Mr Rodney Knott and Secretary, Department of Social Services
[2015] AATA 266
•28 April 2015
[2015] AATA 266
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/5118
Re
Mr Rodney Knott
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member Bernard J McCabe
Date 28 April 2015 Place Brisbane (heard in Sydney) The Tribunal affirms the decision under review.
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Senior Member Bernard J McCabe
CATCHWORDS
SOCIAL SECURITY – Disability support pension – Cancellation of payment for failure to comply with information requirement – Applicant diagnosed with chronic schizophrenia - Whether cancellation a reasonable exercise of respondent’s powers in the circumstances – Whether applicant entitled to repayment of arrears – Date of effect of Tribunal decision - Application for review made more than 13 weeks after the original decision – Whether s 43 of the Administrative Appeals Tribunal Act 1975 (Cth) is subject to the Social Security Administration Act 1991(Cth) ss 109 and 152 – Decision under review affirmed
LEGISLATION
Social Security (Administration) Act 1991(Cth) ss 64, 109, 152
Administrative Appeals Tribunal Act 1975 (Cth) s 43(6)
Social Security Act 1991 (Cth) s 1158
CASES
McHattie and Secretary, Department of Social Services [2014] AATA 246
Secretary, Department of Employment and Workplace Relations v Mitchell [2006] AATA 804
SECONDARY MATERIALS
Social Security Guide
REASONS FOR DECISION
Rodney Knott is a long-term recipient of the disability support pension (“the DSP”). He was first granted the DSP in 1997 after he was diagnosed with schizophrenia. Since that time, his DSP has been cancelled on three occasions because Centrelink was not provided with information it required. The periods in question are:
·From 23 February 2001 to 7 December 2003 (“the first period”);
·From 23 February 2005 to 8 May 2007 (“the second period”); and
·From 14 August 2008 to 11 January 2009 (“the third period”).
The Social Security Appeals Tribunal (“the SSAT”) concluded the respondent should not have cancelled the DSP on 23 February 2001 so that Mr Knott should have been paid throughout the first period. The SSAT found Mr Knott had requested a review of the original decision in a timely way but the Secretary did not respond until Centrelink commenced a review in relation to all three periods in 2013. The respondent does not dispute the SSAT decision in relation to the first period. The respondent also now concedes Mr Knott’s payments should not have been cancelled throughout the entirety of the third period.
Mr Knott remains unwell but was able to participate in the hearing by telephone. He was represented by Ms Finlay, a solicitor from Legal Aid NSW.
Mr Knott’s entitlements during the second period
What happened
A financial management order was made in relation to Mr Knott’s affairs on 28 January 2004. The State Trustee of Victoria (“the Trustee”) took over management of Mr Knott’s financial affairs. The Trustee lodged a fresh application for DSP on the applicant’s behalf on 4 February 2004; the claim was granted with effect from 8 December 2003. The Trustee was also nominated as Mr Knott’s representative in dealings with Centrelink.
There is no question that Centrelink had information on its files confirming Mr Knott had been seriously unwell. On 12 February 2004, for example, a Centrelink officer recorded that Mr Knott suffered from chronic schizophrenia, and that he was behaving bizarrely: exhibit one at p 128. Even so, the applicant (and, it seems, the Trustee) was asked to complete a medical update form in November 2004. There is no direct evidence of the form being sent, but there is a record of a Centrelink officer discussing the review with an officer from the Trustee. The Trustee’s officer is recorded as saying (exhibit one at p 117) the applicant was homeless at the time, and the Trustee had been unable to contact him. The note went on to record the Centrelink officer said the review was not due until February 2005, and the Trustee’s officer indicated the review form should be completed within that time frame.
The applicant says there is no basis for finding that a medical update form was in fact sent to the applicant or anyone else in connection with the file. While I accept there is no direct evidence of a form being sent out or received, the conversation between the Centrelink officer and the Trustee’s officer on 11 November 2004 (exhibit one at p 117) confirms to my satisfaction that the form was despatched and had come to the attention of the applicant’s nominee.
The review form was not completed and filed by February 2005. Centrelink sent the Trustee and Mr Knott a notice dated 23 February 2005 confirming the payments were suspended in light of the failure to complete the review (exhibit one at p 224). The DSP was cancelled on 25 May 2005 (exhibit one at p 224).
The file shows an officer of the Trustee contacted Centrelink by phone on 23 December 2005 to enquire about Mr Knott’s payments. The notes made in relation to that conversation (exhibit one at p 115) suggest the contact was nothing more than an enquiry: the caller sought information about Mr Knott’s payments, and was told the payments were suspended in February 2005. There is no record of the Trustee asking Centrelink to review that decision. Another officer of the Trustee called on 21 February 2006 to ask for information about Mr Knott’s payments; the notes made in relation to the call (exhibit one at p 114) confirm the officer was told the DSP had been cancelled and that it would be necessary to make a fresh claim.
