Martin; Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2001] AATA 148

ADMINISTRATIVE APPEALS TRIBUNAL )

) No W2000/235

GENERAL ADMINISTRATIVE DIVISION       )
           Re      SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
  Applicant
           And    ERIC JOHN MARTIN
  Respondent

DECISION

Tribunal Mr R D Fayle, Senior Member

Date22 February, 2001
PlacePerth

Decision Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 16 June 2000 is set aside. In substitution therefor the Tribunal decides that: the respondent received the letter of 11 August 1997, a copy of which is set out at T document T5, pages 29 to 31 inclusively.

..........(-sgd RD Fayle-)............
Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – whether claim should be backdated; whether notice of a decision received; notice mailed; claimant suffering mental illness; claimant notified Centrelink of change of address; whether notification also of use of financial investments in respect of which deemed income maintained.
Social Security Act 1991 – ss109(2) & 149D(2)

REASONS FOR DECISION

22 February, 2001 Mr R D Fayle, Senior Member

On 17 July 2000, the Secretary, Department of Family & Community Services ("the applicant") applied to the Tribunal to review a decision made by the Social Security Appeals Tribunal ("SSAT") dated 16 June 2000. The SSAT had decided that the application for review of a decision of a delegate of the applicant by Mr Eric John Martin ("the respondent") should take effect from 11 August 1997. That decision was founded on the finding that a notice sent to the respondent by the applicant on 11 August 1997 was not received. The issue before the Tribunal is whether the notice sent by the applicant on 11 August 1997 was received by the respondent for the relevant purposes of the Social Security Act 1991.
Relevant background to the decision is that a delegate of the applicant had decided that an application made by the respondent, on 16 November 1999, to increase his disability support pension retrospectively to 11 August 1997 was denied. This decision was reviewed by an authorised review officer of the applicant and affirmed. The reason for the respondent's application was that money which he had on deposit and in respect of which the applicant attributed deemed income (which therefore reduced his entitlement to disability support pension) was withdrawn to purchase a home. The respondent maintained that he advised the applicant of this on or about 11 August 1997. The SSAT focussed its enquiry on whether it could be ascertained that the respondent "received" a letter sent to him of that date wherein the applicant advised him of his then disability support pension entitlement. That entitlement happened to be less than the immediately previously paid amount because the rent assistance was excluded, but there was no change to the deemed income. A similar letter was sent by the applicant to the respondent a year later, on 11 August 1998 containing virtually the same information except that the rate of pension had changed slightly.
Relevant legislation
The Social Security Act 1991 at 19 November 1999 as is relevant to these proceedings stated:
Date of favourable determination
146D(1) The day on which a determination under section144 or 146C (in this section called the "favourable determination") takes effect is worked out in accordance with this section.
Notified decision – review sought within 3 months
146D(2) If:
(a) a decision (in this subsection called the "previous decision") is made in relation to a person's disability support pension; and
(b) a notice is given to the person to whom the pension is payable advising the person of the making of the previous decision; and
(c) the person applies to the Secretary under section 1240, within 3 months after the notice is given, for review of the previous decision; and
(d) the favourable determination is made as a result of the application for review;
the determination takes effect on the day on which the previous decision took effect.
Notified decision – review sought after 3 months
146D(3) If:
(a) a decision (in this subsection called the "previous decision" ) is made in relation to a person's disability support pension; and
(b) a notice is given to the person to whom the pension is payable advising the person of the making of the previous decision; and
(c) the person applies to the Secretary under section 1240, more than 3 months after the notice is given, for review of the previous decision; and
(d) the favourable determination is made as a result of the application for review;
the determination takes effect on the day on which the person sought the review.
Decision not notified
146D(4) If:
(a) a decision (in this subsection called the "previous decision") is made in relation to a person's disability support pension; and
(b) no notice is given to the person to whom the pension is payable advising the person of the making of the previous decision; and
(c) the person applies to the Secretary under s1240, for review of the previous decision; and
(d) the favourable determination is made as a result of the application for review;
the determination takes effect on the day on which the previous decision took effect.
Social Security (Administration) Act 1999 current as at 20 March 2000
Date of effect of favourable determination resulting from review
109(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 a 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.
109(2) 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) more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for a 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.
109(3) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) a notice is not given of the original decision; and
(c) the person applies to the Secretary, under section 129, for a 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.

