Secretary, Department of Social Services and Muhammad Anwar

[2015] AATA 413

[2015] AATA 413  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2014/4354
Re	Secretary, Department of Social Services
APPLICANT
And	Muhammad Anwar
RESPONDENT

DECISION

Tribunal	Senior Member J F Toohey
Date	12 June 2015
Place	Sydney

The decision to cancel Mr Anwar’s payment on 5 March 2014 is set aside and the decision that his DSP was payable from 5 April 2014 is substituted

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Senior Member J F Toohey

CATCHWORDS – social security – disability support pension – portability period  – DSP suspended and then cancelled – whether Centrelink should have cancelled DSP – whether preferable decision was to continue suspension until the applicant returned to Australia – payability – whether cancellation was rational and proportionate in the circumstances – decision to cancel pension set aside

Legislation

Social Security Act 1999 ss 27, 93, 94, 1217, 1218AAA

Social Security (Administration) Act 1999 ss 37(1), 63, 80(1), 85

Cases

Freeman v Secretary, Department of Social Services (1988) 87 ALR 506

O’Connell and Secretary, Department of Social Security [1991] AATA 523

Fahmy and Secretary, Department of Social Services [2014] AATA 164

Gidaro and Secretary, Department of Social Security 83 FCR 139

Secondary Materials

Guide to Social Security Law

REASONS FOR DECISION

Senior Member J F Toohey

Background

1. This matter concerns a decision by Centrelink to cancel Mr Muhammad Anwar’s disability support pension (DSP) on 5 March 2014 while he was overseas.

2. On 21 July 2014, the Social Security Appeals Tribunal (SSAT) decided that Mr Anwar’s DSP should not have been cancelled and set aside Centrelink‘s decision.  The Secretary seeks review of the SSAT’s decision.  For convenience, I will refer to the Secretary as “Centrelink”.

   The decision to cancel Mr Anwar’s DSP

3. Mr Anwar was granted DSP on 11 October 2007.  Centrelink records show that he travelled overseas on several occasions after that, and notified Centrelink each time of his intended departure.  His payment was suspended on six occasions after the (then) “portability period” of 13 weeks had elapsed, and on two occasions after an “extension period ended”.  The records indicate that his payment was restored each time on his return to Australia.

4. Section 1217 of the Social Security Act 1999 (SS Act) provides that, unless a person is severely impaired or has a terminal illness, the maximum period for which he or she can be paid DSP while overseas is six weeks (“the portability period”).  When Mr Anwar first qualified for DSP, the maximum portability period was 13 weeks; it was reduced to six weeks from 1 January 2013 and has since been reduced further.  It is agreed that the maximum “portability period” relevant in these proceedings was six weeks.

5. A portability period may be unlimited if a person has a severe impairment within the meaning of s 94(3B) of the SS Act that will last more than five years and prevent him or her from working within the next five years: s 1218AAA.  Save for exceptional circumstances, a determination of unlimited portability must be made before a person goes overseas.

6. On 17 October 2013, Mr Anwar telephoned Centrelink to say he was planning to leave Australia for Pakistan on 23 October 2013 and would return on 22 January 2014.  Centrelink records confirm this conversation.  On 17 October 2013, Centrelink wrote to Mr Anwar to the effect that he would be paid up to 4 December 2013 and that his payments “may be impacted” if his return was delayed.

7. On 4 December 2013, Centrelink wrote to Mr Anwar advising that his payment had been suspended “because our records show you are still overseas.” It appears this letter may not have been forwarded to him but nothing turns on this.

8. On 16 January 2014, Mr Anwar telephoned Centrelink to advise that he would return to Australia on 4 April 2014.  His plane was delayed on the way and he arrived in Australia on 5 April 2014.

9. On 5 March 2014, Centrelink wrote to Mr Anwar advising that his DSP had been cancelled “because our records show you are still overseas.”

