Teng and Secretary, Department of Social Services (Social services second review)
[2015] AATA 559
•31 July 2015
Teng and Secretary, Department of Social Services (Social services second review) [2015] AATA 559 (31 July 2015)
Division
GENERAL DIVISION
File Number(s)
2014/6710
Re
Daoli Teng
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Deputy President J W Constance
Date 31 July 2015 Place Sydney The decision under review, being the decision of the Social Security Appeals Tribunal to refuse Mr Teng’s claim for the age pension, is affirmed.
.............................[sgd]...........................................
Deputy President J W Constance
Catchwords
SOCIAL SECURITY – age pension – residence requirements – whether 10 years qualifying Australian residence – decision affirmed
Legislation
Social Security Act 1991 (Cth) ss 7(2), 7(3), 7(5), 43
Social Security (Administration) Act 1999 (Cth), s 29.
Cases
Clifopoulos and Department of Social Security (1994) 36 ALD 745
Hafza v Director-General of Social Security (1985) 6 FCR 444REASONS FOR DECISION
Deputy President J W Constance
INTRODUCTION
Mr Teng lodged a claim for age pension on 30 October 2013.
The claim was rejected by Centrelink on the grounds that Mr Teng did not satisfy the residence requirements for the grant of age pension set out in the Social Security Act 1991 (Cth). After being affirmed by an Authorised Review Officer, the decision was affirmed by the Social Security Appeals Tribunal on 24 November 2014.
Mr Teng has applied to this Tribunal to review the decision of the Social Security Appeals Tribunal.
For the reasons which follow, the decision under review will be affirmed.
BACKGROUND
Mr Teng was born in China in 1948. He arrived in Australia with his wife in 1987. Mr Teng remained in Australia on student visas until he was granted a permanent residence visa in October 1994.
Approximately three weeks after being granted a permanent residence visa, Mr Teng departed Australia for China. In the years from 1995 through to the time Mr Teng lodged his claim for the age pension in 2013, Mr Teng spent the majority of his time in China. From 2002 to 2013, the maximum number of days Mr Teng spent in Australia in any one calendar year was 43. He says that his absence from was ostensibly to advance his business of introducing Australian companies into the Chinese market.
LEGISLATION
The grant of age pension is governed by the Social Security Act 1991 (Cth). Section 43 of the Act provides in part:
(1) A person is qualified for an age pension if the person has reached pension age and any of the following applies:
(a) the person has 10 years qualifying Australian residence;
(b) the person has a qualifying residence exemption for an age pension;
...
It is not in dispute that Mr Teng was of pension age when he lodged his claim and that he does not have a qualifying residence exemption. In order for Mr Teng to qualify for the pension, I must therefore be satisfied that he has 10 years qualifying residence. Mr Teng must have met the requirements by the date of claim (30 October 2013) or within the 13 weeks thereafter.[1]
[1] Section 42 and clause 4 of Schedule 2 of the Social Security (Administration) Act 1999 (Cth).
Importantly, a claim for a social security payment, including the age pension, can only be made by a person who was an Australian resident, and within Australia, at the time he or she lodged a claim.[2]
[2] Social Security (Administration) Act 1999 (Cth), s 29.
Section 7(5) of the Act stipulates that a person has 10 years of qualifying residence “if and only if” the person meets either of the following requirements:
(a) the person has, at any time, been an Australian resident for a continuous period of not less than 10 years; or
(b) the person has been an Australian resident during more than one period and:
(i) at least one of those periods is 5 years or more; and
(ii) the aggregate of those periods exceeds 10 years.
An Australian resident is defined in section 7(2). It 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.
Despite arriving in Australian in 1987, Mr Teng did not hold a permanent visa until October 1994. Mr Teng agrees that this was the case. As such, in accordance with the definition in section 7(2), Mr Teng cannot be regarded as an “Australian resident” for the purposes of the Act during the period from 1987 through to the grant of a permanent visa in 1994.
It is not in dispute that Mr Teng satisfied paragraph (b) of the definition of Australian resident, in that he held a permanent visa, or was an Australian citizen, at all times after October 1994. The question is whether, during this period, Mr Teng resided in Australia for any continuous period of 10 years.