Discussion of evidence and reasons

The Tribunal was informed that the respondent would not be attending a hearing in this matter. The Tribunal, being satisfied that both parties were given due notice of proceedings and an application having been made to it by the respondent which was consented to by the applicant, the Tribunal, pursuant to s33 of the Administrative Appeals Tribunal Act 1975, has decided the matter on the evidence before it. That evidence consists of documents filed pursuant to s37 of the said Act ("T documents, T1 – T16 comprising 58 pages). In addition Mr Steve Ellis, an advocate with the Advocacy and Administrative Law Team, Centrelink, lodged written submissions with the Tribunal. The respondent indicated to the Tribunal, for reasons that may become apparent, that he did not wish to provide any submissions. It needs to be said that in August 2000 the applicant wrote to the Bunbury Community Legal Centre to advise them of the matter and requested that they give consideration to representing the respondent in this matter. In September the Tribunal was informed that nothing had come of that.
Background information
The SSAT decision at T2 is quite detailed. Indeed, that tribunal went to considerable lengths to document the evidence as it saw fit. In doing this it listed a chronology of perceived relevant events occurring from September 1992 (well before the critical time under review), through each intervening year, ending with a reference to a decision of a delegate of the applicant on 7 December 1999. That tribunal had the benefit of interviewing the respondent who attended its hearing on 10 February 2000.
In essence, from 1990, the respondent initially had been in receipt of a sickness benefit and from 1 May 1997, a disability support pension. When he sold his former home in 1993 (or 1994?) he deposited the net proceeds in a Wespac Term Deposit. He also had funds in an advantage saver account with the same bank. At page 8 of its decision (T2, p10) the SSAT state:
"(R) Job Search/Newstart Allowance payment form dated 10.5.94 states that between the period 27.4.94 – 10.4.94 (sic) that car and house were sold for $70,000 / Mr Martin also indicates that he did not change his home address;
(S) Letter from DSS to Mr Martin & Mr Martin's response dated 23.5.94: advised $10,000 in an advantage saver account and $70,000 in Wespac Term Deposit, with the respective interest rates;"
When the applicant granted the respondent entitlement to be paid disability support pension it wrote to him on 21 April 1997. That letter (T4) states, inter alia:
"… Your Disability Support Pension will be $394.80 per fortnight starting from 1 May 1997.
Please read the back of this letter. It tells you about your Social Security rights and what you have to tell us."
The letter provides a break-down of how the $394.80 is made up, being pension, pharmaceutical allowance and rent assistance. It then states:
"How we have assessed your yearly income.
Financial Investments $4,276.20
Total income $4,276.20
Income from Financial Investments
30,000.00 4% 1,200 51,270 6% 3,076.20 Total Value 81,270.00 4,276.20 [emphasis added]
The income assessed from your financial investments had been worked out under the extended deeming rules. Financial investments include bank, credit union and building society accounts, term deposits, managed investments, shares, loans and debentures. To work our your pension under the Income Test, the income assessed from your financial investments has been added to any other income you have. If you would like more information on the extended deeming rules, you can contact our Financial Information Service (FIS). FIS Officers can also discuss other issues about your investments. This service is free. If you want to know more about this please contact us on 132300.
WHAT YOU MUST TELL US
Under sections 132 and 133 of the Social Security Act 1991 you must tell us within 14 days … if any of these things happen, or may happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices.
…
Assets
…
if your financial investments are more than $82,270.00 (this is $1,000 more than the value of your financial investments we have recorded for you); …"
It is noted that the letter does not specify an obligation on the part of the claimant to notify the applicant should his (i.e. the respondent's) financial investments be reduced. However, the applicant has informed the respondent in some detail what it has assessed as his financial assets and the deemed income attributed to them. The letter (T4) does not say that as a result of this assessment the respondent's entitlement to disability support pension is reduced. It does however state: "To work out your pension under the Income Test, the income assessed from your financial investments has been added to any other income you have."
The respondent's evidence to the SSAT is that around August 1997 he attended the applicant's office to advise them that he has spent the money which he had on deposit. The evidence is that about that time he purchased a home, having been in rented premises prior to that and in receipt of rent assistance accordingly. One possible conclusion which could be drawn from that evidence is that the respondent understood that income deemed attributable to his financial investments (deposits) adversely affected his disability support pension, as did occupancy of his own home.
