Stedul and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 1068

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1068

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2006/805

GENERAL ADMINISTRATIVE  DIVISION		)
Re		NIKOLA ŠTEDUL

Applicant

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

Respondent

DECISION

Tribunal Mr Egon Fice, Member

Date19 February 2007

PlaceMelbourne

Decision The Tribunal affirms the decision of the Social Security Appeals Tribunal dated 10 August 2006.

(Sgd)      Egon Fice

Member

SOCIAL SECURITY - portability of age pension – calculation of portability rate – Australian working life residence – Australian resident – resides in Australia

Administrative Appeals Tribunal Act 1975 s 34J

Mineral Resources Act 1989 s 10

Queensland Mining Act 1968  s 25

Social Security Act 1991 ss 7, 1214, 1217, 1221, 1220A

REASONS FOR DECISION

19 February 2007 Mr Egon Fice, Member

1.      Mr Štedul resided in Australia between 1958 and 1973, becoming an Australian Citizen in 1963.  He lived outside Australia between 1973 and March 2002.  Upon returning to Australia, Mr Štedul applied for the age pension which he has received since 2 December 2002.  On 6 May 2006 he left Australia for an extended stay in Zagreb in the Republic of Croatia, where he had previously lived for some time.

2.      Centrelink, which is the service delivery agency for the Department Of Families, Community Services and Indigenous Affairs, calculated Mr Štedul’s Australian working life residence to be 187 months.  Therefore, as Mr Štedul has remained in the Republic of Croatia for more than 26 weeks following his departure in May 2006, it reduced his age pension to 187/300 of his basic pension rate.  That rate of pension became effective after 4 November 2006, Mr Štedul not having returned to Australia.

3.      In 1974, when Mr Štedul was visiting West Germany, the Australian Minister for Foreign Affairs refused to renew Mr Štedul’s passport which was about to expire.  Mr Štedul refused to return to Australia under those circumstances and he remained overseas, living in Scotland and in the Republic of Croatia until he was granted a new passport in 2002.

4.      The only issue before the Tribunal is whether Mr Štedul was an Australian resident between 1974 and 2002.

5. The parties to this application have consented to the review being determined without a hearing in accordance with s 34J of the Administrative Appeals Tribunal Act 1975 (the AAT Act). Accordingly, this decision is based solely on the documents and materials provided to the Tribunal by both parties. I am of the view that the issues for determination can be adequately determined solely on the papers.

RELEVANT FACTS

6.      Mr Štedul was 20 years old when he arrived in Australia on 17 August 1958.  On 12 December 1963 he was granted Australian citizenship. 

7.      Mr Štedul married in 1965 and he has two daughters, both of whom were born in Australia.  Mr Štedul’s wife was born in Scotland and her parents migrated to Australia in 1953.

8.      Mr Štedul took on various forms of employment after arriving in Australia including farm work in New South Wales; timber cutting in South Australia; foundry work at Port Kembla; cane cutting in North Queensland; and prospecting and hard rock mining.  He also owned and worked a tobacco farm; and after the sale of the farm, he entered into a joint venture with two other business partners in a wolfram mine in Queensland.  He joined the Citizens’ Military Forces (CMF) although it is not clear how long he served with the CMF.

9.      While Mr Štedul was a member of the CMF, his battalion commander explained to him that the Australian Security Intelligence Organisation (ASIO) had visited, suggesting that Mr Štedul could be a security risk.  Apparently ASIO considered that Mr Štedul was politically active in the Croatian community and could pose a security risk.  According to Mr Štedul, he thought it best if he was discharged from the CMF and this in fact occurred.

10.     On 26 June 1973 Mr Štedul, his wife and two children left Australia to spend some time in Europe.  After arriving in West Germany, Mr Štedul decided to extend his stay there for one year.  In order to do so, he needed to have his passport renewed as it would have expired prior to his expected departure date.  His application for renewal was refused and his passport expired in 1974. 

11.     Before his passport expired, Mr Štedul and his family moved to Scotland, arriving on 1 May 1974.  He made a number of further applications to have his passport renewed and they were refused, apparently on the ground that Mr Štedul was regarded as a security risk to Australia.  He was offered an identity document which he could use to re-enter Australia but he refused that document.

12.     Mr Štedul and his family remained in Scotland for 17 years before moving to Croatia on 30 July 1991 where he purchased a property.  Mr Štedul and his family remained in Croatia until their return to Australia on 28 March 2002.  From correspondence received by the Tribunal from Mr Štedul dated 24 August 2006, it appears that he has now returned to live in his Croatian property.

13.     Mr Štedul notified Centrelink that he would be departing Australia to return to Croatia on 6 May 2006 and that his absence would be for more than 12 months.

