Mario Gobin and Secretary, Department of Social Services

[2014] AATA 76

[2014] AATA 76

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/4643
Re	Mario Gobin
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	RM Creyke, Senior Member
Date	19 February 2014
Place	Canberra

The decisions under review are affirmed.

..................[sgd]..........................

RM Creyke, Senior Member

Catchwords

SOCIAL SECURITY – age pension – pension bonus scheme – partnered verses single rates – calculation of pension bonus – means testing

Legislation

Social Security Act 1991 (Cth) Sections 55, 92A, 93H, 93J, 1064 and Part 2.2A

Social Security and Other Legislation Amendment (Pension Reform and other 2009 Budget Measures) Act 2009 (Cth) Schedule 9, item 1.

Secondary Materials

Department of Human Services News for Seniors, Issue 88 (2013)

Pension Bonus Scheme booklet,

REASONS FOR DECISION

RM Creyke, Senior Member

1. Mr Mario Gobin is seeking review of two decisions of the Social Security Appeals Tribunal (SSAT) dated 29 August 2013.  Those decisions affirmed decisions by Centrelink on 16 May 2013 that Mr Gobin was entitled to receive a pension bonus payment. 

2. The initial decision by Centrelink calculated Mr Gobin’s pension bonus payment at $13,613.30.  Following an internal review, a top-up payment of $10,603.50 payment was granted, making a total pension bonus payment to Mr Gobin of $24,216.80.

3. Mr Gobin sought further review of these decisions by the Tribunal on 16 September 2013 as he had expected a pension bonus payment of $44,792.00.  The Tribunal is satisfied that it has jurisdiction to hear the application. The matter was heard in Canberra on 14 January 2014.

   Background

4. Mr Gobin, born 1942, is married. His wife was born in 1950.  Mr Gobin was a self-employed painter, but retired in 2012.  His wife owns her own business, which has an annual taxable income of about $18,000.00. In 2012 when Mr Gobin made his claim for age pension and the pension bonus the couple had approximately $10,500 in investments and bank accounts which were deemed to be earning income.

5. On 23 November 2007, Mr Gobin contacted Centrelink concerning his eligibility for a pension bonus payment. Centrelink sent him a claim form and information pack that day. At the hearing Mr Gobin conceded he had been sent documents concerning the age pension and the Pension Bonus Scheme. The documents which he was provided with and which he produced to the hearing were a booklet, Information you need to know about your claim for Age Pension, [and the] Pension Bonus Scheme, and a small booklet, entitled the Pension Bonus Scheme.

6. The small booklet considered at the hearing was a later version of the one seen by Mr Gobin since it had been published in 2010.  Mrs Gobin said at the hearing that the booklet must have changed from the one seen by Mr Gobin. The representative of the Secretary denied that there were any changes on the key issues.  The Tribunal, after the hearing, gave Mr Gobin the option of producing the version he said he had been sent, but he declined to do so.  The Tribunal, accordingly, has accepted the Secretary’s assurance that there were no differences between the earlier and the 2010 version which would have affected the key information provided to Mr Gobin in 2007 and 2008.

7. Mr Gobin completed the Registration for the Pension Bonus Scheme (Scheme) on 21 January 2008, and lodged the form on 23 January 2008. Centrelink notified Mr Gobin on 29 January 2008 that he was registered as an accruing member of the Scheme with effect from 8 November 2007, the date on which he turned age pension age.

8. Mr Gobin was sent an information notice about the requirements for the Scheme on 27 October 2008. On 4 December 2008 Centrelink requested Mr Gobin provide information to assist in making the correct decision about his entitlement. Mr Gobin responded on 14 December 2008.

9. On 17 December 2008, Centrelink requested further information about his income. On 3 January 2009, Mr Gobin advised Centrelink of the details of his accountant. On 31 August 2009, Centrelink notified Mr Gobin about changes to the Scheme. The changes did not affect Mr Gobin since he and his wife were born before the cut-off dates of those affected.  In addition, Mr Gobin claimed that prior to his accident, he continued to meet the minimum annual work hours criterion of 960 hours. 

10. On 17 September 2009 Mr Gobin was invited to speak to a Centrelink Financial Investment Service Officer and he was sent brochures on work bonuses and pension rates.  Mr Gobin did not avail himself of the invitation.

11. On 25 October 2011, Centrelink notified Mr Gobin as to evidence he needed to provide to confirm he met the requirements of the Scheme.   On 1 November 2011, Mr Gobin advised Centrelink he had been working during 2010-2011 in excess of 960 hours for the year.

12. In 2012, Mr Gobin had a serious accident and decided to retire.  As a consequence he was no longer earning an income as a self-employed painter.  On 22 January 2013, Mr Gobin completed a Claim for Age Pension and Pension Bonus, including details from his and his wife’s taxation returns for the 2011 financial year; of the partnership tax return of M & B Gobin for that year, bank statements of the couple, and an Income and Assets Form completed by them both on 22 January 2013.   On 26 January 2013 Centrelink requested he provide further information concerning the age pension application. 

