O’Rourke and Secretary, Department of Social Services (Social services second review)
[2016] AATA 645
•26 August 2016
O’Rourke and Secretary, Department of Social Services (Social services second review) [2016] AATA 645 (26 August 2016)
Division
GENERAL DIVISION
File Number
2015/6149
Re
Anthony O'Rourke
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member J F Toohey
Date 26 August 2016 Place Sydney The Tribunal affirms the decision under review.
........................[sgd]................................................
Senior Member J F Toohey
CATCHWORDS
SOCIAL SECURITY – pension bonus scheme – whether discretion to allow late claim should be exercised – whether special circumstances – decision under review affirmed
LEGISLATION
Social Security Act 1991 ss 92C, 92H, 92U
Social Security (Administration) Act 1999 ss 21(2)
CASES
Re Rosemarie Beadle and Director-General of Social Security [1984] AATA 176
Groth v Secretary, Department of Social Security [1995] FCA 989
Secretary, Department of Social Security v Hales [1998] FCA 219
SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
Senior Member J F Toohey
26 August 2016
Background
This decision concerns a claim by Mr Anthony O’Rourke under the Pension Bonus Scheme (PBS). The PBS is a scheme by which a person who qualifies for the age pension may accrue a bonus by remaining in paid work and deferring receipt of the pension; the longer the deferral, the greater the bonus to which a person may be entitled. The scheme is now closed to new registrations but that does not affect these proceedings.
The requirements for qualification for the pension bonus are found in Part 2.2A of the Social Security Act 1991 (the SS Act). The provisions are quite complex but it is not necessary to go through them in detail here. In summary, a person must first register as a member of the PBS within 13 weeks before or after he or she reaches pension age: subsection 92H(1). Having done that, he or she must then accrue at least one bonus period while deferring the age pension (up to a maximum of five bonus periods): subsection 92C(c) and (d). A bonus period generally runs for one year during which time a person must gainfully work for at least 960 hours: s 92U. The amount of pension bonus depends on the number of bonus periods accrued and the amount of age pension to which the person would be entitled.
The next step is to claim payment of the pension bonus. Relevant provisions are in the Social Security (Administration) Act 1999 (SSA Act). In summary, a person must make a claim for the pension bonus within 13 weeks of lodging a claim for age pension or of failing to accrue a bonus period. That period may be extended if there are special circumstances: subsection 21(2) of the SSA Act.
Mr O’Rourke’s registration and claim
Mr O’Rourke reached age pension age on 7 February 2007 when he turned 65. He did not claim the age pension but continued working and running his own business. He did not register to be a member of the PBS.
During 2009, when he and his wife were planning to “wind down” in preparation for their retirement, Mr O’Rourke contacted Centrelink to discuss his eligibility for the age pension. As a result of that discussion, on 2 October 2009 Mr O’Rourke registered as a member of the PBS. Centrelink accepted his late registration with effect from 7 February 2007.
In late 2009, Mr O’Rourke’s wife was diagnosed with a terminal illness. She died in November 2010. During that time, he nursed her at home. For a time after his wife died, Mr O’Rourke tried to resume his business but, at the same time that he was dealing with his loss, there was a downturn in the market and he decided to wind up the business. He retired in July 2011.
The provisions concerning the date for claiming the pension bonus meant that Mr O’Rourke had to make his claim by 7 May 2012. Mr O’Rourke did not make his claim until 15 January 2015. He accepts that he was well out of time but says there are special circumstances that mean the time for making his claim should be extended.
Should the period for claiming the pension bonus be extended?
Mr O’Rourke says that, during the time that his wife was ill and after she died, he forgot about everything that mattered and “was in a different space”. He ended his involvement with numerous community organisations and travelled overseas on a number of occasions trying to put everything behind him. He did not think of claiming the age pension, even though he may have been entitled to some payment. He believed, because he had superannuation, that he could not apply for the pension, and it was not until 2015 when a friend suggested he could apply, that he did.
Documents provided by Centrelink indicate that Mr O’Rourke’s assets and income around the time he turned 65 may have precluded him from receiving any age pension; if he was entitled to some payment, it appears it would have been minimal, at least for some time after he reached pension age. However, factors including the global financial crisis mean that the value of Mr O’Rourke’s superannuation and the income it produces have declined, and he has received a full age pension since January 2015.
Mr O’Rourke accepts that, had he claimed the pension bonus by 7 May 2012, his bonus might have been minimal. However, he feels aggrieved that his claim has been refused, especially given the circumstances surrounding his wife’s death and advice he has since received from Centrelink officers which indicate that he is entitled to the pension bonus.
Centrelink records show that Mr O’Rourke was advised on several occasions about the PBS. The first record of advice appears to be on 21 September 2009 when Mr O’Rourke contacted Centrelink to discuss his entitlement to age pension. The record shows that Mr O’Rourke discussed his superannuation and his small overseas pension and enquired as to whether he and his wife would be entitled to any payment. He was advised that their income was “probably under the disqualifying income threshold” and the officer “also mentioned PBS to him as he did not register at age 65”. When Mr O’Rourke indicated he “had not heard about PBS at all”, the officer issued a registration form and suggested Mr O’Rourke ask for registration to be backdated.
