Re Peura and Secretary, Department of Family and Community Services
[2003] AATA 1123
•7 November 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1123
ADMINISTRATIVE APPEALS TRIBUNAL )
)No S2002/427
GENERAL ADMINISTRATIVE DIVISION ) No.S2002/428
Re MRS KARINA PEURA Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
Re MR PENTTI PEURA Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES Respondent
DECISION
Tribunal Deputy President D G Jarvis Date7 November 2003
PlaceAdelaide
Decision The Tribunal sets aside the decision under review and substitutes its decision that arrears of age pension and wife pension be paid to the applicants for the period 1 January 2002 to 16 May 2002. D G Jarvis
(Signed)
Deputy President
CATCHWORDS
SOCIAL SECURITY - Age Pension - Wife Pension - income and assets of trust attributed to the applicants - whether applicants were notified of decision to attribute that income - requirements of "notice" - whether applicants entitled to arrears
Social Security (Administration) Act 1999, s109
Secretary, Department of Family and Community Services v Rogers (2000) 104 FCR 272
Re Wills and Secretary, Department of Social Security (1998) 54 ALD 271
Re Secretary, Department of Social Security and Sting (1995) 39 ALD 721
Austin v Secretary, Department of Family and Community Services (1999) 92 FCR 138
R v Secretary of State for the Home Department ex parte Tolba [1988] Imm AR 78
Re Laurent and Secretary, Department of Family and Community Services (2002) 68 ALD 771
Secretary, Department of Family and Community Services v Laurent [2003] FCA 1017 Department of Social Security and Plug [2000] 62 ALD 187REASONS FOR DECISION
7 November 2003 Deputy President D G Jarvis 1. This is an application by Mrs Karina Peura and Mr Pentti Peura for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 23 October 2002 which affirmed the decision of an Authorised Review Officer dated 11 September 2002 not to pay the applicants’ arrears from 1 January 2002 until 16 May 2002 as the request for a review of the decision to attribute the income and assets of the Peura Family Trust ("the trust") was not made within 13 weeks of the original decision.
2. At the hearing the applicants were represented by Ms Anthi Vu of the Welfare Rights Centre (SA) Inc and the respondent was represented by Mr Christian Goldsworthy, departmental advocate. It was agreed between the parties that both applications were to be heard together and that the evidence and submissions were applicable to both matters. Mrs Peura gave oral evidence by telephone.
3. The Tribunal received into evidence the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (T-Documents: T1-T187) (exhibit A1). The Tribunal also admitted the following documents into evidence:
(a)Australian Securities Commission Annual Return of a Company for 1996 (exhibit A2);
(b)Centrelink Private Trust Form relating to the Peura Family Trust dated 27 June 2001 (exhibit A3);
(c)letter dated 5 April 2002 from Mrs Peura to Ms Kath David of the Department of Health and Ageing and its enclosures comprising an estimated fortnightly income and expenditure dated 17 January 2002 (exhibit A4);
(d)letter dated 13 March 2003 from Income Testing, Hardship and Clients Support Service Section of Department of Health and Ageing (exhibit A5);
(e)letter from Centrelink dated 10 December 2001 to Mr Peura (exhibit A6);
(f)fax of a letter dated 15 May 2002 from Department of Health and Ageing to Mrs Peura (exhibit A7); and
(g)letter dated 1 February 2001 to Mrs Peura from Centrelink (exhibit R1).
The Issues
4. The issues for determination are whether the applicants were given notice of the decision, when such notice was given and whether the applicants are entitled to arrears of age pension and wife pension for the period 1 January 2002 to 16 May 2002.
The Evidence
5. In her telephone evidence, Mrs Peura stated that the trust was established on 16 August 1989 with Kemila Pty Ltd (“the company”) as the trustee. The applicants were both directors of and equal shareholders in the company. At that time Mrs Peura was a practising accountant and Mr Peura conducted his own fencing contracting business. Mrs Peura explained that the fencing contracting business was run as a partnership and Mrs Peura periodically conducted an accounting practice. At the time the trust appeared to be the ideal vehicle through which to run their respective businesses.
