Sproson and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 218

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 218

ADMINISTRATIVE APPEALS TRIBUNAL      )

)           No 2007/3831

GENERAL ADMINISTRATIVE DIVISION		)
Re		DENISE SPROSON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Dr Gordon Hughes, Member

Date19 March 2008

PlaceMelbourne

Decision The decision under review is affirmed.

(sgd) Dr Gordon Hughes

Member

SOCIAL SECURITY - Pension bonus scheme – prior receipt of age pension – membership of pension bonus scheme cancelled as a consequence

Social Security Act 1991 sections 92A, 92C, 92L, 92T

Dumic v Department of Family and Community Services [2001] AATA 932

Brutnell v Secretary, Department of Family and Community Services [2002] AATA 436

Walsh v Secretary, Department of Family and Community Services [2003] AATA 163

REASONS FOR DECISION

19 March 2008 Dr Gordon Hughes, Member          

1.       This was an application for a review of a decision by the Social Security Appeals Tribunal (SSAT) dated 24 July 2007. The SSAT affirmed a decision by Centrelink to cancel the Applicant's registration in the Pension Bonus Scheme (PBS) on 20 June 2001. Centrelink is the agency which provides services for the Department of Families, Housing, Community Services and Indigenous Affairs.

Background

2.       The essence of the PBS is that a person who qualifies for an age pension but defers claiming the pension, may subsequently qualify for a single lump sum pension bonus. In order to qualify for the bonus, a person must register as a member of the PBS, must have accrued at least 12 months membership and satisfy minimum work requirements during that period.  Membership of the scheme is cancelled if the person starts to receive the age pension.

3.       The Applicant turned 61 years and six months old, which is the age at which one qualifies for the age pension, in January 2000.  She registered for the PBS on 28 November 2000 and subsequently lodged a claim for the age pension on 31 May 2001.

4.       The Applicant did not lodge a claim for PBS when she lodged her claim for the age pension and her age pension claim form indicated she was not registered as a member of the PBS. She specifically answered no to a question on the claim form as to whether she was currently registered as a member of the PBS. The Social Security Act (1991) provides that membership of the scheme is cancelled if a person does not make a proper claim for a pension bonus when claiming the age pension.

5.The Applicant's membership of the PBS was cancelled on 20 June 2001.

Issue

6.       The principal issue I have to decide is whether Mrs Sproson had accumulated the requisite 12 month minimum membership of the PBS prior to claiming the pension bonus. and whether, in any event, she was subsequently disqualified from claiming the bonus because she had already received the age pension.

Legislation

7.The relevant provisions of the Act provide as follows:

92A     Simplified outline

The following is a simplified outline of this Part:

•A person who qualifies for an age pension but defers claiming that pension may be able to get a single lump‑sum pension bonus.

•A person who wants to get a pension bonus must register as a member of the pension bonus scheme.

•To get a pension bonus, a person must accrue between 1 and 5 bonus periods while deferring age pension.

•          Generally, a bonus period runs for 1 year.

•To accrue a bonus period, the person must pass the work test for that period.

•To pass the work test for a year, either the person, or the person’s partner, must gainfully work for at least 960 hours during that year.

•The amount of a person’s pension bonus depends on the number of accrued bonus periods and the person’s annual rate of age pension. A person may get a bigger bonus by accruing more bonus periods.

92C     Qualification for pension bonus

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 (see section 5 of the Social Security (International Agreements) Act 1999); 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

Note: Even though the person may not have actually received an amount of social security pension or benefit because the rate of the pension or benefit was nil, in some cases the person will be taken to have received the pension or benefit if adjusted disability pension (within the meaning of section 118NA of the Veterans’ Entitlements Act) was payable to the person or the person’s partner: see subsection 23(1D) of this Act.

(f)        the person has not already received:

(i)        another pension bonus; or

(ii) a bonus under Part IIIAB of the Veterans’ Entitlements Act; or

(iii)DFISA bonus under Part VIIAB of the Veterans’ Entitlements Act.

Note: Subclause 8(3) of Schedule 5 to the Veterans’ Entitlements Act deals with income support supplement for carers.

92L     Cancellation of membership

A person’s membership of the pension bonus scheme is cancelled if:

(a)       the person’s claim for pension bonus is determined; or

(b)       the person starts to receive:

(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; or

(c)       the person does not make a proper claim for a pension bonus when the person claims age pension; or

(d)       the person requests the Secretary, in writing, to cancel the person’s membership.

