Platt And Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2011] AATA 912
•19 December 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 912
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/2359
GENERAL ADMINISTRATIVE DIVISION ) Re Geoffrey Platt Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/2360
GENERAL ADMINISTRATIVE DIVISION ) Re Irene Platt Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Senior Member A K Britton Date19 December 2011
PlaceSydney
Decision The decision under review is set aside and in substitution it is decided that:
1. Pursuant to s 92H(4) of the Social Security Act 1991 (Cth) (the Act), the time within which Mr Geoffrey Platt can lodge an application for registration as a member of the pension bonus scheme is extended to 28 January 2011.
2. Pursuant to s 92H(3) of the Act, the date of Mr Geoffrey Platt’s registration as a member of the pension bonus scheme takes effect on 1 June 2009.
3. Pursuant to s 26 of the Social Security (Administration) Act 1999 (Cth) leave is granted to Mr Geoffrey Platt to make a claim for the pension bonus on 14 January 2011.
4. The power to extend the time within which Mrs Irene Platt can lodge an application for registration as a member of the pension bonus scheme cannot be exercised.
........................[sgd]......................
Senior Member A K Britton
CATCHWORDS
SOCIAL SECURITY – pension bonus – registration – late applications – power to extend period within which applications for registration may be made – whether applicants non-accruing members during pre-application period, assuming applicants members of pension bonus scheme throughout pre-application period – whether applicants accruing members during pre-application period and passed work test for each test period, assuming applicants member of pension bonus scheme throughout pre-application period – date upon which registration takes effect – qualification – whether claim for pension bonus lodged within time – discretion to extend pension bonus claim period – special circumstances
LEGISLATION
Social Security Act 1991 (Cth) – ss 23(5A), 23(5C), 43(1), 92H(1), 92H(3), 92H(4), 92H(5), 92H(6), 92K, 92N, 92Q(1),92V, 92X
Social Security (Administration) Act 1999 (Cth) – s 21, 22, 26
CASE LAW
Beadle v Director-General of Social Security (1985) 7 ALD 670
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531; [1999] FCA 106
Groth v Secretary, Department of Social Security (1995) 40 ALD 541; [1995] FCA 1708
Secretary Department of Social Security v Hodgson (1992) 37 FCR 32
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs (2010) 185 FCR 52
REASONS FOR DECISION
19 December 2011 Senior Member A K Britton
1. In early 2011 Geoffrey and Irene Platt, the applicants in these proceedings, lodged a claim with Centrelink for the age pension and also the pension bonus. Each was granted the age pension but their respective applications for the pension bonus were refused. The Platts unsuccessfully challenged that decision in the Social Security Appeals Tribunal (SSAT).
2. The SSAT decided to (i) extend the period for Mr and Mrs Platt to lodge their respective applications to register as members of the pension bonus scheme, and (ii) reject their application for the pension bonus. The Secretary contends that the Platts were statute barred from registering for pension bonus as they applied out of time and in any event did not qualify for the pension bonus.
Pension bonus scheme
3. Introduced in 1998, the pension bonus scheme was designed to increase the labour market participation of persons who have reached retirement age. Under the scheme, persons who reach “pension age” but defer claiming age pension become eligible to receive a tax free lump sum — the pension bonus (See Second Reading Speech, Commonwealth, Parliamentary Debates, House of Representatives, 26 March 1998, 1659-60 (Warwick Smith, Minister for Family Services)).
4. To be eligible for the pension bonus, a person must lodge an application for registration within the period commencing 13 weeks before they qualified for the age pension and ending 13 weeks after that date: s 92H(1) of the Social Security Act 1991 (Cth) (the Act). A person is qualified for an age pension if they have reached the “pension age”: s 43(1) of the Act. The “pension age” is determined by a person’s gender and year of birth. Mr Platt reached “pension age” in 1999. Mrs Platt reached “pension age” in 2004 (ss 23(5A) and 23(5C)). The Act gives the decision-maker the power to extend the period to lodge an application: s 92H(3). The power to extend the registration period is not unfettered and is subject to s 92H(4). These provisions provide:
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. Mr and Mrs Platt failed to lodge their respective applications for registration for pension bonus within the period prescribed by the Act. Whether the power to extend the period for either to lodge their respective applications for registration can be exercised turns on whether they satisfy paragraph (a) or (b) of s 92H(4). The Secretary contends that neither Mr nor Mrs Platt satisfies s 92H(4) and therefore the power to extend time for registration cannot be exercised. Their applications do not stand and fall together and must be determined separately.
