Stoneham and Secretary, Department of Social Services
[2014] AATA 236
•30 January 2014
[2014] AATA 236
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/3411
Re
Kevin Stoneham
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Regina Perton, Member
Date 30 January 2014 Date of written reasons 23 April 2014 Place Melbourne The Tribunal affirms the decision under review.
.............................[sgd]...........................................
Regina Perton, Member
Social Security – payment of arrears – review not sought within 12 weeks – decision under review affirmed
Social Security (Administration) Act 1999 s78, 80, 108, 109, 129, 180(2), 123(3)
REASONS FOR DECISION
Regina Perton, Member
23 April 2014
The Tribunal provided oral reasons for its decision at a hearing of this application on 30 January 2014. The applicants subsequently requested written reasons for the decision.
Mr and Mrs Stoneham received age pension from 11 January 2005 and 1 March 2001 respectively. During that time they received less than the maximum rate of age pension due to the application of the income test.
Mr and Mrs Stoneham have a disabled son who was unable to manage his own finances. His mother directed that their son’s disability support pension be paid into a bank account in her name, long before either she or her husband became eligible for pensions.
On 2 October 2012 $100,000 was withdrawn from Mrs Stoneham’s bank account. Mr Stoneham told Centrelink, which administers age pension payments, that the money was their son’s, and the result of his accumulated disability support pension payments. The withdrawn money was subsequently deposited into a bank account in their son’s name. As a result of these actions and the Stonehams’ explanation, Centrelink reapplied the income test, and in late 2012 it decided to increase Mr and Mrs Stoneham’s age pensions from 28 November 2012.
Mr Stoneham sought arrears of age pension prior to 28 November 2012 on the basis that Centrelink had been underpaying their age pension for some time by incorrectly taking into account deemed interest on the money in Mrs Stoneham’s account that belonged to their son.
On 1 February 2013 a Centrelink authorised review officer (ARO) affirmed the earlier decision to backdate an increase in Mr and Mrs Stoneham’s age pension from 28 November 2012. On 11 June 2013 the Social Security Appeals Tribunal (SSAT) set aside the ARO decision and substituted a decision that the rate of Mr and Mrs Stoneham’s age pension was to be backdated from 24 October 2012. Mr Stoneham lodged an application for review with this Tribunal on 15 July 2013.
On 13 September 2013 Centrelink varied the decision made by the SSAT under section 180 of the Social Security (Administration) Act 1999 (the Administration Act) to backdate the increase in Mr and Mrs Stoneham’s age pension to the earlier date of 20 June 2012. On 23 September 2013 Centrelink also decided that the rate of pension paid to Mr and Mrs Stoneham should be increased for the following closed periods: 9 March 2005 to 17 May 2005; 29 June 2005 to 23 August 2005; 7 September 2005 to 20 September 2005; and 8 March 2006 to 18 April 2006. The Tribunal will refer to these two Centrelink decisions as the new decisions.
Mr Stoneham is adamant that his son’s pension payments deposited into Mrs Stoneham’s account should never have been included in Centrelink calculations determining his wife and his age pension entitlements, and that consequently he and his wife are entitled to have the increase in their age pensions backdated to reflect that error by Centrelink. The Tribunal’s task to is decide whether Mr Stoneham’s age pension has been correctly increased from the dates contained in the new decision.
LEGISLATION
The power of the Secretary to set aside an SSAT decision and substitute a new decision is contained in section 180(2) of the Administration Act:
If an officer sets a decision aside and substitutes a new decision after an application has been made to the AAT for review of the original decision but before the determination of the application, the application is to be treated as if:
(a) the SSAT had set aside the original decision and substituted the new decision; and
(b) the application were an application for review of the new decision.
The time limits for a favourable determination are set out in the following sections of the Administration Act:
Section 123(3) of the Administration Act states:
Continuing effect of determinations
…
(3) A determination of the rate of a social security payment continues in effect until:
(a) a further determination in relation to the payment under section 78…
Section 108 of the Administration Act states:
Definition
In this Subdivision:
favourable determination means a determination under section 78…
Section 78 of the Administration Act states:
Rate increase determination
If the Secretary is satisfied that the rate at which a social security payment is being, or has been, paid is less than the rate provided for by the social security law, the Secretary must:
(a) determine that the rate is to be increased to the rate provided for by the social security law; and
(b) specify the last‑mentioned rate in the determination.
Section 129 of the Administration Act states:
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
…
Section 109 of the Administration Act states:
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.
(6) This section does not apply to determinations to which section 110A applies.
(7) For the purposes of this section, if:
(a) the Secretary makes a decision constituted by a determination made under section 78 to increase the rate at which a social security payment is being, or has been, paid; and
(b) the determination is made because an amount has been indexed or adjusted by the operation of Part 3.16 of the 1991 Act;
then:
(c) each person whose rate of social security payment is, or was, affected by the determination is taken to have been given notice of the determination and of the increased rate; and
(d) the notice is taken to have been given on the day on which the amount was so indexed or adjusted.
