MARK KNIGHT and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2012] AATA 860

[2012] AATA  860

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/2419
Re	MARK KNIGHT
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT

DECISION

Tribunal	Mr P Wulf, Member
Date	6 December 2012
Place	Brisbane

The Tribunal affirms the decision under review.

[Sgd]
Mr P Wulf, Member

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Disability support pension – Rate of pension payable – Member of a couple – Financial aspects of the relationship – Nature of household – Applicant’s knowledge of social and cultural aspects of relationship – No special circumstances – Decision under review affirmed

LEGISLATION

Acts Interpretation Act 1901 (Cth) s 15AA

Administrative Appeals Tribunal Act 1975 (Cth) s 37

Social Security Act 1991 (Cth) ss 4, 24

CASES

Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531

Cocks v Centrelink (2000) FCA 1248

K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 60 ALR 509

Klein v Domus (1963) 109 CLR 467

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 153 ALR 490

Re Colaiacolo and Secretary, Department of Social Security [1985] AATA 91

Re Galewski and Secretary, Department of Social Security (1998) 54 ALD 569

Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651

Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143

Re Malajew and Secretary, Department of Social Security (1988) 16 ALD 1

Re Pelka v Secretary Department of Families, Housing, Community Services and Indigenous Affairs (2008) 102 ALD 22

Re Williams and Director-General of Social Services (1981) 4 ALD 300

Re Secretary, Department of Social Security and Tsimpidaros [1995] AATA 554

SECONDARY MATERIALS

Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991

Guide to Social Security Law

REASONS FOR DECISION

Mr P Wulf, Member

6 December 2012

1. Mr Mark Knight (“the applicant”)[1] seeks review of a decision made by Centrelink on 14 November 2011[2] to reduce the rate of his disability support pension (“DSP”) under the Social Security Act 1991 (Cth) (“the Act”) as it considered he was a member of a couple between 21 September 2011 and 27 December 2011 (“the relevant period”).

   [1] Exhibit 1, T-Document 1/1-5.

   [2] Exhibit 1, T-Document 5/35.

2. On 13 March 2012, the decision was affirmed by an authorised review officer (“ARO”). In affirming the decision, and it does not appear that Mr Knight has ever argued that he was not a member of a couple under s 4 of the Act, the ARO decided on the only remaining issue that there were no special reasons why the discretion to treat Mr Knight as not being a member of a couple should be exercised.[3] The applicant appealed the decision to the Social Security Appeals Tribunal (“SSAT”), which affirmed the decision on 11 May 2012.[4] The applicant has applied to this Tribunal for review of the decision of the SSAT.

   [3] Exhibit 1, T-Document 9/58-62.

   [4] Exhibit 1, T-Document 2/6-10.

3. For the reasons that follow, the Tribunal finds that there are no special reasons to find that he should be treated as though he was not a member of a couple. Therefore the decision is affirmed.

   ISSUES FOR THE TRIBUNAL

4. The issue for the Tribunal to determine is whether there are any “special reasons” that exist to suggest that the applicant should be treated as if he was not a member of a couple for the purposes of his DSP payment during the relevant period.

   LEGISLATION

5. The relevant provisions as to the definition of a couple and whether a person is a member of a couple is contained within s 4 of the Act. The rate at which a person is paid a social security payment is calculated according to formula in the Act. A person who is a member of a couple is paid less than if s/he were single, the rationale being that a couple can pool resources and live more cheaply than if each were single.

6. Section 4(2)(a) of the Act provides that a person is a member of a couple if the person is legally married to another person, and is not living separately and apart from the other person on a permanent or indefinite basis. Section 4(3) of the Act states in determining whether a person is a member of a couple all of the circumstances of a relationship must be considered.

7. However, s 4(6) allows for a person to not be considered a member of a couple “if a determination under section 24 is in force in relation to the person”. Section 24 of the Act allows for the situation where a person may be treated as not being a member of a couple. Relevantly, the section states:

   (1)   Where:

   (a) a person is legally married to another person; and

   (b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and

   (c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

   the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

   THE EVIDENCE

8. The evidence before the Tribunal comprised:

   (a)Exhibit 1: the "T Documents" (T1-14: pp. 1-71) lodged by the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth);

   (b)Exhibit 2: medical report prepared by Dr Ebrahim Patel dated 11 October 2012;

   (c)Exhibit 3: applicant’s Statement of Facts and Contentions and associated case material (undated);

   (d)Exhibit 4: respondent’s bundle of documents including medical reports by Dr Patel (Exhibit 2) and Dr Richard Astill dated 25 September 2001;

   (e)Exhibit 5: respondent’s Statement of Facts and Contentions dated 29 October 2012; and

   (f)the oral evidence of the applicant.

