Pilfoot and Secretary, Department of Social Services (Social services second review)
[2017] AATA 905
•19 June 2017
Pilfoot and Secretary, Department of Social Services (Social services second review) [2017] AATA 905 (19 June 2017)
Division:GENERAL DIVISION
File Number2017/0444
Re:Eric Pilfoot
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Member D K Grigg
Date:19 June 2017
Place:Brisbane
The decision under review is affirmed.
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Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – age pension – whether member of a couple – consideration of special circumstances and whether they exist – decision under review affirmed
LEGISLATION
Guide to Social Security Law
Social Security Act 1991CASES
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531; 53 ALD 277
Cocks v Centrelink [2000] FCA 1248
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084
Purdie and Secretary, Department of Social Services [2013] AATA 743
Secretary, Department of Families, Housing, Community Services & Indigenous Affairs and Nicolaas [2009] AATA 416REASONS FOR DECISION
Member D K Grigg
19 June 2017
Mr Pilfoot has been a recipient of the aged pension since 7 March 2009.[1]
[1] Exhibit 1, T Documents, T21, page 104, Centrelink records.
The rates at which people (who are not permanently blind) are paid an aged pension is determined using the Pension Rate Calculator A at the end of section 1064 of the Social Security Act 1991 (Cth) (Act).[2] The maximum basic rate payable varies depending upon a person’s family situation. The maximum basic rate payable to a member of a couple is less than that of a person who is not a member of a couple.[3]
[2] Section 55(a), Act.
[3] Section 1064-B1, Act.
Until 28 March 2016, Mr Pilfoot was paid at the rate applicable to a single person. However, because Mr Pilfoot was now in a de facto relationship, his rate of payment was changed to that of a couple.
In February 2016, Ms Erlinda Tugade, Mr Pilfoot’s partner, a resident of the Philippines, was granted a Partner (provisional) (class UF) Partner (Provisional) (subclass 309) visa by the Department of Immigration and Border Protection.[4] Mr Pilfoot contacted the Department of Human Services (Centerlink) on 8 July 2016 enquiring about moving overseas and informed them that he had been in a relationship with Ms Tugade since March 2016.[5]
[4] Exhibit 1, T Documents, T6, page 47, Notification of grant of partner visa dated 23 February 2016; T7, pages
48-53, Visa Grant
Notice dated 23 February 2016.
[5] Exhibit 1, T Documents, T21, page 110, Centrelink records.
On 20 July 2016 Centrelink requested Mr Pilfoot provide information about his relationship.[6] As a result of this request Ms Tugade completed a partner information form and declared that she commenced living with Mr Pilfoot on 23 February 2016.[7]
[6] Exhibit 1, T Documents, T8, page 54, Centrelink Request for Information dated 20 July 2016.
[7] Exhibit 1, T Documents, T9, pages 55-66, Module P: Partner Information form declared by Ms Tugade on
22 July 2016.
Mr Pilfoot requested that, although in a relationship, his rate of payment be assessed as a single under section 24 of the Social Security Act 1991 (Cth) (“Act”), because Ms Tugade was unable to work and he was supporting her financially.[8]
[8] Exhibit 1, T Documents, T10, page 67, Statement of Mr Pilfoot dated 22 July 2016.
Section 24 relevantly provides:
(1) Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
(2) Where:
(a) a person has a relationship with another person, whether of the same sex or a different sex (the partner); and
(b) the person is not legally married to the partner; and
(c) the relationship between the person and the partner is a de facto relationship; and
(d) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
As a result of Mr Pilfoot’s request Centrelink requested additional information regarding assets in the Philippines and Mr Pilfoot’s finances be provided.[9] The requested information was provided by Ms Tugade on 9 August 2016.[10]
[9] Exhibit 1, T Documents, T11, pages 68-69, Centrelink Request for Information dated 3 August 2016.
[10] Exhibit 1, T Documents, T12, pages 70-77, Module R: Real Estate Details form declared by Ms Tugade on
9 August 2016.
As a result of the change in Mr Pilfoot’s relationship status Centerlink determined on
23 August 2016 that Mr Pilfoot’s pension should be calculated at the couple rate and not the single rate on the basis that Mr Pilfoot and his partner were not in financial difficulty.[11]
[11] Exhibit 1, T Documents, T13, pages 78-79, Centrelink letter to Mr Pilfoot dated 23 August 2016.
Mr Pilfoot argues that despite his relationship his aged pension should still be calculated at the single rate pursuant to section 24 of the Act.
