Editors --- "Eligibility for Economic Strategy Security payment" [2009] SocSecRpr 40; (2009) 11(4) Social Security Reporter, Article 3

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Eligibility for Economic Strategy Security payment

SECRETARY TO THE DFHCSIA and MCCORMICK

(2009/746)

Decided: 29th September 2009 by S.E. Frost

The facts

Mc Cormick was qualified to receive age pension, however her payments fluctuated due to income. For the period ending 3 October she had earnings of $2000, consequently her payment was suspended. In the next fortnight she had no earnings and her pension was reinstated.

Centrelink rejected payment of ESS as McCormick was found not to be receiving age pension ‘in respect of” 14 October 2008. The decision was reviewed and set aside by the SSAT.

Legislation

The relevant legislation is set out above (see de Waal reported in this edition).

Submissions

The Department relied on ss.23 and 44 of theSocial Security Act 1991 (the Act) and argued that age pension was payable on 6 October, but was not payable after this date because of income. The pension was therefore not payable to McCormick on the critical date of 14 October 2009 and therefore she was not ‘receiving’ age pension for the purpose of s.900 of the Act.

Consideration

The Tribunal firstly distinguished the case of de Waal stating that de Waal had earnings in the period that included 14 October, whereas Mc Cormick did not - her excess earnings were in the period before.

The Tribunal then posed the central question as: ‘...whether Ms McCormick was receiving the pension in respect of 14 October 2008, or, expressed by reference to the concept imported from s.44, whether the pension was payable to Ms McCormick in respect of 14 October 2008’ (Reasons, para. 22).

The Tribunal referred to the rate calculator to determine whether pension was payable to McCormick between 7 and 16 October as distinct from whether it was paid to her.

On considering the steps outlined in the rate calculator, the Tribunal noted that Centrelink practice is to annualise income and then assess entitlement for the following period. The Tribunal noted:

However, when a provision such as s.900(2)(a) is enacted, we must turn away from ‘the way things are done’ and focus on what the law says. The law asks whether Ms McCormick was receiving the age pension in respect of 14 October 2008. The Secretary says, and I agree, that to answer that question I must determine whether the pension was ‘payable’ to Ms McCormick in respect of 14 October 2008. And to answer that question, I have to determine whether her ‘daily rate’ of pension in respect of 14 October 2008 was nil (in which case she is not qualified for the ESS payment), or whether it was greater than nil (in which case she is qualified for the ESS payment). (Reasons, para. 39)

The Tribunal then considered the case of Secretary, Department of Family & Community Services v Rolley [2000] FCA 806, and sought to ascertain Mc Cormick’s ‘ordinary income on a yearly basis’ as at 14 October 2009. The Tribunal found that she had no income in that fortnightly period and no income on 14 October 2008. Therefore her daily rate was greater than nil and she was therefore receiving age pension on the crucial day.

Formal decision

The decision of the SSAT was affirmed.

[R.P.]