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

[2015] AATA 804

Vanderwerf; Secretary, Department of Social Services and (Social services second review) [2015] AATA 804 (16 October 2015)

Division	GENERAL DIVISION
File Number	2015/1975
Re	Secretary, Department of Social Services
APPLICANT
And	Willem Vanderwerf
RESPONDENT

DECISION

Tribunal	Deputy President K Bean
Date	16 October 2015
Place	Adelaide

The Tribunal:

1.    Varies the reviewable decision of the Social Security Appeals Tribunal so as to provide that:

(a) the work undertaken by Mr Vanderwerf in constructing a deck at his home between November 2009 and February 2010 does not satisfy s 92X of the Social Security Act 1991 (the Act);

(b) the work undertaken by Mr Vanderwerf in constructing a deck at his home between November 2009 and February 2010 should be treated as ‘gainful work’ for the purposes of Part 2.2A, pursuant to the discretion conferred by s 92Y of the Act; and

(c)    Mr Vanderwerf accordingly meets the qualification requirements for payment of pension bonus; and

2.    Remits the matter to the applicant for determination and calculation of the amount of pension bonus payable to Mr Vanderwerf as a consequence of this Decision.

.......... [Sgd] ........................................

Deputy President K Bean

CATCHWORDS

SOCIAL SECURITY – Pension bonus scheme – First full-year bonus period – Whether construction of deck by respondent on his own property 'gainful work' – Whether for financial gain or reward – Whether similar task to household maintenance or domestic tasks – Discretion to treat activity as gainful work – Special circumstances – Decision under review varied.

LEGISLATION

Social Security Act 1991, ss 92C, 92T, 92U, 92X, 92Y, 93A, 93C

CASES

Re Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224

Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277

Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281

SECONDARY MATERIALS

Department of Social Services, Guide to Social Security Law (Version 1.215, released 21 September 2015)

REASONS FOR DECISION

Deputy President K Bean

16 October 2015

1. The respondent, Mr Vanderwerf, is a member of the pension bonus scheme (PBS). On 2 June 2014, he lodged a claim for age pension and a pension bonus payment. However, on 30 June 2014, Mr Vanderwerf’s claim for pension bonus was rejected on the basis that he had not met the applicable ‘work test’ in the first year that he was registered for the PBS, and therefore did not qualify for payment of a pension bonus.

2. The decision to reject Mr Vanderwerf’s claim was affirmed upon review by a Centrelink Authorised Review Officer. However, on 17 March 2015, the Social Security Appeals Tribunal (SSAT) set aside Centrelink’s decision and substituted a decision that Mr Vanderwerf met the requirements for payment of a pension bonus. In reaching that decision, the SSAT determined that certain work Mr Vanderwerf did constructing a deck for his home could be considered ‘gainful work’ within the meaning of the Social Security Act 1991 (the Act) and that, by reference to that work, Mr Vanderwerf satisfied the work test and met the requirements for payment of a pension bonus.

3. On 27 April 2015, the applicant, the Secretary of the Department of Social Services (the Secretary), sought review of the SSAT’s decision, giving rise to these proceedings.

4. Before identifying the issues and outlining the evidence and the parties’ contentions, I will first set out the applicable legislative provisions.

   LEGISLATIVE FRAMEWORK

5. Section 92C of the Act relevantly provides:

   Qualification for pension bonus

   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

   (ii)that age pension is received otherwise than because of a scheduled international social security agreement (see section 5 of the Social Security (International Agreements) Act 1999); and

   (b) the person has not received an age pension at any time before making a claim for the pension bonus; and

   (c)    the person is registered as a member of the pension bonus scheme; and

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

   ….

6. Section 92T relevantly provides in respect of pension bonus periods:

   Accrual of bonus periods

   Full-year bonus period

   (1) The first bonus period that accrues to a person is the full-year period of the person's accruing membership of the pension bonus scheme:

   (a)   that began on whichever of the following dates is applicable:

   (i) If the person was an accruing member of the pension bonus scheme on the date the person's registration as a member took effect—the date the registration took effect;

   (ii) in any other case—the date on which the person first became an accruing member of the pension bonus scheme; and

   (b)   for which the person passes the work test.

