Pennell and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2010] AATA 787
•14 October 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 787
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/2120
GENERAL ADMINISTRATIVE DIVISION ) Re Kymberley Pennell Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Senior Member A K Britton Date14 October 2010
PlaceSydney
Decision The decision under review is affirmed. ....................[SGD]...................
Senior Member
CATCHWORDS
SOCIAL SECURITY - disability support pension – transitional provisions – where transitional provisions maintained pre-amendment rate of DSP payments provided a person continued “without a break” to receive DSP payments – where applicant’s rate of DSP temporarily Nil
Social Security Act 1991 (Cth) — ss 17, 1064; Schedule 1A, cl 146
Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009
Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and de Waal [2009] AATA 635
REASONS FOR DECISION
14 October 2010 Senior Member A K Britton 1. Mr Kymberley Pennell has been in receipt of the disability support pension (DSP) since 2000 following injuries at work which left him significantly impaired. In 2009, Parliament made a number of changes to the income test applying to the disability support pension and other pensions. Transitional arrangements were made for persons such as Mr Pennell who as at 19 September 2009 were receiving the disability support pension. Under those arrangements where a person “continues (without a break) to receive [DSP] payments”, their pension rate must be calculated according to the rules that applied before 20 September 2009, or those that applied from that date, whichever gives the higher amount.
2. Centrelink calculated Mr Pennell’s DSP rate to be Nil for the fortnight commencing 6 November 2009. Centrelink also decided that that Nil payment meant that from 6 November 2009, Mr Pennell was no longer entitled to the benefit of the transitional provisions as he had not been receiving DSP “without a break” from 19 September 2009. On review that decision was affirmed by the Social Security Appeals Tribunal.
3. Mr Pennell now seeks review by the Administrative Appeals Tribunal of that decision. In this review the issues to be determined include:
1. What was Mr Pennell’s rate of pension for the period, 6 November 2009 to 19 November 2009?
2. If Nil, was the subsequent decision to calculate Mr Pennell’s rate of pension under the new rules which came into effect on 20 September 2009, the correct decision?
3. If so, does the AAT acting as substitute decision maker have power to vary that decision and, if so, should that power be exercised?
4. The parties requested that the review be determined without a hearing. Being satisfied that the issues for determination could be adequately dealt with in their absence, I proceeded to determine Mr Pennell’s application “on the papers” (see s 34J of the Administrative Appeals Tribunal Act 1975 (Cth)).
Rate of pension
5. A key issue raised in this review is whether Centrelink correctly calculated Mr Pennell’s DSP rate as Nil for the fortnight commencing 6 November 2009. This is relevant because that calculation was the trigger for the subsequent decision that Mr Pennell was no longer entitled to the benefit of the transitional arrangements.
6. Mr Pennell’s pension rate for the fortnight commencing 6 November 2009 was required to be calculated by applying — the rules as they existed immediately prior to 20 September 2009, plus an increase, or, those that came into effect from 20 September 2009 — whichever gave the higher amount: see Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 (“the Amending Act”) and cl. 146(3) of the Social Security Act 1991 (Cth) (“the Act”).
7. Section 117(a) of the Act provides that a person’s rate of disability support pension is to be worked out using the Pension Rate Calculator at the end of s 1064 of the Act. Section 1064-A1 sets out the method by which a person’s maximum rate of pension is to be calculated. Where as in this case, a person is a member of a couple, in calculating that rate, the couple’s ordinary income must be taken into account: s 1064-E2 of the Act.
8. Mrs Pennell disclosed to Centrelink that for the fortnight commencing 6 November 2009 she had earned $792. Mrs Pennell worked as a casual and this amount was significantly more than her usual income. She had accepted additional work to supplement the family income over the Christmas period.
9. The section 37 documents [Administrative Appeals Tribunal Act 1975] did not contain a breakdown of the figures used to calculate Mr Pennell’s rate for the fortnight commencing 6 November 2009. Accordingly, I requested that Centrelink prepare a document setting out the assumptions employed to calculate Mr Pennell’s pension rate for that fortnight. Both parties declined my invitation to comment on the calculation and figures provided by Centrelink. Having reviewed those figures, I am satisfied that Centrelink had correctly calculated Mr Pennell’s rate of pension as Nil.
Consequence of nil payment
10. Set out in cl 146 of sch. 1A of the Act, the transitional provision provides that the rate payable to a person who is covered by that provision will be the rate payable under the pension rules that applied immediately prior to 20 September 2009 — that is, those rules which would have applied had Schedules 6 and 7 to Amending Act not been made — or those that applied from that date, whichever gives the higher amount: cl 146(3) and (4). This provision only applies if the person had been receiving DSP or one of the payments listed in cl 146(1) on 19 September 2009 and continues (without a break) to receive the DSP or one of those payments: cl 146(1).
11. As noted, Mr Pennell’s pension rate was assessed to be Nil for the period 6 November 2009 to 19 November 2009. Nonetheless, he remained eligible for DSP and received a pension payment the following fortnight.
12. Whether cl 146 applied to Mr Pennell after 6 November 2009 turns on whether after 20 September 2009 he “continue[d] (without a break) to receive [the DSP]”. To answer that question, it is necessary to consider the effect of the Nil payment in the scheme of the Act.
