TADEUSZ KAZMIERCZAK and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS Mr A Sweidan, Senior Member Mr A Sweidan, Senior Member
[2010] AATA 762
•22 April 2010
Administrative Appeals Tribunal
WRITTEN REASONS FOR DECISION [2010] AATA 762
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/4246
GENERAL ADMINISTRATIVE DIVISION ) Re TADEUSZ KAZMIERCZAK Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
WRITTEN REASONS FOR DECISION
Tribunal Mr A Sweidan, Senior Member Date of Decision 22 April 2010
Date of Written Reasons 28 May 2010
PlacePerth
- At the conclusion of the hearing of this application on 22 April 2010, the terms of the decision intended to be made and the reasons for that decision were stated orally by the Tribunal.
- On 18 May 2010, the applicant requested the Tribunal to furnish to him a statement in writing of the Tribunal’s reasons for its decision.
- A copy of those written reasons is attached and is forwarded to the applicant and to the respondent.
............sgd A Sweidan...............
Senior Member
STATEMENT OF WRITTEN REASONS
28 May 2010 Mr A Sweidan, Senior Member 1.The decision under review was made by the Social Security Appeals Tribunal on 7 August 2009 to affirm the decision made by a Centrelink authorised review officer on 8 June 2009 to assess Mr Kazmierczak’s rate of disability support pension taking into consideration the employment income of his wife Mrs Iwona Kazmierczak.
Issues
2. The issues to be decided in this appeal are as follows:
(a)should Mr Kazmierczak’s rate of disability support pension be reduced by his wife’s income from employment?
(b)does Mr Kazmierczak have to report his wife’s earnings every fortnight?
(c)can Mr Kazmierczak be paid any other social security benefits for his past and future medical treatments?
Facts
3.Centrelink records indicate that Mr Kazmierczak and Mrs Iwona Kazmierczak have been married since 1 July 1991.
4.Mr Kazmierczak was seriously injured in a motor vehicle accident on 30 March 1993 and subsequently received a compensation payment.
5.On 16 June 1994 Mr Kazmierczak was granted disability support pension and his wife was granted wife pension.
6.Mr Kazmierczak is issued with pensioner concession cards on a regular basis.
7.Mrs Kazmierczak works part time and her income from employment reduces her husband’s rate of Disability Pension (see below).
8.On 31 August 2004 Mr and Mrs Kazmierczak made a statement regarding the “unfairness of the law” and requesting arrears of payment.
9.Mr Kazmierczak was receiving the maximum fortnightly amount of pension at 31 August 2004.
10.On 17 April 2007 a document was created on Mr Kazmierczak’s electronic Centrelink file that stated in part as follows:
“…Cus contacted to enq re his DSP payment being reduced due to prt income. Explained to cus that DSP is income & assets tested. Cus stated that this is "inhumane" & "immoral". Tried again to explain income test to cus but he kept talking over me. Adv cus that income test is for all customers in receipt of a DSP payment (except blind) & CL applies this income test as per the Social Security Law. Cus requested to know Legislation number & Act. Adv cus that it is under the SOCIAL SECURITY ACT 1991, Section 8 (1). Cus continued to state that this is not right & inhumane & immoral [sic]…”
11.On 17 April 2007 Mr Kazmierczak was receiving less than the maximum fortnightly amount of disability support pension due to his wife’s earnings being taken into account.
12.On 21 August 2007 Mr Kazmierczak requested a review of the decision to reduce his disability support pension and of his obligation to report his wife’s fortnightly earnings.
13.On 30 March 2009 Mr Kazmierczak requested that a Centrelink authorised review officer review the decision to reduce his rate of pension.
14.On 8 June 2009 a Centrelink authorised review officer affirmed the decision that Mr Kazmierczak’s rate of pension should be reduced by his wife’s income from employment.
15.On 7 August 2009 the Social Security Appeals Tribunal affirmed the decision made by the Centrelink authorised review officer on 8 June 2009.
Legislation
16.The relevant legislation is contained in the:
Social Security Act 1991 (“the Act”), and the Social Security Administration Act 1999 (“the Administration Act”).
Calculation of the rate of disability support pension
17.Section 117 of the Act states that a person’s rate of disability support pension is worked out using the Pension Rate Calculator A at the end of section 1064 of the Act.
18.Section 1064-A1 of the Act provides a Method Statement for working out a person’s maximum payment rate and Step 11 requires that a person be paid the lower of the income reduced rate and the asset reduced rate.
19.Section 1064-A2 of the Act relevantly states as follows:
1064-A2. Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis…
20.Module E of section 1064 of the Act provides a Method Statement for working out the effect of a person’s ordinary income on the person’s maximum payment rate and states in part states as follows:
1064-E1. This is how to work out the effect of a person's ordinary income on the person's maximum payment rate:
Method statement
Step 1 Work out the amount of the person's ordinary income on a yearly basis.
Note: for the treatment of the ordinary income of members of a couple see point 1064-E2.