13. A decision was made on 7 February 2013 to grant Mr Gobin age pension and to pay $13,613.30 pension bonus. The rate of age pension as at 24 January 2013 was $5,792.91 per annum. That meant he was entitled to a pension bonus payment of $13,613.30 spread over the years since he had registered with the Scheme.  At the same time, further information was sought from him concerning his Old Age Pension from Croatia and he was advised that his Commonwealth Seniors Health Care Card had been stopped.

14. On 13 March 2013, Mr Gobin lodged a complaint to the Minister that he had not been paid the maximum pension bonus payment of $44,792.00.  On 21 April 2013, Mr Gobin told Centrelink that he was unhappy that he had not been advised of how the pension bonus payment was calculated and, in particular, that the payment was income and means tested.

15. On 16 May 2013, Centrelink advised Mr Gobin that his income and assets had been re-assessed, and the fact that he was no longer able to earn an income was taken into account. As a consequence, a decision was made to pay him a top-up amount of pension bonus of $10,603.50.

    Legislation

16. The legislative provisions for the pension bonus scheme are found in Part 2.2A of the Social Security Act 1991 (Cth) (Act).

    Issues

17. The sole issue is whether Mr Gobin was paid the correct amount of pension bonus payment.

    Consideration

18. The Pension Bonus Scheme was introduced in 1998.  The Scheme was closed to new entrants on or after 20 September 2009.[1] Mr Gobin registered to take advantage of the Scheme in 2008.  There is no question that Mr Gobin is entitled to age pension as well as a payment under the Pension Bonus Scheme, since he registered for the Scheme in January 2008. The question is the correct amount of his entitlement under the Scheme.

    [1] Social Security and Other Legislation Amendment (Pension Reform and other 2009 Budget Measures) Act 2009 (Cth) Schedule 9, item 1.

19. Section 92A of the Act explains the Scheme in simplified form. The Scheme provides that if a person qualifies for age pension but does not claim pension at the time of qualification, the person may be entitled to a single lump sum pension bonus when they eventually claim. An incentive to take advantage of the Scheme is that the pension bonus is tax free. Although the Scheme refers to a ‘single’ lump sum payment, there is also provision for a single top-up payment.

20. Mr Gobin claims he was told in 2007 that if he continued to work and did not retire at 65, but worked for another five years he would be eligible for a pension bonus payment, namely a tax free lump sum payment of $32,853.40 together with yearly increases. He said that the promise of the bonus payment kept him working until 2012.

21. Mr Gobin had a serious accident in 2012 and decided to cease working. Following his decision to retire in 2012, he claimed age pension and his lump sum bonus payment. Section 93H(4) of the Act provides that the person’s annual age pension rate, a rate which is linked to the amount of the bonus payment, depends on whether the person is single or partnered.

22. Mr Gobin questioned the amount of the bonus payment he received.  He had expected a payment of over $44,000. That figure was taken from a Department of Human Services publication, News for Seniors Issue 88, which sets out the Bonus Pension Rates and Thresholds in 2012.  However, the publication indicated that the $44,792.40 amount of the bonus payment was expressed to be the ‘Maximum Bonus after Year 5’ and applied when the applicant was ‘Single’.[2]  The maximum bonus after Year 5 for a person who was ‘Partnered’ was shown as $33,867.70 for each eligible partner.

    [2] Department of Human Services News for Seniors, Issue 88 (2013) 30.

23. Mr Gobin’s contention was that he should have been entitled to the bonus payment at the ‘Single’ not the ‘Partnered’ rate since, when he applied, he alone sought the payment.  His wife has not yet done so.  He said that as his wife was still working and did not intend to claim for some years, and as he was the only person applying in 2013, he was entitled to the amount payable to a single applicant. It was explained at the hearing, that the word ‘Single’ referred to the social status of the person.  It did not mean that if a person who was partnered and both members of the couple had registered for the Scheme, but at some point, one only of the couple had retired and made a claim, that claim could be assessed at the ‘Single’ rate.

24. Mr Gobin confirmed that at all relevant times he had been married to his wife and he was not single. On that basis, Mr Gobin was never entitled to the payment at the ‘Single’ rate.  He accepted at the hearing that he had misunderstood the meaning of the term ‘Single’ in the News for Seniors publication.

    Calculation of amount of bonus payment:  principles

25. Section 93J of the Act provides that ‘(1) If: (a) a person was a member of a couple throughout the person’s overall qualifying period … the amount of the person’s pension bonus is worked out using the following formula …: Annual pension rate x Pension multiple x No of years in the person’s overall qualifying period’.   The number of years in Mr Gobin’s qualifying period was five:  he registered for the Scheme in 2008 and made a claim in 2012.

26. The ‘annual pension rate’ and the ‘pension multiple’ refer to the formulae in the Rate Calculators in section 1064 of the Act. Section 55 of the Act provides that a person’s rate of age pension is calculated in accordance with the rate calculator in section 1064 of the Act. Section 93J(4) of the Act provides that for the purpose of calculating pension bonus ‘a person’s annual notional partnered pension rate is equal to: (a) … (i) The person’s maximum basic rate under Table B’ in section 1064-B1. In other words, the ‘annual notional partnered pension rate’ for the pension bonus is worked out using the rate calculator in the Act which applies to the age pension, and this is then used to calculate the amount of the pension bonus.[3] The age pension is means tested.