Can the power to extend the period within which Mr Platt must lodge his application be exercised?
Does Mr Platt satisfy s 92H(4)(a)?
6. The power to extend the period within which Mr Platt must lodge an application for pension bonus can be exercised if he was a “non-accruing member” for all of the “pre-application period”, assuming he had been a member of the pension bonus scheme throughout the same period (s 92H(4)(a)).
7. The “pre-application period” is the period beginning on a person’s “qualification date” for the age pension and ending on the date they lodged their application for pension bonus (s 92H(5)). Mr Platt’s pre-application period commenced on 6 July 1999 and ended on 28 January 2011.
8. Clause 5 of the Social Security (Pension Bonus Scheme—Non-accruing Members) Declaration 2007 (the Declaration) (see s 92Q(1) of the Act) lists “kinds of non-accruing members”. None apply to Mr Platt during the pre-application period. It follows that as he was not a “non-accruing member” for any of the pre-application period, s 92H(4)(a) is not satisfied.
Does Mr Platt satisfy s 92H(4)(b)?
9. To satisfy s 92H(4)(b), Mr Platt must (i) have been an “accruing member” for some or all of the pre-application period; and (ii) passed the work test for each “test period”, again assuming he had been a member of the pension bonus scheme throughout the pre-application period.
Accruing member?
10. A person's membership of the pension bonus scheme at a particular time is accruing unless their membership is non-accruing or “post-75” at that time (s 92N). After a person reaches 75 years of age their membership of the pension bonus scheme is at all times “post-75” (s 92S).
11.If it is assumed that Mr Platt had been a member of the pension bonus scheme throughout the pre-application period, his membership would have been accruing until his 75th birthday. As Mr Platt was an accruing member for part of the pre-application period, he satisfies s 92H(4)(b)(i) of the Act.
The work test
12.Section 92H(4)(b)(ii) requires that the person passes the work test for each “test period”. The method of determining a “test period” is set out in s 92H(6). It provides that the following sequence of steps be taken:
(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.
The test period
13. The first step in identifying Mr Platt’s “test period(s)” is the identification of the “overall accruing period”, that is, that part of the pre-application period, 6 July 1999 to 28 January 2011 during which he would have been an accruing member of the scheme.
14. The Secretary contends that Mr Platt’s “overall accruing period” is equivalent to the pre-application period. The flaw in that argument is that it assumes that the “overall accruing period” and “pre-application period” are one and the same thing. The “overall accruing period” is only that part of the “pre-application period” in which the person’s membership is accruing. By the operation of s 92N, once Mr Platt’s membership was “post-75”, or, to employ the English language rather than the jargon of the Act, once he had turned 75 years of age, his membership of the scheme was not accruing.
15. It follows that Mr Platt’s “overall accruing period” commenced on 6 July 1999 and ended on 5 July 2010. By the operation of s 92H(6)(c), the applicable test periods are:
·6 July 1999 to 5 July 2000 (by virtue of s 92H(6)(c)(i))
·each consecutive full year period from 6 July 2000 to 5 July 2010 (by virtue of s 92H(6)(c)(ii)).
Did Mr Platt pass the work test?
16.Section 92U provides that a person passes the work test if:
Work test — full-year period
For the purposes of this Part, a person passes the work test for a full-year period of the person's accruing membership of the pension bonus scheme if:
(a) in any case—the person satisfies the Secretary that the total number of hours gainfully worked by the person during that period was at least 960 and that at least 640 of that total number of hours were worked in Australia; or
17. There is no argument that until, or shortly before, he turned 75 years of age, Mr Platt “gainfully worked” at least 960 hours per annum. Accordingly, he passed the work test for each test period.
Should the discretion to extend the period within which Mr Platt must lodge his application be exercised?
18. As Mr Platt satisfies s 92H(4)(b), the power to extend the period for lodging an application can be exercised. The Act does not prescribe the matters to be taken into account in exercising that power.
19. The Platts claim that they did not become aware of the pension bonus scheme until late 2010. Each claim that they had planned to support themselves during retirement from their savings and investments and had never intended to turn to Centrelink for assistance. On their account they were forced to abandon this plan following the global economic crisis and the subsequent downturn in their antique business. They also claimed that until late 2010 they had neither heard of, nor turned their minds to, whether they would be eligible for the pension bonus.
