Tselios and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 1112

Administrative Appeals Tribunal

DECISION AND WRITTEN REASONS FOR ORAL DECISION [2008] AATA 1112

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/2542

GENERAL ADMINISTRATIVE DIVISION		)
Re		VASSILIOS TSELIOS

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal   Mrs Josephine Kelly, Senior Member

Date of decision                21 November 2008

Date of written reasons   12 December 2008

Place  Sydney

Decision The reviewable decision is affirmed.

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

Senior Member
  Mrs Josephine Kelly

CATCHWORDS

SOCIAL SECURITY – Pension Bonus Scheme – Two claims  – First claim refused as age pension not payable at time of claim – Second claim - Whether qualified for pension bonus at time of claim or 13 weeks thereafter – Held entitlement contingent on age pension being payable at time of claim – Held membership cancelled after first claim determined – Not qualified to claim pension bonus again - Decision affirmed

Administrative Appeals Tribunal 1975, s 43(2A)

Social Security Act 1991, ss 43, 92C, 92L, 92N, 92P

Social Security (Administration) Act 1999, ss 17, 22, 23, 25, Schedule 2

Guide to Social Security Law

WRITTEN REASONS FOR ORAL DECISION

12 December 2008 Mrs Josephine Kelly, Senior Member      

INTRODUCTION

1. At the conclusion of the hearing of this matter in Gosford the terms of the decision, and a summary of my reasons for decision, were stated orally. The Applicant requested written reasons for my decision, under s 43(2A) of the Administrative Appeals Tribunal Act 1975, which I now provide.

2.      Mr Vassilios Tselios claimed age pension and pension bonus under the Pension Bonus Scheme (PBS), in July 2004. Both claims were rejected by Centrelink because Mr Tselios failed the assets test. In July 2007 Mr Tselios made a second claim for age pension and pension bonus. He was granted age pension at a reduced rate. However, his pension bonus claim was rejected on 7 August 2007. A Centrelink Authorised Review Officer (ARO) affirmed that decision on 11 March 2008. On 27 May 2008, the Social Security Appeals Tribunal (SSAT) affirmed the ARO’s decision. Mr Tselios seeks review in this Tribunal.

ISSUE

3.      The issue is whether Mr Tselios qualified for the pension bonus under the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act) on 12 July 2007 or a period of 13 weeks thereafter.

MR TSELIOS’ CASE

4.      Mr Tselios represented himself at the hearing. He told me that he was led to believe that he would be eligible to receive the pension bonus. Before he retired, someone, who was either from his employer or from Centrelink, came to his workplace and provided information about the PBS. He said that his employer encouraged him to stay on at work because there was a shortage of bus drivers. He worked hard after retirement age with the expectation that he would receive some money under the PBS for his efforts. He felt he gave five years of his life to his employer for nothing. He did not need to stay on at work and could have spent more time with his family. He said the PBS was complex and not properly explained to him.

FACTS

5.      The facts are not disputed. Mr Vassilios Tselios was born on 6 November 1936 and is now 72 years old.   He started working as a Senior Bus Operator for the State Transit Authority on 22 June 1987. He ceased working there on 30 June 2004, at the age of 67. He was entitled to resign from employment with the State Transit Authority when he turned 61, but chose to stay on.

6.      On 6 November 2001, Mr Tselios turned 65, the age pension qualifying age.

7.      On 22 September 2003, Mr Tselios registered for the PBS.  His registration was accepted and backdated to 6 November 2001.

8.      On 14 July 2004 Mr Tselios claimed the age pension and the pension bonus.

9.      On 20 July 2004, his age pension was rejected because the value of his assets exceeded the allowable limit for payment of age pension. His pension bonus claim was rejected because the rate of his age pension was nil.

10.     Mr Tselios did not work between 1 July 2004 and 6 September 2004.  On 7 September 2004 he commenced work as a courtesy bus driver for the Woy Woy and District Rugby League Football Club Ltd.  He worked casually and an average of 18 hours per week. He ceased working there on 1 January 2006 when he was 69 and has not worked since.

11.     On 12 July 2007 Mr Tselios again claimed age pension and the pension bonus. As the assets test threshold had been altered, this time he was granted age pension, although at a reduced rate.

12.     However, his claim for pension bonus was rejected on 7 August 2007. The original decision-maker found he had not lodged his PBS claim within 13 weeks of when he last ceased work on 1 January 2006.

13.     On 11 March 2008 a Centrelink ARO affirmed the decision, but for a different reason. The ARO determined that, because Mr Tselios’ first claim for age pension was rejected in July 2004, he could not be paid pension bonus at any future time.

LAW AND POLICY

14.     The pension bonus scheme is a voluntary scheme intended to reward people who defer claiming age pension and stay in the workforce.

15. The requirements for qualification for pension bonus are detailed in section 92C of the Act. Subsections 92C(a)(i) and (d) of the Act provide:

92C.  A person is qualified for a pension bonus if:

(a)      both:

(i)        the person starts to receive an age pension at or after the time when the person makes a claim for the pension bonus; and

…  

(d)      the person has accrued at least one full-year bonus period while registered as a member of the pension bonus scheme

…

16. The qualification for age pension is set out in s 43 of the Act, which provides that a person is qualified for age pension if they have reached pension age, among other things.

