Editors --- "Age pension arrears: valid notice of decision" [2006] SocSecRpr 13; (2006) 8(2) Social Security Reporter, Article 2

• SECRETRY TO THE DFaCS and KAKIAS
• Background
• Discussion
• Formal decision

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Age pension arrears: valid notice of decision

SECRETRY TO THE DFaCS and KAKIAS

Decided: 11th April 2006 by N. Isenberg

Background

Kakias had received age pension for 7 years when he and his wife went overseas in May 2004. Centrelink was advised prior to departure that they would be overseas about three months, but the trip took longer and they returned on 30 October2004. Soon after their return, Kakias’ wife contacted Centrelink to advise that they had both returned to Australia, but it was recorded that only she had returned, causing Centrelink to reduce incorrectly Kakias’ age pension to $189.95 per fortnight. This decision was communicated to Kakias in a letter of 15 November 2004.

Unfortunately Kakias did not contact Centrelink until 31 May 2005 to query the reduction in payment. He sought arrears to November 2004 and hews successful at the SSAT. The Department appealed that decision.

Discussion

The issue became which subsection of s.109 of the Social Security (Administrative) Act 1991 was applicable. Centrelink based its decision on s.109(2) which provides that where a notice of decision is given and a person seeks a review more than 13 weeks after the notice, a favourable determination will apply from the date the person seeks review (not the date of the original decision). The SSAT upheld Kakias’ appeal based on s.109(3) which provides that where a notice is not given, and a person seeks a review, a favourable determination will apply from the date of the original decision. The SSAT was able to employ s.109(3)by finding that the letter of 15 November 2004 was not a valid notice.

The AAT accepted that it was open for Kakias to have contacted Centrelink before 31 May 2005 to query his payment being reduced, but the issue for determination was whether the letter of 15 November 2005 was a valid notice of the decision to reduce his payment. The Tribunal looked at the actual text of the letter which contained a bare statement as to a rate of payment payable on one date, and another rate payable (the lesser amount)payable at a later date. The letter did not state that Kakias’ payment had been reduced, nor did it state that a decision had been made to affect the rate of payment in any way. It simply gave two figures as payable on different dates. There was no indication that the higher figure was his regular payment and that the lesser figure was a new rate. Indeed, the higher figure had not been his regular payment prior to November 2004.

The Tribunal discussed the decision of Cooper J in Secretary, Department of Family and Community Services v Rogers (2000)65 ALD 185 where it was made clear that reasons for a decision are not a requirement of a proper notice, and that it was not necessary for the notice to bring the decision home ‘to the person’s understanding or knowledge’ (per Cooper J in Rogers). The AAT followed the principle in Rogers and did not find the letter inadequate based on a failure to give reasons. However, Rogers was distinguished because in that case the letter had contained the sentence: ‘Your pension has reduced because of a change in your circumstances’. In Kakias’ case, the letter contained no statement regarding the pension being reduced, or for that matter that a decision had been made at all.

The Tribunal also considered Drummond J’s statement in Austin and Secretary, Department of Family and Community Services[1999] FCA 938; (1999) 57 ALD 330 that a valid notice needed to be a ‘clear statement...that a decision has been made ... as opposed to information from which an inference ... might be drawn... ’.

The AAT adopted the criteria in Peura and Secretary, Department of Family and Community Services [2003]AATA 1123 for assessing the validity of a notice for the purposes ofs.109:

(i) the decision requiring communication needs to be identified;

(ii) letters must be assessed objectively;

(iii) letters should intelligibly inform the recipient of the decision that has been made and its content;

(iv) if a rate of payment alters due to a change in circumstances mere advice of that rate only gives the effect of the decision; and,

(v) reasons for the decision are not required.

The decision to be communicated was that Kakias was wrongly regarded as still being overseas and his pension was to be reduced. The letter did not provide any statement that a reasonable person would regard as a decision to reduce their payment. The letter contain no information as to the actual decision made, and merely gave rates of payment.

Although the letter contained information about his appeal rights it contained nothing about the decision that could be appealed.

Formal decision

The decision under review was affirmed, that is, Kakias’ age pension was payable for the period 17 November 2004 to 30 May 2005.

[J.D.]