    [3] Social Security Act 1991 (Cth) section 93J(4).

27. Section 1064-A2 of the Act provides that where two people are members of a couple they will be treated as pooling their resources – their income and assets – and sharing them on a 50/50 basis. It is for that reason that there is a reduced amount of pension bonus to a person, like Mr Gobin, who is ‘partnered’.  

28. Mr Gobin claims that he was never advised that the amount received under the Scheme is dependent on the amount of income and assets of the person applying.  Mr Gobin did concede he had been sent information by Centrelink but he argued it did not say the pension bonus payment was means tested.  For example, the booklet Information you need to know about your claim for Age Pension [and the] Pension Bonus Scheme.  Information in that booklet on p 10 states only ‘you can get a tax free lump sum bonus at the end of your working life’.  Mr Gobin says that he relied on that undertaking to continue working for five years.  That page of the booklet does not say that the bonus is means tested. Mr Gobin’s argument was that just as the ‘baby bonus’ was not means tested, he assumed that neither was the pension bonus payment.

29. However, more detailed information on the pension bonus scheme in the booklet Pension Bonus Scheme, a copy of which was also given to Mr Gobin when he registered, states among other things: ‘When the time comes to claim your bonus and Age Pension, your entitlement to Age Pension will be subject to the pension income and assets tests.  A reduced rate of pension will mean a reduced rate of Pension Bonus.[4] In other words, there is advice which was provided to him, that both the age pension and the pension bonus payment were subject to a means test. When Mr Gobin registered for the Scheme he gave an undertaking that he understood his rights and obligations under the Scheme.  These rights and obligations included that his Pension Bonus scheme would, according to the law, and to the information in the Pension Bonus Scheme booklet, be means tested. The registration form signed by Mr Gobin in 2008 also advises applicants to read the Pension Bonus Scheme brochure ‘as conditions apply’.

    [4] Pension Bonus Scheme booklet, 15.

30. On the basis of this evidence, the Tribunal is satisfied that although Mr Gobin said he was misled by the information in the Information you need to know about your claim for Age Pension [and the] Pension Bonus Scheme booklet since it did not refer to means testing, he was on notice from the Pension Bonus Scheme booklet, letters from Centrelink, from the registration form, and from the Department of Human Services Senior News publication, that the Scheme was means tested.  The Senior News publication referred to the ‘Maximum’ rates of pension bonus, indicating that amounts less than the maximum payment were also a possibility.

31. He had also been invited by Centrelink to seek further information from a Centrelink Financial Information Service Officer but declined to do so.  Mr Gobin had an accountant, but did not consult him about the amount he could expect to obtain under the Scheme. At the hearing Mr Gobin conceded that his accountant had not told him he would be entitled to the maximum amount. Mr Gobin did not avail himself of available financial advice which may have alerted him to the means testing of the payment either in advice of his decision to register or when he made a claim. Had he done so, he may not have chosen to register for the pension bonus and continue to work until 2012.  

32. The Tribunal is satisfied that Mr Gobin is taken to have been given sufficient information to have alerted him to the means testing of the payment. 

    Calculation of amount of bonus payment:  figures

33. The history of the information provided to and requested from Mr Gobin by Centrelink between 2007 and 2013, is outlined in the Background section of these reasons. Mr Gobin did not dispute that the figures used to calculate his age pension for the purpose of the rate calculator were correct.  The initial payment of pension bonus was erroneously based on income for Mr Gobin, income he was no longer receiving due to his accident and decision to retire. As a consequence he was initially granted a pension bonus of $13,613.30. 

34. When Mr Gobin pointed out that he was not in receipt of income and it was solely his wife’s income and income from investments which should be used in the rate calculation, Centrelink reviewed the figures and paid Mr Gobin a top up payment of $10,305.02.  The figures are set out at page 138 of the tribunal documents and were not queried by Mr Gobin.

35. The Tribunal is satisfied that those figures are correct.  The Tribunal is also satisfied that Mr Gobin was advised that the amount of his age pension and of the related pension bonus payment have now been correctly calculated, taking into account the pooled resources of Mr and Mrs Gobin and allocating Mr Gobin half the resources identified.  That means the decision under review is affirmed.

36. Mr Gobin was advised at the hearing of other avenues he could pursue to voice his dissatisfaction with the amount of the pension bonus which he was paid under the Scheme.

37. The decisions under review are affirmed.

I certify that the preceding 37 (thirty- seven) paragraphs are a true copy of the reasons for the decision herein of RM Creyke, Senior Member.

….......[sgd].................................

Associate

19 February 2014

Date of hearing	14 January 2014
Applicant	In person
Advocate for the Respondent	Glenda Heggen
Solicitors for the Respondent	Department of Human Services