Shipman and Secretary to the Department of Family and Community S Ervices
[2004] AATA 287
•11 March 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 287
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/969
GENERAL ADMINISTRATIVE DIVISION ) Re FREDERICK SHIPMAN Applicant
And
SECRETARY TO THE DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Deputy President Don Muller Date 11 March 2004
PlaceBrisbane
Decision The Tribunal affirms the decision that Frederick Shipman does not qualify for pension bonus within the meaning of that term in section 92C of the Social Security Act 1991.
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Deputy President
CATCHWORDS
Social Security – pension bonus scheme – applicant received age pension before he applied for registration as a member of the scheme- not qualified for pension bonus- matters of extension of time for lodging application, backdating the effective date of registration and backdating claim for pension bonus not properly before the Tribunal- decision that the applicant not qualified for pension bonus affirmed.
Social Security Act 1991 ss 92C, 92H, 92 J, 92K, 92L, 92M, 92N,92P, 93U
Social Security Administration Act 1999 ss179, 181
REASONS FOR DECISION
Deputy President Don Muller 1. This is an application by Frederick Shipman to review a decision that he does not qualify for a pension bonus pursuant to the provisions of section 92C of the Social Security Act 1991.
2. At the hearing Mr Shipman was represented by Ms Fiona McMullin, solicitor, and the Respondent was represented by Ms Helen Wallis-Dunn.
3. The material placed before the Tribunal leads me to make the following findings:
(a)Frederick Shipman was born on 6 September 1928.
(b)He left school at the age of 13 years. He went to work for his father on his father’s farm.
(c)In 1960, he set up a timber mill on his father’s farm.
(d)In 1968, he inherited his father’s farm and timber mill. He became the sole owner.
(e)He worked the farm and timber mill and he also employed other workers.
(f)He turned 65 years of age on 6 September 1993.
(g)He did not retire when he turned 65, nor did he apply for the age pension.
(h)He did not hear about the pension bonus scheme (PBS) when it came into existence in 1998. Consequently, he did not register as a member of the PBS. He believes that if he had known about the PBS he would have registered.
(i)In 1999, his children formed a family company. He then signed over the timber mill and farm to his children’s company in September 1999. He stopped working shortly after his 71st birthday, 6 September 1999.
(j)He and his wife applied for the age pension on 24 January 2000. He, his wife and his daughter were granted an interview at the Coffs Harbour office of Centrelink at 3.15pm on 27 January 2000.
(k)He and his wife were granted the age pension with effect from 24 January 2000.
(l)In September 2001, he heard about the PBS. He was then 73 years of age, and at that stage he had been receiving the age pension for about 20 months.
(m)On 24 April 2002, he submitted the appropriate form at the Grafton office of Centrelink for registration for the PBS.
(n)On 9 May 2002, a Customer Service Officer from Centrelink, Grafton, wrote to Mr Shipman to inform him of the following:
(i)He had been accepted as a member of the PBS.
(ii)He would not receive the pension deferred bonus (PDB) because he had previously received income support payments since qualifying for Age Pension.
(iii)He would be registered as a “non-accruing” member. The non-accrual period commenced on 24 April 2002.
(o)On 3 June 2002, he sought a review of his situation by an Authorised Review Officer (ARO).
(p)On 1 July 2002, the ARO decided as follows:
§To qualify for a PDB a person must, among other things, be a registered member of the scheme and have not received Age Pension at any time prior to making a claim for the bonus;
§In your case you did not register for the bonus scheme prior to claiming and receiving Age Pension;
§I understand that you did not register for the scheme because you were unaware of the scheme, however, I regret that there are no provisions that allow your registration for PDB to be backdated to any day prior to your commencing to receive Age Pension;
§I agree with the decision that you do not qualify for a PDB.
(q)Mr Shipman applied to the Social Security Appeals Tribunal (SSAT) for review of the ARO decision. The SSAT affirmed the decision on 23 September 2002.
