Renfors and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 317
•18 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 317
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/3696
GENERAL ADMINISTRATIVE DIVISION ) Re BRYAN RENFORS Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member L Hastwell Date18 April 2008
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
L HASTWELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Rent Assistance – formula for calculation of Rent Assistance – indexation of rent threshold amount resulting in decrease in Rent Assistance – Social Security benefits calculated fortnightly – effect of indexation – automatic alteration in calculators – decision affirmed
Social Security Act 1991 ss 1070, 1070A, 1070C, 1070K, 1070Q, 1070T, 1070Y, 1189, 1190, 1191, 1192
Re Buckley and Secretary, Department of Employment and Workplace Relations [2006] AATA 549
REASONS FOR DECISION
18 April 2008 Senior Member L Hastwell 1. Bryan Renfors (the applicant) was a recipient of Youth Allowance (YA) at all relevant times.
2. From 25 February 2006 he began paying private rental as a single person in shared accommodation and he commenced to receive payments of Rent Assistance from Centrelink as part of his YA.
3. On 20 March 2006 and on 20 September 2006 his Rent Assistance rate reduced as a result of increases in the Consumer Price Index (CPI) as it affected the Rent Assistance legislation.
4. In May 2006 and again in October 2006 the applicant's father, Mr Seppo Renfors, acting as his nominee, queried the decrease in Rent Assistance rate and sought review of the rate. He contended that his son had been underpaid Rent Assistance throughout the relevant period.
5. On 2 April 2007 a Centrelink Authorised Review Officer (ARO) concluded that the correct rate of Rent Assistance had been paid to the applicant throughout the relevant period, being from 25 February 2006 to the date of the ARO’s decision.
6. The Social Security Appeals Tribunal (the SSAT) affirmed the decision of the ARO on 26 July 2007. The applicant seeks review of the SSAT decision to this Tribunal.
issues for the tribunal’s determination
7. The issues for the Tribunal to determine are:
·Whether indexation applying to part of a formula in a rate calculation under the Social Security Act 1991 (the Act) has effect on existing recipients of the relevant benefit or allowance, or whether it only applies to applicants for the allowance after that date.
·Whether the applicant has been underpaid Rent Assistance at any time from 25 February 2006 to the date of the ARO’s decision being, 2 April 2007 (the relevant period).
background
8. There is no dispute with respect to the relevant facts which are as follows:
·The applicant was a recipient of YA at all relevant times.
·On 25 February 2006 the applicant commenced to pay private rental of $146.66 per fortnight for shared accommodation.
·On 27 March 2006 the applicant notified Centrelink of his rental and change of address details.
·The applicant was not a member of a couple during the relevant period and he is to be assessed with respect to his entitlements as a single person.
·Between 25 February 2006 and 19 March 2006 the applicant received $43.85 in Rent Assistance per fortnight.
·On 20 March 2006 the applicant’s Rent Assistance reduced to $42.80.
·On 20 September 2006 the applicant’s Rent Assistance reduced to $41.15.
·The applicable rental threshold for the period 20 March 2006 to 20 September 2006 was $89.60.
·The applicable rental threshold for the period 20 September 2006 onwards was $91.80.
·The reductions in Rent Assistance payable to him were a direct result of indexation of part of the formula that is used to calculate rent assistance entitlements under the Act being that part of the formula that is known as the “rent threshold amount”.
the hearing
9. The applicant did not appear personally at the hearing, but was represented by his father, Mr Seppo Renfors.
10. The Tribunal had regard to a submission plus annexures provided by Mr Renfors. In addition, the Tribunal accepted the T documents into evidence. The applicant had also provided to the Tribunal a document headed “Outline of Arguments” which was received into the Tribunal on 9 October 2007 and a document headed “Appellant’s Comment on ‘Secretary’s Statement of Facts’”. The respondent’s (the Department) statement of facts and contentions was received as Exhibit R2.
11. The Department referred to the case of Re Buckley and Secretary, Department of Employment and Workplace Relations [2006] AATA 549 in the course of submissions. A further letter was received by the Tribunal from Mr Renfors on 22 January 2008, which provided the Tribunal with Mr Renfors own commentary with respect to the case of Re Buckley.
12. Mr Renfors did not challenge any of the facts as set out above. The applicant accepts that the arithmetical calculations of Rent Assistance payable to the applicant for the relevant period are correct if the formula applied to him at that time. The issue for the Tribunal to resolve is one of statutory interpretation.
the applicant’s contention
13. The applicant contends that he has been underpaid Rent Assistance during the relevant period and that the effect of an increase in the CPI should not be that a person’s Rent Assistance payment is thereby reduced.
