Sycamore and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 889
•16 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 889
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/0724
GENERAL ADMINISTRATIVE DIVISION ) Re Cyril Sycamore Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Ms G Ettinger, Senior Member Date16 September 2008
Place Perth
Decision For the reasons given orally following the hearing, the Tribunal affirms the decision under review. ......(sgd) G Ettiner.................
Ms G Ettinger
Senior Member
CATCHWORDS
Pension bonus scheme – Applicant seeks backdating – certain discretion available – conditions for discretion to be exercised not met – decision under review affirmed.
Social Security Act 1991
Social Security (Administration) Act 1999Scott v Secretary, Department of Social Security (2000) 65 ALD 79
REASONS FOR DECISION
16 September 2008 Ms G Ettinger, Senior Member
BACKGROUND
1. Mr Sycamore was engaged in full‑time employment as a plumber until 25 April 2006.
2. He had an accident in April 1998 and was paid weekly compensation payments until his claim was settled on 22 December 2000. He was then precluded from receiving Centrelink payments until 3 March 2004, although he said that he did not even think about applying at that time.
3. During that time, on 25 April 2002, Mr Sycamore turned 65 years of age, the age when he became eligible for age pension and may have been eligible for the pension bonus. He did not register for it because he said he did not know anything about the pension bonus scheme at that time.
4. Mr Sycamore then had a motor vehicle accident on 26 April 2006, for which he received a compensation payout resulting in a further compensation preclusion period of Centrelink payments from 26 April 2006 to 3 April 2007.
5. On 27 November 2006 Mr Sycamore returned to work for seven days, and as he was unable to continue due to pain, he has not worked since.
6. On 26 June 2007 Mr Sycamore lodged a claim for age pension and the pension bonus scheme. On 17 July 2007 Mr Sycamore was granted age pension effective from 13 June 2007, but his application for registration for the pension bonus scheme was not accepted, because Centrelink would not backdate his registration for the pension bonus scheme. Centrelink determined that he had failed to satisfy the work test for the period 28 April 2006 to 26 June 2007.
7. Mr Sycamore appealed to Centrelink and the Authorised Review Officer. He was refused both times and exercised his right to appeal to the Social Security Appeals Tribunal, and ultimately to this tribunal. In making his claim to this Tribunal, Mr Sycamore argued that the decision going against him was not reasonable, and that he should be entitled to at least part of the payment under the pension bonus scheme. He repeated that when he gave his oral evidence at the Tribunal. He attended with his partner, Ms Merril Rowe. Mr Holt represented the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs, the Respondent in these proceedings.
ISSUE IN THE PROCEEDINGS
8. The issue for the Tribunal to decide is whether Mr Sycamore’s application for registration for the pension bonus scheme can be backdated.
LEGISLATIVE CONTEXT
9. The relevant legislation in this matter is the Social Security Act 1991 and the Social Security (Administration) Act 1999.
10. The pension bonus scheme is a scheme that provides a lump sum payment to people who qualify for age pension but defer claiming that pension and continue to work. That is what Mr Sycamore did. The pension bonus scheme is paid when a person stops working, and claims age pension and the pension bonus scheme.
11. Part 2.2A of the Act sets out the criteria for the pension bonus scheme.
12. Section 92A of the Act states, in summary, that:
· a person who qualifies for 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 which is what Mr Sycamore did on 22 June 2007 when he also claimed age pension, which was granted to him.
· To get a pension bonus, a person must accrue between one and five bonus periods while deferring age pension.
· Generally, a bonus period runs for one 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. That is where the problem has arisen for Mr Sycamore. Essentially the Respondent has held that he does not pass the work test.
· 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. The person may get a bigger bonus by accruing more bonus periods.
CONSIDERATIONS
13. It is not in dispute, and I accept, that Mr Sycamore applied for and was granted age pension and the pension bonus scheme on 22 June 2007. He qualified for age pension and wanted to register for the pension bonus scheme, but was held not to qualify for the pension bonus scheme.
14. In accordance with section 92H(1) of the Act, in order for Mr Sycamore to be entitled to the pension bonus scheme, he was required to register during either the 13 weeks prior to reaching age pension age, or within 13 weeks after reaching age pension age; that is either 13 weeks before or 13 weeks after Mr Sycamore became eligible for the age pension on 25 April 2002.
15. However, Mr Sycamore did not lodge an application within the above required 26 week period because he says he did not know about it, and he therefore fails to satisfy section 92H(1) of the Act.
16. Mr Sycamore said he did not know about the pension bonus scheme until he went in to claim age pension, because he was working, and did not need to contact Centrelink. He, of course, acknowledges receiving the lump sum payments, but told me that a lot of it went because he had a lot of expenses such as paying suppliers for his plumbing supplies, a divorce he went through, and supporting his son.