   Review of the decision to cancel Mr Anwar’s DSP

10. On 8 April 2014, Mr Anwar sought review by Centrelink of the decision to cancel his DSP.  By letter dated 13 May 2014, an authorised review officer (ARO) advised that she considered his DSP had been correctly suspended and correctly cancelled “as you had remained outside Australia for more than six weeks.” 

11. The ARO stated that, in affirming the decision to cancel Mr Anwar’s DSP, she had applied:

    (i)s 1215 of the SS Act which provides that “certain social security payments can be paid for a limited period of time while a person is absent from Australia.  This is called the portability period”;

    (ii)s 1217 which provides that “the maximum portability period for a person on Disability Support Pension is limited to six weeks unless they are severely impaired or have a terminal illness”;

    (iii)s 1218AAA which “explains the circumstances under which a severely impaired person can be paid for an unlimited period while overseas”;

    (iv)subs 94(3B) which “says a severe impairment is an impairment that has been given 20 points or more under a single Impairment Table”; and

    (v)s 80 of the Social Security (Administration Act) Act 1999 (the SSA Act) which “allows for a payment to be cancelled if a person is no longer qualified to receive it (emphasis added).”

12. It is not clear why the ARO treated the question for determination as being whether Mr Anwar qualified for unlimited portability.  He had not proposed going overseas for an indefinite period; as the record shows, he advised he would return on 22 January 2014, and then on 4 April 2014.  He has no argument with the decision to suspend his payments after six weeks when his portability period ended.  His argument is with the decision to cancel his payment rather than to continue the suspension until he returned.

13. In reviewing the ARO’s decision, the SSAT described the issue for its determination as whether his DSP was correctly cancelled which, it said, “involves determining whether or not he had a severe impairment on 23 October 2013”.  In light of the ARO’s decision, the approach taken by the SSAT is understandable but whether Mr Anwar had a severe impairment was relevant only to whether he qualified for unlimited portability.

14. Taking into account various medical reports, the SSAT concluded that Mr Anwar had a severe impairment within the meaning of s 94(3B) of the SS Act when he left Australia on 23 October 2013, and that both the suspension and cancellation decisions must be reversed.  In effect, the SSAT decided that Mr Anwar qualified for unlimited portability when he left Australia and, for that reason, his payment should not have been suspended and nor should it have been cancelled.   

    The issue

15. There is no argument that Centrelink had the power to suspend or cancel Mr Anwar’s DSP after he had been overseas for six weeks (see s 80 of the SSA Act, discussed below).  There is also no argument that it was within Centrelink’s discretion to extend the suspension until his return, rather than cancel his payment. 

16. Mr Anwar contends that, in the circumstances, the preferable decision was to continue the suspension until he returned, after which it was open to Centrelink at any time to review his qualification for DSP, and to suspend or cancel his payment if he failed to qualify.  There is no argument that course was open to Centrelink.

17. I have to decide whether Mr Anwar’s DSP should have been cancelled. 

18. Mr Anwar lodged a new claim for DSP on 14 April 2014.  Applying the relevant provisions of the SS Act in force at that time, Centrelink determined that he did not qualify for DSP.  That decision is not the subject of these proceedings. 

    The ground for cancellation

19. Centrelink must grant a claim for a social security payment if satisfied that the claimant is qualified for the payment and the payment is payable: s 37(1) of the SSA Act.  The distinction between whether a person qualifies for payment and whether it is payable is important.  A person may qualify for a payment without it necessarily being payable.  It is not payable if their rate would be nil because, for example, their income or assets exceed the allowable limit, or a lump sum compensation payment makes them subject to a compensation preclusion period: Guide to Social Security Law 3.1.6.10. 

20. If Centrelink is satisfied that a payment is being, or has been, paid to a person:

    (a)       who is not, or was not, qualified for the payment; or

    (b)       to whom the payment is not, or was not, payable;

    Centrelink must determine that the payment is to be cancelled or suspended: s 80(1) of the SSA Act.

