Merrett and Secretary, Department of Social Services (Social services second review)
[2018] AATA 156
•7 February 2018
Merrett and Secretary, Department of Social Services (Social services second review) [2018] AATA 156 (7 February 2018)
Division:GENERAL DIVISION
File Number: 2017/5049
Re:Anthony Merrett
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Member D K Grigg
Date:7 February 2018
Place:Brisbane
The Tribunal affirms the decision under review
..........................[Sgd]..............................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – age pension – pension bonus scheme – whether applicant met the work test – late lodgement of valid claim – whether any discretion available under section 21(2) of the Social Security (Administration Act) 1999 – no special circumstances –– decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975
Social Security Act 1991
Social Security (Administration) Act 1999
CASES
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
SECONDARY MATERIALS
Guide to Social Security Law (2017, Cth)
REASONS FOR DECISION
Member D K Grigg
7 February 2018
On 9 July 2003 Mr Merrett reached the age pension age of 65 years.[1] Rather than immediately applying for the aged pension, Mr Merrett continued working. Then, on 19 September 2011, Mr Merrett applied to the pension bonus scheme (“PBS”).[2] Mr Merrett provided a statement together with his application for the PBS stating that he was aware of the PBS but unaware that he had to submit a lodgement form and was therefore claiming the PBS dating back from 2005.[3]
[1] Exhibit 1, T Documents, T5, pages 72 – 81, Registration for the pension bonus scheme completed by Mr Merrett dated 19 September 2011.
[2] Exhibit 1, T Documents, T5, pages 72 – 81, Registration for the pension bonus scheme completed by Mr Merrett dated 19 September 2011.
[3] Exhibit 1, T Documents, T5, page 80, Statement of Mr Merrett dated 19 September 2011.
In September 2011 Centrelink confirmed that Mr Merrett had been accepted as a member of the PBS as an accruing member from 9 July 2003.[4]
[4] Exhibit 1, T Documents, T6, pages 82 – 83 Letter from Centrelink to Mr Merrett dated 29 September 2011.
In yearly Centrelink notices Mr Merrett was advised that:[5]
(a)he was still registered as a member of the PBS;
(b)when he was ready to claim the age pension that he would need to claim the PB at the same time; and
(c)he would have to lodge his PBS claim within 13 weeks of ceasing work or within 13 weeks from the date he no longer meets the work test.
[5] Exhibit 1, T Documents, T7, pages 84 – 85, Letter from Centrelink to Mr Merrett dated 25 June 2013; T8, pages 86 – 87,
letter from Centrelink to Mr Merrett dated 25 June 2014; T9, pages 88 – 89, Letter from Centrelink to Mr Merrett dated 25 June 2015.
In June 2015 Centrelink requested that, for the purposes of assessing his age pension claim, Mr Merrett provide information on or before 11 July 2015, including bank account details and evidence that he had met the work test for the PB payment.[6]
[6] Exhibit 1, T Documents, T10, pages 90 – 91, Letter from Centrelink to Mr Merrett dated 27 June 2015.
On 30 June 2015 Mr Merrett ceased work. Prior to ending his employment (which Mr Merrett told the Tribunal he knew was coming to an end) he unsuccessfully attempted to find work at Bunnings Warehouse. Mr Merrett made online applications to Bunnings Warehouse between April 2015 and September 2016.[7]
[7] Exhibit 1, T Documents, T17, page 159, Screen captures of Mr Merrett’s job applications to Bunnings Warehouse.
On 14 July 2015 Centrelink confirmed that Mr Merrett had withdrawn his claim for the age pension.[8] Mr Merrett told the Tribunal that he withdrew his application because he did not want to stop working and was endeavouring to find employment. The confirmation of the withdrawal from Centrelink informed Mr Merrett that if he later decided to proceed he would need to lodge a new claim. No mention was made in this letter of the requirement to lodge his PBS claim within 13 weeks of ceasing work or within 13 weeks from the date he no longer met the work test.
[8] Exhibit 1, T Documents, T 11, page 92, Letter from Centrelink to Mr Merrett dated 14 July 2015.
On 21 October 2016 Mr Merrett lodged a claim for the age pension and PB.[9] Pursuant to his claim Mr Merrett stated that he ceased meeting the work test on 30 June 2015. In conjunction with his claim Mr Merrett also completed an income and assets form enclosing his income tax return estimate for the 2014/2015 financial year, his PAYG payment summary for the 2014/2015 financial year, his notice of assessment for 2014/2015 financial year and list of payments received between 1 October 2013 and 10 June 2014.[10] Mr Merrett also provided Centrelink with details of his income stream on 24 October 2016.[11]
[9] Exhibit 1, T Documents, T 12, pages 93 – 117, Claim for age pension and pension bonus form completed by Mr Merrett
dated 21 October 2016.
