Editors --- "Eligibility for economic security strategy payment" [2010] SocSecRpr 37; (2010) 12(3) Social Security Reporter, Article 3

• SECRETARY TO THE DFHCSIA and COUZENS
• The facts
• The law
• Submissions
• Consideration
• Formal decision

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Eligibility for economic security strategy payment

SECRETARY TO THE DFHCSIA and COUZENS

(2010/453)

Decided: 18th June 2010 by K. Bean

The facts

Couzens was qualified for disability support pension (DSP), however her payments were affected by her husband’s fluctuating earnings. Couzens received $3.24 for the fortnightly reporting period 4 October to 17 October 2008.

Centrelink refused the economic security strategy (ESS) payment as Couzen was not receiving DSP ‘in respect of’ 14 October 2008. The Authorised Review Officer held that the $3.42 was in respect of 4 October 2008 and that she had no entitlement to DSP for the period 5 October to 17 October 2008. The decision was reviewed and set aside by the Social Security Appeals Tribunal (SSAT).

The law

Section 900 of the Social Security Act 1991 (the Act) sets out the qualification criteria for ESS:

(1) A person is qualified for an economic security strategy payment if subsection

(2), (3) or (4) applies to the person.

Receipt of certain payments

(2) This subsection applies to a person if:

(a) the person was receiving one of the following payments in respect of 14 October 2008:

...

(ii) a disability support pension; ...and

(b) except in the case of carer allowance, the person was receiving that payment because of a claim the person made on or before 14 October 2008.

Note: For receive see subsections 23(2) and (4).

Also relevant is the definition of ‘receive’ in s.23 of the Act:

(2) For the purposes of this Act (other than section 735), a person is taken to be receiving a payment under this Act from the earliest day on which the payment is payable to the person even if the first instalment of the payment is not paid until a later day.

(4) For the purposes of this Act, a person is taken to be receiving a social security payment until the latest day on which the payment is payable to the person even if the last instalment of the payment is not paid until a later day.

Section 98 of the Act provides that DSP is not payable if the rate would be nil.

Section 1064-A1 provides as follows:

The rate of pension is a daily rate. That rate is worked out by dividing the annual rate according to this Rate Calculator by 364 (fortnightly rates are provided for information only).

Submissions

The DFHCSIA argued that the rate of DSP is a daily rate. Whilst it may be paid on a fortnightly basis, it did not follow that it was necessarily paid on every day in the relevant period. The DFHCSIA submitted that the AAT in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and De Waal [2009] AATA 635 was incorrect in stating (at[27]): ‘Once the amount of payment for a particular fortnightly instalment period has been calculated, the payment is made in respect of that instalment period, including each day within.’

Couzens submitted that, as she had received an instalment of DSP for the applicable fortnight, she did receive a payment of DSP in respect of 14 October 2008 and was therefore qualified to receive ESS payment.

Couzens relied upon the observation of the AAT in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and McCormick [2009] AATA 746 at [37]:

In the ordinary course of events the SS Act requires, on an ongoing basis, the calculation of a ‘daily rate’ of pension, without any specific focus on the particular day in respect of which the daily rate applies. It does not normally matter whether the daily rate changes today, or tomorrow, or next fortnight, so long as the calculation is tolerably accurate and the relevant payments is processed without disadvantage to the customer – or, if disadvantage is suffered, it will be corrected in due course.

Consideration

The AAT considered on the evidence before it that incorrect income figures were used to calculate Couzens’ entitlement to DSP as $3.42 in respect of 4 October 2008. The AAT believed that the amount was paid in error to Couzens as she had no entitlement to DSP in respect of the fortnight 4 October to 17 October 2008.

The AAT was satisfied that a person’s entitlement to DSP is calculated as a daily rate. The AAT accepted the Secretary’s contentions that the intention of the legislation was that a person would only receive ESS if they had received ‘an amount of the payment for the relevant instalment period that included a daily rate of payment in respect of 14 October 2008’ (as per the Explanatory Memorandum) (Reasons, para.33). The AAT found that to qualify for an ESS payment, a person’s payment of DSP for the relevant fortnight must have included an amount representing their daily rate for 14 October 2008.

The AAT noted that even though it was not satisfied the amount of $3.42 was paid correctly, it was not necessary to reach a final view on this, as it was paid to Couzens ‘in respect’ of 4 October 2008, and she did not receive a payment in respect of 14 October 2008.

The AAT noted that this conclusion was not inconsistent with the AAT’s decision in de Waal where the AAT accepted that the rate of DSP is a daily rate.

Formal decision

The decision of the SSAT was set aside and substituted with the decision that Couzens was not qualified to receive an ESS payment.

[J.F.]