Paral and Secretary, Department of Social Services (Social services second review)
[2022] AATA 6
•6 January 2022
Paral and Secretary, Department of Social Services (Social services second review) [2022] AATA 6 (6 January 2022)
Division:GENERAL DIVISION
File Number: 2021/0891
Re:Miroslav Paral
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Member S Barton
Date:6 January 2022
Place:Perth
The Reviewable Decision being the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal dated 18 January 2021, is affirmed.
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Member S Barton
CATCHWORDS
AGE PENSION – rate of pension – whether Applicant was a member of a couple – financial aspects of the relationship – nature of the household – social aspects of the relationship – nature of people’s commitment to each other – special reason – Tribunal satisfied that the Applicant is a member of a couple – Reviewable Decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) – ss 4(2), 4(3), 24(1)
CASES
Attiwill and Secretary, Department of Education, Employment and Workplace Relations (2013) 134 ALD 215
Boskoski and Secretary, Department of Social Services [2014] AATA 915
Cullinane and Secretary, Department of Family and Community Services [2004] AATA 789
Pelka v Secretary, Department of Family and Community Services [2006] FCA 735
Purdie and Secretary, Department of Social Services [2013] AATA 743
Rendell and Anor and Secretary, Department of Family and Community Services [2004] AATA 711; (2004) 83 ALD 381Zamora and Secretary, Department of Social Services [2018] AATA 309
SECONDARY MATERIALS
The Social Security Guide – [2.2.5.50]
REASONS FOR DECISION
Member S Barton
6 January 2022
BACKGROUND
The Applicant seeks review of a decision of the Social Services and Child Support Division (AAT1) in the General Division (AAT2) of this Tribunal.
The AAT1 decision dated 18 January 2021 affirmed a decision made by an Authorised Review Officer (ARO) of Services Australia (the Agency) on 27 October 2020, that the Applicant was a member of a couple with Mrs Arunee Paral from 8 October 2020, for the purposes of calculating the rate of age pension.
FACTS
The Applicant is 68 years of age and is in receipt of an age pension. He married Mrs Paral on 17 March 1979.
On 30 April 2015, the Applicant provided the Agency with a separated under one roof form, advising that he and his wife had separated on 9 September 2013 (ST1/207). On 19 June 2015, the Agency determined that the Applicant and Mrs Paral remained as members of a couple as they were not living separately on a permanent basis.
The Applicant sought a review of this decision by an ARO of the Agency, who affirmed the decision on 29 June 2015 (T4). The Applicant sought a further review by AAT1.
On 18 August 2015, AAT1 set aside the ARO decision and found the Applicant and Mrs Paral were no longer a couple and living separately, therefore the age pension was payable to the Applicant at the single rate (T5).
On 28 August 2020, Mrs Paral submitted a separated under one roof form completed by both her and the Applicant, and on the following day submitted an application for the age pension (T6, T8).
On 8 October 2020, the Agency advised the Applicant that it had determined that he and Mrs Paral were living as a couple and would be paid the partner rate (T12/137).
On 27 October 2020, an ARO affirmed this decision, which was again affirmed by AAT1 on 18 January 2020. This is the Reviewable Decision before the Tribunal.
ISSUE
The issue to be determined in this application is whether the Applicant is a member of a couple with Ms Paral for the purpose of calculating the rate of age pension.
MATERIAL BEFORE THE TRIBUNAL
The hearing was held on 3 November 2021 at the Tribunal Registry in Perth. The Applicant appeared in person and was self-represented before the Tribunal. The Respondent was represented by Mr Carroll of King & Wood Mallesons and appeared by videoconference from Canberra.
At the hearing, the Applicant made submissions, gave evidence, and was cross-examined.
The following documents were admitted into evidence:
· Application for review dated 7 February 2021 (Exhibit A1);
· AAT1 Decision dated 18 January 2021 (Exhibit A2);
· Section 37 T-Documents, labelled T1-T16, consisting of pages 1-206 (Exhibit R1);
· Supplementary T-Documents, labelled ST1, consisting of pages 207-222 (Exhibit R2); and
· Respondent's Statement of Facts, Issues and Contentions dated 5 May 2021 (Exhibit R3).
LEGISLATIVE FRAMEWORK
The relevant legislation is contained in the Social Security Act 1991 (Cth) (the Act). Sections 4(2) and 4(3) of the Act set out the member of a couple test. Section 4(2) provides as follows:
(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a)the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; ....
Section 4(3) provides as follows:
(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a), subparagraph (2)(aa)(ii) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other majority 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, or in a de facto relationship with, 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 or a de facto relationship.
