Editors --- "Pension bonus scheme: extension of time to make a claim" [2013] SocSecRpr 27; (2013) 15(4) Social Security Reporter, Article 3

• SONTER and SECRETARY to the DSS
• Background
• Issue
• Decision and reasons
• Formal Decision

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Pension bonus scheme: extension of time to make a claim

SONTER and SECRETARY to the DSS

(2013/832)

Decided: 27th November 2013 by D. Letcher

Background

Sonter was born in 1931, left school at 16 and worked as a carpenter until 12 September 2005, when he was nearly 74. He reached pension age at 65 in 1996, but worked on until he was retrenched after illness in 2005. He registered for the pension bonus scheme on 30 September 1998.

After being retrenched, he continued to seek work for another 6 years. He was also a carer for his sister’s husband and, after her husband’s death, for his sister in her grief. He did not apply for public assistance, including any Centrelink payment, until 2012 when he was 80. He used his savings and only claimed age pension and his pension bonus on 28 June 2012 when he had used up his savings.

He had received annual letters from Centrelink between June 2000 and June 2012 which included a reminder to lodge his bonus claim within 13 weeks of ceasing work or otherwise ceasing to meet the pension bonus ‘work test’. Relevantly he had ceased to meet the work test when he stopped work in September 2005.

Centrelink refused his pension bonus claim as it was made outside the 13 week period when he ceased work. Sonter appealed unsuccessfully to a Centrelink authorised review officer and to the Social Security Appeals Tribunal. He then appealed to the Administrative Appeals Tribunal.

Issue

The issue was whether Sonter should be allowed an extension of time to lodge apension bonus scheme claim.

The pension bonus scheme was set up under part 2.2A of the Social Security Act 1991 (Cth) (the Act). If a person defers claiming the age pension and works on for up to five years, they receive a bonus lump sum. The person must register for the scheme, meet a ‘work test’ and then claim the age pension and the bonus within 13 weeks of ceasing work.

There was no dispute that, but for the late claim, Sonter was eligible for the maximum pension bonus based on working for five years past age pension age.

If a person fails to claim within the stipulated time limit, they are generally not eligible for the bonus. But s.21(2) of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) confers a discretion on the Secretary of the Department of Social Services to allow a person a longer time to claim if there are ‘special circumstances’.

Special circumstances is a phrase which is used in several areas of social security law, but is not defined in the legislation. It is generally regarded as requiring that a case be unusual or uncommon in some way or different from the usual case. The Department has also issued some specific policy guidance in regards to late pension bonus claims, but by way of example only (Guide to Social Security Law at 3.4.7.80).

Decision and reasons

The Tribunal decided that there were special circumstances in Sonter’s case warranting an extension of time to lodge his pension bonus claim. These special circumstances included Sonter’s extensive delay in claiming the pension, and consequent saving to the public purse, his lower level of formal education, the complexity of the legislative scheme and his ongoing attempts to find work while caring for his family. It also relied on the decision of Senior Member Bell in Melzer and Secretary of the DFHCSIA [2012] AATA 68. The Tribunal commented on the unsatisfactory nature of the Centrelink letters and the complexity of the scheme.

Formal Decision

The decision of the Social Security Appeals Tribunal was set aside and a decision made that the time for Sonter’s application for the pension bonus scheme to be made should be extended to 28 June 2012.

Contributor’s note: It should be noted that subject to legislation, it is intended to close the pension bonus scheme to new registrations from 1 March 2014.

[M.B.]