14. He contends that this effect cannot possibly be the legislative intent and that the formula determining Rent Assistance may change within the legislation, but that when indexation occurs, it only applies to a recipient of that allowance when they notify change of circumstances to the Department and trigger a reassessment of their entitlement to that allowance.
relevant legislation
15. Part 3.7 of the Act provides for Rent Assistance in the following terms:
“1070 When this Part applies
This Part applies if the rate of a person’s social security payment is to be calculated in accordance with any of the following Rate Calculators:
(a)Pension Rate Calculator A (carer payments and certain age, disability support and wife pensions);
(b) Pension Rate Calculator C (bereavement allowance and widow B pension);
(c) Pension Rate Calculator D (certain disability support pensions);
(d) Youth Allowance Rate Calculator;
(da) Austudy Payment Rate Calculator;
(e)Benefit Rate Calculator B (mature age allowance under Part 2.12B and newstart, partner, sickness and widow allowance);
(f)Pension PP (Single) Rate Calculator or Benefit PP (Partnered) Rate Calculator (parenting payments).
1070A Effect of this Part
If a person to whom this Part applies qualifies for rent assistance in accordance with Division 2, to help cover the cost of rent:
(a)if paragraph (b) does not apply—the amount per fortnight worked out in accordance with Division 3 is added to the person’s maximum basic rate for the social security payment; or
(b)if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A, C or D, or the Pension PP (Single) Rate Calculator—the amount per fortnight worked out in accordance with Division 3 is multiplied by 26 to calculate an amount per year and the amount per year is added to the person’s maximum basic rate for the social security payment.
…
1070C Common requirements (about aged care residence, home ownership and rent)
The common requirements are that:
(a)the person is not an aged care resident, and is not taken to be an aged care resident for the purposes of the Rate Calculator concerned; and
(b)the person is not an ineligible homeowner; and
(c)the person pays, or is liable to pay, rent, other than Government rent, in respect of a period in respect of premises in Australia; and
(d)the person’s fortnightly rent is more than the rent threshold amount (see section 1070T).
…
1070KRate depends on social security payment and family situation
A person’s rate of rent assistance depends on the person’s social security payment and the person’s family situation.
…
1070Q Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance
(1)The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the Austudy Payment Rate Calculator or Benefit Rate Calculator B.
(2)Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two-thirds of rate B.
Rate of rent assistance Column 1
Item
Column 2
Person’s family situation
Column 3
Rate A
Column 4
Rate B
1 Not a member of a couple $93.20 2 Partnered—partner does not have rent increased benefit $88.00 3 Partnered—partner has rent increased benefit Half the rate specified in column 4 of item 2 4 Partnered—member of an illness separated couple $93.20 5 Partnered—member of a respite care couple $93.20 6 Partnered—member of a temporarily separated couple $88.00 7 Partnered (partner in gaol) $93.20 …
1070TRent threshold amount
(1)If the rate of a person’s social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator, the person’s rent threshold amount is $82.80.
(2)In any other case, a person’s rent threshold amount is worked out in accordance with subsection (3).
(3)First, identify which of sections 1070L, 1070N, 1070P, 1070Q and 1070R applies to work out the rate of rent assistance for the person’s social security payment. Next, identify which family situation in the table in that section applies to the person. The person’s rent threshold amount is the amount in the formula in column 3 of the table, in relation to the family situation, that is deducted from fortnightly rent.
Example:
If a person who is not a member of a couple receives an age pension, the person’s rent threshold amount is worked out as follows. First, identify section 1070L as the section applicable to an age pension. Then identify the family situation in item 1 of the table in that section as applicable to the person. Finally, the person’s rent threshold amount is $82.80, being the amount that, in the formula in column 3 of that table, is deducted from the person’s fortnightly rent. Indexation of the $82.80 has been ignored for the purposes of this example.
…
1070Y Indexation of certain amounts for CPI increases before commencement
(1) If any of the following (the pre-indexation amount):
(a)an amount in the table in any of sections 1070L to 1070R as inserted by the Social Security Amendment (Further Simplification) Act 2004 (ignoring this section);
(b) the rent threshold amount in subsection 1070T(1) as so inserted;
would have been different, assuming the pre-indexation amount had (ignoring subsection 1192(5)) been indexed on 20 September 2003 and 20 March 2004 under Division 2 of Part 3.16 of this Act as amended by that Act, then, for the purposes of this Act, the different amount is taken to have been substituted for the pre-indexation amount in the table or subsection inserted by that Act.
Note: As a result of the normal operation of Division 2 of Part 3.16, the amounts will then continue to be indexed in line with CPI increases each 20 September and 20 March.
