Pala and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2010] AATA 1070

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 1070

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/1459

GENERAL ADMINISTRATIVE DIVISION		)
Re		AMRIK PALA

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member Walsh

Date23 December 2010

PlacePerth

Decision The Tribunal affirms the decision under review.

.........(sgd) Chelsea Walsh...........

Senior Member

CATCHWORDS

Social Security - age pension - member of a couple - single rate –“partnered” rate – “special reason” not to treat a person as a member of a couple

LEGISLATION

Social Security Act 1999 (Cth) ss 4(2), 4(3), 4(6), 4(11), 24(1)

CASES

Pala and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 664

Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 603

Chandler v Alberta Association of Architects [1989] 2 SCR 848

Harrington and Military Rehabilitation and Compensation Commission (2005) 85 ALD 624; 89 ALD 61

Boscolo v Secretary, Department of Social Security [1999] FCA 106

Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164

Lenard and Secretary, Department of Family and Community Services [2004] AATA 83.

Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143

Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651

Re Williams and Director-General of Social Services (1981) 4 ALD 300

Re Malajew and Secretary, Department of Social Security (1988) 16 ALD 1

Re Colaiacolo and Secretary, Department of Social Security [1985] AATA 91

REASONS FOR DECISION

23 December 2010 Senior Member Walsh       

Introduction

1.      Indian born Mr Pala moved to Sydney, Australia in 1970 and then to Perth in 1985.  Mr Pala is passionate about education.  That passion has seen him travel the world to undertake various courses to further his education.  On one such trip, Mr Pala met Japanese born Kikuko, a 47 year old divorcee and mother of two.  Mr Pala met Kikuko through her daughter who studied at the same university as him.  Mr Pala was eager to share the company of and talk English with someone closer to his age. 

2.      After Mr Pala left Japan, Kikuko visited him in India and later in Australia.  Their relationship developed into something more than friendship with the consequence that Kikuko moved to Australia and became Mr Pala’s wife on 15 April 2002.  At that time, Mr Pala was in his late 60s and had lived alone for almost 15 years, although he was previously married with five children.  Mr Pala is now 76 years of age.

3.      Unfortunately, the Pala’s marriage deteriorated over approximately a four year period, resulting in Kikuko returning to Japan on a one-way ticket on 31 May 2006.  Despite having a one-way ticket, in December that year, Kikuko returned to Australia and moved back into Mr Pala’s house. 

4.      Mr Pala commenced receiving an age pension, at the single rate, from Centrelink in 1999 (before his marriage to Kikuko).  However, following his marriage to Kikuko in 2002, he began receiving the age pension at the lower “partnered” rate.  

5.      In August 2007, Mr Pala sought to have his age pension increased back to the higher single rate on the basis that whilst he and Kikuko were living under the same roof they were no longer a couple and were separated. In December 2008, Centrelink determined that Mr Pala was a “member of a couple” and that he should therefore be paid the age pension at the lower partnered rate, and not the single rate.

6.      Mr Pala disagreed with Centrelink’s decision and appealed it to the Social Security Appeals Tribunal (SSAT).  The SSAT affirmed Centrelink’s decision on 19 February 2009. 

7.      Discontent with the SSAT’s decision, on March 2009, Mr Pala appealed to this Tribunal.  On 2 September 2009, the Tribunal affirmed the SSAT’s decision of 19 February 2009:  Pala and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 664 (Pala 2009). 

8.      In particular, the Tribunal found that Mr Pala had “not, at any time from the date of his marriage to Kikuko Pala, lived, and is not presently living, “separately and apart from” Kikuko Pala “on a permanent or indefinite basis”” and that Mr Pala had “at all material times been, and is presently, a “member of a couple” for the purposes of the [Social Security Act 1991 (Cth)] Act”:  see Pala 2009 at paras 44 and 45, per DP Hotop.

9.      Less than a month after the Tribunal’s decision in Pala 2009, Kikuko left Australia for Japan (on 6 October 2009) with the intention of returning to Australia a few months later, on 17 December 2009.  That particular trip to Japan was, as was the case with her previous trips there, to provide her sisters with assistance in caring for her elderly parents and it was not a holiday as such.  Two days after Kikuko left for Japan on that trip, Mr Pala contacted Centrelink requesting that he be paid the age pension at the single rate while his wife was in Japan.  Mr Pala then filed a Mod[ule] S[eparation] form with Centrelink claiming that his relationship with Kikuko ended on 6 October 2009, being the date she left Australia for Japan.