[10] Exhibit 1, T Documents, T 13, pages 118 – 138, Income and assets form completed by the applicant with enclosures dated 21 October 2016.
[11] Exhibit 1, T Documents, T 14, pages 139 – 151, details of income stream product form completed by Mr Merrett received 24 October 2016.
On 7 December 2016 Centrelink confirmed that Mr Merrett’s claim:
(a)for age pension had been accepted and that it had been decided to grant payment to him from 10 October 2016;[12] and
(b)for PB had not been accepted because he did not claim within the allowable period.[13]
[12] Exhibit 1, T Documents, T 15, pages 152 – 154, letter from Centrelink to Mr Merrett dated 7 December 2016.
[13] Exhibit 1, T Documents, T 16, pages 155 – 157, letter from Centrelink to Mr Merrett dated 7 December 2016.
On 15 December 2016 Mr Merrett wrote to Centrelink:[14]
(a)confirming that he had made attempts to find employment with Bunnings stores but without success;
(b)noting that he had had to find alternative accommodation; and
(c)stating that considering he had worked full-time past the normal retirement age for 11 years without claiming benefits and that every year he received a letter from Centrelink stating he was eligible for the pension bonus, and considering he was endeavouring to continue working, that through failing to secure employment without receiving unemployment benefits, no doubt places him in a favourable position.
[14] Exhibit 1, T Documents, T 18, page 160, Letter from Mr Merrett to Centrelink dated 15 December 2016.
Claim History
As a result of Centrelink’s decision, Mr Merrett sought a review by an Authorised Review Officer (“ARO”). Mr Merrett contended to the ARO that he was not aware of the time limits for making a claim and believes that Centrelink should take into account the number of years he has worked past reaching pension age and the period of time he spent looking for work after ceasing employment on 30 June 2015.[15] The appeal to the ARO was unsuccessful.[16]
[15] Exhibit 1, T Documents, T 20, pages 164 – 170, Authorised Review Officer’s Decisions and Notes dated 8 February 2017.
[16] Exhibit 1, T Documents, T 20, pages 164 – 170, Authorised Review Officer’s Decisions and Notes dated 8 February 2017.
Mr Merrett then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal. The SSCSD rejected Mr Merrett’s claim and affirmed the ARO’s decision on 13 July 2017.[17]
[17] Exhibit 1, T Documents, T2, pages 3 – 9, SSCSD’s Decision and Reasons for Decision dated 13 July 2017.
Mr Merrett has sought a review of the SSCSD’s decision by this Tribunal.[18]
[18] Exhibit 1, T Documents, T1, pages 1 – 2, Application for Second Review of a Decision dated 18 August 2017.
ISSUES FOR DETERMINATION
The following issues have to be determined:
(a)whether Mr Merrett was qualified to receive a payment under the PBS;
(b)whether Mr Merrett met the work test;
(c)whether Mr Merrett lodged a valid claim for the PBS within 13 weeks of no longer satisfying the work test; and, if he did not
(d)whether special circumstances exist to justify an extension of time to lodge his claim for the PBS.
ELIGIBILITY FOR THE PENSION BONUS SCHEME
Pursuant to section 92A of the Act, a person who qualifies for an age pension but defers claiming that pension may be able to get a single lump-sum pension bonus. In order to qualify for the PBS a person must:
(a)register as a member of the pension bonus scheme before 1 July 2014;
(b)accrue between 1 and 5 bonus periods while deferring age pension by passing a “work test” (defined in section 92U) for those periods;
To pass the work test for a year, either the person, or the person's partner, must gainfully work for at least 960 hours during that year.
Section 92C of the Act sets out when a person qualifies for a PB and provides:
A person is qualified for a pension bonus if:
(a) both:
(i)the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and
(ii)that age pension is received otherwise than because of a scheduled international social security agreement (see section 5 of the Social Security (International Agreements) Act 1999); and
(b)the person has not received an age pension at any time before making a claim for the pension bonus; and
(c) the person is registered as a member of the pension bonus scheme; and
(d)the person has accrued at least one full-year bonus period while registered as a member of the pension bonus scheme; and
(e) the person has not received:
(i)a social security pension (other than an age pension or a carer payment); or
(ii) a social security benefit; or
(iii) a service pension (other than a carer service pension); or
(iv)an income support supplement (other than an income support supplement that is payable as a result of the operation of subclause 8(3) of Schedule 5 to the Veterans' Entitlements Act);
at any time after the person qualified for an age pension; and
Note: Even though the person may not have actually received an amount of social security pension or benefit because the rate of the pension or benefit was nil, in some cases the person will be taken to have received the pension or benefit if adjusted disability pension (within the meaning of section 118NA of the Veteran's Entitlements Act) was payable to the person or the person's partner: see subsection 23(D) of this Act.