6. On 31 December 1996 Mrs Peura completed an Australian Securities Commission Annual Return of a Company Form where she indicated that Mr Peura would resign as a director of the company on 15 January 1997 and that his shares would be transferred to Mrs Peura (exhibit A2).
7. Mrs Peura said that in 1991 Mr Peura underwent a hip replacement from which he did not fully recover. The hip condition prevented Mr Peura from carrying out his work and he subsequently applied for and received a disability support pension in 1993. Mrs Peura also commenced receipt of wife pension at that time. Mr Peura’s health deteriorated further as a result of a stroke in 1994. Mrs Peura said that the stroke affected the entire family and she ceased work as an accountant for a period of 18 months to 2 years in order to care for her husband. Finding herself unable to keep up with mortgage payments, Mrs Peura sold the family home in mid 1997 and eventually moved from Melbourne to Adelaide.
8. Mr Peura had a further stroke in 2000 while in respite care. He has been resident in several care facilities since that time and he is presently a patient at St Anna’s Residential Care Facility. Mrs Peura had taken her husband to hospital on the day of the hearing and it was for this reason that she was unable to give evidence in person.
9. Mrs Peura said that by the end of June 2001, the trust had become inactive and Mrs Peura indicated this on her tax return for the financial year ending 30 June 2001. On 27 June 2001 Mrs Peura completed a “Centrelink Private Trust” form which included a declaration by her that she was owed $24,965 by the trust (exhibit A3). She said that by then the trust was a loss trust, without assets or income, and that the debt owed to her was just a book entry. The debt is still outstanding and will remain so. Mr Goldsworthy informed me that the respondent accepts that the trust is unable to repay the debt owing to Mrs Peura. Mrs Peura confirmed that she has recently cancelled the GST registration of the trust and that, in due course, it will be wound up.
10. Mrs Peura explained that pursuant to a directors’ meeting of the company on 1 August 2001, a resolution was passed to cease acting as trustee for the trust. Mrs Peura appointed herself as trustee and transferred her shares in the company to her daughter, Anita Peura. In the course of her evidence Mrs Peura explained that she had signed a share transfer but she had not yet paid the Victorian stamp duty payable on the transfer. Mrs Peura conceded that her daughter may only be an equitable shareholder of the company shares. On 9 August 2001 the company changed its name from Kemila Pty Ltd to Meri Gallery Pty Ltd.
11. Mrs Peura said that she received a letter from the respondent dated 6 September 2001 in which she was advised of the immediate wife pension payment payable on 10 September 2001 and the regular wife pension payment from pay-day 13 September 2001. The letter also advised that the information used for calculating her regular payment was a “Combined Annual Income” of $4,751.94 (T41/187). A similar letter was sent to Mr Peura dated 6 September 2001 and that letter also provided that the “Combined Annual Income” of $4,751.94 was used to calculate his payment of age pension (T41/186).
12. When asked what her understanding of the contents of those letters was, Mrs Peura explained that at the time that she received the letters she had been on a full pension, as had her husband, for quite some time. She did not concern herself with the rate of payment as neither she nor her husband had any investments, they were not working and they did not own property. She described their situation as providing her with the security of knowing that they were entitled to the full amount and that the full amount was being paid. When she read the combined annual income figure of $4,751.94, Mrs Peura said she understood it to mean the accrued pension that had been paid in that financial year.
13. Mrs Peura stated that she received a further letter from the respondent dated 20 November 2001 (T9/46). That letter advised Mrs Peura of the changes in the way that private trusts and private companies would be assessed under the income and assets tests from 1 January 2002. The letter included the following information:
“You are likely to be attributed 100% control of the income and assets of the Peura Family Trust, because of the control you have through the legal power you hold.
Assuming there are no changes to your circumstances, this provisional assessment will be applied as a reviewable decision on 1 January 2002. You and/or your partner will be advised of this decision in December 2001 and its effect on entitlements. At that time, if you are not satisfied with the decision, you will have the right to appeal under the Social Security (Administration) Act 1999.”
Mrs Peura explained that she had stopped practising as an accountant by that time but remembered the proposed changes to the law being discussed when she was practising in Melbourne. She said that she did not believe that the changes in the law would affect her or her husband as there had been huge losses in the trust, she had declared the loan amount owed to her and there were no assets in the trust.