10.     On 11 January 2010, Centrelink decided that Mr Pala still lived as a member of a couple as nothing had changed since the Tribunal’s decision on 15 September 2009 such that Mr Pala should continue to be paid the age pension at the lower “partnered” rate.  Mr Pala sought a review of that decision by a Centrelink Authorised review Officer (ARO) who, on 22 January 2010, found that since there had been no significant change in Mr Pala’s circumstances since the Tribunal’s September 2009 decision, she had “no jurisdiction” to review the Tribunal’s decision in Pala 2009 that Mr Pala was a “member of a couple” for age pension purposes as he was not living separately and apart from his wife on a permanent or indefinite basis, thereby preserving that decision.  The ARO also found that no special circumstances existed which would allow her not to treat Mr Pala and his wife as members of a married couple for the period Kikuko was in Japan for family reasons.

11.     Mr Pala subsequently appealed the Centrelink ARO’s decision to the SSAT.  On 11 March 2010, the SSAT affirmed the ARO’s decision.  Specifically, the SSAT affirmed the decision of the Centrelink ARO that:

(i)        Mr Pala was a “member of a couple” with Mrs Kikuko Pala; and

(ii)Mr Pala was not entitled to the single rate of age pension for the period that Mrs Kikuko Pala was overseas, being from 6 October 2009 to 16 December 2009.

12.     Dissatisfied with the SSAT’s decision, Mr Pala has appealed to this Tribunal seeking orders from it that he be paid the single rate of age pension from 31 May 2006, being the date he considers as “the actual date of his separation from Mrs Kikuko Pala”. 

Is Mr Pala a “member of a couple”?

13.              Before the Tribunal, the Secretary contended that the Tribunal does not have jurisdiction to consider the question of whether Mr Pala is a “member of a couple” as defined in section 4(2)(a) of the Act since that question had already been decided in the positive by the Tribunal in Pala 2009.  The Secretary further submitted that since there had been no significant change in the relationship of Mr Pala and Kikuko since Pala 2009, as evidenced by the SSAT’s decision of 11 March 2010, a reconsideration of the Tribunals’ decision in Pala 2009 is unwarranted.  Indeed, the Secretary went as far as to argue that, in the circumstances, the Tribunal is functus officio in relation to the issue of whether Mr Pala is a “member of a couple” for the purposes of the Act.  

14.     Generally, once a tribunal has reached a final decision on a matter that is before it, in accordance with its enabling statute, that decision cannot be revisited because the Tribunal has changed its mind, made an error within jurisdiction or because there has been some change or circumstance:  Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 603; see also Chandler v Alberta Association of Architects [1989] 2 SCR 848. This arises from the doctrine of functus officio, which broadly prescribes that once a Tribunal has discharged its statutory power or duty by exercising it, the Tribunal has no further authority to reconsider its decision. 

15.     However, since what is before the Tribunal, on this occasion, is a fresh application for the review of a decision of the SSAT (made on 11 March 2010), the Tribunal does have jurisdiction to reconsider all of the relevant issues before it, including whether Mr Pala is a “member of a couple” for the purposes of section 4(2)(a) of the Act:  see Re Harrington and Military Rehabilitation and Compensation Commission (2005) 85 ALD 624; 89 ALD 61.

16.     The rate of age pension payable to a person under the Social Security Act 1999 (Cth) (Act) is determined by, among other things, whether that person is a “member of a couple”.  The maximum basic rate of age pension is lower for members of a couple (i.e. the “partnered" rate) than it is for a single person (i.e. the single rate).  A person is “partnered” under the Act if they are a “member of a couple”:  section 4(11)(a) of the Act.

17.     Section 4(2)(a) of the Act states that a person is a “member of a couple” if:

“the person is legally married to another person and is not, in the Secretary’s opinion…….living separately and apart from the other person on a permanent or indefinite basis”.[Emphasis added]

18.     Mr Pala has always been and continues to be legally married to Kikuko.   Consequently, the question whether Mr Pala is a “member of a couple” for the purposes of section 4(2)(a) of the Act turns on whether Mr Pala is “living separately and apart from” Kikuko “on a permanent or indefinite basis” within the meaning of that section.

19.     In determining whether a relationship between two people has broken down such that they are “living separately and apart” from each other “on a permanent or indefinite basis” for the purposes of section 4(2)(a) of the Act, section 4(3) of the Act requires that regard be had to all of the circumstances of the relationship, including, in particular, the following matters:

“4(3)    …..

