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Social Security Reporter |
Disability support pension: suspension and cancellation; meaning of 'application for review', effective date of decision
Decided: 20th September 2006 by D.P. Jarvis
Mitchell had been receiving a disability support pension (‘DSP’) for many years in respect of the impairment and continuing inability to work caused by schizophrenia. On 11 March 2003 Centrelink suspended DSP after Mitchell failed to complete and return medical review forms issued to him as part of an automatic review process initiated by Centrelink. Mitchell’s last medical review conducted about five years before had concluded that he remained unfit for any type of employment with, in general, a poor prognosis for improvement.
On the day his DSP was suspended, Mitchell wrote a letter to the Premier of South Australia in which he advised that he had recently been taken off the DSP, expressed concern about having to fill in Centrelink’s forms and about the suspension of his pension, and requested that the Premier ‘convince the RATS’ that he could not continue. The Premier sent this letter on to then Minister for Family and Community Services. The Minister then forwarded the letter on to Centrelink who replied to the letter and again requested that Mitchell complete the forms.
Later, on 27 May 2003, Centrelink cancelled Mitchell’s DSP, with effect from 11 March 2003, for failing to return the forms.
Mitchell lodged an application for review by an ARO on 8 October 2003. On 13 November 2003, the cancellation of his DSP was reversed by the ARO and he directed that the pension be re-instated with effect from 8 October 2003. The ARO in his reasons for decision noted that the cancellation of Mitchell’s DSP for failing to return the medical review forms had been inconsistent with the policy as set out in the Guide to Social Security Law in that because of the nature and extent of his impairment, Centrelink should have undertaken a ‘manual review’.
Mitchell appealed to the SSAT on 15 February 2006. The SSAT decided to set aside the ARO’s decision and
‘sent the matter back to the Chief Executive Officer of Centrelink for reconsideration in accordance with a direction that Mitchell’s claim for disability support pension arrears be reassessed on the basis that the decision to suspend and cancel his pension was wrong and that he should be paid arrears from the date of erroneous suspension’.
On appeal to the AAT, DEWR did not challenge the ARO’s decision that the pension be reinstated with effect from 8 October 2003, but maintained that Mitchell was not entitled to the arrears of DSP in respect of the period 11 March 2003 to 7 October 2003.
The issue was whether Mitchell was entitled to the arrears of DSP in respect of the period from 11 March 2003 to 7 October 2003.
Subsection 64(2) of theSocial Security (Administration) Act 1999 (‘the Administration Act) authorizes the Secretary, amongst other things, in relation to a person receiving a DSP, to give that person a notice that he or she is required, within a specified time, to undergo a medical examination and provide to the Secretary the report, in the approved form, of the doctor who conducts the examination. Subsection 64(4) then provides that the DSP will cease to be payable if the notice has been given, the Secretary is satisfied that it is reasonable for this section to apply to the person, and the person did not take reasonable steps to comply with the requirement of the notice.
Under s.129 of the Administration Act, a person affected by a decision of an officer under social security law may apply to the Secretary for review of that decision. By virtue of ss.109(2) of the Administration Act, if notice is given to a person informing him or her of a decision made in relation to his or her social security payment, and that person applies under s.129 of the Administration Act for review of the decision more than 13 weeks after notice has been given, any favourable determination resulting from the application for review takes effect on the day on which the application for review was made.
Section 152 of the Administration Act provides for the date of effect of decisions of the SSAT. Section 152(4) applies where the application for review was made more than 13 weeks after notice was given of the decision by the Secretary, CEO or ARO. It provides as follows:
If:
(a) a person is given written notice of a decision under the social security law; and
(b) the person applies to the SSAT more than 13 weeks after the notice was given for the review of the decision; and
(c) the SSAT varies the decision or sets the decision aside and substitutes a new decision; and
(d) the effect of the decision of the SSAT is:
(i) to grant the person’s claim for a social security payment or a concession card; or
(ii) to direct the making of a payment of a social security payment to the person or the issue of a concession card to the person, as the case may be; or
(iii)to increase the rate of the person’s social security payment;
the social security law has effect as if the decision under review had taken effect on the day on which the application was made to the SSAT for review of that decision.
Subsection 43(6) of the Administrative Appeals Tribunal Act 1975 (the AAT Act) provides in effect that the decision of the AAT is deemed to be a decision of the person who made the reviewable decision, and gives the Tribunal a discretion to back date the effect of that deemed decision. It provides as follows:
(6) A decision of a person as varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a person, shall, for all purposes... be deemed to be a decision of that person and, upon the coming into operation of the decision of the Tribunal, unless the Tribunal otherwise orders, has effect or shall be deemed to have had effect, on and from the day on which the decision under review has or had effect.
DEWR submitted that there was no request for review of either the suspension or cancellation of the pension until 8 October 2003, when it received from Mitchell a request for review of the cancellation decision. DEWR contended that because this was more than 13 weeks after the decisions to suspend and cancel his DSP, the reversal of those decisions could operate only from 8 October 2003, by virtue of ss.109(2) of the Administration Act.