17. Mr Holt submitted that considerable efforts had been made to notify the general public of the availability of the pension bonus scheme since the Government’s announcement of that in its budget speech on 13 May 1997. He explained there were mailouts to Centrelink clients. Of course, Mr Sycamore did not receive any of those because he was not a client at the relevant time. Mr Holt also explained that apart from a publicity campaign by the Government, there are brochures in various places, including Medicare offices. Mr Holt also argued that there is no general common law duty of care to advise everyone of all the benefits that might potentially be available under the Act. He relies on the case of Scott v Secretary, Department of Social Security (2000) 65 ALD 79, which I accept supports his contention. There isn’t a general duty to inform the general public even though it was done so in the case of the pension benefit.
18. Now, if a person does not automatically qualify for pension bonus, there is a discretion which may be exercised under certain circumstances. I therefore next turn to section 92H(3) of the Act, which permits the Secretary to extend the period in which a person can lodge an application. The Secretary can also nominate another date on which the Secretary may decide. Certain conditions must, however, be met.
19. Section 92H(4) of the Act prohibits the Secretary from extending the period within which a person must lodge an application unless
· (a), the person would have been a non-accruing member for all of the application period.
20. So in order for the registration time frame to be extended and to meet section 92H(4)(a) of the Act, would require Mr Sycamore to be a non-accruing member for all of the pre-application period. Clearly, that does not apply to Mr Sycamore.
21. So we move on to (b), and it is this subsection which could have application, but only if both subsections apply. So if the person would have been an accruing member for some or all of the pre‑application period, and so Mr Sycamore satisfies section 92H(4)(b)(i), but here’s the catch, because he or she also has to pass the work test for each test period which is applicable to that person.
22. Unfortunately, Mr Sycamore has been found not to pass the work test. This is because Mr Sycamore was subject to compensation preclusion periods of 25 April 2002 to 3 March 2004, and from 26 April 2006 to 30 March 2007. For those periods, he was precluded from receiving any social security payment because he had received compensation payouts. Therefore, for purposes of section 92P(2) of the Act, his membership of the pension bonus scheme for those compensation periods is defined as non-accruing. I know this sounds very complicated, and it is, but I must consider the law and apply it as it stands.
23. I next considered section 92H(6) of the Act, which states that a test period is worked out as follows. So what is a test period?
· (a) you have to 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 - overall accruing period is the only test period;
· (c) if the overall accruing period is longer than 365 days, one of the following periods is a test period
(i) the full period beginning at the start of the overall accruing period;
(ii) if two or more succeeding full-year periods are included in the overall accruing period - of those full year periods;
(iii) the remainder, (if any), of the overall accruing period.
24. This means that Mr Sycamore, or his partner, must meet the work test in the period prior to his claiming age pension, and the pension bonus scheme on 22 June 2007. In that connection, Mr Holt asked me to also consider section 92Q of the Act, because a partner’s time at work can be taken into account and may have assisted Mr Sycamore.
25. We know now, however, from Ms Rowe’s evidence that she last worked in 2004, received a compensation payment in 2007 as a result of an accident she suffered at work, and now receives disability support pension. I have to say there was some confusion about all that, because Ms Rowe submitted tax returns in 2006 and 2007, showing that her taxable income was a figure in the vicinity of $28,000 for each of those years. I had not seen the relevant documents previously, as Mr Holt had failed to lodge them with the Tribunal. Ms Rowe told us that the income she declared is likely to have been outstanding payments such as long service leave from the Education Department where she had been a teacher’s assistant at the time of her accident. Accordingly, section 92Q has no application in this case.
26. I then move to consider section 92U, which states that a person passes the work test in a full year test period if they work 960 hours in that period. Section 92V states that for a part year test period, a person must work a pro rata period of hours, to be calculated using a formula set out in section 92V(2) of the Act.
27. Mr Holt submitted that if Mr Sycamore was registered and qualified for the pension bonus scheme, and provided proof that he was employed for at least 960 hours, then he would be entitled to approximately $5,566.19. He also gave us the formula for working that out.
28. However, Mr Holt contended that Mr Sycamore was a non-accruing member and did not return to work. I noted he only worked for one week in November 2006, and I find he does not meet the work test for the applicable test period set out in section 92H(6)(c)(iii) of the Act.
29. To qualify for the pension bonus scheme, Mr Sycamore had to meet the work test in the test period prior to his claiming age pension on 22 June 2007. As he only worked for a week in November 2006, he does not meet the work test for the applicable test period as defined in section 92H(6)(c)(iii) of the Act.
30. The Secretary accordingly submitted that Mr Sycamore is not eligible for the pension bonus scheme, and his application cannot be backdated to the date when he became eligible for age pension.
31. I have accepted the Secretary’s argument, and note that the applicable legislation gives a discretion with regard to backdating eligibility for the pension bonus scheme. Unfortunately Mr Sycamore’s situation is such that he does not meet the conditions he must for the discretion to backdate his eligibility for the pension bonus scheme to be exercised. His claim therefore cannot be met.
32. Accordingly, the only decision I can make is the Tribunal affirms the decision under review.
DECISION
33. For the reasons given orally at the Hearing, the Tribunal affirms the decision under review.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member
Signed: ...(sgd) T Freeman............................
AssociateDate of Hearing 16 September 2008
Date of Decision 16 September 2008The Applicant Self Represented, appearing with his partner Ms M Rowe
Counsel for the Respondent Mr A Holt
Centrelink Legal Services Branch
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