14. Notably, even though his pension would be, and in fact was, affected by the changes in the assessment of trusts and private companies, it appears that Mr Peura was never sent a letter advising him of the changes that were to occur or that his wife had been provisionally assessed as having 100% control of the trust.
15. Mrs Peura said that she and her husband each received a letter from the respondent dated 10 December 2001 (T41, T42 and exhibit A6). These letters advised them of the amounts of payments they would receive during two specified periods and of the regular payments they would receive from pay-day 17 January 2002. The proper construction of these letters is central to the determination of this matter, since it is upon these letters that the respondent relies in asserting that Mr and Mrs Peura had notice of the decision. I set out below the operative part of the front page of the letter from Centrelink to Mrs Peura.
“Your Wife Pension
Payment from 05/12/2001 – 18/12/2001 due on 20/12/2001 $467.40
Payment from 19/12/2001 – 01/01/2002 due on 03/01/2002 $484.06
Regular payment from payday 17/01/2002
Wife Pension Age $391.67
Plus Pharmaceutical Allowance + $5.80
Plus Rent Assistance + $89.60
Less Lump Sum Advance Repayment - $38.50
______
Total $448.47
______
INFORMATION USED FOR CALCULATING YOUR REGULAR PAYMENT
Combined Annual Income . . . . . . . . . . . . . . . . . . . . . . . . $7,647.94
Please read the back of this letter
If you have any questions about this letter please ring: …”
The above information takes up virtually all of the front page of the letter. It is set out clearly against a shaded background, in a way which thus gives emphasis to this part of the information contained in the letter. The back of the letter then contains advice setting out the obligations of the recipient of the letter to notify Centrelink of relevant information, and the recipient’s rights, which include a standard paragraph commencing “If you do not agree with this decision …” and proceeds to refer to rights of review and appeal. The back of the letter contains some 10 paragraphs and a very detailed and formal statement of relevant matters.
16. In considering Mrs Peura’s evidence, it is significant that when one compares the letter to her of 10 December 2001 with the letter of 6 September 2001, the appearance of the front page of each letter was virtually identical. Further, according to the computer printout of T8, the detailed paragraphs on the back of each letter were very substantially similar, and their appearance was virtually identical. I understand from Mrs Peura’s evidence that the letter of 6 September 2001 was typical of other letters which were received by the applicants from time to time. Unless the reader were to look at the figures referred to in the letter of 10 December 2001 and appreciate that there was a more substantial reduction in the figure advised for the “regular payment”, there was nothing on the face of the letter of 10 December 2001 to indicate that that letter was any different. Indeed, the letter of 10 December 2001 advised an increased rate of payment for the second of the two periods referred to, but there was no explanation for the changes in the rates which were to occur on the dates referred to in the letter. Further, there was nothing on the letter of 10 December 2001 to connect it to the earlier letter of 20 November 2001 which had advised Mrs Peura of changes in the way that private trusts and private companies would be assessed.
17. Mrs Peura stated that she did not link the letter of 10 December 2001 with the letter of 20 November 2001. She remained secure in the belief that both she and her husband were on a full pension. She said she would have thought that the change in the rate of payment was just one of the small adjustments that the respondent periodically made, but as she believed there was nothing that could reduce their rate of payment, and relevantly there were no assets in the trust, she would not have given it too much thought. As for the combined annual income amount of $7,647.94, Mrs Peura said that she thought it was a further accrual of the payments made in that financial year.
18. When asked whether she had been advised by the respondent that it had decided to attribute the income of the trust to Mr and Mrs Peura personally, Mrs Peura said she had not been advised that that decision had been made and further, had she been aware that such a decision had been made, she would have done whatever was required to remedy the situation. She stated that if such a decision had been made she would have expected to have been advised, but she was not. Mrs Peura said that the notice was lacking. She further explained that she would not have noticed the reduction in her pension as it went directly into the bank and she only withdrew money in order to meet grocery bills in accordance with a predetermined budget.
