Editors --- "Pension bonus scheme: late registration and claim" [2012] SocSecRpr 3; (2012) 14(1) Social Security Reporter, Article 3

• PLATT and SECRETARY TO THE DFHCSIA
• Background
• The issues
• The facts
• Discussion
• Formal decision

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Pension bonus scheme: late registration and claim

PLATT and SECRETARY TO THE DFHCSIA

(2011912)

Decided: 19th December 2011 by A.K. Britton

Background

Mr and Mrs Platt both made claims for pension bonus in early 2011. These claims were rejected and an application by Mr and Mrs Platt to the SSAT against those decisions was unsuccessful. Before the AAT the Secretary contended that both Mr and Mrs Platt were out of time to claim and were not otherwise qualified for the pension bonus.

The issues

1. Whether the power to extend the period within which an application for registration under the pension bonus scheme was available and whether it should have been exercised.

2. Whether Mr and Mrs Platt were qualified for pension bonus.

3. Whether the time for claiming pension bonus should be extended.

The facts

Mr Platt owned and operated an antique business, continuing to operate the business well past reaching pension age. The couple had anticipated an independent retirement without the need to rely upon the social security system. However, following a reduction in the value of their assets resulting from the global financial crisis, it became necessary for them to claim age pension. Only at that time did they become aware of the pension bonus scheme and their potential eligibility under the scheme.

Discussion

To be eligible for the pension bonus, a person must lodge an application for registration within the period commencing 13 weeks before reaching pension age and ending 13 weeks after that date. Mr and Mrs Platt did not apply for registration within this period. The AAT therefore considered whether to extend the period available to them to lodge an application. The discretionary power to accept late applications for registration arises in the following limited circumstances: if the person is a ‘non-accruing member’ for all of the ‘pre-application period’ or if they are an ‘accruing member’ for some of the ‘pre-application period’ and they pass the ‘work test’.

The ‘pre-application period’ is the period between pension age and the date of application for registration for pension bonus. Mr Platt did not meet any of the categories of ‘non-accruing members’ set out in Clause 5 of the Social Security (Pension Bonus Scheme— Non-accruing Members) Declaration 2007 (the Declaration). Mr Platt was an accruing member under the scheme until he reached the age of 75 and he satisfied the work test because he had ‘gainfully worked’ at least 960 hours per annum.

The discretion to extend the period for registration was therefore available to the AAT and the Tribunal decided that it was an appropriate case to do so. The AAT noted that it was not surprising that the Platts would be ignorant of the pension bonus scheme because they had been planning to be financially independent throughout their retirement. The Secretary contended that the scheme was widely advertised, however adduced no evidence in support of the contention.

Once the AAT decided to backdate Mr Platt’s registration he then became qualified for pension bonus.

A claim for pension bonus must be made within 13 weeks of the last bonus period. Mr Platt’s claim was not lodged until 14 January 2010 which was outside this 13 week period. This period may be extended if there are ‘special circumstances’. The Tribunal accepted that ignorance of itself did not constitute ‘special circumstances’. Mr Platt had only towards the end of 2010 come to realise that his plan of financial independence throughout retirement had not been realised as a result of the global financial crisis and its impact on the antique business. It was only at this point that he turned his mind to the type of benefits that might be available under the social security law. The AAT decided that these were special circumstances which warranted an extension of time within which to lodge the claim for pension bonus.

The time for Mrs Platt’s application for registration was not able to be extended because her voluntary assistance with the business did not satisfy the work test nor was she able to satisfy the work test after Mr Platt reached 75 years of age.

Formal decision

The time within which Mr Platt could lodge an application for registration as a member of the pension bonus scheme was extended to 28 January 2011 with the registration to have taken effect on 1 June 2009.

The time for Mr Platt to make a claim for pension bonus was extended to 14 January 2011.

The power to extend the time within which Mrs Platt could lodge an application for registration as a member of the pension bonus scheme could not be exercised.

[L.H.]