Sells and Secretary, Department of Family and Community Services

[2004] AATA 2

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 2

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V03/945

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		KATHLEEN SELLS

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr J Handley, Senior Member

Date6 January 2004

PlaceMelbourne

Decision The decision under review is affirmed.

(Sgd) J Handley

Senior Member

SOCIAL SECURITY – wife pension – role of payment – earnings from casual employment – allowances paid by employer – whether allowances exempt when calculating pension entitlement – arrears – not payable beyond 13 weeks of notice – recommendation to Centrelink – decision affirmed

Social Security (Administration) Act 1999 s.109(1)

REASONS FOR DECISION

6 January 2004   Mr J Handley, Senior Member

1.      The applicant applies to review a decision made by the Social Security Appeals Tribunal (“SSAT”) on 23 July 2003.  The SSAT then decided to affirm a decision previously made by an authorised review officer on 30 May 2003 not to pay arrears of wife pension for the period 27 July 2002 to 2 February 2003.

2.      The hearing of the application was convened in Bendigo on 3 December 2003.  Mrs Sells appeared without representation.  Mr Meehan appeared on behalf of the respondent.

3.      The circumstances giving rise to the application may be briefly summarised as follows.

4.      In June 2000, Mrs Sells received a pension as the wife of her husband who was in receipt of disability support pension (“DSP”).  She then obtained casual or part-time employment which would entitle her to a salary which varied in amount each week.  Enquiries of Centrelink caused her to report her earnings, each fortnight, to permit calculation of pension entitlement.  The reporting was initially made by personally attending the Centrelink office in Bendigo where a photocopy of her wages receipt was made.  Later, Mrs Sells was given approval to report her salary, each fortnight, by telephone.

5.      In approximately July 2002 the employer of Mrs Sells commenced to pay an allowance described as “linen/uniform”..  The fortnightly pay receipts indicate that gross salary was calculated by reference to the hours worked and the payment of allowance for linen and uniform.

6.      Mrs Sells said that she notified Centrelink of her “gross earnings” by reason of information contained in recipient notices which she received on a fortnightly basis.  Within the body of the recipient notice under the sub-heading of “Income” the following words appear “income means your gross income before payment of any tax…….”.  Mrs Sells accordingly notified Centrelink of her gross income as described in the pay receipt.

7.      In late April 2003, Mrs Sells learnt that she may not have been required to disclose to Centrelink the allowances that were paid to her and that her gross income should only be computed having regard to the total number of hours worked in each fortnight.  She approached Centrelink and asked whether allowances were exempt and was eventually advised that they were.  Centrelink decided to adjust the rate of wife pension from 3 February 2003.  It decided not to pay wife pension absent any consideration of allowances that had been paid from July and accordingly an appeal was lodged with the SSAT and eventually with this Tribunal.

8. Mr Meehan on behalf of the respondent agreed that Centrelink had been incorrectly calculating the rate of wife pension paid fortnightly from July 2002 because the gross salary advised to Centrelink by Mrs Sells did include allowances which were exempt. However he submitted that the provisions of s109(1) of the Social Security (Administration) Act 1999 only permitted arrears of wife pension properly calculated for a period no greater than 13 weeks.

The Legislation

9. Section 109(1) of the Social Security (Administration) Act 1999 applies and it reads as follows:

If:

(a)a decision (the original decision) is made in relation to a person's social security payment; and

(b)a notice is given to the person informing the person of the original decision; and

(c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d)the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the determination embodying the original decision took effect.

10.     For the following reasons I am satisfied that the decision under review should be affirmed, but having regard to what was learnt in these proceedings, I would recommend to Centrelink that it review the content of its recipient notification advises.

11.     By reason of Mrs Sells not having a fixed income each fortnight she was obliged to notify Centrelink, each fortnight, of her earnings.  When her gross salary was requested she provided the figure which was recorded on the preceding fortnight payslip which included income from wages and from allowances.  She also understood, having regard to the content of the recipient notification advices, that gross income was the income before the payment of any tax.  She did not understand that allowances were exempt.

12.     Following the advice to Centrelink each fortnight of her earnings, Centrelink issued a recipient notice.  The T-documents record that between 18 July 2002 and 2 February 2003 a notice was issued to her fortnightly save for the month of September where one notice only was issued.

13. Whilst the respondent acknowledges that it incorrectly calculated the rate of wife pension prior to April 2003 when Mrs Sells first notified Centrelink of her receipt of allowances, it submitted that it was obliged by the provisions of s109(1) of the Social Security (Administration) Act 1999 to adjust payments retrospectively for a period no greater than 13 weeks only. It regards the content of each recipient notice as being “the original decision” within the meaning of s109, and accordingly it adjusted wife pension retrospectively from 2 February 2003, being the date of a recipient notice (T-documents, page 60) 12 weeks prior to 28 April 2003, when Centrelink was first contacted concerning the allowances being received from the employer.  Accordingly that period of time is “within 13 weeks after the notice is given” within the meaning of s109(1)(c).

14.     Accordingly Mrs Sells is entitled only to arrears of properly adjusted wife pension from 2 February 2003.

15.     The issue raised by these proceedings is the explanation of “income” within the recipient notices.  The notices do not advise pension recipients that gross income does not include allowances.  It may be that there are other persons in a similar position to Mrs Sells who are not receiving the proper rate of pension or benefit by reason of them declaring gross income which includes allowances.

16.     Mr Meehan explained that Centrelink is often criticised for having too much information in its recipient notices and to include a reference to those types of payments which may be exempt from gross income may cause greater criticism.  Additionally there are some types of allowances which in law would not be exempted from income and Centrelink would be at risk of giving incorrect information.

17.     His submissions are sound but I can see no reason why a recipient notice could not – in the section describing “income”, by way of example, contain words such as “some allowances paid by employers are not included in gross income or are deductable from gross income for example allowances for meals, uniform, laundry.  You should notify Centrelink of allowances which are recorded in your gross income”..  I note an explanation is presently recorded concerning the meaning of gross income of self-employed persons.

18.     If Centrelink is advised of allowances which it is prepared to regard as being exempt from gross income, proper entitlements of pension or benefit will be paid.

19.     In all of the circumstances I am obliged to affirm the decision under review but I would recommend that Centrelink take account of what has been learnt by these proceedings and amend its recipient notices.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley, Senior Member

Signed:         Grace Carney

Personal Assistant

Date/s of Hearing  3 December 2003
Date of Decision  6 January 2004
Solicitor for the Applicant          Self Represented

Departmental Advocate            Mr S Meehan