O'Brien and Secretary, Department of Social Services (Social services second review)
[2016] AATA 90
•19 February 2016
O'Brien and Secretary, Department of Social Services (Social services second review) [2016] AATA 90 (19 February 2016)
Division
General Division
File Number(s)
2015/3564
Re
Richard O'Brien
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mr S Webb, Member
Date 19 February 2016 Place Sydney The decision under review is affirmed.
.........................[sgd]...............................................
Mr S Webb, Member
CATCHWORDS
SOCIAL SECURITY – age pension – residence requirements – meaning of ‘resides in Australia’ – portability – two year bar on portability following resumption of residence – suspension – cancellation – no discretion – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 7, 43, 1217, 1220
REASONS FOR DECISION
Mr S Webb, Member
19 February 2016
Richard O’Brien lived outside Australia for several years. On returning to Australia, he claimed age pension. Shortly thereafter, he departed Australia again. Nonetheless, his claim for age pension was granted. After a time, a Centrelink officer decided to suspend and later to cancel payment of his age pension on portability grounds. Mr O’Brien has challenged this decision, exercising his rights to review, thus far without success. Most recently, the (former) Social Security Appeals Tribunal affirmed the decision to cancel his age pension.
FACTS
Mr O’Brien is an Australian citizen. He told me that he is “essentially Australian” and he has always viewed Australia as his home. His family is based here and it is the place he always intended to return to.
Mr O’Brien has spent extensive periods living and working overseas. In 1990, he took up employment in Singapore. Sometime later, he moved to New Zealand, his (then) wife’s country of origin. He stayed there for a year and renovated a house. He then returned to Sydney and established a business. His marriage broke down. There was disputation about his access to his two children and about the division of assets – ultimately, his ex-wife was awarded 70 percent of the assets. Mr O’Brien invested his remaining assets in a hotel at Parramatta.
In 2000, seeking refuge from his marital difficulties, Mr O’Brien visited Singapore to stay with a friend. This led to the offer of employment in Singapore, which he took up after returning to Sydney. After a three month trial, the job did not work out and he undertook freelance work, including a campaign for TVWA (an advertising agency for Apple). This led to an offer of employment in Kuala Lumpur, Malaysia, which he undertook on a three year contract. Mr O’Brien told me that he intended to return to Sydney on completion of this contract. During this period, Mr O’Brien’s children visited him in Kuala Lumpur, where he lived, and he visited Australia from time to time.
Before completing the TVWA contract, he took a holiday in Bali, Indonesia. This led to him purchasing a share in a hotel at Umalas in Bali, Indonesia. In order to do so, Mr O’Brien liquidated his investment in the hotel at Parramatta.
Things did not go well, however. Terrorist bombings in Bali had a serious adverse effect on tourism and Mr O’Brien’s hotel business declined. He told me that he took on the management of this business in or about December 2003 or January 2004. Before doing so, he visited his children in Sydney. The following year his father died, and he returned to Sydney for a short time. In or about August 2005, he took out a 10-year lease on a house in Bali.
Before he turned 65 on 2 January 2012, Mr O’Brien was given a working visa for Indonesia, but thereafter he was placed on a retirement visa, which does not permit him to work. He never obtained a residence visa for Indonesia.
Mr O’Brien’s evidence is that in the period from 2004 to 2012 he was tied up with the hotel business in Bali but, generally, he would visit Australia once or twice each year, staying with his brother in Newtown in Sydney. During this period, all his money was invested in the Bali hotel, but the hotel business was depressed. He told me that he and his business partner were not willing to sell the hotel at a loss. In the latter part of 2012, Mr O’Brien found a buyer for the hotel, but the sale was not settled until October 2013.
After the initial exchange of contracts for sale of the Bali hotel, he returned to Australia on 6 January 2012 to visit family members for Christmas. He stayed with his brother in Newtown. His evidence is that he did not intend to remain in Australia at that time, but he intended to return on a permanent basis once the hotel sale had been finalised in Bali.
On 13 January 2012, Mr O’Brien lodged a claim for age pension,[1] stating that –
(a)his permanent address was in Newtown, NSW;[2]
(b)he was living permanently in Australia;[3]
(c)he had not ever lived outside Australia.[4]
[1] T4.
[2] Ibid, folio 33.
[3] Ibid, folio 36.
[4] Ibid, folio 38.