HAS MR STONEHAM’S AGE PENSION BEEN CORRECTLY INCREASED FROM THE DATES CONTAINED IN THE NEW DECISION?
Centrelink records indicate that Mr Stoneham’s son, Mr Paul Stoneham, had his pension paid into Mrs Stoneham’s Commonwealth bank account from 26 November 1998 to 24 April 2013.
On 11 January 2005 records indicate that an Income and Assets form completed and submitted to Centrelink by Mr and Mrs Stoneham indicated that Mrs Stoneham owned 100% of the Commonwealth bank account in her name. She did not mention that she was also holding moneys on behalf of her son.
In the following years Centrelink records show that various Account Statements and information notices were sent out to Mr and Mrs Stoneham detailing their rate of pension and noting that Mrs Stoneham’s savings accounts included the Commonwealth bank account.
On 22 June 2011 Centrelink records show that Mrs Stoneham submitted a form regarding a change in assets, indicating that she owned 100% of Commonwealth bank deeming account.
Subsequently on 22 June 2011 Centrelink recorded that rate of age pension payable to Mr and Mrs Stoneham was to be calculated on the basis that the Commonwealth bank account containing $101,000 was 100% owned by Mrs Stoneham.
Centrelink records indicate that information notices detailing the rate of age pension paid were sent to Mr and Mrs Stoneham on various dates. Included in those notices was an explanation of the rights of review available to them.
On 24 October 2012 Centrelink records indicate a conversation took place between Mr Stoneham and a Centrelink officer is in which Mr Stoneham informed Centrelink that Mrs Stoneham did not own 100% of the Commonwealth bank account, and that Paul’s pension payments had been paid into the account and were owned by him. This date is the first request for a review of the payment rates from Mr Stoneham under s 129 of the Administration Act.
On 29 November 2012 Centrelink received a letter from Mr Stoneham asking that he and his wife be compensated for the reduced age pension payments received resulting from Centrelink ‘incorrectly’ including Paul’s money when calculating their age pension entitlement. Mr Stoneham estimated that 75% of the Commonwealth bank account belonged to Paul.
Mr Stoneham told the Tribunal that as Centrelink was paying their son’s allowance into Mrs Stoneham’s bank account, it was equipped with the knowledge necessary to pay Mr and Mrs Stoneham the correct rate of age pension.
The respondent provided the Tribunal with copies of information notices and Account Statements sent the applicant numerous times over the relevant period. These included the following information:
If you do not agree with a decision we have made Contact us so we can check the details and explain the decision Contact us and ask for a review of the decision. We will change it if it is wrong…It is important to ask for a review within 13 weeks of being notified about the decision. If your request for a review is more than 13 weeks after being notified and the decision can be changed, you may only receive your entitlement from the date you request review.
Unfortunately, as the applicant did not seek review of the rate of pension paid to them within 13 weeks of the information notices or Account Statements being issued to them s 109(2) of the Administration Act applies and arrears cannot be paid for the following periods:
·10 February 2005 to 8 March 2005
·18 May 2005 to 28 June 2005
·24 August 2005 to 6 September 2005
·21 September 2005 to 7 March 2006
·19 April 2006 to 19 June 2012
Subsequent to the SSAT decision the respondent undertook further investigations and found that the rate of pension paid to the applicants was different to the rate specified in certain information notices or Account Statements covering particular periods.
As the rate of age pension paid to the applicants was different than the rate specified in the information notices or Account Statements or not referred to in a subsequent Account Statements arrears were able to be paid under s 109(3) of the Administration Act for the following periods:
·9 March 2005 to 17 May 2005
·29 June 2005 to 23 August 2005
·7 September 2005 to 20 September 2005
·8 March 2006 to 18 April 2006
·20 June 2012 to 23 October 2012
This new information resulted in Centrelink making the new decisions including the decision to backdate the increase in Mr and Mrs Stoneham’s age pension to the earlier date of 20 June 2012 and the decision to increase the rate of pension paid to Mr and Mrs Stoneham for the closed periods of 9 March 2005 to 17 May 2005, 29 June 2005 to 23 August 2005, 7 September 2005 to 20 September 2005, and 8 March 2006 to 18 April 2006.
Unfortunately Mrs Stoneham was unable to participate in the review due to her medical condition. It was in fact her requirement for nursing care that led Mr Stoneham to discover the underpayment of age pension. While the Tribunal has sympathy with Mr Stoneham’s situation, the law does not give the Tribunal discretion to backdate the increase in Mr and Mrs Stoneham’s pension payments prior to 20 June 2012.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 31 (thirty-one) paragraphs are a true copy of the reasons for the decision of Regina Perton, Member .......................[sgd].................................................
Administrative Assistant - Legal
Dated 23 April 2014
Date of hearing 30 January 2014 Applicant In person Respondent In person Advocate for the Respondent Mark Hester Solicitors for the Respondent Program Litigation and Review Branch, Department of Human Services
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Social Security Benefits
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Retrospective Application
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Discretionary Powers
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