Thomas Sonter and Secretary, Department of Social Services
[2013] AATA 839
[2013] AATA 839
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/0160
Re
Thomas Sonter
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mr Dean Letcher, QC, Senior Member Date 27 November 2013 Place Sydney The Tribunal sets aside the decision under review. The time for lodgement of Mr Sonter’s application for Pension Bonus should be extended to 28 June 2012, and he should be granted the payment applicable to the maximum period of five years of work after he was otherwise entitled to the Age Pension.
...................[sgd].....................................................
Mr Dean Letcher, QC, Senior Member
CATCHWORDS
SOCIAL SECURITY – pensions – age pension – pension bonus scheme – time for making a claim – whether special circumstances exist to extend time to make a claim – decision set aside
LEGISLATION
Social Security Act 1991 Pt 2.2A
Social Security (Administration) Act 1999 s 21
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; (2007) 100 ALD 9
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; (2007) 94 ALD 693
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) 2 ALD 634Re Melzer and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 68
SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
Mr Dean Letcher, QC, Senior Member
27 November 2013
Part 2.2A of the Social Security Act 1991 established the Pension Bonus Scheme where if a person who is otherwise entitled to an Age Pension chooses not to claim the pension but to work on for up to five years he or she receives a bonus lump sum. The person must register for the scheme initially, satisfy a “work test” and then claim both the pension and the bonus within 13 weeks of ceasing work. However, if the person satisfies all the other requirements of the scheme but fails to claim within the time stipulated, s 21(2) of the Social Security (Administration) Act 1999 provides that the Secretary of the Department “may in special circumstances allow a person a longer period to make a claim” (my emphasis).
LEGISLATIVE BACKGROUND
The Social Security (Administration) Act 1999 reads:
21 General rule
(1)A claim for pension bonus must be made within the lodgment period fixed by this Subdivision.
(2)However, the Secretary may in special circumstances allow a person a longer period to make a claim than the period fixed by this Subdivision. If the Secretary does so, the lodgment period for the person’s claim is the period allowed by the Secretary.
…
Neither the Social Security Act nor the Social Security (Administration) Act define “special circumstances”. The Department’s Guide to Social Security Law sets out its policy view in relation to late Pension Bonus claims. In 3.4.7.80 there appears:
Reasons to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided where applicable/appropriate.
The reasons for acceptance of a late claim are different to those that apply to late PBS registrations.
Examples my include cases where a member:
·has poor numeracy or literary skills,
·was ill,
·was located in a remote area,
·performed irregular work that made it difficult for the member to determine the lodgement period,
·was helping a close family member suffering from a serious illness,
·has experienced the death of a close family member,
·had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member’s partner moved into a nursing home),
·was unaware that post 20 September 2009 they could no longer be a non-accruing member while their younger partner was working…
The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).
The Tribunal stands in the shoes of the Secretary in deciding upon the correct or preferable decision and will normally apply the departmental policy unless there are cogent reasons not to do so and one of those reasons might be that to apply the apparent policy produces an unjust result (Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645). I note that the policy statement sets out “examples” rather than an exhaustive list of reasons and it is careful to enjoin decision makers to judge each case on its merits.
“Special circumstances” is a phrase found in several areas of the Social Security Act. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal said:
An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional… it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases…
The Federal Court’s Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; (2007) 100 ALD 9 continued this somewhat undemanding view when he said:
… the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word “exceptional” is emphasised. It was not the intention of parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.
Besanko J also noted that “… close attention must be given to the statutory context” which is an aspect also deemed important by Deputy President Forgie of the Tribunal in Re Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; (2207) 94 ALD 693 where she was considering whether there were special circumstances in the context of recovery of overpaid benefit and she said:
That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system.