9. Subsequent to the hearing, the applicant requested to make further written submissions.  There was no objection to these being made by the respondent. The respondent deemed it unnecessary to make any further submissions on receipt of the applicant’s additional submissions.

   ANALYSIS

   Is the applicant a member of a couple?

10. The applicant’s case appeared to rely on two main points, being that he:

    (a)received no financial benefit from being in the relationship through the pooling of resources; and

    (b)needed to be with his wife for the purposes of his psychological wellbeing.

11. The applicant is a man in his mid-50s. He has had a major depressive illness for at least the last ten years[5] and has been the recipient of DSP. He also suggested that he had a seasonal defective disorder; however there was no medical evidence to corroborate this evidence. The applicant said that he lived in Asia as this assisted his disorder. He is a vegetarian and he suggested that his diet assists with his illnesses.

    [5] Exhibit 3: Dr Richard Astill dated 25 September 2001.

12. Sometime prior to September 2011, the applicant sought to find himself a wife from Asia. After meeting his now wife, a school teacher in Thailand, the applicant began living in the same apartment complex as her. On 21 September 2011, they were married and immediately began residing in the same apartment.

13. The applicant returned to Australia on 25 September 2011 for a short visit and returned back to Thailand and his wife on 9 October 2011. He advised the Tribunal that during his time at home in Australia he stayed with friends and did not pay rent. On return to Bangkok, the applicant recommenced living with his wife.

14. The applicant indicated in his evidence and his further written submissions, that he needs his wife’s companionship as this assists with his wellbeing, maintaining his physical and psychological health. While it is apparent that the applicant has a disability, the only evidence before the Tribunal as to whether being with his wife does assist his psychological health is the letter from Dr Patel, which is of very little assistance as it merely makes statement about what the applicant said to Dr Patel and the evidence of the applicant himself.

    Financial aspects of the relationship

15. The financial dealings between two people and how they treat their assets, liabilities and obligations is an important, although not determinative, indicia of whether they are a member of a couple.

16. The applicant argued that he did not receive a financial benefit from being a member of a couple and therefore should not be considered as a member of a couple. With respect to this, the applicant advised the Tribunal that prior to marrying his wife they lived separately in different apartments but within the same complex. He was required to pay his own rent for the apartment and it does not appear from the evidence that he made any contribution to his future wife’s rent or other living expenses prior to their marriage. However, immediately on marriage, they commenced cohabitating. The applicant indicated that upon cohabitation, they began sharing expenses including splitting the rent etc; however, on the applicant’s evidence, the splitting of the rent was not always equal and he would sometimes pay a greater share of the rent that his wife. Nevertheless, on this basis, through cohabitation, the applicant saved money in the form of not having to both pay rent separately. It is therefore clear that there was some financial pooling with respect to paying rent, even if this may not be equal all of the time.

17. There was no evidence presented to the Tribunal to suggest that the applicant and his wife did not have joint bank accounts and shared bills, including for example, power and water. It is, however, patently clear that they were sharing financially in the relationship. This Tribunal does not consider it a specific requirement that this sharing be equally divided. During the hearing, the Tribunal used the example of an Australian man living in Asia with his local wife where he made a significant income and she did not work and therefore made no income. In that situation, while there was solely a financial contribution from the man and nothing from the wife, they would still be deemed to be members of a couple.

18. The applicant in both his oral evidence, although he was less forthcoming with the Tribunal at the hearing, and in his written submissions, made reference to the need for him to pay for certain things and that he was required to buy gifts and other matters for his wife’s family members including her parents. These social aspects are discussed below.

    Nature of the household

19. The evidence is that from the date of marriage and throughout the relevant period, the couple slept in the same bed except for the short period when the applicant was back in Australia. They share the kitchen although it was noted that the applicant ate organic vegetables and therefore may have cooked some meals for himself. They also undertook household duties together which is normal in any relationship. The applicant, in cross examination, admitted that he would save on cleaning.

    Social and cultural aspects of the relationship

20. The applicant made a specific point that due to the social and cultural aspects of the relationship he was required to provide special dinners for his wife as well as buying things for her family. He suggested that this demonstrated that he received no financial benefit from being a member of a couple. These are discussed separately below including in the context of special reasons.