DEWR further submitted that in any event, Mitchell did not apply to the SSAT within 13 weeks of being notified of its decision, and by virtue of par. 152(4)(b) of the Administration Act, the decision to set aside the suspension decision and the cancellation decision was to have taken effect on 15 February 2006 being the date of the lodgement of Mitchell’s appeal to the SSAT. Finally, DEWR submitted that as there were no arrears of DSP from and after that date (because by then Mitchell’s DSP had been reinstated and continued to be paid after that date) nothing was payable to him.
The AAT considered that there were two decisions made by Centrelink, first the decision on 11 March 2003 to suspend the DSP and second the decision on 27 March 2003 to cancel the DSP, with effect from the date of suspension. The AAT decided that having regard to Mitchell’s circumstances, his pension should not have been suspended on 11 March 2003 or cancelled on 27 May 2003. In coming to this view, the AAT noted that in the absence of evidence of changed circumstances, a pre-existing determination to grant a pension should not be varied so as to remove the existing entitlement. There had been no evidence lead before the AAT to suggest that Mitchell’s condition had improved prior to either the suspension or the cancellation of the pension or that he was no longer incapacitated for work. The AAT also relied on the fact that Centrelink’s decision to issue medical review forms to Mitchell pursuant to an automatic review process had been contrary to the Guide.
The AAT referred to the earlier decisions of Frost and Secretary, Department of Social Security (AAT 10360, 17 August 1995) and Secretary, Department of Social Security and Marsh (1996) 42 ALD 639 which suggested that the ‘most informal query’ made verbally may be treated as a request for review. The AAT considered that as the present case involved a written communication it was necessary to consider the terms of the communication and to determine whether the communication, construed objectively, identified the relevant decision and informed the recipient that the person wished to apply for review of the decision.
The AAT concluded that Mitchell’s letter to the Premier constituted an application for review of the decision to suspend the pension because it expressly referred to the fact that he had recently been taken off the DSP, referred to his anger at having to fill out the forms and effectively expressed the hope that the Premier would take up the matter on his behalf and convince Centrelink to reconsider its action in suspending his DSP. The application for review was therefore made within 13 weeks after notice was given of the suspension decision and ss.109(2) had no application.
The AAT found that as Mitchell had applied for review of the cancellation decision more than 13 weeks after that decision was made, by virtue of ss.109(2), the setting aside of the cancellation decision could not therefore have taken effect prior to 8 October 2003. The ARO had reinstated Mitchell’s DSP as of this date.
However, the AAT decided that the decision to suspend and the later decision to cancel were two distinct decisions and entailed different considerations. The AAT characterized the suspension decision as an interim decision which might be reversed without going through the formal review process provided for in the Administration Act. The AAT considered that the question of whether it was reasonable for ss.64(4) of the Administration Act to apply to Mitchell had to be made as at the date when the issue of the possible cancellation of the DSP was being considered and the cancellation should not have been made retrospective to the date of the earlier suspension of the DSP.
The AAT noted that the constraint in ss.152(4) of the Administration Act on the operative date of a decision of the SSAT was in conflict with the discretion in ss.43(6) of the AAT Act to give the deemed decision of the person whose decision is being reviewed a retrospective effect. However, the AAT applied the well-established principle of statutory interpretation that a specific section will override an inconsistent general section, especially where the general section is contained in a separate earlier Act which is of general application. It decided that ss.152(4) of the Administration Act should prevail over the discretion contained in ss.43(6) of the AAT Act.
The AAT concluded that notwithstanding its view that Centrelink should not have made either the suspension or cancellation decision, it was not empowered to make any order that would result in Mitchell being entitled to recover the arrears of the DSP for the periods from 11 March to 27 May 2003 or from 27 May 2003 to 7 October 2003.
Whilst acknowledging that Act of Grace and Defective Administration claims were outside the jurisdiction of the Tribunal, the AAT commented that some consideration should be given to making some payment pursuant to these schemes. The matters that the AAT considered relevant was Centrelink’s failure to initiate a ‘manual’ review instead of an automatic review process as contemplated by the Guide and the failure of the ARO letter and SSAT pamphlet to explain the effect of ss.152(4) of the Administration Act when discussing appeal rights. The AAT also suggested that DEWR should review the relevant wording contained in such correspondence.
The AAT set aside the decision under review, and in place of that decision, decided that:
(a) the ARO who reviewed the decision to cancel Mitchell’s DSP should have decided that his pension should not have been suspended during the period 11 March to 27 May 2003, so that he was entitled to arrears of pension in respect of that period;
(b) the ARO’s decision to set aside the cancellation of Mitchell’s DSP with effect from 8 October 2003 was correct;
but that by virtue of ss.152(4) of the Social Security (Administration Act) 1999, the Social Security Act 1991 has effect as if this decision had taken effect on 15 February 2006, and as a result, no arrears of DSP were payable to Mitchell.
[G.B.]
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URL: http://www.austlii.edu.au/au/journals/SocSecRpr/2006/53.html