21. Although the ARO referred to s 80(1) “which allows a payment to be cancelled if a person is no longer qualified to receive it”, there was no information before Centrelink when Mr Anwar’s DSP was suspended, or when it was cancelled, to suggest that he did not qualify for DSP.  That determination would require Centrelink to be satisfied that he did not meet the criteria for qualification for DSP in s 94(1) of the SS Act.  For his payment to be suspended or cancelled under s 80(1)(a) by reason of his failure to qualify, he had first to be given a notice under s 63 of the SSA Act and then to be assessed according to the procedure in s 27 of the SS Act.  Those provisions are discussed below.

22. The decisions to suspend, and then cancel, Mr Anwar’s DSP were because he “was still overseas”.  Although not stated in such terms, his payment was cancelled because it was no longer payable once he had exceeded the maximum six weeks portability period.The determinations could only have been made under s 80(1)(b). 

    Mr Anwar’s contentions

23. For Mr Anwar it is submitted that the decision to cancel his DSP had serious implications for him and, in the circumstances, a continued suspension until he returned to Australia was the preferable decision.

24. The effect of cancellation is that a person must make a new claim (see Freeman v Secretary, Department of Social Services (1988) 87 ALR 506). A new claim is determined according to the legislation in force at the time. Since 2007 when Mr Anwar qualified for DSP, there have been a number of amendments to the SS Act. In particular, amendments in September 2011 introduced a requirement that, unless a person has a severe impairment within the meaning of s 94(3B), he or she must have undertaken a program of support of at least 18 months duration in the three years immediately preceding their claim in order to have a continuing inability to work: s 94(2)(aa).  A continuing inability to work is one of the criteria for qualification for DSP: s 94(1)(c). 

25. Centrelink may at any time require a person who has made a claim for, or is receiving, a social security payment to attend its office, or contact it, or attend a particular place for a particular purpose, or give information to Centrelink for the purposes of assessing his or her qualification for payment: s 63(1) and (2) of the SSA Act.  Centrelink may require a person who claims, or is receiving, DSP to complete a questionnaire or undergo a medical examination: s 63(3) and (4).  Notice may be given in various ways: s 63(5).

26. For Mr Anwar it is contended, correctly, that it was open to Centrelink to review his qualification for DSP at any time on or after his return at which time it was open to Centrelink to cancel his DSP if he were found no longer to qualify for payment. 

27. A person receiving DSP before September 2011 whose qualification for payment is assessed is not required to have undertaken a program of support in order to continue to qualify for payment: s 94(3A).  The effect of cancelling Mr Anwar’s DSP was that he lost the benefit of this exemption and, unless he had a severe impairment as defined, he could not qualify for payment for at least a further 18 months.  Mr Anwar does not claim to have, or have had, a severe impairment within the meaning of s 94(3B).

28. For Mr Anwar it is submitted that the following considerations made the continued suspension of his payment, rather than cancellation, the preferable decision:

    (i)he notified Centrelink of his intended departure and original date of return, and contacted Centrelink before his original date of return to advise that he would be delayed; it was not a case in which Centrelink had lost contact with him or did not know when he would return;

    (ii)Centrelink continued the suspension for three months after the portability period of six weeks had expired, and cancelled his payment knowing, or when it could have reasonably expected, that he would return within one month;

    (iii)there was no evidence before Centrelink at the time to suggest that he did not qualify for DSP; the subsequent decision that he did not qualify had no bearing on the cancellation decision;

    (iv)he continues to have a number of serious medical conditions which result in significant functional limitations and prevent him from working; and

    (v)there is serious disadvantage to him in cancelling, rather than continuing the suspension and then assessing his qualification for DSP.

    Centrelink’s contentions

29. For Centrelink it is contended that whether Mr Anwar’s payment continued to be suspended until he returned to Australia, or whether it was cancelled and he made a new claim, he would be in the same position.  To the extent that he suffers any disadvantage, it is submitted that it is outweighed by “the public interest”.