19. Mrs Peura stated that she became aware of the reduction in the rate of pension paid to her and her husband after receiving a letter from the Department of Health and Ageing granting them a reduction in aged care fees (exhibit A5). Mrs Peura wrote to the respondent on 15 May 2002, in reply to a letter from the respondent dated 7 May 2003 (a copy of which was not provided to the Tribunal), and advised that she became trustee for the trust on 1 August 2001 and that ownership of the company changed on the same date. She further advised that the trust became inactive on 30 June 2001, that her daughter Anita Peura became the sole director and shareholder of Kemila Pty Ltd and that she subsequently changed its name to Meri Gallery Pty Ltd (T21/116). On the basis of that information, pursuant to s110(1) of the Social Security (Administration) Act 1999 ("the Act"), the respondent decided to cease attributing the income and assets of the trust to Mr and Mrs Peura from 17 May 2002.
20. Mrs Peura sent a further letter dated 29 May 2002 to the respondent enclosing the original minutes of the meetings of Kemila Pty Ltd on 1 August 2001 and, notably, the minutes of the meeting of that company as trustee for the trust recording that the business activities of the trust ceased from 30 June 2001 (T27/125). In her letter Mrs Peura states, inter alia, that:
“… the Peura Family Trust is a loss trust, and thus could not pay any interest to beneficiaries on their loan account, and could never have repaid the loan. In any case as of 30 June, 2001 there is no loan account or Balance Sheet, as the trust became inactive.” (T22/118).
21. In cross examination, Mrs Peura said that she did not worry about the rate of payment stated on the letters because her circumstances had not changed and that she accordingly assumed that she was continuing to receive her full pension entitlement. Mrs Peura also said that she has years of business experience and she would have acted to correct the situation had she been made aware that a decision to attribute the trust income and assets to her and her husband had been made. She explained that she regularly experienced variations in the rate of her payment. When these variations occurred, as demonstrated by the letter of 6 September 2001, the respondent did not advise her of the reason for the variation and Mrs Peura said she was used to this occurring. Mrs Peura also stated that she was aware of the data-matching program between the respondent and the Australian Tax Office.
22. In the course of re-examination Mrs Peura said that the letters relied upon as notification of the decision did not state why there was a reduction in the rate of payment, or that the notified income came from the trust, or how the income used for the reduction was calculated.
23. I found Mrs Peura to be an articulate and intelligent witness and I accept her evidence.
The Legislation
24. The date of effect of a favourable determination is determined in accordance with s109 of the Act. Section 109 provides as follows:
“109(1) If:
(a)a decision (the original decision) is made in relation to a person’s social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.
109(2)If:
(a)a decision (the original decision) is made in relation to a person’s social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the application for review was made.
109(3)If:
(a)a decision (the original decision) is made in relation to a person’s social security payment; and
(b)the person is not given notice of the original decision; and
(c)the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.”
25. Section 110 of the Act relevantly provides as follows:
“110(1)Subject to subsections (2) and (11) (inclusive), if a favourable determination is made following a person having informed the Department of the occurrence of an event or change of circumstances, the determination takes effect:
(a)on the day on which the person so informed the Department; or
(b)on the day on which the event or change occurred;
whichever is the later.”
Notice
26. The primary issue and central argument is whether the applicants were given notice of the decision for the purposes of s109 of the Act to attribute the income of the trust to the applicants following the amendments to the social security legislation. If the letters of 10 December 2001 amount to notice then s109(2) provides that the date of effect of the favourable determination is the day on which the application for review was made. If the letters were deficient, such that the applicants were not notified of the decision, then s109(3) provides that the date of effect of the favourable determination is the day on which the original decision took effect.
27. The applicant contended that the letters sent to Mr and Mrs Peura did not advise them that a decision had been made, nor did the letters convey the contents of that decision, i.e. that the income and assets of the trust would be attributed to them personally. The respondent submitted that the letters satisfy the test in Secretary, Department of Family and Community Services v Rogers (2000) 104 FCR 272 in that they were unambiguous and that they conveyed the relevant and appropriate information when viewed objectively. The respondent further argued that the decision in question was to reduce the payment of the pension and that that decision and the contents of that decision, namely the reduced rate, were conveyed to the applicants.