    Any sexual relationship between the people

21. In considering s 4(3)(d) of the Act, while there was no evidence before the Tribunal that the applicant and his new wife had a sexual relationship with each other, the Tribunal infers that sexual relations took place between the applicant and his wife as they lived together and it would be normal for a newly married couple to have a physical relationship.

    Nature of the people’s commitment to each other

22. The nature of the commitment between the applicant and his wife is an important consideration on whether they were members of a couple during the relevant period. According to s 4(3)(e) of the Act, this commitment is to be assessed by the length of the relationship, the nature of any companionship and emotional support that they provided to each other during the relevant period. This specifically relates to the second component of the applicant’s argument.

23. While it is noted that the relationship was relatively short at the time, the applicant indicated that he was in the process of relocating his wife to Australia once they could process the immigration paperwork. He also indicated that, specifically with respect to the second limb of his argument, their relationship was vital as his psychological wellbeing due to her calming effect on him.

24. In Re Pelka v Secretary Department of Families, Housing, Community Services and Indigenous Affairs,[6] at [27], their Honours stated:

    The tribunal [the AAT] was satisfied that Ms Pelka and Mr Kuhl displayed a special commitment to each other, both physically and emotionally, which was qualitatively different from the commitment that either of them had to any other person.

    And at [30]:

    The matter to which s 4(3) of the Social Security Act requires a relevant decision-maker to have regard is the nature of the commitment of two people to each other. That regard is to include, in particular, four specific matters. Clearly, the tribunal had regard to those four specific matters in terms. The essential requirement of the provision, however, is that the decision maker must have regard to the nature of the commitment of two people to each other. It is clearly relevant to that matter to have regard to the fact that a commitment that each of those persons has to each other is different from the commitment that each person has to any other person. The fact that the commitment that Ms Pelka had to Mr Kuhl was qualitatively different from the commitment that Ms Pelka had to any other person is clearly relevant to the nature of her commitment to Mr Kuhl. The same reasoning applies in relation to the commitment of Mr Kuhl to Ms Pelka. The tribunal, as the decision maker, had regard to precisely the matter to which it was required to have regard, namely, the nature of the commitment of Ms Pelka and Mr Kuhl to each other.

    [6] (2008) 102 ALD 22.

25. The above statements are an excellent example of the case before the Tribunal. There is a clear reliance from both parties to the relationship as is demonstrated by the applicant’s efforts to gain his wife residency status in Australia and in the alternative that the applicant relies upon his wife for emotional support. In the Tribunal’s view, separation means more than physical separation. Separation can only occur in the sense used in the Act where one or both of the spouses form the intention to sever or not to resume the marital relationship and act on that intention; or, alternatively act as if the marital relationship has been severed. Marriage involves many elements, some or all of which may be present in a particular marriage: elements such a living under the same roof, sexual intercourse, mutual society and protection and the recognition of the existence of the marriage by both spouses in private and public relationships.

26. In this situation, the actions of both parties clearly demonstrate that the applicant is a member of a couple.

    SPECIAL REASONS

27. French J, in Boscolo v Secretary, Department of Social Security,[7] (Boscolo) said that although discretion in the Act which involves a “special” reason or circumstance is “not lightly to be enlivened” (at 535), it “does not require that the case be extremely unusual, uncommon or exceptional” (at 536).

    [7] (1999) 90 FCR 531.

28. The expression, “special reason” in s 24 of the Act must, however, be interpreted in context,[8] consistent with the scope and purpose of the Act[9], and in particular the reasons why a member of a couple’s rate of benefit should be the same as that of a single person. That context and purpose was explained in the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991, which stated (at 17):

    … there is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together. This justification is based on the premise that the unpartnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as an unpartnered person. 

    [8] Acts Interpretation Act 1901 (Cth) s 15AA. See also K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309, 315 (Mason J); Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381 (McHugh, Gummow, Kirby and Hayne JJ).

    [9] Klein v Domus Pty Ltd (1963) 109 CLR 467.

29. This justification was elaborated in Re Hawkins and Secretary, Department of Social Security:[10]

    The evident policy behind the relevant legislative provisions is that ordinarily couples should be expected to pool their resources and practise economies of scale; that those expectations should not apply to couples who are separated by illness or imprisonment; but that there would have to be some special reason not to apply those expectations to members of other couples.