30. Centrelink contends that, even had the suspension continued, Mr Anwar’s payment would not have resumed automatically because his qualification for payment had to be assessed in any event.  In this regard, Centrelink refers to s 85 of the SSA Act which relevantly provides:

    Resumption of payment after cancellation or suspension

    (1)If:

    (a)       a person's social security payment is:

    …

    (ii) cancelled or suspended under section 80, 81 or 82; 

    (iii) cancelled under Part 3C (schooling requirements); and

    …

    (b)       the Secretary reconsiders the decision; and

    (c)as a result of the reconsideration, the Secretary is satisfied that, because of the decision:

    (i)the person did not receive a social security payment that was payable to the person; or

    (ii)the person is not receiving a social security payment that is payable to the person;

    the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.

    (2)The reconsideration referred to in paragraph (1)(b) may be a reconsideration on an application under section 129 or a reconsideration on the Secretary's own initiative.

31. Centrelink contends that, on reconsideration under s 85, Centrelink would have had to apply the version of the Impairment Tables in force at the time (see s 27 of the SS Act) and, as the subsequent decision showed, Mr Anwar would not have qualified for DSP; in other words, he was no worse off because his DSP would have been cancelled in any event.  It is contended that the fact that Mr Anwar no longer qualified for DSP on 5 March 2014 is a relevant consideration in determining whether his pension should have been cancelled.  In my view, that cannot be correct. 

32. Section 27 of the SS Act is triggered by a notice given under s 63 of the SSA Act for the purposes of assessing a person’s qualification for DSP.  It relevantly provides:

    (3) If:

    (a)      a person is receiving disability support pension; and

    (b) the Secretary gives the person a notice (the assessment notice ) under subsection 63(2) or (4) of the Administration Act in relation to assessing the person's qualification for that pension;

    the Secretary, in assessing the person's qualification for that pension, must apply the instrument in force under section 26 of this Act on the day the assessment notice was given.

    (4) If:

    (a)after assessing the person's qualification for that pension, the Secretary makes a determination under section 80 of the Administration Act in relation to that pension; and

    (b)the Secretary, the SSAT or the AAT is reviewing that determination or a later decision arising out of that determination;

    the Secretary, the SSAT or the AAT, in making a decision on the review, must apply the instrument in force under section 26 of this Act on the day the assessment notice was given.

33. Section 26 is the provision by which the Impairment Tables, and rules for applying them, are made and amended from time to time. 

34. A suspension or cancellation under s 80 as a result of a s 63 notice being issued and an assessment made, is a determination of a person’s qualification for payment.  

35. Whether Mr Anwar qualified for DSP at the time of the cancellation was not known, or even considered; the decision was solely on the ground that he had been overseas longer than six weeks.  The fact that he was determined subsequently not to qualify is not relevant now to what was the preferable decision at the time.

36. Centrelink further contends that it is relevant that Mr Anwar’s continuing eligibility for DSP was not assessed prior to going overseas.  It is submitted that, in arguing for the continuing suspension of his payment until his return, he is in effect seeking unlimited portability of his payment without having to undergo the necessary assessment before going overseas.

37. In support of this submission, Centrelink relies on the file note of the conversation with Mr Anwar on 17 October 2013.  The note is headed “Record of Portability Interview” and shows that Mr Anwar contacted Centrelink “regarding portability inquiry”.  It records a number of “Decisions” to the effect that Mr Anwar’s payment would continue until 4 December 2013.  Under “Factors affecting the decision” it shows:

    Customer’s Portability Specific Medical Outcome has not been assessed

    Customer is not currently recorded as meeting the no future work capacity provisions

    Customer declined an assessment of their medical condition under current medical tables.

    Further:

    [The officer] expects date of return will be that given by the customer.   

38. Centrelink submits it should be inferred from the heading of the file note that Mr Anwar was in fact seeking unlimited portability and that he was trying to gain that benefit without having his impairment assessed.  I do not think that inference can reasonably be drawn from the officer’s note.  The SS Act shows “portability” is used in the sense of both general and unlimited portability.  There is no evidence from the officer who compiled the note but, as it shows, Mr Anwar indicated, and the officer accepted, that he would return on 22 January 2014.  The evidence does not show that he sought unlimited portability and nor does it suggest that he was trying to circumvent the requirement to undergo an assessment of his impairment before he went overseas.  There was no requirement for him to have his impairment assessed because he did not seek unlimited portability.  It is not clear why the officer discussed an “assessment of [his] medical condition” before he left Australia with Mr Anwar but it cannot be inferred from the note that he “declined an assessment” that he sought that benefit.

