Editors --- "Pension bonus scheme: out of time; special circumstances" [2013] SocSecRpr 3; (2013) 15(1) Social Security Reporter, Article 3

• CUNNOLD and CUNNOLD and SECRETARY TO THE DFaHCSIA
• Background
• Issues for determination
• Discussion
• Formal decision

---

Pension bonus scheme: out of time; special circumstances

CUNNOLD and CUNNOLD and SECRETARY TO THE DFaHCSIA

(2012/816)

Decided: 7th December 2012 by K. Hogan

Background

Mr Cunnold registered for the pension bonus scheme on 9 July 2007 when he reached age pension age. Mrs Cunnold’s registration for the pension bonus scheme was initially incorrectly rejected by Centrelink. However, on review Mrs Cunnold’s registration was accepted from 20 September 2008 which is when she reached age pension age. Mr and Mrs Cunnold lodged claims for pension bonus payments on 25 October 2011. On 25 November 2011 these claims were rejected by Centrelink. The applicants sought review and on 22 December 2011 an authorised review officer affirmed the decisions. The applicants sought review with the SSAT which also affirmed the decisions on 20 February 2012. The applicants then appealed to the AAT.

Issues for determination

At issue was whether, after leaving his employer, Mr Cunnold could be regarded as a non-accruing member of the pension bonus scheme on ‘unpaid leave’ pursuant to sub-clauses 5(e) and (f) of the Social Security (Pension Bonus Scheme – Non- Accruing Members) Declaration 2007 (‘the Determination’).

Also at issue was the correct date by which the claim for the bonus needed to have been made in the Cunnolds’ case, and if outside this date, whether special circumstances warranted exercise of the discretion to extend the period open to the applicants to lodge claims for pension bonus pursuant to s.21(2) of the Social Security (Administration) Act 1999 (the ‘Administration Act’).

Discussion

Mr Cunnold’s evidence was that he left the employ of Recruit West on 4 July 2010 but without intending to retire, and regarded himself as on ‘upaid leave from his working life’. After leaving Recruit West he unsuccessfully looked for work. In March 2011 he and his wife went overseas to assist their daughter to settle in to her new home and work in America. It was contended by the applicants that a person on ‘unpaid leave’ ought to be regarded as a non-accruing member of the scheme, affecting the date by which he would be required to lodge his form.

The Secretary contended that even if the AAT were to find that Mr Cunnold took unpaid leave, clause 6 of the Determination provided that the period of leave during which a person can be a non-accruing member was limited to 26 weeks. The Secretary submitted that Mr Cunnold ceased to satisfy the work test on 8 July 2010, that the claims for the scheme were lodged on 25 October 2011 more than 13 weeks after this date, and there were no special circumstances to justify accepting the claims as late claims.

The AAT examined the evidence and found that it was unable to conclude that Mr Cunnold had retired when he left the employ of Recruit West on 4 July 2010, or that Mr Cunnold failed to meet the work test from 5 July 2010.

Regarding the issue of what constitutes ‘unpaid leave’, the AAT considered the previous decisions of Mann and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2012) AATA 412 and Whiting and Repatriation Commission (2011) AATA 526. The Cunnolds’ situation was distinguished by the AAT from these cases because Mr Cunnold’s consistent evidence was that he had not retired and was taking a period of unpaid leave from his working life. Mr Cunnold’s experience with Recruit West between 2006 and 2010 involved work with four different employers and the nature of his employment contracts was distinguished from the nature of the employment in Mann and Whiting.

The AAT found that Mr Cunnold commenced unpaid leave on 11 July 2010 and was therefore a non-accruing member of the pension bonus scheme. The AAT found that the applicants were required to claim the bonus within 13 weeks of the end of the 26 week non-accruing time limitation, by 10 April 2012, and that they failed to do so.

The AAT found that the applicants were not notified by Centrelink that the non-accruing period was limited to a period of 26 weeks, and considered that Centrelink’s failure to so notify the applicants constituted ‘special circumstances’ within the meaning of s.21(2) of the Administration Act.

Formal decision

The AAT set aside the decision under review and substituted its decision that the applications for pension bonus be accepted out of time and remitted the matter to the Secretary to calculate the amount of the entitlement of the applicants.

[K. W.]