SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS and BARBARA ELAINE COUZENS
[2010] AATA 453
•18 June 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 453
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/3549
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS Applicant
And
BARBARA ELAINE COUZENS
Respondent
DECISION
Tribunal Senior Member K Bean Date18 June 2010
PlaceAdelaide
Decision The Tribunal:
(a) sets aside the decision of the SSAT of 23 June 2009; and
(b) in substitution for that decision decides that the respondent is not qualified to receive an economic security strategy payment under s 900 of the Social Security Act 1991...............................................
K BEAN
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – economic security strategy payment – respondent had been receiving disability support pension – pension not payable in respect of 14 October 2008 – respondent not qualified for economic security strategy payment – decision under review set aside
Social Security Act 1991 ss 23, 98, 117, 900, 1073B, 1073C
Social Security and Other Legislation (Economic Security Strategy) Act 2008Social Security (Administration) Act 1999 s 43
Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and De Waal [2009] AATA 635
Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and McCormick [2009] AATA 746
REASONS FOR DECISION
18 June 2010 Senior Member K Bean 1. On 14 October 2008, the Commonwealth Government announced that there were to be one-off lump sum amounts paid to recipients of various Centrelink payments, including recipients of Disability Support Pension (DSP). Amendments were subsequently made to the Social Security Act 1991 (the SS Act) to enable the payments, known as economic security strategy (ESS) payments, to be made.
2. At the time of the announcement, Mrs Couzens (the respondent) was in receipt of DSP and on 17 December 2008, not having received a payment, she contacted Centrelink regarding an ESS payment. She was advised by Centrelink that she was not qualified for the payment because she had not received DSP in respect of the relevant day, being 14 October 2008.
3. Mrs Couzens subsequently challenged that decision, pointing out that she had in fact received $3.24 for the fortnight containing the relevant day, 14 October 2008. However, the Authorised Review Officer (ARO) affirmed the original decision, finding that the amount of $3.24 received by Mrs Couzens during the relevant fortnight was received in respect of 4 October 2008 only and she had no entitlement to DSP for the period 5 October 2008 to 17 October 2008.
4. Mrs Couzens then applied to the Social Security Appeals Tribunal (the SSAT) for review of that decision and on 23 June 2009, the SSAT decided to set aside the decision under review and substitute a decision that Mrs Couzens was qualified to receive the DSP ESS payment. The SSAT found that Mrs Couzens was paid $3.24 by way of DSP for the entire period of 4 October 2008 to 17 October 2008, not just the day of 4 October 2008. It accordingly found that as she was receiving DSP in respect of 14 October 2008, she was qualified for the payment.
5. However on 30 July 2009, the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (the applicant) applied to this Tribunal for review of that decision, giving rise to these proceedings.
the issue
6. The issue for the Tribunal’s determination in this matter is whether Mrs Couzens was qualified for the ESS payment.
background
7. The essential facts relevant to this matter are not in dispute. Mrs Couzens was granted DSP[1], and was continuing to receive it in October 2008. However, her rate of DSP was affected by the earnings of her husband, Stephen Couzens. At all relevant times, his pattern of earnings was such that he worked a roster of “4 days on, 4 days off” and did not always earn the same amount for each four day period. This had the consequence that the amount of DSP received by Mrs Couzens tended to vary from fortnight to fortnight, depending on the amount of reported earnings for Mr Couzens.
[1] T3
8. Prior to the announcement about the ESS payment, Mrs Couzens had been reporting her husband’s earnings each fortnight for a period ending on a Monday, i.e 1 September 2008, 15 September 2008, 29 September 2008 and so on. However, on 30 September 2008, Centrelink issued a letter to Mrs Couzens changing her reporting to a period ending on a Friday, with the relevant dates being as follows: 3 October 2008, 17 October 2008 and 31 October 2008.
9. That change of reporting dates had significant implications for Ms Couzens’ entitlement to receive the ESS, which I will address further below, together with the evidence relating to the areas of contention between the parties.
statutory framework
10. The provisions of the SS Act which are most relevant to determining whether Mrs Couzens was eligible for the payment are as follows:
“23 General definitions
…
(2)For the purposes of this Act (other than section 735), a person is taken to be receiving a payment under this Act from the earliest day on which the payment is payable to the person even if the first instalment of the payment is not paid until a later day.
