Editors --- "Age pension: suspension; whether request for information was a notice under section 68" [2010] SocSecRpr 21; (2010) 12(2) Social Security Reporter, Article 7

• Background
• The issues
• The evidence
• The legislation
• Formal decision

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Age pension: suspension; whether request for information was a notice under section 68

BYRNES and SECRETARY TO THE FAHCSIA

(2010/383)

Decided: 21st May 2010 by S.E. Frost

Background

Byrnes started receiving age pension (AP) in late 1997. On 2 November 2005 Centrelink sent him a letter as part of a review asking him to complete, and return to them within 21 days, a ‘Real Estate Update’ form. Byrnes did not return a completed form. On 14 December 2005 Centrelink sent a second request in similar terms and he failed to respond within 21 days. On 11 January 2006, Centrelink suspended his AP because he had not provided the completed form. On 12 April 2006, Centrelink cancelled Byrnes’ AP. Eventually he provided the real estate information and lodged a new claim for AP which was accepted. Centrelink granted him AP with effect from 23 December 2008 and decided not to backdate the payment to a date earlier than 23 December 2008. The decision not to backdate the payments was affirmed by an Authorised Review Officer and then by the Social Security Appeals Tribunal. Byrnes sought further review of that decision.

The issues

The issue before the Tribunal was whether Byrnes could be paid AP from a date earlier than 23 December 2008. That depended on whether his AP was properly suspended in January 2006; was properly cancelled in April 2006; and whether he sought review of either of those decisions within 13 weeks.

The evidence

Byrnes had been employed by the New South Wales State Rail. He started receiving periodic workers’ compensation after suffering injuries at work. When he was 66 years old, the State Rail compensation manager claimed AP from Centrelink on Byrnes’ behalf. It was granted and the workers’ compensation payments stopped.

On 18 January 2006, a week after his AP was suspended Byrnes attended the Centrelink office in Kempsey in relation to the suspension. The Secretary conceded that this contact could be considered to be an application for review of the decision under s.129 of the Social Security (Administration) Act 1999 (the Administration Act).

Over the next three years Byrnes contacted Centrelink on many occasions to discuss a range of issues including AP. On 28 January 2009 Byrnes’ son assisted him to lodge the new claim for AP, which was accepted and backdated to 23 December 2008.

The event that triggered the suspension, and then the cancellation, of AP was Byrnes’ failure to provide the real estate information to Centrelink in response to the letters dated 2 November and 14 December 2005. Each of those letters stated:

Real Estate Update

Centrelink regularly updates customers’ details in order to pay correct amounts and provide appropriate services. Please complete the enclosed real estate update. If you have a partner, married or de facto, you should answer the questions for both of you.

The authority to request this information is contained in social security law. Please return the completed update with copies of the requested documents within 21 days of the date of this letter.

If you do not reply to this letter within 21 days your payments may be stopped.

In its Statement of Facts and Contentions the Secretary relied on s.68(2)(b) of the Administration Act as the authority for this request. It asserted that the suspension and the cancellation of AP was activated under s.81 of the Administration Act and that the date of effect of the cancellation, in accordance with s.118(11) of the Administration Act, was the date of suspension, namely 11 January 2006.

The legislation

The Tribunal noted that s.68 of the Administration Act is in Subdivision B of Division 6, in Part 3 of the Act. Subdivision B is headed ‘Requirement to give information about change of circumstances etc’. The Tribunal considered that the relevant provisions of Subdivision B for the purposes of the application were ss.68, 72 and 74. These sections provided:

68 Person receiving social security payment or holding concession card

...

(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:

...

(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;

...

72 Provisions relating to notice

(1) A notice under this Subdivision:

(a) must be given in writing; and

(b) may be given personally or by post or in any other manner approved by the Secretary; and

(c) must specify how the person is to give the information or statement to the Department; and

(d) must specify:

...

(ii) ...the period within which the person is to give the information or statement to the Department; and

(e) must specify that the notice is an information notice given under the social security law.

...

Subsection 72(3) then goes on to set out in detail the periods that must be specified in the notice in particular circumstances.

74 Offence—failure to comply with notice

(1) A person must not refuse or fail to comply with a notice under section 67, 68, 69, 70 or 70A.

Penalty: Imprisonment for 6 months.

(2) Subsection (1) applies only to the extent to which the person is capable of complying with the notice.

(3) Subsection (1) does not apply if the person has a reasonable excuse.

(4) Subsection (1) is an offence of strict liability.

The Tribunal noted that s.72 was highly prescriptive of the matters which needed to be set out in a notice under s.68 and concluded that the legislature saw the issue of a notice under s.68 as a very serious exercise of administrative power. Section 74 further highlighted the serious nature of a notice issued under s.68, and the serious nature of refusing or failing to comply with one.

A further consequence of noncompliance with a notice under s.68 was that, in reliance on s.81, ‘the Secretary may determine’ that the person’s social security payment is to be cancelled or suspended.

The Tribunal considered whether the letters dated 2 November 2005 and 14 December 2005 were notices under s.68. It first considered the meaning of the word ‘require’ as it was used in

s.68 and concluded that in the context of s.68 the appropriate meaning of the word was one which carried with it an element of mandatory obligation placed on the person to whom the notice was addressed.

The Tribunal considered the judgment of the Federal Court in Gidaro v Secretary, Department of Social Security [1998] FCA 400. In that case, Burchett J. considered what was then s.69A of the Social Security Act 1991, which contained the words that the Tribunal found were for practical purposes identical to those in s.68(2) of the Administration Act. His Honour said:

On the face of them, these words authorize the imposition of a mandatory requirement.

Later, his Honour referred to the ‘essential statutory demand authorized by the section’ and then said:

The letter of 26 June 1997 nowhere describes itself as a “notice” under s 69A. In the last paragraph, it refers to itself as ‘this letter’. It contains ... a politely couched request to return certain forms after they will have been received: ‘Please return the forms within 42 days.’ That is not a requirement to do so. ... (His Honour’s emphasis)

The Tribunal considered that the letters sent to Byrnes suffered from the same shortcoming as those in Gidaro’ s case. They did not require Byrnes to do anything. They asked him to complete a questionnaire about a particular property that he owned but were properly

characterised as polite requests for information. The Tribunal expressed the view that it was ‘unimaginable’ that Byrnes was potentially liable to six months’ imprisonment for failure to respond to the letters of request dated 2 November 2005 and 14 December 2005, which would be the case if the letters were found to be proper notices under s.68.

Since the letters were not proper notices under s.68 of the Administration Act, there was no foundation in s.81 for the Secretary’s suspension and subsequent cancellation of his AP.

The Tribunal noted that it was accepted that Byrnes sought review of the suspension decision when he attended the Centrelink office in Kempsey on 18 January 2006. Section 109(1) of the Administration Act says that if a person seeks review of a decision within 13 weeks, and the review results in a decision that is favourable to the person, then the favourable decision takes effect on the date on which the original, unfavourable decision was made.

The Tribunal concluded that since Byrnes sought review of the suspension decision within 13 weeks of being notified of it, and the suspension of the pension was not justified, his AP should be reinstated with effect from 11 January 2006 – the date of suspension.

Formal decision

The decision under review was set aside and a decision was made that the payment of age pension to Byrnes:

• should not have been suspended on 11 January 2006, should not have been cancelled on 12 April 2006; and

• was to be reinstated with effect from 11 January 2006.

[C.E.]