14.     Centrelink notified Mr Štedul that if he was absent from Australia for longer than 26 weeks while receiving the age pension, his basic rate of age pension would be reduced to 187/300 after that period of absence.

LEGISLATIVE SCHEME

15. Chapter 4 of the Social Security Act 1991 (the Act) deals with international agreements and the portability of social security payments. Part 4.2 deals expressly with overseas portability. Section 1214(1) of the Act provides that if a person’s maximum portability period for the payment is unlimited, that person’s right to continue to be paid the social security payment which is received while absent from Australia is not affected by that absence. The table set out under s 1217(4) of the Act makes it clear that the maximum portability period for the age pension is unlimited. That means that Mr Štedul is entitled to continue receiving the age pension for an unlimited period while overseas. However, that does not mean he is entitled to receive the age pension at the full basic rate. Division 3 establishes the appropriate rate payable where a person has been continuously absent from Australia for more than 26 weeks. Where that is the case, the person’s rate of age pension must be calculated using the Pension Portability Rate Calculator which is found at the end of s 1221 of the Act (see s 1220A).

16.     Module A of the Rate Calculator describes the method used to calculate a person’s portability rate.  The first step is to work out the period of a person’s Australian working life residence using Module B. Section 1221-B1 provides that a person’s working life is the period beginning when the person turns 16 and ends when the person reaches pension age (65 years).

17.     Section 1221-B2 defines Australian working life residence as follows:

Subject to points 1221-B3 and 1221-B4, a person’s period of Australian working life residence as at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.

18.     If a person’s period of Australian working life residence is 300 months (25 years) or more, that person’s residence factor is 1 (s 1221-C1).  In other words, where a person’s period of Australian working life residence is 25 years or more, that person’s pension portability rate will be the same as the basic rate and there is no reduction.  However, where a person’s period of Australian working life residence is less than 300 months, that person’s residence factor is calculated by dividing the person’s Australian working life residence by 300 (s 1221-C2).

19. For the purposes of the Act, Australian residence definitions are set out in s 7. Section 7(1) provides that in the Act, unless the contrary intention appears, Australian resident has the meaning given by s 7(2). Section 7(2) of the Act provides:

An Australian resident is a person who:

(a)resides in Australia; and

(b)is one of the following:

(i)an Australian citizen;

(ii)the holder of a permanent visa;

(iii)a special category visa holder who is a protected SCV holder.

20. The matters which must be taken into account when deciding whether a person resides in Australia are set out in s 7(3) of the Act which provides:

In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:

(a) the nature of the accommodation used by the person in Australia; and

(b)the nature and extent of the family relationships the person has in Australia; and

(c)the nature and extent of the person’s employment, business or financial ties with Australia; and

(d)the nature and extent of the person’s assets located in Australia; and

(e)the frequency and duration of the person’s travel outside Australia; and

(f)any other matter relevant to determining whether the person intends to remain permanently in Australia.

PORTABILITY RATE CALCULATION

21.     Whether Mr Štedul’s age pension should be reduced to 187/300 of the basic rate depends on the number of months that Mr Štedul has been an Australian resident between the time that he first arrived in Australia and the time that he reached the pension age which is 65 years.  According to the Secretary, Mr Štedul’s working life residence is calculated by aggregating the periods 23 August 1958 to 25 June 1973 (178 months and 4 days) and 28 March 2002 to 1 December 2002 (8 months and 4 days) and adding a period of one month.  I agree with the Secretary’s calculation that that amounts to a total 187 months.

22.     However, Mr Štedul submitted that the intervening period, that is between 25 June 1973 and 28 March 2002, was also a period during which he was an Australian resident despite the fact that he did not return to Australia at all in that period. 

23. There is no issue about the fact that Mr Štedul was granted Australian citizenship on 20 December 1963. He therefore satisfies the requirements in s 7(2)(b) of the Act. The question is whether Mr Štedul meets the requirement in s 7(2)(a) which defines an Australian resident as a person who also resides in Australia. In determining whether, for the purposes of the Act, Mr Štedul was residing in Australia between 26 June 1973 and 28 March 2002, regard must be had to the factors set out in s 7(3) of the Act.

NATURE OF THE ACCOMMODATION USED IN AUSTRALIA

24.     There was no evidence before me about the nature of the accommodation occupied by Mr Štedul and his family prior to them going overseas in 1973.  According to Mr Štedul, his departure from Australia at that time was for an extended holiday in Europe.  If Mr Štedul owned accommodation in Australia, I have no doubt that he would have provided evidence of that and it would have been mentioned in his written submissions of 24 August 2006.  If Mr Štedul did own property and he sold it or had someone sell it for him while he was overseas, this factor would not assist his claim.  If he did not own the accommodation which he used when he was in Australia, then this fact would not be of any assistance to him in establishing residence.  In the absence of any evidence regarding the nature of accommodation used by Mr Štedul and his family when residing in Australia prior to 1973, it is reasonable that I should conclude that this factor does not assist him.