(4)For the purposes of this Act, a person is taken to be receiving a social security payment until the latest day on which the payment is payable to the person even if the last instalment of the payment is not paid until a later day.
…
(4AA)For the purposes of subsection (4A), the following are the specified provisions of this Act:
(a)provisions in Chapter 2 that provide for an increase in a person’s rate of payment by an amount to be known as the approved program of work supplement;
(b) section 1048;
(c) section 1061PJ;
(d) section 1061Q;
(e) point 1067G-F3;
(f) 1070W;
(g) 1070X;
(h)provisions within the income test module of a rate calculator in Chapter 3 prescribing the partner income free area or the partner income excess for a person.
…
98 Disability support pension not payable if pension rate nil
(1)Subject to subsection (2), a disability support pension is not payable to a person if the person’s disability support pension rate would be nil.
(2)Subsection (1) does not apply to a person if the person’s rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under:
(a) the social security law; or
(b) Division 2 of Part VIIA of the Veterans’ Entitlements Act.
…
900 Qualification for economic security strategy payment
Qualified if this section applies
(1)A person is qualified for an economic security strategy payment if subsection (2), (3) or (4) applies to the person.
Receipt of certain payments
(2) This subsection applies to a person if:
(a)the person was receiving one of the following payments in respect of 14 October 2008:
…
(ii) a disability support pension;
… and
(b)except in the case of carer allowance, the person was receiving that payment because of a claim the person made on or before 14 October 2008.
Note: For receive see subsections 23(2) and (4).
…
1073BDaily attribution of employment income
If:
(a)a person is receiving a social security pension or a social security benefit; and
(b)the person’s rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(c)the person has not reached pension age; and
(d)the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;
the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.
1073CFortnightly or yearly expression of attributed employment income
If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period:
(a)the rate of the person’s employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and
(b)the rate of the person’s employment income on a yearly basis for that day may be worked out by multiplying that amount by 364.”
11. Section 117(a) of the SS Act also provides in effect that a person’s rate of DSP is worked out using the Pension Rate Calculator at the end of s 1064. Module A provides for the overall rate calculation process, and s 1064-A1 provides as follows:
“The rate of pension is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only).”
The daily rate of pension resulting from the application of the Rate Calculator can vary, depending on the extent of changes (if any) to assets or income.
12. Section 43 of the Social Security (Administration) Act 1999 (the Administration Act) is also of relevance and provides as follows:
“43 Payment by instalments
(1) A social security periodic payment is to be paid:
(a) in arrears; and
(b)by instalments relating to such periods (not exceeding 14 days) as the Secretary determines.
(2)Subject to sections 52 and 53, instalments of a social security periodic payment are to be paid at such times as the Secretary determines.
(3)Subject to subsection (4), the amount that is to be paid to a person as an instalment of a social security periodic payment in relation to a period is the total of the amounts of the social security periodic payment (calculated by reference to the daily rate of payment applicable to each day) payable to the person for days in that period on which the social security periodic payment was payable to the person.
…”
13. In terms of extrinsic materials, the Explanatory Memorandum which accompanied the enactment of the relevant amending Act, the Social Security and Other Legislation (Economic Security Strategy) Act 2008, included the following statement:
“The intention is that the person must have received an amount of the payment for the relevant instalment period that included a daily rate of payment in respect of 14 October 2008.”[2]
[2] T5/55
14. It follows that the critical question for the Tribunal is whether Mrs Couzens received a daily rate of payment “in respect of 14 October 2008”.
evidence
15. The documentary evidence before me clearly indicates that, in respect of the reporting period 4 October 2008 to 17 October 2008, Mr Couzens earned a total gross amount of $2,744.94[3] and Mrs Couzens was paid the amount of $3.24 by way of DSP[4]. There was also evidence before me establishing that a computerised pension rate calculation determined that Mrs Couzens was entitled to a daily rate of approximately $3.24 by way of DSP for the date 4 October 2008, and that her daily entitlement for the other days in the relevant period, 5 October 2008 to 16 October 2008 was zero[5].