4. The criteria relating to qualification for a pension bonus are contained in section 92C of the Act which provides:
“92C A person is qualified for a pension bonus if:
(a) both:
(i)the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and
(ii)that age pension is received otherwise than because of a scheduled international social security agreement (within the meaning of section 1208); and
(b)the person has not received an age pension at any time before making a claim for the pension bonus; and
(c)the person is registered as a member of the pension bonus scheme; and
(d)the person has accrued at least one full-year bonus period while registered as a member of the pension bonus scheme; and
(e)the person has not received:
(i)a social security pension (other than an age pension or a carer payment); or
(ii)a social security benefit; or
(iii)a service pension (other than a carer service pension); or
(iv)an income support supplement (other than an income support supplement that is payable as a result of the operation of subclause 8(3) of Schedule 5 to the Veterans’ Entitlements Act);
at any time after the person qualified for an age pension; and
(f)the person has not already received:
(i)another pension bonus; or
(ii)a bonus under Part IIIAB of the Veterans’ Entitlements Act.”
5. Mr Shipman has never made a claim for the pension bonus. His application to register as a member of the PBS on 24 April 2002 was not a claim. Section 92M of the Act makes the distinction clear. It provides:
“s. 92 M Application for registration is not to be treated as a claim
To avoid doubt, an application for registration as a member of the pension bonus scheme is not to be treated as a claim for the purposes of any law of the Commonwealth.”
6. The provisions of subsection 92C (b) of the Act require that for a person to qualify for the pension bonus, that person must not have received an age pension at any time before making a claim for the pension bonus. Mr. Shipman has been receiving the age pension since 24 January 2000. He did not join the PBS until 24 April 2002, and he has never claimed the pension bonus. He clearly does not qualify for the pension bonus.
7. Mr. Shipman has another hurdle to cross. He should have lodged his application for registration within 13 weeks after 1 July 1998. Section 92H (2) provides:
“Age pension qualification date before 1 July 1998
92H.(2) If a person’s date of qualification for the age pension occurs before 1 July 1998:
(a)the person must lodge an application during the period that begins on the commencement of this section and ends 13 weeks after 1 July 1998; and
(b)if registration occurs as a result of an application lodged within that period—the registration takes effect on 1 July 1998.
Note: The Secretary may extend the period: see subsection (3).”
8. Ms McMullin submitted on behalf of Mr Shipman, that because Mr Shipman lived on a farm and was remote from mainstream news items and community information, the Tribunal should allow an extension of time for lodging the application, and determine that registration take effect on 1 July 1998. Extensions of time may be granted pursuant to s. 92H (3) which provides :
“Late applications
92H.(3) The Secretary may extend the period within which a person must lodge an application. If registration occurs as a result of an application lodged during an extended period, the registration takes effect:
(a)on the date on which the application is lodged; or
(b)if the Secretary decides that it should take effect on another date—on that other date.”
9. However, there are some limits to the discretion to be exercised by the Secretary. They are contained in sub-sections 92 H (4), (5), and (6):
“92H.(4) The Secretary must not make a decision to extend the period within which a person must lodge an application unless, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period:
(a)the person would have been a non-accruing member for all of the pre-application period; or
(b)both:
(i)the person would have been an accruing member for some or all of the pre-application period; and
(ii)the person would have passed the work test for each test period that is applicable to the person.
Note 1: Pre-application period is defined by subsection (5).
Note 2: Test period is defined by subsection (6).
92H.(5) For the purposes of this section, the pre-application period is the period beginning on:
(a)in the case of a person whose date of qualification for the age pension occurs on or after 1 July 1998—the person’s date of qualification for the age pension; or
(b)in the case of a person whose date of qualification for the age pension occurs before 1 July 1998—1 July 1998;
and ending on the date on which the person lodged the application.