In determining whether a person resides in Australia, the Tribunal is required by the Act to take into account a number of factors. Section 7(3) states:
(3) 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.
As the Tribunal stated in Clifopoulos and Department of Social Security:[3]
... the decision-maker is also entitled to consider the converse of each factor. For example, when s 7(3) of the Act refers to “the nature of accommodation in Australia”, the Tribunal would be entitled to consider the nature of the applicant’s accommodation outside Australia.
[3] (1994) 36 ALD 745 at [17]
ISSUES
The issue for the Tribunal to determine is whether Mr Teng satisfied the residence requirements for the grant of the age pension. This requires consideration of whether Mr Teng was an Australian resident for a continuous period of 10 years. In the alternative, should Mr Teng have resided in Australia in multiple periods, he will qualify for age pension if the aggregate of those periods is 10 years, and one period of residence was at least 5 years in duration.
If Mr Teng is found to satisfy the residence requirements, the Tribunal must then proceed to determine whether he was an Australian resident at the date of claim.
EVIDENCE
Mr Teng gave evidence at the hearing with the assistance of an interpreter. Unless stated otherwise, the below is based on his evidence.
Mr Teng first received a permanent residence visa in 1994. Not long after receiving that visa, Mr Teng left Australia for China. His wife and daughter remained in Australia during this time. The purpose of the trip was to build business connections in China to allow Mr Teng to develop a business which would introduce Australian companies to the Chinese market.
He returned to Australia in early 1995 before leaving for China again in July of that year. Mr Teng remained in China until April 1996. Mr Teng accepted that he spent only about one third of 1996 in Australia. During his time in Australia he sought to learn about Australia and Australian companies in order to advance his own business as an intermediary between Australian and Chinese companies.
The following table, taken from Mr Teng’s movement records, which he accepts as accurate, indicates the time in which Mr Teng spent in Australia from 1995 to 1999.
Year Days spent in Australia 1995 160 1996 115 1997 107 1998 39 1999 81
Mr Teng stated that on the occasions that he returned to Australia during this period, it was for the purpose of learning about Australia and Australian businesses. His wife and daughter remained in Australia throughout each of Mr Teng’s periods of absence.
In 2000 and 2001, Mr Teng spent 365 and 267 days in Australia respectively. This, he states, was because he wanted to qualify for citizenship. During his time in Australia, Mr Teng states that he was also advancing his business interests by contacting Australian businesses and encouraging them to expand into the Chinese market.
Mr Teng spent considerably less time in Australia after 2001. After leaving Australia in October 2001, Mr Teng did not return until 18 April 2004. His wife and daughter remained in Australia during this time.
In 2004, Mr Teng returned to Australia for one month to communicate with Australian companies. On his leaving Australia in May 2004, Mr Teng and his wife separated. They have since remained separated.
Mr Teng subsequently remained in China until June 2007. During this three year period, Mr Teng stated that he was advancing his business in China.
Mr Teng registered his company with the Australian Securities and Investments Commission in July 2007. He and his daughter are the only shareholders and directors. Mr Teng ran, and continues to run, the company.
From 2008 to the date he lodged his claim for the pension in 2013, Mr Teng continued to spend most of his time in China. Movement records from the Department of Immigration indicate that Mr Teng spent the following number of days in Australia:
Year Days spent in Australia 2008 0 2009 43 2010 0 2011 29 2012 26 2013 (to date of claim) 38
When Mr Teng returned to Australia, he continued to live in the family home, which was purchased in his wife’s name in about 2000. He and his wife lived separately under one roof. He would sometimes pay the telephone bill and would pay for his own food. He did not own a car, the family car having been sold in about 2004.
Mr Teng’s wife has always been responsible for mortgage repayments on the family home. Mr Teng is unsure as to whether the mortgage has been discharged.
Whilst in Australia in 2013, Mr Teng paid his wife rent of approximately $100 per week in order to stay in the house. He did not own any assets in Australia as by this time he had sold all of his shares, other than those in his own company. He held one bank account in Australia, with a balance of less than $100.