[3] Exhibit 13
[4] Exhibit 13, T3/17, Exhibit 6
[5] T3/17-19
16. In terms of oral evidence, evidence was given for the applicant by Mr Joe Giarreffa, a Centrelink officer with some 20 years experience. He gave useful evidence as to the application of the income test affecting entitlement to DSP, explaining that, at the relevant time, for income above $240 per fortnight, the rate of DSP was reduced by 40 cents for every dollar of earnings (for a person who was not a member of a couple). He also gave evidence in relation to the change of reporting dates, stating that, at least based on Centrelink’s records, this appeared to have occurred at Mrs Couzens’ request. He also confirmed that, if the reporting dates had remained the same, so that Mrs Couzens reported on 13 October 2008, she would have received $7.41 in respect of 14 October 2008, and accordingly would have been entitled to the ESS payment. He stated that the Centrelink computer does the relevant calculations and that the rate of payment was worked out having regard to a person’s earnings and entitlements for a particular fortnight.
17. In her oral evidence, Mrs Couzens stated that she had no recollection of requesting a change to her reporting dates and could not see the benefit in this, having regard to her husband’s pattern of work and earnings. Under cross-examination, it was put to Mrs Couzens that Centrelink’s records contained records of a number of conversations with her in the period 26 September 2008 to 3 October 2008, which appeared to indicate that she first raised the issue of the reporting period not coinciding with her husband’s pay periods, and that it was ultimately agreed that her reporting dates would be altered accordingly. She did not actually dispute the accuracy of these records, but simply indicated she had no recollection of requesting the change in reporting dates. She also clarified that she was not claiming to have been paid any wrong amounts of DSP, but simply that the change in reporting dates had resulted in her being deprived of the ESS payment.
contentions
18. Ms Odgers for the applicant relied heavily upon the terms of s 900 of the SS Act, and in particular the requirement that a person be receiving, relevantly, DSP “in respect of” 14 October 2008. She drew attention to paragraph 30 of the SSAT’s Reasons for Decision where the Tribunal stated as follows:
“The Tribunal finds therefore that Mrs Couzens was paid disability support pension of $3.24 for the entire period of 4 October 2008 to 17 October 2008, and not just the day of 4 October 2008.”
19. She submitted that it was this aspect of the SSAT’s reasoning in particular which the applicant submitted was incorrect. Rather, she submitted that the rate of DSP is a daily rate. She referred to s 43 of the Administration Act and pointed out that even though DSP may be paid in respect of a particular fortnight, it did not follow that it was necessarily payable on every day of the relevant period.
20. She drew the Tribunal’s attention to the decision of Deputy President Jarvis in Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and De Waal [2009] AATA 635, and submitted that one sentence in the Deputy President’s Reasons for Decision in that matter was incorrect. She directed the Tribunal to the following statement in that decision (at [27]):
“Once the amount of payment for a particular fortnightly instalment period has been calculated, the payment is made in respect of that instalment period, including each day within that period.”
She submitted that that statement was inconsistent with the statutory scheme.
21. In relation to the change to Mrs Couzens’ reporting period, Ms Odgers submitted that the evidence supported a conclusion that this was initiated by Mrs Couzens, and in any event there was nothing untoward about this change.
22. In reply, Ms Riley for the respondent directed the Tribunal’s attention to the details of Mr Couzens’ earnings for the applicable period and questioned how this could have resulted in an entitlement of Mrs Couzens to be paid an amount of DSP for 4 October 2008, but not for any other day in that fortnight.
23. Ms Riley relied upon the observation of Member Frost in Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and McCormick [2009] AATA 746 at [37], where Member Frost stated as follows:
“In the ordinary course of events the SS Act requires, on an ongoing basis, the calculation of a ‘daily rate’ of pension, without any specific focus on the particular day in respect of which the daily rate applies. It does not normally matter whether the daily rate changes today, or tomorrow, or next fortnight, so long as the calculation is tolerably accurate and the relevant payment is processed without disadvantage to the customer – or, if disadvantage is suffered, it will be corrected in due course.”
