Sharpe and Secretary, Department of Family, Community Services and Indigenous Affairs
[2006] AATA 402
•9 May 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 402
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2005/1479-80
GENERAL ADMINISTRATIVE DIVISION ) Re JOHN SHARPE
MAUREEN SHARPEApplicant
And
SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal REAR ADMIRAL A R HORTON AO Date09 May 2006
PlaceSydney
Decision The decision under review, being the decision of the Social Security Appeals Tribunal to refuse payment of arrears in Mr and Mrs Sharpe’s age pension payments from 29 July 2003 to 7 March 2005, is affirmed.
[Sgd] Rear Admiral A R Horton AO
CATCHWORDS
SOCIAL SECURITY - Age pension – pensions granted in 1999 (John Sharpe) and 2000 (Maureen Sharpe) – 50 per cent share of property included in asset assessment – property sold in 2003 and Centrelink informed – pensions adjusted taking account of financial assets and income derived from property sale – property not deleted from Centrelink - pension calculations and hence age pensions not paid at correct rate – applicants advised of new pension rates - applicants did not seek review within 13 weeks as required under legislation - situation evident following real estate assessment in 2005 – decision to restore correct pension rates - applicants claimed age pension arrears – arrears not payable from 29 July 2003 to 7 March 2005 as review not sought within 13 week period required under legislation – decision affirmed
LEGISLATION
Social Security Act 1991 – sections 23, 55, 1064.
Social Security (Administration) Act 1999 – sections 109, 129(1).
CASE LAW
Austin v Secretary, Department of Family and Community Services [1999] 92 FCR 138
Secretary, Department of Family and Community Services v Rogers [2000] 104 FCR 272
Rowe and Secretary, Department of Family and Community Services [2004] AATA 1160
Weir and Secretary, Department of Family and Community Services [2004] AATA 1416
REASONS FOR DECISION
09 May 2006 REAR AMIRAL A R HORTON AO BACKGROUND
1. Mr John Sharpe and Mrs Maureen Sharpe (“the Applicants”) became eligible for the Age Pension in 1999 and 2000 respectively. They were 50% owners of an investment property at Copacabana, this being taken into account in asset assessment as required for the calculation of pension rates (Social Security Act 1991 (“the Act”) section 1064 refers). In July 2003, they sold their half of the property to their son, the proceeds being variously applied to investments. Centrelink was advised of this sale and the resultant financial transactions in August 2003. Mr and Mrs Sharpe were advised by letter (of 6 August 2003) of revised pension rates, and the asset and income amounts upon which this revised rate was based. Centrelink failed to remove the Copacabana property from computer records and hence the total asset value was overstated by the real estate valuation of $125,000, and the pensions were subsequently paid at an incorrect rate.
2. On 5 May 2005, Mr and Mrs Sharpe were required to complete a “Real Estate Update form”, their response on 11 May being to the effect that the Copacabana property had been sold two years previously. On 23 May 2005, Centrelink advised them of a change in pension rates and the information used to calculate that rate (that being a result of deletion of the property from Centrelink calculations). That letter stated that arrears would be paid from 11 July 2005. Mr and Mrs Sharpe sought review of that decision on 30 May 2005 on the basis that arrears should have been paid from 11 July 2003. A subsequent request for reconsideration on 11 July 2005 was denied as “arrears cannot be paid as appeal was lodged outside 13 weeks”, this being a requirement under section 109(2) of the Social Security (Administration)Act1999 (“the Administration Act”).
3. On 5 August 2005, an Authorised Review Officer (“ARO”) affirmed this decision, albeit he waived in each case an August 2003 debt of $364.82 resulting from overpayment of age pension. On 7 November 2005, the Social Security Appeals Tribunal (“SSAT”) found that the Applicants were entitled to arrears of age pension for the period 8 March 2005 to 10 May 2005, on the basis that the information provided by them on 11 May effectively sought review of the situation and arrears from August 2003, and was made within 13 weeks of the previously received decision of 7 March 2005, which had advised pension rates.