The SSAT noted that in a Jobsearch Allowance review form of 12 November 1996 the respondent was paying rent of $110 per week and had bank balances of $5,418.82 and $73,710 (T2, item (W) p.10). Similarly in an activity test/entitlement review (presumably for Jobsearch Allowance) the respondent reported that he was still paying rent, of $115 each week and that he had $4,073.08 in a bank account although he stated elsewhere in the form that "he has no money in bank accounts or the like" (T2, item AA) p.11). The very next month he reports in a claim form for disability support pension dated 18 April 1997 that his bank balances was $1,464 and fixed term deposit was $79,806, that he does not own a home and is paying rent at $155 per week (T2, item (BB) p.11).
It was as a result of the last-mentioned application for disability support pension that the applicant's letter of 21 April 1997 was sent. That letter notified the respondent of his entitlement to disability support pension. Interestingly, the SSAT in its otherwise thorough review of relevant events, make no mention of that letter, which for reasons to become apparent, is regarded by the Tribunal as relevant to the applicant's case.
On 11 August 1997 the applicant wrote to the respondent (T5) at his then notified address of 37b Moore Street, East Bunbury 6230 (T10, p.40). Prior to that the applicant's recorded address for service of notices was 5/38 Preston Street, Bunbury 6230 (T10, p.40), being rented premises in relation to which he received rent assistance. The SSAT decision notes:
"(CC) Centrelink file record notes (2): stating that Mr Martins address for correspondence as at 27.4.94 was 5/8 Preston St. Bunbury, and from 11 August 1997 37B Moore St. East Bunbury." (T2, item (CC), p.11)
The letter of 11 August 1997 follows the same format as that of 21 April 1997 referred to above, except that the fortnightly payments were set at $321.10 and did not include any rent assistance. It reports that the deemed income from financial investments and the amount of those financial investments as being the same as reported in the earlier letter of 21 April 1997.
A computer file note (T10, p.42) by an officer of the respondent, dated 14 August 1997 notes "… client is presently at Graylands Hospital" and further states:
"Statement from Sharon Steel who is the Mental Health Nurse at Bunbury Regional Hospital says Eric is currently undergoing treatment at Graylands Hospital and any contact should be referred through Shaw House at Graylands to the Social Worker unit. Also Eric is known as JOHN Martin – rvm buy 14.8.97"
There is no evidence as to when the respondent was admitted as a patient to Graylands Hospital. But clearly, it was proximate to the time that the letter of 11 August 1997 was mailed. The SSAT, in its reasons (T2) make the following statement in this regard:
"51. In relation to the letter from Centrelink to Mr Martin of 18 August 1998 (sic), Mr Martin stated that he does not recall the dates when he was hospitalised, but does recall a period of hospitalisation during 'winter months' of 1998. Given he has no knowledge of having received it, it may have arrived whilst he was hospitalised and unable to manage his own affairs."
The next critical relevant fact is that on 16 November 1999 the respondent advised the applicant that his term deposit had been withdrawn approximately two years previously, for the purpose of funding the purchase of his current home (T10, p.42). Meanwhile the respondent had received another "routine" letter from the applicant, dated 11 August 1998, which advised him of the then current rate of disability support pension of $322.50 starting on 20 August 1998. It advised in detail the same information as before in relation to the deemed income from financial investments and the value taken by the applicant for the purpose of that calculation.
As mentioned, the SSAT go to considerable lengths in its reasons to document the respondent's state of health. However, in the opinion of the Tribunal, and based on the chronology of evidence as recorded in the SSAT decision (T2), there are insufficient grounds for concluding that the respondent was, at 11 August 1997, incapable of looking after his affairs. As noted in paragraph 8 above, the respondent told the SSAT that he had attended the applicant's office to advise them that he had spent the money that he had on deposit. Clearly, if that is to be accepted as fact then it does not easily reconcile with the alternate view that the respondent was depressed and unable to deal with his affairs at that time. The evidence before the Tribunal relevant to the decision of the applicant to send its letter of 11 August 1997 includes a computer file note appearing at T10, p40 which states inter alia:
" Address Start Date: 11 Aug 1997    Address end date: (blank)
          Line 1:           (blank)
          Line 2:           37B Moore St
          Line 3:           East Bunbury
          Postcode        6230    State    WA

