Rodham and Secretary, Department of Families, Community Services and Indigenous Affairs
[2007] AATA 1331
•17 May 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1331
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2006/900
GENERAL ADMINISTRATIVE DIVISION ) Re PHILLIP RODHAM Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date17 May 2007
PlacePort Macquarie
Decision The Administrative Appeals Tribunal sets aside the decision under review. Subject to payment to Centrelink of $302.87, Mr Rodham is not precluded from payment under the pension bonus scheme, by virtue of having previously received that amount from Centrelink. ..........................................
Ms N Isenberg
Senior Member
CATCHWORDS
SOCIAL SECURITY – pension bonus scheme – applicant paid age pension – application for compensation for detriment caused by defective administration – receipt of aged pension to be nullified by re-payment – decision under review set aside.
Social Security Act 1991- s 92C
Re Shipman and Secretary, Department of Family and Community Services [2004] AATA 287
Re Brutnell and Secretary, Department of Family and Community Services [2002] AATA 436
Re Brignell and Secretary, Department of Family and Community Services (2003) 73 ALD 302
Re Secretary, Department of Social Security and Jessop (1989) 17 ALD 62
REASONS FOR DECISION
17 May 2007 Ms N Isenberg, Senior Member Decision under Review
1. The decision under review is a decision made by a Centrelink authorised review officer (“ARO”) on 1 May 2006 to affirm the decision that Mr Rodham cannot be paid a pension scheme bonus payment because he has previously received age pension. On 26 June 2006, the Social Security Appeals Tribunal (“SSAT”) affirmed that decision.
Background
2. There was no dispute that Mr Rodham was paid age pension from 19 March 2003 with the first payment being made on 5 August 2003. On 20 November 2003, Mr Rodham was advised that his pension had been cancelled due to the combined income of himself and his wife being above the allowable limit, and that an overpayment of $100.78 had been made. Between March and November 2003 Mr Rodham received $403.65 but had been entitled to $302.87 in age pension.
Legislation
3. Section 92C of the Social Security Act 1991 (“the Act”) provides:
92C Qualification for pension bonus
A person is qualified for a pension bonus if:
(a) both:
(i) the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and
(ii) that age pension is received otherwise than because of a scheduled international social security agreement (within the meaning of section 1208); and
(b) the person has not received an age pension at any time before making a claim for the pension bonus; [my emphasis] and
(c) the person is registered as a member of the pension bonus scheme; and
(d) the person has accrued at least one full‑year bonus period while registered as a member of the pension bonus scheme; and
(e) the person has not received:
(i) a social security pension (other than an age pension or a carer payment); or
(ii) a social security benefit; or
(iii) a service pension (other than a carer service pension); or
(iv) an income support supplement (other than an income support supplement that is payable as a result of the operation of subclause 8(3) of Schedule 5 to the Veterans’ Entitlements Act);
at any time after the person qualified for an age pension; and
Note: Even though the person may not have actually received an amount of social security pension or benefit because the rate of the pension or benefit was nil, in some cases the person will be taken to have received the pension or benefit if adjusted disability pension (within the meaning of section 118NA of the Veterans’ Entitlements Act) was payable to the person or the person’s partner: see subsection 23(1D) of this Act.
(f) the person has not already received:
(i) another pension bonus; or
(ii) a bonus under Part IIIAB of the Veterans’ Entitlements Act; or
(iii) DFISA bonus under Part VIIAB of the Veterans’ Entitlements Act.
Note: Subclause 8(3) of Schedule 5 to the Veterans’ Entitlements Act deals with income support supplement for carers.
4. The policy underlying the legislation was defined by the Hon. Phillip Ruddock MP, the then Minister for Immigration and Ethnic Affairs representing the Minister for Social Security in the Second Reading Speech for the Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998:
This scheme, which complements other government measures for the aged, is designed to provide an incentive for older Australians to remain in the work force. … By choosing to work longer, people can add to their individual savings for retirement.
The scheme will apply to people who qualify for age pensions or equivalent Veterans’ Affairs payments, but who delay their retirement and keep working.
Issue before this tribunal
5. The issue before this Tribunal is whether Mr Rodham is precluded from payment under the pension bonus scheme (“PBS”)?
Consideration of the Evidence
6. In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.
7. Prima facie, Mr Rodham, having been paid age pension between March and November 2003, would be precluded from payment of the pension bonus by virtue of subsection 92C(b) of the Act.
8. That, however, is not the end of the story.
9. Mr Rodham is presently aged 69. His evidence was that he has worked in his own company since 1999 and his financial adviser thought he may be entitled to the pension bonus rather than age pension on retirement. On 19 February 2003, Mr Rodham attended the Centrelink office in Forster to enquire about the PBS. He said the clerk he saw knew little about the scheme. Mr Rodham was given an application for age pension with a view to recording all his particulars so an objective analysis of his circumstances could be made so as to determine if he were entitled to the pension bonus. Mr Rodham took the form, filled it out and returned it with further information. He had no intention of applying for the age pension because he was still working.
10. On 8 February 2005, Mr Rodham lodged a Registration for the PBS form. He stated in that form that he had been in receipt of age pension and that he was self-employed. As a result Mr Rodham was advised that he may not be eligible for Pension Bonus as he had received age pension in the past, but, nonetheless, was registered as an accruing member of the PBS from that date. On 8 March 2006, Mr Rodham was advised that he could not be registered for the PBS as he had received age pension in the past.
