Editors --- "Federal Court decisions Disability support pension: portability; estoppel and meaning of 'absent'" [2006] SocSecRpr 56; (2006) 8(4) Social Security Reporter, Article 13

• RAJCINOSKI v SECRETARY TO THE DEWR
• Background
• The law
• The issue
• Submissions
• Conclusions
• Formal decision

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Federal Court decisions Disability support pension: portability; estoppel and meaning of 'absent'

RAJCINOSKI v SECRETARY TO THE DEWR

Federal Court of Australia

Decided: 20th September 2006 by Middleton J.

Background

Rajcinoski, an Australian citizen, was granted disability support pension in December 1998. In February 2003 he left Australia on a permanent basis.

He had planned to visit Australia in 2004. Before his visit he received a letter from Centrelink in April 2004 that advised that:

Social Security and Family Assistance legislation will change from 1 July 2004. The length of time that most Australian payments, including Disability Support Pensions, can be paid whilst overseas will be shortened to 13 weeks.

If you are already outside Australia on 1 July 2004 the new rules will not apply to you until you return to Australia. However, there are some exceptions to this, including if you go to a country with which Australia has an international social security agreement.

Shortly after receiving the letter he contacted Centrelink and was advised that, provided he did not return to live in Australia, the new rules would not apply to him. Relying on this advice he returned to Australia in June 2004. In September 2004 he told Centrelink of his plan to return to Macedonia. He was advised that his disability support pension would stop after 13 weeks.

A decision to this effect was made in January 2005 by a Centrelink officer and the decision was subsequently affirmed by an ARO, the SSAT and the AAT.

The law

Section 1217 of the Social Security Act 1991 (the Act) states that a person’s maximum portability period for disability support pension is 13 weeks.

Section 1218AA states that the Secretary can determine that a person’s maximum portability period is an unlimited period in specific circumstances.

As a consequence of the amendment to section 1217, a savings provision was inserted at clause 135 Schedule 1A to the Act which states:

The Secretary may determine that a person’s maximum portability period for disability support pension is an unlimited period if:

(a) at the commencement of this clause, the person is absent from Australia and receiving disability support pension; and

(b) under this Act as in force immediately before the commencement, that absence could not affect the person’s right to continue to be paid the disability support pension through the period of that absence; and

(c) after the commencement, the person enters Australia but does not become an Australian resident again.

The issue

The court identified two main issues:

The first was whether the advice given by Centrelink was incorrect and if so whether the Department was estopped from refusing to conclude that Rajcinoski’s maximum portability period was an unlimited period.

The second issue concerned the meaning of the words ‘absent’ and ‘absence’ as those words are used in clause 135(1) schedule 1A of the Act.

Submissions

Rajcinoski argued that the findings made by the AAT in relation to the advice given by Centrelink were wrong and as a consequence of incorrect advice the Department was estopped from not exercising the discretion contained in clause 135. He submitted that the incorrect advice constituted a breach of duty.

Rajcinoski also argued that the words ‘absent’ and ‘absence’ should be interpreted as more than ‘not physically present’ in Australia. The basis for this submission was that the interpretation of these words should take into account whether the construction would ‘manifestly work an injustice’.

Rajcinoski submitted that he was ‘absent’ from Australia as he was not a resident of Australia when he returned in June 2004, despite the fact that he was physically present in Australia at that time.

Conclusions

The judge found no flaw in the reasoning of the AAT in relation to whether or not incorrect advice was given. The judge agreed with the conclusions of the Tribunal and found that the advice give by Centrelink may have been misunderstood. The judge noted that, in any event, findings of fact of the Tribunal were not reviewable by the court and that even if the findings were incorrect, this would not constitute an error of law.

The judge then considered the issue of estoppel and found that estoppel cannot arise where provisions of legislation are mandatory. He referred to the case of Minister for Immigration and Ethnic Affairs v Kurtovic [1990] FCA 22; (1990) 21 FCR 193 and quoted Gummow JJ (at 208):

Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying.

On the issue of a breach of duty, the judge concluded that the findings of the AAT did not establish any breach and even if they had, this would not constitute an error which would enable the relief sought by Rajcinoski to be granted.

The judge then considered the submission in relation to the words ‘absent’ and ‘absence’. He concluded that the provisions of the Act were clear and unambiguous and that... ‘extrinsic material cannot not be used to contradict the meaning of legislation itself’ (Reasons, para. 21). The judge commented that the Explanatory Memorandum to the Bill, if anything, supported the ordinary and natural meaning of these words.

Formal decision

The appeal was dismissed with costs.

[R.P.]

Court:

Federal Court of Australia