Mr Teng’s company did not generate any income in 2013. He stated that the company has never generated income, although his work recently resulted in his being conferred an area of land in China.
Whilst in China, Mr Teng lives with his mother and is dependent upon his siblings for income. His family members also fund his travel between Australia and China.
Mr Teng was not employed by any companies in China. Instead, he sought to develop relationships between Australian and Chinese businesses. Mr Teng pointed to a number of photographs of him at work sites and in meetings in support of this. He also pointed to a number of letters written on behalf of Australian companies. Some of these purport to authorise Mr Teng to act on behalf of the company in negotiations with Chinese businesses. Mr Teng states that he worked with up to 12 companies between 1999 and 2013.
CONSIDERATION
The meaning of the word ‘residence’ has been discussed at length by the courts. In the Federal Court decision in Hafza v Director-General of Social Security, Wilcox J stated:[4]
… As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Limited v The FC of T (1941) 64 CLR 241 at 249, by Williams J.: "The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode."
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place -- even involuntarily (see Inland Revenue v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VLR 383) a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place (Levene v Inland Revenue Commissioners[1928] AC 217 at 225 and Judd v. Judd (1957) 75 WN (NSW) 147 at 149) together with an intention to return to that place and an attitude that that place remains "home" –(see Norman v Norman (1969) 16 F.L.R. 231 at 236) …
[4] (1985) 6 FCR 444, 449.
I am not satisfied that Mr Teng resided in Australia for a continuous period of 10 years, or a continuous period of five years as is required by subsection (b) to the definition of qualifying residence. I have come to this conclusion having weighed up the factors in subsection 7(3) of the Act. I will consider each in turn below.
The nature of the accommodation used by the person in Australia
In the periods in which Mr Teng was in Australia, he lived in the family home in Sydney. This home was purchased by his wife. The title to the property is held, and has always been held, in her name.
Prior to 2004, and whilst in Australia, Mr Teng lived in the home as a husband and father. Once he and his wife separated, the nature of his accommodation arrangements whilst in Australia changed. Mr Teng paid his wife rent. His wife would pay the bills, other than sometimes the phone bill, and Mr Teng would purchase his own food.
Mr Teng lived with his mother during his time in China.
The nature and extent of the family relationships the person has in Australia
Mr Teng had limited family relationships in Australia during the period 1995 to 2013. There is no evidence that his extended family live here. In fact, Mr Teng lives with his mother when he is in China, and receives financial help from his siblings who also reside there.
The strength of his relationships in Australia has also weakened as Mr Teng has spent more time in China. He and his wife separated in 2004, and remain separated. When he stays in the family home, Mr Teng describes their relationship as “separated under one roof”.
Prior to 2004, Mr Teng had no hesitation in leaving his family in Australia. He did not contribute to mortgage repayments on the family home, did not maintain a joint bank account with his wife, nor did he maintain the life insurance policy for his daughter which he had previously paid for prior to 1995.
Mr Teng’s daughter lived with his wife in Australia until about 2007. From that time, she moved to China where, having previously lived with Mr Teng, she has lived in a home owned by Mr Teng’s mother.
Taking into account all of the above, in my view, Mr Teng’s familial ties to Australia were relatively weak compared to those in China throughout the entirety of the period from 1995 to 2013.
The nature and extent of the person's employment, business or financial ties with Australia
Mr Teng argues that he has strong business ties with Australia. He owns and operates a company which is incorporated in Australia. This company is directed towards introducing Australian companies to the Chinese market. To this end, Mr Teng has produced a number of letters which point to him acting as an agent in the Chinese market for several Australian companies. He has never been directly employed by any of these companies.
Mr Teng claims to have worked closely with 12 Australian companies from 1999 to 2013. I am not satisfied that this is the case. Documents produced with respect to a claimed working relationship with TAFE NSW do not go beyond indicating that Mr Teng enquired about acting as a recruitment agent; Mr Teng accepted that he was never formally appointed as such. He also accepted in evidence that he was never appointed as an agent of James Hardie Australia Pty Ltd, another company which Mr Teng claimed to have engaged in business with.
