Thiagarajan and Secretary, Department of Employment and Workplace Relations

[2007] AATA 2065

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2065

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1362

GENERAL ADMINISTRATIVE DIVISION		)
Re		SUVATHI THIAGARAJAN

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member P W Taylor SC

Date18 December 2007   

PlaceSydney

Decision The decision under review is affirmed.  

....................[sgd]........................

P W Taylor SC
  Senior Member

CATCHWORDS

SOCIAL SECURITY – parenting payment entitlement – suspension and cancellation decisions – date of effect for favourable determination resulting from review – decision under review is set aside.

LEGISLATION 

Social Security (Administration) Act 1999 – ss 55, 55(5) 63, 63(2), 63(4), 63(4)(c), 63(6), 63(9), 67, 68, 78, 80, 81(1), 85, 85A, 85(1)(c), 107-123, 109, 109(2), 109(5), 118(11) 126, 126(3), 129, 135, 135(1), 135(1)(b)(iii), 135(5), 137, 137(1), 137(5), 137(6), 152, 179(1), 181, 237, 237(1), 237(2), 237(3)

Acts Interpretation Act 1901 – s 33(1)

Social Security Act 1947 – s 168, 183

Social Security Act 1991 – s 1243A and 1302A

Administrative Appeals Act 1975 – s 43(6)

CASE LAW

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

Repatriation Commission v Gordon (1990) 100 ALR 255

Walden and Department of Families, Community Services and Indigenous Affairs [2007] AATA 1064

Dixon and Secretary, Department of Employment and Workplace Relations [2006] AATA 872

Lambert and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 870

Parker and Secretary, Department of Family and Community Services [2004] AATA 1278

Catt and Department of Family and Community Services [2000] AATA 1101

Johnson and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1535

Secretary, Department of Employment and Workplace Relations and Lu-Zaw [2007] AATA 82

Secretary, Department of Social Security v O’Connell (1992) 28 ALD 626

Katsimanlis and Secretary, Department of Social Security (1994) 36 ALD 759

Re Secretary, Department of Social Security and Hartmann (1998) 52 ALD 631

Rafiee and Secretary, Department of Family and Community Services (2002) 70 ALD 605

Lesi v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 203 ALR 420

Secretary, Department of Health and Ageing v Marnotta Pty Ltd [2005] FCA 1395

Re Mulhallen and Secretary, Department of Family and Community Services (2001) 65 ALD 579

REASONS FOR DECISION

18 December 2007 Senior Member P W Taylor SC      

1.Mrs Thiagarajan successfully applied for parenting payment on 30 March 2004.  She says it was not until April 2005 she discovered that (i) no payments had ever been made, (ii) the Secretary had suspended the payment on 4 May 2004, and (iii) the Secretary cancelled the payment on 4 August 2004.  Mrs Thiagarajan also says she was unaware the Secretary made the decisions because she did not respond to letters requesting “100 points proof of identity” documents to support her application.  Mrs Thiagarajan says she provided all the required information when she lodged her original application in 2004.

2.Mrs Thiagarajan’s April 2005 discovery occurred when she approached the Strathfield Centrelink office, to update Centrelink’s records, after her family’s recent move from Narre Warren in Victoria.  As a result of that contact the Secretary promptly restored Mrs Thiagarajan’s parenting payment from 19 April 2005, but not for any of the earlier period from March 2004.  In July 2006 Mrs Thiagarajan contacted Centrelink and asked to be paid the parenting payment arrears for the 12 month period between April 2004 and April 2005.  That request was refused, in a decision dated 15 July 2006, and the refusal was ultimately affirmed by the Social Security Appeals Tribunal (“SSAT”) in its 12 September 2006 decision.

3.The 15 July 2006 decision was that Mrs Thiagarajan’s request for payment of the arrears could not be granted because she had applied more than 13 weeks after the cancellation decision. Mrs Thiagarajan was wrongly informed that “section 129(1) SSA” was the basis for this decision. The Authorised Review Officer (ARO) affirmed the decision on 28 July 2006. This refusal was based on the erroneous reason that section 129(3) of the Social Security (Administration) Act 1999 (“SSAA”) precluded any review entitlement. (The subsection relates only to pension bonus and was irrelevant). In its 22 September 2006 reasons for decision the SSAT concluded that SSAA s 109(2) precluded payment of the arrears.

4.The substance of Mrs Thiagarajan’s request involves:

(a)a challenge to each of the suspension and cancellation decisions; and

(b)a request for parenting payments to be made for the April 2004 to April 2005 period irrespective of the suspension and cancellation decisions.

5.The Secretary contends that:

(a)The suspension and cancellation decisions were correct.

(b)Even if those decisions were set aside, no substituted decision could take effect before 11 April 2005 – because of the operation of s 109(2) of the Social Security (Administration) Act 1999 (“SSAA”).

(c)Mrs Thiagarajan’s 11 April 2005 enquiry is the earliest date from which her restored parenting payment entitlement can be recognised.

Mrs Thiagarajan’s lack of awareness explained

6.Mrs Thiagarajan’s claim not to have been aware of the suspension and cancellation decisions, and not to have received any of Centrelink’s letters requesting information, would ordinarily attract scepticism. However it has been dispelled by her explanations. Those explanations have not been contested either by the ARO, in the proceedings in the SSAT or in the present review proceedings.

7.Centrelink’s records show that it unsuccessfully attempted to credit parenting payment for the period from 2 April 2004 to 5 May 2004 (a total of $802.45) to Mrs Thiagarajan’s bank account.  Mr Thiagarajan told the Tribunal he thought the attempt may have failed because the March 2004 application did not disclose that the account was in joint names. In fact, Centrelink’s records show that two fortnightly payments were sent to an account that had been used for earlier payments made in 2001. They were not sent to the actual account number designated in Mrs Thiagarajan’s March 2004 application.  Whether the explanation for the error lay in the account name, or the use of the wrong account number, Centrelink discovered the difficulty in early May 2004 and sent Mrs Thiagarajan a letter, dated 25 May 2004, requesting her bank account details.  Nevertheless no further payments were made and this suggests that Mrs Thiagarajan did not respond to the letter. Since the letter requested information that could only have been to her benefit to provide, the absence of response itself strongly suggests she did not receive the letter. 