(a)       the financial aspects of the relationship, including:

(i)any joint ownership of real estate or other major assets and any joint liabilities; and

(ii)any significant pooling of financial resources especially in relation to major financial commitments; and

(iii)any legal obligations owed by one person in respect of the other person; and

(iv)      the basis of any sharing of day-to-day household expenses;

(b)       the nature of the household, including:

(i)        any joint responsibility for providing care or support of children;                  and

(ii)       the living arrangements of the people; and

(iii)      the basis on which responsibility for housework is distributed;

(c)       the social aspects of the relationship, including:

(i)        whether the people hold themselves out as married to each other; and

(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and

(iii)the basis on which the people make plans for, or engage in, joint social activities;

(d)       any sexual relationship between the people;

(e)       the nature of the people’s commitment to each other, including:

(i)        the length of the relationship; and

(ii)the nature of any companionship and emotional support that the people provide to each other; and

(iii)whether the people consider that the relationship is likely to continue indefinitely; and

(iv)whether the people see their relationship as a marriage-like relationship.” [Emphasis added]

20.     It is necessary to examine the nature of the relationship both prior to the breakdown and afterwards an assessment must be made as to how the relationship has evolved and, specifically, whether that change amounts to a destruction of the consortium vitae (being the Latin term for cohabitation): Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164. In Staunton-Smith the Federal Court of Australia had regard to the Family Law Act 1975 (Cth) and In the Marriage of Pavey (1976) 10 ALR 259 and found (at 175, per O’Loughlin J) that “separation” requires destruction of the “consortium vitae” and that the composition of the marital relationship for each couple varies from case to case and that “it is wholly inappropriate to fall back on standards, conventions or ‘role models’.” 

21.     In Pala 2009, having conducted an exceptionally thorough inquiry into and assessment of the matters it was required by section 4(3) of the Act to consider, the Tribunal made the following factual findings (refer to  paras 27 to 39, per DP Hotop):

“Financial aspects

27.      The Tribunal is satisfied that:

·the applicant and Kikuko Pala do not jointly own any real estate or any other major assets, nor do they have any joint liabilities;

·there is no significant “pooling” of financial resources by the applicant and Kikuko Pala;

·other than the joint legal obligation arising out of the insurance policy jointly entered into by the applicant and Kikuko Pala in respect to the latter’s car, neither the applicant nor Kikuko Pala owes any legal obligation in respect of the other;

·the applicant pays for all the household expenses, including food, gas, electricity, telephone/internet, water consumption charges and Council rates;

·Kikuko Pala pays the sum of $115 per week ($500 per month) to the applicant to cover her day-to-day living expenses;

·Kikuko Pala does not pay any money to the applicant for her accommodation in the house jointly owned by him and his daughter;

·the applicant and Kikuko Pala have held one joint bank account since 2002 but it has been inactive for the last 2 years and in that period the credit balance has been approximately $180.

28.Although it is apparent that the applicant and Kikuko Pala have not been financially intertwined to a significant extent, it is clear that the applicant has provided financial support, by way of the provision of free accommodation, to Kikuko Pala throughout the period of their marriage.

Nature of the Household

29.      The Tribunal is satisfied that:

·the applicant and Kikuko Pala have, at all material times, shared the living areas, kitchen, bathroom and laundry of the house in which they reside, but that in or about 2007 they ceased sharing a bedroom and have, from that time, each occupied their own bedroom in that house;

·at all material times Kikuko Pala has done most of the cleaning and clothes washing, the applicant has done all of the gardening and general maintenance and most of the shopping, and each of them has done their own cooking.

30.In the Tribunal’s opinion there has, at all material times, been a substantial interrelationship and degree of co-operation between the applicant and Kikuko Pala in respect of the running of their household.

Social Aspects

31.The Tribunal is satisfied that, at all material times, the applicant and Kikuko Pala have not gone out socially together or engaged in any joint social activities, have not been invited out as a couple, and have not travelled overseas, or otherwise holidayed, together.

32.As regards the assessment of friends and regular associates about the nature of the relationship between the applicant and Kikuko Pala, the only independent evidence before the Tribunal is the letter from Louise Nanne (see paragraph 23 above).  The Tribunal notes, however, that in that letter Ms Nanne merely refers to what the applicant has told her about his relationship with Kikuko Pala and she does not purport to make an objective assessment of that relationship.  The Tribunal also notes that the contents of that letter do not go so far as to assert, or even imply, that the applicant and Kikuko Pala have been living separately and apart under one roof.

33.The Tribunal is satisfied that he applicant and/or Kikuko Pala have not, at any material time, actively held themselves out as married to each other, but the Tribunal is also satisfied that they have likewise not, at any material time, actively held themselves out as living separately and apart from each other albeit under one roof.

Sexual Relationship

34.The Tribunal is prepared to accept that the applicant and Kikuko Pala have not had a sexual relationship with each other since 31 May 2006 when she departed Australia (and did not return until 1 December 2006).

Nature of Mutual Commitment

35.The applicant has known Kikuko Pala since April 2001 and they have been married since April 2002.

36.Since the date of their marriage Kikuko Pala has visited, and spent a substantial amount of time in, Japan each year (see paragraph 24 above), but following each visit to Japan she has returned to Australia and has resumed living in the applicant’s house, most recently in February 2009.