Despite the inconsistencies between some of the evidence and the claims of Mr Teng, I am satisfied that during the period 1995 to 2013 he was actively involved in introducing Australian companies to the Chinese market. A number of letters before the Tribunal indicate that Mr Teng was appointed as an agent of several Australian companies to liaise, and negotiate, on their behalf with Chinese corporations.
This, on its face, would suggest that Mr Teng has relatively strong business ties with Australia. Nevertheless, Mr Teng’s business has not made any money in recent years. He gave evidence that in 2013 the business did not produce any income. Mr Teng also confirmed in evidence that the company did not earn any income in 2011 and 2012. He said that over the course of his business, the agreement was that the parties to a deal would pay him a commission. Mr Teng, however, was never paid a commission.
In his claim form for Special Benefit, dated 15 January 2014, Mr Teng stated that:
I have spent many years in China helping Australian companies to develop their business overseas without pay. I have been living on my savings and have now exhausted it all.[5]
The failure of Mr Teng’s business to make any income suggests that Mr Teng’s ties to Australian businesses are tenuous at best.
[5] Exhibit R1, p.149.
Those business ties are also inextricably connected with Mr Teng’s ties to China. In a letter purportedly sent to the Chief Executive of James Hardie Australia Pty Ltd, Mr Teng wrote:
Acting on both the Directors of the Shanghai New Wall Materials Development Office and the Shanghai Bulk Cement Administrative Office, I am contacting you for a possible future joint venture opportunity.
...
I have recently returned to China and met up with both their present directors who I have worked with for 15 years...[6]
In the business relationship that Mr Teng indicated he had with James Hardie Australia Pty Ltd, he was ultimately working on behalf of two Chinese companies. Mr Teng also confirmed that on two later occasions he worked as a consultant for Chinese railway companies in deals with Australian suppliers.
[6] Exhibit R1, p.145.
Such evidence, along with the fact that Mr Teng spent the vast majority of his time in China over the 18 year period from 1995 to 2013 and generated no income from Australian enterprises, suggests that Mr Teng holds stronger ties with Chinese companies.
Mr Teng’s financial ties to Australia are also limited. During his time in Australia in 2000 and 2001, Mr Teng held a bank account in Australia. This account contained a minimal amount of money, although Mr Teng could not remember the exact amount. There is no evidence of Mr Teng holding an account in Australia in which he deposited income from his family, in lieu of any earnings. It was Mr Teng’s evidence that his family paid him in cash. Mr Teng confirmed in evidence that, in 2013, he held an account in Australia containing less than $100.
The nature and extent of the person's assets located in Australia
The family home in Australia was purchased by Mr Teng’s wife in about 2000 and has always been held in her name. Despite claiming that he held a joint interest in the house, Mr Teng accepted that his wife has at all times been responsible for mortgage repayments.
Mr Teng previously purchased a life insurance policy for his daughter. From about 1995, however, Mr Teng’s wife assumed responsibility for payments of the premium to maintain that policy.
Mr Teng and his wife previously owned a car, which they purchased in about 2000. This was sold in around 2004.
Mr Teng previously owned some shares, but, by the time of his claim for the aged pension, these had been sold. Mr Teng has, however, maintained part-ownership of his own business.
According to Mr Teng, he owns no property or shares in China. He is dependent upon his mother for accommodation and his siblings to subsidise his living expenses.
The frequency and duration of the person's travel outside Australia
Mr Teng first left Australia within three weeks of being granted permanent residence. As reflected in the evidence above, he has spent the vast majority of his time since 1994 in China.
The only outliers in this trend are the years 2000 and 2001, where Mr Teng was in Australia for a combined total of 632 days. Mr Teng stated in evidence that he remained in Australia for this time in order to qualify for Australian citizenship. This indicates that Mr Teng’s intention to live in Australia at that time was transitory at best. It was designed towards securing an entitlement.
Any other matter relevant to determining whether the person intends to remain permanently in Australia.
Mr Teng indicated that, in his view, he lives in both Australia and China. He has sought actively to advance the interests of Australia and Australian businesses in China. To this end, Mr Teng pointed to benefits his business had been paid by Austrade.