4. As to the remaining period from 29 July 2003 (as calculated by the SSAT) to 7 March 2005, the SSAT found that the Applicants were not entitled to age pension arrears, they being precluded by having not met the 13 week provision under section 109(2) of the Administration Act.
5. The matter before this Tribunal at a hearing on 28 March 2006 was in respect of eligibility for arrears of age pension for the period 29 July 2003 to 7 March 2005. Mr and Mrs Sharpe were self represented. The Secretary, Department of Family, Community Services and Indigenous Affairs (“the Respondent”) was represented by Ms Pankaj Sharma. The documents (“T docs”) provided by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were taken into evidence, as was the Statement of Facts and Contentions of the Respondent with Annexures A and B dated 8 March 2006 (Exhibit R1), and a letter from Centrelink to the Applicants dated 7 August 2001 (Exhibit R2).
LEGISLATION
6. Pursuant to section 55 of the Act, the age pension rate for a person not permanently blind is calculated under section 1064 Pension Rate Calculator A of the Act wherein the rate of pension is the lower of that determined by comparison of income and asset reduced rates.
55 How to work out a person’s age pension rate
A person’s age pension rate is worked out:
(a) if the person is not permanently blind—using Pension Rate Calculator A at the end of section 1064 (see Part 3.2); or
(b) if the person is permanently blind—using Pension Rate Calculator B at the end of section 1065 (see Part 3.3).
…
1064 Rate of age, disability support, wife pensions and carer payment and of disability wage supplement (people who are not blind)
1064(1) The rate of:
(a) age pension; and
(b) disability support pension or disability wage supplement of a person who has turned 21; and
(c) wife pension; and
(d) carer payment; and
(f) mature age allowance under Part 2.12A; and
(g) mature age partner allowance;
is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.
7. Section 129(1) of the Administration Act, as relevant to this matter, provides the authority to seek review under section 109, which gives the provisions governing payment of arrears of social security pensions, including the age pension and relevantly states:
“109 Date of effect of favourable determination resulting from
review(1) 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.
(2) 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) more than 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 application for review was made.
(3) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) the person is not given notice of the original decision; and
(c) 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.
(4) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) the person is given a notice informing him or her of the original decision; and
(c) the Secretary reviews the decision under section 126 without any application under section 129 for review of the decision having been made; and
(d) as a result of the review, the favourable determination is made within 13 weeks after notice of the original decision was given to the person;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.
(5) If:
(a) a decision (the original decision) is made in relation to a person's social security payment; and
(b) the person is given a notice informing him or her of the original decision; and
(c) the Secretary reviews the decision under section 126 without any application under section 129 for review of the decision having been made; and
(d) as a result of the review, the favourable determination is made more than 13 weeks after notice of the original decision was given to the person;
the favourable determination takes effect on the day on which the review was begun by the Secretary.
…
129 Application for review
(1) Subject to subsections (3) and (4), a person affected by:
(a) a decision of an officer under the social security law; or
(c) a decision of an officer under the Farm Household Support Act 1992; or
(e)a decision under section 44‑24 of the Aged Care Act 1997 by the Secretary or by a person to whom the Secretary has sub‑delegated power under section 96‑2(7) of that Act;
may apply to the Secretary for review of the decision.
CONSIDERATION
8. The Respondent does not deny that Mr and Mrs Sharpe informed Centrelink in August 2003 that their property at Copacabana had been sold, or the investment details of the $205,000 received from that sale. Nor does the Respondent deny that Centrelink failed to remove this property from the combined asset register until further advised by them of its sale on 11 May some two years later. The Respondent’s position is that Mr and Mrs Sharpe are not entitled to arrears of age pension for the period from 29 July 2003 until 7 March 2003 (the latter date being determined by the SSAT and accepted by the Respondent) because a request for review of the (revised) rate of pension as advised by Centrelink letter of 6 August 2003 was not lodged within 13 weeks of receipt of that notice in accordance with section 109 of the Administration Act.
