Editors --- "Special Benefit: income test" [2013] SocSecRpr 28; (2013) 15(4) Social Security Reporter, Article 4

• LI and SECRETARY to the DSS
• Background
• Issue
• Discussion
• Formal decision

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Special Benefit: income test

LI and SECRETARY to the DSS

(2013/724)

Decided: 9th October 2013 by J. Toohey

Background

Li came to Australia from China in 2011 on a ten year Assurance of Support from his daughter and her husband.

On 19 April 2013, following the breakdown of his relationship with his sponsors, Centrelink granted Li special benefit. Centrelink determined that Li’s special benefit should be subject to a direct deduction income test, the effect of which was to reduce his special benefit payments by the amount of apension he received in China. Li received approximately $AU420 per month in China, but that money was diverted to his wife, who lived in Beijing and needed it for her own survival and to care for Li’s elderly mother. The effect of Centrelink’s decision was to reduce Li’s special benefit payment and rent assistance to approximately $360 per fortnight.

From 27 November 2013 (after having been resident for two years), Li would be entitled to apply for newstart allowance, at which time his foreign pension would be subject to the ordinary income test rather than a direct deduction income test.

Li argued that the ordinary income test should be applied whilst he was receiving special benefit.

Issue

The issue for determination by the AAT was whether the direct deduction income test or the ordinary income test should be applied in calculating the rate of special benefit payable to Li between 19 April 2013 and 26 November 2013.

Discussion

The Tribunal noted that special benefit is unique in that it is a discretionary payment, and wide discretion can be applied when determining whether a person should receive special benefit and, if so, how much. The Tribunal further noted that, unlike most other social security payments, special benefit is generally subject to a direct deduction income test, whereby all income, whether earned or unearned, reduces the rate payable by a dollar for dollar amount. Further, there is no allowable income-free area and no taper.

Whilst the Tribunal was satisfied that Li found himself in very difficult circumstances through no fault of his own, and that his current rate of special benefit was insufficient to cover the most basic costs of living, the Tribunal considered that Li had access to his Chinese pension and that he could use that money to support himself.

The Tribunal noted that there was no evidence about Li’s wife’s circumstances before the Tribunal other than Li’s assertion that she could not afford to be without his Chinese pension. The Tribunal considered that the fact that any special benefit payable to Li could be recovered from Li’s sponsors was not a relevant factor in determining the rate at which special benefit should be paid.

Formal decision

The AAT affirmed the decision under review.

[S.O.]