28. In support of her argument Ms Vu, for the applicant, relied upon the language of s72 and s74. She submitted that s72 should be read in conjunction with s74 so as to require that notices under s68 of the Act must be clear and unambiguous. The SSAT also had regard to these provisions of the Act. However, these sections relate only to notices under the relevant subdivision, being Subdivision B – Requirement to give information about change of circumstances etc. of Division 6 of the Act. Section 109 is contained in Subdivision B – Determination under s78 or s85 of Division 9 of the Act and is clearly not contained within the same subdivision as s72 and s74. Sections 72 and 74 are concerned with the statutory requirements of s68 notices, being notices requiring a benefit recipient to inform Centrelink of the likelihood or occurrence of a specified event or change in circumstances, or to give Centrelink a statement about a matter that might affect a person’s payment. While the portion of the letters which concerned the obligations to provide information to Centrelink was issued pursuant to s68, I find that s72 and s74 are not relevant to a consideration of notice under s109 of the Act.
29. I was referred to a number of cases in the course of submissions. The applicant relied on the decision in Re Wills and Secretary, Department of Social Security (1998) 54 ALD 271. That case concerned a decision by Centrelink that Mrs Wills was no longer a homeowner for the purposes of her pension. This decision led to an increase in her assessable assets but that would not have reduced Mrs Wills’ pension had she also been correctly coded as a non-homeowner on the Centrelink computerised decision making program. Because she was not correctly recorded as a non-homeowner she suffered a reduction in her pension for over a year. After her death, her son challenged the decision and was successful in the Administrative Appeals Tribunal on the basis that the underpayment of pension was caused entirely by an administrative error on the part of Centrelink and that the letters sent to Mrs Wills did not accord with the actual decision (to record Mrs Wills as a non-homeowner) and in fact reflected Centrelink’s error. The Tribunal found that the letters did not amount to notice of the relevant decision.
30. In coming to that conclusion in Wills (supra), the Tribunal distinguished the case of Re Secretary, Department of Social Security and Sting (1995) 39 ALD 721 on the basis that Sting involved a notice that reflected the decision that had actually been made by the department (at 276). In the present matter, the respondent argued that the facts in Wills can be distinguished from those of Mr and Mrs Peura as Wills concerned departmental administrative error and that is not an issue in the present matter. I concur with the respondent's analysis and agree that the present case does not involve an error on the face of the letters.
31. However, a different result was reached in Austin v Secretary, Department of Family and Community Services (1999) 92 FCR 138. In this case Drummond J examined the requirements of "notice" in circumstances where Centrelink incorrectly recorded the rental income received by Mr Austin leading to a reduction in his newstart pension. The applicant submitted that the letters dated 6 September 2001 and 10 December 2001 from the respondent in the present matter are similar to the fortnightly forms in Austin in that they do not convey information about the method of calculation of the rate nor do they specifically indicate how the combined annual income was calculated. The applicant submitted that Austin stands for the principle that a mere statement of an amount of payment is insufficient notification of the decision to reduce the payment. The respondent contended that the type of information that the applicant seeks to have included in the letters would amount to reasons for the decision and Drummond J expressly excluded that requirement (at 148). Furthermore, the respondent submitted that some letters in Austin were found to constitute sufficient notice and that it was only the fortnightly forms that Mr Austin regularly completed that failed to amount to notice.
32. The respondent further submitted in the present case that the letters of 1 February 2001 (exhibit R1) and 20 November 2001 (T9/46) put the applicants on notice that their rate of pension would be affected as a result of the changes to the assessment of private trusts and companies. I have already referred in paragraph 13 to the contents of the letter of 20 November 2001. The earlier letter of 1 February 2001 was sent to Mrs Peura (and there is no evidence that a similar letter was sent to Mr Peura in respect of his age pension). The letter of 1 February 2001 also advised that rules relating to the assessment of income and assets for private trusts and small private companies were changing from 1 January 2002. It made reference to Kemila Pty Ltd and enclosed an information booklet and requested Mrs Peura to complete the private trust or private company forms, or to advise why she thought she was not involved in a trust or company. Mrs Peura subsequently completed the relevant forms and it appears from T4 that they were returned to Centrelink on 5 July 2001. However, in my view it follows from what Drummond J said in Austin that the requirements of “notice” are not met in circumstances where a pension recipient is compelled to compare various communications in order to understand that a decision had been made that impacts upon the rate of payment. In considering what constitutes "notice" His Honour said at 146:
"It is therefore unlikely that Parliament intended that the answer to the question whether a notice had been given might permit an investigation into a range of information supplied by the Department to the benefit recipient over a longer or shorter period to determine whether an inference could be drawn from a part or from the entire body of that information that a prior decision as to the rate of the entitlement had been made."
