Editors --- "Disability support pension: totalisation of residence under the New Zealand Agreement; applicability of working life residence restriction to a minor" [2012] SocSecRpr 35; (2012) 14(4) Social Security Reporter, Article 7

• SECRETARY TO THE DFaHCSIA and MAHROUS (No 2)
• Background
• The legal framework and issues
• Discussion
• Formal decision

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Disability support pension: totalisation of residence under the New Zealand Agreement; applicability of working life residence restriction to a minor

SECRETARY TO THE DFaHCSIA and MAHROUS (No 2)

(Federal Court of Australia )

Decided: 31st October 2012 by Logan J.

Background

Mr and Mrs Mahrous immigrated from Egypt to New Zealand with their three year old son Andro in 1998. They became New Zealand citizens. In 2003 they moved to Australia. About a year after Andro arrived in New Zealand, while he was still a New Zealand resident, he became significantly disabled.

In 2011 Andro’s parents lodged a claim for disability support pension which was rejected by a Centrelink Authorised Review Officer, then on appeal by the Social Security Appeals Tribunal.

The Administrative Appeals Tribunal (AAT) set aside this decision, finding that Andro satisfied the residence requirements of ten years qualifying Australian residence under the International Agreement with New Zealand. The AAT found that the restriction requiring at least one year of working life residence under Article 12(3) did not apply as it was not relevant to Andro in view of his age.

The Secretary then appealed to the Federal Court submitting that the AAT had misinterpreted the phrase ‘10 years qualifying residence’ in s.94(1)(e)(ii) of the Social Security Act 1991 (Cth) (the Act), and had misinterpreted the effect of Article 12 of Schedule 3 of the Social Security (International Agreements)Act 1999 (Cth) (the International Agreements Act).

The legal framework and issues

When Andro satisfied the ‘continuing inability to work’ requirement of s.94(1) (c), he was not an Australian resident and was not the dependent child of an Australian resident as required by either s.94(1)(e)(i) or s.94(1)(e)(iii) of the Act. He also did not have a period of ten years qualifying residence in Australia as required under s.94(1)(e)(ii) of the Act.

To qualify residentially, Andro sought to demonstrate ten years qualifying residence by totalising his periods of residence in both Australia and New Zealand under the International Agreement with New Zealand found in Schedule 3 to the International Agreements Act.

Under the Agreement, a person must have become severely disabled while living in Australia or New Zealand under Article 2(2), and have ten years residence in total from periods in either Australia or New Zealand under Article 12(4). Article 12(3) contains a restriction that a person must have resided in Australia for at least one year of working life residence (‘working age residence’ as used in clauses 1 to 3 of Article 12 defined as applying to the age group 20-64 years).

It was not disputed that Andro had an aggregate of more than ten years residence derived from his residence in Australia and New Zealand. At issue for the Court was whether the restriction on requiring at least one year of working life residence in Australia applied to Andro, who was only 16 years of age.

Discussion

The Court made clear that, to the extent that the totalised outcome from the Agreement differs from the ten years Australian residence specified in s.94(1) (e)(ii) of the Act, Article 12(4), requiring an accumulated aggregate of 10 years residence, prevails. The Court said that this is the effect of s.6 of the International Agreements Act, which provides that the provisions of the agreement have effect despite anything in the social security law.

The Court then considered the interpretation of Article 12 concerning totalisation for Australia and the correct construction of its paragraphs including paragraph 3 referring to working life residence.

The AAT had found that the restriction on requiring at least one year of working life residence under Article 12(3) need not apply if not relevant to the applicant.

The Court found that this approach by the AAT was not a decision or an adopted construction which was in error. The Court found that upon the correct construction of the Act read with the International Agreements Act, and in particular Article 12, paragraph 4 of Schedule 3 to the International Agreements Act, Andro met the requirements of s.94(1)(e)(ii) of the Act of ten years qualifying residence.

Formal decision

The appeal was dismissed.