Moran; Secretary, Department of Families, Community Services and Indigenous Affairs
[2006] AATA 501
•8 June 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 501
ADMINISTRATIVE APPEALS TRIBUNAL № V2005/450
GENERAL ADMINISTRATIVE DIVISION
Re: SECRETARY,
DEPARTMENT OF FAMILIES,COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Applicant
And: PATRICK FRANCIS MORAN
Respondent
DECISION
Tribunal: Mr C. Ermert, Member
Date:8 June 2006
Place:Melbourne
Decision:The decision under review is set aside and the matter is to be remitted to the Secretary to the Department of Families, Community Services and Indigenous Affairs for a determination of the benefits due to and debts payable by Mr Moran on the basis that since the commencement of his benefits and continuing he is a member of a couple.
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Member
SOCIAL SECURITY – mature age allowance – member of a couple – special reasons – pooling of resources – sharing of expenses – wife living overseas – family company
Social Security Act 1991 s 24(1)
Boscolo v Secretary Department of Social Security (1999) FCA 106
Cocks v Centrelink (2000) FCA 1248
REASONS FOR DECISION
8 June 2006 Mr C. Ermert, Member
Introduction
1. Mr Moran first went to Papua New Guinea (PNG) in 1965 as a lay missionary working in the Catholic Diocese of Wewak on coconut plantations until 1976. He then worked in the Diocese main store as the wholesale manager and general manager until 1985. The store supplied food and materials to small parish stores.
2. In 1972 he married Mrs Moran, a citizen of PNG. They have six children ranging in age from 16 to 32 years. The children received their primary education at the International School in Wewak and were then sent to private schools in Ballarat for their secondary education.
3. In 1985 Mr and Mrs Moran established the Marani Trading Company Limited (“the Company”). Mrs Moran is a Director and holds 10 of the 15 issued shares in the Company. Initially the Company sold only clothing, tools and saucepans, anything which people would use in the village. With the help of a loan the Company purchased a Chinese business in Wewak that involved the selling of grocery items. The Company owns a house being used as the residence for Mrs Moran and the extended family. The Company also owns the premises of the business. The business was leased out in July 2003 for income to pay creditors and to provide a regular income for Mrs Moran.
4. Mr Moran returned to Australia in early 2000 to help his sister look after his mother who was suffering from dementia. Later that year he enrolled in a course of peace studies to improve his chances of finding employment in PNG with organisations such as the United Nations, AusAid, Care Australia and World Vision.
5. Mr Moran enrolled in an off-campus course at the University of New England (UNE) at Armidale. Most of UNE’s 17,000 students are external. He decided to live in Australia while doing his studies because of the difficulties in accessing libraries and study material in PNG. He stayed in Australia until 2002, when he returned to PNG to help the Company through financial difficulties. Mr Moran returned to Australia in 2004, living with his sister in Ballarat. Now that he has completed his studies he intends to return to PNG.
6. In 2000 Mr Moran received approximately $7,000 from the Company to establish himself in Australia with accommodation, a car and university fees. Since that time the Company has also paid amounts for air fares and expenses related to the education of the children and fees for an Australian passport for his daughter. Since the Company business was leased in July 2003 Mrs Moran has been receiving approximately $1,000 per month in directors’ fees.
7. Mr Moran commenced receiving mature age allowance on 6 February 2004. Payments were suspended on 25 May 2004 pending enquiries about his entitlement. On 4 June 2004 Centrelink, acting as agent for the Secretary, determined that, as Mrs Moran was the majority shareholder in the Company, and its controller, the income from the Company was required to be taken into account in assessing Mr Moran’s mature age allowance. Centrelink recalculated the rate of payment and found that Mr Moran was being paid at too high a rate and the rate was reduced accordingly. Mr Moran asked for this decision to be reviewed by an Authorised Review Officer (ARO).
8. On 24 August 2004 the ARO affirmed the decision. Mr Moran appealed this decision to the Social Security Appeals Tribunal (SSAT). On 26 April 2005 the SSAT set aside the decision of the ARO and directed that the matter be sent back to Centrelink for reconsideration in accordance with the direction that “for the purposes of assessing the rate of mature age allowance payable to Mr Moran, he is to be treated as if he were not a member of a couple and that he is to be paid arrears from the date of suspension of that payment”.
9. The Secretary to the Department of Families, Community Services and Indigenous Affairs (the Applicant in this matter) sought review of the SSAT decision. Therefore, the issue before the Tribunal is the appropriate rate of the mature age allowance payable to Mr Moran at the relevant time.
