Mears and Secretary, Department of Social Services (Social services second review)
[2024] AATA 53
•24 January 2024
Mears and Secretary, Department of Social Services (Social services second review) [2024] AATA 53 (24 January 2024)
Division:GENERAL DIVISION
File Number(s): 2023/2136
Re:Valerie Mears
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member O'Donovan
Date:24 January 2024
Place:Canberra
I direct that the parties, within 21 days of the publication of these reasons, provide the Tribunal with a proposed decision (either agreed or separately) which is consistent with the finding that the applicant should be treated as if she were not a member of a couple.
………………………[sgd]……….…………..
Senior Member Damien O’Donovan
Catchwords
SOCIAL SECURITY – age pension – member of a couple – wife ineligible due to husband’s assets – whether living separately and apart – status and application of Social Security Guide – whether section 24 ‘special reason’ – decision set aside and substituted
Legislation
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Migration Act 1958 (Cth)
Family Law Act 1975 (Cth)Cases
SZOXP v Minister for Immigration and Border Protection and Another (2015) 231 FCR 1
Boscolo v Secretary, Department of Social Security [1999] FCA 106
Main v Main (1949) 78 CLR 636
ReDrake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Secretary, Department of Social Services v Doherty [2022] FCA 1242
Pearson and Secretary, Department of Social Services [2022] AATA 4441 (22 December 202)
Crabtree v Crabtree (1963) 64 SR (NSW) 110
Frugtniet v Australian Securities and Investments Commission [2016] FCA 995Secondary Materials
Commonwealth of Australia, Department of Social Services, Social Security Guide (Version 1.314, released 2 January 2024), available at FOR DECISION
Senior Member O'Donovan
24 January 2024
The decision under review in this matter is a decision to refuse Valerie Mears access to the Age Pension as a consequence of the value of her husband’s assets. There is no dispute that if Mrs Mears is treated as a member of a couple, her husband’s assets are such that she does not qualify for the pension. Mrs Mears contends that she should not be treated as a member of a couple, either:
(a)because she is living separately and apart from her husband; or
(b)because there is a special reason why she should not be treated as a member of a couple.
The material before the Tribunal consists of T-Documents and the following documents provided by the applicant after the application for review was lodged:
(a)Draft submissions on why the decision in 2022/C175936 is not the correct and preferable decision, dated 4 July 2023;
(b)Bank statements for the period 1 July 2022 – 30 June 2023, filed 21 July 2023;
(c)Letter confirming maturity of Mrs Mears’ Guaranteed Annuity, dated 13 June 2023;
(d)Written submissions dated 29 September 2023;
(e)Statement of Peter Mears (applicant’s husband), undated, with further written submissions, filed 18 October 2023;
(f)Written submissions dated 16 November 2023;
The applicant’s son and grandson also gave some evidence informally at the hearing which was not objected to by the respondent. Based on that material my findings are as follows.
Valerie Mears and her husband Peter Mears have been married since 2001. When the couple married Valerie was 65 years old and Peter was 72. They had both been married before. After the wedding they lived together in Peter’s house, but had an agreement that they would, for the most part, keep their finances completely separate. In 2018 Mrs Mears had a significant health setback. It became clear that her husband was not coping with the additional care that his wife needed so arrangements were made by Mrs Mears’ children to move her to an aged care facility. Later that year, Mr Mears moved into the same premises. Even though they live at the same address (40 Chapel St, Kogorah NSW) the pair do not live together. Mrs Mears lives in the high care part of the facility while Mr Mears has his own apartment.
In order to obtain a place at the facility Mrs Mears had to pay a refundable accommodation deposit of $775,000. This left her with around $60,000 in savings and only a small income from some annuities. Her ongoing expenses to stay at the facility are met from these funds. Her husband makes no contribution to meeting her expenses. Mr Mears owns his own home and has at least $1.6 million in other assets.
On 1 February 2019 an application for the Age Pension was lodged on Mrs Mears’ behalf by her son Glenn Smith, who holds a power of attorney from her. The application was rejected because Mr Mears’ assets exceeded the allowable limit.
If Mrs Mears is not treated as part of a couple she would qualify for the pension.
On 2 March 2023 when the matter was reviewed by a member of the Social Security and Child Support Division of the Administrative Appeals Tribunal (AAT) (Tier 1), the rejection of the pension was confirmed. Mrs Mears, through her son Glenn, has exercised her right of appeal to the General Division of the AAT (Tier 2).