8.The fact that Mrs Thiagarajan received no parenting payments might itself be thought to have been obvious to Mr and Mrs Thiagarajan, and likely to prompt them to seek an explanation from Centrelink. However Mr Thiagarajan explained that he had made an application for Family Tax Benefit at the same time as the application for parenting payment.  On 5 May 2004, shortly after the applications were made, Centrelink did write to Mrs Thiagarajan requesting details of her bank account for the Family Tax Benefit payments.  However Mr and Mrs Thiagarajan say they did not receive any of Centrelink’s letters, and certainly there is no evidence of any response to even this letter.  Nevertheless, regular deposits of Family Tax Benefit were made to their joint bank account.  Mr Thiagarajan said that neither he nor his wife was aware of the precise amount of either of their benefit entitlements.  Neither was there any change – of the kind that might have been observed as a result of a suspension or cancellation decision – in the amounts paid. Mr and Mrs Thiagarajan simply assumed the Centrelink deposits to their bank account were for the correct amount. Operating on that assumption they neither complained, nor inquired further, about Mrs Thiagarajan’s proper parenting payment entitlement.

9.Although this explanation evidences an element of trusting acceptance it is precisely that quality that vouches for its credibility.  This is because, given the promptness with which parenting payment was resumed in April 2005, the lack of enquiry to Centrelink was contrary to Mrs Thiagarajan’s interests.  The fact that she failed to question the Centrelink payment amounts in those circumstances suggests her explanation should be accepted.

10.Similar reasoning requires acceptance of Mr and Mrs Thiagarajan’s claim that they never received any of the requests for identity information, or the suspension and cancellation notices, from Centrelink.  Given that Centrelink’s address records were correct, and the letters were addressed to Mrs Thiagarajan at that address, non-receipt of several letters sent at different times over a four month period is surprising.  But Mr Thiagarajan said that local children often interfered with their letter box at Narre Warren and mail regularly went missing. That possible explanation becomes even more significant in the light of the fact that the suspension and cancellation decisions were based on a failure to provide “100 points proof of identity” information. It may be inferred, at least from the prompt restoration of parenting payment in April 2005, that Mrs Thiagarajan could at any time have provided the allegedly outstanding identity information.  The fact she did not, despite the obvious self interest in so doing, corroborates the claim that she never received any of the Centrelink letters.

Mrs Thiagarajan did provide “proof of identity” with the March 2004 application

11.Mr Thiagarajan says he and his wife provided copies of any required “proof of identity” documents when the original application was lodged in March 2004.  He says (i) a copy of their passports appears in the documents used by the ARO, (ii) Mrs Thiagarajan provided her citizenship papers, Medicare card and bankcard at the original interview, and (iii) the Secretary paid the Family Tax Benefit in any event. He says that, in effect, Mrs Thiagarajan had complied with the Secretary’s requests and the letters of 5 and 23 April 2004 (requesting further proof of identity) were either a mistake, or resulted from the Secretary’s error in misplacing documents that had been provided with the application.

12.The Secretary contends that Mrs Thiagarajan only provided her passport with the original application and that additional information was required to satisfy the 100 points requirement.  Certainly Centrelink’s 2 April 2004 file note and 5 April 2004 letter suggest that the proof of identity requirement was not recorded as having been met.

13.Four features of the available documents arguably support Mr Thiagarajan’s claim: (i) the checklist included in the original application contains nothing to suggest that there were any outstanding “proof of identity” documents. (ii) Centrelink’s 5 April 2004 letter indicated that an original form lodged by Mrs Thiagarajan in relation to her family benefit claim had been misplaced.  (iii) The 5 April 2004 letter requested “driver licence, bankcard, medicare card” and warned that the information should be provided within 14 days “to avoid possible rejection of your claim”.  However other Centrelink documents record that Mrs Thiagarajan’s parenting payment application had already been approved on 2 April 2004, and that approval rather suggests at least substantial compliance with the “proof of identity” at that time.  (iv) Centrelink records show that Mr Thiagarajan had himself satisfied the 100 points requirement, in relation to his New Start Allowance application, on 25 March 2004.

14.But perhaps the most significant considerations tending to corroborate Mr Thiagarajan’s claims are (i) the fact that the Family Tax Benefit was paid and (ii) the fact that Mrs Thiagarajan did not provide any additional “proof of identity” in 2004.  The first point is significant because “proof of identity” was presumably just as material for payment of Family Tax Benefit as it was for payment of parenting benefit.  The second point requires a little explanation.  Mr and Mrs Thiagarajan (or at least one of them), attended Centrelink’s offices on 29, 30 and 31 March 2004.  They were interviewed on 30 March 2004 in relation to the parenting payment application.  If there was an outstanding “proof of identity” requirement at that time, it would have been both in their interest and their ability, to remedy the outstanding requirement very promptly.  The fact that they did not provide any further information rather suggests that no such requirement was conveyed to them.  And a likely explanation for the absence of any such requirement being conveyed is that the interviewing Centrelink officer was in fact presented with complying “proof of identity” documents – as Mr Thiagarajan claims.

15.The 5 April 2004 letter Centrelink addressed to Mrs Thiagarajan itself concedes that at least one document lodged by Mr Thiagarajan was misplaced. And, as I have already noted, Centrelink’s records show it attempted to pay the parenting payment into an account other than the one nominated by Mrs Thiagarajan in her application.  These matters bespeak inadequacy in Centrelink’s recording of the information it had been provided.  In the light of these apparent errors, and the other considerations I have set out in the preceding paragraphs, there are persuasive reasons to accept Mr Thiagarajan’s claim that he and his wife provided all the required “proof of identity” when her parenting payment application was first lodged on 30 March 2004.