37.The applicant, according to his own evidence, married Kikuko Pala for companionship and he has consistently, throughout their marriage, encouraged her to become better educated and more self-confident and generally supported and provided help to her.  Each of them has indicated that they have provided support to the other in times of illness or personal crisis.

38.The applicant has indicated that he regards it as beneficial to him for Kikuko Pala to continue to stay with him because of his heart condition and his age (see his letter of 15 May 2008 set out in paragraph 19 above) and that it is a comfort to him to know that, if he were to become seriously ill or have a serious accident, she would be there to look after his dogs (see his oral evidence set out in paragraph 25 above).  Furthermore, neither the applicant nor Kikuko Pala has taken any steps to obtain a divorce or a legal separation.  On the contrary, each of them has indicated that they do not intend to seek a divorce.  The Tribunal infers from this evidence that the applicant and Kikuko Pala see their relationship as likely to continue indefinitely.

39.The applicant and Kikuko Pala have indicated that they “do not have much in common” with each other.  More specifically, the applicant, in his abovementioned letter of 15 May 2008, described their marriage as “totally non-functional” and stated that that has been the case for the last 5 years, and he attributed this to the difference in their ages and ethnicity and their being “entirely two different people”.  It appears from his evidence that the applicant has regarded himself as separated from Kikuko Pala since at least 2007 and, in that respect, he has not regarded their relationship as “marriage-like” from that time.” [Emphasis added]

22.     The above factual findings are not in dispute in this application.  What Mr Pala disputes is that he has been a “member of a couple” with Kikuko for the purposes of the Act  since 31 May 2006 (being the date that Kikuko returned to Japan on a one-way ticket and the date Mr Pala considers that his marriage to Kikuko was irretrievably broken).  Mr Pala maintains that whilst he remains legally married to Kikuko and continues to live under the same roof as her, they are “separated”. The evidence before the Tribunal in Pala 2009, before the SSAT on 11 March 2010 and before the Tribunal presently is that Mr Pala has made no steps toward divorcing Kikuko and that he has no intention of doing so in the future.  Despite that fact, Mr Pala has continually maintained, and does so presently, that he and Kikuko have been “separated” whilst living under the same roof since 31 May 2006.

23.In Pala 2009, the Tribunal reached the following conclusion on the issue of whether Mr Pala was a “member of a couple” within the meaning of section 4(2)(a) of the Act (refer to paras 43 to 45, per DP Hotop):

“43.……………

In short, the Tribunal is not satisfied that the marital relationship of the applicant and Kikuko Pala has broken down such that it can be said that they are living separately and apart from each other on a permanent or indefinite basis.

44.Accordingly, in the Tribunal’s opinion, the applicant has not, at any time from the date of his marriage to Kikuko Pala, lived, and is not presently living, “separately and apart from” Kikuko Pala “on a permanent or indefinite basis”, within the meaning of s 4(2)(a) of the Act.

45.The Tribunal concludes, therefore, that the applicant has at all material times been, and is presently, a “member of a couple” (as defined by s 4(2)(a) of the Act) for the purposes of the Act.”

24.     Having regard to the Tribunal’s findings of fact in Pala 2009 and given that those facts are not contested in this application, the Tribunal considers that the Tribunal’s decision in Pala 2009 was the correct or preferable one at that time and that that decision should not be disturbed.  Relevant to this application, being a review of SSAT’s decision dated 11 March 2010, is a consideration by the Tribunal of what may or may not have changed in the relationship between Mr and Mrs Pala since the Tribunals’ decision in Pala 2009 and whether that change can be said to have caused a destruction of the consortium vitae such that it can be said that they are “living separately and apart” from one another “on a permanent or indefinite basis” for section 4(2)(a) purposes:  Staunton-Smith.

25.     Before the SSAT (on 11 March 2010), Mr Pala gave evidence that, since the Tribunal’s decision in Pala 2009, the following three changes had occurred in his relationship with Mrs Pala:

“First, the joint bank account referred to in paragraph 27 of [Pala 2009] had been closed.  Second, Mrs Pala now paid him $150 per week for accommodation, an increase of $35 per week from the $115 per week referred to in paragraph 27 of [Pala 2009].  Third, when Mrs Pala’s car insurance came up for renewal he was going to remove himself from the policy.  This was also referred to in paragraph 27 of [Pala 2009].” [Emphasis added]

26.     Mr Pala also informed the SSAT that, since Pala 2009, he had not moved to divorce Mrs Pala, nor had he sought advice about her rights to his assets if he died.

27.     The SSAT concluded that since Mr Pala could not point to any substantial changes in his relationship with Mrs Pala since the time of the Tribunal’s decision in Pala 2009 to the lodgement of the Mod[ule] S[eparation] form with Centrelink and, thereafter, that Mr Pala was and continued to be a “member of a couple” under the Act.