24. She submitted that Mrs Couzens did not request a change to her reporting dates, and as the change had operated to her detriment, this anomalous result should be corrected. In any event, Ms Riley maintained that as Mrs Couzens had received an instalment of DSP for the applicable fortnight, she did receive a payment of DSP in respect of 14 October 2008, and was therefore qualified to receive the ESS payment.
consideration
25. I propose to first consider the issue of the change in reporting dates, before proceeding to the issues of Mrs Couzens’ entitlement to DSP in the relevant fortnight, and the construction and application of s 900 of the SS Act.
The change in reporting dates
26. Consistently with Mr Giareffa’s evidence, it was ultimately conceded by the applicant that if the reporting dates had remained as they were, Mrs Couzens would have received some amount by way of DSP in respect of 14 October 2008, and therefore would have received the ESS payment.
27. However, the evidence before me also established that the change in reporting dates was attributable to an attempt by the Centrelink officers administering Mrs Couzens’ payment to find reporting dates which more closely matched her husband’s pay periods. On reflection, given the pattern of Mr Couzens’ work and earnings, there is no fortnightly reporting date which will reflect his pay fortnights and for that reason, the change in reporting date was misguided and did not and could not achieve its goal. Although it was misguided however, there is nothing before me to suggest that the change in reporting dates was otherwise inappropriate or improper[6]. I am therefore satisfied that is appropriate for me to assess Mrs Couzens’ entitlement to the ESS payment on the basis that the revised reporting dates were the applicable reporting dates at the relevant time.
[6] Exhibit 4
Mrs Couzens’ entitlement to DSP in the relevant fortnight
28. As outlined above, there is no dispute that for the fortnight beginning on 4 October 2008 and ending on 17 October 2008, Mr Couzens received a gross amount of income of $2,744.94 comprised of two payments of $1,372.47, the first received on 7 October 2008 and the second on 15 October 2008. As I understand the position, Mrs Couzens’ entitlement to DSP was calculated by reference to receipt of those sums, each of which related to earnings during that fortnight. On the evidence, it appears that, notwithstanding that Mr Couzens earned identical amounts in respect of 4, 5, 6 and 7 October 2008 as well as 12, 13, 14 and 15 October 2008 (namely $1,372.47 in respect of each four day period) Mrs Couzens was paid DSP only in respect of 4 October 2008. Neither the advocate for the applicant or the witness called for the applicant, Mr Giarreffa, were able to explain this result, other than by reference to the calculations undertaken by the computer.
29. As I understand the effect of the applicable provisions, as Mrs Couzens was a member of a couple at the relevant time, her entitlement to DSP was reduced by 20 cents for every dollar of income in excess of the relevant threshold, which at the relevant time was $240.00[7]. In her case, doing the applicable calculations yields a result that her income amount (i.e. the income amount for she and Mr Couzens as a couple) for the relevant fortnight was $2,744.94. Once $240 is deducted from this amount, Mrs Couzens’ “income reduction amount” (ie the amount by which her pension must be reduced having regard to her income) was approximately $500, which is more than the rate of pension at that time. On an annualised basis, her income reduction amount was approximately $13,000, which also precluded payment of DSP.
[7] Exhibit 10
30. Comparison between these results and the calculations apparently undertaken by the Centrelink computer at the relevant time yields some interesting outcomes. In respect of 4 October 2008, Mrs Couzens’ entitlements were apparently calculated on the basis of an income reduction amount of $11,075.52[8], which so far as I can ascertain, bears no relation with Mr Couzens’ earnings for the applicable fortnight. By way of a contrast, the income reduction amount used for the period 5 October 2008 to 16 October 2008 was $13,035.01[9], which corresponds with Mr Couzens’ income for the relevant period. It appears to be this different income reduction amount which has resulted in Mrs Couzens being paid a small amount of DSP in respect of 4 October 2008, and yet I have been unable to identify any explanation as to why a different income reduction amount was used for that day as compared with every other day in the same fortnight. Undertaking a manual calculation as to Mrs Couzens’ entitlement to DSP in the relevant period yields the result that she was not entitled to be paid DSP for any day in the relevant fortnight.
