SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS and REGINALD WRIGHT

[2010] AATA 123

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 123

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/1607

GENERAL ADMINISTRATIVE  DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Applicant

And REGINALD WRIGHT

Respondent

DECISION

Tribunal Senior Member A K Britton

Date16 February 2010

PlaceSydney

Decision The decision of the Social Security Appeals Tribunal dated 13 March 2009 is set aside, and the Tribunal substitutes a decision that the respondent was not entitled to an economic strategy payment under s 900 of the Social Security Act 1991 (Cth)

.....................[SGD]....................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Economic Security Strategy (ESS) payment – DSP not “payable” to applicant on eligibility date for ESS payment due to declared income – whether applicant “receiving” DSP on the eligibility date – whether applicant consequently eligible for ESS payment.

Social Security Act 1991 ─ 23, 38B, 117, 900, 1064
Social Security (Administration) Act 1999 ─ s 43

Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and de Waal [2009] AATA 635

REASONS FOR DECISION

16 February 2010	Senior Member A K Britton
Introduction

1. In November 2008, the Commonwealth Government announced a one-off payment of up to $1400 to social security payment recipients. This scheme formed part of its “Economic Security Strategy” (ESS). Under s 900(2)(a) of the Social Security Act 1991 (the Act), a person qualifies for an ESS payment if they were receiving a disability support pension (or other social security payment) on 14 October 2008.

2.      Mr Reginald Wright, a long-term disability support pension recipient, missed out on this payment.  The respondent Secretary decided that as Mr Wright was not paid an instalment of the disability support pension for the fortnight period in which the entitlement date, 14 October 2008, fell, he was ineligible to receive an ESS payment. 

3.      Mr Wright was successful in his application to the Social Security Appeals Tribunal for review of that decision.  The Secretary now applies to the Administrative Appeals Tribunal for review of the SSAT’s decision. 

4. The sole issue for determination is whether Mr Wright is entitled to an ESS payment. This turns on the proper construction of s 900 of the Act.

Background

5.      Mr Wright has been qualified to receive the disability support pension since March 2005.

6.      Since that time he has worked on an occasional basis as a bus driver. His income has varied from week to week, depending on the availability of work. In the fortnight ending 22 October 2008, Mr Wright earned about $1,700. This represented an abnormally high income for Mr Wright, precipitated by a spike in work because of the Supercheap Bathurst 1000, a popular annual car rally. 

7.      Mr Wright was not paid the disability support pension for the period 9 October 2008 to 22 October 2008 (the relevant period) because of the income he had received from bus driving for the corresponding period.  The pension rate is calculated according to a statutory formula (see [13]-[14] below). In short, the fortnightly rate payable to a person is affected by any non-pension income they receive.  A person can earn up to a certain amount without any reduction in their fortnightly pension rate, but once that figure is exceeded the rate payable is progressively reduced — ultimately to zero.

8.      There is no argument that Mr Wright’s pension rate for the relevant period was correctly calculated as nil.  Nor is there any dispute that but for the bus driving income earned during the relevant period, he would have benn paid an instalment of the disability support pension for that period. 

9.      Mr Wright was paid a disability support pension for the fortnightly periods  immediately before and after the relevant period.

Statutory Framework

10. As previously noted, eligibility for the ESS Payment is governed by s 900 of the Act. It provides:

(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.  [emphasis added]

Note:   For receive see subsections 23(2) and (4).

11.     Section 23 provides that "receive" has the meaning given by subsections (2), (4), (4A) and (4AA).  Section 23(2) and (4) provide:

(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.

12.     “Social security payment” includes the disability support pension: s 23(1) of the Act.

13.     To put the parties’ submission, in context it is necessary to set out the provisions which govern the calculation and payment of disability support pension.

14.     Section 117(a) of the Act provides that a person’s rate of disability support pension 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).

15.     The method statements included in the Rate Calculator take into account the assets and income of the person receiving social security payments. 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.

16. The disability support pension is paid in fortnightly instalments in arrears: s 43 of the Social Security (Administration) Act 1999 (“the Administration Act”). The method of calculating the periodic payment of social security payment is set out in s 43(3) of the Administration Act, which provides:

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.

17.     Where the rate of disability support pension is calculated to be nil, s 98(1) of the Act provides that disability support pension is not “payable” to a person.  Disability support pension was therefore not “payable” to Mr Wright for the relevant period, which included 14 October 2008.

Was Mr Wright “receiving” DSP on 14 October 2008?

18. Whether Mr Wright was “receiving” DSP on 14 October 2008 turns on the proper construction of s 900(2)(a) of the Act.

19.     In Re Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and de Waal [2009] AATA 635, Deputy President Jarvis considered this issue. The facts of that matter were not materially different to those raised in these proceedings. Like Mr Wright, Mr de Waal was a long term DSP recipient; was not paid DSP for the fortnight ending 22 October 2008, but would have received payment for that period but for other income.

20. The Deputy President concluded that Mr de Waal was not entitled to an ESP payment because he was not “receiving” DSP in respect of 14 October 2008. The Deputy President decided that the word “receiving” in the context of s 900(2)(a) should be given its ordinary English meaning, that is “to take into one’s hand or one’s possession (something offered or delivered)” (The Macquarie Dictionary, Revised Third Edition, 2001). Applying this meaning he concluded at [37] that Mr De Waal did not “receive” a payment in this sense, because no payment was made to him with respect to 14 October 2008.

