PIDUN and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2010] AATA 228
•31 March 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 228
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/2253
GENERAL ADMINISTRATIVE DIVISION ) Re FREDERICK PIDUN Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member R W Dunne Date31 March 2010
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
R W DUNNE
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – applicant registered for the Pension Bonus Scheme upon turning 65 – claim for Age Pension and Pension Bonus refused because of assets level – after ceasing work, further claim for Age Pension and Pension Bonus – part Age Pension granted – whether qualified for Pension Bonus at time of claim or 13 weeks thereafter – further claim for Pension Bonus refused as too late – decision affirmed
Social Security Act 1991 ss 43, 92A, 92C, 92H, 92L, 92N, 92P(1), 92Q, 92U-93B
Social Security (Administration) Act 1999 ss 17, 22, 23, 25Guide to Social Security Law
Jones and Secretary, Department of Family, Housing, Community Services and Indigenous Affairs [2008] AATA 413
REASONS FOR DECISION
31 March 2010 Senior Member R W Dunne introduction
1. Frederick Pidun (“applicant”) turned 65 years of age on 16 July 2002 and qualified for the Age Pension. On the same day, he registered as an accruing member of the Pension Bonus Scheme (“PBS”). He was still working and continued to work until 25 June 2006. On 26 June 2006, he attended a Centrelink office and inquired about receipt of the Age Pension and the Pension Bonus. On 3 July 2006, he was advised by Centrelink (“respondent”) that he was not eligible for the Age Pension, and therefore the Pension Bonus, because his assets were in excess of the maximum level for the Age Pension. On 8 August 2007, in anticipation of being eligible for the Age Pension after the commencement of legislative changes to the qualifying assets level, he lodged another claim for the Age Pension and the Pension Bonus. On 14 September 2007, he was granted a part Age Pension, but the Pension Bonus was refused on the ground that his claim for the Bonus was lodged too late. Mr Pidun requested an internal review of the decision, which was affirmed by the original delegate and an Authorised Review Officer.
2. The decision of the Authorised Review Officer was later affirmed by the Social Security Appeals Tribunal (“SSAT”) and, on 26 May 2008, Mr Pidun applied to this Tribunal for review of the decision of the SSAT. At the hearing, he represented himself and Mr Anthony Parker (from Centrelink Advocacy Branch) represented the respondent. The Tribunal received into evidence the T documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Exhibit R1).
issue
3. The issue in this matter is whether Mr Pidun qualified for the Pension Bonus under the Social Security Act 1991 (“Act”) and the Social Security (Administration) Act 1999 (“Administration Act”) on 25 June 2006, or a period of 13 weeks thereafter.
law and policy
4. The PBS is a voluntary scheme intended to reward people who defer claiming the Age Pension and stay in the workforce. The law in relation to the scheme is found in the Act and the Administration Act. A simplified outline of the PBS is contained in s 92A of the Act, and reads:
“92A Simplified outline
The following is a simplified outline of this Part:
·A person who qualifies for an age pension but defers claiming that pension may be able to get a single lump-sum pension bonus.
·A person who wants to get a pension bonus must register as a member of the pension bonus scheme.
·To get a pension bonus, a person must accrue between 1 and 5 bonus periods while deferring age pension.
·Generally, a bonus period runs for 1 year.
·To accrue a bonus period, the person must pass the work test for that period.
·To pass the work test for a year, either the person, or the person’s partner, must gainfully work for at least 960 hours during that year.
·The amount of a person’s pension bonus depends on the number of accrued bonus periods and the person’s annual rate of age pension. A person may get a bigger bonus by accruing more bonus periods.”
5. The requirements for qualification for the Pension Bonus are set out in s 92C of the Act, which relevantly reads:
“92C Qualification for pension bonus
A person is qualified for a pension bonus if:
(a) both:
(i)the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and
…
(b)the person has not received an age pension at any time before making a claim for the pension bonus; and
(c)the person is registered as a member of the pension bonus scheme; and
(d)the person has accrued at least one full-year bonus period while registered as a member of the pension bonus scheme; and
…”
6. The qualification for the Age Pension is set out in s 43 of the Act, which provides that a person is qualified for the Age Pension if they have reached pension age, amongst other things. The timing of an application and registration for the Pension Bonus is contained in s 92H, which appears in Part 2.2A of the Act. Section 92H relevantly reads:
“92H Timing of application and registration
Age pension qualification date on or after 1 July 1998
(1)If a person’s date of qualification for the age pension occurs on or after 1 July 1998:
(a)the person must lodge an application during the period that begins 13 weeks before the person’s date of qualification for the age pension and ends 13 weeks after that date; and
(b)if registration occurs as a result of an application lodged within that period—the registration takes effect on the person’s date of qualification for the age pension.
Note: The Secretary may extend the period: see subsection (3).