NATURE AND EXTENT OF FAMILY RELATIONSHIPS IN AUSTRALIA

25.     When Mr Štedul left Australia in 1973, his wife and two young children went with him.  His father had passed away and his mother was living in Croatia.  Mr Štedul’s brother and his family lived in Perth.  His wife’s sister, brother and their families and parents also lived in Australia.  Mr Štedul submitted that when the Minister for Foreign Affairs decided not to renew his passport in 1975, he suggested that his wife and children return to Australia and he would follow when the passport issue was resolved.  However, according to Mr Štedul, his wife refused to return to Australia without him, as she did not want their family to live apart from each other because the children were at a very young age.  By that time, Mr Štedul said that he had rented a furnished house in Scotland on a short lease and that the children were enrolled in a local school.  He intended that this be a temporary arrangement before returning to Australia. 

26.     Although I have no evidence before me of the matters submitted by Mr Štedul, there appears to be no controversy about them and I accept that this factor favours Mr Štedul’s claim that he was residing in Australia, although temporarily living overseas. 

NATURE AND EXTENT OF EMPLOYMENT, BUSINESS OR FINANCIAL TIES WITH AUSTRALIA

27.     According to Mr Štedul, when he left for his overseas holiday in 1973, he was the owner of a wolfram mine together with two business partners, Mr Littlemore and Mr Payne.  Mr Štedul said in his submissions that when he went to Europe in 1973, he had agreed with his partners that he would examine other hard rock mining operations in order to obtain ideas about how to organise workings at their mine in North Queensland.  He said that he had Mr Littlemore prepare a reference for him and that document was in evidence. 

28.     However, the reference provided by Mr Littlemore, while it does refer to Mr Štedul being interested in examining overseas mining operations and is by way of an introduction, is dated 17 March 1972.  There was no explanation as to why the reference was obtained some 15 months before his planned trip in June 1973.  There is evidence before me that Mr Štedul also went to Europe in what he described as the later part of 1972.  Although there is no evidence that Mr Štedul visited mining operations in 1972, it offers one possible explanation for the reference provided by Mr Littlemore in March 1972.  

29.     Furthermore, Mr Štedul has not previously mentioned that viewing mining operations in Europe in 1973 was the purpose of that visit.  Rather, Mr Štedul has said that he went to Europe in 1973 to meet with his mother and to have an extended holiday.  That explanation does not sit comfortably with Mr Štedul examining mining operations in Europe and returning to Australia to use the benefit of that experience in his own wolfram mine in North Queensland. 

30.     Mr Štedul also put into evidence two further references, one from Mr Borzi who is stated to be the Chairman of the Mareeba Shire Council and one from Mr Payne.  Mr Borzi’s reference is dated 26 November 1970.  It makes no mention at all of the wolfram mine.  Mr Payne’s reference is a general character reference and it is undated.  It does state that Mr Štedul is engaged in a mine at Wolfram Camp but it goes no further than that.

31.     Mr Štedul submitted that although the mine ceased to operate when he did not return from Europe, he is of the view that the mine may still formally be in our ownership because it has never been sold.  Although no further submissions were made about that, I have examined the Queensland Mining Act 1968 (the Mining Act) which dealt with mining operations in Queensland at the time Mr Štedul operated the wolfram mine.  Mining rights are normally issued by way of a mining lease.  Section 25 of the Mining Act states that a mining lease shall be of such duration as the Governor in Council in each case agrees to, but in no case shall it exceed 21 years.  Therefore, even if Mr Štedul held a mining lease when he went overseas in 1973, that lease would have well and truly expired and there is no evidence that he sought its renewal at any time. 

32.     Mr Štedul also submitted that when he learned that his passport would not be renewed, he contacted Mr Littlemore, who was also his accountant, and instructed him to close a joint bank account in Australia and to forward the proceeds, which he said were needed to make new arrangements.  The letter from Mr Littlemore dated 7 May 1975 is addressed to Mrs Štedul and it stated your savings bank account was closed and the balance forwarded to you together with the joint account.  There is no other reference to any other arrangements.  The letter also indicates that child endowment would have stopped as Mrs Štedul had been out of Australia for more than 12 months. 