28.     The Tribunal asked Mr Pala to advise it of what, if any, changes had occurred in his relationship with Mrs Pala since the Tribunal’s decision in Pala 2009 and since the SSAT’s decision on 11 March 2010.  Mr Pala confirmed for the Tribunal that since Pala 2009, he and Kikuko no longer shared a bank account and that Kikuko paid him $150 per week for accommodation from her Newstart allowance from Centrelink (representing an increase of $35 per week).  Mr Pala also informed the Tribunal that since the SSAT’s decision dated 11 March 2010, he had been removed from Kikuko’s car insurance policy and she now had her own. 

29.     Importantly, Mr Pala advised the Tribunal that three additional changes have  transpired in his relationship with Mrs Pala since the since the SSAT’s decision on 11 March 2010. 

30.     First, Mr Pala was hospitalised for open heart surgery on 6 October 2010.  He was expected to remain in hospital for ten days following his operation but was discharged after only six.  Evidence was given by Mr Pala about his relationship with Kikuko during his time in hospital.  Relevantly, Kikuko visited Mr Pala in hospital every day.  She brought him his mail and news about his dogs (for example, she told him that his dogs were looking for him and that they missed him).  While Mr Pala was in hospital, Kikuko also walked and cared for Mr Pala’s dogs for him every day. 

31.     The Tribunal considers that Kikuko’s conduct during Mr Pala’s recent time in hospital is demonstrative of her enduring support of him and of his continuing dependence on her and clearly indicates that they are not presently living “separately and apart” from each other “on a permanent or indefinite basis” for the purposes of section 4(2)(a) of the Act and, in particular, that Mr Pala continues to be a “member of a couple” with Kikuko.

32.     Upon his return from hospital, Mr Pala admitted that he needed a lot of help and that Kikuko was there to provide it.  Indeed, Kikuko put her TAFE studies on hold to stay home and look after Mr Pala.  Mr Pala gave evidence that, although they slept in separate rooms, he kept his door ajar and called for her help whenever necessary (for example, for a glass of water or if he felt faint due to trouble with his leg).  Kikuko helped Mr Pala get in and out of bed and assisted him to bathe and dress.  For at least two months since Mr Pala’s surgery, Kikuko has shopped, cooked and cleaned for Mr Pala and washed his clothes, as he has simply been physically too unwell to perform these tasks himself.  Since hospital, Kikuko has also driven Mr Pala wherever he needed to go (including to the bus stop to attend this hearing).  In short, Mr Pala advised the Tribunal that Kikuko had been “managing everything” for him since his return from hospital.

33.     The assistance Kikuko has provided to Mr Pala since his recent heart surgery, in the Tribunal’s opinion, clearly points to Kikuko’s on-going care for and support of Mr Pala and of Mr Pala’s reliance on Kikuko.  It reveals the comfort and support derived by Mr Pala from living under the same roof as Kikuko to whom he is still legally married.  Based on such evidence, it would be difficult for the Tribunal to reach the conclusion that their relationship had broken down to such an extent that they could be said to be living “separately and apart” from each other “on a permanent or indefinite basis” within the meaning of section 4(2)(a) of the Act or that has been a destruction of the consortium vitae.  To the contrary, this evidence reaffirms the supportive nature of and their continuing commitment to each other and their marital relationship.

34.     Second, since Mr Pala’s return from hospital, Kikuko has received a carer’s payment from Centrelink to assist her to care for him.  Kikuko will continue to receive those payments for twelve months following Mr Pala’s operation, although those payments will be terminated for the three month period that Kikuko is in Japan (refer to paragraph 36 below).  In her Centrelink Claim for Carer Payment and Carer Allowance Form SA411.1007, dated 6 October 2010, Kikuko stated “I visit [Mr Pala] in hospital every day and after his discharge from hospital I will help him in any way he needs”.

35.     Before the Tribunal, submitted that because Kikuko has received a carer’s payment since his return from hospital she is not providing care for him in the way in which a wife would because she is being paid by Centrelink to provide the care for him.  In other words, because Kikuko is receiving a payment to care for him, it is more akin to her being remunerated for paid work.  That is one way of looking at it.  However, the Tribunal considers the better view is that it provides yet a further example of Kikuko’s commitment to and support of Mr Pala and must be regarded in the context of the totality of their relationship.

36.     Since marrying Mr Pala in 2002, Kikuko has made regular trips to Japan for family reasons, namely to help her sisters care for her elderly parents.  Mr Pala told the Tribunal that Kikuko would be leaving for Japan in a week’s time, following this hearing, for three months to once again help her sisters care for her elderly parents.  Mr Pala confirmed for the Tribunal that Kikuko would live with him again upon her return from Japan.  Mr Pala also gave evidence that Kikuko had asked some of her friends to keep in touch with him and help him, if necessary, while she was gone. The fact that Kikuko will return to live in Mr Pala’s house upon her return from her latest trip to Japan and that she has arranged for her friends to keep an eye on Mr Pala and ensure his well-being while she is gone is yet a further indication that their relationship as a married couple remains on-foot and that they are not living “separately and apart” from each other “on a permanent or indefinite basis”.