The Issues
10. Qualification for mature age allowance is governed by the Social Security Act 1991 (the Act). The Act applies a means test in determining qualification for this payment. Part 3.18 sets out the means test treatment of private companies and trusts.
11. Section 1207 of the Act sets out a three-stage system for the attribution of the assets and income of private companies and trusts to individuals:
· The company must be a designated private company;
· The company must be a controlled private company; and
· The individual must be an attributable stakeholder.
12. Both parties accept that the Company is a designated company, which it is a controlled private company and that Mrs Moran is correctly attributed with 100% of the income of the Company.
13. Under normal circumstances Mrs Moran’s income would affect the amount of Mr Moran’s mature age allowance because they are married and are therefore members of a couple. Married couples are treated differently from single people because they are expected to be able to pool their resources. Married people would usually live in the same premises, share the rent and living expenses and obtain better value for money.
14. Recognizing that the circumstances of couples may vary considerably, and that hardship may be caused to a member of a couple if the general rule were applied to every case, the Act has created an exception which allows the decision‑maker to treat a person who is a member of a couple as though they were not. Where this discretion is exercised, a person may be paid a social security benefit as if they were a single person.
15.The relevant provision is found in ss 24(1) of the Act:
24(1) Where:
(a)a person is legally married to another person; and
(b)the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of the Act.
16. In this case there is no dispute that Mr and Mrs Moran are legally married and that they are not living separately and apart on a permanent or indefinite basis. The only issue in dispute is whether there is a special reason such that the decision‑maker is satisfied that Mr Moran should not be treated as a member of a couple.
Is There A Special Reason Why Mr. Moran Should Not Be Treated As A Member Of A Couple
Member of a Couple
17. Before considering the facts of the matter I went first to the meaning of the phrase “as a member of a couple”. The Federal Court considered this issue in the matter of Cocks v Centrelink (2000) FCA 1248. O’Loughlin J said:
12. The marriage of a man and woman is taken to mean, in ordinary circumstances, that they will pool their resources, share their expenses, and thereby live more cheaply than if they were two single persons who were living separate and apart. In the case of income earners they would pool their respective incomes. In the case of pensioners they would pool their pensions. In the case of Mr and Mrs Cocks it would seem to be the case that she has nothing to pool and he, as a result, has nothing to gain from any supposed pooling. That predicament exists whether or not they are residing together or apart.
18. In effect this defines a member of a couple as one who in ordinary circumstances is able to live more cheaply by being able to benefit from the pooling of resources and the sharing of expenses.
Special Reason
19. The other issue for consideration is the meaning of “special reason”. In Boscolo v Secretary Department of Social Security (1999) FCA 106 French J considered the general approach to determining whether special reasons exist. He said:
18. The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory requirements. It is generally futile to search for its meaning terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. A Full Court has spoken of it as having content which is “… sufficiently understood not to require judicial gloss”: Beadle v. Director-General of Social Security (1995) 60 ALR 225 at 228. If helpful to speak in terms of its meaning almost all of it comes from context. Thus man may be “special” in relation to animals generally but “… when you are speaking of poets, he may need to be a Milton”; Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 at 578 per Burchett J. It is an elastic instruction suitable for application across a range of situations: Jess v Scott (1986) 12 FCR 187. This is just another way of pointing to its instrumental character. That application is not to be confined by precise limits or rules: Beadle (supra) at 228. Circumstances or reasons will not necessarily fall outside the designation of “special” because they fall within a class which is widely defined or because they are circumstances or reasons which can be foreseen before they arise: Hutchins v Commissioner of Taxation (Cth) (1987) 14 FCR 510 at 527. The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course: Minister for Community Services and Health v Thoo (1988) 78 ALR 307 at 324 (Burchett J). But that does not require that the case be extremely unusual, uncommon or exceptional: Secretary, Department of Social Security v Hodgson (1992) 27 FCR 32. (at 29 AAR 124).
Focus on the Individual
20. Another issue was raised in Boscolo where French J decided that the Tribunal had erred in law by considering “special reasons” by reference to the circumstances of the couple, rather than solely in relation to the person seeking to have the discretion exercised in their favour. The Court noted, however, that this does not of course prevent the Tribunal from considering all relevant circumstances including the position of [the spouse] as it affected Mr Boscolo. French J said:
20. It is of importance in the present case to note that s.24 requires the decision‑maker to focus on the position of one person, not the couple, and to assess whether that person should for a special reason not be treated as a member of the couple.
Considerations in this Case
21. I have applied these decisions to this case by testing each of the submissions to determine whether, for Mr Moran as an individual, there are special circumstances or special reasons that relate to his ability to live more cheaply by being able to benefit from the pooling of resources and the sharing of expenses.