11. When his application for review against that decision was refused by the ARO and the SSAT Mr Rodham, with the apparent encouragement of the SSAT, lodged an application for Compensation for Detriment caused by Defective Administration (‘CDDA’). In its response to Mr Rodham’s claim Centrelink conceded in its letter dated 30 October 2006 (“the concession letter”) that it had breached “its duty of care owed to [you] … when you received wrongful advice in February 2003.” (Mr Rodham’s registration date in the PBS has since been backdated to 19 March 2003.)
12. The concession letter went on to inform Mr Rodham that, although he was now “registered” under the scheme, he was not currently eligible for the bonus as he was still working. More importantly, it informed Mr Rodham to the effect that when he did ultimately cease work and apply for the pension bonus, his claim would be rejected because he had been previously paid age pension.
13. The effect of the concession letter was discussed at the hearing. While the anticipated rejection of a claim for pension bonus would be “under the legislation”, the advocate for Centrelink said Mr Rodham had “one foot in the door” to getting the bonus under the CDDA provisions. As I pointed out, that left his entitlement to the pension bonus entirely at the discretion of a CDDA delegate, a decision which would not be reviewable if it were not in his favour. His only remaining avenue for complaint would be the Ombudsman.
14. The submission on Mr Rodham’s behalf was that the payment of age pension was as a result of Centrelink‘s mistake because at no time did Mr Rodham intend to apply for age pension. Several cases were discussed.
15. In Re Shipman and Secretary, Department of Family and Community Services [2004] AATA 287 an elderly farmer sought and received age pension for nearly two years before he registered for the PBS. As a result he was not eligible for the pension bonus.
16. In Re Brutnell and Secretary, Department of Family and Community Services [2002] AATA 436 the applicant sought Centrelink benefits during periods of illness when she was unable to work. It was Centrelink‘s decision that she be paid age pension (and widow’s pension). Later she applied for pension bonus but was precluded because of having previously received age pension.
17. I do not think this case is like either of those matters because in each of those matters the applicant had sought Centrelink benefits. It was only later that entitlement to pension bonus was contemplated. In this matter, Mr Rodham enquired about pension bonus, and for reasons known only to Centrelink, he was erroneously paid age pension.
18. The matter is more akin to Re Brignell and Secretary, Department of Family and Community Services (2003) 73 ALD 302 to which I was also referred. The Centrelink position in that matter was effectively the same as in the present matter: once age pension was paid to the applicant he was for evermore precluded from the pension bonus under the legislation.
19. In Brignell the advocate relied on Re Secretary, Department of Social Security and Jessop (1989) 17 ALD 62.
20. Jessop was distinguished in Brignell on the basis that Mr Jessop had an entitlement at the relevant time, whereas Mr Brignell had no entitlement at all. The advocate for Centrelink pointed out that in the present matter Mr Rodham had an entitlement (to age pension), albeit to only about $300 over a period of several months. Like Mr Jessop he was “entitled to it by virtue of the then existing circumstances. It could not be suggested that payment was at that time illegal or not in accordance with law.” But Mr Rodham had not sought it, and it was paid to him, I accept, in error.
21. The Tribunal in Brignell effectively accepted that Mr Brignell’s receipt of age pension could be nullified by its repayment. At the hearing in the present matter the solicitor for Mr Rodham offered on behalf of his client to repay the $302.87. That offer was refused by the advocate because Centrelink would not know how to accept a payment. In fairness, payments to Centrelink (other than in response to a claim by Centrelink of overpayment of benefit) would be rare indeed. I do not know if Mr Rodham has since attempted to make that payment.
22. The Tribunal in Brignell also referred to the following commentary about Jessop found in Social Security and Family Assistance Law by P. Sutherland and A. Anforth (Federation Press, 2001):
The Tribunal’s decision should not be construed as meaning that there are no circumstances in which a payment actually received will be deemed not to have been received. The Tribunal was here dealing with a payment which was legally made at the time although it subsequently became repayable. The Tribunal stressed this point. The Tribunal seems to have left to one side the issue of whether a payment, which was illegal at the time it was made, could be deemed to have been received within the meaning of the Act.
23. The Tribunal in Brignell took into account that the purpose of the pension bonus scheme is “to encourage people to remain in the workforce, defer retirement and receipt of the age pension. The applicant's actions mark him as a person intended to benefit from the pension bonus scheme.” Mr Rodham is also such a person: an older person who has remained in the workforce, and is entitled to the incentive payment to do so, that is, the pension bonus.
24. It is bizarre to suggest that because Mr Rodham was erroneously paid approximately $300 which was characterised as age pension that he should be precluded from pension bonus in an amount the Centrelink advocate conceded may be in the vicinity of $45,000.
25. I am prepared to adopt the approach of the Tribunal in Brignell and find that, subject to payment to Centrelink of $302.87, Mr Rodham is not precluded from payment under the PBS.
Decision
26. The Administrative Appeals Tribunal sets aside the decision under review. Subject to payment to Centrelink of $302.87, Mr Rodham is not precluded from payment under the PBS, by virtue of having previously received that amount from Centrelink.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member.
Signed: ............[Emily Gadsby]..............
AssociateDate of Hearing 23 April 2007
Date of Decision 17 May 2007
Solicitor for the Applicant Mr M Lindeman of Priest McCarron
Solicitor for the Respondent Ms H Wallis-Dunn of Centrelink Legal Services
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