company Arks Pty Limited to be part of her assets. By 29 December 2016 the Department reversed that position, and it is that reversal which the applicant wished to make retrospective.  On 29 December 2016 the Department learned that the company which had recorded the applicant as its creditor was deregistered.

8. An examination of the company accounts sent to the Department in 2014 show total assets of $5,258 and total liabilities (being the debts owed to the applicant) of $105,456. The company’s net assets were shown as negative $100,188. In the 2013 financial year the company made a loss of $26,126 and in the previous year it made a loss of $20,482.  The applicant was lending the company the amount of its losses so as to keep it afloat.  Those facts appear to me to have been reasonably ascertainable from the financial records placed before the Department and, in any event, if the Department had any doubt about the matter it could have been confirmed by the applicant to the Department if it made an enquiry in 2014.  Those circumstances suggest to me that the case is one where an application by the applicant under the CDDA Scheme is appropriate. I therefore recommend that such an application be made by the applicant.

9. For reasons set out at [1]-[4] above, the application for review of the AAT1 decision is dismissed.

I certify that the preceding 9 (nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President Rayment QC

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Associate

Dated: 14 February 2019

Date(s) of hearing:	8 February 2019
Applicant:	In person
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services