   Note: Accruing membership is defined by section 92N.

   (2)   Each succeeding full-year period of the person's accruing membership of the pension bonus scheme:

   (a)   that is specified in the person's claim for pension bonus; and

   (b)   for which the person passes the work test;

   is a bonus period that accrues to the person.

7. Section 92U relevantly provides:

   Work test – full-year period

   For the purposes of this Part, a person passes the work test for a full-year period of the person's accruing membership of the pension bonus scheme if:

   (a)in any case—the person satisfies the Secretary that the total number of hours gainfully worked by the person during that period was at least 960 and that at least 640 of that total number of hours were worked in Australia; or

   ...

   and either:

   (d) the person satisfies the Secretary that the applicable record-keeping requirements (see section 93C) have been complied with in relation to that period; or

   (e)the Secretary decides to waive compliance with the applicable record-keeping requirements in relation to that period.

8. The meaning of ‘gainful work’ is relevantly described in section 92X as follows:

   Gainful work – basic rule

   (1) For the purposes of this Part, gainful work is work for financial gain or reward, whether as an employee, a self-employed person or otherwise, where:

   (a) the work involves a substantial degree of personal exertion on the part of the person concerned; and

   (b)   the work is carried on within or outside Australia.

9. However, the Secretary (and the Tribunal, standing in the Secretary’s shoes) has a discretion to treat an activity as ‘gainful work’ for the purposes of the Act. Section 92Y provides:

   Secretary's discretion to treat activity as gainful work

   (1)    If a person satisfies the Secretary that:

   (a)   the person, or the person's partner, has engaged in a particular activity; and

   (b) the activity involves a substantial degree of personal exertion on the part of the person or the person's partner, as the case may be; and

   (c) the activity does not consist of voluntary work for a charitable, welfare or community organisation; and

   (d) because of special circumstances, the activity should be treated as gainful work;

   the Secretary may determine that this Part has effect as if the activity were gainful work.

   (2)    The determination has effect accordingly.

10. Section 93A of the Act also provides (emphasis added):

    Domestic duties in relation to a person's place of residence do not count as gainful work

    (1) Unless the Secretary otherwise determines, work undertaken by a person is taken not to be gainful work for the purposes of this Part if the work consists of carrying out:

    (a)   domestic tasks; or

    (b)   household maintenance tasks; or

    (c)   gardening tasks; or

    (d)    similar tasks;

    in relation to:

    (e)   the person's place of residence; or

    (f) if the person has 2 or more places of residence—any of those places of residence.

    (2)    For the purposes of this section, a place of residence includes:

    (a) if the place is a dwelling-house—any land or building that is adjacent to the dwelling-house and that is used primarily for private or domestic purposes in association with that dwelling-house; or

    (b) if the place is a flat or home unit—a garage or storeroom that is used for private or domestic purposes in association with the flat or home unit.

11. Finally, with respect to the ‘record-keeping requirements’ referred to in s 92U, s 93C relevantly provides:

    Record-keeping requirements

    Record-keeping requirements for person

    (1) For the purposes of the application of paragraph 92U(a) or 92V(1)(a) or subsection 93B(1) or (3) to a person, the applicable record-keeping requirements have been complied with in relation to a period of the person’s accruing membership of the pension bonus scheme if:

    (a)   in a case where the person has:

    (i) been given a group certificate or payment summary (within the meaning of section 16-170 in Schedule 1 to the Taxation Administration Act 1953) in respect of any gainful work carried on by the person during that period; or

    (ii) lodged an income tax return that relates to any gainful work carried on by the person during that period;

    the person would be in a position to produce a copy of the certificate or of the return, as the case may be, to the Secretary if the Secretary were to require the person to produce that copy; and

    (b)   both:

    (i) the person has kept a recognised work record (see subsection (3)) in relation to gainful work carried on by the person during that period; and

    (ii) the person would be in a position to produce that record to the Secretary if the Secretary were to require the person to produce that record.

    ...