Note: Subclause 8(3) of Schedule 5 to the Veterans’ Entitlements Act deals with income support supplement for carers.

92T     Accrual of bonus periods

Full‑year bonus period

92T(1)  The first bonus period that accrues to a person is the full‑year period of the person’s accruing membership of the pension bonus scheme:

(a)       that began on whichever of the following dates is applicable:

(i)        if the person was an accruing member of the pension bonus scheme on the date the person’s registration as a member took effect—the date the registration took effect;

(ii)        in any other case—the date on which the person first became an accruing member of the pension bonus scheme; and

(b)       for which the person passes the work test.

Note:    Accruing membership is defined by section 92N.

92T(2)  Each succeeding full‑year period of the person’s accruing membership of the pension bonus scheme:

(a)       that is specified in the person’s claim for pension bonus; and

(b)       for which the person passes the work test;

is a bonus period that accrues to the person.

8.       The above sections have been subject to limited amendment since 2000. Section 92C(e) (Note) and section 92C(f)(iii) were inserted in 2004 and section 92C(a)(ii) was amended in 2006.

Consideration

9.       Section 92C(d) provides that to be qualified for PBS, a person must have accrued at least one full-year bonus period while registered as a member of the pension bonus scheme.  Section 92T(1) provides that the first bonus period that accrues to a person is the full year period of the person's accruing membership of the PBS. The Applicant registered for the PBS on 28 November 2000 and was deemed to be an accruing member from 15 November 2000, which was the date she initially enquired about registration. She was subsequently paid the age pension from 31 May 2001, meaning the lapsed period since the commencement of the first bonus period was less than a full year.

10.     The Applicant had received a letter from the Respondent on 6 December 2000, following her registration for the PBS, which included the following information:

I am pleased to tell you that you have been accepted as a member of the Pension Bonus Scheme.

You are registered as an accruing member from 15 November 2000.

You have indicated the length of time you intend participating in the Pension Bonus Scheme. However you can claim a bonus whenever you are ready, provided you have been an accruing member of the Scheme for at least the minimum 12 month period.

11.     Accordingly, it is difficult for the Applicant to claim not to have been on notice as to the prerequisite membership period for claiming the pension bonus.

12.     Section 92L(c) provides that a person's PBS membership is cancelled if that person fails to make a proper claim for pension bonus when claiming the age pension. In this instance, the Applicant did not make a claim for pension bonus when she claimed the age pension and accordingly the claim for pension bonus was not correctly made. The Respondent was thus entitled to cancel the Applicant's membership. Having now received the age pension, the Applicant is not eligible to rejoin the scheme.

13.     The result may appear somewhat harsh on the Applicant, who has apparently acted with the best of intentions at all times. The Applicant stated that she was not adequately advised by Centrelink as to her options when she initially made enquiries in 2000, particularly with respect to the implications of how an application for age pension might impact on her husband's future entitlement under PBS. She told the Tribunal that a Centrelink financial advisor had conceded to her earlier in 2007 that, at the time she had lodged her claim for age pension in 2001, the level of general knowledge about how the PBS system worked was not great.

14.     The Tribunal is left with the impression that the Applicant is a prudent and cautious person who apparently acted in accordance with the advice that she was given by Centrelink; and more to the point, was disadvantaged by the fact that she apparently received no advice as to the adverse consequences of electing to receive the age pension in 2001. Had she been fully advised, it is likely she would have elected not to take the age pension at that stage.

15.     The Tribunal makes no finding as to what the Applicant was or was not told by Centrelink representatives in 2000 and 2001. The Applicant may, nevertheless, be well advised to consider pursuing a claim under Centrelink’s Scheme for Compensation for Detriment caused by Defective Administration.

16.     The fact remains that the Applicant did not meet the requirements of the legislation and accordingly the decision to cancel her membership of PBS was legally sound.

Decision

17.For the above reasons, the decision under review is affirmed.

I certify that the seventeen [17] preceding paragraphs are a true copy of the reasons for the decision herein of  

Signed            Lauren Spragg
  Associate

Date of Hearing  14 December 2007    
Date of Decision        19 March 2008
Advocate for the Applicant                 Self‑represented
Advocate for the Respondent             Michael Todd, Centrelink Legal Services