RIXTA FRANCIS and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2009] AATA 667

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 667

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/1895

GENERAL  DIVISION		)
Re		RIXTA FRANCIS

Applicant

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

Respondent

DECISION

Tribunal Justice R J Buchanan (Presidential Member)
Dr J D Campbell (Member)

Date3 September 2009  

PlaceSydney  

Decision The Tribunal sets aside Centrelink’s decision of 7 January 2009, which cancelled Ms Francis’ disability support pension.  

.................[sgd]..........................

Justice R J Buchanan
  (Presidential Member)  

Social Security Act 1991 (Cth) ss 23(4B), 94(2)

Social Security (International Agreements) Act 1999 (Cth)

REASONS FOR DECISION

3 September 2009

  Justice R J Buchanan (Presidential Member)

  Dr J D Campbell (Member)

1.      Rixta Francis was born in the Netherlands on 12 March 1968 and lived there until 20 January 2005.  She came to Australia on 21 January 2005 and married an Australian resident on 26 March 2005.  She was, in due course, granted a permanent resident (spouse) visa on 31 July 2007.  She is not an Australian citizen.

2.      On 29 July 2008 she applied for a disability support pension under the Social Security Act 1991 (Cth) (“the Act”). Entitlement to the pension would depend, if Ms Francis had resided permanently in Australia for ten years or more, on having a “continuing inability to work” within the meaning of s 94(2) of the Act – i.e. broadly speaking, an inability, within two years, to either work at least 15 hours per week independently of a programme of support, and an inability to be trained for such work because of her disability. As Ms Francis had not resided permanently in Australia for the necessary length of time different, stricter tests applied. It was necessary that she be severely disabled and satisfy other conditions connected with her residence in the Netherlands.

3.      At first Centrelink decided that each of the necessary conditions was satisfied. Ms Francis’s claim to be suffering from chronic fatigue syndrome was supported by her treating doctor.  Her medical condition was accepted as severely disabling her and preventing her from working.  She was accepted as satisfying the terms of the Agreement between the Government of Australia and the Government of the Kingdom of the Netherlands on Social Security (“the Agreement”) made for the purpose of the Social Security (International Agreements) Act 1999 (Cth) (“the International Agreements Act”), to which it will be necessary to return. Her application for a disability support pension was granted on 17 October 2008 with effect from 22 July 2008.

4.      On 7 January 2009 Ms Francis was advised that her disability support pension had been cancelled because she did not meet Australian residence requirements.  In particular, Centrelink decided that the provisions of the Agreement did not assist her to establish that she met the qualifying period of ten years.  Ms Francis initiated a series of reviews against this decision but the decision has been consistently confirmed.  Those reviews resulted in decisions by a reviewing officer, also on 7 January 2009, a decision of an Authorised Review Officer on 29 January 2009 and a decision of the Social Security Appeals Tribunal (“the SSAT”) handed down on 28 April 2009.  The SSAT affirmed the decisions within Centrelink that Ms Francis did not satisfy the requirements arising from her period of residence in the Netherlands.  It also decided, contrary to the views of Centrelink, that she had not been shown to be severely disabled.  On 1 May 2009 Ms Francis applied to the Administrative Appeals Tribunal by way of further review of the decision to cancel her disability support pension.

5. It is convenient to deal first with the question of whether Ms Francis may be said to be severely disabled. Section 23(4B) of the Act provides:

“(4B)  For the purposes of this Act, a person is severely disabled if:

(a)a physical impairment, a psychiatric impairment, an intellectual impairment, or 2 or all of such impairments, of the person make the person, without taking into account any other factor, totally unable:

(i)    to work for at least the next 2 years; and

(ii)   unable to benefit within the next 2 years from participation in a program of assistance or a rehabilitation program; or

(b)the person is permanently blind.”

(Original emphasis.)