Claim History
As a result of Centrelink’s decision, Mr Pilfoot sought a review by an Authorised Review Officer (“ARO”). The appeal to the ARO was unsuccessful on the grounds that no special reason, such as financial difficulty, existed to not treat Mr Pilfoot as a member of a couple (section 24(2)).[12]
[12] Exhibit 1, T Documents, T15, pages 82-88, Authorised Review Officer’s Decision and Notes dated
20 September 2016.
In 27 September 2016, Mr Pilfoot then lodged an application for review with the Social Security Appeals Tribunal (“SSAT”).[13] The SSAT rejected Mr Pilfoot’s claim and affirmed the ARO’s decision on 3 January 2017.[14]
[13] Exhibit 1, T Documents, T16, pages 89-90, Letter from AAT dated 27 September 2016.
[14] Exhibit 1, T Documents, T3, pages 5-9, SSAT’s Decision and Reasons for Decision dated 3 January 2017.
Mr Pilfoot has sought a review of the SSAT’s decision by this Tribunal.[15]
[15] Exhibit 1, T Documents, T2, pages 3-4, Application for Second Review of a Decision dated 18 January 2017.
ISSUES FOR DETERMINATION
In order to decide whether Mr Pilfoot’s aged pension should be calculated at the single rate, despite his relationship, the following issue has to be determined:
(a) whether or not Mr Pilfoot should, for a special reason in the particular case, not be
treated as a member of a couple (s 24(2)(d));
and then,
(b) whether or not to exercise the discretion to determine that Mr Pilfoot is not to be
treated as a member of a couple for the purpose of calculating his aged pension.
IS MR PILFOOT A MEMBER OF COUPLE?
Section 4 of the Act, relevantly, defines a person as a "member of a couple" if the person is legally married to another (s 4(2)(a)) or if the person is in a de facto relationship
(s 4(2)(b)).
It is not in dispute that Mr Pilfoot is in a relationship with Ms Tugade however there is a question as to whether or not Mr Pilfoot is legally married or in a de facto relationship. Mr Pilfoot gave evidence that he and Ms Tugade were married in 2012 in Townsville by a celebrant and that the marriage was registered. However, a copy of the marriage certificate has not been provided. Mr Pilfoot also explained that Ms Tugade had previously married in the Philippines and that that marriage had not been annulled. For the purpose of this decision, it matters not whether Mr Pilfoot is legally married or in a de facto relationship. I am going to continue on the basis that Mr Pilfoot is in a de facto relationship for a lack of other evidence.
It is not in dispute that Mr Pilfoot is in a de facto relationship with Ms Tugade and that the other criteria in section 4(2)(b) are satisfied.
There is no dispute that Mr Pilfoot is a member of a couple under section 4 of the Act.
IS THERE A SPECIAL REASON THAT MR PILFOOT SHOULD NOT BE TREATED AS A MEMBER OF A COUPLE PURSUANT TO SECTION 24?
As I have found that Mr Pilfoot is a member of a couple I must now consider whether there is, for the purposes of s 24(2) of the Act, a special reason why Mr Pilfoot should not be treated as a member of a couple.
What must be considered is the position of Mr Pilfoot, not the position of the couple of which he is a member: Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 at 536; 53 ALD 277 at 282 per French J (“Boscolo”).
The Respondent referred me to the Guide to Social Security Law (“the Guide”) which is used by the Department. Section 2.2.5.50 of the Guide sets out how section 24 is to be applied. The Tribunal is not bound to apply the Guide but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[16]
[16] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, at 645.
Section 2.2.5.50 provides that the questions to be considered are whether there is:
(a) A special reason in this couple’s circumstances;
(b) A lack of being able to pool resources as a result of the couple’s circumstances;
(c) Financial difficulty as a result of the couple’s circumstances.
I note there is some debate as to whether section 24 of the Act poses 3 questions or fewer.[17] While financial difficulty and an ability, or lack thereof, to pool resources may be relevant in the circumstances to an exercise of the discretion, they are only relevant if they constitute a “special reason” which is all the section prescribes.
[17] See Purdie and Secretary, Department of Social Services [2013] AATA 743, at [14].
In order for Mr Pilfoot to not be treated as a member of a couple for the purposes of calculating his age pension the Secretary needs to be satisfied that there is a special reason for why he should not be so treated. In the event that there is such a special reason the Secretary may then determine that the person is not to be treated as a member of a couple.[18] That is under section 24 even if a special reason exists the Secretary may still decide not to exercise the discretion.
