Thompson and Secretary, Department of Social Services (Social services second review)

[2016] AATA 661

Thompson and Secretary, Department of Social Services (Social services second review) [2016] AATA 661 (18 July 2016)

Division	GENERAL DIVISION
File Number	2016/0818
Re	Theresa Thompson
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member J F Toohey
Date	18 July 2016
Date of written reasons	31 August 2016
Place	Sydney

The Tribunal affirms the decision under review.

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

Senior Member J F Toohey

CATCHWORDS

SOCIAL SECURITY – age pension – New Zealand superannuation benefit – effect on Australian Age Pension – exchange rate – decision under review affirmed

LEGISLATION

Social Security Act 1991 ss. 43, 55, 1064

Social Security (Administration) Act 1999

Social Security (International Agreements) Act 1999

REASONS FOR DECISION

Senior Member J F Toohey

31 August 2016

1. Ms Theresa Thompson seeks review of a decision that her Age Pension is to be reduced on account of a superannuation benefit she receives from New Zealand.  These written reasons reflect reasons given orally at the conclusion of a hearing on 18 July 2016.

   Background

2. Ms Thompson is an Australian citizen. She has lived and worked in Australia for 40 years.  She is now 76 years old.  She is a member New Zealand superannuation fund from which she is entitled to a superannuation benefit of approximately $5550.00 per year.

3. Up until 1 April 2015, Ms Thompson received a Carer’s Pension. On 2 April 2015, she was transferred to an Age Pension.  The rate of her Age Pension was calculated on the basis that she had an annual income of $5548.96 from her New Zealand superannuation fund and her payment was reduced accordingly.  

4. Ms Thompson does not believe that her New Zealand benefit should be taken into account in calculating her Age Pension, and she believes she is being treated as a “second class citizen”.  She does not wish to receive her New Zealand benefit and objects to Centrelink’s insistence that her Age Pension in Australia will be reduced even if she does not claim her New Zealand benefit.

5. Ms Thompson objects to receiving her New Zealand benefit for two reasons.  Firstly, she says, her income from New Zealand affects the amount of rent she is required to pay in her community housing accommodation.  Secondly, she says, the effect of the exchange rate is that she incurs a loss each fortnight. 

   The law

6. The relevant law is contained in the Social Security Act 1991 (the SS Act), the Social Security (Administration) Act 1999 (the SSA Act), and the Social Security (International Agreements) Act 1999 (the International Agreements Act).

7. The rate of a person’s age pension is worked out according one of two calculators in s 1064 of the SS Act. It is not necessary to describe the details of the calculation here. They are set out correctly in the Secretary’s Statement of Facts and Contentions. In summary, a person’s rate of payment may be reduced if he or she earns income over or has assets over the allowable limits.

8. The International Agreements Act modifies the provisions concerning calculation of an Australian Age Pension and requires that a person’s New Zealand superannuation benefit be taken into account in determining the rate of his or her Age Pension. The details of the calculation are quite complex and it is not necessary to set them out in detail here. Their effect is that a person cannot be better off by drawing a benefit from both countries. The amount of the combined benefit can only be as high as the maximum benefit that a person would receive in the country he or she is residing in.

   Ms Thompson’s Age Pension

9. The effect of the legislation is that Ms Thompson’s New Zealand superannuation benefit must be taken into account of determining the rate of her Age Pension.  The Tribunal has no discretion to change the calculation of her Age Pension.

10. Ms Thompson feels aggrieved that Centrelink has required her to claim her New Zealand superannuation benefit and that she was told that it would be taken into account even if she did not claim it.  She says she is now forced to pay higher rent in her community housing accommodation because of her New Zealand superannuation benefit even though she receives no more in total than if she were receiving the Australian Age Pension alone. 

11. It is not clear to me why Ms Thompson’s rent would be higher than any other age pensioner in the same accommodation.  However, if those are the community housing rules, the Tribunal has no power to change them.  Even if Ms Thompson is disadvantaged in this way, her superannuation benefit is still payable to her; it is her property and must be taken into account in determining the rate of her Age Pension.   Even if she decides not to accept it, it remains her entitlement and her property and must be taken into account.

12. Ms Thompson says she is also disadvantaged because she loses some money each fortnight when her New Zealand benefit is converted for the purposes of her Australian pension.  It appears that she may lose $5 - $6 each fortnight at current exchange rates.  Over a year, that adds up.  However, the legislation does not provide for an adjustment on account of the exchange rate and the Tribunal has no power the make that adjustment.  The most that can be said is that there may be times when it works in Ms Thompson’s favour.

    Conclusion

13. For these reasons, I am satisfied that Ms Thompson is being paid the Age Pension at the correct rate.  It may be in her interest to inquire again with her community housing association to be quite sure that she is not being inadvertently disadvantaged by her current housing arrangement.

14. I affirm the decision under review.

I certify that the preceding 14 (fourteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey

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

Associate

Dated 31 August 2016

Date of hearing	18 July 2016
Applicant	In person
Solicitors for the Respondent	Ms A Fletcher, Department of Human Services