21. The Deputy President considered the interrelationship between the definition of “receive” contained in ss 23(2) and (4) and s 900(2)(a):

31. [I]t must be borne in mind that ss 23(2) and (4) are deeming provisions. They are necessary because there will inevitably be some delay between the date when a person first becomes entitled to a payment under the Act and when that person receives the first payment; the payment will be back-dated to the start day, being the earliest day on which the payment is payable. Similarly, s 43(1)(b) recognises that instalments of payments are paid in arrears, and so by the deeming provisions of s 23(4), a person is taken to be receiving the payment until the latest day on which it is payable, rather than until the actual date of payment of the last instalment. ….

32. Sections 23(2) and (4) accordingly provide for the duration of the period during which a person is taken to be receiving a payment under the Act. The subsections expressly recognise that payments are to be made by instalments, consistently with s 43 of the Administration Act.

33. Sections 23(2) and (4), in defining the period during which a person is taken to be receiving a payment, are conditional upon the payment being “payable” to the person. Section 98 of the SS Act provides that DSP is not payable to a person if his or her DSP rate would be nil. It follows from the ordinary meaning of the words used in s 900(2)(a), as aided by the interpretation provisions of ss 23(2) and (4), that Mr de Waal was receiving DSP continuously from his start day, that is 7 February 2006, until 13 October 2008. There were then two successive 14-day instalment periods during which his DSP entitlement was reduced to nil as a result of his declared earnings. By virtue of s 98 of the SS Act, DSP was not payable in respect of these two instalment periods, and applying the ordinary meaning of ss 23(2) and (4) of the SS Act, he was not taken to be receiving DSP in respect of those periods. The first of these instalment periods included the eligibility day, 14 October 2008, and accordingly, in my opinion, he did not “receive” DSP in respect of that day.

22. The issue about the proper construction of s 900(2)(a) was fully argued before Deputy President Jarvis. He had the benefit of lengthy and detailed submissions from senior counsel representing Mr de Waal. The decision relies on a number of well-established principles of statutory interpretation and gives careful consideration to the statutory framework in which s 900 is to be found. In my view the Deputy President’s analysis is correct, and I will adopt that approach in these Reasons.

23.     I also respectfully agree with the Deputy President’s careful analysis of s 38B of the Act, and its application in circumstances such as these. This section treats a person in certain circumstances as having received an income support payment for a continuous period even though they did not receive a payment for part or parts of that period. However, it does not support Mr Wright’s case in this instance.  I would only add that s 38B is a general rule that, according to standard principles of statutory interpretation, gives way to a specific provision.

24.     In the interests of completeness I will deal briefly with an argument made by Mr Wright that was not addressed in de Waal.

25.     Mr Wright argued that it is somewhat anomalous to assert he was not “receiving” DSP throughout the relevant period, given that he continued to receive a Pharmaceutical and Utility Allowance throughout that period.

26.     Documents provided by the Secretary after the hearing indicate that Mr Wright was mistaken, and that he was not paid a pharmaceutical allowance for the fortnight ending 22 October 2008.

27.     However he was, as claimed, paid a Utility Allowance for the period in which the entitlement date fell. This is an annual payment, currently of $500, to assist DSP recipients and others with regular household expenses.  To qualify for this allowance a person must among other things, be “receiving” a prescribed pension or allowance, which includes a disability support pension: s 1601T(1). The allowance is not payable unless the relevant qualifying pension was payable to the person on the “utility test day”, namely 20 March, 20 June, 20 September and 20 December:                 s 1061TA(2). 

28.     Different eligibility rules apply for the Utilities Allowance and the ESS payment. That Mr Wright qualified for the former does not establish that he qualified for the latter and vice a versa. That Mr Wright received a Utility Allowance, for the three month period in which the ESS eligibility date fell does not assist him in his argument that he qualified for the ESS payment.

Summary

29.     DSP was not payable to Mr Wright during the relevant period.  It follows from the reasoning in de Waal that Mr Wright was not receiving DSP during the relevant period and that, as a result he did not receive DSP in respect of 14 October 2008. As a result, he did not qualify for the ESS payment. It follows that as Mr Wright was not receiving DSP in respect of 14 October 2008 within the meaning of s 900(2)(a) of the Act, he was not qualified for an ESS payment.

30.     Understandably Mr Wright feels aggrieved by the arbitrary nature of the eligibility criteria for the ESS. As he correctly points out he would have qualified for an ESS payment had the Government elected different eligibility criteria, for example an eligibility date of 10 October 2008. Similarly if he had not worked in the fortnight period ending 22 October 2008 he would have qualified for payment. The content of the eligibility rules however is a matter for the legislature and it is not within the power of this Tribunal to vary those rules.

Decision

31. For these reasons, I set aside the decision of the Social Security Appeals Tribunal made on 13 March 2009, and in place of that decision decide that the respondent was not entitled to an economic strategy payment under s 900 of the Social Security Act 1991 (Cth).

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton.

Signed:         ....................................[SGD]..........................................
  Associate to Senior Member Britton

Date of Hearing:  19 January 2010
Date of Decision:  16 February 2010
Solicitor for the Applicant:         Centrelink Legal Services
The Respondent was self-represented and appeared via telephone.