    Recognised work record

    (3) For the purposes of this section, a recognised work record, in relation to a person, is a written statement signed by the person that sets out, in relation to gainful work carried on by the person during a particular period:

    (a)   the nature of the gainful work; and

    (b)   the dates on which the gainful work was carried on; and

    (c)   the total number of hours gainfully worked; and

    (d)    the total number of hours gainfully worked in Australia; and

    (e) in a case where any of the gainful work was carried on in the capacity of employee—the name or names of the employer or employers concerned; and

    (f)     such other particulars as the Secretary requires.

12. It will be apparent that the combined effect of these provisions is that in order to qualify for a pension bonus, during their first year of registration a person must have undertaken at least 960 hours of work which either meets the definition of ‘gainful work’ in s 92X, or which can be treated as gainful work pursuant to the discretion conferred by s 92Y. Mr Vanderwerf’s first year of registration was from 22 July 2009 to 21 July 2010, therefore he must meet that test for that period.

    ISSUES

13. It follows that the issues for my determination include:

    (a)With respect to the relevant period, has Mr Vanderwerf met the record-keeping requirements imposed by s 93C?

    (b)Was the work Mr Vanderwerf undertook on his deck during that period ‘gainful work’ within the meaning of s 92X?

    (c)Is that work caught by s 93A?; and

    (d)If it was not ‘gainful work’ within the meaning of ss 92X and 93A, should the Tribunal exercise the discretion conferred by s 92Y to treat the work Mr Vanderwerf undertook on his deck as ‘gainful work’ for the purposes of assessing his entitlement to a pension bonus?

14. Before addressing these issues more directly, I will outline the most salient aspects of Mr Vanderwerf’s evidence, and the parties’ contentions.

    MR VANDERWERF’S EVIDENCE

15. In his oral evidence, Mr Vanderwerf explained the circumstances which led him to construct the deck on his property. He said that prior to becoming a registered member of the PBS, he was working as an engineer for Mitsubishi in Adelaide. When Mitsubishi closed, he moved to Melbourne where he worked for Ford and then Iveco Trucks. However, due to family pressures, he decided to return to Adelaide in September 2009, but unfortunately was unable to obtain employment in Adelaide “straight away”. Mr Vanderwerf explained that his wife did not move to Melbourne with him when he went, as she had a number of family responsibilities, including caring for her elderly parents. While he was living in Melbourne, Mr Vanderwerf travelled home every second weekend. However, he and his wife ultimately decided this situation was untenable and so he gave up his job in Melbourne and returned home to Adelaide.

16. Mr Vanderwerf gave evidence that upon returning to Adelaide he applied for “numerous jobs” and was ultimately offered, and accepted, a job as a bus driver. However, on the last day of his training, he was offered a position at a company which manufactures automotive components, and he started working there on 21 June 2010.

17. With respect to the construction of the deck, Mr Vanderwerf explained that, despite having set aside the necessary funds, he and his wife had decided not to engage a builder in 2009 because there were “rumours” that Mr Vanderwerf’s contract in Melbourne would be finishing soon, and he noted that this in fact transpired. Accordingly, Mr Vanderwerf undertook that job himself from November 2009 to February 2010, after he had returned to Adelaide and before he took the job as a bus driver.[1] He calculated, by reference to contemporaneous calendar entries made by his wife, that he had spent approximately 350 hours (give or take 20 hours) doing the necessary work on the extension to their property.

    [1]     Exhibit 3.

18. Mr Vanderwerf noted that by doing the job himself, he saved approximately $8,000, which effectively became his wages for that period of time, as that money “paid for weekly expenses”. Further, he also developed a certain amount of expertise in repairing decking, which prompted offers of work from others. For example, he repaired the roof of his accountant’s patio, and was also engaged to repair the deck at his tennis club.[2]

    [2]     Exhibit 4.

19. Mr Vanderwerf also confirmed during his evidence that he deliberately did not claim age pension when he returned to Adelaide, as he was aware that if he did this he would no longer be eligible to receive a pension bonus payment in the future.