…
1189Analysis of Part
This Part provides for
(a)the indexation, in line with CPI (Consumer Price Index) increases, of the amounts in column 2 of the CPI Indexation Table at the end of section 1191; and
(c)the adjustment of other amounts in line with the increases in the amounts indexed; and
(d)one-off adjustments of certain amounts.
1190 Indexed and adjusted amounts [see Notes 2 and 4]
The following table sets out:
(a)each amount that is to be indexed or adjusted under this Part; and
(b)the abbreviation used in this Part for referring to that amount; and
(c)the provision or provisions in which that amount is to be found.
Indexed and adjusted amounts table
Column 1Column 2 Column 3 Column 4
Item Description of Abbreviation Provisions in amount which amount
specified
17 Rent assistance MRA [Part 3.7—section
Maximum rent 1070L—Table—column assistance for 4—items 1, 2, 5, 6, 7, 8, social security 9 and 10] payments
[Part 3.7—section
1070M—Table—column 3—amount]
[Part 3.7—sections 1070N and 1070P— Table—column 4— items 1, 2, 5, 6, 7, 8, 9 and 10]
[Part 3.7—section
1070Q—Table—column
4—items 1, 2, 4, 5, 6 and
7]
[Part 3.7—section
1070R—Table—column
4—items 1, 3, 4, 5 and 6]
18 Rent threshold RTA [Part 3.7—sections amount 1070L and 1070N to
1070R—Table— formulas in column 3— all amounts deducted from fortnightly rent]
[Part 3.7—section
1070M—Table—formula in column 2—amount deducted from fortnightly rent]
[Part 3.7—subsection
1070T(1)—amount]
…
1191 CPI Indexation Table
(1)Subject to subsection (1A), an amount referred to in the following CPI Indexation Table below is to be indexed under this Division on each indexation day for the amount, using the reference quarter and base quarter for the amount and indexation day and rounding off to the nearest multiple of the rounding amount:
CPI Indexation Table
Column 1 Column 2 Column 3 Column 4 Column 5 Colum 6
Item Amount Indexation Reference Base Rounding day(s) quarter (most quarter base
recent before
indexationday)
…
Rent Assistance
11MRA (a) 20 March (a) December highest June $0.20
(b) 20Sept (b) June or December
quarterbefore
reference
quarter (but not earlier than June quarter 1979)
12 RTA (a) 20 March (a) December highest June $0.20
(b) 20 Sept(b) June or December
Quarter before
reference
quarter (but not earlier than June quarter 1979)
…
1192 Indexation of amounts
(1)If an amount is to be indexed under this Division on an indexation day, this Act have effect as if the indexed amount were substituted for that amount on that day.”
16. The Tribunal also had regard to Chapter 5.2.6.10 of the Guide to Social Security Law.
discussion of the evidence and application of the law
17. Section 1070K of the Act provides that the person’s rate of Rent Assistance depends on the nature of their Social Security payment and their family situation.
18. Section 1070Q(1) of the Act provides the rate payable for YA. Section 1070Q(2) provides that the first step is to ascertain the family situation applicable to the individual. In this case it is agreed that the applicant is “a single person sharing accommodation”.
19. Section 1070Q(2) of the Act provides that in that instance his maximum rent assistance rate is two-thirds of rate B, which is set out in column 4 of the table attached to that section.
20. The rent threshold amount is defined in s 1070T as being “the amount in the formula in column 3 of the table … that is deducted from fortnightly rent”.
21. Section 1070Q(2) of the Act is most specific in providing how the rate of Rent Assistance is calculated and the applicant does not dispute that in accordance with this table, there has been a correct arithmetical calculation.
22. The applicant’s argument revolves around how the indexation provisions in the Act have been interpreted to apply in this case such that his rate of Rent Assistance has decreased rather than increased upon indexation occurring.
23. The rent threshold amount and the maximum rent assistance amount are subject to adjustment to take into account changes in the CPI pursuant to the provisions of Part 3.16 of the Act. Section 1189 sets out the purpose of Part 3.16 in the following terms:
“1189Analysis of Part
This Part provides for:
(a)the indexation, in line with CPI (Consumer Price Index) increases, of the amounts in column 2 of the CPI Indexation Table at the end of section 1191; and
(c)the adjustment of other amounts in line with the increases in the amounts indexed; and
(d)one-off adjustments of certain amounts.”
24. Sections 1190 and 1191 set out which amounts are to be indexed or adjusted. Section 1191(1) provides that YA has its maximum rent assistance indexed on 1 January in each year by reference to the previous June quarter.