When considering a relationship between two people, the circumstances may be complex, with a variety of emotional and material arrangements and accommodations, which may be attended by a degree of unhappiness and dissatisfaction by both parties.
In Cullinane and Secretary, Department of Family and Community Services [2004] AATA 789, Senior Member McCabe (as he then was) made the following observation [at 16]:
Application of the criteria will often be difficult because relationships come in many forms. Not all relationships are happy, and they do not always conform to the stereotypes of family life. And why should they? People must be free to structure their domestic arrangements as they please. But it is still necessary to attempt to characterise the relationship where the decision whether or not to take into account the other person’s income depends on whether they are members of a couple, or merely share a common address. The criteria offer common-sense indicators. One need not satisfy them all; indeed, one may satisfy few of them but still be considered to be a member of a couple if the decision-maker forms the view the applicant is in fact a member of a couple. The matters referred to in s 4(3) inform the exercise of the discretion, but they are not the end of the story. The decision-maker must consider all of the circumstances.
The Tribunal is also mindful of French J’s observation in Pelka v Secretary, Department of Family and Community Services [2006] FCA 735 (Pelka) [at 47]:
The judgment to be made is difficult and, once out of the range of obvious cases falling within the core concept of 'marriage-like', will be attended by a degree of uncertainty. Indeed, it may be that different decision-makers on the same facts could quite reasonably come up with different answers.
The parties may have subjective and firmly held views on their relationship’s history, disputes, fractures and current direction. However, as Deputy President Constance observed in Boskoski and Secretary, Department of Social Services [2014] AATA 915 [at 63]:
In considering the various criteria set out in subsection 4(3) it is necessary to take an objective view of the facts. However the subjective views of the parties may be relevant in considering aspects of the relationship, such as the commitment of each party to the other.
CONSIDERATION
Financial aspects of the relationship
The Applicant and Mrs Paral jointly own their house and share the mortgage (T6/63; T7/89). In 2019, the Applicant purchased a vehicle, which both parties share (T6/69; transcript/9). They also share joint ownership of a small parcel of shares (T7/85). The Applicant and Mrs Paral are beneficiaries under each other’s superannuation and wills (T7/102; T10/122).
They also share household expenses. Mrs Paral pays some of the household expenses, such as the mortgage, council rates and home insurance (T6/65). The Applicant contributes what he can to the various household expenses (transcript/9). They share access to bank accounts, a joint Medicare Card and a joint health insurance policy, which the Applicant pays (T6/67; T7/99; T6/70).
The Applicant’s evidence is that the sharing of financial resources is driven by necessity (transcript/9):
And, look, I only have a income from Centrelink and that - I mean that is seriously not enough to do whatever my ex-partner does. She does it because we been married for such a long time and it’s not emotional, it’s not physical but, you know, we only are human beings. And if we can't help each other in some desperate situations, well, there is - life is not worth living to put it this way. And that’s why I look at it.
In the relationship details form Mrs Paral provided to the Agency, she stated that (T6/71):
With financial problems, I don’t have another choice than stay with him, I feel safe here and work, amenities very close in walking distance, if I decide to move out I have to share it with someone I don’t know, rent will cost almost same as I pay mortgage, we live in civilised manner, the situation could change in the future no one know.
There remains the question of whether this aspect of the relationship is, as both parties contend, driven by necessity rather than that which reflects the behaviour of a couple pooling their resources. The Tribunal has previously considered the notion of financial necessity, relevantly in Zamora and Secretary, Department of Social Services [2018] AATA 309 (Zamora), Attiwill and Secretary, Department of Education, Employment and Workplace Relations (2013) 134 ALD 215 (Attiwill) and Rendell and Anor and Secretary, Department of Family and Community Services [2004] AATA 711; (2004) 83 ALD 381 (Rendell).
In Zamora, Member Burke found that [at 38-39]:
The Tribunal accepts Mrs Zamora’s evidence that she was not able to pool resources with her husband at the time of her initial claim, beyond their arrangement whereby Mr Zamora pays the mortgage and Mrs Zamora pays the household expenses. This arrangement is in place due to financial necessity which, as is outlined in Rendell and Attiwill, is not enough to correspond to a marriage-like relationship. Whilst they were still living together, they were eating and sleeping separately; they had no sexual relationship; they had no social relationship beyond that of family functions; there were no third parties living in the house; their financial arrangements were separate; they had a genuine belief they were separated under the one roof; their shared major asset was the joint ownership of the property they live in; and finally there was no degree of permanency to the relationship.