In an Income and Assets form Mr O’Brien lodged with Centrelink on the same day, he answered ‘No’ to the following questions –
(a)’26 Do you … have any money invested in, or do you receive income from, any other investments not declared elsewhere on this form?’;[5]
(b)’34 Do you … have any other assets (in or outside Australia) that you have not already advised us about on this form’;[6]
(c)’37 Are you or have you … been involved in a private company?’;[7]
(d)’38 Are you … involved in any type of business?’;[8] and
(e)‘43 Do you … have an interest in any other real estate in and/or outside Australia?’.[9]
It is quite clear that the answers Mr O’Brien gave to these questions were not correct.
[5] T5 folio 65.
[6] Ibid, folio 68.
[7] Ibid, folio 69.
[8] Ibid.
[9] Ibid, folio 70.
On 15 January 2012, Mr O’Brien departed Australia and returned to Bali.[10]
[10] T20 folio 117.
On 31 January 2012, Mr O’Brien informed Centrelink that –
(a)he had been residing in Bali, Indonesia;
(b)where he owned a “20% share” of a small hotel;
(c)the “value of hotel shareholding approx. AUD 120,000”; and
(d)he was selling the hotel “to use [his] share to buy accommodation in Australia”.[11]
[11] T7 folio 74.
It appears that Mr O’Brien’s shareholding was in PT Villa Seri, a private company in Indonesia. Extracts of the financial records of this company are in T8.
On 15 May 2012, Mr O’Brien was sent a notice informing him that his age pension claim was granted from 13 January 2012. The notice sets out Mr O’Brien’s obligations to inform Centrelink if certain things happen, or may happen.[12] The obligation in respect of travel is expressed as follows –
“If you are already travelling outside Australia:
you must tell us if your travel plans change and you no longer intend to return to Australia on the date you advised
you must also tell us when you return to Australia or if you go to another country”.
[12] T10.
Mr O’Brien’s travel records reveal the following subsequent movements[13] –
[13] T20 folio 117 and Exhibit 2.
Arrival in Australia Departure from Australia 20 June 2012 25 June 2012 8 March 2013 15 March 2013 27 June 2013 1 July 2013 28 February 2015 6 March 2015
On 28 March 2013, Mr O’Brien was sent a notice informing him that his age pension was suspended from 20 March 2013.[14]
[14] T11 folio 88; see also T12 folio 90 and T15 folio 94.
On 2 May 2013, Mr O’Brien sent an email to Centrelink, stating –
“You have advised me that you have stopped paying my Aged Pension with the reason given that I left Australia without reporting to you. I guess I am not very good at reporting but I thought I had communicated my reasons for being in Bali, Indonesia on several occasions and you accepted my reasons, which is why you started paying me in the first place.
Anyway, let me tell you how my plans have changed and see if there is enough latitude in your rules to keep supporting me, even though in Indonesia, and reinstate my payments.
I was originally planning to come home to Australia this year but I have embarked on a new project that will keep me occupied for the next couple of years and will require me to stay in Indonesia.
…” [15]
[15] T16 folio 101.
On 19 June 2013, Mr O’Brien was sent a notice informing him that his age pension had been cancelled with effect from 20 March 2013.[16]
[16] T13.
On 30 October 2013, an Authorised Review Officer decided to affirm the decision to cancel Mr O’Brien’s age pension.
On 3 June 2015, the SSAT decided to affirm the decision.
ISSUES
The issue to be decided is whether Mr O’Brien’s age pension should have been suspended on 28 March 2013 and cancelled on 19 June 2013.
Accordingly, it is necessary to determine –
(a)if he was an ‘Australian resident’ at relevant times; and if not
(b)if the portability rules preclude payment of age pension in the particular circumstances; and if so
(c)whether the decision to cancel Mr O’Brien’s age pension is correct; and if so
(d)whether there is any discretion to reinstate Mr O’Brien’s age pension.
AUSTRALIAN RESIDENT
It is quite clear that prior to 1990, Mr O’Brien was an Australian resident.
It is conceivable that from 1990 to 2003, he may have satisfied that test at various times. Whether or not this is so, it is the period of years prior to his return to Australia on 6 January 2012 that must be considered for present purposes.