(f) the person has not already received:
(i) another pension bonus; or
(ii) a bonus under Part IIIAB of the Veterans' Entitlements Act; or
(iii) DFISA bonus under Part VIIAB of the Veterans' Entitlements Act.
Note: Subclause 8(3) of Schedule 5 to the Veterans' Entitlements Act deals with income support supplement for carers.
Section 92U of the Act defines what is meant by “work test” relevantly as follows:
Work test--full-year period
For the purposes of this Part, a person passes the work test for a full-year period of the person's accruing membership of the pension bonus scheme if:
(a) in any case--the person satisfies the Secretary that the total number of hours gainfully worked by the person during that period was at least 960 and that at least 640 of that total number of hours were worked in Australia; or
(b) if the person had only one partner during that period--the person satisfies the Secretary that the total number of hours gainfully worked by the person's partner during that period while the partner was a partner of the person and was:
(i) an accruing member, or a post-75 member, of the pension bonus scheme; or
(ii) an accruing member, or a post-70/75 member, of the corresponding scheme under Part IIIAB of the Veterans' Entitlements Act;
was at least 960 and that at least 640 of that total number of hours were worked in Australia; or…
If a person qualifies for the PBS and upon ceasing to comply with the work test wishes to make a claim, that claim must be made within 13 weeks of failing the work test or becoming a non-accruing member of the PBS: section 92H(1) of the Act.
Senior Member Fice explained the reason for the 13 week time limit in Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224, at [13]:
After some research, I was able to locate the reason why the period of 13 weeks was selected for the purposes of ss 22 and 23 of the Administration Act as being the time limit within which, after the last bonus period, a claim must be made. In a report prepared by the Senate Community Affairs Legislation Committee dated May 1998, the committee provided the following reasons for the 13 week limit:
DSS and DVA noted, however, that the Scheme provides that a bonus payment can only be made to a person who is able to claim and receive an age (or equivalent DVA) pension within 13 weeks of their retirement or within 13 weeks of failing to meet the work test requirements for a year. The 13 week limits were included to minimise the capacity of people to disperse or reduce their retirement savings following the cessation or reduction in work.
Mr Merrett registered for the PBS
Mr Merrett became qualified for the aged pension in 2003. In September 2011 Centrelink confirmed that Mr Merrett had been accepted as a member of the PBS as an accruing member from 9 July 2003.[19]
[19] Exhibit 1, T Documents, T6, pages 82 – 83, Letter from Centrelink to Mr Merrett dated 29 September 2011.
Did Mr Merrett meet the work test?
The information provided by Mr Merrett is limited such that the Tribunal is unable to conclude whether Mr Merrett complied with the requirements in section 92U of the Act.
Mr Merrett indicated in his claim for PB that he ceased meeting the work test on 30 June 2015[20] and provided PAYG payment summaries which indicate that Mr Merrett did earn an income in the financial year ended 30 June 2014[21] and 30 June 2015.[22] However, the information provided does not indicate whether Mr Merrett worked 960 hours in each of the accrued bonus periods between 2011 and 2015.
[20] Exhibit 1, T Documents, T 12, page 113, Claim for age pension and pension bonus form completed by Mr Merrett dated 21 October 2016.
[21] Exhibit 1, T Documents, T 12, page 138, Claim for age pension and pension bonus form completed by Mr Merrett dated 21 October 2016.
[22] Exhibit 1, T Documents, T 12, page 136, Claim for age pension and pension bonus form completed by Mr Merrett dated 21 October 2016.
On this basis alone the Tribunal would be unable to find that Mr Merrett qualified for the PB.
However, for completeness the Tribunal will also consider the timing of Mr Merrett’s application for the PB.
Mr Merrett’s claim for PB
There is no contention that the claim lodged by Mr Merrett for the age pension and PB on 21 October 2016 was not a valid PBS claim.[23]
[23] Section 17, Administration Act sets out the requirements for the valid PBS claim.