The Tribunal finds that taking all the circumstances into account, special circumstances exist in this particular case and that the extreme financial difficulty faced by Mrs Zamora , compounded by her ill health, means that she is not currently able find alternative accommodation to the property she currently occupies with her husband.
In Attiwill, Senior Member Bean concluded that [at 26-27]:
As will be apparent from my discussion of the evidence above, I have found Ms Attiwill and Ms Hermann’s situation a particularly difficult one to assess. As I have already observed, at face value, there are a number of aspects of their relationship which would appear to suggest they continue to be members of a couple. However it is also apparent that they are currently in an extremely precarious financial position which leaves them with few choices. They each acknowledged that they were in arrears with the mortgage on their house and therefore at risk of losing the house they jointly owned. However they explained that neither of them had the financial or social resources to seek out alternative accommodation, or otherwise extricate themselves from their current predicament.
The picture which emerged from the evidence was in effect one of the two of them being forced to co-habit due to financial necessity and the absence of any alternative for either of them.
Senior Member Bean further observed that [at 28]:
… it is accordingly apparent that some of the aspects of their relationship which point most strongly toward them being members of a couple are driven more by necessity than choice.
In Rendell, the Tribunal found no reason to conclude that the relationship went beyond one formed and conducted for economic purposes.
Unsurprisingly, there are differences between Zamora, Attiwill and Rendall to the current matter under consideration. In Attiwill and Rendall in particular, the nature and duration of the relationships were markedly different and the economic necessity more pronounced. In Zamora, the Applicant paid household expenses, while her husband paid the mortgage, beyond which there was no pooling of resources.
The Respondent contends that the financial aspects of the relationship did not arise out of the necessity described in Zamora and Attiwill. Moreover, the parties live in the same house for reasons beyond financial, including practicality, safety and that they know each other (R3/7). There is no evidence before the Tribunal that the Applicant and Mrs Paral have made any moves to separate their financial arrangements.
On balance, the Tribunal regards the financial aspects of the Applicant’s relationship as indicative of being members of a couple.
Nature of the household
The Applicant states that some financial decisions by him contributed to the breakdown in his relationship with Mrs Paral. He expressed that these were decisions that she could not forgive him for (transcript/6-7). Since that point, they have lived separate lives (T6; T10). They have no children together, they have their own bedrooms and bathrooms, and generally do their own cooking. In this regard, they are more like housemates or co-tenants than members of a couple.
The nature of their household is not consistent with being members of a couple.
Social aspects of the relationship
The Applicant is still married to Mrs Paral, a function of the Applicant’s religious faith. However, there is no evidence before the Tribunal that they present as a couple to friends or family, beyond to various service providers as evidenced by their joint accounts.
The social aspects of the relationship are not indicative of being members of a couple.
Sexual relationship
Based on evidence from both the Applicant and Mrs Paral (T6/66; T6/77; T10/118) there is no sexual relationship between the two. This aspect is not indicative of membership of a couple.
Nature of people’s commitment to each other
As stated above, the Applicant and Mrs Paral are still married, reflecting the Applicant’s position on the sanctity of marriage, although, he has been divorced before (T1/13). However, the Tribunal has no evidence before it to suggest his conviction is not genuine. When asked if Mrs Paral shared his views, the Applicant stated (transcript/15):
Look, in the full honesty she will love to divorce me many times but, you know, it’s a very difficult situation and very difficult question, you know. If she would divorce me she definitely would have everything and I would have nothing. But, you know, I mean I don't want to end up on a street, that’s why we all try to be sort of civilised.
Nevertheless, the two remain in the same household, some six or seven years after the breakdown of their relationship. They have made no moves to separate their finances, to divorce or to live apart. This is indicative of some measure of commitment. Moreover, there is nothing to suggest that the nature of their relationship and their arrangements will change in the future.
The Respondent has pointed to three overseas trips the Applicant and Mrs Paral undertook between 2016 and 2019 (R3/8). In 2016, they travelled to visit the Applicant’s sick mother in the Czech Republic, they travelled to China in 2018 for health treatment for the Applicant and again to the Czech Republic in 2019 following the death of the Applicant’s mother and the winding up of her estate.
These trips appear to demonstrate a level of commitment and companionship, from two people who were married for over 30 years before the relationship broke down. Organising these trips would have involved a degree of planning and preparation, which would have required the Applicant and Mrs Paral to communicate at some length. It is also worth noting that the travel in question related to intimate family matters and the Applicant’s health. This travel is given considerable weight.