Mr Knott attended at Centrelink offices himself on a number of occasions in the months that followed. He was obviously in a bad way: Centrelink social workers saw Mr Knott in December 2006 and January 2007 and recorded him making bizarre claims, but he declined to cooperate by completing forms that might assist him to get back on the DSP. During this period, the Trustee was unaware of Mr Knott’s whereabouts: indeed, an officer of the Trustee contacted Centrelink on 1 May 2007 asking if Centrelink had any information that would assist the Trustee to find Mr Knott. Mr Knott was located on 9 May 2007 when he was admitted to the Mental Health Unit at Townsville Correctional Centre. A claim for DSP was subsequently lodged with the assistance of staff from the centre and the DSP was granted with effect from 9 May 2007.
Was the DSP properly suspended and then cancelled in 2005?
Ms Finlay, for the applicant, argued the decision to suspend then cancel the DSP in 2005 was not a valid exercise of the respondent’s power under s 64 of the Social Security (Administration) Act 1991 (Cth) (“the Administration Act”). Section 64 permitted Centrelink to cancel payments if the applicant failed to comply with a valid notice requesting information and:
(e)…the Secretary is not satisfied that the person had a reasonable excuse for not complying with the requirement; and
(f)the Secretary is satisfied that it is reasonable for this subsection to apply to the person
Ms Finlay said the Secretary could not be reasonably satisfied Mr Knott should be cut off for failing to respond to a notice when the Centrelink files included ample evidence that confirmed Mr Knott was seriously unwell. Ms Finlay pointed out the Social Security Guide at the relevant time said at [6.2.5.15]:
Caution must be exercised when reviewing DSP recipients with psychiatric, psychological, neurological impairment such as acquired brain injury or intellectual impairments so these people are not disadvantaged. If the sole or dominant reason for a person failing to return the review form is related to their psychiatric or intellectual impairment, payment should be restored.
The respondent pointed out Mr Knott was, by this point, in the hands of the Trustee. The respondent says it is reasonable to request up-to-date medical evidence to determine whether Mr Knott’s condition had changed. The respondent adds there is no evidence that the Trustee took reasonable steps to comply with the requirements of the notice – although, in fairness, the Trustee’s officer did tell Centrelink on 11 November 2004 that the Trustee could not find Mr Knott at the time.
I doubt whether the Secretary could be satisfied at the time the notice was issued (or when the decision was subsequently made) that it was reasonable to send the notice or act on the failure to comply with its requirements. I accept there was ample evidence available to the Secretary confirming the applicant was seriously unwell, and there was no reason to suppose (or even suspect) his condition had changed or improved. It is also unclear what steps the Trustee could reasonably take if they could not find the applicant.
Unfortunately, a finding at this point that the Secretary should not have suspended and cancelled the DSP in 2005 does not assist the applicant. Section 109 of the Administration Act says a favourable determination on review can be backdated to the date of the original decision if the application for review was made within 13 weeks of the decision being made and notified to the applicant.[1] If the review was sought by the applicant or commenced on the respondent’s initiative more than 13 weeks after the original decision, the earliest date on which a favourable determination can take effect is the date on which the review was sought or commenced.[2] The Trustee did not respond to the notices containing the decisions to suspend or cancel the DSP in 2005. Records of the notices are included in exhibit one at pp 225-227. There is also no record of a request for review being made by the Trustee’s officer who spoke with Centrelink on 23 December 2005. The first date on which a review was sought or commenced was 28 February 2013.
[1] s 109(1).
[2] s 109(2).
The SSAT could not avoid the consequences of s 109 given the drafting of the relevant “date of effect” provisions in the Administration Act. Section 152(3) says a decision to vary or set aside a decision comes into effect on and from the day on which the decision under review has or had effect (if the application for review to the SSAT is made more than 13 weeks after the decision made by the authorised review officer, the SSAT’s decision cannot be backdated beyond the date of the application to the SSAT: s 152(4). But that is not the problem in this case). The decision otherwise comes into effect on the date of the SSAT’s decision (s 152(1)), although the SSAT has the power to order that it take effect on a later date: s 152(2).
The respondent says I cannot make orders in relation to what occurred in 2005-2007 because that period is more than 13 weeks before the review process commenced. The respondent says this Tribunal is effectively subject to the limits on the SSAT which are found in s 152. Ms Finlay argued I could overcome the limitation in ss 109 and 152 of the Administration Act by relying on the power in s 43(6) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) which permits the Tribunal to specify a date upon which its decision comes into effect. She argued ss 109 and 152 of the Administration Act should not qualify the power in s 43(6) of the AAT Act to pick an earlier date of effect. She said the fact the SSAT’s powers to specify an alternative date of effect were limited in s 152 of the Administration Act does not have any bearing on s 43(6) of the AAT Act. If the Parliament intended that the Administrative Appeals Tribunal’s decisions should be subject to the same limitations, she argued, the Administration Act would have said so.