Submissions
22. Ms Manova of counsel, representing Mr Moran, submitted that the following factors should be considered as constituting special reasons in this case:
(a)Mr Moran is 66 years of age;
(b)Employment opportunities in PNG are very limited for non-PNG citizens. Mr Moran was studying to further his employment prospects and was undertaking his studies in Australia because of the difficulties with study material and facilities in PNG;
(c)Mr Moran’s entitlement to an Australian age pension is not portable overseas for longer than six months;
(d)Neither Mr Moran nor Mrs Moran has an entitlement to a PNG pension;
(e)Mrs Moran is not an Australian citizen and cannot benefit under the Australian welfare scheme;
(f)Payments made by the Company for air fares for Mr Moran and his children were not made by choice but necessity;
(g)Mr Moran could bring his wife and family to Australia to live and receive Australian funded benefits;
(h)Mr Moran could not liquidate the Company to realise its assets;
(i)It is difficult to undertake university studies in PNG;
(j)Mr Moran has received only limited financial support from Mrs Moran; and
(k)Mrs Moran’s income is taken up in living expenses and supporting a very large family.
Each of these factors is considered in turn against the criteria in paragraph 21 above.
23. Ms Manova submitted that Mr Moran is 66 years old, an age when the majority of people choose to retire from full time work. Instead, Mr Moran is attempting to educate himself in order to further his employment prospects. This situation applies whether or not Mr Moran is a member of a couple and does not impact on his ability to live more cheaply by the pooling of resources.
24. Mr Moran’s studies in Australia are an important factor for consideration and this issue is explored more fully in paragraphs 35 to 39 below.
25. The question of Mr Moran’s eligibility for age pension benefits while living in PNG was raised but not explored in detail. Mr Meehan, the Centrelink advocate representing the Secretary, stated that the issue of entitlements was complex and would need to be the subject of further detailed inquiries by Mr Moran. In any case it is not at issue in this hearing and is not further considered.
26. The fact that Mr and Mrs Moran are not eligible for a PNG age pension applies regardless of whether they are members of a couple and is therefore not a relevant consideration in this matter.
27. Ms Manova submitted that Mrs Moran is not an Australian citizen and cannot benefit from the Australian welfare scheme under the particular provisions that relate to a couple. Ms Manova stated that the underlying assumption in similar cases is that the couples tend to live in Australia and are able to avail themselves of Australian welfare benefits. However, in accordance with Boscolo, I am bound to focus on the situation of Mr Moran rather than the situation of the couple. In addition, there is nothing in the meaning a member of a couple in Cocks that restricts the resources to be pooled to only those resources arising from the Australian welfare system. I consider this submission to have no bearing on the decision.
28. The issue of the limited opportunities for employment in PNG is considered together with the need for Mr Moran’s Australian studies in paragraphs 35 to 39 below.
29. The Company provided some assistance with air fares and expenses related to the education of Mr Moran’s children in Ballarat. The Company also provided assistance with the air fares for Mr Moran to return to PNG in 2002 in order to salvage the financial situation of the Company. I consider such assistance to be an example of the benefits of being a member of a couple; that is having an ability to share expenses.
30. The possibility of Mr Moran bringing his wife and children back to Australia to live and thereby becoming eligible to receive Australian benefits is a situation outside the ambit of this hearing. It would need detailed examination of the conditions and benefits and would in any case be a matter of separate decision by Mr Moran. At this stage it is hypothetical. It does not affect the period under review and is not considered further.
31. Mr Meehan submitted that Mr Moran had an option to liquidate the company in order to realise assets for living expenses. In response Ms Manova submitted that liquidation was not an option for Mr Moran because of the effect of such an action on the long term benefits for the children. Any such option is not affected by whether Mr Moran is a member of a couple or not. The assets to be realised and the long term benefits for the children are unaltered by Mr Moran’s situation and the issue is not considered further in this matter.
32. The issue of the difficulties in undertaking studies in PNG is also considered in paragraphs 35 to 39 below.
33. Mr Moran’s evidence was that while living in Australia he received no financial assistance from Mrs Moran other than the initial setting-up allowance and the air fares. While this submission may confine the assistance to that provided for setting‑up and air fares it does not negate the fact that some level of support was provided by the Company to Mr Moran.
34. The fact that Mrs Moran’s income is taken up in her living expenses and in supporting a very large family determines the amount of Mrs Moran’s total resources that are not available for pooling. The living expenses absorbed by Mrs Moran and the family will not necessarily be altered by Mr Moran’s living with them as a member of a couple. They are resources that are not available for pooling and are not altered by whether or not Mr Moran is a member of a couple. This issue is therefore not considered further.