    What was the preferable decision?

39. In O’Connell and Secretary, Department of Social Security [1991] AATA 523, the Tribunal considered whether the cancellation of family allowance to thousands of persons who failed to return an income review form “could have been justified in terms of good governmental practice as both a rational and proportionate response to the failure to receive a response to the queries about qualifying income level, measured against the finality of action to cancel …”: at [30] (emphasis in original). In the circumstances, the Tribunal decided it could not.

40. The test of suspension or cancellation as a “rational and proportionate response” has been adopted by the Tribunal in other cases: for example, Fahmy and Secretary, Department of Social Services [2014] AATA 164. In that case, the Tribunal was satisfied that the suspension and then cancellation of Mr Fahmy’s age pension was the correct and preferable decision in the circumstances. Mr Fahmy had spent extended periods overseas returning only briefly to Australia, he had left Australia without notifying Centrelink, his whereabouts at the time of cancellation were unknown, and there were matters which raised “legitimate concerns about whether [he] was, or would remain in the foreseeable future, qualified for the age pension at the rate being paid, or at all”: at [35]. The Tribunal was satisfied that cancellation was “not disproportionately harsh” in the circumstances.

1. Mr Fahmy’s circumstances are clearly distinguishable from Mr Anwar’s.  In particular, there was no information before Centrelink when Mr Anwar’s payment was suspended or cancelled to suggest that he did not qualify for DSP. 

2. In Gidaro and Secretary, Department of Social Security 83 FCR 139, the applicant’s age pension was suspended when he did not respond to a notice concerning his possible entitlement to an overseas pension. The Tribunal apparently treated the decision as one to cancel his payment. Setting aside the Tribunal’s decision, Justice Burchett emphasised the need for care in determining whether suspension or cancellation was the preferable decision. Noting [at 152] that “suspension is intended to be a genuinely lesser thing than cancellation, and that the Secretary’s discretion extends to suspension for an appropriate period”, he said “a suspension for long enough to recoup the Commonwealth’s losses for a significant period would generally fulfil all the purposes of the legislation”.

3. The circumstances in Gidaro were quite different from here but the principle remains that the discretion should be exercised in a way that is appropriate in the circumstances of the case.   

4. There is no doubt that there is a public interest in the efficient administration of social security payments but it does not outweigh all other considerations.  I am satisfied, in the circumstances of this case, that the preferable decision was to continue the suspension of Mr Anwar’s payment until his return.  He had been in contact with Centrelink before he left Australia and again when his return date changed.  Given his history, there was no reason to think he would not return when he said he would.  At the time of cancellation, he was due to return within a matter of weeks; in the meantime, his payments were suspended.  The implications for him of cancellation were serious.  There was no reason for Centrelink to think, at the time, that he did not qualify for DSP.  In any event, it was open to Centrelink to require him to have his qualification for DSP assessed at any time after his return.  If Centrelink determined he did not qualify at that time, it was open to Centrelink to cancel his payment. 

   Conclusion

5. I am satisfied that the continued suspension of Mr Anwar’s DSP until his return on 5 April 2104 was the proportionate response and the preferable decision in the circumstances.  His DSP became payable again on his return.  Whether he continued to qualify for the payment is a separate matter. 

6. The decision to cancel Mr Anwar’s payment on 5 March 2014 is set aside and the decision that his DSP was payable from 5 April 2014 is substituted.

1.          I certify that the preceding 46 (forty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey. 

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Associate

Dated 12 June 2015

Date(s) of hearing	2 June 2015
Representatives for the Applicant	Dr Stephen Thompson, Solicitor
Representatives for the Respondent	Ms Jackie Finlay, Solicitor, Legal Aid