37.     Third, on 22 July 2010 Mr Pala applied to the Family Court of Western Australia (using a Form 11 “Application for Consent Orders”) in accordance with Rule 10.15 of the Family Law Rules and the Family Law Act 1975 (Cth) (Exhibit “A1”). Broadly, Rule 10.15 of the Family Law Rules provides, among other things, that a person may apply to the Family Court for a consent order by Filing an “Application for Consent Orders” (Form 11) and attaching a draft consent order.  On 24 September 2010, a Registrar of the Family Court granted (in chambers) Mr Pala and Kikuko the consent orders they applied for on 22 July 2010. Those consent orders state:

“1.The applicant [Mr Pala] will pay to the respondent [Kikuko] the sum of $20,000 within a time frame agreed between the parties.

2.The applicant [Mr Pala] will retain his interest in the property at 280 Morley Drive, Dianella.

3.        Each party will retain their own motor vehicle.

4.That except as otherwise provided in these Orders, each party is declared to have no further interest in the items of personal property in the possession of the other.”

38.     It is the Tribunal’s view that those consent orders do not bring about any significant change in the relationship of Mr Pala and Kikuko such that it can be said that they are now “living separately and apart” from each other “on a permanent or indefinite basis” within the meaning of section 4(2)(a) of the Act.  Order 1 provides for a promise by Mr Pala to pay Kikuko an amount of money at some future unspecified date “to be agreed” between them.  Nothing about that Order is concrete or relationship changing.  As regards the remaining Orders, based on Mr Pala’s oral evidence before the Tribunal, those Orders merely provide a written record of understandings which already exist between Mr Pala and Kikuko concerning the ownership of their respective property.  They do not amount to Mr Pala and Kikuko living “separate and Part” from each other “on a permanent or indefinite basis” within the meaning of section 4(2)(a) of the Act.

39.     Mr Pala also offered the Tribunal some more general comments about his relationship with Kikuko.  In particular, Mr Pala explained to the Tribunal why he has never moved to divorce Kikuko.  Mr Pala said that if Kikuko wasn’t there he would probably have to go and live in an aged care facility and he didn’t want that.  Mr Pala described Kikuko as a “comfortable chair” and stated that it was “good to have someone around” (although if she were not around, he would still have his dogs).  Mr Pala commended that he and Kikuko generally don’t argue and have a reasonably amicable relationship.  Mr Pala’s house (which he jointly owns with his daughter) is a three bedroom single level dwelling with one kitchen, one bathroom and one laundry and he and Kikuko share these facilities, although they sleep and work on their computers in separate rooms of the house.  Mr Pala also explained that Kikuko helped him with his dogs and that his dogs liked her and that having her live in the house with him meant that she would be there to care for his dogs in an emergency (for example, if something happened to him).  Therefore, according to Mr Pala, there to be some “benefit” to him in Kikuko living with him under the same roof. 

40.     Mr Pala also articulated to the Tribunal why he chose to marry Kikuko in the first place.  Mr Pala told the Tribunal that he and Kikuko did not marry for love and that their marriage was based on other factors.  Mr Pala stated that it is common in both Indian and Japanese culture to “marry just to get married and then fall in love”.  Mr Pala stated that he saw his marriage to Kikuko as an opportunity for a new challenge in his life, something new to stimulate him and someone to provide him with company.  According to Mr Pala, Kikuko chose to marry him because she was eager to rid herself of the negative stigma attached to being a divorced woman in Japan.  Mr Pala stated that Kikuko had on many occasions threatened to “go back to Japan” and that he had never responded to that threat with a “yes” she should or “no” she shouldn’t.

41.     Before his recent heart surgery, Mr Pala generally cooked for himself, to his own taste.  Kikuko looked after the indoor chores (i.e. cleaning, washing etc.) and Mr Pala took care of the outdoors and the general maintenance of the house.  Mr Pala paid and continues to pay for all of the household bills and, in return, Kikuko contributes $150 weekly for accommodation and provides him with household help and assists him to care for his dogs. 

42.     Mr Pala advised the Tribunal that he has always encouraged Kikuko to study.  He believes that education can lead to a better lifestyle, “open your mind” and create greater job opportunities.  Mr Pala stated that Kikuko has been studying successfully at Perth Central TAFE for many years and up until the time Mr Pala recently underwent heart surgery.  Mr Pala commented that he would help anyone (not just Kikuko) to study as he considers it a privilege to help another human being to obtain a good job and to feel an integral part of Australian society.