    [10] (1996) 44 ALD 651 at 652.

30. With respect to the first aspect, it is clear that the applicant and his wife only require one residence, not two, and that there are economies of scale in their sharing of food, costs of electricity and other household expenses, means of transport, petrol and other outgoings. While there may be some increased expenses: more money must be spent on items for two individuals than for one, such as clothes and individual transport, to cite some obvious examples. However, on balance, the economies of scale are likely to favour a couple over a single person.

31. With respect to the second aspect, the applicant argues that in his circumstances, there has been no benefit from pooled finances and assets. However, unlike other decisions discussed later,[11] the applicant’s wife in the present case had assets and income to pool at the commencement of their marriage. She holds the position of a teacher and is able to contribute to the financial pool. Therefore, her circumstances are like those which ordinarily apply when two people agree to live together. On these facts, the applicant falls within the second reason for the reduced rate of payment for DSP at the partnered rate.

    [11] Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143.

32. The issue before the Tribunal was whether there is any “special reasons” which would constitute a difference between the norm and the current circumstances of the applicant and his wife that would be sufficient to bring the applicant within the test in section 24(1)(c) of the Act. That test, as French J said in Boscolo, at 536, has at its core “the requirement … that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course”. Do the applicant and his wife’s situation mean that the discretion should be exercised in the applicant’s favour because, on his argument, the couple “could not reasonably be expected to enjoy the pooling of resources that usually occurs in a marital relationship …”?[12]

    [12] ReSecretary, Department of Social Security and Tsimpidaros [1995] AATA 554 at [2] citing the Social Security Guide.

33. The applicant argued that buying his wife pizza every fortnight and indulging her with small luxuries should make the Tribunal consider him as not being as a member of a couple as this was very unusual. The Tribunal has concerns as to why the applicant would believe this was unusual. It is fairly normal for a husband to take his wife out for dinner and to pay for that dinner, particularly a western man and, in this case, his Asian wife.

1. The applicant also suggested that as a result of social and cultural requirements he was required to buy presents for his wife’s family. During the hearing the applicant raised this but when questioned by both the respondent and the Tribunal he was very elusive and evasive as to what it meant and it was not until he provided his additional submissions that the information as to these gifts became apparent.

2. In his additional submissions, the applicant indicated that as a result of social and cultural requirements, he was forced to pay all the costs for his wedding; he was required to purchase his mother-in-law a bicycle at a cost of $70; and was again forced to give small gifts of money ranging from $2 to $4 to his wife’s family. He indicated that these requirements “grated on” his nerves.

3. The above are, in the Tribunal’s opinion, a demonstration that the applicant was a member of a couple and should not be considered unusual from what is expected of any man living in an Asian country. The payment of what can only be considered minor amounts does not constitute a special reason to demonstrate that the applicant should be provided the exemption of not being treated as a member of a couple.

4. The Tribunal notes that in Boscolo, French J, at 536, suggested that:

   [Section] 24 requires the decision-maker to focus on the position of one person, not the couple, and to assess whether that person should for a special reason not be treated as a member of the couple.

5. However, French J went on to say at 537:

   That does not of course prevent the Tribunal from considering all relevant circumstances including the position of [the wife] as it affected [the husband]. The matter will be a matter for the Tribunal to reconsider in the light of these remarks.

6. The Tribunal therefore considers that it is necessary to consider the circumstances of both the applicant and his wife when making its findings in this case.

7. In the applicant’s submissions, he referred at length to Re Holt and Secretary, Department of Education, Employment and Workplace Relations[13] (Holt) and suggested that this Tribunal should follow that decision. However, there are a number of distinguishing factors between it and the applicant’s case. In Holt, Mrs Holt had no separate income, nor did she bring any assets to the marriage except for wedding gifts. In contrast to this matter, the applicant’s wife has an income from her position as a school teacher and it would appear that she also had a number of assets that she brought into the relationship, for example personal and household effects.

   [13] [2010] AATA 143.

8. A finding that, for example, the applicant’s wife did not have the financial assets or income to support herself before coming into the marriage is not sufficient on its own to justify a finding that the applicant should receive the DSP at the single rate. The Tribunal accepts the correctness of the sentiment in the Explanatory Memorandum that:[14]

   There is no clear justification for paying a higher rate of pension/benefit or pharmaceutical allowance to a member of a couple simply because the partner does not also receive income support.

   [14] Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991, 17.