It is not apparent from the documentation before the Tribunal just how the applicant became aware of the new address for the respondent. But at T10, page 46, the applicant's computer based record for the respondent records on 11 August 1997 "Notes: CL notif'd rec'n now paying off home no more rent". In any event, the fact remains that it was on that day that the applicant wrote to the respondent at his new address informing him of its decision to reduce his entitlement to disability support pension and that he was no longer entitled to rent assistance. That reduction arose because the respondent was no longer a tenant but owned his own home. It is more probable than not that on 11 August 1997 the respondent told the applicant that he had moved into his own home. There is no record of the respondent advising the applicant of any other details, especially pertaining to the use of his savings. The note at T10, page 46 implies that the respondent (client) notified the applicant that he was "now paying off (his) home". That fact, in the Tribunal's opinion, does not provide any direct evidence that the respondent advised the applicant that he had withdrawn and defrayed his deposits in the process of purchasing his home. Nor, in the Tribunal's opinion, was there any obligation on the respondent to investigate further that matter. In the Tribunal's opinion the applicant's immediate action of writing to the respondent that same day, to inform him of his reduced entitlement to disability support pension and detailing the basis upon which the assumed financial investments' deemed income was calculated, was sufficient to communicate the applicant's decision in that respect (see Secretary, Department of Social Security and Debra Jeanette Plug [2000] AATA 744).

In support of the previous conclusion it is instructive to review the evidence of the respondent's state of mind before the critical date of 11 August 1997. The evidence is that at least until March 1997 the respondent, although suffering a psychiatric condition, did consider himself capable of work. On 13 March 1997 the treating doctor concluded that the respondent's mental condition was stable but it would be more than two years before he would be capable of any form of employment. Indeed in March 1997 the respondent had advised the applicant that he believed that "he could work full-time but employers say he is too old". So it was not until the advice from the Mental Health Nurse at Bunbury Regional Hospital, on 14 August 1997 that the applicant was informed of the respondent's hospitalisation (supra), even though there appear to have been four previous occasions, in 1991 to 1992, when the respondent was hospitalised for a psychiatric condition (T2, items (B), (E), (G), (J) and (Y)). The evidence suggests that the applicant had been informed of these occasions. The available evidence in relation to events leading up to 14 August 1997, including the fact that proximate to that time the respondent was sufficiently capable of closing out a contract to buy his home and to notify the applicant of that transaction, does not support a conclusion that the respondent was incapable of understanding the content of the letter of 11 August 1997. It may well be that by 14 August 1997 that situation had changed dramatically such that it was necessary for him to be hospitalised.

