Maddison; Department of Family and Community Services

[2001] AATA 778

DECISION AND REASONS FOR DECISION [2001] AATA 778

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2000/1903

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES  
  Applicant
           And    HELEN MADDISON          
  Respondent

DECISION

Tribunal       MS N BELL

Date12 September 2001

PlaceSydney

Decision      The Tribunal sets aside the decision under review, and in substitution therefor decides that the Respondent is deemed not to be a member of a couple for the purposes of calculating her aged persons savings bonus, and is therefore entitled to an aged persons savings bonus in the sum of $134.00.      
  ………………………
  Ms N Bell
  Member
CATCHWORDS
SOCIAL SECURITY – aged persons savings bonus- whether 50 per cent of the income of the Respondent's husband's superannuation rollover fund should be taken into account for the purpose's of calculating aged persons savings bonus-assumption that Respondent is not a member of a couple – use of extrinsic material in the interpretation of a provision of the Act – whether provision is ambiguous or obscure or unreasonable

A New Tax System (Bonuses for Older Australians) Act 1999 – s 5
Acts Interpretation Act 1901 – s 15AB

REASONS FOR DECISION

MS N BELL             

1. This is an application by the Secretary, Department of Family and Community Services ("the Applicant") for review of the decision of the Social Security Appeals Tribunal ("SSAT") on 23 November 2000 that the deemed income of Helen Maddison ("the respondent") should include deemed income from one half of the funds held by her husband in his superannuation rollover fund.  The decision made by the SSAT followed an application by the Respondent, to that tribunal, to review the decision of the Applicant to pay the Respondent the sum of $134.00 aged person's savings bonus.

2. The Applicant was represented by Ms Smith, of the Advocacy and Administrative Law Team at Centrelink, and the Respondent was represented by Mr Boyd, Solicitor. The only evidence before the Tribunal was the documents lodged under section 37 of the Administrative Appeals Tribunal Act, 1975 (Exhibit TD1) and the Applicant's Statement of Facts and Contentions (Exhibit A1). No oral evidence was presented to the Tribunal.

3. The issue to be considered by the Tribunal is whether, for the purposes of the calculation of the Respondent's aged persons savings bonus (savings bonus"), 50% of the income from the Respondent's husband's superannuation rollover fund should be taken into account.

4. The following facts are not in dispute:

• the Respondent was paid a savings Bonus of $134.00 on 21 July 2000, having received aged pension during the period 1 April 2000 to 30 June 2000;

• the payment made to the Respondent arises out of limited savings and investments held in her own name; and

• the Respondent and her husband of 45 years enjoy, jointly, the benefits of periodic withdrawals made by the Respondent's husband from his superannuation fund and deposited by him into their joint savings account;

1. It was agreed between the Applicant and the Respondent that the amount of savings bonus paid to the Respondent by the Applicant had been calculated by reference to the amount of half of the sum held in a joint savings account by the Respondent and her husband.  No other investment or savings moneys (apart from the Respondent's husband's superannuation fund) were raised by the Respondent as being relevant to her entitlement.
    legislation

2. The relevant legislation is A New Tax System (Bonuses for Older Australians)Act 1999 ("the Act"). In particular, section 5 of that Act provides for the calculation of a person's annual retirement income and annual savings and investment income:

   "5 Annual retirement income and annual savings and investment income—customers with previous calculation of ordinary income on a yearly basis

   (1)       This section applies to a Family and Community Services customer if, on one or more occasions in the period covered by the 2 qualifying years, the Secretary was required to work out the customer's ordinary income on a yearly basis for the purpose of determining the customer's entitlement to any payment under the Social Security Act 1991.

   (2)       If the Secretary was required to work out the amount on only one such occasion, the customer's annual retirement income and annual savings and investment income for the purposes of this Part are worked out in accordance with subsections (3) and (4).

   (3)       The customer's annual retirement income is the amount of the ordinary income on a yearly basis that would have been required to be worked out on the occasion if:

   (a)       any pension under Part II or IV, or a payment by way of allowance under Part VI, of the Veterans' Entitlements Act 1986 paid to the customer were disregarded; and
   (b)       any application of section 1171 of the Social Security Act 1991 were disregarded; and
   (c)       any payment under the Social Security Act 1991, to the extent that it was not exempt from income tax under the Income Tax Assessment Act 1997, were included in ordinary income; and
   (d)       any amount taken by Division 1B of Part 3.10 of the Social Security Act 1991 to be ordinary income on a financial asset that is a deprived asset were disregarded; and
   Note:    Any actual return on the deprived asset is also disregarded: see subsection 1083(1) of the Social Security Act 1991.
   (e)       the customer were not a member of a couple.

3. In working out a person's annual retirement income and annual savings income (those being relevant to the calculation of the savings bonus), the Act provides for certain assumptions to be made. Section 5(3)(e) of the Act provides for an assumption to be made, for the purposes of the calculation, that the customer is not a member of a couple.
   submissions

4. Ms Smith, for the Applicant, submitted that the provisions of section 5(3)(e) of the Act are clear and unambiguous. She noted that the Act has a specific purpose, being the one off payment of bonuses, and is distinct from the Social Security Act 1991 and the scheme of continuing payments established under that legislation. Ms Smith submitted that the particular purpose given effect to by the Act, that is, the payment of one off bonuses, makes it inappropriate to attempt to interpret the legislation by reference to provisions of, or schemes established by, the SocialSecurity Act 1991 and the Family Law Act 1975.

