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Social Security Reporter |
Rent assistance: arrears entitlement, adequacy of notice
(Federal Court of Australia)
Decided: 23rd April 2007 by Graham J.
In May 1999 Cameron and his wife moved into residential accommodation where they lived for the period under review. In December 1999, Cameron applied for partner allowance, advising the Department at that time of his rental details.
He explained he was unable to obtain rent receipts from the landlady and was told he was not eligible for rent assistance. On some four or five occasions, between 1999 and 2005, Cameron was interviewed at Centrelink’s offices in relation to partner allowance and rent assistance was raised. On these occasions Cameron advised he was unable to obtain either receipts or his landlady’s signature on a rent certificate and the respondent’s advice was there was no entitlement.
Rent assistance was however paid from 6 September 2005, following an interview some two weeks after Cameron provided a completed SU336(M) form headed, ‘rent declaration for use in extreme circumstances only’. The form, which does not require any third party certification, was provided to Cameron following a telephone call to Centrelink.
The option of an extreme circumstances form was not mentioned at any of the earlier interviews. Consequently, Cameron requested Centrelink consider an arrears payment of rent assistance, back-dated to 1999. This request was denied.
Asking in September 2005 for review of that decision by an ARO, Cameron was advised that the decision was correct. On application to the SSAT, payment was backdated to 14 June 2005, the date on which Cameron provided copies of money orders made out to the landlady, together with her signed notice to vacate the premises.
On application to the AAT, Cameron was successful, the AAT deciding that there had been no notice given to Mr Cameron of the decision not to pay rent assistance, so that he was entitled to arrears from December 1999 (see report in this issue, p.10).
On 1 March 2007, the Secretary appealed to the Federal Court on a question of law; a ministerial change in departmental responsibilities also resulting in a change of appellant. The questions put were:
‘1. Whether the “original decision”, for the purposes of s.109(2) of the Social Security (Administration) Act 1999, comprised: the decision, made on or about 15 December 1999, to grant partner allowance to the Respondent at the specified rate; or the decision not to include rent assistance as a component of that allowance.’
2. Accordingly, whether the Tribunal erred in holding that s.109 (2) did not apply on the basis that “Mr Cameron was not given notice of a decision not to pay him rent assistance”.
Section 23(1) of the Social Security Act 1991 (the Act) defines ‘social security payment’ as a social security pension or benefit or allowance or;
(e) any other kind of payment under Chapter 2 of this Act.
Section 109 of the Social Security (Administration) Act 1999 (the Administration Act), headed, ‘Date of effect of favourable determination resulting from review’ provides that where a request for review takes place more than thirteen weeks after notice of a decision and:
...(d) the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the application for review was made.
If no notice of decision is given, s.109(3) provides that ‘the favourable determination takes effect on the day on which the determination embodying the original decision took effect’.
The Court also considered the meaning of the term ‘favourable determination’ which includes a determination under s.78. That provision states:
78 If the Secretary is satisfied that the rate at which a social security payment is being, or has been, paid is less than the rate provided for by the social security law, the Secretary must:
(a) determine that the rate is to be increased to the rate provided for by the social security law; and
(b) specify the last-mentioned rate in the determination.
A person’s rate of partner allowance is worked out using the Benefit Rate Calculator B at the end of s.1068 of the Act. Section 1068 contains a module for calculating the allowance. The calculation of entitlement may have a number of components including rent assistance.
The Court characterised the issue before it as determining the correct method of fixing the date upon which a ‘particular favourable determination’ within the meaning of... the Act ... took effect.’ (Reasons, para. 1)
What constitutes a request for review
In discussing the history of the matter Graham J. noted the SSAT’s finding that:
Mr Cameron attended Centrelink on 14 June 2005 with details of a money order for rent. At this time he was clearly querying the non payment of rent assistance, and nothing else. He had the means available by which he could have met the documentary requirements of lodging a rent declaration, but was not advised to do so. In the Tribunal’s view this was clearly Mr Cameron requesting a review of the decision not to pay him rent assistance, and arrears must be backdated accordingly.
Graham J. observed that:
The SSAT was in error in construing any attendance by the respondent at a Centrelink Office on 14 June 2005 with details of a money order for rent as an application for review of a ‘decision not to pay him rent assistance’. Putting it at its highest, the respondent’s attendance amounted to an application for a favourable determination under s78 of the Administration Act that the rate at which his partner allowance benefit was being, or had been, paid was less than the rate provided for by the Social Security Act and that the rate be increased to the rate provided for by the Social Security Act. (Reasons, para. 47)
The decision of Graham J.
In considering the steps required to calculate partner allowance and rent assistance, the Court observed:
... the rate of a partner allowance benefit is to be ascertained by undertaking a series of mathematical exercises... The ascertainment of an applicable amount for rent assistance is but one of the steps in the calculation process. The Social Security Act [1991] does not recognise rent assistance as a discrete category of social security benefit.
(Reasons, para. 12)
The Court focused on the capacity provided under the Act for backdating of payment:
The point that needs to be made is that no power exists to backdate a favourable determination to a point in time earlier than 3 months (or 13 weeks) before the day on which a determination ‘that the rate [at which partner allowance is being or has been paid] is to be increased’ is made.
(Reasons, para. 28)
The Court found the AAT was in error in its application of ss.109 and 78 of the Administration Act.
Section 109(2) only applies to determine the day on which a ‘favourable determination’ takes effect where that favourable determination is made as a result of an application under s 129 of the Administration Act for review of a decision under, relevantly for present purposes, s.78 of the Administration Act. A decision under s.78 of the Administration Act is not a decision to grant or refuse an application for partner allowance; rather it is a decision that the rate at which partner allowance is being or has been paid is (or is not) less than the rate provided for by the Social Security Act, in which case a determination that the rate is to be increased to the rate provided by the Social Security Act will be required.
No such determination was made on 15 December 1999.
Decisions/determinations under s.78 of the Administration Act are not decisions ‘to pay rent assistance’ or ‘not to pay rent assistance’ as the case may be.
The reasoning of the Tribunal Member proceeded on the erroneous assumption that the relevant decision to which the review in this case related was a decision not to pay the respondent rent assistance. The Tribunal Member’s finding at [28] that the ‘original letter of 15 December 1999, advising Mr Cameron of Centrelink’s calculations of partner payment, contained no mention of rent assistance’ is quite irrelevant, as was the finding at [38] that ‘[n]o notice was given to Mr Cameron that a decision had been made not to pay him rent assistance’. (Reasons, paras. 56-59)
Graham J. also observed that the AAT’s alternative finding, that Cameron was entitled to earlier payments of rent assistance under s.110(1) of the Administration Act, was erroneous. This was because ‘Section 110(1) of the Administration Act is concerned with favourable determinations of a different character – where the Department is informed of the occurrence of an event or a change of circumstances (see s.110(1A)-(11)).’
(Reasons, para. 65)
The Court dismissed the Secretary’s application by answering ‘neither’ to the first questions put, and ‘does not arise’ to the second question.
[J.S.]
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URL: http://www.austlii.edu.au/au/journals/SocSecRpr/2007/24.html