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

[2008] AATA 1048

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 1048

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/3366

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		ARNOLD SCHWATSCHKO

Applicant

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

Respondent

DECISION

Tribunal Dr Gordon Hughes, Member

Date21 November 2008

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Gordon Hughes

Member

SOCIAL SECURITY – United Nations Pension – whether included in the assessment of income for the purpose of age pension entitlement – whether the United Nations Pension falls within definition of income stream

Re Bersee and Secretary, Department of Family and Community Services (2003) 72 ALD 461

Re Cocci and Secretary, Department of Family and Community Services [2004] AATA 196

Re Nemaz and Secretary, Department of Social Security (1987) 12 ALD 107

Re Rose and Secretary, Department of Social Security (1999) 17 ALD 615

Re Sallan and Secretary, Department of Family and Community Services [1999] AATA 539

Re Zanon and Secretary, Department of Social Security (1989) 18 ALD 82

Life Insurance Act 1995

Retirement Savings Account Act 1997  sections 11, 23, 26

Social Security Act 1991 sections 9(1), 55, 1064

Superannuation Industry (Supervision) Act 1993 section 10(1)

REASONS FOR DECISION

21 November 2008               Dr Gordon Hughes, Member

1.      Mr Schwatschko (the applicant) was granted the age pension on 12 January 2007 by Centrelink.  Centrelink is the service delivery agency for the Department of Families, Housing, Community Services and Indigenous Affairs.  On 9 February 2007 a Centrelink officer, acting as a delegate to the Secretary of the Department, decided not to allow a deductible amount from the applicant’s United Nations pension in order to calculate his rate of age pension.  On 12 December 2007 a Centrelink authorised review officer affirmed the decision.  The applicant sought review of the decision by the Social Security Appeals Tribunal (the SSAT).  On 27 June 2008 the SSAT also affirmed the decision.  The applicant now seeks review of the SSAT decision by this Tribunal.

2.      The issue before the Tribunal is whether monthly payments received by the applicant from his United Nations Joint Staff Pension Fund (UNJS Pension) should be included in the assessment of his income for the purpose of determining the rate of age pension to which he was entitled.

3. Section 55 of the Social Security Act1991 (the Act) provides that the rate of age pension is determined by reference to section 1064 of the Act. Section 1064-A1 provides that the age pension is subject to an income test.

4.      The UNJS Pension would be deducted from the applicant’s income for these purposes, if it were to fall within the definition of income stream in section 9(1) of the Act.

5.Section 9(1) provides:

income stream means:

(a)an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or

(b)an income stream arising under a public sector superannuation scheme (within the meaning of that Act); or

(c)an income stream arising under a retirement savings account; or

(d)an income stream provided as life insurance business by a life company registered under the Life Insurance Act 1995; or

(f)an income stream designated in writing by the Secretary for the purposes of this definition, having regard to the guidelines determined under subsection (1E); or

(fa)a family law affected income stream;

but does not include…

6.      The applicant had contributed to the UNJS Pension Fund for 20 years after obtaining work in Montreal as a United Nations expatriate professional employee.  He considered that the pension should reasonably come under the Australian umbrella with respect to income streams as provided for in section 9(1) of the Act, although he acknowledged that it did not comfortably fall within any of the subparagraphs of section 9(1).

7.      The Tribunal does not accept that the UNJS Pension does fall within the definition of income stream as set out in section 9(1).  The applicant conceded as much at the hearing, adding in a written submission that he believed that as a matter of fairness, an equitable resolution of the situation in which I find myself is possible and within the power of [the] Tribunal.  Unfortunately for the applicant, however, the Tribunal must apply the legislation in its literal form and does not have the capacity to make exceptions for what some might regard as being inequitable. 

8. In relation to paragraph (a) of section 9(1), the UNJS Pension is not regulated by the Superannuation Industry (Supervision) Act1993 and hence that paragraph is inapplicable to the applicant's situation.

9.      In relation to paragraph (b) of section 9(1), the UNJS Pension does not arise under a public sector superannuation scheme and hence, again, that paragraph does not assist the applicant. 

10.     In relation to paragraph (c) of section 9(1), the UNJS Pension does not qualify as an income stream arising under a retirement savings account.  The effect of sections 11, 23 and 26 of the Retirement Savings Account Act 1997 is that a retirement savings account institution means an entity regulated by the Australian Prudential Regulation Authority.  This requirement excludes the UNJS Pension. 

11. In relation to paragraph (d) of section 9(1) the UNJS Pension is not an income stream provided as life insurance business by a life company registered under the Life Insurance Act1995.

12. In relation to paragraph (f) of section 9(1), the UNJS Pension would not be embraced by the relevant determination by the Secretary, namely the Asset-Test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998.By virtue of clause 2.2(4) of the Determination, this section has, since 19 September 1999, only been of relevance to public sector superannuation schemes; and, to comply, the relevant fund must be a public sector superannuation scheme or a public sector fund as defined in section 10(1) of the Superannuation Industry (Supervision) Act1993. The UNJS Pension is not derived from a fund that is established under a law of the Commonwealth or a State or Territory, or with the authority of the Commonwealth or a State or Territory. Accordingly, it does not meet the definition prescribed in section 10(1) of the Superannuation Industry (Supervision) Act1993.

13.     In relation to paragraph (fa) of section 9(1), this is clearly not relevant to the applicant's situation.

14.     For the above reasons, the Tribunal can only conclude that there is no provision in the Act which would exempt a United Nations pension for the purposes of assessing the applicant's age pension.  This conclusion is consistent with previous decisions of the Tribunal involving the treatment of income from overseas pensions: see ReCocci and Secretary, Department of Family and Community Services [2004] AATA 196, ReNemaz and Secretary, Department of Social Security (1987) 12 ALD 107, Re Zanon and Secretary, Department of Social Security (1989) 18 ALD 82, Re Sallan and Secretary, Department of Family and Community Services [1999] AATA 539, ReRose and Secretary, Department of Social Security (1999) 17 ALD 615 and Re Bersee and Secretary, Department of Family and Community Services (2003) 72 ALD 461.

DECISION

15.     For the above reasons, the Tribunal affirms the decision under review.

I certify that the fourteen [14] preceding paragraphs are a true copy of the reasons for the decision herein of:

Dr Gordon Hughes, Member

signed            Dianne Eva

Clerk

Date of Hearing:  28 October 2008
Date of Decision:  21 November 2008
Advocate for the Applicant:         self represented
Advocate for the Respondent:      Mr D Perdon, Centrelink Legal Services