It is contended on Mrs Mears’ behalf that she is not a member of a couple as that phrase is defined in subsection 4(2) of the Social Security Act 1991 (‘the Act’), and even if she is, there is a ‘special reason’ why she should not be treated as a member of a couple (as permitted by section 24).
Is Mrs Mears a member of a couple?
The test for whether a person will be a member of a couple is set out in section 4(2) of the Act. It provides that a person will be a member of a couple if:
(a)they are legally married to another person; and
(b)they are not, in the [decision-maker’s] opinion, living separately and apart from the other person on a permanent or indefinite basis.
It is accepted that Mrs Mears is legally married to her husband. The issue is whether they are living separately and apart on a permanent or indefinite basis.
The Act provides some guidance on what the Tribunal should have regard to when forming an opinion about whether the couple are living separately and apart. Section 4(3) relevantly provides:
Member of a couple – criteria for forming opinion about relationship
(3) In forming the opinion about the relationship, the [Tribunal] is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a)The financial aspects of the relationship, including:
(i)Any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)Any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)Any legal obligations owed by one person in respect of the other person; and
(iv)The basis of any sharing of day-to-day household expenses;
(b)The nature of the household, including:
(i)Any joint responsibility for providing care or support of children; and
(ii)The living arrangements of the people; and
(iii)The basis on which responsibility for housework is distributed;
(c)The social aspects of the relationship, including:
(i)Whether the people hold themselves out as married to or in a de facto relationship with each other; and
(ii)The assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)The basis on which the people make plans for, or engage in joint social activities;
(d)Any sexual relationship between the people;
(e)The nature of the people’s commitment to each other, including:
(i)The length of the relationship; and
(ii)The nature of any companionship and emotional support that the people provide to each other; and
(iii)Whether the people consider that the relationship is likely to continue indefinitely; and
(iv)Whether the people consider that their relationship as a marriage-like relationship or a de-facto relationship.
Before examining the matters which I am obliged to consider, it is important to develop a closer understanding of the state of affairs comprehended by the concept of a legally married couple ‘living separately and apart…on a permanent or indefinite basis’. On a straightforward reading of the text of the provision, it appears to raise a question about living arrangements and the relative geography of the two parties to the marriage. However, the task of statutory construction requires the words to be construed in the context in which they appear (in the widest sense of that phrase), and to choose a construction which is both open on the text and which best fulfills the purpose of the Parliament. In the present case, it would appear that the Parliament employed a phrase which has a well understood legal meaning as a consequence of its regular use in a variety of contexts over time. That meaning is different from the one conveyed if the words of the phrase are given their ordinary meaning.
The Full Federal Court in SZOXP v Minister for Immigration and Border Protection and Another[1] (SZOXP) examined the origin of the phrase in the context of its use in the Migration Act 1958. The Court noted that the phrase was originally used in England when formal divorce was unavailable due to the abolition of the ecclesiastical courts. Parties were unable to use a formal process to bring an end to the legal marital relationship but often wished to make it clear in some recognised way that their marital relationship was at an end. In this context parties used what were known as separation agreements which were private arrangements which ended the substance of a marriage even though the legal form remained intact.[2] The phrase ‘living separately and apart’ captured not so much the physical separation of the parties but the fact that they would ‘live separate lives’.[3] As a consequence the phrase came to have an accepted meaning which signalled that the marital relationship was at an end.
[1] (2015) 231 FCR 1 (SZOXP).
[2] See, in particular, paragraphs [43] to [60] of SZOXP.
[3] SZOXP, [47].
The High Court in Main v Main[4] (Main), when construing the phrase ‘living separately and apart’, read it as requiring two elements. Physical separation and the destruction of the marital relationship. It is clear from Main that the Court understood that while matrimonial relationships normally mean that the spouses share a common home and live in the closest association, a marital relationship is not inconsistent with absences from one another, even for very long periods of time. The ongoing existence of the marital relationship is not determined by reference to the location of the participants but rests on a mutual recognition by the husband and wife that the marriage subsists and both have a definite intention to resume the closer association of a common life as soon as the occasion or exigency has passed.
[4] (1949) 78 CLR 636.