FACTUAL BACKGROUND
Mr Sonter was born in 1931. He left his country high school at age 16 and worked as a formwork carpenter until 12 September 2005 when he was almost 74 years old. He reached pension age of 65 in 1996 and worked on. On 30 September 1998 he registered for the Pension Bonus Scheme and worked on. He did not choose to cease work but he was retrenched after illness in 2005. His employer had ceased local operations and moved back to Queensland. Mr Sonter was then unable to find employment. He persisted in efforts to find work at the trade in which he had long experience but was not successful. He kept trying for another six years. Although he owned a home unit in Canberra he lived there only when on holidays or when work was slack and he would spend a few weeks there. For the most part, he lived with his sister at Erskine Park and assisted with the care of her husband who had a disabling stroke in about 1994. Mr Sonter gave help in this way until his brother-in-law died and thereafter assisted his sister who suffered a very prolonged grieving. She did not seek treatment but was seriously affected and required a great deal of his time and care. During the time from September 2005 until 2012, although aged 73 to 80, Mr Sonter did not apply for any government assistance. He supported himself from his savings (some $170,000). Only when those savings were gone on 28 June 2012 did Mr Sonter apply for the age pension and his pension bonus. He had ceased to meet the Scheme “work test” on or about 12 September 2005.
From June 2000 to June 2012 Centrelink sent annual form letters which I find the applicant received at his address although he does not recall them. Each of those letters was headed “ANNUAL REMINDER NOTICE – PENSION BONUS SCHEME” or “PENSION BONUS SCHEME” and commenced: “[t]his letter is just to let you know that you are still registered as a member of the Pension Bonus Scheme… Even if you are not yet ready to claim Age Pension, you might find it helpful to confirm at the end of each working year that you are still “on track” with this Scheme. If you would like to do this, please phone us … When you are ready to claim Age Pension you will need to claim the bonus at the same time. Please remember that you’ll need to lodge your bonus claim within 13 weeks of ceasing work, or within 13 weeks from the date you no longer meet the work test…”.
DISCUSSION
Centrelink refused the claim because it was made outside the 13 week period after the Applicant ceased gainful work – and indeed the claim was made more than six and a half years late. The fault in Mr Sonter’s case was that he did not grasp that (as the Social Security Appeals Tribunal said in para 14 of its decision): “The pension bonus scheme … is complex”. Exactly why it should be so, when it is designed for people of advanced years in the socio-economic group eligible for the pension, is not clear. It contains provisions apparently to discourage “members who deliberately claim late … to get a higher bonus” as the Guide to Social Security Law states. The Guide does not analyse this statement nor offer proof of this motivation. I am satisfied that Mr Sonter did not claim late to make a profit. As pensions generally increase only in line with inflation, this seems to make wilful delay a futile exercise.
Had Mr Sonter ceased work at age 65 he would have been entitled to age pension from 1996 to the date he actually claimed, namely 28 June 2012. That is some 15.5 years that the government did not have to pay a pension. Alternatively, had he claimed pension when he ceased work on 12 September 2005 he would have been entitled to some 6.75 years of it at about $500 per fortnight (at least) to his actual date of claim. By his delay in claiming age pension he lost irretrievably any right to something over $87,000 which he could have rightfully received. I note that when he did receive the age pension in 2012 it was $695.30 pension plus $60.20 pension supplement per fortnight.
When his bonus claim was refused, the Applicant wrote to Centrelink (T30-175) saying:
Its baffling to learn that someone continuing the spirit of the Pension Bonus Scheme (like I have) ie continuing working long after the stated five years, and then still trying to find work for almost seven years after my last successful job, can be denied the payment which I obviously well and truly earnt …
… I thought my five years would be written in stone and my payment likewise. When I worked another 2¼ years more I thought I would be highly commended for doing so.
Then it was shattering to read the Centrelink letter saying I wouldn’t be paid anything or given the accolades I thought I deserved…
The Respondent’s view is that the Applicant did not read carefully enough, or at all, the Centrelink letters he received after he ceased work. Those letters commence in a friendly tone “just to let you know you are still registered” and apparently still “on track” with the Scheme, even though he was “not yet ready to claim”. It is true that further on there is the reminder about a time for claiming, but the letter refers to it as some indefinite time in the future. Perhaps a better educated, younger, more sophisticated person would have read the letters more closely.
The Department might properly have concerns for:
(a)the desirability of orderly administration of the Scheme with applications being made soon after a government liability arises;
(b)applications being made late to increase the amount of bonus; and
(c)applications being made late to make it difficult to determine whether the work criteria had been met.
