Nikolic; Secretary, Department of Social Services and (Social services second review) - [2024] AATA 2883

Nikolic; Secretary, Department of Social Services and (Social services second review) [2024] AATA 2883 (10 July 2024)
Division:General Division
File Number: 2023/9176
Re:Secretary, Department of Social Services
APPLICANT

Maria NikolicAnd
RESPONDENT

DECISION
Tribunal:Emeritus Professor P A Fairall, Senior Member
Date:10 July 2024
Date of written reasons: 9 August 2024
Place:Sydney

The decision of the Administrative Appeals Tribunal (Social Services and Child Support Division) dated 6 November 2023 is affirmed.
............[SGD]............................................................
Emeritus Professor P A Fairall, Senior Member
CATCHWORDS
SOCIAL SECURITY – age pension – portability – overseas residence – whether respondent ceased to be an Australian resident – where respondent maintained continuing ties to Australia – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 7, 1217, 1220
CASES
Hafza v Director-General of Social Security (1985) 60 ALR 674
Kupisc v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 788
Secretary, Department of Families and Community Services and Indigenous Affairs v Baccon (2006) 90 ALD 557
REASONS FOR DECISION
Emeritus Professor P A Fairall, Senior Member
9 August 2024
INTRODUCTION

Mrs Maria Nikolic (the respondent) is an Australian citizen. On 6 November 2023, the Administrative Appeals Tribunal (AAT1) decided that she was entitled to receive age pension from 12 April 2023.[1] This is an application by the Secretary seeking review of that decision.
[1] T2, 13.
The application was heard by videoconference on 10 July 2024. Mrs Nikolic speaks only limited English, and the Tribunal was assisted by a Montenegrin interpreter. Mrs Theresa Camaj, the respondent’s niece, gave evidence on her behalf. The Secretary was represented by Mr B. Hearnden of Hunt & Hunt lawyers.
After hearing from the parties, the Tribunal decided to affirm the decision of the AAT1 and provided oral reasons for doing so. The Secretary subsequently sought written reasons for the Tribunal’s decision.
BACKGROUND
Mrs Nikolic was born in what was then Yugoslavia in 1956, began residing in Australia on 30 October 1974 and became an Australian citizen on 1 June 1977.[2] She married and purchased a house in Sydney. The couple had three boys. Her husband died unexpectedly in 2006.
[2] T4, 43.
On 30 March 2006 she left Australia to return to Montenegro, accompanied by her youngest son, who later returned to Sydney. Her older sons remained in Sydney. She made nine relatively short trips back to Sydney up to the end of 2021, usually staying for about a month, as set out below.
On 31 December 2021 she arrived in Sydney. She made two trips back to Montenegro in 2022, spending less than half of the year in Australia. She was out of Australia from 9 May to 14 September 2022, and from 26 September to 16 December 2022.[3]
[3] T16, 92.
On 30 December 2022, she made a claim for the age pension, which was granted from 15 February 2023. On 12 April 2023, she returned to Montenegro, triggering the suspension of her pension under section 1220 of the Social Security Act 1991 (Cth) (the Act).
Section 1220 is headed ‘No portability where claim based on short residence’ and relevantly provides:
(1) If:
(a)    a person is an Australian resident; and
(b)    the person ceases to be an Australian resident; and
(c)     the person again becomes an Australian resident; and
(d)    within the period of 2 years after the person again becomes an Australian resident, the person is granted, or is transferred to:
(i) an age pension; or
…
(e)    after the pension is granted, or the person is transferred to the pension, but before the end of that period of 2 years, the person leaves Australia; and
…
a pension based on that claim is not payable to the person during any period during which the person is outside Australia.
The age pension has unlimited portability[4] but Parliament deems it necessary to exclude persons who have ceased to be Australian residents and return to Australia for a short period simply in order to claim the age pension. Section 1220 is designed to prevent this. If Mrs Nikolic did not cease to be an Australian resident prior to returning to Australia on 31 December 2021, then a condition for applying section 1220 falls away.[5] Under those circumstances, the decision of the AAT1 must be affirmed.
[4] See section 1217: T3, 30-31.
[5] In its original form, the provision was somewhat more generous: the period of disqualification was 12 months and paragraph (3) provided: ‘(3) The Secretary may determine that subsection (1) or (2) is not to apply to a person if the Secretary is satisfied that the person's reasons for leaving Australia before the end of the 12 month period arose from circumstances that could not be reasonably foreseen when the person returned to or arrived in Australia’. In 2000, the disqualification period was increased to 24 months and subsection (3) was repealed: Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Act 2000, Schedule 1.
Centrelink considered that Mrs Nikolic was an Australian resident on 30 December 2022, when she made her claim for age pension. The pension commencement date of 15 February 2023 meant that any departure from Australia within two years of that date triggered section 1220. The section only applied if she had ceased to be an Australian resident at some point prior to 31 December 2021, her most recent arrival back to Australia prior to claiming the pension. Centrelink did not accept her claim that she was an Australian resident prior to arriving back in Australia on 31 December 2021, noting her claimed inability to return to Australia earlier due to travel restrictions arising from the COVID pandemic.[6]
[6] T10, 62.
The Centrelink letter of 26 May 2023 conveying its decision on formal review states:
When we’re deciding whether you live in Australia, we’ll look at the following:
• where you live and who you live with
• if you have family in Australia or overseas
• your employment, business or financial ties in Australia and overseas
• your assets in Australia and overseas
• how often and how long you travel outside Australia