The respondent’s argument would have been stronger if the letters of 10 December 2001 had expressly referred back to the previous correspondence, but this was not the case. On the contrary, the appearance and content of the letters of 10 December 2001 appeared to be virtually identical with the letter of 10 September 2001, which itself, on Mrs Peura’s evidence, was similar to other routine letters from Centrelink.
33. Drummond J in Austin also referred at paragraph 35 of his judgment to a decision of Kennedy J in R v Secretary of State for the Home Department ex parte Tolba [1988] Imm AR 78, a decision concerned with a statutory provision requiring that “notice giving or refusing leave” to enter the United Kingdom be given to a new arrival. His Lordship held that a communication could only constitute such “notice” if it was in writing and if “viewed objectively, it can reasonably be expected to convey the relevant information to the mind of the average intending immigrant of the class to which the particular immigrant belongs”. Drummond J then stated at paragraph 35 of his judgment in Austin:
"A clear statement by the respondent that a decision has been made fixing the rate of payment of Newstart Allowance at a particular figure or that a decision has been made cancelling or suspending Newstart Allowance, as opposed to information from which an inference to one or other of those effects might be drawn, is, in my opinion, required before a communication can constitute a ‘notice’ within s660K. It is not enough for there to be a ‘notice’ of a prior decision within s660K(2) or (3) that there is notification to the recipient of the amount of the payment of Newstart Allowance required to be made by that prior decision. At most, that involves notice being given of only the result or effect of a decision that fixes the rate of Newstart Allowance to be paid, without any notification that that amount has been fixed by a decision that has been made. The person affected is entitled to be informed with clarity that the change made to his benefit is the result of a decision."
34. In Secretary, Department of Family and Community Services v Rogers (supra) the income paid in respect of each of Mrs Roger's children by the Worker's Compensation Board of Queensland, as a result of the work related death of Mrs Roger's husband, was incorrectly assessed as her income and her pension was accordingly reduced. Cooper J held that a notice must contain two elements; the fact that a decision had been made and the contents of that decision. His Honour referred at paragraph 35 of his reasons to a requirement that the notice be intelligible, but said that this did not require that “reasons for the decision be given, or that sufficient information be given for the purposes found by the AAT” (which latter point was apparently a reference to the AAT’s proposition that intelligibility would enable the applicant to consider the decision, and if so advised, apply to review it within 28 days of the notification). His Honour said that this requirement (i.e. that the notice be intelligible) “meant no more than the means employed to communicate the decision must be intelligible to the person to whom the notice is to be given so that that person is informed of the making of the decision and the content of it”. His Honour proceeded to expand upon the requirements in Austin in relation to notice. He stated at paragraph 38:
"I have reached my conclusion as to the proper construction of the phrase ‘notice is given to the person to whom the pension is payable advising the person of the making of the previous decision’ without reliance on the reasoning of Drummond J in Austin … Although our reasons are substantially similar in excluding any requirement to provide reasons or information of the type found by the AAT to be necessary to constitute an intelligible notice, I would not limit the content of the notice to a communication to the benefit recipient that a decision has been made to pay him or her a particular allowance at a particular rate. Rather, I construe this phrase as meaning any decision capable of review under s1240 of the Act which, when reviewed, leads to a favourable determination under s293. It would include, for example, a decision in relation to a sole parent pension which is not a decision to pay the pension at a particular rate which however, upon review, reveals that the effect of the decision is that the pension recipient has been, or will be, paid at a lesser rate than that provided for in the Act." (emphasis added)
In finding that Mrs Rogers was notified of the decision, one of the factors that Cooper J had regard to was that the sentence "your pension has reduced because of a change in your circumstances" conveyed to the reader that a decision had been made to reduce the pension to the stated amount for the stated reason (at paragraph 39).