Step 2 Work out the person's ordinary income free area limit (see points 1064-E4 to 1064-E9 below).
Note: a person's ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person's maximum payment rate.
Step 3 Work out whether the person's ordinary income exceeds the person's ordinary income free area.
Step 4 If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil.
Step 5 If the person's ordinary income exceeds the person's ordinary income free area, the person's ordinary income excess is the person's ordinary income less the person's ordinary income free area.
Step 6 Use the person's ordinary income excess to work out the person's reduction for ordinary income using points 1064-E10 to 1064-E12 below.
1064-E2. If a person is a member of a couple, add the couple's ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person's ordinary income for the purposes of this Module.
21.The term “ordinary income” is defined in subsection 8(1) of the Act by exclusion as not “maintenance income” or an “exempt lump sum”.
22.The term “income” is defined in subsection 8(1) of the Act in relation to a person, as an “income amount earned derived or received by the person for their own use or benefit”.
23.Section 1072 of the Act states as follows:
1072. A reference in this Act to a person's ordinary income for a period is a reference to the person's gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.
[Division 1A is not relevant to this appeal]
24.Subsection 24(1) of the Act states as follows:
24.(1) Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
Case Law
25.In Lada and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1496 (2 July 2007) the Tribunal said the following:
18. The purposes of the Act must be kept in mind. The purpose of the Age Pension is to provide income support to those people above pension age (who are otherwise qualified) and thereby to enable them to live without great hardship. The general policy is that when calculating the rate of Age Pension for a member of a couple, the combined ordinary income and assets of both people will be taken into account. Merely failing to satisfy the expectation underlying the rate calculator (that there will be some pooling of resources between members of a couple) is not a ‘special reason’ to enliven the discretion conferred by . The reasons for the failure may be rendered ‘special’ by the particular circumstances, for example, if the failure results from something out of the ordinary that is beyond the control of those concerned. An inability to pool resources, at least, is required. Without fettering the discretion, it seems to me that it may be appropriately exercised if it is not reasonable for an applicant member of a couple to seek the support of the other, or if it is not reasonable for that other member to provide such support.
Tribunal’s Findings
26.This Tribunal has considerable sympathy for the applicant and his family in relation to the circumstances in which they find themselves, which are obviously extremely distressing for them. However, the sympathy which the Tribunal has cannot influence the Tribunal’s decision in relation to the correct interpretation and application of the relevant law.
27.The Secretary determined that there is nothing in the circumstances of Mr Kazmierczak and his wife that would warrant the application of the discretion contained in subsection 24(1) of the Act and in the Tribunal’s view this is correct.
28.It is clear that absent some special reason there is no basis in the Act to exclude partner income from affecting a person’s rate of pension and that Centrelink has correctly calculated Mr Kazmierczak’s rate of disability support pension based on the statutory provisions set out above.
29.Mr Kazmierczak said in his evidence that he received a lump sum compensation payment in the amount of $25,000 as a lump sum in respect to his injuries sustained in the accident. Without knowing more about the facts and circumstances relating to the compensation claim that Mr Kazmierczak brought, it appears to this Tribunal, on the face of it, that that payment was grossly inadequate. However the Tribunal makes that comment in the knowledge that it is not in possession of all the facts and circumstances.
30.The relevant facts and the Tribunal’s reasoning in Lada appear at paras 40 to 44 of the Tribunal’s decision ie.
“The reasonable expectation underlying the pension rate calculator that there will be some pooling of resources between members of a couple, or that one member will provide support to the other if it is necessary to do so, should not lightly be dispensed with. Nor should the discretionary power conferred by s.24 be too lightly exercised. However, for a ‘special reason’ to exist for the purposes of s.24 it is not necessary for the particular case to be extremely unusual, uncommon or exceptional (Boscolo v Secretary, Department of Social Security (1999)).
This is a difficult case in which the particular circumstances in which Mr Lada presently finds himself may change with the passage of time or as the result of decisions he and Mrs Gusner make. Nevertheless, it is not appropriate to determine this matter on the basis of what may possibly occur in the future.
Carefully considering all of the circumstances and the evidence before me, I am reasonably satisfied that the particular circumstances of Mr Lada case set it apart from the ordinary course. Even though Mr Lada is a member of a couple with Mrs Gusner, I am satisfied that he is not able to benefit from any pooling of resources with Mrs Gusner during the periods each year when she is obtaining medical treatment in Austria. On Mr Lada evidence concerning Mrs Gusner’s expenses, there may be an amount of her Austrian pension income remaining after her annual medical treatment has been obtained. To that extent at least it may be reasonable to expect Mr Lada to benefit from some pooling of resources during periods when they are together in Australia. However, if Mrs Gusner has any money left over from her annual pension after travelling to Austria each year for medical treatment, it appears to me on the available evidence that the amount remaining would be small and insignificant in terms of any pooling of resources with Mr Lada . Thus, I accept that the reason by which Mr Lada case is rendered ‘special’ during the periods when he and Mrs Gusner are apart, also applies during the periods when they are together.
