Matzinger and Secretary, Department of Family and Community Services

[2004] AATA 369

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 369

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2003/74

GENERAL ADMINISTRATIVE   DIVISION		)
Re		GUSTAV MATZINGER

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Miss Mary Imlach (Senior Member)

Date8 April 2004

PlaceHobart

Decision The decision under review is affirmed.

[Sgd Mary Imlach]

Senior Member

CATCHWORDS

Social Security – age pension – international agreement – SSAT.

Social Security Act 1991 and amendments – ss8, 44, 1100, 1064 and 1072

Social Security (International Agreements) Act 1999

Agreement on Social Security between Australia and Republic of Austria

Re Sallan and Secretary, Department of Family and Community Services (1999) AATA 539

Re Crewer and Secretary, Department of Family and Community Services (2001) AATA 509

Re Rose and Secretary, Department of Family and Community Services (1999) 17 ALD 615

REASONS FOR DECISION

8 April 2004 Miss Mary Imlach (Senior Member)         

Decision Under Review

1.      The applicant, Mr Gustav Matzinger, seeks a review of a decision made by Centrelink on 27 September 2002 to reject his application for age pension on the basis that his income exceeded the disqualifying limit.

Issues

2.      The issues under review are:

(a)      What is the applicant’s income?

(b)Does the applicant’s income exceed the cut off point for an Australian age pension?

Legislation

3.      The relevant legislation is the Social Security Act 1991 and amendments ss8, 44, 1064, 1100 and 1072 and the Social Security (International Agreements) Act 1999, ss12, 13 and Schedule 10.

Standard of Proof

4.      Mr Matzinger is resident in Austria and is unable to attend the hearing.   The Tribunal decided to hear the matter on the papers provided.   The standard of proof is on the balance of probabilities and to the reasonable satisfaction of the Tribunal.

Background

5.      Mr Matzinger, the applicant was born in Vienna on 1 October 1937 and is currently a resident of Austria.   He claims to have spent 15 years in Australia between 1958 and 1973.

6.      The applicant sought an Australian age pension on 8 August 2002 based on the Agreement on Social Security between Australia and Austria (“the Agreement’).   He notified Centrelink in his application that he was in receipt of an Austrian retirement or old age pension.   Mr Matzinger turned 65 years of age on 1 October 2002.

7.      Centrelink contacted the payment authority for Austrian pensions and was advised that the applicant’s  annual rate of Austrian pension was 18314.24 euros, applying the exchange rate of 0.5737 as at 1 October 2002, the applicant’s annual income amounted to $31, 923.02.

8.      Centrelink rejected Mr Matzinger’s claim for age pension on 27 September 2002.   It determined that the applicant’s income exceeded the disqualifying limit.

9.      Mr Matzinger sought a review of this decision on 28 October 2002 and following further affirmation by Centrelink and an Authorised Review Officer (ARO), the decision to reject the applicant’s claim for age pension was made on 9 December 2002.  

10.     The applicant applied on 15 January 2003 for a review by the SSAT of Centrelink’s decision.

11.     The SSAT affirmed Centrelink’s decision to reject the applicant’s claim for age pension on 3 April 2003.

12.     On 1 May 2003 the applicant lodged a request with the Administrative Appeals Tribunal for a review of the decision of the SSAT.

Facts and Contentions

13.     Mr Matzinger has not filed any formal statement of facts and contentions, but in correspondence claims he is eligible for an Australian age pension and cannot understand why he has not received it.

14.     The respondent contends that as the applicant turned 65 on 1 October 2002 his qualification for age pension must be determined as at that date under the  Agreement.

Reasons for Decision

15. Schedule 10 of the Social Security (International Agreements) Act 1999 sets out the provisions of the Agreement.   Article 7 of the Agreement states that in regard to Australian pensions “the rate of benefit shall be determined according to the legislation of Australia.”