43.     Based on the totality of the evidence before the Tribunal, the Tribunal considers that Mr Pala was at the time of the decision in Pala 2009 and continues to be a “member of a couple” for the purposes of section 4(2)(a) of the Act.  That is, based on the evidence it cannot in the Tribunal’s view, be said that Mr Pala is “living separately and apart” from Kikuko “on a permanent or indefinite basis” within the meaning of section 4(2)(a) of the Act. 

44.     A global assessment of the evidence undoubtedly reveals that, since marrying on 15 April 2002, Mr Pala and Kikuko have derived, and continue to derive, substantial personal benefits from their marriage.  Although their relationship, may from an outsider’s perspective, not be seen as standard or conventional (for example, because they sleep in separate rooms of the house they share and share no sexual relations), it is plainly mutually beneficial to them:  Staunton-Smith.  That is, Mr Pala has provided and continues to provide Kikuko with accommodation and  security as well as financial and moral support (for example, by encouraging and helping her to further her education).  On the other hand, Kikuko provides Mr Pala with companionship, assistance around the household and with his dogs and supportive care.  They may be “separated” in the sense that they sleep in separate rooms of the house but that does not equate to them living “separately and apart” from each other “on a permanent or indefinite basis” or amount to a destruction of the consortium vitae:  Lenard and Staunton-Smith.  The comfort and support they each derive from their relationship is based in a combination of domestic, interpersonal and financial co-operation.  In Mr Pala and Kikuko continues to demonstrate a substantial commitment to their marital relationship

45.     Accordingly, the Tribunal concludes that Mr Pala and Kikuko cannot be said to be living “separately and apart” from each other “on a permanent or indefinite basis” for the purposes of section 4(2)(a) of the Act.   As Mr Pala remains legally married to Kikuko, it follows, therefore, that he is “member of a couple” under section 4(2)(a) of the Act.

Do any special reasons exist which would entitle Mr Pala, under section 24(1) of the Act, to receive the single rate of age pension for the period from 6 October 2009 to 16 December 2009, when Mrs Pala was in Japan?

46.     A person is not a “member of a couple” if a determination under section 24 is in force in relation to the person:  section 4(6) of the Act.  Section 24(1) of the Act confers a discretion on the Secretary to determine in writing that a person who is legally married to another person and is not living apart from the other person on a permanent or indefinite basis is not to be treated as a “member of a couple” for section 4(2) purposes, if the Secretary is satisfied that some “special reason” exists in that particular case.   The effect is that the person is treated as single, so he or she can receive the higher single rate of age pension and is unaffected by the income or assets of the partner.

47.     The expression “special reason” is not defined in the Act.  However, the Federal Court of Australia observed in Boscolo v Secretary, Department of Social Security [1999] FCA 106 that although the section 24 discretion is “not lightly to be enlivened” that “does not require that the case be extremely unusual, uncommon or exceptional”.  Instead, the test is whether the circumstances meet “the requirement….that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course”:  per French J at para 18.  In other words, section 24 is intended as a provision of last resort and should only be applied when all other reasonable means of support have been exhausted.

48.     Further, the expression “special reason” must be interpreted in the context and consistent with the scope and purpose of the Act.  That context and purpose was explained in the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 (Cth), which relevantly provided (at 17):

“…there is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together.  This justification is based on the premise that the unpartnered person does not enjoy the economies of shared living costs as does the member of a couple in those circumstances.  If the economies of scale are not available to the member of the couple because, for example, of the illness of one or both members of the couple, then each would face similar living costs as an unpartnered person.”

49.     This justification was expanded in Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651 (at 652) as follows:

“The evident policy behind the relevant legislative provision is that ordinarily couples should be expected to pool their resources and practise economies of scale; that those expectations should not apply to couples who are separated by illness or imprisonment; but that there would have to be some special reason not to apply those expectations to members of other couples.”

50.     The above extracts indicate two reasons for the “partnered” rate.  First, that there are economies of scale in two people living together.  Second, because there has been a pooling of resources, the two people are better-off financially because they pool their joint income and assets:  Holt applied. 

51.     Other guidance on how the section 24 discretion should be exercised is provided in Guide 2.2.5.50 of the Guide to Social Security Law (titled “Discretion to Treat a Person as Not Being a Member of a Couple for a Special Reason”) (Guide) offers some assistance in the interpretation of that expression.  The Guide provides, among other things, that the discretion should only be exercised where a full consideration of all the circumstances relevant to the individual’s case would make it “unjust or unreasonable” not to do so. 

52.     According to the Guide, the following three questions should be considered as part of an assessment of the full circumstances of the case: (i) is there a special reason to be considered in this couple’s circumstances?; (ii) is there a lack of being able to pool resources as a result of the circumstances?; and (iii) is there financial difficulty as a result of the couple’s circumstances? 