33.     Although the evidence does point to the fact that Mr Štedul had business and financial ties in Australia at the time that he left in 1973, it appears that those ties were severed by 1975 when Mr Štedul was told that his passport would not be renewed.  Although Mr Štedul claims that he was operating the wolfram mine in 1973, other than his statements that that was the case, there is no evidence of that fact.  There is no evidence that he attempted to renew the mining lease or sought to have that operation continued in his absence.  There is no evidence disclosing what happened to the mining lease and I have no doubt that in any event it would not have existed beyond 1994.  Although the Mining Act was repealed and replaced by the Mineral Resources Act 1989 (Resources Act), the Resources Act makes it clear that a mining tenement under the Resources Act does not create an estate or interest in land (s 10).  I therefore cannot accept Mr Štedul’s submissions that he may nevertheless have a subsisting interest in the mine he operated in North Queensland some time prior to his departure from Australia in 1973.  Nor does the evidence point to the fact that he intended to return to operate that mine.

34.     The fact that Mr Littlemore was instructed to close all of the banking accounts and to forward the proceeds to Mrs Štedul, in my view, points to the fact that at that time, Mr Štedul did not intend to return to Australia.  If he had that intention, it seems to me that those accounts would not have been closed; even though, no doubt through necessity, funds would have been transferred to him in Scotland.

35.     In my view, the evidence tendered in support of this factor does not support Mr Štedul’s claim that he continued to reside in Australia while overseas. 

THE NATURE AND EXTENT OF ASSETS LOCATED IN AUSTRALIA

36.     Following the closure of Mr and Mrs Štedul’s bank accounts in Australia, there is no evidence that Mr or Mrs Štedul retained any assets in Australia after 1975.  Mr Štedul referred to his ownership of the wolfram mine but, as I have set out above, even if Mr Štedul held a mining lease in 1973, and there is no evidence of that, the lease would have expired long ago.  There is no evidence that it was ever renewed. 

FREQUENCY AND DURATION OF THE PERSON’S TRAVEL OUTSIDE AUSTRALIA

37.     Between 1973 and 2002 Mr Štedul did not return to Australia.  This factor does not assist Mr Štedul. 

ANY OTHER MATTER RELEVANT TO DETERMINING WHETHER THE PERSON INTENDED TO REMAIN PERMANENTLY IN AUSTRALIA

38.     Mr Štedul submitted that there was ample evidence by way of correspondence between him and various Australian government authorities and officials indicating his intention to return to Australia between 1973 and 2002.  The only correspondence in evidence is a letter from Mrs Štedul to the Governor-General dated 20 April 1978.  In that letter Mrs Štedul refers to the offer from the Australian Government of an identity document which he could use to re-enter Australia.  However, she said that her husband’s view was that if he were to accept and use that document, he would be admitting that he accepted the insinuation that he is not worthy of full Australian citizen’s rights. 

39.     I have no reason to doubt that after 1975, when his passport was not renewed, Mr Štedul made numerous representations to various authorities and officials seeking the renewal of his passport.  However, it is clear that Mr Štedul did not intend to return to Australia unless his passport was renewed, even though there was nothing which would have prevented him from returning to Australia to reside.  Although Mr Štedul is firmly of the belief that the renewal of his passport was wrongly denied, and that I should take account of that in considering whether or not he intended to remain permanently in Australia, I am clearly not in a position to make any such judgement; nor is it appropriate for me to do so given the nature of the review by this Tribunal.  As far as this factor is concerned, it is my role to determine whether there is evidence which points to an intention to remain permanently in Australia despite a prolonged period of absence overseas.  While I accept that there is some evidence that Mr Štedul believed he had been unjustly treated and denied renewal of his passport, that is not the same thing as disclosing an intention to remain permanently in Australia.  I am therefore of the view that this factor does not assist Mr Štedul in this application.

CONCLUSION

40. I have carefully reviewed the evidence that Mr Štedul submitted supporting his contention that he continued to reside in Australia between 1973 and 2002. An examination of that evidence, in light of the considerations to which I must have regard in accordance with s 7(3) of the Act, directs me to conclude that between 1973 and 2002, Mr Štedul was not an Australian resident as defined in the Act. For that reason, Mr Štedul’s period of Australian working life residence was correctly calculated by Centrelink for the purpose of determining his age pension portability rate.  The rate was correctly calculated at 187/300 of his basic rate.

41.     It follows that the decision of the Social Security Appeals Tribunal delivered on 10 August 2006 was correct and must be affirmed.

I certify that the forty-one [41] preceding paragraphs are a true copy of the reasons for the decision herein of:

Mr Egon Fice, Member

Signed:   Dianne Eva
  Clerk

Date of Hearing:  10 January 2007
Date of Decision:  19 February 2007
Advocate for the Applicant:         Self-represented
Advocate for the Respondent:      Ms K. Paul, Centrelink Legal Services