[18] Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 at [19].
The basis upon which Mr Pilfoot argues that he should be treated as a single and not as a member of a couple is because his partner, Ms Tugade, is not presently employed, receives no benefits from the government, has no other income, and is 69 years old and is therefore unlikely to be employed in the future.
Ms Tugade obtained her Visa on 23 February 2016[19] at which time Mr Pilfoot says he went to Manila to make arrangements to assist her in coming to Australia. Mr Pilfoot gave evidence that it cost him in excess of $7000 in order to pay for Ms Tugade's Visa and other associated arrangements. Mr Pilfoot said that he and Ms Tugade commenced living together on 28 March 2016.
[19] Exhibit 1, T Documents, T6, page 47, Notification of grant of partner visa dated 23 February 2016; T7, pages 48
53, Visa Grant Notice dated 23 February 2016.
Until 2016 Mr Pilfoot had managed to accumulate $41,000 in savings over a period of
18 years even though he had for the whole of that time been a recipient of the disability support pension, carer’s pension[20] and then subsequently the age pension.
[20] Which Mr Pilfoot receives for caring for his son who is on the disability support pension.
On 22 July 2016 Mr Pilfoot provided Centrelink with a statement requesting that as he was the sole financial support for his wife he wished to be assessed under section 24 as not as not being a member of a couple.[21]
[21] Exhibit 1, T Documents, T10, page 67, Statement of Mr Pilfoot dated 22 July 2017.
On 23 August 2016 the section 24 request was refused on the basis that centre link determined that Mr Pilfoot was not considered to be in financial hardship.[22] At that stage bank accounts provided by Mr Pilfoot indicate that as at 24 August 2016 Mr Pilfoot had $42,455.67 in his account.[23]
[22] Exhibit 1, T Documents, T13, pages 78-79, Centrelink letter to Mr Pilfoot dated 23 August 2016.
[23] Exhibit 3, Commonwealth Bank Account Statements of Mr Pilfoot between 16 June 2016 and 16 March 2017.
One week later, on 31 August 2016, after refusing Mr Pilfoot's section 24 request Mr Pilfoot withdrew $10,000 from his account. Mr Pilfoot says that he withdrew this money and gave it to his daughter so that she would have sufficient funds to pay for his funeral. The Secretary submits that the withdrawal of this money may have been an attempt by
MrPilfoot to reduce his financial position such that he would then be considered to be in financial hardship. No documentary evidence was provided to support or corroborate
MrPilfoot's evidence that he had given this money to his daughter.
The ARO decision refusing Mr Pilfoot section 24 request was decided on
29 September 2016. As at that date Mr Pilfoot's bank statements show that he had $32,364.46 in his bank account. However less than a week later Mr Pilfoot again withdrew $10,000. Mr Pilfoot gave evidence that this money was given to his brother-in-law to pay for some of his sister's medical expenses. Mr Pilfoot said this money was intended to be a loan but that he told his sister and brother in law they could pay him back “whenever”.
MrPilfoot says that his sister was “close to death” and that her body had “shut down”, and that she was taking in excess of 30 different types of medication. Mr Pilfoot also gave evidence that his sister had been sick for a most of her life. However no medical evidence was provided by Mr Pilfoot nor was there any evidence or statement provided by
MrPilfoot's sister or brother-in-law regarding the payment nor is it entirely clear what was wrong with his sister such that she urgently required a $10,000 payment. Further,
MrPilfoot said his sister did not have private health insurance and received treatment at a public hospital. Again the Secretary seeks to highlight the fact that the timing of this payment seems to be shortly after having been refused his section 24 request and points to further evidence of his intention to reduce his savings in order to be found to be suffering from financial hardship. I concur that this is a possibility.
Further withdrawals of larger than normal sums are noted on 13 October 2016 when $5000 was withdrawn and on 17 October when $2000 was withdrawn. Mr Pilfoot says the $5000 was used to buy furniture including a television, lounge, and fridge, and that the rest was used to pay bills. In relation to the $2000 withdrawal Mr Pilfoot says $200 of that money was used to buy tires for his car and he used the balance for rent and other bills. By this stage the balance in Mr Pilfoot's account is now $15,096. Within the space of two months Mr Pilfoot's savings had been depleted by approximately $27,000. The Secretary pointed out that further withdrawals of larger sums were also made on 23 December 2016 in the sum of $2050, on 9 January 2016 in the sum of $1025, on 23 January 2017 sum of $900, and on 8 February 2017 in the sum of $1300. The closing balance as at
8 April 2017 is $7516.95.
It was put to Mr Pilfoot that he only withdrew those larger sums because of the decisions made by Centrelink and the SSCSD. Mr Pilfoot denied this suggestion.