53.     As regards the first question, states that the circumstances must be unusual, uncommon, abnormal or exceptional.  It is the context which generally determines whether the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as “special”.  In relation to the second question, the Guide provides that in ordinary circumstances “members of a couple” will “pool” their resources and share their expenses, making it cheaper for them to live than if they were two single people.  According to the Guide, an inability to pool resources for their mutual benefit is a “special reason” to exercise the discretion in section 24 of the Act:  see also the Explanatory Memorandum to the Social Security Bill (No 4) 1999 (at 17) and Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651. With respect to the third question, the Guide 2.2.5.50 notes that financial difficulty, for this purpose, is not being able to provide for accommodation and the basic necessities of life or to be without adequate means of support. That is, the overall financial situation should be considered and income and readily available funds from assets should be compared to necessary expenditure.

54.     In other words, section 24 of the Act is normally enlivened in a situation where: (i) the person is experiencing financial difficulty; (ii) there is an inability for the couple concerned to “pool” resources and (iii) the persons’ circumstances are, to some degree at least, beyond their ability to control.  However, none of these factors taken alone are sufficient to constitute a “special reason” for section 24 purposes:  see Re Williams and Director-General of Social Services (1981) 4 ALD 300 at para 27, Re Malajew and Secretary, Department of Social Security (1988) 16 ALD 1 and Re Colaiacolo and Secretary, Department of Social Security [1985] AATA 91 at para 20.  Further, it is noteworthy that there is no specific legislative requirement that a person be experiencing financial difficulty or that there be an inability to “pool” resources for section 24 of the Act to apply.  Further, in Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143 the Tribunal observed that there is no requirement in section 24 of the Act for the person’s circumstances to be beyond their ability to control. The Guide is, as its name suggests, merely a “guide” to assist in the interpretation of the section 24 discretion and it is not in any way restrictive or binding.

55.     Before the Tribunal, Mr Pala submitted that in view of his old age, his poor health (associated with his heart condition and recent heart surgery) and his other “unique” circumstances, the section 24 discretion should be exercised in his favour. 

56.     Based on the evidence before it, the Tribunal is of the opinion that in this particular case there is no “special reason” to warrant an exercise of the section 24 discretion. 

57.     In reaching this conclusion the Tribunal notes the following.  Although Mr Pala suffers from poor health due to his heart condition and recent heart surgery, that is not unusual for someone of his age.  Although their relationship is more one of companionship and support than anything else that is also not uncommon or unusual as people get older. 

58.     Mr Pala gave evidence that he has some $23,000 set aside in bank accounts for dental work.  Mr Pala could choose to apply that money toward other expenses, if necessary.  Further, whilst, on the one hand, Mr Pala and Kikuko do not jointly own any real estate or any other major assets, on the other hand, they do not have any joint liabilities.  Mr Pala and Kikuko both receive social security payments.  That is, Mr Pala receives an age pension and Kikuko receives a Newstart allowance and has more recently commenced receiving a carer’s payment.  Whilst Mr Pala pays for all of the household bills, those expenses can be expected to diminish while Kikuko was in Japan for the period from 6 October 2009 to 16 December 2009. 

59.     Although there is no significant “pooling” of financial resources by Kikuko into the marriage, she does contribute  $150 per week for accommodation.  In any event, a lack of “pooling” by Kikuko is, by itself, an insufficient justification for the exercise of the section 24 discretion.  Kikuko is an Australian resident living in Australia who has been employed in the past and has an ability to obtain work in the future.  In addition, Kikuko is able to afford regular trips to Japan for family reasons.  Kikuko also assists Mr Pala to clean the house, wash their clothes and care for his dogs.  These are services which Mr Pala may otherwise have to pay someone outside the marriage to provide.  In this sense, it may be said that Kikuko is “pooling” her resources and bringing economies of scale to the marriage.   

60.     In conclusion, the Tribunal considers that there is nothing “unusual or different” in the particular case of Mr Pala and Kikuko to warrant an exercise of the discretion in section 24 of the Act:  Boscolo.

Decision

61.     For the reasons provided above, the Tribunal affirms the decision under review.  Specifically, The Tribunal affirms the decision of the SSAT dated 11 March 2010 that:

(i)Mr Pala was a member of a couple with Mrs Kikuko Pala; and

(ii)Mr Pala was not entitled to the single rate of age pension for the period that Mrs Kikuko Pala was overseas, from 6 October 2009 to 16 December 2009.

I certify that the 61 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Walsh

Signed: ........(sgd) L Huynh......................................................
  Associate

Date/s of Hearing  3 December 2010
Date of Decision  23 December 2010
Representative for the Applicant               Self represented
Representative for the Respondent          Ms M Conlon
  Centrelink Legal Services Branch