17. A claim for pension bonus must be made when a person claims age pension and is contingent on the person receiving an age pension. Section 17 of the Administration Act provides:

17  Special requirements regarding claims for pension bonus

(1)A claim for pension bonus must be:

(a)  attached to a proper claim made by the person for age pension and lodged together with that claim for age pension; or

…

(2)A claim for pension bonus may be made even though it is not certain whether the person will start to receive an age pension at or after the time when the person makes the claim. The claim has effect as a claim that is contingent on the person receiving an age pension.

…

18. Part 2.2A of the Act deals with Pension Bonus. Division 4 of that Part specifies the manner in which bonus periods can be accrued. Bonus periods may be full year or part year. Importantly, bonus periods can only be accrued if they are consecutive, or separated only by a period of non accruing membership.

19. The terms "accruing membership" and "non-accruing members" are defined in ss 92N, 92P and 92Q. Section 92L of the Act provides that membership of the PBS is cancelled if a person’s claim for pension bonus is determined:

92L  Cancellation of membership

A person’s membership of the pension bonus scheme is cancelled if:

(a)  the person’s claim for pension bonus is determined; or

…

20. Sections 22, 23 and 25 of the Administration Act stipulate time limits within which a person may lodge a claim for pension bonus, usually 13 weeks immediately following the end of the person’s last bonus period.

21.     The Guide to Social Security Law (the Guide) contains policy guidelines about the operation of the PBS. Part 3.4.7.80, which is headed “Claiming the PBS Bonus,” states:

Summary

The bonus can be claimed only after the member completes the first full bonus year. The bonus is NOT payable without a claim. The claim for a pension bonus must be lodged together with the claim for Age.

…

When MUST the bonus be claimed?

A member of the scheme MUST claim the pension bonus if they:

·     lodge a claim for Age, OR

·     fail to accrue a bonus period - that is, they fail the work test, AND

·     are NOT a non-accruing member of the scheme.

A member who accrues some bonus periods and then fails to accrue a full year bonus period without claiming, can never be paid a pension bonus.

Explanation: Bonus periods must be consecutive, so a member of the scheme must claim their bonus as soon as they fail to accrue a full year bonus period. This may not be the case if they have a partner who is continuing to accrue a bonus.

A person who claims Age and PBS and whose claim for Age is rejected cannot receive a bonus EVER unless they become qualified for Age within 13 weeks of failing the PBS work test or within 13 weeks of the end of a non-accruing period.

…

CONSIDERATION

22. It was not disputed, and I accept, that Mr Tselios had correctly registered for the PBS with effect from 6 November 2001. Further, it was not in dispute that he has worked more than one full year following his registration as an accruing member of the PBS, and that he met the work test as to hours of work performed under s 92T of the Act. It is not contentious that Mr Tselios qualified for age pension when he turned 65 (s 43 of the Act).

23. Mr Tselios claimed the pension bonus and age pension on 14 July 2004. His claim for age pension was rejected on 20 July 2004 because he did not meet the assets test. Therefore, Mr Tselios did not start to receive the age pension at the time of claiming his pension bonus. Section 17 of the Administration Act states that the claim for pension bonus “has effect as a claim that is contingent on the person receiving an age pension” and s 92C(a)(i) of the Act also requires that the person starts to receive the age pension at or after the time when the person makes a claim for the pension bonus. Further, Mr Tselios did not qualify for the age pension (or the pension bonus) within the period of thirteen weeks of making his claim (Schedule 2, s 4 (1) of the Administration Act). It follows that he did not qualify for the PBS and the decision to reject his pension bonus claim in 2004 was correct.

24. Mr Tselios again claimed age pension and pension bonus on 12 July 2007, having ceased work as a courtesy driver 18 months before. As set out above, he received a part age pension but his application for the pension bonus was rejected. I note the reasons given by the primary decision-maker, the ARO and the SSAT. It seems to me the reason why Mr Tselios could not qualify for the pension bonus in 2007 lies in s 92L(a) of the Act, which provides that a person's membership of the pension bonus scheme is cancelled if the person's claim for pension bonus is determined. That occurred in 2004. Thereafter, Mr Tselios could never qualify for the pension bonus. This is consistent with Part 3.4.7.80 of the Guide.

25.     While Mr Tselios has been unsuccessful, I do sympathise with his position. The PBS is complex and technical. In my opinion many well-intentioned pensioners who continue to work in good faith long after retirement age, with the expectation they will receive a bonus under the PBS, are disappointed, because they have failed to satisfy one of the many technical requirements of the legislation.

DECISION

26.     For the reasons stated above, the reviewable decision is affirmed.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member.

Signed: ………[sgd]..…….

Steven Mulipola, Associate

Date of hearing:  21 November 2008

Date of oral decision:  21 November 2008

Date of written reasons:                 12 December 2008

Representative for the Applicant:  Self-represented

Solicitors for the Respondent:      Centrelink Legal Services and Procurement