The 4 May 2004 suspension is not the preferable decision

16.Mr Thiagarajan says that if Centrelink had originally been provided with the required “proof of identity” the Secretary cannot rely on a lack of response to the requests in the letters of 5 and 23 April 2004. The Secretary at least implicitly concedes that the 23 April 2004 letter was written with 14 days of, and therefore could not justify, the 4 May 2004 suspension. However the Secretary says the 5 April 2004 letter was properly given, under either s 63 or 68 of the SSAA, and because Mrs Thiagarajan did not respond to the letter, her claimed parenting payment was not payable.

17.In April 2004 s 63 of the SSAA permitted the Secretary to give a notice to a social security payment applicant such as Mrs Thiagarajan, if the Secretary was of the opinion that the person “should” contact the Department or provide information. The notice could be given by prepaid post addressed to the person’s last known address. If the requirements of the notice were reasonable, and the person failed to comply, the person’s social security payment was not payable – unless the Secretary was satisfied that the person had a reasonable excuse for not complying: see s 63(4) and (9) of the SSAA.

18.The notice power conferred on the Secretary by SSAA s 63(2) is in wide terms. Neither the terms of the section, nor its obvious purpose in facilitating the proper administration of social security law, warrant restricting its exercise to eliciting new information. If a person has already provided information to the Secretary, a notice that merely required its repetition would not usually impose a reasonable requirement. However reasonableness of the requirement will depend on the particular circumstances. If the Secretary’s request is made for the purpose of obtaining, supplementing, clarifying, or checking proper records of information, the notice may be reasonable notwithstanding that the substance of the information sought has already been provided by the person.

19.In the present case the Secretary’s 5 April 2004 notice sought “proof of identity” documents in a situation where the most likely reasons for the request were either that no proper record had originally been made, or that record had been misplaced. The available Centrelink documents at least suggest some recording errors and they certainly do not clearly substantiate that Mrs Thiagarajan had satisfied the “100 point proof of identity” requirement. For these reasons, it is proper to conclude that the 5 April 2004 letter involved a reasonable request and was a valid notice for the purpose of SSAA s 63.

20.But it is also the case that Mrs Thiagarajan had a reasonable excuse for not complying with the 5 April 2004 letter and its request for information.  As I have indicated earlier in these reasons, Mrs Thiagarajan denies ever having received the letter, and objective evaluation of the circumstances warrants acceptance of her denial.  The Secretary was not aware of this excuse at the time of the 4 May 2004 suspension decision, but once her denial is accepted, the proper conclusion to draw is that she had a reasonable excuse for not complying with the 5 April 2004 letter.  Her non-compliance would not, in the light of all the circumstances now established, justify suspension of her parenting payment.

21.The Secretary also contends that the 5 April 2004 letter was an information notice that complied with s 68 of the SSAA. The Secretary says that Mrs Thiagarajan’s failure to comply with the letter can be relied on to justify suspension of her parenting payment in the exercise of the power conferred by s 81(1) of the SSAA. Since no payment had been made to Mrs Thiagarajan by 5 April 2004, as the letter itself indicated, the request could only be justified by s 67, rather than s 68, of the SSAA. But the more significant point is that it is doubtful whether the letter could properly be construed as falling within either section, because it did not impose a requirement “to give a statement”. It merely required Mrs Thiagarajan to provide the documents it specified.

22.It is not necessary, however, to reach a concluded view about the application of SSAA ss 67 and 68. The 5 April 2004 letter was a valid notice under SSAA s 63 and non-compliance with it enlivened the suspension power. However in light of the fact that Mrs Thiagarajan, through no apparent fault of her own, did not receive the letter, it would not be appropriate to rely on her lack of response as a sufficient reason to suspend her parenting payment.

The 4 August 2004 cancellation was not the preferable decision

23.The Secretary contends the 4 August 2004 cancellation decision was correctly made because (i) Mrs Thiagarajan had not complied with the 5 April 2004 letter, and it could be relied on, as a notice under either ss 63 or 68 of the SSAA, notwithstanding the 4 May 2004 suspension. (ii) Mrs Thiagarajan had not complied with the further letter of 23 April 2004, and that letter was also a notice under either s 63 or 68. (iii) Mrs Thiagarajan had not responded to a letter dated 25 May 2004 requesting details of the bank account to which the parenting payment was to be paid. The Secretary contended that Mrs Thiagarajan’s absence of response meant that the parenting payment could be cancelled under ss 80 and 81 of the SSAA.

24.The 25 May 2004 letter did not provide a basis for cancellation of Mrs Thiagarajan’s parenting payment. First of all, if the letter was a requirement under SSAA s 55 to nominate a bank account, Mrs Thiagarajan had already nominated the payment account in her original application. That nomination satisfied the requirements of s 55(5) of the SSAA. It was not necessary for her to provide the information again. Second, viewed as a notice under s 63 of the SSAA, the letter did not impose a reasonable requirement, and did not therefore comply with s 63(4)(c) of the SSAA. Mrs Thiagarajan’s original application disclosed the bank account to which payments were to be made. According to the payment summary included in Exhibit 5 (i.e. the material considered by the ARO) Centrelink did not use that account and attempted to make the payment to a different account, one to which payments had previously been made in August 2001. In these circumstances it appears that any difficulty Centrelink had encountered in making the payment to Mrs Thiagarajan was the result of its own internal error. That error could have been remedied simply by checking the details Mrs Thiagarajan had already provided in her application. Thirdly, in so far as the Secretary relies on SSAA s 68, the 25 May 2004 letter simply requested Mrs Thiagarajan to provide details of the account to which her parenting payment was to be made. It was not a request for Mrs Thiagarajan to provide a “statement” for the purpose of SSAA s 68. Neither was it a request to provide a statement about “a matter that might affect the payment” payable to her. It was simply a request to identify the bank account into which her payment was to be made.