The Tribunal accepts the evidence contained in the reasons of the SSAT (T2) that the respondent qualified for disability support pension because of, possibly amongst other conditions, his psychosis and depression. But that diagnosis, of itself and in the light of the other evidence as discussed above, in the Tribunal's respectful opinion, does not support the conclusion that the SSAT reached at paragraph 72 of its reasons that the letter of 11 August 1997 ((T5) was not received by the respondent. That decision was founded on the proposition set out at paragraph 70 of its reasons:
"70.     Effectively each of these decisions by the Administrative Appeals Tribunal are authority for the general proposition that:
(a)       if Centrelink is aware that a persons suffers from an intellectual impairment and;
(b)       Centrelink knows that the person is likely to have a limited understanding of the notices it sends, and;
(c)       no additional measures are taken by Centrelink to ensure that the person understands the notices of decision they are sent (other than sending the standard form)
then that person has not received such a notice.
Even if the Tribunal was to agree with the SSAT that its proposition in paragraph 70 of its reasons was desirable practice to be adopted by the applicant in properly carrying out its administrative duties, the proposition does not apply in the present case. There is insufficient evidence as at 11 August 1997 that the respondent, although undoubtedly still suffering the very disabilities that qualified him for the disability support pension, had an intellectual impairment which was likely to cause him to have a limited understanding of the notice. The fact is that only a matter of months earlier, on 21 April 1997 (T4), the applicant had informed the respondent of his entitlement to disability support pension and detailed therein the basis of his deemed income. There is no suggestion that the respondent had a limited understanding of what that letter conveyed. And that letter is in the same terms as the letter of 11 August 1997, (except for the change in rate of pension due to the excision of the rent allowance). Further, by 14 August 1997 when the respondent was hospitalised, the applicant was informed by Sharon Steel, the Mental Health Nurse, Bunbury, that it should contact the respondent at Shaw House through the Social Worker Unit (T10, p.42). So, even if from 14 August 1997, the respondent was incapable of looking after his own affairs (which is not necessarily the case), the applicant had reason to anticipate that any future communications whilst the respondent was hospitalised, would be handled competently on his behalf.
In the respectful opinion of this Tribunal there is sufficient evidence to support the conclusion of fact that the applicant's letter of 11 August 1997 (T5) was more than likely prompted by advice received from the respondent in relation to his new address. That letter was sent to the then correct address for service of notices. It was received proximate to that date or soon thereafter. The letter would not have been unexpected since it was most probably prompted by a contact made in the first instance by the respondent to the applicant. The letter did not contain any information which would have taken the respondent by surprise because it was similar in principal content to a letter previously received (T4). And indeed the letter of 11 August 1997, contained sufficient detail to alert him to the fact that the applicant was still maintaining a sum of deemed income for the purpose of calculating his entitlement to pension. In the opinion of the Tribunal, based on the evidence before it, there was no obligation on the part of the applicant to investigate further whether the respondent had received and understood the contents of its letter of 11 August 1997. That of course, may well have been different if the applicant had received specific due notice from a competent authority that the respondent was then adjudged incapable of handling his affairs. In the opinion of the Tribunal it would be taking the responsibilities of administering the Social Security function of government too far to expect departmental officers of the applicant to make value judgements about the capacity of individual claimants to comprehend routine notices sent. For that would require both a constant review of each claimants' personal file and a judgement about whether that file supports a particular conclusion. Clearly, it is not desirable that such subjectivity should be a criterion for administrative decision making in an environment where there are literally millions of clients and many thousands of daily communications relevant thereto.
In the opinion of the Tribunal, for the purpose of s149D(3) of the Social Security Act 1991, the notice of decision "(the previous decision)", relating to the rate of the respondent's disability support pension was given to the respondent on or about 11 August 1997. The respondent applied to the applicant on 16 November 1999 for a review of that decision. As a result, a favourable determination was made increasing the respondent's amount of disability support pension. Therefore, the favourable determination takes effect on 16 November 1999.
Decision
For the above reasons, pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 16 June 2000 is set aside and in substitution therefor the Tribunal decides that the respondent received the letter of 11 August 1997 a copy of which is set out at T document T5, pages 29 to 31 inclusively.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R D Fayle, Senior Member
Signed:         ..................(-sgd W Treasure-)...................
  Associate
Date/s of Hearing  14 November 2000
Date of Decision  22 February 2001
Counsel for the Applicant        unrepresented
Solicitor for the Applicant
Counsel for the Respondent    Mr Steve Ellis
Solicitor for the Respondent

[2001] AATA 148

22 February 2001