Preca and Secretary, Department of Family and Community Services - [2002] AATA 634

DECISION AND REASONS FOR DECISION [2002] AATA 634

ADMINISTRATIVE APPEALS TRIBUNAL)

No V2001/1305

GENERAL ADMINISTRATIVE DIVISION)

JOHANNA PRECA

Applicant

SECRETARY,
DEPARTMENT OF FAMILY &
COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Mr J Handley, Senior Member
Date:             29 July 2002
Place:            Melbourne

Decision:The decision under review is affirmed.

. . . . Sgd. Mr J. Handley . . . .
Senior Member
SOCIAL SECURITY – age pension – marriage by an age pensioner to a compensation recipient - affect on rate of age pension payable - whether any special circumstances - decision affirmed.

Social Security Act 1991 ss.17(1), 1173, 1184K

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Secretary, Department of Social Security and Lee (1993) 30 ALD 250

Re Krzywak & Secretary, Department of Social Security (1998) 15 ALD 690

REASONS FOR DECISION

29 July 2002 Mr J Handley, Senior Member

The applicant applies to review a decision of the Social Security Appeals Tribunal ("SSAT") on 19 September 2001. The SSAT then decided to affirm decisions previously made by an authorised review officer ("ARO"), namely:
(i)to cancel the age pension being paid to Mrs Preca with effect from 17 February 2000; and
(ii)to pay Mrs Preca age pension at $91.66 per fortnight from 17 January 2001.
The hearing of the application proceeded on 7 June 2002. Mr Bowden appeared on behalf of Mrs Preca. Ms D'Cunha appeared on behalf of the respondent. Mr Bowden indicated at the commencement of the proceedings that his client did not challenge the decision initially made by an ARO, which the SSAT subsequently affirmed, to make payments of age pension at $91.66 per fortnight from 17 January 2001. Accordingly, the review proceeded only with respect to the decision to cancel age pension on 17 February 2000.
The circumstances giving rise to these proceedings may be briefly summarised as follows-
Mr Preca has been in receipt of periodic compensation since 1989. In 1998 he claimed disability support pension but this was rejected. Mrs Preca was receiving Disability Support Pension but was later transferred to age pension. On 4 December 1999 Mr and Mrs Preca married. Mr Preca continued to receive compensation however the respondent cancelled the age pension of Mrs Preca on 17 January 2000.
Centrelink cancelled the pension payment of Mrs Preca following her marriage, having regard to the provisions of the Social Security Act 1991 ("the Act"). Mrs Preca submitted that her circumstances were special and she should be entitled to beneficial provisions of s1184 of the Act.
The special circumstances advanced were a deterioration in the health of the applicant's husband, the economic consequences to the applicant and her husband as a result of marriage, the operation of the legislation and the conduct and advice variously given by Centrelink and Administrative Appeals Tribunal officers.
THE LEGISLATION
Section 17(1) of the Act provides that an age pension is a "compensation affected payment".
Section 17(2) of the Act defines "compensation" and provides, that no distinction is to be drawn between moneys paid as compensation either as a lump sum or in the form of periodic payments.
Section 1168 of the Act refers to the reduction in the rate of compensation affected payments if periodic compensation has been received.
Section 1168(1) of the Act provides as follows:
"1168(1) Subject to subsections (4), (5), (6) and (7), if:
(a)a person, or the person's partner, receives a series of periodic compensation payments; and
(b)the person receives or claims a compensation affected payment for the periodic payments period; and
(c)the person was not, at the time of the event that gave rise to the entitlement of the person, or the person's partner, to the compensation, receiving a compensation affected payment referred to in paragraph (b);
the rate of the person's compensation affected payment is to be reduced, in accordance with this section".
Section 1168(2) provides as follows:
"1168(2) If the rate of a person's compensation affected payment is to be reduced under subsection (1), subsections (3), (3A) and (3B) are to be used to work out the person's reduced rate".
Section 1168(3B) provides:
"1168(3B) If:
(a)the person is a member of a couple; and
(b)the person's partner receives or claims a compensation affected payment, or a compensation affected pension under the Veterans' Entitlements Act;
the person's fortnightly rate of the compensation affected payment is reduced by half the fortnightly rate of the periodic compensation".
Section 1184 permits the Secretary to the Department to disregard some compensation payments. It says:
"1184(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a)not having been made; or
(b)not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
1184(2) If:
(a)a person receives or claims a compensation affected payment; and
(b)the person's partner receives compensation; and
(c)the set of circumstances giving rise to the compensation are not related to the set of circumstances that give rise to the person's receipt of or claim for the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not in itself constitute special circumstances for the purposes of subsection (1)".

CONCLUSION AND REASONS FOR DECISION

I am satisfied that s.1168(1) applies because-

Mr Preca received a series of periodic compensation payments at all relevant times; and
Mrs Preca claimed a compensation affected payment during the "periodic payments period" (refer s.17); and
At the time of the event that gave rise to the entitlement of Mr Preca to compensation (1989), Mrs Preca was not receiving a compensation affected payment.