16. Mr Matzinger has sought an Australian age pension and the relevant provisions of the Act are ss8, 1072, 1064(1) and 1064A1 which deal with the definition and meaning of “income” and the method of calculation of pensions. Section 1072 of the Act specifies that a reference to income involves gross ordinary income from all sources. Section 4.3.6.10 of the Guide to Social Security Law clearly states that the gross rate of overseas pensions and income is assessed as income for social security purposes. A number of Tribunal decisions have confirmed that gross income from overseas pensions is “income” for the purposes of social security law, see for example:

Re Sallan and Secretary, Department of Family and Community Services (1999) AATA 539

Re Crewer and Secretary, Department of Family and Community Services (2001) AATA 509

Re Rose and Secretary, Department of Family and Community Services (1999) 17 ALD 615

17.     Section 12 of the Agreements Act explains how to work out a person’s rate of pension when the person is outside Australia:

“If:

(a) a social security payment is payable to a person under a scheduled international social security agreement; and

(b)the person is outside Australia; and

(c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia;

the rate of the social security payment is the person's international agreement portability rate worked out in accordance with Part 3.

(2) A reference in the agreement to a person's period of residence in Australia is to be taken to be a reference to the period of the person's Australian working life residence for the purposes of this Act.”

18.     Part 3 of the Agreements Act s13(1) states:

”Overall calculation process

(1)      A person's international agreement portability rate is worked out as follows:

(a) the period of the person's Australian working life residence in Australia (the residence period) is worked out according to Division 2;

(b) the person's residence factor is worked out according to Division 3;

(c) the person's notional agreement pension rate is worked out by calculating the rate that would be the person's social security payment rate if this section did not apply to the person but taking into account section 14;

(d) if the person's notional agreement pension rate is nil, the international agreement portability rate is also nil;

(e) if the person's notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person's notional agreement pension rate. This new amount is the person's total notional rate;

(f) multiply the person's total notional rate by the person's residence factor: the result is the person's international agreement portability rate.”

19.     Section 14(1) of the Agreements Act says:

“(1)  If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part.”

20.     Information obtained by the respondent from the Austrian pension authority disclosed that the applicant is receiving an Austrian pension of 1308.16 euros per month.    There are no provisions in the Agreement to exclude the applicant’s Austrian pension from the assessment income.

21. Section 8(1) of the Act says that “income” in relation to a persons means:

“(a) an income amount earned, derived or received by the person for the person's own use or benefit.”

The section also states that “income amount” means:

“(a) valuable consideration.”

22. In brief, s8 of the Act applies and the Austrian pension payments received by the applicant are an income amount by way of moneys. As these income amounts are received by the applicant for his own use or benefit, his Austrian pension payments are income and therefore ordinary income for the purposes of the Social Security Law.

23.     Austrian pensions are paid 14 times per year, therefore, the applicant’s Australian pension per annum amounted 18314.24 euro per annum (i.e. 1308.16 x 14).

24. Section 1100 of the Act requires that payments made to a person in a foreign country are converted to Australian dollars. The exchange rate effective under s1100 of the Act from 1 October 2002 was 0.5737.

25.     Section 55 of the Act states:

“(a)  if the person is not permanently blind—using Pension Rate Calculator A at the end of section 1064 (see Part 3.2)”

26. There was no evidence that the applicant is blind, therefore the appropriate rate calculator is in s1064 of the Act.

27. Section 1064 sets out the steps required to apply the income test and calculate whether the applicant is entitled to a pension.

28.     The respondent contended that under s1064-A1 Steps 11-12, the applicant’s rate of pension was nil and produced rate calculations for the applicant from 1 October 2002 to 1 May 2003 showing that from 1 October 2002 the applicant’s income had precluded him from an entitlement to age pension.

29.     Under s13(1) of the Agreements Act the applicant’s notional agreement pension rate is nil, and consequently his international agreement portability rate is nil.

30. Under s44 of the Act as the applicant’s rate of age pension is nil, an age pension is not payable to the applicant.

Decision

31.     The decision under review is affirmed.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Miss Mary Imlach (Senior Member)

Signed: K L Miller (Administrative Assistant)

Date/s of Hearing  Matter decided on the papers.
Date of Decision  8 April 2004