25.In relation to the 5 April 2004 letter, the Secretary relies on s 33(1) of the Acts Interpretation Act 2004 to submit that Mrs Thiagarajan’s non-compliance with the 5 April 2004 letter could be relied on to cancel her parenting benefit, notwithstanding the suspension decision of 4 May 2004. However that provision, which permits a statutory power to be exercised at any time, or from time to time, operates “unless the contrary intention appears”. Both ss 80 and 81 of the SSAA confer on the Secretary a disjunctive power to suspend or cancel the payment in the case of non-compliance with a relevant notice. It is at least arguable that the Secretary’s 4 August 2004 suspension decision exhausted the potential consequences of Mrs Thiagarajan’s non-compliance with the 5 April 2004 letter. An initial decision to suspend may be thought to recognise that the triggering non-compliance may be readily capable of proper explanation, and that the person concerned may have a continuing qualification for the payment. It may even be contemplated that the apparent non-compliance is attributable to not having received a relevant notice. Given these various possibilities it is reasonable to infer that the suspension and cancellation powers were deliberately conferred disjunctively and required the Secretary to make a principled election between them. In those circumstances, if the Secretary contemplated a subsequent cancellation, the exercise of that power would require some additional triggering default. However it is not necessary to reach a concluded view on that question, because of the remaining basis on which the Secretary relies to justify the cancellation decision. That basis is Mrs Thiagarajan’s failure to respond to the letter of 23 April 2004.

26.I noted earlier in these reasons the Secretary’s implicit concession that the 23 April 2004 letter, requesting “100 points proof of identity”, could not be relied on to justify the 4 May 2004 suspension decision. (This was because the cancellation decision had been made within the 14 day compliance period stated in the notice.)  But this concession is not required in relation to the 4 August 2004 cancellation decision, and the Secretary relies on the 23 April 2004 letter as providing a basis for that cancellation decision. 

27.Earlier in these reasons I also said that s 63 of the SSAA could, depending on the circumstances, permit the Secretary to require information from a social security applicant even where the person contended that they had already provided the substance of the information. And in the present case, although I accept Mr and Mrs Thiagarajan’s claim that they did provide the required “proof of identity” information when the parenting payment application was lodged, the evidence also suggests that Centrelink’s records of what had been provided were deficient. In those circumstances, and especially considering that the 23 April 2004 letter gave Mrs Thiagarajan the opportunity to contact Centrelink to discuss the requirements of the letter, I do not consider that the “requirement of the notice” was itself unreasonable. Assuming the letter was in fact sent by prepaid post in compliance with s 63(6) of the SSAA, Mrs Thiagarajan’s non-compliance with the 23 April 2004 letter did enliven the cancellation power in s 80 of the SSAA.

28.It would not be proper to conclude, however, that the 23 April 2004 letter was a notice under s 68 of the SSAA. The letter merely required Mrs Thiagarajan to provide “100 points proof of identity”. That proof could really only be provided by producing documents of particular kinds – such as a passport, driver’s licence, credit card or a Medicare card. The letter could not reasonably be construed as requiring Mrs Thiagarajan to provide a “statement” – and there is no other basis on which the letter could be regarded as authorised by s 68 of the SSAA.

29.As I also pointed out earlier in these reasons, non-compliance with a notice under s 63 of the SSAA does not result in a person’s social security payment becoming not payable if the Secretary is satisfied the person had a reasonable excuse. Mrs Thiagarajan’s non-compliance with the 23 April 2004 letter resulted solely from the fact that, through no apparent fault of her own, she did not receive the letter. Although that excuse was not known to the Secretary at the time of the August 2004 cancellation, it should be regarded as a reasonable excuse in the light of the totality of the circumstances. It follows that although Mrs Thiagarajan’s non-compliance with the 23 April 2004 letter enlivened the Secretary’s cancellation power, it does not require the conclusion that cancellation of her parenting payment was the preferable decision in the circumstances that are now known to have existed.

The preferable decisions in relation to suspension and cancellation

30.Having regard to the preceding paragraphs of these reasons, whilst each of the suspension and cancellation decisions in 2004 was permissible in the light of the circumstances then known to the Secretary, acceptance of Mrs Thiagarajan’s explanation means that neither decision is the “preferable” decision when all of the relevant circumstances are taken into account.  Nevertheless the Secretary contends that it would be futile to set aside either of the suspension or cancellation decisions, because Mrs Thiagarajan would still not be able to establish that the parenting payment could be paid to her for any part of the period between April 2004 and April 2005.  The Secretary says this result flows from the fact that Mrs Thiagarajan was “given notice” of the relevant decisions and did not request a timely review. The Secretary contends that, in these circumstances the SSAA operates to prescribe the date of effect of any favourable determination resulting from Mrs Thiagarajan’s review application: see s 109 of the SSAA. According to the Secretary that date is 11 April 2005 and precludes payment of any of the arrears.

The Secretary did “give” Mrs Thiagarajan notice of the suspension and cancellation decisions

31.Mrs Thiagarajan says that she was not given notice of the suspension or cancellation decisions because she never received either the 4 May 2004 or the 4 August 2004 letters.  Mr Thiagarajan also appeared to dispute that there was adequate evidence that Centrelink had posted either of the suspension or cancellation letters.  In submissions provided after the hearing, in response to additional information the Secretary had provided, Mr Thiagarajan relied on what he claimed was the known efficiency of the postal system.