Section 1168(2) provides the appropriate avenue for calculation of the rate of a compensation affected payment. Relevantly, s 1168(3B) applies. This section applies because Mrs Preca is a member of a couple and her partner - Mr Preca - had claimed a compensation affected payment, namely a disability support pension. In these circumstances, the rate of the compensation affected payment payable to Mrs Preca is to be reduced by half of the fortnightly rate of the periodic compensation. Mr Preca was in receipt of fortnightly compensation of $701.18. Half of that sum is $350.59. When the latter sum is deducted from the maximum rate of age pension applicable, namely $311.30, the result is a nil entitlement to any compensation affected payment. It follows, therefore, that during the relevant period under review in these proceedings Mrs Preca had no entitlement to an age pension.
In reaching these conclusions I have had regard to s1168, as described above. That section was relied upon by the respondent. The SSAT, in its review of the respondent's decision, also relied on that section. The SSAT made its decision on 19 September 2001. On 20 September 2001, Act No. 71 of 2001 entitled, Family and Community Services Legislation (Simplification and Other Measures) Act 2001 (Cth) repealed ss1168(1),(2), & (3B) and 1184. Section 1184 is reproduced identically as s1184K, in the amending Act. In relation to the other provisions, I can find no equivalent sections in the amending Act or in other legislation. Neither party, nor their representative, referred to the repeal of these sections at the hearing or in the Statements of Fact and Contentions lodged prior to the hearing. Accordingly, this decision is made upon the basis of the legislation that existed at the time of the primary decision under review and at the time of the review by the SSAT. The duty of the Tribunal is to review the administrative decision before it, on the material before it, and to make the correct or preferable decision (refer Drake & Minister for Immigration & Ethnic Affairs (No. 2) (1980) 2 ALD 634).
Subject to the following, concerning the submissions as to special circumstances, the decision made to cancel age pension was consistent with the legislation that applied at that time.
In so far as s.1184 of the Act is concerned, I am satisfied that there are no special circumstances allowing the compensation payment to be treated as either not having been made, or not liable to be made.
The health of the applicant's husband, however unfortunate, is not special. It is a common unfortunate occurrence that a large proportion of the Australian community suffers. Mr Preca said in evidence that on one occasion he was admitted to the Royal Melbourne Hospital, for two days by reason of angina type pains following the decisions made in this case. Having been admitted to a public hospital, it is anticipated that fees would not have been incurred.
In so far as the applicant's husband alleged incorrect or misleading advice from departmental officers (and without making any findings on this issue), I am satisfied that officers of Centrelink are responsible for responding to numerous enquiries that members of the public make. Indeed, I can recall a conference paper delivered by the Chief Executive Officer of Centrelink, in approximately 1997, where she estimated that departmental officers make 3 million decisions per annum. It is not inconceivable that from time to time errors might be made or there may be misunderstandings. However, unfortunate any misunderstanding might have been, there is nothing which points to any detrimental consequence. In the absence of departmental officers giving evidence or any documents pointing to administrative error, I am not prepared to find that any error or incorrect advice was given.
In so far as the applicant had a combined income less than the amount of income she would have received had she remained single, this occurred by reason of the operation of the Social Security Act and because she chose to marry. Of course it is unfortunate that Mrs Preca was not economically independent between February 2000 and January 2001, however her pension was eliminated because she became a member of a couple. As a result of her entering into the marriage, she became dependent on the income of her partner. The circumstances that affected Mrs Preca affect every other person who is in a similar position under the operation of the Social Security Act. Throughout the Act, the incomes of spouses or members of couples are brought into account when calculating an entitlement to a Social Security pension or benefit.
I would acknowledge that the marriage of Mr and Mrs Preca has produced an unintended consequence, namely, the temporary elimination of her pension. Sometimes legislation can produce a harsh consequence that may be said to be unfair. But that circumstance of itself can not assume a singular significance of being special without consideration to all the other circumstances that may exist.
In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 ("Re Beadle"), the Tribunal decided that, while "special circumstances" are impossible to define (indeed, it would not be helpful to impose a definition), the circumstances of a person when looked at should be seen to be "unusual, uncommon or exceptional".
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 ("Groth"), Kiefel J said that the words "special circumstances" require a person's case to be distinguished from others and "to take it out of the usual or ordinary case".
In Secretary, Department of Social Security and Lee (1993) 30 ALD at 250 the Tribunal decided that the discretion available under s 1184 can be used to alleviate circumstances where the operation of s 1168 is unfair. However, Mr and Mrs Preca are unencumbered home owners and Mr Preca continues to receive periodic compensation. Mr Preca also has the benefit of a total and permanent disablement superannuation payment of more than $80,000, which is currently invested and producing an income. Mrs Preca now receives age pension, although at a reduced rate. It follows that Mr and Mrs Preca have regular income presently from 3 sources. Their circumstances are not special. They are not in "straitened" circumstances as discussed in Re Krzywak & Secretary, Department of Social Security 1998 15 ALD 690.
For the reasons given above, I am not satisfied that the circumstances surrounding the cancellation of the pension to Mrs Preca fits within the character of the decisions of Re Beadle and Groth.
In all of the circumstances, the decisions under review should be affirmed.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed:         Katherine Navarro......................
  Associate
Date/s of Hearing  7 June 2002
Date of Decision  29 July 2002
Counsel for the Applicant        Mr Bowden
Solicitor for the Applicant         N/a
Counsel for the Respondent    Ms D'Cunha
Solicitor for the Respondent    N/a