That the concept of ‘living separately and apart’ is less about where each spouse is living and more about the continuing reality of the marital relationship was emphasised in Crabtree v Crabtree,[5] a decision of the Supreme Court of NSW. The Full Court specifically found that physical separation was not required to meet the concept of ‘separately and apart’. This conclusion was reached notwithstanding the ordinary meaning of the words. Consequently, a couple could be living ‘separately and apart’ notwithstanding the absence of physical separation in circumstances where there was ‘such a forsaking and abandonment by one spouse of the other that the court can say that the spouses were living lives separate and apart from one another’. In that case the Full Court held that Parliament intended the words to bear the meaning that had become familiar in matrimonial law, and not the more straightforward meaning suggested by the phrase. Consequently, a husband and wife could live “separately and apart” in the same house. In other words, the focus of the Parliament was on whether the marital relationship had ended, rather than the place where each party to the marriage lived. The Commonwealth Parliament used the same phraseology in the Family Law Act 1975 (Cth) noting in section 49(2) that:
The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.
[5] (1963) 64 SR (NSW) 110.
Again, the decisive feature of a couple living separately and apart is not the physical circumstances of the couple, but whether they are living separate lives.
In light of this history, the Full Federal Court in SZOXP determined that to qualify as living ‘separately and apart’ it was necessary to satisfy a mental element which consists in ‘the destruction of the marital relationship’.
In light of these analyses by various courts I am satisfied that the phrase ‘living separately and apart’ has a meaning which needs to be understood in light of the history of the phrase rather than by simply giving each word in the phrase its ordinary meaning. When that is done, the focus shifts from issues concerned with the physical location of each participant in the marriage (although this could still be relevant), to whether the marital relationship is continuing.
In circumstances where the marital relationship is continuing, regardless of where the spouses are living, the proper conclusion is that they are not living separately and apart.
In this case, I am satisfied that the marital relationship is continuing. Although the Mears do not live in the same room or the same apartment, the couple do live in the same building. Importantly, Mr Mears moved to where Mrs Mears was living soon after she was moved to that facility. It is not disputed that Mr Mears visits his wife on most days although the visits on many occasions may be quite short. It is also not disputed that both members of the couple regard themselves as still married, and as having a marital relationship with the other.
In these circumstances, it does not matter that there is no pooling of financial resources, that they live in separate parts of the building and are unlikely to have a sexual relationship. They regard themselves as still married, they hold themselves out as married, their children regard them as married. The relationship is a long one and is one which is likely to continue until one or other of them dies. I have had regard to all of the matters in subsection 4(3) and I am of the opinion that Mrs Mears is not ‘living separately and apart’ from Mr Mears in the sense in which that phrase is used in section 4(2).
Consequently, Mrs Mears is a member of a couple and, subject to the exercise of the discretion in section 24, must be treated as such for the purposes of the Act.
Is there a special reason why she should not be treated as a member of a couple?
Section 24 of the Act provides that if I am satisfied that a person should, for a special reason in the particular case, not be treated as a member of a couple, I may determine in writing that the person is not to be treated as a member of a couple for the purposes of the Act.
Justice French, when he was on the Federal Court, considered the nature of this discretion in the matter of Boscolo v Secretary, Department of Social Security[6] (Boscolo).
[6] [1999] FCA 106 (Boscolo).
The key point he makes in relation to the concept ‘special reason’ is that reasons will not necessarily fall outside the designation of ‘special’ just because they fall within a class which is widely defined, nor just because the circumstances giving rise to the reason can be foreseen before they arise. The core of the requirement is that there be something unusual or different to take the subject of the discretion out of the ordinary course.
Justice French also noted in Boscolo:
The decision-making process under s 24 is notionally in two stages. First, is the assessment whether there is a special reason in the particular case for which the Secretary is satisfied that the person the subject of his discretion should not be treated as a member of a couple. There follows the determination that the person is not to be treated as a member of a couple. The latter determination involves the exercise of discretion although as a practical matter assessment and determination will tend to be rolled up as one decision.[7]
[7] Boscolo, [19].
This analysis, although undoubtedly correct, perhaps underemphasises that the first stage of the process has a number of elements to it. The structure of the provision is such that the state of mind that the decision maker must reach is satisfaction that the applicant should be treated as if they were not a member of a couple. Second, the reason relied upon by the decision maker in reaching that state of satisfaction has to be a special one in the circumstances of the particular case.
