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

[2006] AATA 569

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 569

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2005/1125

GENERAL ADMINISTRATIVE  DIVISION

Re:         OLGA TERZINI

Applicant

And:       SECRETARY,

DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             29 June 2006

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) Regina Perton

Member

SOCIAL SECURITY – age pension – underpayment – recipient of Italian pension – lengthy investigations by applicant to uncover error – review sought more than 13 weeks after notification of reviewable decision – Tribunal lacks power to make favourable decision ‑ decision under review affirmed

Social Security (Administration) Act 1999 s 109

REASONS FOR DECISION

29 June 2006  Regina Perton, Member

1.      Olga Terzini, a widow now 78 years old, was born in Italy and receives age pension from both the Australian and Italian governments.  Mrs Terzini has been paid the Australian age pension since 26 May 1988.  She was granted the Italian pension as from 1 September 1988.  The calculation of the rate of the Italian pension is complex in its structure and in its impact on the Australian age pension.  The applicable exchange rate also affects the calculations.  This case concerns a 15 year dispute over the impact of the Italian pension income on an Australian age pension.  

BACKGROUND

2.      In early December 1991, the then Department of Social Security (DSS) was notified by Italian authorities of the grant of an Italian pension to Mrs Terzini, backdated to 1 September 1988.   DSS reduced Mrs Terzini’s Australian age pension based on its calculations of the amount she would receive in Italian income.  In early December 1991, Mrs Terzini’s son, Nino Terzini, contacted DSS expressing concern about the timing and level of reduction of his mother’s Australian pension.  He believed that DSS had miscalculated the relevant components of the Italian pension and should not have reduced his mother’s pension until after she received the back payment of the Italian pension.  DSS maintained that its calculations and procedures were correct.  

3.      On 18 December 1991, an authorised review officer (ARO) affirmed the DSS decision.  In a letter to Mrs Terzini the ARO indicated that if Mrs Terzini wished to appeal to the Social Security Appeals Tribunal (SSAT), she should do so within 3 months, as otherwise, she would not be able to be paid arrears beyond the date of application. 

4.      Mrs Terzini’s arrears of Italian pension were released in mid-1992.  On 17 July 1992, Mrs Terzini wrote to the Director of International Operations of DSS seeking explanations and documents concerning the formulae for conversions of the Italian pension to Australian dollars, the break-up of amounts by month and other information.  In late July 1992, Mrs Terzini and her son queried the Department’s calculation of overpayment of Australian pension to her as a result of the back payment of the Italian pension.  On 29 July 1992, an officer of the International Operations Branch of DSS wrote to Mrs Terzini providing information and some documents concerning its calculations of the arrears of the Italian pension due to her.

5.      On 20 August 1992, DSS advised Mrs Terzini of the recalculation of arrears and adjusted payments.  Mrs Terzini sought review of the decision by an ARO.   On 28 August 1992, an ARO informed her that the DSS calculations were incorrect and would be reassessed.  There was further contact between Mr Terzini (on his mother’s behalf) and DSS between October and December 1992. 

6.      In May 1993, Mrs Terzini wrote to DSS informing them that the receipts for the amounts received in Italian pension were much lower than those quoted by DSS.  She provided the figures and receipts and asked that DSS investigate the discrepancy and provide a refund if she was entitled to it.  On 22 June 1993, DSS wrote to Mr Terzini informing him that the Italian pension was calculated according to a set formula.  Mr Terzini was also advised that the amount had been recalculated and that his mother’s pension had increased from 20 May 1993 by approximately 29 dollars per fortnight.  On 20 July 1993, Mrs Terzini wrote to DSS on several issues, stressing her dissatisfaction with its responses to her situation and its calculations. 

7.      On 24 September 1993, an ARO advised Mrs Terzini that the ARO was affirming the decision in relation to the calculation of her Italian pension and its impact on her Australian pension.  On 29 October 1993, Mrs Terzini sought review of the decision by the SSAT.  On 6 December 1993, the SSAT affirmed the decision.

8.      On 3 September 2004, Mrs Terzini wrote to Centrelink’s International Services branch seeking details of the components of her Italian pension, their calculations and relevant dates.  She indicated that she believed that she may have been disadvantaged by the incorrect portion of her Italian pension being considered as income for the purposes of her Australian pension.  On 8 September 2004, Centrelink responded advising that the Italian authorities did not provide information directly to Centrelink about individual pensions, rather they provided an annual statement to the recipient.  Mrs Terzini was advised that the onus was on her to inform Centrelink of any changes to her income including that from an overseas pension. 