6. The initial conclusion, that Ms Francis was severely disabled within the meaning of this provision, received support from the comments of her treating doctor in the medical report which accompanied her claim for a disability support pension. A job capacity assessment report carried out by Advanced Personnel Management on 4 August 2008 concluded that Ms Francis had a continuing inability to work. Her capacity for work was estimated at 0 to 7 hours per week at the time of the assessment and 0 to 7 hours per week in the two years thereafter. No suitable work was identified as applicable. The job capacity assessment report was taken into account in a Record of Medical Decision made on 14 October 2008. The certifying officer indicated that Ms Francis was unable to work full time or part time for the next two years and unable to undergo retraining/rehabilitation to the extent of doing any work for the next two years. She was certified as severely disabled in accordance with s 23(4B) of the Act.

7.      Until the decision of the Social Security Appeal Tribunal it appeared to be accepted by all decision-makers and reviewing officers within Centrelink that Ms Francis met the medical requirements for a disability support pension.  The Social Security Appeals Tribunal decided that Ms Francis was not severely disabled for the following reasons:

“Dr Smith says that due to her chronic fatigue syndrome, Mrs Francis has reduced endurance, reduced cognitive function, and is sometimes unable to do daily tasks.  She acknowledges that there are no investigation results of Mrs Francis chronic fatigue syndrome and that she had found her to be normal in all other aspects.  Mrs Francis’s evidence was that this doctor’s opinion is based on what she had told her.  In these circumstances, the Tribunal found it difficult to rely on this doctor’s opinion.  Similarly, the Tribunal had difficulty accepting the conclusion of Centrelink’s job capacity assessor that she has work capacity for 0-7 hours per week because his conclusion is not supported by independent and reliable medical or other evidence.”

8.      No reference was made to the Record of Medical Decision or the conclusions stated therein.  In our view there is no reason to go behind the earlier findings.  At the hearing before us it was accepted that Ms Francis has been found to be severely disabled.  Ms Francis is not disqualified from a disability support pension for the reasons that she is not severely disabled.

9.      The central question in the present appeal is whether Ms Francis meets the residence requirements for the grant of a disability support pension.

10. The conditions for the grant of a disability support pension are stated in s 94 of the Act. Ms Francis met each of the conditions apart from the requirement of s 94(1)(e) that, as a person whose inability to work had not occurred while she was an Australian resident, she had “ten years qualifying Australian residence”. Section 7 of the Act provides that a person has ten years qualifying Australian residence if they have been an Australian resident for a continuous or aggregated periods of ten years (s 7(5)). Section 7 of the Act also defines an Australian resident as a person who resides in Australia and is, relevantly for the present case, an Australian citizen or the holder of a permanent visa (s 7(2)). Ms Francis is not an Australian citizen. She has been the holder of a permanent visa since 31 July 2007. It follows that her period of Australian residence for the purpose of s 94 of the Act was just under one year at the time she made her application for a disability support pension. It is therefore necessary to see whether Ms Francis qualifies for the disability support pension in some other way because she does not do so by reference only to the terms of the Act. The International Agreements Act, however, permits the residence requirement to be met in other ways. One way is identified by the Agreement.

11. Under the provisions of the International Agreements Act the Agreement (which appears as Schedule 7 to the International Agreements Act) modifies the Act so far as it concerns disability support pensions for former residents of the Netherlands who are living permanently in Australia and who are severely disabled. Article 14 of the Agreement provides for ways in which a person to whom the Agreement applies might satisfy minimum qualifying periods for benefits under Australian legislation, as follows:

“1.Where a person to whom this Agreement applies has claimed an Australian benefit under this Agreement and has accumulated:

a)a period as an Australian resident that is less than the period required to qualify him or her, on that ground, under the legislation of Australia for that Australian benefit; and

b)a period of Australian working life residence equal to or greater than the period identified in paragraph 4 for that person; and

c)has accumulated a period of insurance;

then, for the purposes of a claim for that Australian benefit, that period of insurance shall be deemed, only for the purposes of meeting any minimum qualifying periods for that benefit set out in the legislation of Australia, to be a period in which that person was an Australian resident.