However, in Mr Sonter’s case:
(a)the government made a substantial net saving by his delay;
(b)I do not believe he had any ulterior motive for his late claim;
(c)there was no doubt about the facts of his employment;
(d)by his delay Mr Sonter lost a substantial benefit of pension to which he was entitled, and also lost irretrievably the $170,000 of his own savings he paid out to support himself;
(e)Mr Sonter was a 73 year old manual worker who left school after the Intermediate (School Certificate) year and now failed to comply with complex provisions of the Scheme where the reasons for the complexity are not easily discernible; and
(f)Mr Sonter was more concerned with his attempts to find work and his assistance to his brother-in-law and sister than he was concerned with his legal rights and very substantial financial benefit to himself.
The categories of “special circumstances” are not closed and each case is to be assessed on the particular array of facts relevant. I was not referred to it in submissions but in the recent case of Re Melzer and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 68 Senior Member Bell of the Tribunal found special circumstances where a claimant for Pension Bonus had delayed more than seven years after ceasing to meet the work test. Ms Melzer reduced her hours of work to assist her daughter suffering post-natal depression exacerbated by the death of a step-daughter. Then the applicant’s other daughter was diagnosed with terminal cancer and Ms Melzer again reduced her hours to care for her. After that daughter died, the applicant was depressed. During the period she did not meet the work test, she supported herself using a $60,000 inheritance and $25,000 of her superannuation. The applicant recalled receiving the letters from Centrelink that said she should “stay on track”, and contained the same information as in the letters to Mr Sonter. Senior Member Bell agreed with the applicant that the letters did not explain what being “on track” meant, and that her failure to take up the invitation to contact Centrelink was understandable in her particular circumstances. Senior Member Bell found that Ms Melzer had not sought to delay her claim to maximise the amount she might receive, that her family situation was a cause of her inattention to her interests and that the vagueness of the Centrelink letters did not assist her awareness of the steps she needed to take. She found that the work test failure was due completely, and the failure to claim was due in part, to her special circumstances. Notwithstanding the long delay, Senior Member Bell exercised the discretion in s 21(2) in the applicant’s favour.
I am assisted in Mr Sonter’s case by the reasoning of Senior Member Bell. The requirements for care of his close family were not as onerous as Ms Melzer, but they were a factor. Mr Sonter acted very much more to his own detriment in spending some $170,000 of his modest savings rather than claiming pension. I think that pride may have been a factor in his stubborn insistence on trying to regain employment. I found the Centrelink letters to be not particularly helpful and certainly not conveying any sense that the bonus could be jeopardised by inattention.
FINDINGS AND CONCLUSIONS
I find that the Applicant was duly registered pursuant to the Pension Bonus Scheme and that he satisfied the work test to entitle him to the bonus for five years of work after he was otherwise entitled to claim the age pension. He did not claim the bonus within the time prescribed by the Act, but otherwise satisfied all the other requirements entitling him to payment of the bonus. I find that he did not do so but that he falls within the provisions of s 21(2) of the Act, and that special circumstances exist in his particular case so that the discretion to allow his claim lodged on 28 June 2012 should be exercised in his favour. The special circumstances include the support of himself for a prolonged period by depletion of his savings, the consequent saving to the government of a substantial amount of pension payments, the requirement for care of his immediate family members and his inadequate understanding of the requirements of the scheme. I find that the Applicant at all times acted in good faith and without a motivation to gain benefit by delay in making his claim.
DECISION
The Tribunal sets aside the decision under review. The time for lodgement of Mr Sonter’s application for Pension Bonus should be extended to 28 June 2012, and he should be granted the payment applicable to the maximum period of five years of work after he was otherwise entitled to the Age Pension.
I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Mr Dean Letcher, QC, Senior Member .................[sgd].......................................................
Associate
Dated 27 November 2013
Date of hearing 5 July 2013 Date final submissions received 11 July 2013 Applicant In person Advocate for the Respondent Ms S Mantaring, Department of Human Services
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