32.The difficulty with Mrs Thiagarajan’s contention is that merely sending a pre-paid letter recording a decision may constitute giving notice of the decision for the purpose of “the social security law”. If the notice is sent by prepaid post to the person’s last address known to the Secretary, notice is taken to have been given to the person at the time when the letter would be delivered in the ordinary course of post: ss 237(1) and (2) of the SSAA. This is so unless there is evidence to establish that it was not delivered – either in the ordinary course of post or at all: s 237(3) of the SSAA. Proof of non-delivery is not provided, or at least not necessarily provided, merely by evidence that the addressee did not actually receive the letter:             Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96-7 and Repatriation Commission v Gordon (1990) 100 ALR 255. The fact that an addressee does not receive a posted complying notice does not prove non delivery where (i) other people have access to delivered mail: Walden and Department of Families, Community Services and Indigenous Affairs [2007] AATA 1064. (ii) The addressee makes no attempt to collect mail that has been delivered: Dixon and Secretary, Department of Employment and Workplace Relations [2006] AATA 872. (iii) There is evidence of mail having been stolen: Lambert and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 870 and Parker and Secretary, Department of Family and Community Services [2004] AATA 1278. (iv) Non-delivery to the addressee could reliably be expected to have resulted in the letter being returned: Catt and Department of Family and Community Services [2000] AATA 1101.

33.The original suspension and cancellation letters, as distinct from Centrelink’s file copies of their contents, are not available.  Nor was there any direct evidence they were posted.  After the hearing the Secretary provided a witness statement from an employee responsible for supervision of Centrelink’s mail operations, Ms Selby.  It appears from this statement that any advice letters – such as the suspension and cancellation letters of 4 May 2004 and 4 August 2004 – are automatically “stripped” daily from the Centrelink computer system and “batch printed” by a subcontractor.  The “batch” is given a unique identifier and the total number of advice letters in each batch is recorded in a summary “Quality Control Sheet”.  When the advice letters are printed the subcontractor allocates a unique job number to each letter printed.  The total number printed by the subcontractor is then reconciled with the “Quality Control Sheet”.  Then the printed letters are put into envelopes, and again the total number is reconciled back to the “Quality Control Sheet”.  The usual practice is that when the enveloped letters are actually lodged with Australia Post the number lodged is also reconciled.  Finally, the total number lodged is later reconciled with the Australia Post invoices.

34.In her statement Ms Selby explains that the Centrelink records archive does not retain the batch numbers to identify specifically the “batches” that would have included the 4 May 2004 and 4 August 2004 letters.  However she has checked the records of what was lodged with Australia Post at the relevant dates.  No lodgement discrepancies were reported for those dates.

35.In these circumstances the posting of each of the suspension and cancellation letters is a matter of inference from (i) the electronic copies of the letters retained by Centrelink, (ii) the contents of those copy letters (as evidenced by printouts) – including their date and the accuracy of the address details, (iii) the apparent practice of Centrelink to give notice of decisions, (iv) the evidence of Centrelink’s mail handling practices at the time and (v) Ms Selby’s evidence that there was no reported irregularity in postings at the relevant times. 

36.If either the suspension or the cancellation letter had been the only letters that Mrs Thiagarajan had not received, or if there was any apparent irregularity in the address details in Centrelink’s copies, the inference of posting may be unsafe to draw.  However, no such irregularity is apparent.  Moreover, Mr Thiagarajan says that many letters went missing from the letterbox at their Narre Warren address.  In these circumstances the preferable inference to draw is that each of the suspension and cancellation letters was sent by prepaid post to Mrs Thiagarajan’s Narre Warren address.  The most likely explanation for the fact that Mrs Thiagarajan did not become aware of the letters is that they were taken from her Narre Warren letterbox, rather than that they were never posted by Centrelink.

37.In the circumstances I am satisfied that Centrelink did post the suspension and cancellation letters so as to comply with SSAA s 237. I am also not satisfied that Mrs Thiagarajan has disproved delivery of the letters. It follows that she is taken to have been given notice of each of the decisions: see SSAA s 237(3).

Can the Tribunal’s review of the suspension and cancellation decisions take effect before April 2005

38.In the present case Mrs Thiagarajan lodged her review application with the SSAT more than 13 weeks after both of the suspension or cancellation decisions, but within 13 weeks of the ARO’s decision refusing her claim for payment of the arrears. 

39.The Secretary contends that the decision Mrs Thiagarajan seeks, namely payment of the arrears for the period from April 2004 to April 2005, would constitute a “favourable determination” for the purpose of SSAA s 109(2) and (5). Those subsections apply where a person has been given notice of a decision and a “favourable determination” is later made as a result of a review (under SSAA s 129) or a reconsideration by the Secretary (under SSAA s 126) that was initiated more than 13 weeks after the notice. In those situations the “favourable determination” takes effect on the day the review or reconsideration was initiated. The Secretary says these subsections apply in the present case. In support of this contention the Secretary relies on a number of decisions of this Tribunal, including Johnson and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1535; Secretary, Department of Employment and Workplace Relations and Lu-Zaw [2007] AATA 82, Walden and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1064, and Dixon and Secretary, Department of Employment and Workplace Relations [2006] AATA 872.

40.The fact that different SSAA provisions were erroneously cited as the justification for the refusal of Mrs Thiagarajan’s claim, in both the initial refusal and the ARO’s confirmation, point to some difficulty in properly identifying and applying the relevant “date of effect” principles that apply to decisions of the present kind.

41.The provision on which the Secretary principally relies is SSAA s 109(2). It is one of several “date of effect” provisions in ss 107-123 in Division 9 of the SSAA. There are two notable features of s 109. First, it is one of a group of provisions (in Subdivision B and comprising ss 108 - 114) that are expressed to apply to any “favourable determination” under sections 78, 85 (or, after 2005, s 85A) of the SSAA: see SSAA s 108. Second, it applies not only where the “favourable determination” is made as a result of an affected person’s application for review under SSAA s 129, but also where it is the result of the Secretary’s own review under SSAA s 126.

42.SSAA s 78 is concerned with the Secretary’s power to determine the rate at which a social security payment is being made. SSAA s 85 is concerned with the Secretary’s power to resume payment of a social security payment after cancellation or suspension, where that decision had been made by the Secretary either because the person was not qualified (SSAA s 80) or had not complied with relevant notices (SSAA ss 80 and 81).