9.      Mr Terzini was not happy with Centrelink’s response to his mother and wanted further information about the calculations of her Italian pension backdated to its commencement.  Mrs Terzini wrote to Centrelink on 22 September 2004 to express her displeasure and confusion at Centrelink’s response.  On 29 September 2004, Centrelink wrote to Mr Terzini enclosing copies of documents and advising of the difficulties of obtaining the original grant documentation from the Italian provincial office but undertaking to make every effort to obtain it.  On 5 October 2004, Mrs Terzini replied to the Centrelink letter describing the history of the dispute and enclosing copies of pertinent documents in her possession.

10.     On 22 October 2004, Centrelink International Services wrote to the relevant Italian pension authority asking for an explanation of what appeared to be differing information provided in various documents issued following the approval of Mrs Terzini’s Italian pension.  On 24 October 2004, Mrs Terzini sent further documents to Centrelink as they were apparently unable to locate some of the early records. 

11.     On 3 November 2004, Mrs Terzini lodged an application for review of the 1993 SSAT decision with the Administrative Appeals Tribunal (the Tribunal).  She also applied for an extension of time for lodging the application for review, which the respondent opposed.  A hearing took place on 13 December 2004.  On 22 December 2004, the Tribunal constituted by Senior Member Handley refused the application for extension of time.   

12.     On 23 December 2004, Centrelink wrote to Mr Terzini advising that the situation with arrears of pension for the period from 1988 to 1993 was still under investigation.  The officer indicated that they were awaiting further information from Italy and hence could not give him a timeframe.  A Centrelink file note dated 16 February 2005 indicates that a Centrelink officer spoke to Mr Terzini advising that they are still awaiting legal advice before making any payment.  More correspondence and discussion took place within Centrelink and with Mr and Mrs Terzini over the next months.  

13.     On 4 April 2005, Mrs Terzini wrote to Centrelink advising that she wished to be paid interest on the amount wrongly withheld from her pension between December 1991 and 23 March 2005.  She also claimed repayment of the incorrect Australian pension paid to her between December 1991 and November 1994.  Mrs Terzini wrote further letters in late April 2005 and late May 2005 asking when the amount withheld from her Italian pension would be paid into her bank account.

14.     On 24 May 2005, a Centrelink International Services officer wrote to Mrs Terzini advising that a review had been undertaken of the amount of arrears that was withheld from her Italian pension lump sum payment between 1 September 1988 and 5 December 1991.  Centrelink indicated that an excess of $6,076.70 had been recovered from her Italian pension and that this amount, less $490.80 already received, was being paid into her bank account.  The officer noted that Mr Terzini still disagreed with the amount attributed to his mother in income from other sources in that period.

15.     There was further correspondence between Mrs Terzini and Centrelink with Mrs Terzini expressing her dissatisfaction with the slow progress in dealing with outstanding issues.  On 4 July 2005, an officer from the Legal Services Branch of Centrelink wrote to Mrs Terzini referring to her request for interest on the payment of $6,079.00 made earlier that year and for review of the rate of age pension paid between December 1991 and November 1994.  He advised that social security legislation makes no provision for payment of interest on arrears of social security payment.  He also conveyed the view that for part of the period between December 1991 and November 1994, Mrs Terzini had already exhausted all tiers of merits review.  In relation to the balance of the period, he noted that Mrs Terzini had received several letters during that time advising her of her rates of age pension and her right to seek review if she believed the rate to be incorrect.  However, review was not sought within the 13 weeks that allow for back payment in the event of a successful review.  Mrs Terzini was advised of her right to still seek review but that …the date of effect of any subsequent favourable decision will be the date of your request for a review. 

16.     Mrs Terzini provided a lengthy response to Centrelink on 8 July 2005.  She stated that she was not seeking interest on the arrears but rather for two incorrect decisions in 1993.  She stated that she had incurred a huge financial loss as a result of those decisions.  She explained the details and reasons for pursuing an amount she calculated as $6,323.92 for the period from 1991 to 1994.  She also sought review of the rate of age pension paid during that period.

17.     On 7 September 2005, an ARO affirmed the decision not to pay arrears for the specified period. The ARO provided an extensive chronology concerning the letters sent to Mrs Terzini. The ARO indicated that because of the provisions of s 109 of the Social Security (Administration Act) 1999 (the Administration Act), no arrears are payable when review was sought more than 13 weeks after the right to seek review accrued, namely in 1994. 