Based on the information provided by Mr Pilfoot regarding his current living expenses which include such things as telephone bills, rent, food and so on, his expenses are approximately $1366/fortnight[24] whereas he only receives $696/fortnight by way of the age pension and carers pension.
[24] Exhibit 5, Financial Information provided by Mr Pilfoot (undated).
The Secretary submits that it was entirely Mr Pilfoot's choice to expend the monies the way he has rather than to keep it for himself and that this factor is a relevant one to the exercise of whether or not there is a special reason for treating Mr Pilfoot as a single and not as a member of a couple.[25] The Secretary submits that these choices also go toward whether or not the discretion in section 24 should be exercised.
[25] Exhibit 2, Secretary’s Statement of Facts, Issues and Contentions dated 2 May 2017, paras 5.6 and 5.8
Even though there is no documentary evidence corroborating the motivating reasons Mr Pilfoot says he withdrew sums at various points, it was entirely at his discretion to do so. However, without such corroborating evidence it does leave a doubt regarding how and for what the money was used.
I find that there is simply not enough evidence either to convince me that it was
MrPilfoot’s intention to purposefully deplete his funds, or that the money was expended in the ways Mr Pilfoot submits. In any event, even if those monies were expended in the ways Mr Pilfoot has explained to the Tribunal, none of those reasons give rise to a “special reason” to explain why Mr Pilfoot is in his current financial position. Further while I note that his current living expenses far exceed the total of the benefits he receives I was not provided with sufficient information regarding why he has been able to live comfortably up until Ms Tugade arrived from the Philippines to live with him. It seems that the expenses have increased significantly as a result of that change in living arrangements. Again, that is a decision that Mr Pilfoot and Ms Tugade have made. Further, at this stage, Mr Pilfoot still has close to $8000 in savings income which is income that a lot of other pensioners may not have at their disposal. Where people are reliant upon the savings they have managed to accumulate in order to pay for their daily expenses they should be extremely careful about how that money is spent and to whom it is lent and on what terms. For example whilst it is potentially understandable why Mr Pilfoot wanted to ensure that sufficient funds were put aside to cover any for his funeral expenses in the future there is no evidence that $10,000 was required nor was there any evidence that his daughter in fact did not have the money or would not have the money at some point in the future to cover those costs. There is no explanation as to why that expense and that withdrawal was entirely necessary and there is certainly no evidence to show that this decision was outside Mr Pilfoot's control. The fact that Mr Pilfoot had been so prudent and was able to save money has meant that he has been able to make provision for himself and to assist his family but it is not something that he was required to do.
The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo, at [18]; Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084, Barker J, at [37].
In Cocks v Centrelink [2000] FCA 1248, O’Loughlin J said that it may be appropriate to exercise the discretion where a couple could not pool resources. In that case Mrs Cocks had nothing to contribute to the pool. In Secretary, Department of Families, Housing, Community Services & Indigenous Affairs and Nicolaas [2009] AATA 416 however it was found that although the applicant’s partner was unable to contribute to the pooling of resources it did not weigh in favour of exercising the discretion. Each situation has to be considered based on its own circumstances.
In these circumstances I find that no special reason exists to enliven the discretion in section 24. This is not to say that at some point in the future, possibly near future, Mr Pilfoot’s situation may change, particularly given that he is supporting his wife who is unable to pool resources. If at any time in the future Mr Pilfoot is suffering from financial hardship it is open to him to make another section 24 request.
Mr Pilfoot is not presently in financial difficulty.
Mr Pilfoot raised no other “special reason” which may exist to enliven the discretion in section 24.
CONCLUSION
Mr Pilfoot’s appeal fails. He is a member of a couple for the purposes of the Act and no special reason exists to treat him differently.
The decision under review is affirmed.
I certify that the preceding 44 (forty-four) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
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Associate
Dated: 19 June 2017
Date of hearing:
Applicant:
5 June 2017
By phone
Solicitors for the Respondent: Matthew Hawker
Sparke Helmore
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Appeal
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Judicial Review
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Procedural Fairness
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Statutory Construction
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