Madoyris and Secretary, Department of Families, Community Services and Indigenous Affairs

[2006] AATA 318

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 318

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2005/151

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ALEXANDER MADOYRIS

Applicant

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

Respondent

DECISION

Tribunal Associate Professor B W Davis AM (Part-time Member)

Date5 April 2006

PlaceHobart

Decision The decision under review is affirmed.

..............................................

Part-Time Member

CATCHWORDS

Social Security - age pension - overseas residence - Greece - eligibility - rate of payment - married rate - wife's illness - claims of hardship - Social Security Appeals Tribunal.

Social Security Act 1991 and Amendments – ss8, 43(1), 1072

Social Security (Administration) Act 1999

Social Security (International Agreements) Act 1999

Guide to Social Security Law

Re Drake and Minister for Immigration and Ethnic Affairs (1979) 24 ALR 557

Re Drake (No 2) (1979) 2 ALD 634

Re Walsh and SDFCS (2002) AATA 881 (4 October 2002)

Re Sallan and SDFCS (1999) ATA 539 (20 July 1999)

Re Crewer and SDFCS (2001) AATA 509 (8 June 2001)

REASONS FOR DECISION

5 April 2006 Associate Professor B W Davis AM (Part-time Member)   

Decision Under Review

1.      The decision under review is a decision made by a Centrelink officer on 8 October 2004, subsequently affirmed by the Social Security Appeals Tribunal (SSAT) on 20 September 2005 to reduce the rate of the applicant’s age pension.

Issue

2.      Whether the decision to reduce Mr Madoyris’ age pension was properly made.

Legislation

3.      The relevant legislation is the Social Security Act 1991 and Amendments, especially sections 43(1), 1072 and section 8 specifying income definitions.

Standard of Proof

4.      The standard of proof is on the balance of probabilities and to the reasonable satisfaction of the Tribunal.

Background

5.      Mr Alexander Madoyris’ currently resides in Greece, thus this is an international matter to be decided on the papers, his consent being given on 24 August 2005.

6.      Mr Madoyris has been in receipt of Australian age pension since 6 February 2000.   His rate of age pension at that time was that of a single person, as he had become divorced prior to leaving Australia.

7.      On 13 July 2004 the applicant started living as a couple with Konstantina Petsa and they subsequently married on 30 August 2004.   Initially Mr Madoyris’ rate of age pension was changed from the single rate to the partnered rate based on him being a member of a couple.   This reduced his payment from $920.46 per month to $775.20 per month.

8.      An income and assets declaration was sent to Mr Madoyris’ wife to complete on 15 September 2004.   The completed form was returned to Centrelink on 8 October 2004, showing that Konstantina Petsa earnt 925 euros per month gross, which is around $A1487.37 as at 1 February 2006.

9.      A recalculation of Mr Madoyris’ age pension was undertaken from 8 October 2004, taking into account his wife’s income.   As a result his rate of age pension was reduced from $784.26 per month to $539.52 per month and currently continues at that level.     It was also noted that Mr Madoyris had purchased a property in Athens and had a bank account with a balance of $66,836.   The latter amount is deemed to be earning income of $2,942.90 per annum (around $113.18 per fortnight).

10.     On 24 May 2005 an authorised review officer (ARU) affirmed the decision to reduce age pension and this decision was in turn affirmed by the SSAT on 20 September 2005.    Mr Madoyris then appealed to the Administrative Appeals Tribunal (AAT).

Analysis

11.     The matter before the Tribunal is a de novo merits review of an administrative decision and the Tribunal, in arising at a correct and preferable decision, is bound to apply the law.    The Tribunal must also take into account extant policy provisions and any relevant prior case determinations (for confirmation see Re Drake and Minister for Immigration and Ethnic Affairs (1979) 24 ALR 557 and Re Walsh and SDFCS (2002) AATA 881 (4 October 2002).

12.     As earlier indicated, the key legislation in the current case is the Social Security Act 1991 and Amendments (“the Act”), especially ss43(1), 1072 and 8 defining “income”.   There is no International Agreement between Greece and Australia in respect of social security, thus the Australian Social Security Act 1991 applies.