9. There is no dispute that Mr and Mrs Sharpe did not seek a review of the revised pension rate as received in that letter. The evidence of Mrs Sharpe, speaking for herself and her husband, and clearly reflecting the views of Mr Sharpe, was that the detail advised in the letter of 6 August 2003, which they did not deny receiving, did not indicate the composition of the asset and income amounts, nor the resulting calculations. They were not competent to assess whether the revised age pension rate had been correctly calculated, but having advised Centrelink of the sale of the Copacabana property and the resultant financial asset distributions, they believed that Centrelink would have correctly calculated pension rates. Whilst the reduction in pension from about $300 plus to $114 (at that date) was significant and disturbing and in due course led to them augmenting these payments by withdrawal from their financial assets, they nonetheless assumed that Centrelink had made the correct calculations. In doing so, they in effect placed their trust in Centrelink.
10. Mrs Sharpe expressed her concern that having consistently provided Centrelink with honest and timely advice as to changes in the circumstances of she and her husband, there seemed to be an expectation that they were then expected to double check the calculations by that organisation. This she considered both an imposition and a task beyond the financial capabilities of her and her husband. She further drew my attention to the lack of adequate periodic advice from Centrelink in the period under consideration. I note that the only notice before me of pension rate changes prior to 6 August 2003 is that of 7 August 2001 as provided at the hearing by the Respondent (Exhibit R2); subsequent to 6 August 2003, only the letters referring to age pension rate changes of 22 September 2004, 1 March 2005 and 7 March 2005 are before me. Mrs Sharpe stated that prior to August 2003, they had received periodic requests for review of their asset situation, but none following until that of 6 May 2005 when Centrelink sought completion of the Real Estate Update form which revealed that the Copacabana property was still included on the asset “register”.
11. The form of the periodic letters referred to above deserves explanation. It is in computer format, and hence may be somewhat difficult for some recipients to follow the considerable detail. However, that was not an observation made by Mr and Mrs Sharpe, but it is reasonably common comment made before this Tribunal. The letter defines the pension (topic), refers to the amount of any immediate payment and the relevant period, and then states the “regular payment” with start date as well as any ancillary payment such as pharmaceutical allowance, the total amount being then shown. Whether this is a weekly or fortnightly payment is not indicated, but I presume that recipients are invariably aware of the periodicity of payment.
12. The information used to calculate the regular payment is shown in the letter of 6 August 2003, as follows:
“ Total Combined Assets ><# Amount= $381,725.10
Combined Annual Income><# Amount= $10,393.72
IMPORTANT INFORMATION. Your age pension has been reduced because the combined value of you assets and those of your partner has increased.”
No further explanation is given. That is, there is no explanation as to the reasons for any asset or income change which has, in turn, led to an adjustment of the age pension.
13. Returning to section 109 of the Administration Act, the legislation in each part refers to “a decision (the original decision) made in relation to a person’s social security payment”. The Respondent submitted that the letter of 6 August 2003 was “a decision” in conformity with that legislation. That is, Centrelink had made a decision, based on new information, to amend the rate of age pension payment. The Respondent further submitted that in conformity with subsections 109(1) and (2) of the Administration Act, a “notice is (was) given to the person informing the person of the original decision”, that notice having been conveyed to Mr and Mrs Sharpe by way of that letter. It followed that subsequent letters of a like nature, as referred to in paragraph 10 above, also conveyed a decision in each case.
14. Decision is defined in section 23 of the Act as having the same meaning as in the Administrative Appeals Tribunal Act 1975. The latter refers to the authority of the Tribunal to review “decisions”, which in itself is not an issue before me, the ability of this Tribunal to review this matter not being challenged. The Macquarie Dictionary defines “decision” as “the act of deciding; determination (of a question or doubt); a judgment….; that which is decided; a resolution”. The Respondent drew on a number of Federal Court and tribunal decisions to support the contention that the letters of 6 August 2003, 22 September 2004, 1 March 2005 and 7 March 2005 constituted sufficient notice of a decision for the purpose of section 109 of the Administration Act.