    PARTIES’ CONTENTIONS

    Secretary’s contentions

20. The Secretary contends that the construction of the deck does not constitute ‘gainful work’ within the meaning of s 92X of the Act because Mr Vanderwerf was not an employee or self-employed, and because there was no immediate financial gain. In particular, the Secretary relies on the Tribunal’s decision in Re Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224, in which Senior Member Fice said:

    ... the expression gainful work in the context of the Act means work which involves a substantial degree of personal exertion on the part of the person concerned which results in that person receiving money or some other form of payment for that work.[3] (emphasis added)

    In that case, the following work undertaken by Mr Polchow was found not to be ‘gainful work’:

    (a) lawn mowing and gardening related to the two level dwelling which was let to tenants;

    (b) work Mr Polchow conducted as an artisan, which included repair and restoration of furniture, carpentry work and the relaying of carpet and vinyl;

    (c) inspecting damaged premises the subject of insurance claims and providing quotations to the insurer;

    (d)improvement works on the rental property, including constructing a second flat on the ground level of the rental dwelling; and

    (e) substantial construction of retaining walls, car parking space and water tank for the rental property.[4]

    [3] At [27].

    [4] At [31].

21. The Secretary further contends that the work undertaken by Mr Vanderwerf is captured by subs 93A(1)(d) of the Act, because a household renovation is a ‘similar task’ to household maintenance or domestic tasks.

22. With respect to the discretion in s 92Y of the Act, Mr Visser, who appeared on behalf of the Secretary at the hearing, contended that there were no special circumstances in this case to warrant the exercise of the discretion and also drew my attention to the Department’s Guide to Social Security Law (the Guide),[5] which relevantly provides:

    [5]     Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60.

    3.4.7.70 Gainful Work for PBS

    …

    Other activities may be treated as gainful work

    The Secretary of the department may treat an activity as gainful work in situations in which the activity performed by the member appears to meet the spirit of the legislation but cannot be clearly defined as gainful work.

    Example 1: A member engaged in a business that is temporarily running at a loss. In this case, their activity would be considered as gainful work, provided the activity did not appear to be deliberately contrived to meet the scheme's requirements.

    Example 2: A member who has to practice for a performance such as a piano recital. The practice time would count as gainful work.

    Example 3: A member who attends a training course or conference to maintain their qualifications or knowledge to perform their duties.

    Example 4: A member who is, by the nature of their employment, required to perform tasks to gain employment, such as preparing tenders, which may or may not be successful. The preparation time would be counted as gainful work. This would be the case for people working as consultants.

    Example 5: A member's time performing jury duty may be counted as gainful work.

    …

    Under no circumstances can any form of voluntary work be considered as gainful work.

    …

23. Mr Visser contended that Mr Vanderwerf’s situation did not fit within the examples given in the Guide. He submitted that the rationale for piano practice time constituting ‘gainful work’ is because it is known that the person will be paid for the actual piano recital. Similarly, a teacher preparing lessons will be paid for teaching, and it is reasonable for time spent on preparation to be regarded as ‘gainful work’.

24. With respect to the record-keeping requirements, Mr Visser confirmed that the Secretary did not press that issue, noting that Mr Vanderwerf was well-organised, based his record of work on contemporaneous calendar notes, and gave sworn evidence on the subject.

    Mr Vanderwerf’s contentions

25. Ms Riley, who appeared on behalf of Mr Vanderwerf at the hearing, sought to distinguish Polchow, noting that in that case Mr Polchow’s work spanned over five years and was ultimately found by the Tribunal to be difficult to quantify. By contrast, Mr Vanderwerf’s work was for a limited period of three months, and was well-documented.

26. Further, Ms Riley submitted that a ‘reward’ within the meaning of s 92X did not necessarily have to be “dollars and cents” and pointed to the paid work offered to Mr Vanderwerf following completion of his own deck, as well as his “increased nest egg” as a result of the value added to his property by the new deck.

27. Ms Riley also contended that the deck construction was not caught by subs 93A(1)(d), because that provision contemplates the types of tasks which everyone has to do, or which would be done anyway. She noted that Mr Vanderwerf would not be undertaking “an extension like this every month” and that it was not a task he would have done himself in the normal course. In his oral evidence, Mr Vanderwerf similarly noted that “planning approval and engineer’s calculations” are not required “to do household chores”.