92H.(6) For the purposes of this section, to work out what is a test period:
(a)identify the overall accruing period, which is that part of the pre-application period for which, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre-application period, the person would have been an accruing member of the scheme;
(b)if the overall accruing period is 365 days or less—the overall accruing period is the only test period;
(c)if the overall accruing period is longer than 365 days—each of the following periods is a test period:
(i)the full-year period beginning at the start of the overall accruing period;
(ii)if 2 or more succeeding full-year periods are included in the overall accruing period—each of those full-year periods;
(iii)the remainder (if any) of the overall accruing period.”
10. A person is an accruing member of the PBS unless the person’s membership is non-accruing, or the person is a “post-75” member (see s. 92 N).
11. Section 92P defines the circumstances in which a person’s membership of the PBS is non-accruing. The sub-section which may have relevance to Mr. Shipman is 92P (1) which provides:
“92P (1) Disposal preclusion period. For the purposes of this Part, if a person is subject to a disposal preclusion period at a particular time when the person is a member of the pension bonus scheme, the person’s membership of the scheme is non-accruing at that time.
Note: Disposal preclusion period is defined by section 93U.”
Section 93 U provides:
“SECTION 93 U DISPOSAL PRECLUSION PERIOD – DISPOSALS BEFORE 1 JULY 2002
93U(1A) [Disposal of assets before 1 July 2002] This section applies only to disposals of assets that took place before 1 July 2002.
93U(1) [Disposal preclusion period] For the purposes of this Part, if:
(a) either:
(i) a person has, during a designated year of the person, disposed of an asset of the person; or
(ii) the partner of a person has, during a designated year of the person , disposed of an asset of the partner; and
(b) the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person and/or the person’s partner during that designated year, exceeds $10,000.00;
the person is subject to a disposal preclusion period throughout the period of 5 years that starts on the day on which the disposition referred to in paragraph (a) took place.”
12. No evidence was placed before the Tribunal about the value, or the circumstances surrounding the disposal by Mr. Shipman of his timber mill and farm in September 1999. However, the total assets disposed of probably exceeded $10,000.00 in value.
13. The questions as to the circumstances and value of Mr Shipman’s disposal of his assets to his children’s company have apparently never been examined by Centrelink. There has been no decision by Centrelink, nor by the SSAT as to whether Mr. Shipman would have been an accruing member or a non-accruing member of the PBS if he had joined in July 1998. There has been no decision of Centrelink, nor of the SSAT as to whether the Secretary’s discretion to extend time could have been made, should have been made or might have been a wasted exercise in any case.
14. It is my view that this matter of extension of time is not properly before this Tribunal because it has not been the subject of review by Centrelink or by the SSAT. Sections 179 and 181 of the Social Security Administration Act 1999 provide as follows:
“179(1) [ When case can be brought before the AAT] If:
(a) a decision has been reviewed by the SSAT; and
(b) the decision has been affirmed, varied set aside by the SSAT;
Application may be made to the AAT for review of the decision of the SSAT.
181 The AAT may only review a decision that has been reviewed by the SSAT.”
15. If Mr.. Shipman wishes to pursue this course of action he should make a formal application to Centrelink for an extension of the period with in which he must lodge his application for registration. The matter can then be properly investigated, and if Mr. Shipman is unhappy with that decision he can then seek review by the SSAT, and then if it comes to that, the AAT.
16. Ms. McMullin also submitted that the Tribunal should treat Mr. Shipman’s application for age pension on 24 January 2000, as also containing a claim for the pension bonus, or alternatively, deem that he had made a claim for pension bonus before January 2000, that is, before he received the age pension.
17. It is the Tribunal’s view that Mr. Shipman should also take this matter up with Centrelink and if necessary, the SSAT, before bringing the matter to the AAT.
18. The decision that Mr. Shipman does not qualify for pension bonus is affirmed.
I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: .......................................................................................
C. O’Donovan AssociateDate/s of Hearing 11 March 2004
Date of Decision 11 March 2004
Solicitor for the Applicant Ms McMullin
Advocate for the Respondent Ms Helen Wallis-Dunn
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