• anything else we think is relevant.
During the period before and after you resided overseas from 2 February 2020 to 31 December 2021, you had frequent permanent residence overseas. Additionally, there is evidence of family ties overseas. This indicated you were residing permanently overseas.
You supplied a letter from the travel company used to arrange flights from Montenegro on 19 May 2023. The letter indicates there were restrictions that prevented you from returning to Australia. There is no evidence that the flights were booked and when the flights were due to depart. Additionally, we have not received evidence that the Australian government advised you cannot return as a result of travel restrictions. I have insufficient evidence to determine you did not intend to reside overseas for the period 2 February 2020 to 31 December 2021.
I have made the decision that the period from 2 February 2020 to 31 December 2021 you were residing outside Australia. Therefore, the date you are considered to begin living in Australia is 31 December 2021.[7]
[7] T10, 62.
The AAT1 provided the following cogent reasons for setting aside the decision.
13. Section 7 of the Act contains the definition of “Australian resident”. It provides that a person is an Australian resident if the person is a holder of a permanent visa and “resides in Australia”. Subsection 7(3) of the Act contains a list of factors that must be considered by a decision-maker when determining whether a person is residing in Australia. It is generally accepted that the converse of those factors is also relevant to the determination that must be made.
14. Courts and Tribunals have considered the concept of residence found in the Act on numerous occasions. Wilcox J, in perhaps the key case in this area, Hafza v Director-General of Social Security (1985) 60 ALR 674, stressed that a decision maker needed to identify whether a person has retained a “continuity of association” with a place together with an intention to return “and an attitude that that place remains ‘home’” (at 680–681):
There is a plethora of decisions, arising in various contexts but predominantly matrimonial causes and revenue cases, relating to the legal concept of residence. As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Ltd v FC of T (1941) 64 CLR 241 at 249, by Williams J: “The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situated, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode.”
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place, even involuntarily (see Inland Revenue Commissioners v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VLR 383) a person does not necessarily cease to be resident there because he or she is physically absent.
The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains “home” (see Norman v Norman (1969) 16 FLR 231 at 236). It is important to observe, firstly, that a person may simultaneously be a resident in more than one place — see the facts of Lysaght and the reference by Williams J to “a home or homes” — and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as “home”, a change of intention may be decisive of the question whether residence in a particular place has been maintained.
15. Wilcox J’s conception of residence has been applied by the Federal Court in Secretary, Department of Families and Community Services and Indigenous Affairs v Baccon (2006) 90 ALD 557; and Kupisc v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 788.
16. Centrelink was satisfied that Mrs Nikolic was a resident on 30 December 2022 and the Tribunal agrees. But was she a resident of Australia in the immediately preceding period for any length of time? At face value, given Centrelink’s determination that Mrs Nikolic was an Australian resident on 30 December 2022, it is perhaps somewhat surprising that the same conclusion was not drawn for the period leading up to that date given the facts and circumstances did not appear to be materially distinguishable.
17. Paragraph 7(3)(a) of the Act requires consideration of the nature of the accommodation. In the period from 31 December 2021 leading up to her claim, Mrs Nikolic lived with her niece, Mrs Camaj, in Australia. Mrs Camaj stated during the hearing that Mrs Nikolic was overseas visiting her elderly mother from 2 February 2020 to 31 December 2021 and unable to return to Australia due to travel restrictions during the COVID-19 pandemic. Mrs Camaj explained that during this period of time Mrs Nikolic flew to Turkey and then she was turned back because she was required to have a further vaccination. The Tribunal noted the letter dated 17 May 2023 included at T doc 31 from the Inter travel club in Montenegro which stated that Mrs Nikolic was unable to fly back to Australia in 2021 due to COVID rules and closure of Australia for many airlines travelling from Montenegro. Mrs Camaj explained during the hearing that Mrs Nikolic has booked a flight to return to Australia on 22 September 2023 (corroborated in a booking document for Mrs Nikolic from the Inter travel club (A3 to A4)) and she will reside with Mrs Camaj and her family again in Sydney.
18. Paragraph 7(3)(b) requires a consideration of the nature and extent of family relationships in Australia. The Tribunal accepts Mrs Camaj’s evidence that Mrs Nikolic has strong ties to family in Australia which includes her sister, her niece (Mrs Camaj) and her nephew and their families, her three sons, grandchildren and great grandchildren. The evidence supports that Mrs Nikolic has lived with Mrs Camaj since 2018. The Tribunal considers this factor supports Mrs Nikolic being regarded as a resident of Australia given her substantially stronger family ties.
19. Paragraph 7(3)(c) requires analysis of the nature and extent of a person’s employment, business or financial ties. Mrs Nikolic had no material ties to either country. She was no longer working. Paragraph 7(3)(d) provides for consideration of the nature and extent of a person’s assets located in Australia. Similarly, during the period prior to her claim, Mrs Nikolic held no assets in Australia or overseas. Mrs Camaj provided to the Tribunal a bank statement for Mrs Nikolic’s Australian bank account with St George Bank. The fact Mrs Nikolic held no material assets or significant financial ties in Australia does not necessarily work against her: see the Administrative Appeals Tribunal matters of Raad and Department of Family and Community Services [2000] AATA 387 (18 May 2000) and Stelio Gnisios and Secretary, Department of Social Security [1996] AATA 66 (22 February 1996) which stand for the proposition that poverty, a lack of assets or lack of income, should not count against an applicant in considering paragraphs 7(3)(c) and (d) of the Act. These factors were, in the Tribunal’s view, not persuasive either way.