The Tribunal also notes that the Applicant has serious health issues and his wife occasionally assists him in attending medical appointments (transcript/9-10).
While quite clearly the level of commitment, companionship and emotional support falls short of what may exist in a more functional relationship, it is possible to discern a level of commitment to each other ‘for richer, for poorer’ and in ‘sickness and health’, which, on balance, reflects that of a couple.
CONCLUSION
The decision before the Tribunal involves applying a legal test to determine whether the Applicant is a member of a couple with Mrs Paral for the purposes of calculating the rate of age pension. While this may appear relatively simply, it also involves applying the test to a relationship between two people, a relationship that can be exceedingly complex and perhaps only truly understood by the two parties.
From the evidence before the Tribunal, it appears that after decades of marriage, at some point in 2013 or 2015, there was a breakdown in the Applicant’s relationship with Mrs Paral from which the relationship has never truly recovered. It is clear that the relationship is not especially functional, nor does it appear to give a good deal of joy to either the Applicant or Mrs Paral. However, the question remains whether they are a couple according to the test provided in the Act.
As French J recognised in Pelka, any decision will be attended with a degree of uncertainty. The Tribunal has sought to weigh a number of considerations. In many respects, this is a finely balanced issue: there are aspects to their relationship, such as the nature of their household and the social aspect of their relationship that weigh against being a member of a couple. That said, the financial aspect to their relationship suggests that of a couple. This may be driven by financial prudence and perhaps the inertia from over 30 years of marriage, but nevertheless they are financial partners, each contributing as they can to their shared financial pressures. The Tribunal also notes that there remains a considerable degree of commitment to each other, there is a measure of emotional support as evidenced by the overseas travel. There is also no evidence before the Tribunal that the current situation is likely to change.
Having regard to all these considerations, the Tribunal finds that the Applicant is a member of a couple with Mrs Paral for the purpose of calculating the rate of age pension.
Is there a special reason not to treat the Applicant as a member of a couple under s 24 of the Act?
Section 24(1) of the Act provides discretion to the Secretary to determine that a person who is legally married to another person is not to be treated as a member of a couple, for the purposes of section 4(2), if the Secretary is satisfied that some special reason exists in that particular case.
Section 24(1) of the Act provides that a person may be treated as not being a member of couple, where they are legally married to another person, not living separately or apart and if the Secretary is satisfied that the person should, for special reasons, not be treated as a member of a couple. If enlivened, the effect of this provision would be to treat the person as if they were single.
The Social Security Guide at 2.2.5.50 posits three considerations when assessing such circumstances:
·Is there a special reason to be considered in this couple’s circumstances?
·Is there a lack of being able to pool resources for a couple as a result of the circumstances?
·Is there financial difficulty as a result of the couple’s circumstances?
Deputy President Hack addressed this policy advice in Purdie and Secretary, Department of Social Services [2013] AATA 743 at [14]:
I turn then to the question of whether there is a special reason in the circumstances of this case to treat Mr Purdie as not being a member of a couple. The Secretary’s submission point to the departmental policy guide for the application of this discretion. That guide suggests that three questions need to be considered as part of an assessment of the application of s 24. Those questions are – is there a special reason to be considered in this couple’s circumstances? Is there a lack of being able to pool resources for the couple as a result of the circumstances? Is there financial difficulty as a result of the couple’s circumstances? For my part I remain unpersuaded that the section poses three questions. It seems to me the section poses only one question – is there a special reason to treat Mr Purdie in the present case as not being a member of a couple. It may well be that the inability to pool resources informs the policy reason for the insertion of s 24 in the Act but the requirement to consider financial difficulty, whilst no doubt relevant in many cases, is not something that I see dictated by the plain words of the statute.
Deputy President Hack’s approach has been adopted by the Tribunal in other comparable matters when considering the notion of special reasons, an interpretation which will be followed here. To that end, the question before the Tribunal is as follows: is there a special reason to treat the Applicant in the present case as not being a member of a couple?
The Applicant’s relationship with Mrs Paral is far from functional and common to many on an age pension, and his financial means are limited. However, both he and Mrs Paral pool their resources for mutual benefit, they live in a good suburb, with access to good amenities. On this basis, there are no reasons before the Tribunal which give rise to a special reason to justify why the Applicant should not be treated as a member of a couple.
DECISION
The Reviewable Decision being the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal dated 18 January 2021, is affirmed.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for the decision herein of Member S Barton
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Associate
Dated: 6 January 2022
Date of hearing: 3 November 2021 Applicant: In person Solicitors for the Respondent: Mr D Carroll
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