28. Finally, with respect to the discretion in s 92Y and the examples given in the Guide, Ms Riley submitted that an activity which is a precursor to paid work may constitute ‘gainful work’, such as the preparation of tenders (which may ultimately be unsuccessful), or participation in a training course (where that person will be paid for skills developed as a result of that training). Ms Riley reiterated that Mr Vanderwerf did in fact obtain paid employment as a result of constructing the deck on his own property. She also contended that there were special circumstances to justify the exercise of the discretion in this case, citing the closure of Mitsubishi in Adelaide where he otherwise would have continued working, pressure for Mr Vanderwerf to return to Adelaide in light of his family circumstances, as well as Mr Vanderwerf’s notional entitlement to a part age pension while he was working which he had forgone in favour of his expectation of a pension bonus.

    CONSIDERATION

1. I will first consider whether Mr Vanderwerf meets the record-keeping requirements, before turning to the other issues identified above.

   Does Mr Vanderwerf meet the record-keeping requirement in s 93C?

2. As alluded to above, the Secretary did not press this issue at the hearing and, based on the evidence before me, I am satisfied that Mr Vanderwerf has kept a ‘recognised work record’ of his work on the deck based on contemporaneous calendar entries made by his wife. I note that he has in fact produced this record to the Secretary and the Tribunal. The parties also agree that, in addition to the time he spent on the deck, this correctly records approximately 660 hours of gainful work Mr Vanderwerf undertook during the relevant period, as an engineer and also training to be a bus driver. [6]

   Was the work Mr Vanderwerf undertook on his deck ‘gainful work’ within the meaning of s 92X of the Act?

   [6]     Exhibit 1,T14/123-125. The Secretary also did not dispute that Mr Vanderwerf would be in a position to produce group certificates and/or a tax return in respect of this work.

3. There is no doubt that the construction work undertaken by Mr Vanderwerf on the deck involved a substantial degree of personal exertion on his part and was carried on within Australia. Nor is his situation necessarily inconsistent with the kinds of situations that may have been contemplated by the use of the word ‘otherwise’ in the phrase “whether as an employee, a self-employed person or otherwise”.

4. The real question however, is whether the work was for “financial gain or reward”, and I note the following relevant comments of Senior Member Fice in Polchow:

   [Counsel, Mr Flower] submitted that although only some minor payments were made to Mr Polchow by tenants for upkeep of the lawn and gardens, the enhancement of the rental premises, including fitting out the lower section of the dwelling so that an additional flat was constructed, resulted in Mr Polchow being able to earn higher rental from the premises as well as increased rental due to the additional accommodation. With the greatest respect to Mr Flower, I cannot agree with that submission.

   ...

   ... the work itself must result in the person receiving monetary or other recompense for that work to enable them to increase their retirement savings while at the same time deferring receiving the age pension. In simple terms, the person’s gainful work enables the person to meet his or her living expenses as well as providing some additional savings. The person does not require any supplementary form of income by way of pension.

   It should be apparent that Mr Polchow could properly have claimed the age pension after having accrued five bonus periods and nevertheless conducted the works he did on the rental property without those works in any way affecting the amount of pension to which he was entitled. Clearly, that work was not carried out in substitution for receiving the age pension as it could have equally been undertaken while receiving the age pension. He was not paid for that work.

   There is also a second argument against Mr Flower’s submission. The work Mr Polchow conducted on the rental property may well have enhanced the capital value of that property, although even that is not certain. While it may have allowed Mr Polchow to demand higher rental for that property (although there was no evidence of that before me), if it did, then the increased rental cannot be described as financial gain or reward arising from his exertions. Any increased rentals would arise from the improved appearance and facilities attributed to the property. They would simply be an indirect consequence of the work performed. Accordingly, I find that the work Mr Polchow conducted after September 2004 in respect of the rental properties does not satisfy the basic rule regarding gainful work set out in s 92X of the Act.[7]

   [7]     At [32]-[36].

5. I have concluded that I respectfully agree with Senior Member Fice that the phrase “for financial gain or reward” implies some form of payment for the work performed, and is not wide enough to embrace indirect financial benefits of work performed, such as the potential increase in the value of Mr Vanderwerf’s home resulting from his work on the deck. Accordingly, I am not satisfied that Mr Vanderwerf’s construction of the deck falls within s 92X, properly construed.