However, the issue is whether the claim was made within prescribed time limits pursuant to section 92U of the Act.[24] Assuming that Mr Merrett ceased complying with the work test on 30 June 2015, he should have lodged his claim within 13 weeks, that is by 30 September 2015. However, his claim was made more than 12 months later. As referred to earlier Mr Merrett told the Tribunal that he withdrew his application because he did not want to stop working and was endeavouring to find employment. Mr Merrett said he did not turn his mind to the fact that he should have lodged his claim within 13 weeks of ceasing work and that it was a misunderstanding on his part.
[24] See also sections 20-29, Administration Act.
Pursuant to section 21(1) of the Administration Act, therefore Mr Merrett is not entitled to receive the PB.
An exception to this finding can occur where the Secretary may allow a longer period of time to lodge a claim if there are “special circumstances”: section 21(2) of the Administration Act.
Are there any special circumstances?
The Act does not define what constitutes “special circumstances”.
There has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·“Special” denotes something different from the usual or ordinary: Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J (as she then was).
·French J (as he then was) said in in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion… It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
·The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
·Jacobson J in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639 explained the effect of the authorities as follows [emphasis added]:
[51] ...the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statute in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme: see Smith per von Doussa J at 60, 61–62; Groth per Kiefel J at 545, Kertland v Secretary, Dept of Family and Community Services (1999) FCA 1596; (1999) 95 FCR 64 per Merkel J at 71, 73; Kirkbright v Secretary, Dept of Family and Community Services (2000 FCA 1876; (2000) 106 FCR 281 per Mansfield J at [22], [26]–[27] and [31]–[32]; see also Secretary to the Department of Family and Community Services v Allan (2001) FCA 1160 (2001) 116 FCR 1 per Heerey J at [17].
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[25]
[25] See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37].
In summary, the circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[26]
[26]The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084,at [37].
The Secretary referred the Tribunal to the Guide to Social Security Law (“Guide”) which is used by Centrelink as guidance to applying the Act. The Tribunal is not bound to apply the Guide but it may, and it should apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[27]
[27] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, at 645.
Part 3.4.7.80 of the Guide provides guidance on when it may be appropriate for the Tribunal to exercise its discretion under section 21(2):
Discretion to accept late claims - PBS claims lodged on or after 1 January 2008
The Secretary has discretion to accept any late PBS claim lodged on or after 1 January 2008 (including claims from exempt partnered persons, those non-accruing immediately after the end of the last bonus period and post-75 members) providing there was a special reason for late lodgement of the claim. The event that caused the late lodgement of the claim may have occurred prior to 1 January 2008.
Act reference: Social Security (Administration) Act 1999 (Cth).section 21 General rule
Reasons to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.
Examples may include cases where a member:
•has poor numeracy or literacy skills,
•was ill,
•was located in a remote area,
•performed irregular work that made it difficult for the member to determine the lodgement period,
•was helping a close family member suffering from a serious illness,
•has experienced the death of a close family member,
•had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member's partner moved into a nursing home),
•was unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).
The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).
Mr Merrett contended that the discretion should be exercised because he had acted on a misunderstanding and had always thought he would obtain work again. Mr Merrett told the Tribunal that on his calculation, based on what he receives by way of the aged pension, his not claiming the aged pension when he could have had saved the Government approximately $400,000.
The Tribunal sympathises with Mr Merrett. This is not a situation where Mr Merrett has tried to shirk responsibility for his own actions, deliberately lodged his claim late or sought to allocate the blame to Centrelink. It is simply a situation where Mr Merrett feels, understandably, deserving of receiving the bonus because he elected not to claim the aged pension when he could have and instead continued to work and pay taxes for a further 12 years. However, this does not constitute a special circumstance. Further, this is not a situation where Mr Merrett’s claim was lodged only a short time after the 13 week period. His claim was not lodged for over 12 months after that time limitation expired. His reasons for the delay were that he always hoped and thought he would find enough work to meet the work test requirement. However, he did not. Mr Merrett made a mistake based on his best intentions to hopefully find sufficient employment to continue satisfying the work test. The Tribunal finds that this does not constitute something which is unusual, exceptional or out of the ordinary and therefore does not constitute a special circumstance.
On the available evidence, the Tribunal finds that no “special circumstances” occur to allow a longer period of time to lodge the claim for the PB.
DECISION
The decision under review is affirmed.
I certify that the preceding 38 (thirty - eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
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Associate
Dated: 7 February 2018
Date of hearing: 25 January 2018 Applicant: In person Advocate for the Respondent: Rick McQuinlan Solicitors for the Respondent: Department of Human Services
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Procedural Fairness
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Standing
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Statutory Construction
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