Mr O’Brien says that he should be treated as an Australian resident at all relevant times. At no point has he sought or obtained residence status in another country. He argues that, at all times when he was absent from Australia, he always intended to return – “I never left in my heart”. In Mr O’Brien’s submission, he is “in essence” Australian – Australia is his home. It is the place where he was born and raised. It is the place where his family resides, where his remaining siblings and his children live, and where his friends are located. It is the place where he worked and paid taxes for many years. It is the place “where I intend to live out my final days”.[17]
[17] T1 folios 3 and 4.
These things may be true, but the test of Australian residence that must be applied is set out in s 7(2) of the Social Security Act 1991 (the Social Security Act). Relevantly in Mr O’Brien’s case, for him to be an ‘Australian resident’ it must be established by evidence that he was ‘residing in Australia’ at the relevant time under s 7(2)(a). While the term ‘residing in Australia’ is not given special meaning, certain matters must be considered when deciding whether or not a person satisfies this test -
7(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.
By his own account, in the period from late 2003 to 5 January 2012, Mr O’Brien was living in Bali, Indonesia. From August 2005, he was living in a house under a 10-year lease, and when the lease expired he continued to live in Bali in a house rented by his daughter. After departing from Australia on 15 January 2012, it appears that he visited Australia for only four very brief periods (20 to 25 June 2012, 8 to 15 June 2013, 27 June to 1 July 2013 and 28 February to 6 March 2015), and that when he did so, he stayed with his brother in Sydney. These factors weigh against him being treated as residing in Australia as of 20 March 2013 and subsequently.
I accept that Mr O’Brien has close and enduring familial relationships and emotional ties to Australia, especially with his siblings and with his two children. This weighs for him being treated as residing here.
Mr O’Brien was employed in the hotel business he partly owned at Umalas in Bali. This ended when the hotel was sold in 2013. Thereafter, he has been engaged on his own account in a film project in Bali. At that time and presently, he does not have any business or employment ties to Australia. This weighs against finding that he was residing in Australia.
In 2013, he did not own any property, financial interests, investments or assets of note in Australia, although he retained a Westpac bank account. All of his money was invested in the Bali hotel business, and all of his assets were located in Bali. This weighs against him being treated as residing in Australia at that time.
In the 10 years from 5 January 2002, prior to returning to Australia on 6 January 2012, Mr O’Brien spent a total of 91 days in Australia out of a possible 3,658 days. He returned to Australia 11 times, once for 23 days, once for 13 days, but otherwise for periods of nine days or less. In the period from 15 January 2012 to December 2016, he spent a total of 26 days in Australia. This weighs heavily against him being treated as residing in Australia.
I accept that Mr O’Brien, ultimately, intends to reside permanently in Australia. By his own account, he is not yet ready to do so. When he returned to Australia on 6 January 2012, he was not then ready to permanently reside here, but planned to do so once the sale of his share of the Umalas hotel was finalised. It is quite clear on Mr O’Brien’s evidence that his position changed after he was granted age pension – he decided to undertake a project that would hold him in Indonesia for another two years or so, researching and writing a documentary. He formally notified Centrelink of this on 2 May 2013. I think it can be accepted that Mr O’Brien has always seen himself returning to reside permanently in Australia at some point in the future. This indicates a deep and ongoing connection with Australia as his home, but it does not mean that he should be treated as residing in Australia before 6 January 2012 or when his age pension was suspended and subsequently cancelled from 20 March 2013. Nonetheless, it is a relevant matter to weigh in the balance.
Having regard to these matters, on balance, the weight of the evidence is that Mr O’Brien was not ‘residing in Australia’ for a period of years before 6 January 2012. That being so, I am satisfied that he did not satisfy the residence test, and he was not an ‘Australian resident’ at that time.
The Secretary accepted that he met the test as of 13 January 2012 for the purposes of s 29 of the Social Security (Administration) Act 1999 (the Administration Act) and his claim for age pension. I do not intend going behind that finding even though the present evidence raises questions about it.
On balance, the present evidence is sufficient to establish that Mr O’Brien was not ‘residing in Australia’ on 20 March 2013 or subsequently. I am satisfied that he does not satisfy the residence test under s 7(2) of the Social Security Act.
PORTABILITY RULES
Subject to exceptions that apply in specific circumstances, under s 1217 of the Social Security Act, age pension is payable during periods of absence from Australia, without limit. The question, presently, is whether the exception set out in s 1220 of the Social Security Act applies in the circumstances of Mr O’Brien’s case.