18.     On 13 September 2005, Mrs Terzini sought review of the decision in the SSAT. On 15 November 2005, the SSAT affirmed the decision stating that there was no basis on which the SSAT could make a positive decision even if Centrelink had erred because of the provisions of s 109 of the Administration Act. On 14 December 2005, Mrs Terzini then lodged an application for review of the decision with the Tribunal.

19.     The background provided above does not represent all communication between Mrs Terzini, her son and DSS and Centrelink but rather displays the history and nature of the ongoing dispute. 

20.     The task for the Tribunal in this matter is to assess whether it is able to provide resolution of the outstanding dispute regarding possible pension underpayment in the period between 1991 and 1994.

EVIDENCE

21.     Mrs Terzini and her son appeared before the Tribunal and provided documentary and oral evidence.  They explained the difficulties they had encountered in obtaining documentation and information from Australian and Italian authorities.  They had not been able to obtain relevant information within 13 weeks of the letters advising of changes to age pension rates, due to factors beyond their control.  It took ten years including visiting Italy to try and track down relevant information.  They indicated that they had provided relevant documentation to Centrelink as Centrelink could not locate pertinent information about the case.  They stated that it was their belief that Mrs Terzini’s pension had been underpaid between December 1991 and December 1994.  They explained why Mrs Terzini is persisting with the case.

22.     The Tribunal was also provided with Mrs Terzini’s written response to Centrelink’s Statement of Facts and Contentions.

CONSIDERATION OF THE ISSUES

23.     Mrs Terzini has been in dispute with DSS and its successor, Centrelink, since late 1991.  An ARO review in December 1991 arose out of a decision by the DSS delegate to reduce Mrs Terzini’s rate of Australian pension before she received any of the backdated income from her Italian pension.  In July 1992, a request for review was made about the amount withheld from the arrears of the Italian pension.  A further ARO review was sought in July 1993 concerning the use of a particular formula to calculate the amount of the Italian pension deemed to be income for calculation of the rate of Australian pension.  The SSAT considered that application in December 1993.  The Tribunal refused an extension of time in December 2004. 

24.     Centrelink has submitted that Mrs Terzini has exhausted her review rights in respect of her pension entitlement between 1 September 1988 and 23 September 1993 as it was the subject of review through all tiers of merits review, culminating in a refusal of extension of time before the Tribunal in December 2004.  The Tribunal accepts Centrelink’s submission.  It is not entitled to revisit a decision that has already been through the merits review process. 

25.     Centrelink has acknowledged that there was no review specifically sought for the period between late September 1993 and December 1994.  The Tribunal is satisfied that it has jurisdiction to review that latter period.  However, as indicated above, that does not mean the Tribunal is in a position to grant Mrs Terzini what she is seeking, even if it were to undertake the complex calculations required and to subsequently find that the amount paid to her was incorrect.  

26. The Tribunal (and the SSAT) is bound by s 109 of the Administration Act. Section 109 provides differing outcomes depending on when a person affected by a DSS or Centrelink decision seeks review. Section 109 provides that:

109(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.

109(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.

…

27.     Mrs Terzini did not seek review by the ARO until July 2005, a decade after she was informed in letters from DSS of changes to her rate of pension and her right to seek review.  Mrs Terzini did not dispute that she was sent letters in the latter part of 1993 and during 1994 advising her of changes to her pension. 

28. The Tribunal does not have the authority to overrule the legislative requirement that review must be sought within 13 weeks of a decision for a person to be entitled to be paid arrears. While the Tribunal accepts that Mrs Terzini was not in a position to challenge the amount of her payments because of lack of specific information until many years later, there is no discretion for the Tribunal to overlook the requirements of s 109 of the Administration Act. Section 109 applies regardless of how valid or genuine the reason for review being sought more than 13 weeks after notification of a DSS or Centrelink decision.

29.     The Tribunal does not accept Mrs Terzini’s submission that the application before the Tribunal arises out of the payment made by Centrelink in March 2005. 

30.     The Tribunal has no option but to affirm the decision under review.

DECISION

31.     The Tribunal affirms the decision under review.

I certify that the thirty-one [31] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

signed:     Olympia Sarrinikolaou

Clerk

Date of hearing:  10 April 2006
Date of decision:  29 June 2006
Advocate for applicant:                Mr N. Terzini, applicant’s son
Advocate for respondent:            Ms A. Bramley, Centrelink Legal Services Branch