2.        For the purpose of paragraph 1, where a person:

a) has been an Australian resident for a continuous period which is less than the minimum continuous period required by the legislation of Australia for entitlement of that person to a benefit, and

b)has accumulated a period of insurance in two or more separate periods that equals or exceeds in total the minimum period referred to in subparagraph (a), the total of the periods of insurance shall be deemed to be one continuous period.

3.For all purposes of this Article, where a period by a person as an Australian resident and a period of insurance accumulated by that person coincide, the period of coincidence shall be taken into account once only by Australia as a period as an Australian resident.

4.The minimum period of Australian working life residence to be taken into account for the purposes of paragraph 1 shall be as follows:

a)for the purposes of an Australian benefit claimed by a person residing outside Australia, the minimum period required shall be one year, of which at least six months must be continuous, and

b)for the purposes of an Australian benefit claimed by an Australian resident there shall be no minimum period of Australian working life residence.”

(Emphasis added.)

12.     It was therefore necessary, in Ms Francis’ case, to identify an aggregated “period of insurance” which, taken together if necessary with her permanent Australian residence, totalled at least ten years.

13.     Article 1 of the Agreement defines a “period of insurance” to mean “a period defined as such in the legislation of the Netherlands”.  For the purpose of that definition, “legislation” in relation to the Netherlands means “the laws, ordinances and administrative regulations relating to the systems and branches of social security specified in subparagraph 1(b) of Article 2 in relation to the Netherlands”.  Those systems and branches of social security are identified in Article 2 clause 1(b) as follows:

“i)        general old age insurance;

ii)        invalidity insurance for employees and the self-employed;

iii)        general survivors’ insurance;

iv)       children’s allowances;

v)

sickness insurance (including employers’ liability for payment during sickness);

…

vi)unemployment insurance.”

14.     Ms Francis argues, as we understand her, that she is entitled to refer to periods of insurance relating to any of the matters in the list and that she is not restricted to periods of any particular type of insurance.  We think that construction of the Agreement is correct. 

15. A Guide to Social Security Law, published by the Australian Government for the purpose of the Act and the International Agreements Act, gives an outline of the Netherlands’ social security system as follows:

“10.8.1.30  The Netherlands’ Social Security System

General information

The Netherlands’ social security system consists of 2 compulsory contribution-based insurance schemes supported by a non-contributory means tested welfare scheme.  These schemes are:

●        the National Insurance Scheme,

●        the Employee Insurance Schemes, and

●        the National Assistance Scheme.

National Insurance Scheme

The benefits covered under the National Insurance Schemes are:

●        General Old-age Pension Act – AOW,

●        General Surviving Relatives Act – ANW,

●        General Child Benefits Act – AKW,

●        General Act on Exceptional Medical Expenses (Compensation) – AWBZ,

●        Self-employed Person’s Disablement Benefits Act – WAZ, and

●        Supplementary Benefits Act – TW.

Employee Insurance Scheme

The benefits covered under the Employee Insurance Scheme are:

●        Sickness Benefits Act – ZW,

●        Disablement Benefits Act – WAO, and

●        Unemployment Benefits Act – WW.

National Assistance

Other Netherlands’ social security benefits covered are:

●        National Assistance Act (Algemene Bijstandswet) – ABW.

Administration

The ministry responsible for social security in the Netherlands is the Ministry of Social Affairs and Employment.

Each Dutch scheme is administered by a separate independent authority.

The Sociale Verzekeringsbank or SVB (Social Insurance Bank) administers AOW, ANW and AKW benefits through its 9 district offices.

The National Institute for Social Insurance through UWV Gak administers ZW, WAO, WAZ, WW and TW benefits through its district offices and International Office.

Payments of Algemene Bijstandswet are administered by Municipal authorities throughout the Netherlands.”