20. Through no fault of his own Mr Platt now finds himself in the position where he is unable to support himself from his savings and investments throughout retirement. I accept the claim made by the Platts that it had been their intention to be financially independent throughout their retirement. In those circumstances it is not surprising that they were ignorant of the pension bonus scheme or more importantly the consequences of not lodging an application for registration. The Secretary contends that the scheme is widely advertised but has adduced no evidence about the extent to which the scheme was advertised throughout the relevant period. There is no evidence that once Mr Platt reached retirement age, or at any other time, he was notified in writing of the scheme or the consequences of not applying for registration.
21. In my view, this is an appropriate case to exercise the power to extend the period for lodging an application for registration for pension bonus.
Date of registration
22. Where, as in this case, a decision has been taken to extend the period for registration, registration takes effect on the date on which the application was lodged, in this case 28 January 2010, unless the decision-maker decides that it should take effect on another date (s 92H(3)).
23. The practical effect of not back-dating the period for registration is that Mr Platt would not qualify for the pension bonus, because he would not have accrued at least one full-year bonus period while registered as a member of the pension bonus scheme (s 92C) — a requirement for qualification for the pension bonus.
24. Applying the same reasoning as set out above I have decided to backdate the date Mr Platt’s registration takes effect to 1 June 2009.
Is Mr Platt qualified for the pension bonus?
25. The Secretary contends that even if the power to extend the period within which an application may be lodged is exercised, Mr Platt does not satisfy two of the criteria that must be met to qualify for the pension bonus. Section 92C provides:
Qualification for pension bonus
A person is qualified for a pension bonus if:
…
(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
…
at any time after the person qualified for age pension.
26. Mr Platt satisfies s 92C(c), as he was registered as a member of the pension bonus scheme after he qualified for an age pension.
27. The effect of back dating the date of registration to 1 June 2009 is that Mr Platt also satisfies s 92C(d). (Mr Platt’s “bonus period” commenced on the date he first became an accruing member of the pension bonus scheme, that is, 1 June 2009 (s 92T(1)(a)(ii)). He was an accruing member of the Scheme until his 75th birthday, a period of slightly more than 12 months.)
28. There is no argument that Mr Platt meets all other criteria for pension bonus set out in s 92C.
Can the power to extend the period within which Mrs Platt must lodge her application be exercised?
29. The power to extend the period within which to lodge an application for pension bonus cannot be exercised if Mrs Platt would have been a “non-accruing member” for all of the “pre-application period”, assuming she had been a member of the pension bonus scheme throughout the same period (s 92H(4)(a)). Mrs Platt’s pre-application period commenced on 9 November 2004 and ended on 28 January 2011.
30. The only “kind of non-accruing member” listed in cl 5 of the Declaration that is potentially relevant is that listed in paragraph (d) which relevantly provides:
(d) a member who is not a participant in the workforce, but whose partner:
(i) is a participant in the workforce; and
…
31. Mrs Platt testified that throughout the pre-application period, she assisted her husband in his antique business but did not receive any form of remuneration or financial reward. The term “participant in the workforce” is not defined in either the Declaration or the Act. The Macquarie Dictionary defines “workforce” to mean: the total of all those engaged in employment. “Employment” is defined to mean “the state of being employed”. “Employee” is defined to mean “a person working for another person or a business firm for pay”.
32. While broad in scope, the term “participant in the workforce”, in my opinion does not extend to a person in Mrs Platt’s position who participates in a business on a voluntary basis.
33. Being satisfied that Mrs Platt was not a participant in the workforce during her pre-application period, it is necessary to decide whether Mr Platt was a participant in the workforce for some or all of that period. While there is no argument that Mr Platt was a participant in the workforce until, or shortly before his 75th birthday, the Secretary contends that he was not a participant in the workforce for the remainder of the pre-application period, i.e. 6 July 2009 to 28 January 2010.