35. I was also referred to the decision of the Administrative Appeals Tribunal in Re Laurent and Secretary, Department of Family and Community Services (2002) 68 ALD 771. At the time of the hearing of the present application, the Federal Court had reserved its decision in the appeal of the decision in Laurent. The Federal Court subsequently handed down its decision in Secretary, Department of Family and Community Services v Laurent [2003] FCA 1017, and the Court set aside the decision of the Tribunal for reasons to do with the nature of rent assistance and the Tribunal's construction of the definition of the phrase "social security payment". In considering that appeal the Federal Court did not examine the nature of "notice" or discuss the decisions in Austin and Rogers.
36. For the sake of completeness, I also refer to Department of Social Security and Plug [2000] AATA 744. In this matter the Tribunal considered the issue of what was required to constitute a sufficient notice of a decision regarding the respondent’s family allowance. The SSAT had decided that the relevant notice was deficient because it did not include the main reasons for the department’s decision. The Administrative Appeals Tribunal decided on the authority of Austin that that approach was wrong and that the notice in question was sufficient.
The facts in Plug are distinguishable from the facts in the present matter. In Plug, the department continued to take into account maintenance payments resulting in a diminution of the family allowance which the applicant was receiving, notwithstanding that she had advised the department that she was reconciled with her husband. The department apparently did not act on this advice and so made no decision which required notification to the benefit recipient; accordingly, the summary of what was required for a valid notice did not include a requirement to give notice that a decision had been made (see paragraph 24 of the reasons for decision in Plug). I note that this determination was made prior to Rogers. In my opinion, on the authority of Austin and Rogers, the letters of 10 December 2001 in the present matter were required to give notice that a decision had been made, but they did not do so. In the present matter, Centrelink did not erroneously fail to act on changed circumstances advised to it by Mr and Mrs Peura; rather, Centrelink made a decision based on the new trust rules which resulted in a reduction of their pension entitlements.
37. From the reasoning of the Federal Court in both Austin and Rogers I think that the correct approach in considering whether the letters relied upon constitute notice of the relevant decision may be summarised as follows:
· the Tribunal should identify the decision of which notice is to be given;
· the letters should be construed objectively;
· the letters should be intelligible, that is they should inform the recipient of the making of the decision and the content of it;
· where the rate of pension is changed as a result of changed circumstances or the manner in which those circumstances are assessed, merely advising the recipient of the rate of his or her pension only constitutes advice of the effect of the decision; and
· the letters need not advise the reasons for the decision.
The letters should then be construed in accordance with the above principles in order to determine whether they constitute notice of the decision as identified by the Tribunal.
38. I consider that the letters sent to Mr and Mrs Peura on 10 December 2001 do not constitute notice for the purposes of s109 of the Act, for the following reasons.
(a)In the letter of 20 November 2001, the respondent advised that a provisional assessment had been made and the letter then went on to explain to Mrs Peura that “You and/or your partner will be advised of this decision in December 2001 and its effects on entitlements” (emphasis added). It is clear in this communication that the respondent was of the view, as is the case, that the decision in question was the decision to attribute the trust income and assets. In this letter the respondent distinguished the decision from its effect upon the entitlements of the applicants and made it clear that Mrs Peura could expect to be advised of both the decision and its impact in December 2001. In my opinion, the letters of 10 December 2001 merely constitute advice to the applicants of the effect of the decision upon their rate of pension.
(b)As mentioned in paragraph 32 above, following the approach of Drummond J in Austin, the letters of 10 December 2001 should not be interpreted by reference to the earlier letters of 20 February 2001 and 1 February 2001, especially as the letters of 10 December 2001 made no reference to these earlier letters.
(c)In my opinion, the letters properly construed constitute advice to Mr and Mrs Peura of the amounts of payments which they would receive during two stated periods, and of the regular payments that they were to receive from pay-day 17/01/2002. To the extent that the letters advise the rate of the pensions they inform the recipients of the effect of decisions, and an inference can be drawn that decisions have been made. This inference is reinforced by the paragraph on the back of the letters relating to rights of review. However, in my view these matters are not sufficient to satisfy the requirements of notice under s109(2)(b) of the Act (see paragraph 38 of Drummond J’s reasons in Austin). Further, they do not advise what the relevant decision was (i.e. that trust assets or income were being attributed to the applicants for the first time). The letters were not intelligible in the sense referred to by Cooper J in Rogers, in that the recipients of the letters were not informed of the making of the decision and the content of it.