5. Ms Smith also submitted that there is no need to refer to the Explanatory Memorandum to the Act in order to interpret section 5(3)(e). She referred the Tribunal to section 15AB of the Acts Interpretation Act 1901 and argued that none of the bases on which extrinsic material may be used, in the interpretation of an Act, pursuant to that provision, are established in relation to section 5(3)(e). In particular, she argued that the provision is neither ambiguous nor obscure and that the ordinary meaning conveyed by the text of the provision does not lead to a result that is manifestly absurd or unreasonable.

6. Mr Boyd, for the Respondent, submitted that the purpose of the Act was to benefit self-funded or partially self-funded retirees who had been disadvantaged by the Government's new tax system. He referred the Tribunal to passages in the Explanatory Memorandum which he submitted showed an intention to benefit, and to a particular use of the word "their" which, he submitted, denoted an intention to recognise combined or joint savings. He argued that it is appropriate to refer to the Explanatory Memorandum, in the interpretation of the relevant provisions, because those provisions are in conflict with the purpose or policy behind the legislation, as stated in the Explanatory Memorandum.

7. Mr Boyd noted that an amount held jointly by the Respondent and her husband in a joint savings account had been recognised by the Applicant as joint moneys and had been halved for the purposes of calculating the Respondent's entitlement. In this way, the Respondent had been treated as a member of a couple. On the other hand, the Applicant had failed to recognise that, notwithstanding that the Respondent's husband's superannuation rollover investment was in his name only, that investment was regarded and used by the Respondent and her husband as a joint investment. Mr Boyd argued that the application of section 5(3)(e) by the Applicant produced a result that is unreasonable, in that the Respondent is granted a bonus considerably smaller than that granted to her husband whose income from his superannuation rollover fund is taken into account in the calculation of his entitlement.

8. Mr Boyd referred the Tribunal to the treatment of superannuation funds under the Family Law Act 1975 and by the Family Court as illustrated by its decision In the Marriage of T. G. & H. M. Hauff (1986) 10 Fam LR 1076. He submitted that the Family Court treats superannuation as a joint asset and that a similar approach should be adopted in the circumstances of this application.
   consideration

9. Section 15AB(1) of the Acts Interpretation Act 1901 provides:

   "Use of extrinsic material in the interpretation of an Act

   (1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:

   (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
   (b) to determine the meaning of the provision when:

   (i) the provision is ambiguous or obscure; or
   (ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable".

10. The provisions of section 5(3)(e) are neither ambiguous nor obscure and require no reference to the material contemplated by section 15AB(1) of the Acts Interpretation Act 1901 on that basis. In considering whether the ordinary meaning of the text of the provision leads to a result that is manifestly absurd or is unreasonable, it must be kept in mind that the legislation has a specific purpose in relation to a one off payment. While it employs a scheme of assessment that is not identical to the one employed by the Social Security Act 1991, that does not, of itself, render the result unreasonable. Similarly, the failure of the legislation to "look behind" the nomination of a single beneficiary under a superannuation fund may be out of step with the treatment of such funds in the family law jurisdiction, but neither does this render the result unreasonable. It should also be kept in mind that a joint savings account is, on the face of it, a joint asset, in this case in two names, capable of equal division between two people deemed to not be members of a couple, while a superannuation fund, generally, and in this case in particular, is in the name of one person only and so not amenable to such division. This is so notwithstanding its potential for consideration by the Family Court. The Tribunal considers that, while there may be critics of the Act and of the effect of section 5(3)(e), neither this, nor any of the matters noted above, render the provision unreasonable.

11. If regard were had to the Explanatory Memorandum for the purpose of confirming that the meaning of the provision is the ordinary meaning conveyed by the text, taking into account its context and the purpose or object underlying the Act, the words in the following extract from the Explanatory Memorandum would show that not every aspect of the method of calculation is expected to be beneficial in every case:

    "Subsection 5(3) modifies the meaning of ordinary income for the purposes of calculating and paying the bonuses. These modifications are for the most part beneficial to the customer…"

12. As to the impact of the Family Law Act 1975 and decisions of the Family Court concerning superannuation, the Tribunal is unable to see any basis for their application to the operation of section 5(3)(e) of the Act to the Respondent's circumstances. Section 5(3)(e) of the Act simply says that the annual retirement income is to be worked out on the basis of an assumption that the person is not a member of a couple. That assumption goes to the working out of the person's annual retirement income. It does not purport to have general effect in relation to the person's matrimonial property rights or in relation to any matter, other than the calculation of the amount of the person's savings bonus.
    determination

13. The Tribunal sets aside the decision under review, and in substitution therefor  decides that the Respondent is deemed not to be a member of a couple for the purposes of calculating her aged persons savings bonus, and is therefore entitled to an aged persons savings bonus in the sum of $134.00.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of MS N BELL

Signed:         .....................................................................................
 O. Caragianni  Associate

Date/s of Hearing  29 August 2001
Date of Decision  12 September 2001
Solicitor for the Applicant         Anjela Smith
Solicitor for the Respondent    Karl Boyd