34. In his claim for pension bonus lodged on 14 January 2011 (T4), in answer to the question “when did you cease meeting the work test” Mr Platt wrote “21 June 2010”. Later in the application, he wrote that he had worked from January 1985 to 21 June 2010. In a letter attached to that claim, Mr Platt wrote “I was self-employed and retired from my business on 26 June 2010 at age 75”. Attached to the claim was a letter from Mr Platt’s accountant who wrote that Mr Platt told him he had worked 40 to 50 hours per week in the period 1999 to 2004; 20 to 30 hours per week in the period 2005 to 2008 and “up until he ceased his business on 21 June 2010”. The SSAT, in summarising the evidence given by Mr and Mrs Platt in its reasons for decision, stated that Mr Platt had finished work in June 2010 (unreported, 26 May 2011).
35. In these proceedings, Mr Platt testified that while he decided to close his business in June 2010, he continued to work two days per week and sometimes more. He said the only major change after June 2010 was that he worked a bit less and any income generated went directly to him and not into his business. In support of that claim he tendered a handwritten note headed “Sales after this date [21 June 2010]”. The note listed four sales totalling $5,000 made between late September and January 2011 but provides no further particulars.
36. Mr Platt was taken to the following extract of the SSAT’s Reasons for decision (at [9]):
The Tribunal asked if there was a reason why Mr Platt had finished work in June 2010 and had not claimed age pension until January 2011. Mr Platt said the only reason they had held off claiming was to see if they could manage without it.
He claimed that he had told the Tribunal he stopped working “officially” in June 2010.
37. The explanation given by Mr Platt for the apparent conflict between the claim about when he stopped work made in his application for pension bonus and that given in these proceedings, in my opinion is unsatisfactory. Absent some reliable independent corroborative evidence I am unable to accept Mr Platt’s claim that he continued to work beyond his 75th birthday.
38. It follows that as Mr Platt was not a participant in the workforce for the period 21 June 2010 to 14 January 2011, Mrs Platt was an accruing member for that period (cl 6 of the Declaration and s 92N of the Act).
39. As a consequence, Mrs Platt was not a non-accruing member for all of the pre-application period assuming she had been a member of the pension bonus scheme throughout the same period, and therefore s 92H(4)(a) does not apply.
Accruing member?
40. Because Mrs Platt was an accruing member for some of the pre-application period (assuming that she had been a member of the pension bonus scheme throughout that period) s 92H(4)(b)(i) is satisfied. It is therefore necessary to decide if she passed the work test for each applicable period (s 92H(4)(b)(ii)).
41. Mrs Platt’s “overall accruing period” is that part of the pre-application period she was an accruing member of the scheme — June 2010 to 14 January 2011 (s 92H(6)(a)). That period is the only test period as it is less than 365 days: (s 92H(6)(b)).
42. Mrs Platt does not pass the work test for that period because, on her own account, she performed no “gainful work” within that period: ss 92V and 92X. Nor can she satisfy the work test on the basis of s 92V(1)(b) as her husband was not gainfully employed for the requisite number of hours throughout that period: s 92V(b).
43. It follows that s 92H(4)(b) does not apply. As neither s 92H(4)(a) nor s 92H(4)(b) apply, the power to extend the period within which Mrs Platt must lodge an application for pension bonus cannot be exercised.
Claim out of time
44. The final issue to be decided is whether Mr Platt’s claim for pension was lodged within time prescribed by the Social Security (Administration) Act 1999 (Cth) (the Administration Act). Section 26 of that Act provides:
General rule
(1) A claim for pension bonus must be made within the lodgment period fixed by this Subdivision.
(2) However, the Secretary may in special circumstances allow a person a longer period to make a claim than the period fixed by this Subdivision. If the Secretary does so, the lodgment period for the person's claim is the period allowed by the Secretary.
(3) Subsection (2) does not apply in relation to a claim for which the lodgment period is fixed by subsection 23(1).
45. Mr Platt was required to lodge a claim pension bonus within 13 weeks of his “last bonus period” (s 22 of the Administration Act). His last bonus period was the full year period, 1 June 2009 to 1 June 2010, as he had accrued only one full year bonus period (s 22(2) of the Administration Act). Alternatively his last bonus period was the part year, 1 June 2010 to 21 June 2010 (s 22(3) of the Administration Act). Irrespective of which of these was his “last bonus period”, his claim for pension bonus was out of time as it was not lodged until 14 January 2010.
46. The issue therefore arises whether the discretion conferred by s 21(2) of the Administration Act to allow a person a longer period to make a claim should be exercised.