Ms Finlay’s argument refers to the Tribunal’s decision in McHattie and Secretary, Department of Social Services [2014] AATA 246 (“McHattie”). In that case, the applicant had sought review of the SSAT decision more than 13 weeks after the date of the decision of the authorised review officer. When the matter reached the Administrative Appeals Tribunal, the Tribunal was asked to specify an earlier date of effect pursuant to s 43(6) of the AAT Act notwithstanding the restriction in s 152(4) of the Administration Act. In the course of her reasons, SM Britton discussed an earlier decision of the Tribunal in Secretary, Department of Employment and Workplace Relations v Mitchell [2006] AATA 804 (“Mitchell”). In that case, DP Jarvis had concluded (at [59]):
Where (as in the present situation, by virtue of the AAT Act) this Tribunal stands in the shoes of the SSAT, and has the same powers and discretions as the SSAT, and its decision is deemed to be that of the SSAT, the specific constraint in subsection 152(4) on the effective date of the deemed SSAT decision should, in my view, prevail over the discretion to order retrospectivity contained in subsection 43(6), which is a provision of general application. In resolving the apparent conflict between the two provisions, it is also significant that the specific provision, subsection 152(4), does not literally refer to the effective date of the SSAT decision, but refers in terms to how the social security law is to have effect. In this case the decision under review is the decision of the SSAT (s 179(2) of the Administration Act). The decision of the AAT is deemed to be a decision of “that person”, namely the SSAT (S 43(6) of the AAT Act). By the operation of s 43(6), the tribunal’s decision, unless otherwise ordered, has effect “on and from the day on which the [SSAT] decision has or had effect”.
SM Britton took a different view. She explained (at [10]):
I cannot agree with the analysis of DP Jarvis that s 152(4) of the Administration Act operates to deprive the AAT of the discretion conferred by s 43(6) of the AAT Act to “otherwise order” and to determine the date of effect of any decision it makes on review. Section 152 concerns the date of effect of a decision of the SSAT; s 43(6) concerns the date of effect of a decision of the AAT. While as the Deputy President points out, a decision of the AAT is deemed to be a decision of SSAT, it does not mean that s 152(4) of the Administration Act governs the date of effect of a decision made by the AAT.
The Secretary did not have the opportunity to contest the reasoning in McHattie on appeal because SM Britton declined to exercise the discretion she found was preserved in s 43(6). In this case, the Secretary argued in written submissions that the decision in McHattie was not directly on point in any event as s 152(4) was not in question, and the operation of s 109 was not discussed.
I am satisfied s 43(6) of the AAT Act must be read subject to the restrictions in s 109 and 152 of the Administration Act. The provisions in the Administration Act reflect a policy requiring the recipients of social security benefits to exercise their rights of review in a timely way. Those provisions operate as a statute of limitations, as DP Jarvis explained in Mitchell (at [57]). It would be odd if parliament did not intend that policy to apply to reviews of social security decisions by this Tribunal. I think the words of the Administration Act ought to be interpreted broadly to give effect to that policy, which necessarily qualifies the operation of s 43(6) of the AAT Act.
Mr Knott’s entitlements during the third period
The respondent cancelled Mr Knott’s payments on 19 August 2008 after it was advised Mr Knott was incarcerated on 13 August 2008. A copy of Mr Knott’s corrective services file was tendered at the hearing (exhibit two). The file shows Mr Knott was released on 28 November 2008, not 11 January 2009.
Mr Knott was not entitled to be paid the DSP while he was incarcerated: s 1158 of the Social Security Act 1991. There was no basis for withholding his payments after he was released, although it seems Centrelink officers were not aware of the true position at the time they made their decision. But neither Mr Knott nor the Trustee sought a review of the decision to withhold payments for the period between 28 November 2008 and 11 January 2009 within 13 weeks. That review did not commence until the respondent looked into the matter in February 2013. Section 109 of the Administration Act means the applicant is not entitled to recover arrears in those circumstances.
CONCLUSION
The decision under review is affirmed.
I certify that the preceding 23 (twenty-three) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe. .................................SGD....................................
Associate
Dated 28 April 2015
Date of hearing 14 November 2014 Date final submissions received 18 November 2014 Solicitors for the Applicant Ms Finlay, Legal Aid New South Wales Solicitors for the Respondent Ms Thangasamy, Department of Human Services
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