Editors --- "Age pension: notice of decision" [2007] SocSecRpr 52; (2007) 9(4) Social Security Reporter, Article 10

• SECRETARY TO THE DFaCSIA and Walshe
• Background
• The law
• The issue
• Findings
• Case law
• Formal decision

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Age pension: notice of decision

SECRETARY TO THE DFaCSIA and Walshe

(2007/1861)

Decided: 16th October 2007 by Justice Downes, and J.W. Constance

Background

The Walshes received age pension. Mr Walshe worked part time and his income varied as did his and his partner’s age pension payments.

Mr Walshe advised Centrelink about any changes to his income and Centrelink adjusted his pension and sent letters to Mr Walshe advising of the new rate of payment.

In April 2005 Mr Walshe’s financial planner asked for a review of various decisions made by Centrelink based on seven notices that were sent, with the intention that arrears of age pension would be paid. The Centrelink authorised review officer found that, while the original decisions may have been incorrect, the review application was made out of time, so no favourable decision could be made in relation to them. In accordance with s.109, the period for which favourable decisions take effect depends on whether notices of the original decisions were given. The SSAT set aside the decision of the ARO and the Secretary appealed the matter to the AAT.

The law

The effect of s.109 of the Social Security (Administration) Act 1999 ( the Act) is as follows:

- if notice of the original decision is given and an application for review is made within 13 weeks of the notice, a favourable decision takes effect from the date of the original decision;

- if notice of the original decision is given and an application for review is made more than 13 weeks after the notice, a favourable decision takes effect from the date of the application for review; and

- if notice of the original decision has not been given, a favourable decision, on the motion of the Secretary, takes effect from the date of the original decision, no matter when the application for review is made.

The issue

The issue before the AAT was whether seven different forms of letter sent to the Walshes by Centrelink were valid notices of an original decision by the Secretary for the purposes of s.109 of the Act. The decisions made in this case related to variations in pension entitlement, and were made under sections 78, 79 and 80 of the Act.

Elements of the decisions

For sections 78 and 79, the AAT stated there were two elements:

· that there was an increase or reduction in the rate of pension; and

· that there was a new rate of pension.

For section 80, the two elements are:

· that the person does not qualify for a pension or that a pension is not payable; and

· the consequence, being cancellation or suspension.

Section 109 refers to a notice of the decision being given. The AAT referred to the case Secretary, Department of Family and Community Services v. Rogers [2000] FCA 1447; (2000) 104 FCR 272 and concluded that a notice must have two elements: ‘the fact that a decision has been made and the content of the decision... and that the person is informed of the making of the decision and content of it’ (Reasons, paras. 33 and 35).

The AAT stated that when deciding whether a letter conveys the required information it should be read in the context of what would be understood by an ordinary or reasonable person within the group of persons to whom the information is directed.

The adequacy of a notice unders.109 should also be considered in the context of the purpose of the notice. The AAT found that there was an ‘air of unreality’ to propose that a pensioner who receives Centrelink letters of the kind in this case would not be aware that they involved a change in payments which may be subject to review. In this case there was no suggestion that the applicants were unaware of the changes, rather the applications for review were prompted by an audit by the Walshes’ financial adviser. In any event AAT accepted that the test is not subjective, not objective.

Findings

The AAT considered the seven letters sent to the applicants.

The first letter stated the payment due on the next paid date; the regular payment and information used for calculating the payment. The AAT found this was a valid notice as it communicated ‘to the recipient in intelligible form the two aspects of the decision required by section 78’.

The second and third letters stated that the pension had been stopped because earnings exceeded the allowable limit. They contained information about annual income and the second contained information about fortnightly earnings. The letters did not state that the rate of pension would be nil, nor did they state the date of suspension. Despite this, the AAT found that no pensioner would have any doubt about what decision had been made.

The fourth letter was similar to the third, however, it contained additional information. The AAT also found this a valid notice.

The fifth letter was similar to the first letter although it did not state that there had been a change byway of an increase or reduction. It simply stated the regular payment amount. The AAT considered that this was the ‘least specific’ of the seven letters however, the ‘purport of the letter would be clear’.

The sixth and seventh letters were similar to the first letter and the AAT found both letters to be valid.

Case law

The AAT considered the cases of Secretary to the DEWR v Spinapolice (2006) AATA191 and Secretary to the DFaCS v Kakias (2006) AATA 345.

The AAT found that its decision was consistent with the decision of Spinapolice and distinguished the case of Kakias. It said that in the latter case, the Tribunal did not have the benefit of considering the actual letter, but relied on the computer print out.

Referring to the significant case law on this issue, the Tribunal noted that there has been at least 19decisions considering the adequacy of notices since 2000,and of those 12 have found that the letters are adequate.

Formal decision

The AAT set aside the decision under review and remitted the matters to the Secretary for reconsideration in accordance with its decision and reasons.

[R.P.]