Ray and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 663

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 663

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/2014

GENERAL ADMINISTRATIVE DIVISION		)
Re		GERALD RAY

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date31 July 2008

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  

................[Sgd].........................

Member

CATCHWORDS

SOCIAL SECURITY – Administration of the Act – pension bonus scheme – applicant required to work 960 hours in the full year bonus period in order to satisfy the work test – relevant bonus period was the first year of membership of the scheme – applicant worked for less that 960 hours in the relevant bonus period – work test not satisfied – pension bonus not payable to applicant – decision under review affirmed.

Social Security Act 1991 ss 92A, 92C, 92P, 92Q, 92T, 92U, 93U, 93V, 93W

Explanatory Memorandum to the Social Security and Veterans Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998

Borg-Olivier and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1211

REASONS FOR DECISION

31 July 2008 Mr RG Kenny, Member      

Application

1.      The pension bonus scheme (“the scheme”) enables people who stay in remunerative employment after reaching the relevant age for payment of the age pension, but who defer claiming the age pension, to receive a single-sum pension bonus[1]. This is provided for in Part 2.2A of the Social Security Act1991 (“the Act”).  On 17 January 2008, an authorised review officer with Centrelink affirmed a decision made on 20 September 2007 which determined that Gerald Ray was not qualified to receive the pension bonus.  That decision was affirmed by the Social Security Appeals Tribunal on 1 April 2008. 

[1] Social Security Act 1991 s 92A

Issues and Legislation

2. The qualifying criteria for the pension bonus are set out in s92C(a) to (f) of the Act. It is not disputed that, with one exception, Mr Ray meets those criteria including the need to register as a member of the scheme. His registration was accepted with effect from the date of his 65^th birthday which was mid June 2005. The exception is s92C(d) of the Act which requires accrual of at least one full‑year bonus period while registered as a member of the scheme. This requires satisfaction of the work test in a full-year bonus period. Under s92U of the Act, the work test is met if Mr Ray gainfully worked in that year for at least 960 hours.

Evidence

3.      Mr Ray worked for Woolworths Ltd for over 50 years.  This was on a full-time basis until 2000 and then on a part-time basis until 27 July 2007.  Mr Ray’s part-time work was randomly arranged by the employer in accordance with the need to utilise his work-related skills.  He conceded that he had not worked for the required 960 hours in the first 12 months after his 65^th birthday but believed that he had done so in the following 12 months.  He was unaware of the work-test requirements and had not been provided with any relevant information about that test by Centrelink officers.  He believed that, if he had been aware of the test, he would have been able to increase his work commitments and meet the test requirement in each of the 12 month periods after his 65^th birthday.

4.      In evidence was a notice, dated 18 October 2007, from Woolworths Ltd which advised that, from 27 July 2005 until 26 July 2006, Mr Ray worked an average of 15.21 hours per week.  Additional documentation from Woolworths demonstrated that hours in excess of 960 were worked by Mr Ray in the 12 months from 16 June 2006.

Submissions

5. For the respondent, Mr Guthrie submitted that the relevant period for considering the full‑year bonus period for the purposes of s92C of the Act was the year commencing on Mr Ray’s 65^th birthday i.e mid June 2005 to mid June 2006. He submitted that the work-test was not met for that year although he conceded that it was met for the 12 months commencing 16 June 2006. However, he submitted that the scheme did not allow for the work-test to be satisfied merely because 960 hours were worked in any 12 month period. He submitted that s92T of the Act required the work test to be met in the first 12 months after registration and that, because Mr Ray did not work for 960 hours in that period, the pension bonus was not payable to him.

6. Mr Ray referred to s92C and its requirement that, to qualify under the scheme, it was only necessary to complete at least one full-year bonus period. He submitted that he had done this in the year commencing 16 June 2006 and that it did not matter that he did not satisfy the work-test in the previous 12 months.

Consideration

7. I am satisfied that Mr Ray meets the scheme’s qualification requirements in s92C(a), (b), (c), (e) and (f) of the Act. Under s92C(d) of the Act, he needs to have accrued “at least one full‑year bonus period” while registered as a member of the pension bonus scheme. Accrual of bonus periods is provided for in s92T of the Act which, in so far as relevant, reads:

s92T Accrual of bonus periods
“Full‑year bonus period
(1)  The first bonus period that accrues to a person is the full‑year period of the person's accruing membership of the pension bonus scheme:
(a) that began on whichever of the following dates is applicable:

(i) if the person was an accruing member of the pension bonus scheme on the date the person's registration as a member took effect–the date the registration took effect;
(ii) in any other case–the date on which the person first became an accruing member of the pension bonus scheme; and

(b) for which the person passes the work test.

(2)  Each succeeding full‑year period of the person's accruing membership of the pension bonus scheme:
(a) that is specified in the person's claim for pension bonus; and
(b) for which the person passes the work test;
is a bonus period that accrues to the person.”

8. As I read Part 2.2A of the Act, a person, once registered in the scheme, will either be an accruing member[2] or a non-accruing member[3].  The latter description has particular meaning and involves some dispensation for not being an accruing member[4].  The status of non-accruing membership does not apply merely because the work test is not satisfied.  In the first 12 months of Mr Ray’s membership of the scheme, he did not come within any of the categories of non-accruing membership.  Accordingly, he was an accruing member during that period.  In general, he must pass the work test during a period of accruing membership[5].

[2] See s 92N of the Act

[3] See s 92P, 92Q of the Act

[4] See ss 92P(1) and 93U (disposal preclusion period); ss 92P(2) and 93V (compensation preclusion period ) ss 92P(3) and 93W (carer preclusion period) and s 92Q (where the secretary exercises a discretion) of the Act.

[5] See commentary on clause 92C in the Explanatory Memorandum to the Social Security and Veterans Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998.

9. Mr Ray’s circumstances are embraced by s92T(1)(a)(ii) of the Act. While s92C requires at least one full bonus year, I am satisfied that, where only one bonus year has been accrued, it must be the “first” such year and must fall within the terms of s92T(1) of the Act. In order for that to count as a bonus period, the work test had to be met during that time. I do not accept the contention that the second 12 month period may be considered independently[6]. 

[6] See Borg-Olivier and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1211 at paras 30-32

10.     I have noted Mr Ray’s reference to his not being advised of the need to meet the work test.  However, that is not a matter that can be taken into account in applying the provisions relating to the scheme.  These provisions do not allow for the exercise of any discretion by Centrelink officers or by the Tribunal.  Mr Ray’s hours of work in the first 12 months of his membership of the scheme did not reach the threshold of 960 and, accordingly, he does not satisfy the requirements of the scheme.

Decision

11.     The decision under review is affirmed.

I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         ..............................[Sgd]..................................................
  Elizabeth Young, Research Associate

Date/s of Hearing  23 & 24 July 2008 
Date of Decision  31 July 2008
The applicant was self represented.
For the Respondent                  Mr Joe Guthrie, departmental advocate.