Werner and Secretary, Department of Family and Community Services

[2007] AATA 1607

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1607

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N 2006/115

GENERAL ADMINISTRATIVE DIVISION		)
Re		Michael Werner

Applicant

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date3 July 2007

PlaceSydney

Decision As stated orally at the conclusion of the hearing in this matter, the decision under review is affirmed.  

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

Ms N Bell
  Senior Member

AGE PENSION – Foreign Pension – Gross Income – Net Income – Rate of Pension is Calculated on Gross Income – The Decision Under Review is Affirmed

Social Security Act 1991

DECISION

Ms N Bell, Senior Member

Facts

1.Mr Werner was granted an age pension on 21 September 1995. He was also entitled to two foreign pensions, an Austrian and a Croatian one. His Austrian pension was granted on 6 May 2005, the entitlement including back pay. His Croatian pension was granted from 1 July 2004, the pension payable from 1 January 2005.

2.Other money Mr Werner receives in addition to his Australian pension includes a NSW Miners’ pension and interest on the balance of his Illawarra Credit Union account.

3.Centrelink decided to pay Mr Werner’s age pension at a reduced rate to account for the income he was receiving.  Mr Werner applied for a review of this decision to the Social Security Appeals Tribunal. The SSAT affirmed Centrelink’s decision to pay his age pension at a reduced rate.  Mr Werner now seeks review of the SSAT’s decision by this Tribunal.

Issue

4.Mr Werner agrees that his foreign and local income must be taken into account when the rate of his age pension is calculated.  Now he appears to understand that it is the gross amount of this income which must form part of the calculations to be made by Centrelink in this respect. However, he continues to be concerned about deductions that were made by the bank into which his foreign pensions were paid.  He has addressed this to a large extent by changing his account to one which applies lower or no such charges.  However, he is still worried about money that was deducted by his former bank before he made this change. I have explained to Mr Werner that the Tribunal does not have jurisdiction over the actions of his bank.

5.The essential question for me to consider, taking all the above into account, is whether Centrelink has correctly calculated Mr Werner’s rate of pension. In this I am mindful of the provisions of section 8 of the Social Security Act 1991 which defines “ordinary income” as an amount earned derived or received by a person for that person’s use or benefit. I am also mindful of the pensions income test provided for in section 1064-E1 of the Act and set out step by step in Module E-Ordinary Income Test in the Act.

what income has to be taken into account?

6.When calculating the rate of age pension Centrelink must take into account any income that a person receives. Mr Werner appears to acknowledge this. When Centrelink considers income, it must take into account the gross amount of income before tax, before bank charges and before administration fees.   The definition of “ordinary income” in the Act makes no allowance for tax, fees, charges or any other deductions from gross income.

7.Mr Werner queried the discrepancy between the amount of pension he was supposed to receive and the final amount received in his bank account. I explained to Mr Werner that the discrepancy appears to be made up of bank fees and charges, which is entirely a matter between Mr Werner and the bank. Mr Werner appeared to understand this.

8.Since about the middle of this year Mr Werner has changed banks. His pension is now deposited into a bank which takes out either none or a significantly reduced amount of fees and charges. Mr Werner is now happy with his situation.  I cannot do anything at about fees that have been taken out by the bank.  I have no power over banks.  I have looked at the calculations made by Centrelink, provided to me by Ms Garcia. The calculations are very detailed and show that the amount of foreign pension that has been taken into account by Centrelink is the gross amount before any deductions by banks.

9.The Module E-Ordinary Income test requires a person’s ordinary income to be determined on a yearly basis.   The annual amount of income determined by Centrelink to have been received by  Mr Werner as at 15 December 2005 was NSW Miner’s Pension of $2,827.50 ($108.75 per fortnight); Austrian pension of $A549.22 and Croatian pension of $A418.44: and $27.03 from a financial investment of $901.00 held with the Illawarra Credit Union.   His total yearly ordinary income was therefore $3,822.19.

10.This amount exceeded the relevant ordinary income free area limit of $3,224.00.  This is the amount of income a single person could receive before having his rate of pension reduced.   Mr Werner’s ordinary income excess was therefore $598.19.  That does not mean that Mr Werner’s pension had to be reduced on a dollar for dollar basis.  Rather, a formula applies to reduce his pension by 40% of that ordinary income excess.  Mr Werner’s annual rate of pension rate of pension was therefore reduced by $239.28 or approximately $9.00 per fortnight.   These calculations use figures, including exchange rates and maximum rates of pension, that applied at the relevant time and at other times different figures will apply.  However, the method of calculation and the formulae applied remain the same.

11.Centrelink has provided the Tribunal with the detailed calculations it made in arriving at the rate of payment of Mr Werner’s age pension over the period of June 2005 to July 2006. I have no evidence before me to cast doubt on the accuracy of those calculations. I accept them as reflecting the correct application of the statutory provisions that require Centrelink to have regard to the total amount of ordinary income received by Mr Werner.

new area of concern

12.For some time Mr Werner did not claim his foreign pensions and Centrelink was paying his age pension at the maximum rate.  Centrelink encouraged him to claim his foreign pensions and when he did claim them, he received some back pay from the foreign pensions authorities.  Centrelink withheld some money from the amount of that back pay because it had paid Mr Werner at the maximum rate as if he had no additional income over the period June 2005 to July 2006.  As far as I can discern, the amount withheld by Centrelink was $98.66.

13.In the hearing of this application Mr Werner objected to this withholding by Centrelink.  The matter has not been the subject of review by Centrelink or by the SSAT and therefore is not a reviewable decision and can not be the subject of review by this Tribunal.

Conclusion

14.The decision that Centrelink has made in relation to Mr Werner’s rate of pension and the amount that should be paid to him is correct. I also note for the record that Centrelink has gone to enormous lengths to assist Mr Werner with advice and explanation through Ms Garcia, the Centrelink advocate in this application. 

15.The decision under review is affirmed.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member

Signed:         ...............[ Sanjiv Shah ]...................
  Associate

Date of Hearing  3 July 2007
Date of Decision  3 July 2007

Solicitor for the Respondent     Ms Garcia