Finally, if one could compare Mr Lada and Mrs Gusner’s circumstances with a similar couple, in the absence of Mrs Gusner’s choice to obtain necessary medical treatment in Austria each year, that similar couple would be in a position where it would be reasonable to expect them to pool resources together on the basis that the wife obtained treatment as a public or a private patient in Australia. Thus, it would not be reasonable or appropriate in those circumstances to find for Mr Lada – the effect of Mrs Gusner’s ill health on Mr Lada in those circumstances would not present a special reason to treat him other than as a member of a couple. Alternatively, if the similar couple chose to obtain medical treatment for the wife overseas without any reasonable or compelling reason to do so, as a simple matter of preference, those circumstances may not give rise to a ‘special reason’. However, as can be seen, Mrs Gusner has good reasons to obtain medical treatment in Austria and has done so for many years. She trusts her Austrian doctors, with whom she can converse in her native language, and she obtains medical treatment under a private health insurance policy. She considers that any change in her medical arrangements could endanger her life. She expends her pension income to continue obtaining medical treatment in Austria, and in that regard, it appears, her decision is immutable, and it has a direct and detrimental effect on Mr Lada’s circumstances. He is unable to pool resources with his wife and is forced to rely on his diminishing savings to live day to day. Nevertheless he has committed himself to a relationship with her on that basis. His only choice is to leave the relationship, in which case the taxpayer would bear the cost of his increased Age Pension entitlement and he would lose the companionship, emotional support and other intangible benefits he presently obtains from his relationship with Mrs Gusner.
Weighing the various factors, the fact that Mrs Gusner obtains medical treatment in Austria and substantially expends her pension income to do so, thereby not enabling Mr Lada to benefit from any pooling of resources with his wife, is a special reason to treat him not as a member of a couple. I so find. Furthermore, I am not persuaded by the Secretary’s submissions that it is not appropriate to exercise the discretion conferred by s.24 in the circumstances.”
31.In this case the evidence is clear that, Mr and Mrs Kazmierczak are legally married, they are not living separately and Mrs Kazmierczak’s income is applied towards the household expenses. There is no “inability to pool resources” in this case. It is obvious from Mr Kazmierczak’s evidence that he feels reluctant to have his wife contribute out of her earnings for his needs and the family needs and while the Tribunal understands that reluctance, that does not create an inability to pool resources.
32.However, that is not a special circumstance as envisaged by subsection 24(1), and accordingly it, in the view of this tribunal, is clearly the case that the discretion available under section 24(1), as enunciated in the Lada decision, is not a discretion which is available in this case.
Requirement to Report Fortnightly income
33.Section 43 of the Administration Act provides that a social security payment is an arrears payment paid in fortnightly instalments and that the amount of each instalment is equal to the sum of the daily rates of payment applicable in that period.
34.Section 1073B of the Act came into effect on 20 September 2003 and states as follows:
1073B. If:
(a) a person is receiving a social security pension or a social security benefit; and
(b) the person's rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(c) the person has not reached pension age; and
(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;
the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period
35.The cumulative effect of these provisions is that 50% of the gross employment income of Mrs Kazmierczak must be assessed on a fortnightly basis (annualised) to determine Mr Kazmierczak’s rate of disability support pension.
36.Subsection 68(2) of the Administration Act authorises Centrelink to give a notice (an “information notice”) to a person requiring them, amongst other things, to give a statement about a matter that might affect that person’s rate of social security payment.
37.On a regular basis Centrelink issues Mr Kazmierczak with an information notice requiring him to provide fortnightly statements in regard to his wife’s employment income which enables Centrelink to calculate his fortnightly rate of disability support pension.
38.It is therefore clear that while Mrs Kazmierczak is receiving varying amounts of employment income, there is no discretion to exempt Mr Kazmierczak, or Mrs Kazmierczak on his behalf, from providing details of this income to Centrelink each fortnight.
Can Mr Kazmierczak Be Paid Any Extra Amounts For His Past And Future Medical Treatments?
39.Mr Kazmierczak has been paid disability support pension based on him having serious medical conditions that prevent him from working full time. His rate of disability support pension includes pharmaceutical allowance of $2.90 per fortnight. There is no identified rate component in regard to the cost of medical treatment.
40.The Secretary points out that Mr Kazmierczak is issued with a pensioner concession card.
41.The Secretary also points out that based on his disclosed financial circumstances, Mr Kazmierczak has been paid the full amount of pension he was entitled to receive each fortnight and that there are no Centrelink social security benefits which are available to cover past and future medical treatments for a person in the applicant’s position.
Decision
42.Pursuant to section 43 (1) (a) of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision of the Social Security Appeals Tribunal dated 7 August 2009.
I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: .......... E Jordan..........
AssociateDate of Decision 22 April 2010
Date of Written Reasons 28 May 2010
Applicant: Self Represented
Respondent’s Representative: Ms M ConlonCentrelink Legal Services Branch
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