20. Paragraph 7(3)(e) requires consideration of the frequency and duration of the person’s travel outside Australia. From 2020 to 2021, Mrs Nikolic was mostly in Montenegro. From 31 December 2021 to when she claimed age pension Mrs Nikolic was living with Mrs Camaj in Australia. However, as is evident from the case law, that is not fatal to her claim of Australian residency. In the matter of Gracie and Secretary, Department of Family and Community Services [2005] AATA 179 (3 March 2005), the applicant made 30 trips to Indonesia in a seven-year period, spending a majority of their time overseas. The Tribunal was satisfied in the facts of that case that the applicant had stronger ties with Australia than Indonesia, and that they intended Australia to be their home.
21. The Tribunal is satisfied in this case that, notwithstanding the length of time Mrs Nikolic spent in Montenegro, she always regarded Australia as “home” and ultimately intended to reside here on a permanent basis.
22. Paragraph 7(3)(f) requires consideration of any other matter relevant to determining whether the person intends to remain permanently in Australia. Mrs Camaj explained that the reason Mrs Nikolic has travelled to Montenegro was to care for her elderly mother.
23. Weighing the above factors – in particular Mrs Nikolic’s strong family ties to Australia and the lack of factors pointing to her being a resident of Montenegro – the Tribunal concluded that Mrs Nikolic should be regarded as having maintained her residency of Australia throughout.
24. The Tribunal therefore finds that at all material times – including the two-year period prior to her claim for age pension – Mrs Nikolic was a resident of Australia.
(Emphasis added) [8]
[8] T2, 13, per Member D. Lambden.
Section 7 of the Act provides definitions of ‘Australian residence’. Subsection 7(3) provides:
(3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:
(a) the nature of the accommodation used by the person in Australia; and
(b) the nature and extent of the family relationships the person has in Australia; and
(c) the nature and extent of the person’s employment, business or financial ties with Australia; and
(d) the nature and extent of the person’s assets located in Australia; and
(e) the frequency and duration of the person’s travel outside Australia; and
(f) any other matter relevant to determining whether the person intends to remain permanently in Australia.
Mr Hearnden cross-examined Mrs Nikolic on her reasons for travelling to Montenegro and her reasons and motivations for doing so. In essence it appears that she had strong family connections in Montenegro and a frail mother who needed her care, and for a period she had been estranged from her two older sons in Sydney. She had taken the youngest boy to Montenegro in 2006 to escape their influences, but he had subsequently returned. She maintained that she had strong family connections both in Montenegro and in Australia, and this was confirmed by Mrs Camaj in her evidence to the Tribunal.
Mrs Nikolic said that she had owned a home in Sydney but sold it some time ago. Mrs Camaj told the Tribunal that Mrs Nikolic stayed with her whenever she visited.
She does not appear to have any business or financial ties in Australia.
The Tribunal is required to consider the frequency and duration of the person’s travel outside Australia. Immigration records show that Mrs Nikolic returned to Australia on nine occasions between 30 March 2006 and 31 December 2021.[9]
[9] T16, 93. The dates are as follows: 7 August 2009 - 1 September 2009; 4 July 2012 - 3 August 2012; 19 December 2014 - 21 January 2015; 7 February 2015 - 18 February 2015; 10 September 2016 – 16 January 2017; 15 December 2017 - 30 January 2018; 25 April 2018 - 9 May 2018; 16 November 2018 - 3 December 2018; 28 December 2019 - 2 February 2020.
Wilcox J emphasised, in the case referred to by the AAT1, that the test is whether the person has retained a continuity of association with the place together with an intention to return to that place and an attitude that that place remains “home”. His Honour added the important caveat that a person may simultaneously be a resident in more than one place, and that the ‘application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises’.[10]
[10] Hafza v Director-General of Social Security (1985) 60 ALR 674, at 680-681.
I noted earlier that by enacting section 1220, Parliament has evinced an intention to exclude claimants for the pension who have ceased to be Australian residents and return to Australia for a short period simply to claim the age pension. Although a long period of residence abroad will invariably raise questions about a person’s connection with Australia, careful consideration is required to determine whether a claimant for the age pension falls within the purview of the section.
Mrs Nikolic has maintained a continuity of association with Australia, where she has close family ties, including children, a grandson, and a niece. Although there is evidence of estrangement in relation to her sons, or at least two of them, I did not hear sufficient evidence to form a view that these relationships are devoid of any prospects of rehabilitation. She undoubtedly has a very close relationship with her niece, and her niece’s family. She has provided invaluable assistance to Mrs Camaj during a recent health scare.
The fact that Mrs Nikolic resided in Montenegro for lengthy periods between 2006 to 2021 does not preclude a finding that she was resident in Australia during some or all this period. If she ceased to be an Australian resident at some point during her residence in Montenegro, it is not apparent to the Tribunal as to when this occurred.