Move to Australia
35. A significant factor relevant to the issue of Mr Moran’s ability to benefit from being a member of a couple is that relating to his move to Australia. It is his location in Australia that has caused extra expenses that would not have been incurred if Mr Moran had been living with his wife in PNG. In particular, he would not have incurred the expense of travelling to and from PNG in 2002 to salvage the Company from its financial problems. Living away from home also means Mr Moran is not able to benefit from the sharing of general living costs, as he would were he living with his wife and family.
36. Mr Moran’s evidence was that his reason for moving to Australia in 2000 was to look after his mother who was suffering from dementia. Later that year he enrolled for his studies because his son had taken over the management business and “it was a good opportunity for me to do some study” (transcript p.15).
37. Mr Moran then contended that this study is essential to enable him to gain qualifications, without which he would not be able to gain employment in PNG. Mr Moran gave evidence that employment in PNG is difficult for non-PNG citizens. However, he could be employed by organisations such as the United Nations, AusAid, Care Australia and World Vision. He said that to find such employment he would need some formal qualifications. Mr Moran determined that a university course in peace studies would provide the necessary qualifications for such employment. He then gave evidence that it is impractical to access the required study material in PNG, thereby necessitating his living in Australia for the duration of his study.
38. Mr Meehan submitted that Mr Moran’s presence in Australia and his study in Australia is not essential, rather it a choice that he made to further his education and to increase his employment prospects. He submitted that Mr Moran could have found work in PNG at least until the circumstances of the Company had stabilised. In his evidence Mr Moran said that he thought he should be able to find work on the basis of his extensive contacts and his business experience. Mr Moran agreed that he had not explored with UNE arrangements that might overcome difficulties with the late submission of assignments, allowing for postal delays in the receipt of study material and the delivery of assignments. Mr Moran also accepted that although it was difficult to access internet based study material in Wewak, it was not impossible.
39. On the basis of the evidence I am not convinced of the necessity of Mr Moran’s move to Australia to undertake a course of study, particularly a course that is designed to be undertaken by external students. When considered together with Mr Moran’s original decision of taking advantage of a good opportunity to study in Australia, it is difficult to conclude that Mr Moran’s move to Australia was such that he had no choice or any other reasonable alternative. As a result of his decision to study in Australia Mr Moran did not avail himself of all of the benefits he could have realised from the sharing of expenses by living with his wife and family. That is not to say that those benefits were not available to Mr Moran or that it was not possible for him to benefit from being a member of a couple. By moving to Australia because it was a good opportunity to do some study he chose not to avail himself of the benefits that may have been available.
Pooling Resources and Sharing Expenses
40. Although Mr Moran did not avail himself of all of the benefits that could have been available to him from living with his wife and family, he did share some expenses with his wife. He received some initial help from the Company to set himself up for his studies in Australia. This included some money for rent while he lived in Brisbane. In addition, the Company provided assistance with air fares for Mr Moran and his children. While receiving assistance from his wife Mr Moran also provided assistance to his wife. He gave evidence that while he was in Australia he assisted his wife with savings from his pension. This receiving and giving of assistance between members of a couple is the essence of the pooling of resources and sharing of expenses which is the essential element of being a member of a couple.
41. Mr Meehan submitted that there was a capacity for Mr Moran to seek further amounts of money from the Company, thereby availing himself of benefits from the pooling of additional resources. No evidence was led to support this contention and it would appear to me to be largely dependent on the agreement of the creditors. This matter is not considered further.
Consideration of Cocks and Boscolo
42. Ms Manova referred the Tribunal to the case of Cocks. In that case Mr Cocks was married to a woman working as a cleaner in the Philippines. The Federal Court agreed that in her circumstances Mrs Cocks had nothing to contribute to the pool and accepted this was a special reason sufficient to treat Mr Cocks as a being not a member of a couple. Ms Manova submitted that Mr Moran’s circumstances are similar to those in Cocks. Mrs Moran has been unable to offer Mr Moran any financial support and, further, Mr Moran has had to provide support to his family in PNG.
43. Mr Meehan submitted that there is a significant difference between this case and that of Cocks. Mrs Cocks was not working during the period under review and had no income at all. In this case Mrs Moran clearly has some income. Mrs Moran also has a valuable asset in PNG, retained within the family company. I accept these as points of difference between the cases. The family home is owned by the Company and is provided to Mrs Moran and to Mr Moran should he choose to live there. Furthermore, the Company provides some income to Mrs Moran, which provides for the support of the family. Should Mr Moran choose to live in the home, he would also be able to benefit from the sharing of living expenses implicit in such an arrangement.