43.Although these two provisions expressly confer power on the Secretary to depart from a previous decision, both SSAA ss 126 and 135 impliedly grant similar powers. SSAA s 126 gives the Secretary a general power to review any officer’s social security law decision. In the exercise of that review power SSAA s 126(3) permits the Secretary to set aside or vary the original decision or to substitute a new decision. SSAA s 129 permits an affected person to apply to the Secretary for the review of an officer’s decision. SSAA s 135 obliges the Secretary to complete the review by either affirming, setting aside or varying the original decision, or by substituting a new decision.

44.Because the various subsections of SSAA 109 apply to reviews under either SSAA 126 or 129, and each of those review procedures appear to confer its own decision making power on the Secretary, it would be unremarkable to characterise the outcome of the review as a decision under either SSAA s 126(3) or 135(1). Indeed, each subsection of SSAA s 109 does characterise the relevant decision as one made “as a result of” the review or application. Consistent with that approach SSAA 107 (which deals with the review of decisions rejecting claims for social security payments) provides “date of effect” rules that operate simply by reference to the result of the review, rather than by characterising the new decision as one made under any particular provision of the SSAA.

45.Against this background, the fact that the defined expression “favourable determination” is used in SSAA s 109, and means a “determination under section 78 or 85” of the SSAA, provokes enquiry as to whether characterisation of a decision as one made under those sections, as distinct from one made in the exercise of the review powers implied by SSAA ss 126 and 135, has any significance in determining the “date of effect” of a particular decision. SSAA s 78 does not itself suggest any such significance. The section refers to the Secretary’s satisfaction and implies some element of reconsideration of an earlier decision. It mandates the Secretary’s obligation to determine a new rate of payment if satisfied that underpayment is occurring or has occurred. To that extent a determination under SSAA s 78 might be regarded as specifying the particular kind of “new decision” that the Secretary is otherwise authorised to make under SSAA s 126(3) and s 135(1)(b)(iii).

46.The close connection between the nature of a “favourable determination” and the Secretary’s review functions is more explicitly suggested in SSAA s 85. The section potentially applies whenever the Secretary “reconsiders” a relevant suspension or cancellation decision and it expressly applies irrespective of whether the reconsideration occurs in the context of a “review” application under SSAA s 129 or a review, on the Secretary’s own initiative under SSAA s 126. Consequently when SSAA s 85(1)(c) requires the Secretary to “determine that the social security payment was or is payable” – if the “reconsideration” satisfies the Secretary of that conclusion – it is explicitly stipulating the nature of the “new” decision that must be made in the exercise of the Secretary’s review powers under SSAA ss 126 and 135.

47.This analysis suggests that in the circumstances contemplated by SSAA ss 78 and 85, the Secretary will have co-extensive obligations both under those provisions and under the review provisions in SSAA s 126 and 135. It suggests that there is unlikely to be any practical way of characterising any particular determination as having been made under the specific provisions in SSAA 78 and 85 rather than under the more general review provisions. And the absence of any practical basis for such a distinction further encourages the impression that the “date of effect” rules in SSAA s 109 are really intended to have a general application to all kinds of review and reconsideration decisions made by the Secretary.

48.This conclusion does not entirely dispose of the apparent difficulty apparently created by the specificity of the obligation imposed on the Secretary by SSAA s 85(1)(c)(i). This point is best made simply by considering the terms of s 85 of the SSAA and paying careful attention to the nature of the obligation that the section imposes on the Secretary

SOCIAL SECURITY (ADMINISTRATION) ACT 1999
- SECT 85
Resumption of payment after cancellation or suspension

(1) If:
(a)      a person's social security payment is cancelled by force of section 93 or 94 or the Secretary cancels or suspends a person's social security payment under section 80, 81 or 82; and
(b)      the Secretary reconsiders the decision; and
(c)      as a result of the reconsideration, the Secretary is satisfied that, because of the decision:

(i) the person did not receive a social security payment that was payable to the person; or
(ii) the person is not receiving a social security payment that is payable to the person;

the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.

(2)     The reconsideration referred to in paragraph (1)(b) may be a reconsideration on an application under section 129 or a reconsideration on the Secretary's own initiative.

49.The expressions to which I have added emphasis show that if the required satisfaction exists then the Secretary has a mandatory statutory obligation to determine that the relevant social security payment was payable to the particular person.  Two things are significant about this obligation.  First, it is not expressed in terms of setting aside or varying the previous suspension or cancellation – though a decision of that kind is presumably implied.  It is an explicit, albeit contingent, command to make the required determination, including a determination that the payment “was payable”.  Second, a determination that a social security payment “was payable” is an inherently retrospective assessment. The statutory obligation to make such a determination arguably implies an intention that a right to payment will arise from the determination.

50.Against this background, the “date of effect” provisions in SSAA s 109 provide an ambiguous justification for confining the retrospective effect of a determination that the Secretary has been required to make under SSAA s 85(1)(c)(i). All that the various provisions in SSAA s 109 appear to do is to stipulate the date when a “favourable determination” takes effect. They do not expressly purport to alter the content of the determination itself. A determination by the Secretary that a benefit was payable, despite a previous suspension or cancellation decision, necessarily relates to a past period. Once that determination becomes effective, it necessarily operates according to its terms. Those terms permit a degree of retrospective operation. The uncertainty is whether the terms of a favourable determination under SSAA s 85(1)(c)(i) can permit a larger retrospective operation than the “date of effect” rules in SSAA s 109 might themselves otherwise permit.

51.The answer to that apparent uncertainty is that the “date of effect” rules in SSAA s 109 apply to provide the conclusive date from which the “favourable determination” is permitted to have any effect. The five alternative rules in SSAA s 109 apply indifferently to any determination under SSAA s 85, irrespective of whether it is a determination that a social security payment “is payable” or a determination that it “was payable” and, as a matter of practical reality, any determination under SSAA s 85 will inevitably include some retrospective component. Moreover the five alternative rules use, as the principal criteria for determining the applicable date of effect, whether the applicant was given notice of the original decision and the timeliness of any review application. The different specific rules, which conditionally permit a “favourable determination” to have a measure of retrospective operation, would provide illusory limitations if a determination under SSAA s 85, once it became effective on the date provided for in SSAA s 109, could then operate for the whole of the period that had elapsed since the relevant suspension or cancellation decision.