   Does the deck construction fall within s 93A?

6. Section 93A provides that “unless the Secretary otherwise determines”, activities in the nature of domestic or household maintenance tasks or similar are not regarded as gainful work. Although it may not be strictly necessary for me to determine this issue having regard to the discretion in s 92Y, for completeness I am not persuaded that the planning and construction of the deck by Mr Vanderwerf is ‘caught’ by subs 93A(1)(d).

7. I consider that the nature of the task undertaken by Mr Vanderwerf was one which skilled professionals would ordinarily be engaged to do (noting, for example, the need for engineer’s calculations, intensive physical labour, etc.), and not a task which would generally be undertaken by a homeowner in the normal course as part of household maintenance/domestic duties or on a regular basis. Further, there is no suggestion that the deck construction was a ‘contrived arrangement’ for the purposes of obtaining a pension bonus payment, such as where a person may seek to treat ordinary domestic duties of their partner as gainful work.[8]

   Should the Tribunal exercise the discretion in s 92Y to treat the deck construction as gainful work?

   [8]     Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 (Cth) Explanatory Memorandum: Exhibit 1, T5/56.

8. It follows that the key issue for my determination is whether there are ‘special circumstances’ in this case which warrant the exercise of the discretion in s 92Y, noting that, as I understand the position, there is no dispute that Mr Vanderwerf satisfies subss 92Y(1)(a), (b) and (c).

   What are ‘special circumstances’?

9. The term ‘special circumstances’, as understood by reference to the applicable case law, has a relatively narrow meaning.

10. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, her Honour Justice Kiefel (as she then was) commented:

    ... for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.[9]

    [9]     At 545.

11. In Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277, his Honour Justice French (as he then was) said:

    The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened. ... The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course ... But that does not require that the case be extremely unusual, uncommon or exceptional ...[10]

    [10] At 281-282 [18].

12. Importantly in this context, it is clear from the authorities that, while hardship will often be relevant to whether circumstances are ‘special’, it is not necessarily essential to show hardship. It can be sufficient to show that, in the applicant’s particular circumstances, a strict application of the legislation produces an unfair or unjust result. As his Honour Justice Mansfield observed in the context of s 1184 of the Act, a ‘special circumstances’ discretion may provide a “release valve for such unfairness or injustice in certain circumstances”. [11] Of course, whether there is in fact an unfairness or injustice must be assessed having regard to the objects of the legislation in question.

    [11]    Kirkbright v Secretary, Department of Family and Community Services (2000) 106 FCR 281 at 288 [28].

    Were Mr Vanderwerf’s circumstances ‘special’?

13. It was clear from Mr Vanderwerf’s evidence that, irrespective of the PBS, he always intended to continue working beyond pension age. I accept that he was placed in a difficult situation when Mitsubishi closed in Adelaide, and he was effectively forced to move to Melbourne to obtain work as an engineer. I further accept that difficult family circumstances led him to make the decision to return to Adelaide, and that despite his best efforts, he was unable to obtain employment immediately upon his return.

14. At the hearing, Mr Visser submitted that these circumstances were not particularly uncommon or unusual. He also pointed to the fact that Mr Vanderwerf was not induced to continue working by the expectation of a pension bonus payment, and is presently in good health and financially secure.

15. However, it is relevant in my view that the hiatus in Mr Vanderwerf’s employment following his return to Adelaide was largely unavoidable in his case, and he made significant efforts to mitigate it. In particular, I am satisfied that he made reasonable attempts to secure employment (including as a handyman and a bus driver) upon his return to Adelaide, and that his ultimate decision to construct the deck himself was consistent with his intention to continue working in one capacity or another. It is also relevant in my view that the construction work in fact led to further (paid) work repairing roofing and decking (in contrast to an ‘everyday domestic task’ which ordinarily would not result in employment).

16. Ms Riley also submitted that Mr Vanderwerf had foregone an entitlement to part age pension in the knowledge that his receipt of a pension would mean he would no longer be eligible for the PBS, and pointed to the savings already achieved by the Commonwealth as a result of Mr Vanderwerf’s decision.