…
Late applications
(3)The Secretary may extend the period within which a person must lodge an application. If registration occurs as a result of an application lodged during an extended period, the registration takes effect:
(a) on the date on which the application is lodged; or
(b)if the Secretary decides that it should take effect on another date—on that other date.
(4)The Secretary must not make a decision to extend the period within which a person must lodge an application unless, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period:
(a)the person would have been a non-accruing member for all of the pre-application period; or
(b) both:
(i)the person would have been an accruing member for some or all of the pre-application period; and
(ii)the person would have passed the work test for each test period that is applicable to the person.
Note 1: Pre-application period is defined by subsection (5).
Note 2: Test period is defined by subsection (6).
(5)For the purposes of this section, the pre-application period is the period beginning on:
(a)in the case of a person whose date of qualification for the age pension occurs on or after 1 July 1998—the person’s date of qualification for the age pension; or
(b)in the case of a person whose date of qualification for the age pension occurs before 1 July 1998—1 July 1998;
and ending on the date on which the person lodged the application.
(6) For the purposes of this section, to work out what is a test period:
(a)identify the overall accruing period, which is that part of the pre-application period for which, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period, the person would have been an accruing member of the scheme;
(b)if the overall accruing period is 365 days or less—the overall accruing period is the only test period;
(c)if the overall accruing period is longer than 365 days—each of the following periods is a test period:
(i)the full-year period beginning at the start of the overall accruing period;
(ii)if 2 or more succeeding full-year periods are included in the overall accruing period—each of those full-year periods;
(iii) the remainder (if any) of the overall accruing period.
…”
7. A claim for the Pension Bonus must be made when a person claims the Age Pension and is contingent upon the person receiving the Age Pension. Section 17 of the Administration Act deals with the requirements regarding claims for the Pension Bonus and relevantly provides:
“17 Special requirements regarding claims for pension bonus
(1) A claim for pension bonus must be:
(a)attached to a proper claim made by the person for age pension and lodged together with that claim for age pension; or
…
(2)A claim for pension bonus may be made even though it is not certain whether the person will start to receive an age pension at or after the time when the person makes the claim. The claim has effect as a claim that is contingent on the person receiving an age pension.
…”
8. As can be seen from paragraph 6 above, Part 2.2A of the Act deals with the Pension Bonus. Division 4 of that Part refers to bonus periods, which are the periods in which the Pension Bonus may be accrued, and specifies the manner in which the bonus periods can be accrued. Bonus periods may be a full year or a part year. Importantly, bonus periods can only be accrued if they are consecutive, or separated only by a period of non-accruing membership.
9. The terms “accruing membership” and “non-accruing membership” are defined in ss 92N, 92P and 92Q. Section 92L of the Act provides that membership of the PBS is cancelled if a person’s claim for the Pension Bonus is determined.
10. Sections 22, 23 and 25 of the Administration Act stipulate time limits within which a person may lodge a claim for the Pension Bonus, usually 13 weeks immediately following the end of the person’s last bonus period. The Guide to Social Security Law (“Guide”) contains policy guidelines about the operation of the PBS. Part 3.4.7.80 of the Guide, which is headed “Claiming the PBS Bonus” states:
“Summary
The bonus can be claimed only after the member completes the first full bonus year. The bonus is NOT payable without a claim. The claim for a pension bonus must be lodged together with the claim for Age.
…
When MUST the bonus be claimed?
A member of the scheme MUST claim the pension bonus if they:
·lodge a claim for Age, OR
·fail to accrue a bonus period – that is, they fail the work test, AND
·are NOT a non-accruing member of the scheme.
A member who accrues some bonus periods and then fails to accrue a full year bonus period without claiming, can never be paid a pension bonus.
Explanation: Bonus periods must be consecutive, so a member of the scheme must claim their bonus as soon as they fail to accrue a full year bonus period. This may not be the case if they have a partner who is continuing to accrue a bonus.
A person who claims Age and PBS and whose claim for Age is rejected cannot receive a bonus EVER unless Age becomes payable within 13 weeks of failing the PBS work test or within 13 weeks of the end of a non-accruing period.”
11. A registered member of the PBS is an accruing member, unless they are in a defined non-accruing period or a preclusion period. Only periods of accruing membership contribute to bonus years and are used to calculate the bonus payable. Accruing members must meet the “work test” for each bonus period. The work test is contained in ss 92U to 93B of the Act. If a person is not accruing the Pension Bonus because they are not meeting the work test, they are in a defined non-accruing period or in a preclusion period. They must then claim the Age Pension and the Pension Bonus within 13 weeks of ending the final defined non-accruing period. In a full year bonus period, to satisfy the work test, the recipient must perform “gainful work” for at least 960 hours during the period. Periods of leave (whether paid or not) do not count towards meeting the work test.