25. The maximum rent assistance is the figure in column 4 of the table under which the applicant’s Rent Assistance is calculated and he can only receive assistance up to a maximum of two-thirds of that rate because of his single shared accommodation status under the Act.
26. Nevertheless the rent threshold amount, which is an essential part of the formula set out in column 3 in the table that is used to calculate the actual rate of rent assistance payable (the table set out in s 1070Q), is indexed as per item 12 of the table set out at s 1191. The indexation occurs on 20 March and 20 September in each year. The table sets out the calculation of how the indexation occurs on each of those dates.
27. Section 1192(1) of the Act provides if an amount is to be indexed under Part 3.16 on an indexation day, then the Act is to have effect as if the indexed amount were substituted for that amount on that day. Section 1192(2) provides the formula for calculating the indexed amount.
28. The applicant’s own calculations of the application of the formula in the Act throughout the relevant period are identical to those relied upon by the Department in assessing the applicant’s Rent Assistance entitlement.
29. The reduction in the applicant’s Rent Assistance during the relevant period has occurred because the rent threshold amount has been indexed twice during the relevant period. The indexation of the rent threshold amount results in Rent Assistance to the applicant decreasing until such time as the actual fortnightly rent payable increases. There appears to be a built in legislative assumption that the rental will increase with the CPI. If it does not, then the Rent Assistance recipient will face a reduction in Rent Assistance until they have a rental increase. The maximum rent assistance bears no direct relevance to the formula calculation in column 3. It provides for a ceiling on Rent Assistance payments. Nevertheless, when YA is indexed in accordance with the Act, the total benefit will increase. YA is indexed in January of each year. The applicant does not argue that the indexation of YA in each year does not automatically apply to him with respect to Rent Assistance.
30. The applicant argues there is an injustice in the outcome and that the Tribunal should find some other way of interpreting the legislation, such that the applicant’s Rent Assistance does not reduce during the relevant period.
31. The applicant contends that indexation should not affect him unless he seeks a re-assessment of his entitlement to Rent Assistance. He argues that the adjustment to his Rent Assistance should not occur until there is an increase in his rent.
32. Section 1192 of the Act applies the indexed amount to the table under which the calculation of Rent Assistance occurs. It states most specifically that if an amount is to be indexed under the particular division it shall have effect “as if the indexed amount were substituted for that amount on that day”.
33. The applicant’s entitlement to Rent Assistance was properly calculated throughout the relevant period if the new indexed formula used to calculate Rent Assistance applied to the calculation of the applicant’s entitlements during the relevant period.
34. How often is a person’s rate of allowance calculated? Is it fixed at the date that Rent Assistance is first included in a person’s benefit until such time as the benefit recipient seeks a reassessment because of a change in their circumstances, or does the amount of the entitlement automatically fluctuate with the adjustments in the formula that occur in line with indexation and which are automatically imposed into the table under which Rent Assistance is calculated by virtue of the operation of s 1192 of the Act?
35. Having carefully considered the applicant’s arguments and the relevant legislation, the Tribunal is satisfied that the new rate deriving from the indexation of the rent threshold amount applies to the applicant when the indexation occurs and that the applicable rate of YA, of which Rent Assistance is a component, is calculated on a fortnightly basis by the Department. The applicant receives a fortnightly payment of YA and when the rate calculator alters because of the operation of the indexation provisions, combined with the operation of s 1192 of the Act, then the new formula will apply to the next fortnight's calculation of his entitlement.
36. If the applicant's argument were accepted, then a recipient paying the same amount of rent as the applicant, but who qualifies for Rent Assistance at a later date, would receive a different amount of Rent Assistance than the applicant merely because of the date at which they made their application and the applicable formula at the time.
37. Section 1192 of the Act is clear and unambiguous that the indexed amount takes effect immediately in the formula on the indexation day. It is the Tribunal's view that benefits are calculated fortnightly and are based on the relevant rate calculator at the time. Entitlements are formula driven.
38. The Tribunal finds support for this argument in the wording of the Act. Section 1070Q(2) states that a “person's rate of rent assistance per fortnight” is calculated in accordance with the tables. When that table alters because of the operation of indexation and s 1192 of the Act, the fortnightly rate will alter.
39. The applicant’s argument is a matter that he needs to take up with Government. The legislation is unambiguous with respect to the calculators and how indexation affects those calculators. The Tribunal is satisfied that the correct decision was made in this case.
40. In the circumstances, the Tribunal affirms the decision under review.
I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell
Signed: .....................................................................................
AssociateDate of Hearing 21 January 2008
Date of Decision 18 April 2008
Advocate for the Applicant Mr S Renfors (father)Advocate for the Respondent Mr C Goldsworthy
Centrelink Legal Services Branch
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