(d)In Rogers, Cooper J was concerned to avoid limiting the required content of a notice to a communication that a decision had been made to pay a benefit recipient at a particular rate (see paragraph 34 above). His Honour referred, by way of example, to a decision which is not a decision to pay a benefit recipient at a particular rate but is rather, a decision which had the effect of providing for a pension payment at a lesser rate than that provided for by the Act. The decision in the present matter was a decision to attribute the assets and notional income of the trust to the applicants, the effect of which was to reduce the rate of pension. Given that this was the effect of the decision, the letters of 10 December 2001 do not amount to notice in accordance with the decision in Rogers as neither the fact that such a decision had been made nor the contents of that decision were communicated to the applicants in the letters of 10 December 2001. To satisfy the requirement of Rogers, the notices should have contained advice to the effect that a decision had been made to take into account their interest in the family trust, resulting in a specified rate of pension, or at the very least, that a decision had been made to reduce the applicants’ pensions because of a change in the way in which their assets and income were assessed (although this alternative would have been less explicit).
(e)There is nothing in the letters of 10 December 2001 which effectively distinguishes them from the letter of 6 September 2001. The December and September letters both indicate a reduction in the rate of pension payable as between the payment due and the regular payment. There is nothing in the December letters, especially in light of their similarity to the September letter, which enables a reasonable person to determine that a decision has been made as a result of a change in the way that the respondent assessed the applicants' circumstances. Unlike the letter sent to the applicant in Rogers, the letters of 10 December 2001, viewed objectively, do not advise that it is the result of a change in circumstances or a change in the assessment of those circumstances.
39. Accordingly, I find that the applicants were not given notice of the original decision to attribute the income and assets of the trust to them personally. In these circumstances, s109(3) of the Act applies and the favourable determination, being the decision to cease the attribution of the trust income and assets, takes effect on the day on which the original decision took effect.
Applicant’s Alternative Argument Under Section 110(1)(a)
40. In view of my decision as to s109(3), it is not strictly necessary for me to consider the applicant’s alternative argument, that by February 2002 sufficient information had been supplied to the respondent such that it should have known that the trust had become inactive and that the company had changed names and ownership well before 17 May 2002. However, I will do so, for the sake of completeness. If there was evidence which demonstrated that the applicants had provided information which informed the respondent of these changes in their circumstances then, in accordance with s110(1), the favourable determination, being the decision to cease attributing the income and assets of the trust to the applicants, would take effect from the day on which such information was conveyed to the respondent or on the day on which the event or change in circumstances occurred, whichever was the later. While there is evidence of the applicant’s daughter, Anita Peura, having advised of a change in name and ownership of the company on 12 February 2002 (T13), the form that conveys that information does not refer to the trust having been a loss trust or rendered inactive; it does not refer to the trust at all. As a result of the information in the form completed by Anita Peura, the respondent conducted a company search, but the information revealed by that search does not take the applicants’ case any further. There is no evidence before me which supports the applicants’ contention that the respondent knew or should reasonably have known about the impecunious state of the trust at a date earlier than 17 May 2003. Accordingly, I find that s110(1) applies only insofar as the relevant date of effect for the favourable determination is 17 May 2003, being the date that Mrs Peura advised of the change in the status of the trust.
Decision of the Tribunal
41. For the reasons set out above I set aside the decision under review and substitute for it a decision that arrears of age pension and wife pension be paid to the applicants from 1 January 2002 to 16 May 2002.
I certify that the 41 preceding paragraphs are
a true copy of the reasons for the decision herein
of Deputy President D G JarvisSigned: .....................................................................................
N. Quirke AssociateDate/s of Hearing 19 August 2003
Date of Decision 7 November 2003
Counsel for the Applicant Ms A Vu
Solicitor for the Applicant Welfare Rights Centre (SA) Inc
Counsel for the Respondent Mr C Goldsworthy
Solicitor for the Respondent Service Recovery Team, Centrelink
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