9. Financial hardship on its own is also not a sufficient “special reason”,[15] although hardship is a consideration.[16] There must be other circumstances to justify the favourable exercise of the discretion. In particular, since the applicant’s wife works, those circumstances or special reasons must explain why it would be unreasonable to deny the applicant the benefit of the exercise of the discretion in s 24 of the Act.

   [15] Re Malajew and Secretary, Department of Social Security (1986) 16 ALD 1; Re Colaiacolo and Secretary, Department of Social Security [1985] AATA 91 at [20].

   [16] Re Williams and Director-General of Social Services (1981) 4 ALD 300 at [27].

10. The Guide to Social Security Law, at s 2.2.5.50, notes that:

    A significant body of case law has established that the inability to pool resources for their mutual benefit is a special reason to exercise the discretion in section 24.

11. In Cocks v Centrelink,[17] Mr Cocks was a pensioner who lived in the Philippines with his wife and young daughter for up to six months of the year, but returned to Australia for the balance. In that case, O'Loughlin J said, at [11]:

    It is submitted that the absence of Mrs Cocks and the child overseas was a matter which was not beyond Mr Cocks' control but, according to the department, it was a lifestyle choice for which the public purse should not bear responsibility. That submission, in my opinion, cannot be accepted. It is contrary to the facts as found by the Tribunal, and I quote ... the relevant passage: ‘He simply cannot afford the $3500 to bring his family to Australia and provide accommodation’.

    O’Loughlin J, at [12], also made the following observation in relation to the issue of an inability to pool the financial benefit of marriage:

    The marriage of a man and woman is taken to mean, in ordinary circumstances, that they will pool their resources, share their expenses, and thereby live more cheaply than if they were two single persons who were living separate and apart. In the case of income earners they would pool their respective incomes. In the case of pensioners they would pool their pensions. In the case of Mr and Mrs Cocksit would seem to be the case that she has nothing to pool and he, as a result, has nothing to gain from any supposed pooling. That predicament exists whether or not they are residing together or apart.

    [17] (2000) FCA 1248.

12. The barrier in that matter was a practical one. Mr Cocks had to live in the Philippines for part of the year because he could not afford to bring his family to Australia, and when in the Philippines, it was inferred that his wife was neither earning an income or on any form of welfare benefit. On remittal to the Tribunal, it was found that Mr Cocks was eligible for Newstart allowance at the single rate in the six months of the year when he resided in the Philippines with his wife and her child. However, this case is distinguished from the present on the grounds that here the applicant’s wife was earning an income and, as the Tribunal has noted earlier in its decision, the applicant and his wife were receiving the benefit of pooling their resources, even if in unequal amounts as argued by the applicant. Therefore this case cannot be used to support the applicant’s position.

13. In Re Galewski and Secretary, Department of Social Security,[18] the Tribunal said, at 571, in favourably applying s 24 of the Act:

    The case of the pensioner who has to support a partner who brings to the marriage no assets, no financial resources and no financial prospects, seems to have been overlooked by the people who framed the amending legislation.

    [18] (1998) 54 ALD 569.

14. In that case, Mr Galewski had married a Tongan lady and was living in Tonga and as the reasons indicate at 570, his wife “had no qualifications, no job, no assets and no prospects prior to her marriage. … Her prospects have not improved much since her marriage”. As the Tribunal also noted at 570, it is “most unlikely that Ms Finau will bring any financial resources to the marriage”. In that case, the Tribunal determined that the lack of assets to pool by the wife, and the poor prospects of her subsequent employment were sufficient to attract the exercise of the discretion. However, again this case is distinguished on the grounds that the applicant’s wife was earning an income and therefore this case cannot be used to support the applicant’s position.

15. The Tribunal does not consider there to be any special reasons to consider that the applicant should be treated as not being a member of a couple. His wife has, on the evidence, a good job, income, assets and the prospect of always being able to gain employment through her qualifications. She also provides to the financial pool.

    DECISION

16. For the reasons set out above, Tribunal finds that the applicant was a member of a couple and that no special reasons exist to set that determination aside. Therefore the decision is affirmed.

I certify that the preceding 49 (Forty-nine) paragraphs are a true copy of the reasons for the decision herein of Mr P Wulf, Member.

....................[Sgd]....................................................

Associate

Dated 6 December 2012

Date of hearing	8 November 2012
Applicant	In person
Solicitors for the Respondent	Mr Joe Guthrie