Mr O’Brien told me that he does not cavil with the legislation or the law concerning these matters. His issue is with Centrelink’s failure to provide him with adequate information about the portability rules and with the apparently arbitrary exercise of power to suspend and cancel his age pension payments.
Whether or not Mr O’Brien’s concerns are well founded, unfortunately for him, the exception set out in s 1220 of the Social Security Act is, in effect, self-executing. If the preconditioning criteria are satisfied in the particular circumstances of a case, s 1220 applies with blunt effect.
The section is in the following terms –
1220 No portability where claim based on short residence
(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
(ii) a disability support pension; or
(iii) a bereavement allowance; and
(e) after the pension or allowance is granted, or the person is transferred to the pension or allowance, as the case may be, but before the end of that period of 2 years, the person leaves Australia; and
(f) financial assistance is not payable in respect of the person’s absence from Australia under the Medical Treatment Overseas Program administered by the Minister who administers the National Health Act 1953;
a pension or allowance based on that claim is not payable to the person during any period during which the person is outside Australia.
On the facts, Mr O’Brien meets s 1220(1)(a) – he was an Australian resident up to 1990, at least.
He ceased to be an Australian resident for a period of years before 6 January 2012, satisfying s 1220(1)(b).
On the Secretary’s finding, he became an Australian resident again as of 13 January 2012 from which day he was granted age pension, meeting the tests in s 1220(1)(c) and (d)(i).
Mr O’Brien is within the terms of s 1220(1)(e) as he departed Australia within two years of 13 January 2012, leaving on 15 January 2012, 25 June 2012, 15 March 2013, 1 July 2013 and 6 March 2015 for absences of varying duration.
On the present materials, financial assistance is not payable to Mr O’Brien under the Medical Treatment Overseas Program, meaning that he meets the test in s 1220(1)(f).
It follows that s 1220 is enlivened in the particular circumstances. For this reason, age pension cannot be paid to Mr O’Brien during the periods he was outside Australia after 13 January 2012.
CANCELLATION
The decision to cancel Mr O’Brien’s pension flows from the applicability of s 1220. Section 80 of the Administration Act provides –
(1) If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a) who is not, or was not, qualified for the payment; or
(b) to whom the payment is not, or was not, payable;
the Secretary is to determine that the payment is to be cancelled or suspended.
In the circumstances of Mr O’Brien’s case, age pension was not payable to him during periods in which he was outside Australia after 13 January 2012. It follows that the payment of age pension must be suspended or cancelled. The words ‘is to determine’ are directive.
Mr O’Brien’s age pension payments were suspended and subsequently cancelled from 20 March 2013. In the circumstances, I think suspension of his age pension from that date is required.
Furthermore, I think that the subsequent decision to cancel his age pension is appropriate. To my mind, the periods of time in which Mr O’Brien has been outside Australia since the grant of age pension on 13 January 2012 far outweigh the time he has spent in Australia.
DISCRETION
Mr O’Brien maintains that he has been denied natural justice – he was never told that age pension would not be payable if he travelled overseas. I note the concerns he has expressed in the document I have placed in Exhibit 1. Denying him the pension is simply unjust and unfair – the effect of Centrelink changing its mind has had a profound effect on his circumstances and on his financial position. For these reasons, he says that discretion should be exercised and his age pension should be reinstated and backdated to the day on which it was suspended.
Mr O’Brien’s complaint has some force. To my mind, it is reasonable to expect that he should have been provided with information about the rules governing portability of his age pension.
Perhaps he would have been provided with more information if he had been more candid or frank in the claim form he lodged, which it is quite clear contained information that was not accurate or correct.
In any event, there is no discretion that can be applied to reinstate Mr O’Brien’s age pension payments in the circumstances. As I have said, s 1220 is self-executing, and this bars payment of age pension payments to him while he is absent from Australia.
DECISION
The decision under review is affirmed.
I certify that the preceding 55 (fifty -five) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member ...........................[sgd].............................................
Associate
Dated 19 February 2016
Date(s) of hearing 14 January 2016 Applicant In person Solicitors for the Respondent Mr S Davidson, Department of Human Services
Key Legal Topics
Areas of Law
-
Administrative Law
-
Statutory Interpretation
Legal Concepts
-
Judicial Review
-
Jurisdiction
-
Procedural Fairness
-
Statutory Construction
-
Appeal
0
0
1