[8] T3/18
[9] T3/19
31. It follows that I accept Ms Riley’s submission that no coherent explanation was provided by the applicant as to why Mrs Couzens was paid an amount only in respect of 4 October 2008. However, on further scrutiny of the evidence and on undertaking the relevant calculations, it appears to me that that amount was paid to Mrs Couzens in error as a result of the use of an incorrect income reduction amount. It further follows that on the evidence before me it appears that she had no entitlement to DSP in respect of the fortnight 4 October 2008 – 17 October 2008 and DSP was not “payable” to her for that fortnight[10].
[10] See s 96 of the SS Act.
32. This has some potential implications for her qualification for the application of s 900 to her circumstances, which I will address further below.
Construction and application of s 900
33. Having regard to the relevant provisions, including the Benefit Rate Calculator, I am satisfied that a person’s entitlement to DSP is calculated as a daily rate. In light of the terms of the Explanatory Memorandum, I am also satisfied that, as contended by the applicant, the intention of the legislation which introduced s 900 was that a person would only receive the ESS if they had received “an amount of the payment for the relevant instalment period that included a daily rate of payment in respect of 14 October 2008”, to quote directly from the Explanatory Memorandum. In other words, for a person to qualify for an ESS payment, their payment of DSP for the relevant fortnight must have included an amount representing their daily rate for 14 October 2008. If they received an instalment of DSP for the relevant fortnight but their daily rate for 14 October 2008 was nil, then the person is not qualified to receive the ESS payment[11].
[11] I note this is consistent with the decision of Member Frost in Re McCormick.
34. If I had not reached that conclusion, but had been persuaded that it was sufficient for Mrs Couzens’ to have received an amount of DSP in respect of the relevant fortnight, it would have been necessary for me to reach a final view as to whether, as appears to be the case on the material before me, the $3.24 paid to Mrs Couzens was paid incorrectly. Having regard to the terms of s 900 in conjunction with s 23 and s 98 of the SS Act, an issue would have arisen as to whether, if that amount was paid incorrectly and DSP was in fact not payable to her for the relevant fortnight, Mrs Couzens was not “receiving” DSP for that fortnight within the meaning of the Act[12].
[12] See s 23(2). See also the discussion in Re McCormick at [22]-[23].
35. However in light of my conclusion as to the necessity for a payment to be made in respect of 14 October 2008, it is unnecessary for me to reach a final view as to whether the amount of $3.24 was correctly paid. That is because, even if I was to construe s 900 such that the requirement to have been “receiving” a payment in respect of 14 October 2008 is satisfied by a payment having been made in error, that does not lead to any different result. Having regard to the material in the T documents which I have referred to above, I am satisfied that the amount of $3.24, whether it was paid correctly or not, was paid to Mrs Couzens “in respect of” 4 October 2008 and that she did not receive a daily rate of payment in respect of 14 October 2008. Further Ms Riley did not contend that there was any other basis upon which Mrs Couzens satisfied the terms of s 900, apart from her receipt of this amount, and the change to the reporting period.
36. It follows that in my view, as she did not receive a payment of DSP in respect of 14 October 2008, Mrs Couzens was not qualified to receive the ESS payment.
37. I should add that I do not consider my reasoning or conclusion to be in any way inconsistent with the decision of Deputy President Jarvis in Re de Waal. The observation of the Deputy President in that matter referred to by Ms Odgers was a general one made in the context of describing the overall scheme of the Act. On my reading it was intended to convey the fact that entitlements are generally calculated and payments made on a fortnightly basis. It is clear from other parts of his Reasons for Decision that the Deputy President accepted that the rate of DSP is a daily rate[13].
[13] See for example [15].
conclusion
38. I have concluded that, as Mrs Couzens did not receive a payment of DSP “in respect of” 14 October 2008, she is not qualified to receive an ESS payment.
decision
39.
I have therefore decided to set aside the decision under review and substitute a decision that Mrs Couzens is not qualified to receive an ESS payment.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K Bean
Signed: ............J Coulthard...........................................
AssociateDate of Hearing 20 April 2010
Date of Decision 18 June 2010Advocate for the Applicant Ms L Odgers
Centrelink Advocacy Branch
Advocate for the Respondent Ms M Riley
Welfare Rights Centre
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