15. The Respondent referred to the decisions in Austin and Another v Secretary, Department of Family and Community Services [1999] 92 FCR 138 and Secretary, Department of Family and Community Services v Rogers [2000] 104 FCR 272, both of which addressed the matter of composition of a notice conveying a decision, albeit in both cases, legislation other than in this matter was relevant. The appropriate content of such a decision in respect of reasons for those decisions was also addressed.
16. Whilst the Respondent in the matter before me submitted that the approach taken by Copper J in Rogers (supra) should be preferred, the view of their Honours in both cases was similar in that a clear and intelligible statement to the effect that a decision has been made is required to establish that a “communication can constitute a notice” (Drummond J in Austin at 36).
17. As to whether any relevant legislation (section 109 of the Administration Act in this instance as relevant to the age pension) requires the notice to contain reasons or sufficient information for the recipient of the notice to understand the main reason for the decision and so be in a position to exercise a right to seek a review, Cooper J stated at 33: “the subsections make no reference to any requirement”, and nor “in my view, do any principles of procedural fairness require that such a requirement be read into the provisions of s 299” (as relevant to the matter before him).
18. I note also the decision in Rowe and Secretary, Department of Family and Community Services [2004] AATA 1160 (8 November 2004) where the Senior Member relied on the decisions in Austin (supra) and Rogers (supra) in that they found “that there is no obligation of the Respondent to do more than communicate the making of a decision. The Respondent does not have to explain the reasons for the decision …”.
CONCLUSION
19. Drawing on that summary in Rowe (supra), and following the reasoning in both Austin (supra) and Rogers (supra), I find that on the evidence before me, Mr and Mrs Sharpe were provided with a decision (in both cases) in respect of the rate of age pension, as well as the basis for such decision (that is, Total Combined Assets and Combined Annual Income). Further decisions in respect of the rate of age pension were provided by Centrelink on 22 September 2004, 1 March 2005 and 7 March 2005, there being no dispute that any of these letters were received. As earlier explained it was not until receipt of the Real Estate Update form on 6 May 2005 that Mr and Mrs Sharpe challenged the rate of payment of age pension, and effectively sought review. Hence they did not meet the 13 week criteria required under section 109(2) of the Administration Act and accordingly I must affirm the decision of the SSAT which refused payment of arrears in their age pension payments from 29 July 2003 to 7 March 2005.
20. I consider further comment on this matter to be appropriate and valuable. The Tribunal in Rowe (supra) made the observation that further explanation of the reasons for the decision “would have been desirable”. Whilst clearly not a requirement of the legislation as authoritatively defined in Austin (supra) and Rogers (supra), further explanation might indeed have assisted Mr and Mrs Sharpe, given that they only had reference to the bald combined asset and income figures, and by their own evidence, were not skilled in the interpretation of relatively complex financial issues, instead placing their trust in Centrelink.
21. The SSAT recommended that consideration be given to a payment to Mr and Mrs Sharpe under the Compensation for Detriment Due to Defective Administration (CDDA) scheme. Such a payment has been refused, but I do suggest review of that decision should such an avenue be available under the guidelines, given the substantial loss of eligible benefit solely due to administrative error by Centrelink.
22. It warrants observation that whilst legislation permits an overpayment or debt to be waived or seen as not having been received, either because of an error wholly attributable to the Respondent or under the special circumstances provision, a person receiving less than an entitlement, (entirely through inaction or fault by the Respondent in this case), receives no such consideration should that person fail to recognise that an error may have occurred.
DECISION
23. The decision under review, being the decision of the SSAT to refuse payment of age pension to Mr and Mrs Sharpe for the period from 29 July 2003 to 7 March 2005, is affirmed.
I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of REAR AMIRAL A R HORTON AO
Signed: .....................................................................................
Associate Sandrine LepageDate/s of Hearing 28 March 2006
Date of Decision 09 May 2006
Representative for the Applicant Self-Represented
Advocate for the Respondent Ms Pankaj Sharma
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