This structure implies that there is a class of people who might provide subjectively persuasive reasons why they should not be treated as a member of a couple, but because those reasons are not objectively ‘special’, section 24 is not engaged. For example, the fact that members of a couple live apart for a period might satisfy a decision maker that its members should not be treated as a couple because in such a case, the members of the couple do not get the financial benefits derived from living together. However, it is unlikely that living separately and being unable to share living expenses constitutes an objectively special reason to treat members of a couple as if they were single. Couples living separately is too common to be regarded as special.
In the decision-making process the final step is the exercise of the discretion to make that decision effective for the purposes of the Act. It would be a rare case where the exercise of the residual discretion was anything more than a formality.
Justice French also emphasised that the question for determination in Boscolo was ‘whether [the husband whose application it was] was not to be treated as a member of the couple for the purposes of the Act’.[8] In a statement which was effectively the ratio of the decision, his Honour noted that by ‘[t]reating the relevant reasons as those applicable to [the husband and his second wife] as a couple, the tribunal has not disclosed either expressly or by necessary implication that it has approached the test in this case as required by the statute, that is to consider whether [the husband] should not be treated as a member of a couple’.[9] His Honour did however go on to note ‘[t]hat does not of course prevent the tribunal from considering all relevant circumstances including the position of [the second wife] as it [affected the husband].’[10]
[8] Boscolo, [22].
[9] Boscolo [24].
[10] Boscolo [25].
The result of this analysis is that in this case I am required to focus on the question of whether Mrs Mears should, for a special reason, not be treated as a member of a couple. In considering that question I am at liberty to consider her husband’s position as it affects her, but in undertaking any analysis the question to be explored is whether Mrs Mears should be treated otherwise than as a member of a couple.
Applicant’s submissions
It is submitted on behalf of Mrs Mears that the special reason I should treat her as not a member of a couple consists of the following:
(a)The applicant is financially independent of her husband. They do not pool financial resources or jointly meet living expenses;
(b)The applicant’s husband firmly refuses to pool financial resources with the applicant, irrespective of the outcome of this case. The applicant has no influence on her husband’s decision;
(c)If the applicant is treated as being a member of a couple, the applicant will be outright denied access to the age pension. This is not a case of the applicant merely receiving a lesser rate of the age pension;
(d)The applicant is living separately and apart from her husband on a permanent basis.
Consequently, none of the financial presumptions that sit behind the treatment of couples in the Social Security Act are present in Mrs Mears’ case. There is no pooling of expenses and no mutual support. There are no economies derived from common living arrangements and Mrs Mears’ assets and expenses are best understood by treating her as a single financial entity.
The applicant also notes the finding in Boscolo that section 24(2) 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. The applicant contends that she should not be punished for her husband’s firm refusal to pool financial resources.
Respondent’s submission
The respondent in its submissions refers to the Guide to Social Security Law (‘the Guide’).[11] It provides that if there are practical or legal reasons a couple cannot share income and assets, then there may be grounds for exercising the discretion under section 24. However, the Guide also states that section 24 would not be appropriate to use where:
(a)a couple is able to pool resources but chooses not to do so; or
(b)if one or both members of a couple has access to other sources of support and either has not explored or realised the support or chooses not to access it.[12]
[11] Commonwealth of Australia, Department of Social Services, Social Security Guide (Version 1.314, released 2 January 2024), available at The Guide, 2.2.5.40 Discretion to treat a person as not being a member of a couple for a special reason – s 24.
The position outlined in the Guide appears to be that couples who, either unilaterally or by agreement, limit one member of the couple’s access to financial resources, should not, by the use of that device, be treated as single for the purposes of the Social Security Act. That is what has occurred in Mrs Mears’ case, and in the interests of consistency that general principle should be applied to Mrs Mears.
Consideration
As noted above, to make a favourable decision in relation to Mrs Mears, I must first be satisfied that she should be treated otherwise than as a member of a couple. The presence of the word ‘should’ requires more than an evaluation of whether Mrs Mears’ circumstances are special. The question is whether I am persuaded that she ought to be treated as single and if so why.
The respondent urges me to resolve this question in a manner consistent with The Guide. The Guide deals with the provision in this way.
Inability to pool resources
In general, an income support payment is paid at a partnered rate where a person is a member of a couple in recognition that a couple living together typically pool resources and therefore have lower living costs in comparison to 2 single people living separately. Where a couple is unable to pool resources, it may result in extra expenditure causing financial difficulty, which would make it unfair to treat the person as partnered.
If there are practical or legal reasons a couple cannot share income and assets, then there may be grounds for exercising the discretion under section 24 provisions.