Mr Hearnden was unable to identify when Mrs Nikolic ceased to be a resident, within the meaning of subsection 1220(1). This is not a criticism at all, but simply a reflection of the complexity of human motivations. For many migrants the call of the old country, with its comfortable associations and compelling duties, remains a powerful force. This does not exclude the intention to call Australian home.
I note especially the following passage from the AAT1 decision:
16. Centrelink was satisfied that Mrs Nikolic was a resident on 30 December 2022 and the Tribunal agrees. But was she a resident of Australia in the immediately preceding period for any length of time? At face value, given Centrelink’s determination that Mrs Nikolic was an Australian resident on 30 December 2022, it is perhaps somewhat surprising that the same conclusion was not drawn for the period leading up to that date given the facts and circumstances did not appear to be materially distinguishable.[11]
[11] T2, 16.
CONCLUSION
My conclusion is that Mrs Nikolic did not cease to be an Australian resident during her period of residence in Montenegro, taking account of the various factors that the Tribunal must have regard in subsection 7(3). Therefore subsection 1220(1) is not engaged. I agree with the AAT1. I note the findings of fact made by the AAT1 and having heard from Mrs Nikolic and Mrs Camaj, I endorse those findings.
DECISION
The decision of the Administrative Appeals Tribunal (Social Services and Child Support Division) dated 6 November 2023 is affirmed.

I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of

..............[SGD]..........................................................
Associate
Dated: 9 August 2024

Date of hearing: 10 July 2024

Applicant: In person

Solicitors for the Respondent: Mr B. Hearnden, Hunt & Hunt Lawyers

Date of hearing:	10 July 2024
Applicant:	In person
Solicitors for the Respondent:	Mr B. Hearnden, Hunt & Hunt Lawyers