It was this conversation that led to Mr O’Rourke registering for the PBS on 2 October 2009. He accepts that any entitlement to the age pension and the pension bonus at this time would have been small.
On 6 October 2009, Mr O’Rourke and his wife attended an interview at Centrelink to discuss their eligibility for the age pension. Records show they were advised that the assets would put them over the asset limit, and this was apparently confirmed in a further discussion on 24 November 2009.
On 22 June 2010, Centrelink wrote to Mr O’Rourke confirming that he had been registered as an accruing member of the PBS as of 7 February 2007. The letter confirmed that Mr O’Rourke had “signed an acknowledgement of your rights and obligations under the Pension Bonus Scheme and have received an information booklet which sets out details of the scheme”.
On 30 July 2010, Mr O’Rourke contacted Centrelink. The record shows that “pension bonus issues” were discussed and that an appointment was made for 3 August 2010 for Mr O’Rourke to discuss a possible claim. A record on 3 August 2010 shows that Mr O’Rourke cancelled his appointment as he was not feeling well and would reschedule once he felt better. Mr O’Rourke believes, and I accept, that the appointment was probably cancelled on account of his wife’s illness.
On 24 January 2011, Centrelink wrote to Mr O’Rourke. The letter, headed Pension Bonus Scheme, confirmed that he was still registered as a member of the PBS and, even if he was not yet ready to claim the age pension, he might find it helpful to confirm at the end of each working year that is he was still “on track” with the scheme. The letter further advised that, when the he was “ready to claim” the age pension, he would need to claim the pension bonus at the same time. It reminded him that he would need to lodge his bonus claim within 13 weeks of ceasing work, or within 13 weeks from when he no longer met the work test. It also referred to the Pension Bonus Scheme booklet (which he had received previously) and advised how he could obtain a copy.
Centrelink records show that, on 27 January 2011, an officer telephoned Mr O’Rourke but there was no answer, so he was sent a claim form. On 9 March 2011, Mr O’Rourke contacted Centrelink to say he had not received the claim form, and a further copy was sent.
Mr O’Rourke does not dispute any of these records, although he cannot recall all of the communications in detail. He acknowledges that Centrelink gave him information about the PBS, and about when he should claim. He feels aggrieved that he could have been entitled to some age pension, for some years, and was likely entitled to the full pension before February 2015 when he finally made his claim. He feels further aggrieved that more recent advice from Centrelink officers has led him to believe that he could be entitled to up to approximately $48,000 in pension bonus.
Mr O’Rourke has given the Tribunal a copy of a handwritten document dated 2 February 2015 which a Centrelink officer prepared for him. It sets out the assets and income limits that applied at that date. It advises that the maximum pension bonus payable to a single person was $48,806.70 and that his bonus “would probably be little below this”. I accept that Mr O’Rourke understood this to mean that was his entitlement, and that appears to be a reasonable reading of the letter. However, while the letter may have raised his expectations unrealistically, it had no bearing on the delay in Mr O’Rourke’s claim for the pension bonus.
The meaning of the expression “special circumstances” for the purposes of the various provisions in the SS Act has been considered by the Tribunal and the courts on many occasions. The concept is broad and a “constellation of factors” may fall within in it: Secretary, Department of Social Security v Hales [1998] FCA 219. It is “by its very nature incapable of precise or exhaustive definition” and each case must be determined according to its circumstances: Re Rosemarie Beadle and Director-General of Social Security [1984] AATA 176 at [12]. In Groth v Secretary, Department of Social Security [1995] FCA 989, the Court described special circumstances as those that distinguish an applicant’s case from others’ and take it “out of the usual or ordinary case”.
I accept without hesitation Mr O’Rourke’s evidence that nothing was the same after his wife died, and that he was “not thinking straight”. I accept that he may have been entitled to the age pension, even if a reduced amount, well before February 2015, and I accept that he may have been entitled to the pension bonus, even if a reduced amount, had he made his claim by 7 May 2012.
However, I am not satisfied that Mr O’Rourke’s circumstances can be considered special for these purposes. The delay of nearly three years in making his claim is lengthy. A factor in my decision is that allowing such a late claim, after his financial circumstances had changed, could have the effect of entitling Mr O’Rourke to a larger pension bonus than he would have received if he had made his claim within the timeframe provided for by the legislation.
Mr O’Rourke told the Tribunal that he would willingly accept a smaller amount by way of compensation from Centrelink. However, the Tribunal has only the power to decide whether or not a claim is within time and, if not, whether the time for making the claim should be extended.
For these reasons, I affirm the decision under review.
I certify that the preceding 24 (twenty -four) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey ........................[sgd]................................................
Associate
Dated 26 August 2016
Date of hearing 28 July 2016 Applicant In person Solicitors for the Respondent Mr G Lozynsky, Department of Human Services
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