44. In the case of Boscolo, Mr Boscolo was married for a second time, to a citizen of the Philippines, and they were resident in Perth. Mr Boscolo was involved in family law proceedings with respect to the residence of his child from his first marriage. Mr Boscolo was forced to become involved in these protracted proceedings, which required him to move to Sydney where the child was resident and where the Family Court was considering the matter. The Secretary submitted that Mr Boscolo had relocated to Sydney by choice; that it was not unreasonable for the Boscolo’s to rent out the home in Perth and for Mrs Boscolo to move to Sydney. However, the Federal Court concluded that Mr Boscolo had no real choice but to live separately for the period he had to be in Sydney and therefore that part of the appeal was made out. Ms Manova submitted that Mr Moran’s circumstances were similar, in that Mr Moran had no real choice but to live in Australia.
45. Mr Meehan submitted that Mr Boscolo had had no choice but to live in Sydney He was involved in Family Law proceedings with respect to the residence of his child from his first marriage, David, and there was a Family Court order which prevented Mr Boscolo from changing the residence of the child from the Sydney Metropolitan area. In the present case, however, Mr Meehan submitted that Mr Moran made a personal choice to live separately from the family in order to improve his employment prospects. He submitted further that Mr Moran had other options available to him, namely rearranging the financial affairs of the Company. I found earlier that Mr Moran’s move to Australia was not essential. I therefore accept Mr Meehan’s submission that Mr Moran exercised a degree of personal choice. In this way the present matter is differentiated from Boscolo.
Summary
46. The essence of Mr Moran’s contentions is that, during the period in question, he was unable to benefit from being a member of a couple due to special circumstances. I have found that, although Mr Moran did not avail himself of all the benefits of pooling resources and sharing of benefits that could have come from living with his wife and family, he did act as a member of a couple and did enjoy some benefits from being a member of a couple. He received financial assistance from his wife and the Company for the costs of establishing himself in Australia, assistance with school fees and expenses and assistance with air fares. In turn Mr Moran also assisted his wife to the extent he could from his pension. To that extent Mr Moran was in fact acting as and benefiting from being a member of a couple.
47. An extension of that issue is whether Mr Moran was prevented by special reasons from enjoying any other benefits of being a member of a couple, such as those that might have accrued from living with his wife and family had he not gone to Australia to study. Although the difficulties of undertaking studies and finding employment in PNG could be considered as unusual and different in another context, they are problems well known to Mr Moran and are no more than factors Mr Moran had to take into account when making his decision to move to Australia. These factors are a normal part of the life of the expatriate in PNG; and in the context of Mr Moran’s many years of working in PNG they could not be considered unusual or different.
48. In considering the relevance of the cases of Cocks and Boscolo, I have found their facts differentiate them from the present matter, such that those judgements are not binding on me in this case.
49. The other factors submitted for consideration by Ms Manova, while providing the context of Mr Moran’s overall circumstances, are not relevant to the principle underlying the different rates of benefit payable for single persons compared to members of a couple.
50. I consider, therefore, that Mr Moran’s circumstances are not sufficiently unusual or different to be considered as “special reasons” in the terms of s 24(1).
Finding
51. I find that there is no special reason in this particular case for Mr Moran not to be treated as a member of a couple. I have found no time limitations that qualify this decision. As a consequence, the Secretary is to treat Mr Moran as a member of a couple for the full period for which Mr Moran was paid pension benefits. This period commenced on 5 February 2004 (T5) and continues until there is a change in circumstances requiring reconsideration.
52. The effect of my finding is that the decision of the Social Security Appeals Tribunal dated 26 April 2005 is set aside. That means that the benefits paid to Mr Moran are to be calculated on the basis that he is a member of a couple.
Decision
53. The decision under review is set aside and the matter is to be remitted to the Secretary to the Department of Families, Community Services and Indigenous Affairs for a determination of the benefits due to and debts payable by Mr Moran on the basis that since the commencement of his benefits and continuing he is a member of a couple.
I certify that the fifty‑three (53) preceding paragraphs are a true copy of the reasons for the decision herein of
Mr C. Ermert, Member
(sgd) . . . . . . . . . . . . . . . . . . . . . . . .
ClerkDate of Hearing: 4 April 2006
Date of Decision: 8 June 2006
Advocate for the applicant: Mr S. Meehan, Centrelink
Counsel for the respondent: Ms D. Manova
Solicitors for the respondent: Victorian Legal Aid
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