47. The term “special circumstances” appears in a number of provisions of the Act and the Administration Act. Its meaning has been the subject of exhaustive consideration by the Administrative Appeals Tribunal and the Federal Court. The Federal Court has consistently declined to adopt a prescriptive formula: see for example Beadle v Director-General of Social Security (1985) 7 ALD 670 at 673; and French J in Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 at 535. Nonetheless, the Court has emphasised that the term denotes a requirement that there be “something which distinguishes [the claimant’s] case from others, to take it out of the usual or ordinary case”: per Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545. This however is not to be interpreted as a requirement that the claimant’s circumstances be “extremely unusual, uncommon or exceptional” per Hill J in Secretary Department of Social Security v Hodgson (1992) 37 FCR 32 at 42.
48. The Guide to Social Security Law (the Guide) provides direction to decision‑makers on the application of the “special circumstances” discretion. The Tribunal is not bound to apply the policy expressed in the Guide, but may do so and, indeed, will usually do so unless there are cogent reasons in a particular case for not doing so (see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60).
49.The Guide states (at 3.4.7.80):
Discretion to accept late claims - PBS claims lodged on or after 1 January 2008
The Secretary has discretion to accept any late PBS claim lodged on or after 1 January 2008 (including claims from exempt partnered persons, those non-accruing immediately after the end of the last bonus period and post 75 members) providing there was a special reason for late lodgement of the claim. The event that caused the late lodgement of the claim may have occurred prior to 1 January 2008.
…
Reasons to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.
…
The reasons for acceptance of a late claim are different to those that apply to late PBS registrations.
Examples may include cases where a member:
•has poor numeracy or literacy skills,
•was ill,
•was located in a remote area,
•performed irregular work that made it difficult for the member to determine the lodgement period,
•was helping a close family member suffering from a serious illness,
•has experienced the death of a close family member,
•had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member's partner moved into a nursing home),
•was unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).
The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).
50. The Secretary contends that special circumstances have not been established. He contends that ignorance of the statutory time limits “without more” does not constitute special circumstances.
51. I agree with the Secretary’s contention that ignorance of itself does not constitute special circumstances. Ignorance of the scheme however is not the only ground relied upon by Mr Platt. As noted he claims and I accept, that it was only towards the end of 2010 that he came to realise that his plan of financial independence throughout retirement had been thwarted by the diminution of his asset position as the consequence of the global financial crisis and its impact on the antique business. It was only at this point that he turned his mind to the type of benefits that might be available under the social security law. While Mr Platt would not be alone in finding, on the eve of his retirement, that his financial position had been altered as a consequence of the global financial crisis, as Katzmann J noted in Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs (2010) 185 FCR 52 at 65 there is no requirement that the asserted special circumstances be unique to the individual — circumstances might be special although they apply to more than one person or to a class of persons, provided they are not of universal application.
52. While as the Secretary points out the ground advanced by Mr Platt is not one listed by the Guide (at 3.4.7.80) as an example of “special circumstances”, that list of course is not exhaustive.
53. I am satisfied that “special circumstances” exist and that this is an appropriate case to extend the time for lodging the claim. In reaching that decision I have had regard to the fact that while the delay is significant, in my view it is not excessive and there is nothing to indicate that it was the result of Mr Platt seeking to obtain a real or perceived financial or other advantage.
Summary
54. I find that the correct and preferable decision is to set aside the decision made by the SSAT and in substitution, decide, in respect of Mr Platt:
·Pursuant to s 92H(4) of the Act to extend the time he can lodge an application for registration as a member of the pension bonus scheme to 28 January 2011;
·Pursuant to s 92H(3) that the date of his registration as a member of the pension bonus scheme takes effect on 1 June 2009;
·Pursuant to s 26 of the Social Security (Administration) Act 1999 (Cth) leave is granted to Mr Platt to make a claim for the pension bonus on 14 January 2011.
55. I find that the correct and preferable decision is to set aside the decision made by the SSAT and in substitution, decide, in respect of Mrs Platt:
·The power to extend the time Mrs Platt can lodge an application for registration as a member of the pension bonus scheme cannot be exercised.
I certify that the 55 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 A K BrittonDate/s of Hearing 10 November 2011
Date of Decision 19 December 2011
Applicants self-representedSolicitor for the Respondent Ms J Maclean, Centrelink Litigation and Review Branch
3
6
1