Peter Spelta and Secretary, Department of Social Services

[2015] AATA 425

[2015] AATA  425

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2014/6303 2014/6436
Re	Peter Spelta
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member Bernard J McCabe
Date	16 June 2015
Place	Brisbane

The decisions under review are affirmed.

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Senior Member Bernard J McCabe

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Disability Support Pension – DSP – rent assistance – where applicant sought review outside of 13 week period – information notices given under social security law –decisions under review affirmed.

LEGISLATION

Social Security Act 1991 (Cth) s 94

Social Security (Administration) Act 1999 (Cth) s 109

REASONS FOR DECISION

Senior Member Bernard J McCabe

16 June 2015

1. These proceedings arise out of two separate applications before the Tribunal.

2. The first application – No 6303 of 2014 – refers to Mr Spelta’s argument that he should have qualified for payment of the disability support pension (“DSP”) following a claim submitted on 21 August 2012. The claim was refused on 9 October 2012 because the Secretary decided Mr Spelta did not satisfy the so-called medical criteria in s 94 of the Social Security Act 1991 (Cth) (“the Act”). (Mr Spelta was subsequently granted the DSP following a further application in 2014.) But there is an obstacle to reconsidering Mr Spelta’s claim in 2012: s 109 of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”) prevents an applicant from recovering arrears if they do not promptly seek a review of the adverse decision in question. As a practical matter, that means the applicant cannot recover arrears even if the decision was wrong where the person applies for review later than 13 weeks after they were notified of that decision. That is a problem here because Mr Spelta waited until May 2014 to request a review of the adverse decision dated 9 October 2012.

3. The second application – No 6436 of 2014 – relates to the Secretary’s decision to discontinue the payment of rent assistance in November 2012 following a review. Mr Spelta apparently told the reviewer he was not paying rent at the time, although he says there may have been a misunderstanding about that. In any event, a decision was made that Mr Spelta was not entitled to rent assistance. Rent assistance is a not a separate category of payment: it is a supplement that augments the rate paid to the recipient of an existing payment (in this case, Newstart Allowance). The letter informing Mr Spelta of the reduction in the rate of Newstart Allowance following the withdrawal of rent assistance was dated 30 November 2012. Mr Spelta did not ask for that decision to be reviewed until early in 2014. The Secretary says s 109 of the Administration Act prevents recovery of arrears if this decision turns out to have been wrong.

4. Mr Spelta, for his part, says there is a problem with applying the time limits under s 109 to a case like his. He says – and I accept – the medical evidence establishes he was not always able to understand what he was being asked by Centrelink officers, and he did not always understand the effect of correspondence sent to him because of his medical condition. He says it is unfair that he be held to standards which are based on an assumption that he would promptly understand and challenge any adverse decision when the very fact of his condition – the reason why he needed help from Centrelink in the first place – made it difficult for him to understand the process.

5. Sadly for Mr Spelta, the legislation does not leave any alternative but to affirm the two decisions under review. Having said that, in each case, I am not satisfied from the evidence before me that the respondent actually made mistakes in relation to the original decisions. I explain my reasons below.

   Application No 6303 of 2014: the disability support pension

6. Mr Spelta made a claim for the DSP on 21 August 2012. He was suffering from serious medical problems at the time: while he spoke of experiencing a number of long term conditions, he had recently been diagnosed with major depression by Dr Muir. Dr Muir’s medical report is set out in exhibit three at pp 76-78. That report confirmed Mr Spelta was very sick at the time but it was relatively optimistic about the prognosis: it suggested Mr Spelta was likely to improve with treatment over the next 3-24 months. The report also foreshadowed a number of treatment options that were to be attempted. The job capacity assessor concluded in a report dated 5 September 2012 that it was impossible at that point to assign an impairment rating as the condition had not been fully diagnosed, treated and stabilised.

7. Mr Spelta was advised of the decision in a letter dated 9 October 2012. The letter included advice about his appeal rights if he were dissatisfied with the decision and warned it was important that review be sought within 13 weeks. Mr Spelta did not ask for the decision to be reconsidered until 2014 after he had made a fresh application for the DSP which was successful.

8. Mr Spelta says he should have succeeded in his original claim for DSP and he wants back-payment for the period August 2012 until he was granted the DSP in 2014.

9. The material before me suggests Mr Spelta was not eligible for the DSP when he applied in August 2012. I start from the proposition that I must have regard to material that sheds light on his condition at the time of the application and in the 13 week period that followed. Dr Muir’s report was the most important evidence available at the time. It confirms Mr Spelta’s condition was not fully treated and stabilised during the assessment period. That is significant because the impairment tables that must be used to assess the level of impairment require that the identified condition be fully diagnosed, fully treated and fully stabilised before an impairment rating can be assigned.

10. Mr Spelta’s condition was diagnosed in August 2012 and his treatment had only just commenced during the assessment period. It was almost inevitable the decision-maker would conclude an impairment rating could not be assigned. Dr Muir’s report also made it clear he was sanguine about the chances of Mr Spelta’s condition improving over the course of the next two years, which casts doubt on whether the applicant had a continuing inability to work for the purposes of s 94 of the Act.

11. Dr Muir may have been unduly optimistic about Mr Spelta’s prognosis. Dr Alroe, the applicant’s current treating doctor, effectively says as much in a letter date 28 November 2014. Dr Alroe says the applicant has been totally disabled since the time of his diagnosis, and Dr Muir would have realised that in time. Dr Alroe may be right about that: Mr Spelta has not improved as Dr Muir originally hoped. But we are not entitled to the benefit of hindsight. The law requires that we make an assessment having regard to what was known (or knowable) at the time. That evidence suggests there were grounds for optimism, and it was too early to tell at that point whether the applicant’s condition would persist.