Generally, section 24 would NOT be appropriate where:
- a couple is able to pool resources but chooses not to do so, or
- if one or both members of a couple has access to other sources of support and either has not explored or realised the support or choose not to access it.[13]
The Social Security Guide
[13] Ibid.
In considering whether the policy in the Guide should be applied, it is prudent to first consider its status and provenance. When the document is viewed on the internet (and it does not exist in any separate hard copy form) it comes with a disclaimer in the following terms:
Information provided on this website is prepared by the Department of Social Services (DSS) for general information only. You should independently check whether information is relevant for your purposes. While DSS makes every effort to ensure that the information on this site is up to date, DSS accepts no responsibility for the accuracy or completeness of the information.
A disclaimer of this kind covering a website which includes documents which purport to express government policy (which the respondent urges the Tribunal to adopt) is unsettling. It is not obvious that the Tribunal should apply a document on the basis that it reflects government policy in circumstances where the Department which promulgates it accepts no responsibility for it being accurate.
However, notwithstanding the disclaimer, it appears that in practice the Guide is not ‘for general information only’ but is used, and it is intended to be used, by delegates within the Department as providing the policy basis for decisions which are made. I base this conclusion in part on the submissions which have been put in this matter but also the references to the Guide which appear in other Tribunal decisions and Federal Court judgments.[14] That the Guide is regularly used in decision making becomes clear when the Guide itself is examined. The opening statement in relation to the Guides to Social Policy, of which the Guide is one, reads as follows:
The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change.
[14] See, eg, Secretary, Department of Social Services v Doherty [2022] FCA 1242; Pearson and Secretary, Department of Social Services [2022] AATA 4441 (22 December 2022).
This slightly ambivalent statement about the use of the Guide signals that it is to be used by decision-makers but ‘only as a guide’ and may not be current.
To add to the difficulties in determining the status of the Guide, it is difficult to determine at what level of government the content of the Guide was signed off on and who takes responsibility for its contents. This is not just a question of idle interest. The extent to which the Tribunal should be influenced by a policy when approaching a discretionary question is to some degree a product of how the policy fits within the decision-making scheme authorised by the Parliament and Australia’s system of accountability to Parliament. This was made clear by Justice Brennan as he then was in ReDrake and Minister for Immigration and Ethnic Affairs (No 2) (Drake No 2):[15]
… the powers with which this Tribunal is vested by s 43 of the Administrative Appeals Tribunal Act 1975 are wide enough to permit the sterilization or amendment of policy in its application to the cases which come here. Although the Tribunal ought not, indeed cannot, deprive itself of its freedom to give no weight to a Minister's policy in a particular case, there are substantial reasons which favour only cautious and sparing departures from Ministerial policy, particularly if parliament has in fact scrutinized and approved that policy.
…
If consistency in decision-making is sought, as it ought to be, the standards and values which a Minister expresses in a statement of lawful policy can be a constant reference point for each of the presidential members of the Tribunal in exercising the discretion in particular cases. Ministerial policy can be an aid to consistency among Tribunal decisions, and to consistency between the decisions of the Tribunal and those of the Minister. Decisions made under a statutory power and reviewed by the Tribunal are but a proportion of the decisions made under that power, and it would be a regrettable anomaly if the decisions which were not reviewed revealed different standards and values from those made on review.
These considerations warrant the Tribunal's adoption of a practice of applying lawful ministerial policy, unless there are cogent reasons to the contrary. If it were shown that the application of ministerial policy would work an injustice in a particular case, a cogent reason would be shown, for consistency is not preferable to justice.[16]
[15] (1979) 2 ALD 634 (Drake No 2).
[16] Drake No 2, 644-5.
In this passage Justice Brennan places the Tribunal in a broader constitutional context and explains why proper deference should be shown to policies adopted by a Minister in the exercise of a discretion. While the present case differs in that the discretions within the Social Security Act have been conferred on the Secretary rather than the Minister, the fact remains that the Secretary is accountable to the Parliament in ways in which individual members of the Tribunal are not. Any policy document adopted after due consideration of the policy implications by the Secretary of a Department is worthy of careful consideration for the reasons explained by Justice Brennan. If, however, the approach to the discretion which the Guide promotes only represents the current thinking of those charged with the production of the document, the cogent reasons for close adherence to government policy in the exercise of discretions may not be present. If the respondent expects the Tribunal to apply the policy approaches adopted in the Guide, consideration should be given to clarifying the extent to which it represents considered and endorsed policy of the Secretary and the extent to which it is used to guide the making of discretionary decisions inside the Department.
