Puchalski; Department of Family and Community Services

[2001] AATA 200

DECISION AND REASONS FOR DECISION [2001] AATA 200

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2000/775

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Applicant
           And    ZBIGNIEW & STEFANIA PUCHALSKI
  Respondent

DECISION

Tribunal       Mr K L Beddoe, Senior Member  

Date16 March 2001 

PlaceBrisbane

Decision      The Tribunal affirms the decisions under review.       
  (Sgd) K L Beddoe
  Senior Member

Decision No: 200/2001

CATCHWORDS: Social Security – Allocated Pension – Review of rate of age and disability pension - Whether application for review made within the terms of s1240 Social Security (Administration) Act 1999 – Correct date for payment of arrears
Social Security Act 1991 s 76, 80(2), (3), (4), (5), 1239, 1240
Social Security (Administration) Act 1999 110(1),
Re DSS and Austin(1995) 21 AAR 83

REASONS FOR DECISION

16 March 2001                   Mr K L Beddoe, Senior Member              

1. The applicant refused to pay arrears of pension to the respondents for the period 2 October 1997 to 12 December 1999.

2. By a decision dated 21 July 2000 the Social Security Appeals Tribunal set aside the decisions under review and substituted the following decisions:

(a)arrears of disability support pension and age pension are payable to Mr Puchalski in respect of the period from 31 October 1997 to 12 December 1999.

(b)arrears of age pension are payable to Mrs Puchalski in respect of the period from 31 October 1997 to 12 December 1999.

