Nicholson; Secretary, Department of Social Services and (Social services second review)

[2019] AATA 1037

Nicholson; Secretary, Department of Social Services and (Social services second review) [2019] AATA 1037 (27 May 2019)

Division:GENERAL DIVISION

File Number(s):      2018/0161

2018/0162

Re:Secretary, Department of Social Services

APPLICANT

AndColin Nicholson

Josephine Nicholson

RESPONDENTS

DECISION

Tribunal: Senior Member A Poljak

Date: 27 May 2019

Place:Sydney

The decision under review is set aside and, in substitution:

(a)the respondents’ age pension was correctly cancelled on 20 December 2016, with effect from 22 November 2016; and

(b)the respondents have had no entitlement to a SHC and LIC since 1 January 2017.

.............................[SGD]..........................................

Senior Member A Poljak

CATCHWORDS

SOCIAL SECURITY – age pension – Commonwealth Seniors Health Cards – Low Income Health Care Card – where age pension automatically cancelled for failure to report – whether applicants entitled to SHC and LIC due to grandfathering provisions – decision set aside and substituted

LEGISLATION

Social Security Act 1991 (Cth) ss 1061ZJA, 1061ZRA
Social Security (Administration) Act 1999 (Cth) ss 68, 95, 237
Social Services Legislation Amendment (Fair and Sustainable Pensions) Act 2015 (Cth)

REASONS FOR DECISION

Senior Member A Poljak

27 May 2019

1. Mr Colin Nicholson and Mrs Josephine Nicholson, the respondents, were both in receipt of the age pension and were holders of non-income tested Commonwealth Seniors Health Cards (“SHC”). Mr Nicholson was granted the age pension on 5 February 2015 and became a holder of a SHC on 31 December 2014. Mrs Nicholson was granted the age pension on 18 October 2011 and became a holder of a SHC on 31 December 2014.

2. On 12 September 2016, the respondents were informed that they were required to report to the Department every two weeks for each reporting period in accordance with subsection 68(2) of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”). Relevantly, the later reporting dates were specified as 21 November 2016 and 5 December 2016. They are deemed to have received the written notice pursuant to section 237 of the Administration Act. On 21 November 2016, the respondents duly reported in accordance with their reporting obligations however; they failed to report on 5 December 2016.

3. On 25 October 2016, the respondents were informed of proposed amendments to the assets test for the age pension and, on 3 December 2016, the Department advised them that as a result of the amendments, as at 1 January 2017, they would no longer be eligible for the age pension because their combined assets would be calculated as above the allowable limit. However, in accordance with the grandfathering provisions (section 1061ZJA and section 1061ZRA of the Social Security Act 1991 (Cth) as introduced by the Social Services Legislation Amendment (Fair and Sustainable Pensions) Act 2015 (Cth) (“Amendment Act”)) (“grandfathering provisions”) they would automatically be entitled to a SHC and Low Income Health Care Card (“LIC”).

4. On 20 December 2016, the respondents’ age pensions were automatically cancelled under subsection 95(1) of the Administration Act for failing to report on 5 December 2016, with effect from 22 November 2016 (“cancellation decision”).

5. On 1 January 2017, the Amendment Act came into effect which, inter alia, introduced a significantly more stringent assets test for the age pension.

6. Despite the respondents’ age pension being cancelled on 20 December 2016, they both automatically received a SHC and LIC on 1 January 2017. On 11 September 2017, the Department of Human Services (“the Department”) cancelled the respondents’ SHC and LIC. An authorised review officer (“ARO”) of the Department reviewed the cancellation decision and found on 31 October 2017 that the respondents were not eligible to hold the SHC and LIC free of the income test.

7. The decision under review in these proceedings is a decision of the Social Services and Child Support Division (“SSCSD”) of the Administrative Appeals Tribunal made on 4 December 2017, which set aside the decision of an ARO of the Department made on 31 October 2017. In its decision the SSCSD decided that the respondents were entitled to the age pension between 22 November 2016 and 31 December 2016 and that the issue of SHC and LIC to the respondents was correct and they should be reinstated.  

8. The issues for determination in these proceedings are:

   (c)whether the automatic cancellation of the respondents’ age pension on 20 December 2016 properly occurred; and

   (d)whether the decision made on 11 September 2017 to revoke the respondents’ SHC and LIC was properly made.

   CONSIDERATION

9. The respondent’s age pension was cancelled on 20 December 2016 for a failure to report on 5 December 2016, with effect from 22 November 2016. The cancellation automatically occurred pursuant to subsection 95(1) for non-compliance with paragraph 68(2)(b) of the Administration Act. Subsection 95(2) of the Administration Act provides that in special circumstances it may be appropriate to determine that subsection 95(1) does not apply. The term “special circumstances” is not defined in Social Security law and the Tribunal has a wide discretion to consider a variety of circumstances. In this case, the respondents have not provided any evidence giving rise to a consideration of “special circumstances” for the purposes of subsection 95(2). As such, I am satisfied that the cancellation of the respondents’ age pension for non-compliance with paragraph 68(2)(b) of the Administration Act properly occurred pursuant to subsection 95(1) of the Administration Act.

10. Had the respondents’ age pension not been cancelled on 20 December 2016, the respondents’ combined assets would have disqualified them for the age pension on 1 January 2017 when the stricter assets test in the Amendment Act came into effect, but in accordance with the grandfathering provisions, they would have both been issued a SHC and LIC.

11. Despite the respondents not being in receipt of the age pension as at 31 December 2016, they were issued with a SHC and LIC. This it seems was done due to some sort of “system error”. There was no legal foundation for the SHC and LIC to automatically be issued to the respondents on 1 January 2017 as they were not age pensioners on 31 December 2016. The grandfathering provisions were not enlivened.

    DECISION

12. The decision of the SSCSD made on 4 December 2017 is set aside and I find in substitution that:

    (e)the respondents’ age pension was correctly cancelled on 20 December 2016, with effect from 22 November 2016; and

    (f)the respondents have had no entitlement to a SHC and LIC since 1 January 2017.

I certify that the preceding 12 (twelve) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak.

.............................[SGD]...........................................

Associate

Dated:   27 May 2019

Date(s) of hearing:	18 June 2018
Applicant:	In person
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services