Despite these sources of uncertainty about how deferential the Tribunal should be to the policy positions taken in the Guide, it is clear that the document has some influence on internal decision makers. As a result, consistency in decision making will be promoted by applying it. That alone provides a basis for having regard to it.
The importance of consistency and the role of government policy in maintaining it were also emphasised by Justice Brennan in Drake No 2:
If the Tribunal applies ministerial policy, it is because of the assistance which the policy can furnish in arriving at the preferable decision in the circumstances of the case as they appear to the Tribunal. One of the factors to be considered in arriving at the preferable decision in a particular case is its consistency with other decisions in comparable cases, and one of the most useful aids in achieving consistency is a guiding policy. An appropriate guiding policy should thus be applied…[17]
[17] Drake No 2, 643.
For that reason I have had regard to the policy expressed in the Guide in relation to the exercise of the discretion in section 24.
How should the policy be applied?
The policy in relation to the exercise of the power in section 24 (extracted at paragraph 36 above) on its face is both lawful and sensible. Due regard should be had to it.
I am not satisfied that Mrs Mears should be treated as if she were not a member of a couple merely because she has an agreement with her husband not to pool financial resources. Indeed an agreement between spouses not to pool finances doesn’t provide any reason at all to treat a person as not a member of a couple. Pooling finances is only one aspect of being a couple. A private agreement on the organisation of finances alone would rarely provide a basis for treating a member of a couple as if he or she were single. While the Mears were living together and enjoying the benefits of lower living costs, their decision not to pool resources did not provide a basis for forming the view that they ‘should’ not be treated as members of a couple.
In recent years though, a number of aspects of the relationship have changed. The couple no longer live together and Mrs Mears is now responsible for meeting all of her own expenses from her own resources.
Consequently, Mrs Mears in her current circumstances gets none of the benefit of lowered living costs as a consequence of being a member of a couple.
On the other hand, to the extent that the Mears’ financial arrangements cause Mrs Mears ‘financial difficulty’ it is because her husband, consistent with their longstanding arrangement, will not contribute to her support. The Guide indicates that in circumstances where a couple is able to pool resources but chooses not to, then generally they should not benefit from the exercise of the power in section 24. No explanation for the general position or when an exception to it could be applied is included.
I accept that as a general rule, agreements not to pool resources should not lead to members of a couple being treated as if they were single. It should be accepted that marriage and the other forms of committed partnerships which the Social Security Act recognises bring with them obligations of mutual support which should not be undermined by the structure of the social safety net. There should not be incentives for couples to introduce into their financial arrangements a degree of structural separation in order to maximise the level of government support which each member of the couple attracts. It would be very undesirable for arrangements like the one the Mears have to become commonplace as a device for wealth maintenance in retirement, with one member obtaining social support which the couple does not need.
Given that the policy seems generally sound and consistency in decision making will be promoted by its application, there are strong reasons for applying it.
However, in the present case I am satisfied that it is appropriate to depart from the policy, and I am satisfied that the applicant should be treated as not a member of a couple.
First, it is the case that in their current circumstances, the Mears do not enjoy any benefit in terms of lower living costs as a result of pooling resources. They live separately and the costs that each incurs are the same costs they would incur if they were single.
Second, I have no concern that the arrangement which the Mears have reached is the result of any deliberate attempt to structure their affairs to attract government benefits. When the Mears married and Mrs Mears liquidated her primary residence, one significant effect of that was to reduce the likelihood of her ever being able to claim an age pension. The decision not to pool resources was made at a point in time where there were other reasonable motivators for them to structure their affairs in that way – accessing government benefits was not one of them. There is no reason to approach the structural separation of their financial resources with suspicion.
Third, due to Mr Mears’ unwillingness to take proper financial responsibility for the care of his wife and his intransigence in sticking to a financial arrangement which was reached in very different circumstances, Mrs Mears finds herself in a financial position which would normally attract either support from the government or support from her spouse. Currently she attracts neither.
In combination, these circumstances satisfy me that Mrs Mears should be treated as if she were not a member of a couple.
The question then is, are these reasons ‘special’ reasons particular to the case? I am satisfied that they are.