13. The disability support pension is paid in fortnightly instalments in arrears: s 43 of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”). The method of calculating the periodic payment of social security payment is set out in s 43(3) of the Administration Act. Where the rate of disability support pension is calculated to be Nil, s 98(1) of the Act provides that the disability support pension is not “payable” to a person. Disability support pension was therefore not “payable” to Mr Pennell for the period 6 November 2009 to 19 November 2009.
14. In Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and de Waal [2009] AATA 635, Deputy President Jarvis considered an analogous situation to that raised by Mr Pennell’s application. Under s 900(2)(a) of the Act, a person qualified for the “Economic Security Strategy” payment — a one-off payment payable to persons receiving a disability support pension (or other social security payment) on 14 October 2008.
15. The Deputy President concluded that Mr de Waal was not entitled to an ESP payment because he was not “receiving” DSP in respect of 14 October 2008. The Deputy President decided that the word “receiving” in the context of s 900(2)(a) should be given its ordinary English meaning, that is “to take into one’s hand or one’s possession (something offered or delivered)” (The Macquarie Dictionary, Revised Third Edition, 2001). Applying this meaning, the Deputy President concluded at [37] that Mr de Waal did not “receive” a payment in this sense, because no payment was made to him with respect to 14 October 2008.
16. The Deputy President referred to the definition of “receive” in ss 23(2) and 23(4) of the Act:
(2) For the purposes of this Act (other than section 735), a person is taken to be receiving a payment under this Act from the earliest day on which the payment is payable to the person even if the first instalment of the payment is not paid until a later day.
…
(4) For the purposes of this Act, a person is taken to be receiving a social security payment until the latest day on which the payment is payable to the person even if the last instalment of the payment is not paid until a later day.
17. He commented on the interrelationship between those provisions and s 900(2)(a):
31. [I]t must be borne in mind that ss 23(2) and (4) are deeming provisions. They are necessary because there will inevitably be some delay between the date when a person first becomes entitled to a payment under the Act and when that person receives the first payment; the payment will be back-dated to the start day, being the earliest day on which the payment is payable. Similarly, s 43(1)(b) recognises that instalments of payments are paid in arrears, and so by the deeming provisions of s 23(4), a person is taken to be receiving the payment until the latest day on which it is payable, rather than until the actual date of payment of the last instalment. ….
32. Sections 23(2) and (4) accordingly provide for the duration of the period during which a person is taken to be receiving a payment under the Act. The subsections expressly recognise that payments are to be made by instalments, consistently with s 43 of the Administration Act.
33. Sections 23(2) and (4), in defining the period during which a person is taken to be receiving a payment, are conditional upon the payment being “payable” to the person. Section 98 of the SS Act provides that DSP is not payable to a person if his or her DSP rate would be nil. It follows from the ordinary meaning of the words used in s 900(2)(a), as aided by the interpretation provisions of ss 23(2) and (4), that Mr de Waal was receiving DSP continuously from his start day, that is 7 February 2006, until 13 October 2008. There were then two successive 14-day instalment periods during which his DSP entitlement was reduced to nil as a result of his declared earnings. By virtue of s 98 of the SS Act, DSP was not payable in respect of these two instalment periods, and applying the ordinary meaning of ss 23(2) and (4) of the SS Act, he was not taken to be receiving DSP in respect of those periods. The first of these instalment periods included the eligibility day, 14 October 2008, and accordingly, in my opinion, he did not “receive” DSP in respect of that day.
18. The Deputy President’s reasoning relies on a number of well-established principles of statutory interpretation. In my view, it applies equally to the meaning of the term “to receive” in cl 146(1)(b). Applying that approach, it could not be maintained that as at 20 November 2009 Mr Pennell was a person who “continues (without a break) to receive the DSP”. As a consequence of the Nil payment during the fortnight commencing 6 November 2009, there was a break in continuity of Mr Pennell receiving DSP payments. As a result, cl 146 does not apply to him, and his pension rate from that date must be assessed under the pension rules introduced by the Amending Act.
Discretion to vary the decision
19. Mr Pennell asserts that Centrelink provided him with inaccurate information about the transitional arrangements which he relied upon to his detriment. On his account, his family has experienced a significant loss of income as a result of his pension rate being assessed under the new rules. He estimates this loss to be about $4000 pa. He points out that this has occurred at a time when his health is poor and his functional capacity is in decline.
20. He contends that he should not be subject to the new rules given the assurances provided by Centrelink that he would not be worse off under the changes introduced in September 2009. He points to the following extract contained in the Centrelink information sheet attached to correspondence received by him on 7 September 2009:
A new transitional rate will apply to protect existing pensioners who would otherwise have had a reduction in their payment. These pensioners will receive an increase in their pension and will remain on this transitional rate until they are no longer worse off under the new rules.
21. A Centrelink fact sheet, also prepared in September 2009, read as follows:
The transitional rate of pension is a special rate of pension for people who do not benefit immediately from the [pension reform] changes.
22. I agree with Mr Pennell’s arguments about the shortcomings of this information. It is at best ambiguous. Nonetheless, I do not have power to vary the operation of cl 146 of Schedule 1A of the Act. While I have considerable sympathy for the position Mr Pennell now finds himself in, the decision made by the respondent Secretary that he was no longer entitled to benefit of the transitional provisions introduced by the Amending Act was nonetheless correct, and must therefore be affirmed.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton.
Signed: ...............................[SGD]................................
Associate to Senior Member BrittonDate of Hearing: On the Papers
Date of Decision: 14 October 2010
The Applicant was represented by Ms K Pennell.
Solicitor for the Respondent: Centrelink Advocacy Branch
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