17. Further, I consider that the exercise of the discretion in this case would not necessarily be inconsistent with the objects of the PBS, which include allowing people who defer their pension to increase their retirement savings during the period of deferment, and restraining growth in pension outlays.[12] In this regard, I note Ms Riley’s submission that Mr Vanderwerf has arguably increased the value of his property should he and his wife need to sell it at some point in the future, and that any future reliance on the age pension may be reduced by the application of the assets test in that event.

    [12]    Re Polchow and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 224 at [33].

18. Clearly, aside from the eight-month period after he returned to Adelaide (part of which he spent working on the deck) there is no doubt that Mr Vanderwerf did what was required and expected of him in order to obtain a pension bonus, namely, continue in paid employment. However, if his work on the deck is found not to amount to gainful work in the relevant sense, not only will that work not be recognised for the purposes of the PBS, the other work he undertook, which clearly was ‘gainful’, will have been to no avail for the purposes of the PBS. In effect, the fact that there was a relatively brief hiatus in Mr Vanderwerf’s paid work will have defeated the entitlement he would otherwise have had to a pension bonus.

19. If Mr Vanderwerf had not worked at all during that eight-month period, clearly that outcome would have been unavoidable. However, on balance, I am satisfied that there are special circumstances in this matter which warrant the exercise of the discretion conferred by s 92Y of the Act to treat the hours spent by Mr Vanderwerf on the deck construction as ‘gainful work’. In reaching this conclusion, I am influenced by the fact that this particular activity was a discrete and non-routine task which would ordinarily require special skills and which led to paid employment of a similar nature, and which was undertaken within a limited period of time and for a quantifiable number of hours. The particular employment difficulties faced by Mr Vanderwerf, in combination with family circumstances, both of which were largely out of his control, also lead me to the conclusion that his circumstances are sufficiently ‘special’. In addition, I have had regard to the unfairness which in my view would result from a strict application of the Act in the unusual circumstances which have arisen in Mr Vanderwerf’s case.

20. In effect, Mr Vanderwerf’s desire and intention to work past pension age (consistently with the objects of the PBS) was to some extent thwarted by a combination of family and employment circumstances. In the hiatus which resulted before he resumed paid work, he used his time ‘gainfully’, undertaking work he would otherwise have needed to pay a tradesperson to do. He worked at this task in a disciplined and organised way, until it was completed, and to a standard which led to him securing paid work of a similar nature.

21. In these particular and unusual circumstances, I have decided to exercise the discretion in s 92Y in his favour, such that the time he spent working on the deck is to be treated as gainful work for the purposes of assessing Mr Vanderwerf’s claim for a pension bonus.

22. As it was not clear from the SSAT’s decision whether it was satisfied that Mr Vanderwerf met the requirements of s 92X or, alternatively, whether it considered that the s 92Y discretion should be exercised, I propose to vary that decision so as to reflect my conclusion that s 92X is not met, but the discretion in s 92Y should be exercised in Mr Vanderwerf’s favour.

    DECISION

23. The Tribunal:

    (1)Varies the reviewable decision of the SSAT so as to provide that:

    (a)the work undertaken by Mr Vanderwerf in constructing a deck at his home between November 2009 and February 2010 does not satisfy s 92X of the Act;

    (b) the work undertaken by Mr Vanderwerf in constructing a deck at his home between November 2009 and February 2010 should be treated as ‘gainful work’ for the purposes of Part 2.2A, pursuant to the discretion conferred by s 92Y of the Act; and

    (c)  Mr Vanderwerf accordingly meets the qualification requirements for payment of pension bonus; and

    (2)Remits the matter to the applicant for determination and calculation of the amount of pension bonus payable to Mr Vanderwerf as a consequence of this Decision.

I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean.

....... [Sgd] ........................................

Associate

Dated 16 October 2015

Date of hearing	12 August 2015
Solicitors for the Applicant	Mr C Visser Department of Human Services Program Litigation and Review Branch
Solicitors for the Respondent	Ms M Riley Welfare Rights Centre (SA) Inc.