52.However, it is necessary to recognise that the “date of effect” rules in SSAA s 109 avowedly only apply to “favourable determinations” under SSAA ss 78 and 85. Those determinations are made by the Secretary. In the present case the Secretary has made no such determination. Mrs Thiagarajan now seeks instead to have the Tribunal make a decision in her favour. This raises the questions whether a decision by the Tribunal would be a “favourable determination” to which SSAA s 109 applied and, if not, whether it would otherwise be subject to a restrictive “date of effect”.

53.Substantially the same question was decided by the Full Federal Court, in relation to the Social Security Act 1947, in Secretary, Department of Social Security v O’Connell (1992) 28 ALD 626 . That case involved the cancellation of family allowance benefits. The cancellation was set aside by the Tribunal and there was a dispute about whether arrears, relating to the period between the cancellation and the review application, were payable. The controversy arose because the review application to the SSAT had been made within three months of the Secretary’s refusal to pay the arrears. However the reconsideration application to the Secretary had been made more than three months after the cancellation decision.

54.This scenario resulted in the Secretary and the social security claimants disputing the application of the “date of effect” provisions in s 168 of the Social Security Act 1947 (SSA). That provision conferred on the Secretary powers, similar to those contained in s 85 of the SSAA, to make a favourable determination to grant or increase a social security payment, notwithstanding a prior adverse decision. However the section stipulated that if a person applied to the Secretary more than three months after the original decision, the Secretary’s favourable decision only took effect when the review application was made. The Secretary contended that the section applied and precluded any payment of the arrears.

55.The Full Federal Court rejected this argument. The Full Court held that the “date of effect” provisions in s 168 of the 1947 Act only applied to decisions made by the Secretary. They did not apply to decisions made by either the SSAT or to decisions made on a review by the AAT. The most directly relevant part of the Full Court’s judgment was the following paragraph (at 28 ALD 635):

Our second reason for thinking (the “date of effect” provisions in s 168(3) of the 1947 Act) inapplicable is that, if, contrary to our view, the decision to pay the arrears was a decision answering one of the descriptions contained within that subsection, it was not one made by the Secretary. It was made by the AAT. Ordinarily, we agree, the AAT stands in the shoes of the primary decision-maker, so that any limitation attaching to the primary decision-maker binds the AAT. But in this case, the AAT stands only indirectly in the primary decision-maker's shoes. The AAT takes the place of the SSAT: see ss 205–215 of the Act and s 43 of the Administrative Appeals Tribunal Act 1975 (Cth). And s 183 provides its own rules as to the date of effect of a SSAT decision. The primary rule is that the decision comes into effect when made: subs (1). In the present cases, that does not invalidate the AAT decision that family allowance was payable in respect of the period between 28 December 1989 and the August applications (i.e. the “arrears” period). It merely means that this decision, once made, had immediate effect, thereby immediately entitling the respondents to payments for that period. Once again we adopt the view of Jenkinson J. At 34 his Honour said: 110 ALR 627 at 638

“What is in my opinion important is to recognise that a decision to set aside a decision to cancel a family allowance has its effect when it comes into operation. It makes legally inoperative the decision which it sets aside when it is made, and once the January decision to cancel the allowance ceased to have legal effect there was revived Mrs O'Connell's legal entitlement to receive payment of family allowance payable on each family allowance pay day falling after the cancellation, until some disentitling event or act in the law should supervene.”

56.Immediately after this passage the Full Federal Court went on to address the Secretary’s further argument that, if the AAT’s review function was properly described as a review of a decision of the SSAT then, the SSAT was itself subject to a “date of effect” limitation where a review application was lodged with it more than three months after the relevant decision. (That limitation was contained in s 183 of the SSA 1947 and is substantially reproduced in SSAA s 152.) The Secretary emphasized that the relevant decision was the original cancellation and that the review application had not been made within that period. The social security claimants, with whom the Full Federal Court agreed, contended that the relevant decision was the Secretary’s later refusal to pay arrears. The Full Court said (at 28 ALD 635-636):

…  The applicants did not seek review of the delegate's decision to cancel the allowance. They sought review of the decisions not to pay arrears. Each of the applications for review was made promptly after the decision to deny arrears, well within the three month period.

Counsel for the applicant acknowledges that this analysis is correct in form. But he argues that the substance of the matter is that the respondents were seeking a review of the cancellation decision, without which there could be no entitlement to arrears. We agree that the applications to review the decisions not to pay arrears inevitably raised the validity of the cancellation decision. But that is not the point.  (The relevant provision – namely s 183(5) of the 1947 Act)  … is designed to avoid a situation where a person has notice of an adverse decision but waits for more than three months before challenging it, and then seeks to backdate the benefit of a successful challenge. No doubt the rationale of the provision is that it is in the interest of good administration for any challenge to be made promptly. This object is achieved if there is a prompt application to review the operative decision, notwithstanding that, in the course of the review, it may be necessary to revisit an earlier decision.

57.The decision in O’Connell, prompted changes to the Social Security Act 1991. New sections 1243A & 1302A were inserted. Section 1243A contained new “date of effect” provisions. These applied specifically to rate reductions and cancellations. They also applied to any review, including review by the SSAT and the AAT: If the review application was made more than 13 weeks after notice of the relevant decision had been given, then setting aside the cancellation decision was expressly declared not to revive the affected person’s entitlement.