13.     The Tribunal notes that the following sections of the Act must be considered in this case:

·     Section 4 which deals with who is a member of couple;

·     Section 8 dealing with the definition of ordinary income, with section 1072 clarifying that the gross amount of income must be taken into account;

·     Section 55, explaining that a person’s rate of age pension must be assessed in accordance with Pension Rate Calculator A in section 1064 of the Act;

·     Section 1064-A1 gives the overall rate of calculation method;

·     Various other sections then deal with specifics of calculations as they relate to Madoyris:  e.g. s8 and s1172: income to be assessed is gross income.

S1064-A2 Members of a couple, pooling resources.

S1064-E4 Individual’s ordinary income free area.

S1064-E10 Pension reduction for ordinary income in excess of income free area.

14.     The Department correctly contends that Mr Madroyis’ Age Pension must be worked out with reference to his wife’s income in accordance with the Act and there is no sound basis to disregard that income.    The reality is that Mr Madoyris is married to Konstantina Petsa, they live together and share financial resources.   Australian social security law treats income as gross income from all sources in determining qualification and rate of pensions (s8 and s17(2) of the Act).   The Guide to social security law makes it clear this also applies to pensions and income from overseas sources and there are several AAT decisions reinforcing this point.

15.     There is only one provision in the Act which might permit Mrs Madroyris’ wife income to be disregarded.   Where it is considered a “special reason” may exist, the Secretary of the Department can determine under s24 of the Act that a person is not to be treated as a member of a couple.   That would have the effect of excluding Mrs Madroyris’ income from assessment in establishing his rate of age pension.   But section 24 only applies in very special circumstances, such as extreme financial hardship, health reasons or other major personal factors.

16.     Mr Madoyris has claimed that any reduction in age pension would constitute hardship in his circumstances, which involve a sick wife who is poor and cannot afford the loan on their apartment and various living expenses.    He says he is suffering psychologically because of his situation and low rate of Australian pension.  He considers it is unfair for Centrelink to focus on gross combined income, when net income would be a more appropriate indicator.

17.     As against this point the Madoyris couple are in no different circumstances to many others who depend upon thin incomes and part pensions; indeed their circumstances are more favourable, with Konstantina Madroyis owning property in Athens, with a substantial bank balance and earning reasonable income per month.   Centrelink are correct in deciding that currently the applicant is not in an extreme hardship situation.    There do not appear to be circumstances warranting invoking s24 of the Act.

18.     The Tribunal notes that the SSAT came to much the same conclusion in its determination dated 20 September 2005.    The SSAT agreed that Centrelink was required to determine age pension taking partners’ gross income into account and did not accept the proposition Alexander Madoyris faced special circumstances of great hardship.

19.     The Secretary’s Statement of Facts and Contentions at paragraph 4.8 draws attention to the fact the couple receive around $1,084 per fortnight, taking into account age pension, wife’s income and interest on assets, whereas if both were to receive an Australian pension and it was their sole source of income, then the maximum they would receive would be $916.40 per fortnight, less than the sum in Greece.   It is clear that they are not in hardship relative to many others.

20.     The respondent contends that Alexander Madoyris is a member of a couple sharing income and assets as joint resources, thus his Age pension must be calculated taking into account his wife’s income and assets in accordance with ss1064-A1 and 1064-E2 of the Act.   To do otherwise would frustrate the intent of the legislation which aims to deliver a fair and equitable rate of pension based on the financial means already available to a person.

21.     The Tribunal concurs and having considered all available evidence and relevant statutory and policy provisions, finds on the balance of probabilities the SSAT and Centrelink acted correctly in reduce Mr Madoyris’ pension.

Decision

22.     The decision under review is affirmed.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor B W Davis AM (Part-time Member)

Signed:  K L Miller (Administrative Assistant)

Date/s of Hearing  Matter decided on the papers.
Date of Decision  5 April 2006