It also says relevantly to Ms Francis’ circumstances, as will shortly be seen:

“Netherlands’ National Assistance (Algemene Bijstandswet) – ABW/Algemene Bijstandswet

This is a means tested benefit for those in need.  It is payable to a person who is not entitled to an AOW pension or whose AOW entitlement is insufficient to provide for their essential needs.

It is paid to Dutch Nationals and ‘tolerated foreigners’ living legally in the Netherlands who do not have enough income.  It is not portable from the Netherlands.  Australian pensioners living in the Netherlands can receive this benefit.

Payments are monthly at a standard rate determined by the person’s age, marital status and living and domestic circumstances.”

A further explanation of “period of insurance” says:

“Netherlands’ period of insurance/Netherlands’ periods of insurance

These are periods during which contributions were paid or were deemed to be paid under Netherlands’ law (e.g. a period receiving Netherlands’ sickness benefit would be deemed to be a ‘period of insurance’).”

16.     It would appear that after her disability support pension was granted Centrelink insisted that Ms Francis should make an application for a disability benefit in the Netherlands.  Although Ms Francis filled out and provided the necessary form she pointed out in strong terms that she did not qualify for the suggested benefit and that it would not be granted.  The application was made to the authority in the Netherlands called UWV. 

17.     On 17 December 2008 an officer of Centrelink had made inquiries of UWV in the Netherlands by facsimile.  The inquiries were directed, it would appear, to seeking confirmation whether Centrelink (and Ms Francis) should continue with the application she had made for a disability benefit in the Netherlands, which application she had told Centrelink was certain to be refused because she did not qualify.  The facsimile to UWV asked for the “contribution period(s)” for Ms Francis and informed UWV that Ms Francis had provided annual statements from 1995 to 2004 which Ms Francis said referred to social security payments.

18.     The reply from UWV informed Centrelink that there were total periods of insurance for Ms Francis in the Netherlands of three years and one day between April 1989 and June 1994.  The reply also informed Centrelink that Ms Francis had lodged an unsuccessful application in 1995 for an invalidity benefit which was denied because she was not considered unable to work.  This information was later regarded by Centrelink as conclusive of the periods of insurance which were relevant under the Agreement to be added to Ms Francis’ period of permanent residency in Australia.  On this calculation she fell well short of the ten year qualifying period.  However, it does not appear to us that the matter is as simply resolved as that.

19.     The inquiry made was explicitly related to an application for a disablement benefit and it is far from clear that the response which was made concerned anything more than insurance related to the grant of such a benefit.  There were a number of other areas in respect of which Ms Francis claims to have made contributions which appear to be relevant to the operation of the Agreement. 

20.     Although Ms Francis had provided an “annual statement of wages and withholdings” from the Netherlands for years from 1995 to 2004, which were also provided to the UWV, the Authorised Reviewing Officer said, of these documents:

“I note that the group certificates provided by Mrs Francis shows they were issued by Gemeente Borculo and Geemente Bwekelland and were for payments of Algemene Bijstandswet (ABW), which is a means tested benefit for those in need.  It is payable to a person who is not entitled to an AOW pension or whose AOW entitlement is insufficient to provide for their essential needs.  Rixta Francis was not employed during the periods she received ABW.  As UWV has not accepted these periods as contribution periods, Centrelink is unable to do so.”

21.     In fact UWV made no comment about the documents.  If the documents disclose contributions which are to be regarded as insurance (or if the periods are deemed to be periods of insurance) for any of the purposes earlier identified then they are evidence of periods of insurance which need to be taken into account.

22.     The annual statements of wages and withholdings supplied by Ms Francis, according to the translation of those documents obtained by Centrelink, show, for the years and for the periods set out hereunder, the amounts shown as “wages”, PAYE/social security contributions withheld, health insurance fund contributions and, where applicable, disability insurance.  They all show Ms Francis’ social security number.