Mrs Mears’ circumstances are unusual and can be appropriately classified as ‘special’. She is married to her husband and both she and her husband regard themselves as being in an ongoing marital relationship. They do however live separately and so obtain none of the financial benefit that sharing a common residence provides. Furthermore, Mr Mears, with the longstanding agreement of his wife, has decided to make no financial contribution to the housing and care of his wife. Consequently, his only influence on her financial position is a wholly negative one. Because the couple are legally married and the marital relationship is genuine and ongoing, his assets disqualify his wife from receiving support from the government. Despite this, he provides no financial support to her. His conduct is consistent with the agreement made earlier in the marriage not to pool financial resources and Mrs Mears has no influence over his decision. I am satisfied that this combination of features is unusual and in that sense they are special reasons particular to this case.
I am satisfied that given the financial circumstances in which Mrs Mears finds herself she should be treated as not a member of a couple. The reasons which satisfy me of that are special in the sense that they are unusual. While Mr Mears’ refusal to provide proper financial support for his wife could provide a discretionary basis for refusing to give Mrs Mears the benefit of section 24, I do not consider it appropriate to exercise the discretion in that way in this case.
Accordingly I am satisfied that I should exercise my power under section 24 and treat Ms Mears as not a member of a couple.
DECISION
Having reached the conclusion that the power in section 24 should be exercised favourably to the applicant, two further questions arise: what is the correct decision to be made in relation to the applicant, and from what date should the decision have effect?
Having exercised the discretion in section 24 favourably to the applicant it is necessary to determine the pension that the applicant was entitled to in February 2019 on the basis that her husband’s assets and income are not included in any assessment. Rather than undertake that assessment myself, I direct that the parties within 21 days of the publication of these reasons, provide the Tribunal with a proposed decision (either agreed or separately) which is consistent with the finding that the applicant should be treated as if she were not a member of a couple.
The proposed terms should also deal with the question of the decision’s date of effect.
I note that the respondent submits that the discretion conferred on me by section 43(6) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) to determine the date of effect of any decision made in substitution for the decision under review has been altered by section 147 of the Social Security (Administration) Act 1999 (Cth). It relevantly provides as follows:
For the purposes of the AAT first review under this Division, a provision of the AAT Act listed in an item of the following table is disapplied or modified as set out in that item, in relation to the decision or matter under this Act set out in that item.
Item
Decision or matter
Provision of AAT Act
Application or modification of provision of AAT Act
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Date of effect of decision on AAT first review…
Subsection 43(6) (AAT’s decision taken to be decision of decision-maker
The subsection has effect as if the decision under review had taken effect on the day a person applied for AAT first review of the decision, if:
(a) the person is given written notice of the decision under the social security law; and
(b) The person applies for AAT first review more than 13 weeks after the notice was given; and
(c) On AAT first review, the AAT varies the decision or sets the decision aside and substitutes a new decision; and
(d) The effect of the AAT’s decision is:
(i) To grant the person’s claim for a social security payment or a concession card; or
(ii) To direct the making of a payment of a social security payment to the person or the issue of a concession card to the person, as the case may be; or
(iii) To increase the rate of the person’s social security payment
On its face, the alteration of the operation of section 43(6) effected by section 147 applies only in relation to AAT first review. I am not aware of any equivalent provision which applies directly when an application reaches the second tier of AAT review. Accordingly, section 147 itself does not provide an answer to the scope of my power to direct when any decision I make in relation to the applicant’s entitlement to the age pension commences.
However, section 43(6) deems any decision made in substitution for the decision of a person to be a decision of that person and upon the coming into operation of the decision it is deemed to have had effect on and from the day on which the decision under review has or had effect. The result appears to be that my decision would ordinarily have a later date of effect than the AAT’s first review decision, which has effect ‘as if the decision under review had taken effect on the day a person applied for AAT first review of the decision’. I do however have a discretion to alter the date of effect.
The parties should give consideration to these issues before submitting any proposed decision. If the parties propose that I make a decision with a different date of effect and reflecting a different date of assessment, the request for decision should be supported by submission on that point.
I give the parties 21 days to either provide me with agreed terms of the decision I should make or, in the absence of agreement, submissions in support of the decision each party wishes me to make.
73. I certify that the preceding 72 (seventy-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member O'Donovan
……………………[sgd]……………………………
Dated: 24 January 2024
Date of hearing: 2 November 2023 Date final submissions received: 16 November 2023 Applicant’s representative: Cameron Anderson-Smith Counsel for the Respondent: Mr Matt Gauci Solicitors for the Respondent: Hunt & Hunt
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