background and evidence of applicant
12. The factual background to this case is not in dispute and appears in the reasons for decision of the SSAT. The more important facts appear in paragraph 1 of these reasons. Mr Pidun initially applied for the Age Pension the day after he stopped working, but was advised that he would not pass the assets test. He was told by Centrelink that legislative amendments were going to come into effect in September 2007 and that he could re-apply for the Age Pension at that time. He did re-apply after the amendments to the assets test and was granted part Age Pension, but was told by Centrelink that he could not be paid the Pension Bonus as he had applied too late after he had stopped working. Mr Pidun thought it was unfair that he could not be paid the Pension Bonus. He believed he had complied with all the relevant conditions by registering as an accruing member, working past the age of 65 and applying for the Age Pension and the Pension Bonus straight after he had stopped working. He said he had satisfied the work test and had non-accruing membership, after he stopped working, through a carer’s position he held for his partner. He received Carer Payment in respect of this position.
13. Mr Pidun told the Tribunal that he had claimed compensation as part of the Compensation for Detriment caused by Defective Administration and as an Act of Grace payment. However, there was no evidence of defective administration by Centrelink and his claims were rejected. He said he was disillusioned by the PBS and the fact that he had missed out on the Pension Bonus. If he had worked after 25 June 2006, he would have been eligible for the Pension Bonus in August/September 2007 when he became entitled to the Age Pension. He said he believed Centrelink should have advised him to get a job after he retired in order that he would be eligible for the Pension Bonus when he eventually received the Age Pension.
consideration
Is a Pension Bonus payable to the applicant?
14. Mr Pidun met the age requirement for the Age Pension by turning 65 on 16 July 2002. He registered and was accepted as a member of the PBS on 16 July 2002. He passed the required work test and accrued a full three years’ bonus periods from 16 July 2002 to 16 July 2005. He then accrued another bonus period from 17 July 2005 to 25 June 2006. While he was in employment he passed the work test and was an accruing member of the PBS. When he stopped working on 25 June 2006, he became a non-accruing member of the PBS because he failed the work test. Having stopped working, on 26 June 2006 he enquired about claiming the Age Pension and the Pension Bonus. However, he was then not eligible for the Age Pension and, therefore, the Pension Bonus because of the level of his assets.
15. Section 17 of the Administration Act provides that the claim for Pension Bonus “has affect as a claim that is contingent on the person receiving an age pension”, and s 92C(a)(i) of the Act also requires that the person starts to receive the Age Pension at or after the time when the person makes a claim for the Pension Bonus. The Tribunal notes that Mr Pidun did not qualify for the Age Pension (or the Pension Bonus) within the period of 13 weeks of making his claim on 26 June 2006. It follows that he did not qualify for the PBS and the decision to reject his Pension Bonus claim in 2006 was correct.
16. Mr Pidun again claimed the Age Pension and the Pension Bonus on 8 August 2007, having stopped working over 12 months before. He received a part Age Pension, but his application for the Pension Bonus was rejected. Mr Pidun argued that he had applied for PBS registration within 13 weeks of 25 June 2006. However, Centrelink had no record of the claim but, even if he had done so, he would not have been eligible for the Pension Bonus as his assets level for the Age Pension was too high.
17. Mr Pidun’s membership of the PBS became non-accruing immediately after the end of his last bonus period, which was 25 June 2006, because he no longer met the work test from that time. As such, he needed to claim the Pension Bonus within 13 weeks of that date (s 25 of the Administration Act). However, had he lodged a claim for the Pension Bonus within the relevant 13 week period after 25 June 2006, the claim would have been rejected because, even at that date, the level of his assets for the Age Pension was too high.
18. Mr Pidun contended that he continued to work after 25 June 2006 in a carer’s position for his partner. On this basis, he says his membership of the PBS would have remained accruing as he completed at least another 960 hours per year of gainful work. In the Tribunal’s view, gainful work means work for financial gain or reward, whether as an employee, a self-employed person or otherwise (see Jones and Secretary, Department of Family, Housing, Community Services and Indigenous Affairs [2008] AATA 413). As his involvement as a carer for his partner would not satisfy this requirement, he would not satisfy the work test during the period from 25 June 2006 until 8 August 2007 when he lodged his claim for the Age Pension and the Pension Bonus.
19. Whilst Mr Pidun’s claim for Pension Bonus was unsuccessful, the Tribunal sympathises with his position. The PBS is complex and technical and, despite Mr Pidun continuing to work for nearly four years after he turned 65, it is unfortunate that he did not continue to engage in gainful work after 25 June 2006 and until he applied for the Age Pension in August 2007.
decision
20. For the reasons outlined above, the decision under review is affirmed.
I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne
Signed: ............J Coulthard.........................................
AssociateDate of Hearing 26 November 2009
Date of Decision 31 March 2010
Advocate for the Applicant Self-representedAdvocate for the Respondent Mr A Parker
Centrelink Advocacy Branch
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