Year	Period	Wage	PAYE / social security contributions withheld	Health insurance fund contributions	Disability insurance
1995	1 January – 31 December	€18,675	€4,525	€683	“ – “
1996	1 January – 31 December	€19,727	€4,548	€1,198	“ – “
1997	1 January – 31 December	€21,599	€5,919	€1,291	“ – “
1998 (probably)	€23,129	€4,900	€1,466	“ – “
1999	1 January – 31 December	€24,827	€5,353	€1,701	“ – “
2000	1 March – 31 March	€25,453	€5,232	€1,901	“ – “
2001	1 January – 31 December	€22,381	€2,366	€912	No entry
2002	1 January – 31 December	€32,697	€2,469	€952	No entry
2003	1 January – 31 December	€13,229	€2,620	€1,048	No entry
2004	1 January – 10 November	€11,944	€2,438	€896	No entry

23.     The total of the periods dealt with in these documents is a little less than ten years.  When those periods are added to the earlier period of three years and one day, about which there was no dispute, and the period of undisputed permanent Australia residency they result in a total of more than ten years.

24.     During the period from 1995 to 2004 there were no contributions shown for disability insurance.  That is consistent with the possibility that the response from UWV related to periods of contribution to disability insurance as seems quite likely given the subject matter of the request.  However, that is not the only matter to be taken into account.

25.     For the statements which are, or appear to be, related to the years 1995 to 2000 the code for social security contributions is shown as “0”.  That gives rise to an inference, but not a conclusion, that perhaps no social security contributions were made in those periods.  The difficulty with any supposition of that kind is that there is simply no information to that effect.  In the statements for the years 2001 and 2002 the code is “1” and for the years 2003 and 2004 it is “250”.  There is no explanation of those codes either.

26.     A further complication is that a single figure is given for PAYE/social security contributions.  Ms Francis argues, we think correctly, that even a single dollar contribution for social security would satisfy the insurance requirements in the Agreement.  It certainly has not been shown, in our view, that no social security contributions were made after 1994, as Centrelink and the SSAT appear to have concluded.

27.     The position concerning health insurance contributions seems clearer.  In each of the years for which Ms Francis provided an annual statement of wages and withholdings health insurance fund contributions were deducted.  It certainly seems possible, to say the least, that these payments fall within the scope of “sickness insurance” in Article 2(1)(b) of the Agreement.  The contrary has not been established.

28.     There is a further possibility which has not been excluded.  It appears that, in the years between 1995 and 2004, Ms Francis was in receipt of a form of assistance for persons who do not have enough income.  Deductions were nevertheless made from what were described as “wages”.  It has not been shown that such persons fall outside the coverage of the general social security system in the Netherlands when they receive such payments, that deductions made from the payments are not contributions to a relevant form of “insurance” or that periods in receipt of this form of assistance would not, like periods of sickness benefits, be deemed to be a period of insurance in their own right.

29.     The decision under review is not the decision to grant a disability support pension.  It is the decision to cancel it.  That decision depended upon attributing a meaning to the response from UWV that we are not satisfied it should have been given.  The meaning attributed by Centrelink and by the SSAT does not appear to us to arise naturally from either the terms of the UWV response, or the terms of that response considered in the light of the questions posed.  On the other hand, the documents provided by Ms Francis do appear to give prima facie support to her claim.  They were obviously accepted as sufficient in the first instance.

30.     In the circumstances the appropriate course for us to take is to set aside Centrelink’s decision of 7 January 2009 which cancels Ms Francis’ disability support pension.  That leaves the earlier decision of 17 October 2008 extant.  We emphasise that there is nothing to stop Centrelink making further inquiries.  If those inquiries reveal that Ms Francis does not satisfy the Australian residence requirements, with the assistance of the Agreement, further steps may be taken but there is, at present, no adequate basis demonstrated for the cancellation decision.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for the decision herein of Justice Buchanan, Presidential Member, and Dr Campbell, Member.

Signed:........................[sgd]..................................................
  Associate

Dates of Hearing  3 August 2009         
Date of Decision  3 September 2009   
Representative for the Applicant    Mr G Francis
Counsel for the Respondent          Ms C Butler, Centrelink