It was also argued by Mr Teng that his memberships of the local RSL club and library, as well as possession of an Australian driver licence and Medicare card, point to an intention to remain in Australia permanently.
Does Mr Teng satisfy the qualifying residence requirement for the grant of age pension?
Taking into account all of the above, I am not satisfied that Mr Teng was an Australian resident for a continuous period of 10 years, nor for a period of 5 years.
Mr Teng spent the vast majority of his time between 1994 and October 2013 (the time of his claim for the age pension) in China. His finances derived from his family in China and Mr Teng’s main business operations took place in China. Despite the fact that Mr Teng sought to engage Australian businesses, as noted above he was often engaged to do this by Chinese companies with which he had worked closely.
I accept that Mr Teng has sought to benefit Australia through his business activities, however, this is not determinative of residence. Residence contains two elements, physical presence in a place, and intention to treat that place as home.[7] Mr Teng’s commitment to his business resulted in him spending the majority of his time in China. This was his choice. As Mr Teng stated, “everything I do, I do for my business”. In such circumstances, it is my view that Mr Teng intended to live in China and not Australia in order to advance his business.
[7] Hafza v Director-General of Social Security (1985) 6 FCR 444, 449.
His intention to reside in China is also supported by Mr Teng’s extended stay in Australia in 2000 and 2001. This period most likely qualifies as one in which Mr Teng resided in Australia. Nonetheless, he stated in evidence that he remained in Australia for that period in order to qualify for Australian citizenship. He left the country not long after citizenship was conferred. This indicates that Mr Teng’s ultimate intention was to reside in Australia only temporarily and then resume his residence in China.
Although Mr Teng’s wife and daughter lived in Australia, he spent little time with them over an 18 year period. He provided minimal financial support, did not hold a joint account with his wife and left the life insurance policy he had purchased for his daughter to his wife to maintain. Mr Teng and his wife eventually separated in 2004. In my view, Mr Teng’s family connections are not of such strength to suggest a continued intention during his periods of absence to treat Australia as his home.
I am not satisfied that Mr Teng has resided in Australia for a continuous period of 10 years, or even for a period of 5 years. It is clear on the evidence before me that during his substantial periods of absence from Australia between 1995 and 2013, Mr Teng not only lived in China, but intended to treat China and not Australia as his home.
Mr Teng does not therefore satisfy the qualifying residence requirements for the grant of age pension.
Was Mr Teng an Australian resident at the time of his claim for age pension?
For completeness, I will also consider whether Mr Teng was an Australian resident at the time he made his claim for age pension. A claim for age pension can only be made by a person who was an Australian resident, and within Australia, at the time they lodged a claim.[8]
[8] Social Security (Administration) Act 1999 (Cth), s 29.
I have included evidence pertaining to 2013 in my consideration of the factors in section 7(3). On the basis of that evidence, I am also not satisfied that Mr Teng was an Australian resident at the time he lodged his claim for age pension.
Mr Teng was within Australia when he lodged his claim. He arrived in Australia on 23 September 2013 and departed again for China on 20 November 2013. He has continued to travel to and from China after this period.
This is inconsistent with a statement made by Mr Teng on 11 October 2013 in which he stated that “I now plan to live and work in Australia”.[9] His limited time in Australia immediately before lodging his claim, continued travel to China afterwards, along with the temporary nature of his accommodation (he was paying a small amount of rent to his wife), and his commitment to an ongoing business project in China, indicate that Mr Teng was only paying a brief visit to Australia at the time of his claim and not resuming residence.
[9] Exhibit R1, p.27.
On those grounds, I cannot be satisfied that Mr Teng was an Australian resident at the time he lodged his claim for age pension.
DECISION
The decision of the Social Security Appeals Tribunal, dated 24 November 2014, will be affirmed.
I certify that the preceding 74 (seventy-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance ............................[sgd]............................................
Associate
Dated 31 July 2015
Date(s) of hearing 18 June 2015 Date final submissions received 18 June 2015 Applicant In person Solicitors for the Respondent K Hehir; Department of Human Services
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Qualifying Australian Residence
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Residency Requirements
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Continuous Presence
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Residency Intention
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