The applicant Secretary seeks review of both of those decisions.
At the hearing the applicant was represented by Mr Kanowski and Mr Puchalski represented himself and his wife. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were before the Tribunal as the T documents and further documents were tendered and marked as exhibits.  Oral evidence was given by Mr Puchalski.  Subsequent to the hearing the parties made written submissions.
By letter dated 19 September 1997 the applicant notified the first respondent that payment of disability support pension was to be continued with payment at the rate of $271.90 per fortnight from 2 October 1997.  The letter provided details of the respondent's financial circumstances taken into account.  In particular there was a deemed income of $6,748.74 in respect of an amount of $155,215.12 being described as financial investments.  The second respondent got a letter in similar terms relating to her Age Pension payments.  The letter did not characterise the "financial investment".
The financial investment consisted at that time in the main of the first respondent's superannuation funds held as units in a roll-over fund and valued at $150,439.13.
The applicant continued to treat the funds as being in the roll-over fund until a review in March 2000 disclosed, but not for the first time, that the first respondent had purchased an allocated pension in October 1997.  The consequence is that the respondents have been underpaid their pension entitlements from October 1997 because of the failure to take into account the use of the roll-over funds to purchase an allocated pension on 17 October 1997 [T20].
It is the circumstances surrounding the failure of the applicant to take into account the change in the first respondent's investment to an allocated pension that is in issue here.
Document T36 includes a copy of a letter dated 17 June 1997 by the Department of Social Security ("DSS") whereby the first respondent was notified of changes to income test and assets test assessments for persons over 55 with superannuation assets.  The letter enclosed information about the change, notified the availability of free public seminars and the availability of assistance of a Financial Information Service Officer.
The first respondent says, and I accept, that he reacted to this advice from DSS, was interviewed by the adviser, purchased an allocated pension from 25 September 1997 [T20] through Commonwealth Financial Services (associated with the Commonwealth Bank), and provided the relevant documents evidencing the allocated pension to DSS in October 1997.
The first respondent says he had a number of interviews about the allocated pension.  It is not clear as to who all these interviews were with but I accept the first respondent's evidence that he provided evidence of the purchase of the allocated pension to the DSS office at Baulkham Hills.  He also says, and I accept, that he pointed out that the financial investment figure being used by DSS was incorrect.  He says he was told that the inaccurate figure would make little difference to the pension calculation.
He alleges that at the time that he was dealing with DSS there was confusion because of the transfer of functions to Centrelink.  He also alleges that there was error in transfer of information from the Baulkham Hills office of DSS to the Maroochydore office of DSS.  Whether there is any basis in fact for these allegations is not apparent to me.
Document T13 is an Income and Assets Review form completed by the respondents on 31 January 2000.  It is stamped as having been received by Centrelink on 13 January 2000.  There is no explanation for the inconsistency in dates.  The form disclosed that the first respondent received income from an allocated pension.  The form is endorsed "No change" in handwriting which the first respondent denies is his or the second respondent's.  There is no other explanation before me about the hand-written endorsement.
Document T27 is a handwritten note for file, unsigned, recording a review of the respondents' age pensions on 13 March 2000 and noting that the allocated pension had not been coded onto the respondents' file.  The pensions payable to the respondents were adjusted but payment of arrears was refused.
It is clear from exhibit A, which is a statement by a Centrelink officer, that the first respondent's allocated pension was not entered on the Centrelink system in 1997.
It is equally clear that the first respondent took action to follow up on DSS advice about changes in the law in 1997 and he purchased the allocated pension after receiving advice about the effect of those changes.  He also says and I accept and find that he notified DSS/Centrelink of the purchase of the allocated pension. There is nothing before me which suggests that the applicant's predecessor responded in any way to the first respondent's advice regarding the allocated pension.
Document T5/57 is a copy of a computer frame showing a review conducted by Centrelink late January 1998.  However the review form lodged by the respondents is not available.  I am satisfied however that the first respondent was in the habit of keeping DSS/Centrelink informed of matters relevant to the pension payments.  I agree with the SSAT that he is a credible witness and gave a description of his contacts with DSS/Centrelink.  His description of events in October 1997 is consistent with the contemporaneous documents.  In the circumstances I am satisfied that it is more likely than not that the first respondent gave DSS/Centrelink the details of his purchase of an allocated pension.
That brings me to the conclusion that DSS failed to make a decision about the first respondent's purchase of the allocated pension even though he advised of the purchase of the pension.
The applicant does not dispute that the respondents would have been entitled to payment of pensions at the maximum rate if the error in relation to the investment income had not been made.  However, the applicant says that the respondents were given notice of the rate of pension payable from time to time, that was sufficient notice of a decision, and the respondents did not seek review of those decisions.  However the applicant concedes there was no relevant notification for the pay days 16 October 1997 to 15 February 1998 and 1 April 1999 to 13 March 2000 in respect of both respondents and 2 April 1998 to 17 September 1998 for the second respondent.
By letter dated 6 March 2000 the applicant initiated a review of the first respondent's age pension payment [T16 & T36].  The letter was, in effect, a requisition for information and was satisfied by the first respondent providing copies of the documents contemporaneous to the purchase of the allocated pension [T20].
The review initiated by the applicant is a review within the terms of section 1239 of the Social Security Act 1991 Act ("the Act").  Whether the respondents sought a review when they lodged the Income and Assets Review form on 13 January 2000 is a matter I need not consider for present purposes.  It may well be a request for review within the terms of section 1240 of the Act but I do not need to decide the question in this case because it is clear that the 6 March 200 review was initiated by the applicant.
In particular document T27 shows there was an own motion review within the terms of section 1239 of the Act. That review resulted in favourable determinations although not as favourable as the respondents now seek, hence their request for review of the decision as to the date of effect of the determination.
Section 76 of the Act provides that if the Secretary is satisfied that the rate at which an age pension is being, or has been, paid is less than the correct rate, the Secretary is to determine that the rate is to be increased to the rate specified in the Secretary's determination. This was done in both cases here and the determinations are effective from a date to be determined in accordance with section 80 of the Act.
How section 80 operates depends upon when review of a notified decision is sought and whether there was an application for review within the terms of section 1240 of the Act (ss 80(2) and 80(3)).
Section 80(4) depends upon there being a request for review of a decision not notified which is made under section 1240 of the Act.
I am satisfied there is not a request for review within section 1240 of the Act applicable for present purposes.  In coming to that conclusion I have not decided whether the Income and Assets Review form lodged in January 2000 [T13] can be characterised as a request for review.
Section 80(5) is the applicable provision on the circumstances of this case.  It provides that if the favourable determination is made following a person having advised the applicant of a change in circumstances, the determination takes effect on the day on which the advice was received or on the day on which the change occurred, whichever is the later.
In this case the advice was given to the applicant on or about 31 October 1997 in respect to a change in circumstances effective from 25 September 1997 being the date of commencement of the contract in relation to the allocated pension.  The document evidencing the contract was executed on 17 October 1997 no doubt in response to a proposal made by the first respondent at some earlier date.
I am satisfied that the date of advice is the relevant date and will follow the SSAT in finding that date to be 31 October 1997 albeit that the evidence only satisfies me that the date of advice was on or about that date.
In this regard I adopt the reasoning of Deputy President Forgie in Re DSS and Austin(1995) 21 AAR 83. Mr Kanowski submitted that the case was wrongly decided. However I see no error in the reasoning at AAR 90-95 in so far as it is relevant to the facts of this case.
The Social Security (Administration) Act 1999 ("the Administration Act") commenced its operation from 20 March 2000 for present purposes. The decision under review before this Tribunal is the decision of the SSAT dated 21 July 2000. Whether the respondents had accrued rights was not argued before me. However, if the provisions of that Act are the applicable provisions then I am satisfied that section 110(1) of the Administration Act is the appropriate provision to determine the date of effect of the delegate's review in March 2000.
In my view and for the above reasons the decisions of the SSAT were correct and will be affirmed.

I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr K L Beddoe, Senior Member

Signed:         .....................................................................................
  Associate

Date/s of Hearing  27 October 2000
Date of Decision  16 March 2001
Applicant  Mr Puchalski (In person)
Respondent  Mr P Kanowski, Advocate