12. But even if I thought the decision-maker was wrong about all that, s 109 of the Administration Act prevents the Tribunal from correcting the decision in this case. Section 109 effectively creates a Statute of Limitations in respect of social security decisions: once informed of an adverse decision, an applicant is expected to act on it promptly and ask for reconsideration. The reconsideration process includes review by an authorised review officer, and potentially an appeal to the Social Security Appeals Tribunal and the Administrative Appeals Tribunal. It is a very thorough process. But if an applicant delays for more than 13 weeks after being notified of the decision, the decision-maker cannot award the payment of arrears. If there was a mistake, it can only be corrected with effect from the date of the application for review.

13. Mr Spelta waited until February 2014 to ask for a review of the 2012 decision to refuse the DSP. The period of delay is more – indeed, substantially more – than the 13 week limitation period. By the time he requested a review, he was in receipt of the DSP following his subsequent application. He is not eligible to be paid arrears even if I concluded the original decision was wrong. It follows the respondent’s decision must be affirmed.

    Application No 6436: rent assistance

14. Mr Spelta’s serious health problems in 2012 were compounded by an accommodation crisis. Late in 2012, he recalled visiting Centrelink to ask about assistance with his housing. He says he was not given a sympathetic ear. He had been receiving rent assistance during this period but he was in danger of becoming homeless. He said he was taken in to the home of a friend, who was a nurse. He said they agreed to an arrangement: he would pay over half of his fortnightly benefits and perform various chores in return for accommodation. The arrangement was obviously a fluid one: Mr Spelta said the friend would often return the money he paid over so he could shop for them both. Mr Spelta said he paid rent in the form of an amount of cash together with irregular payments in kind.

15. On 30 November 2012, Mr Spelta was asked to provide information for a report into his situation in order to determine his continued eligibility for various benefits. The “field review” was conducted by a Centrelink officer. Mr Spelta was randomly selected for the review. The report is included in exhibit one at pp 39ff. An entry on the first page (exhibit one at p 39) suggests the review was conducted at a Centrelink office. It was signed by the applicant although it does not appear as if he filled out the report himself: that was apparently done by the Centrelink officer. Question 10 of the report asks whether the applicant paid rent or incurred other accommodation costs; the applicant answered “no”. In answer to question 11, he confirmed he received the accommodation for free although it was noted he lived on the property in a “donga” and paid for food (exhibit one at pp 43-44). A further report was prepared on 20 December 2012. It seems it was prepared after information was received about the amount of money Mr Spelta was receiving from other sources. That report (reproduced in exhibit one at pp 69ff) covered the same ground as the earlier field report. The second report confirmed “Customer is a non-homeowner and does not pay any rent” (exhibit one at p 69).

16. Mr Spelta was informed by letter of the adjustment to his rate of payment on 30 November 2012. The adjustment referred to in the letter reflected the decision that he was no longer entitled to rent assistance because he was not paying rent. Unfortunately, the letter did not expressly refer to the decision in relation to rent assistance: it simply referred to the reduced rate of payments from that date. The letter also included advice about review rights and warned that Mr Spelta should seek review within 13 weeks if he disagreed with the decision. Mr Spelta did not seek review within the 13 weeks that followed.

17. The material before the Centrelink decision-maker suggests the decision under review was correct. An applicant cannot get rent assistance if he or she does not pay rent, and Mr Spelta had told Centrelink he was not paying rent. Mr Spelta now says that is not right: he was in fact paying rent. His failure to communicate that fact to Centrelink was because he was so ill at the time. Although he does not recall his interactions with Centrelink, he says he was in such poor health he was not in a position to provide accurate information or seek a review. He adds that Centrelink should have been aware of his difficulties.

18. It is possible the decision might have come out differently if the Centrelink decision-maker had been aware of the details of the arrangement between Mr Spelta and his friend – although there is also some evidence suggesting Mr Spelta’s friend was unwilling to provide the information out of fear that she would be penalised for her kindness by cynical tax authorities when she sold the property. Unfortunately, it is now too late to do anything about that as more than 13 weeks have passed since the date of the decision to lower the rate of Newstart payments. Section 109 of the Administration Act prevents me from ordering a payment of arrears even if I were to be satisfied the decision was wrong. It follows the decision under review must be affirmed.

    CONCLUSION

19. As I have explained, both of the decisions under review must be affirmed. I should add one note, however. Mr Spelta made the point that it was unfair that someone in his position – who was applying to Centrelink for assistance in light of a serious psychiatric condition – should be expected to respond to generic correspondence from Centrelink, or be dealt with like other customers who are able to represent their own interests and answer questions more effectively.

20. Section 109 of the Administration Act makes no allowance for persons who are unable to respond to an adverse decision within 13 weeks of notification by reason of a mental illness. Absent a change in the legislation, there is little that can be done about that limitation. But it may be possible to do something about the quality and presentation of the information contained in notices issued under the legislation. When it was decided Mr Spelta was no longer entitled to rent assistance, he was not formally told that in the letter of notification. He was merely told of a change in the rate. It would be helpful if Centrelink identified in such a case why the rate was changed. It was unfortunate that Centrelink did not expressly refer to the loss of entitlement to rent assistance so that anyone – such as a carer – could readily understand the decision and assist the applicant to do something about it.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe

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Associate

Dated 16 June 2015

Date(s) of hearing	18 May 2015
Applicant	In person
Solicitors for the Respondent	Mr R McQuinlan, Department of Human Services