58.The amendment made by the section 1243A of the 1991 SSA directly contradicted the central reasoning in O’Connell.  The new provision was considered by the AAT in Katsimanlis and Secretary, Department of Social Security (1994) 36 ALD 759. In that case the Tribunal held that it did not preclude payment or arrears during a period of suspension – because the restrictive provisions of the section were expressly noted not to apply to suspensions. However in Re Secretary, Department of Social Security and Hartmann (1998) 52 ALD 631, the Tribunal, after a careful and informative summary of the history of the legislative changes, held that the section also precluded recovery of suspension arrears where the suspension had been followed by cancellation, and the review application had not been made timeously. (The same conclusion would appear to apply in the present case because SSAA s 118(11) provides that a cancellation after a prior suspension takes effect on the day the suspension occurred.) In Rafiee and Secretary, Department of Family and Community Services (2002) 70 ALD 605, a decision that also dealt with cancellation after non-receipt of posted notices, the Tribunal confirmed that arrears were not payable. This was so, even though the Tribunal was satisfied the cancellation decision was incorrect, unless the applicant sought review within 13 weeks of the date when notice of the cancellation decision was deemed to have been given.

59.Section 1243A of the SSA remained relatively unchanged until its repeal in 1999 and the enactment of the Social Security (Administration) Act 1999. The SSAA 1999 contained new “date of effect” provisions in SSAA ss 107-114 and also s 137. The provisions in SSAA s 137 reflected the substance of the limitations expressed in s 1243A of the SSA. In particular, SSAA s 137(1) & 137(5) provided that a decision of any review authority (such as the SSAT or the AAT) setting aside a prior cancellation neither avoided the cancellation nor automatically revived the original decision to grant the relevant social security payment. In addition SSAA s 137(6) provides that a person is deemed to have applied for review of a decision where review of that decision is “necessary to resolve the issues raised by another review application”. This provision is a further explicit indication that the date of effect limitation imposed by SSAA s 137 cannot be circumvented, in the manner upheld in O’Connell, by characterising the reviewable decision as a refusal to pay arrears, as distinct from the suspension or cancellation decision on which the refusal to pay was ultimately based.

60.The final matter to consider is the effect of the AAT’s own powers in relation to the date of effect of its decision. In the present circumstances the AAT’s review jurisdiction is confined to review of decisions by the SSAT: see SSAA s 179(1) & 181. The AAT’s decision is deemed to be that of the person who made the reviewable decision. The general position is that the Tribunal’s decision has effect “for all purposes” from the date on which the reviewed decision has effect: However, s 43(6) of the AAT Act confers on the Tribunal a general power to “otherwise order” and to determine the date of effect of any decision that it makes on the review.

61.The ultimate parameters of the Tribunal’s power to “otherwise order” are not susceptible to prescriptive definition.  It is a power that may be enlivened by particular circumstances, in the light of their application to the relevant statutory powers, their nature and purpose.  It is implicit in the width of the power to “otherwise order” that it contemplates a measure of retroactive operation of a Tribunal decision.  Just how far that might be permissible, in the light of events that have changed with the passage of time, has been the subject of cautionary comment” see Lesi v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 203 ALR 420 at [39]-[50]; Secretary, Department of Health and Ageing v Marnotta Pty Ltd [2005] FCA 1395 at [30]-[39]. But these complications do not arise in the present case. There is no suggestion of any relevant change in circumstances during the arrears period. Even if there was, the effect of any change is only likely to affect the amount of the parenting payment benefit and a contingency of that kind would not militate against the retrospective operation of the Tribunal decision, if such an order was appropriate to make.

62.But the Tribunal’s power to otherwise order cannot overcome the difficulties presented by SSAA s 137. Those difficulties are two fold. First of all, the express terms of SSAA s 137(1) & 137(5) unequivocally declare the legislative intention that setting aside a cancellation decision, at least if the original decision was validly made, does not result in reviving a past entitlement to payment of arrears. That intention is unequivocally expressed. It carries no suggestion that lack of fault on the part of a social security applicant, at least one who had been given notice of the relevant decision, provides a justification for not applying the “date of effect” rules according to their tenor. Secondly, SSAA s 135(5) precludes a Tribunal decision from operating of its own force to revive the effect of the original decision. Consequently even if the Tribunal came to the conclusion that the cancellation decision should be set aside, and even if it ordered that its own decision setting aside the cancellation should take effect before 11 April 2005, not even that decision would itself revive the effect of the original decision under which Mrs Thiagarajan was granted parenting payment.

63.I have found that Mrs Thiagarajan did not relevantly fail to comply with any requirement. The principal real cause of both the suspension and cancellation decisions was the loss of mail from Mrs Thiagarajan’s Narre Warren address. Anterior causes were significant errors within Centrelink in the administration of Mrs Thiagarajan’s parenting payment application. When those matters are properly taken into account neither the suspension nor the cancellation decision in the present case was the preferable decision in all the circumstances. Nevertheless the Tribunal’s decision, even if was expressed as a decision setting aside the suspension and cancellation decisions, could not take effect so as to confer on her any entitlement to payment of the parenting payment arrears for the period between April 2004 and April 2005. This is because of the unambiguous terms of SSAA s 137(5).

64.In other cases the Tribunal has sometimes proceeded to make a formal decision setting aside a prior cancellation decision, despite being aware that the tardiness of the review application will, because of the “date of effect” rules, deprive the formal decision of practical consequences:  Re Mulhallen and Secretary, Department of Family and Community Services (2001) 65 ALD 579. Views may differ about the desirability of such a course. In some circumstances the explicit alteration of the cancellation or suspension decision may be of use in emphasising the proper approach to be taken on any questions of principle. In the present case, as I pointed out earlier in these reasons, there has been some inaccuracy in identifying which “date of effect” rules apply. But there has not been any significant contest about the factual complaints made by Mrs Thiagarajan, and both the ARO and the SSAT decisions substantially proceeded merely on the basis that there was no power to permit payment of the arrears. In these circumstances I am of the opinion that the preferable course to take is simply to affirm the decision under review.

Decision

65.     The decision under review is affirmed.

I certify that the 65 preceding paragraphs are a true copy of the reasons for the decision herein of  

Signed:         .................[sgd]............................................................
  Associate

Date of Hearing  16 July 2007
Date of Decision  18 December 2007
Appearance for the Applicant        Self-Represented    
Solicitor for the Respondent           Ms G Heggen