Byrnes and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 383 (21 May 2010)

DECISION AND REASONS FOR DECISION [2010] AATA 383

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

The decision under review is set aside. The Tribunal decides instead that the payment of age pension to Mr Byrnes:

• should not have been suspended on 11 January 2006;
• should not have been cancelled on 12 April 2006; and
• is to be reinstated with effect from 11 January 2006.

SOCIAL SECURITY - age pension - suspended and then cancelled for failure to provide information - whether applicant was "required" to provide information - whether suspension justified - whether cancellation justified - whether applicant sought review of either decision within 13 weeks - decision set aside and pension reinstated

Social Security (Administration) Act 1999 - s 68(2)(b), 72, 74, 81, 94, 95, 109(1), 118, 129

Re Department of Family and Community Services and Gray and Witchard [1999] AATA 541

Gidaro v Secretary, Department of Social Security [1998] FCA 400

1. Lawrence Byrnes started receiving the age pension in late 1997.
2. After eight apparently uneventful years of receiving the pension, Centrelink sent Mr Byrnes a letter on 2 November 2005 asking him to complete, and return to Centrelink within 21 days, a "Real Estate Update" form. The purpose of the letter, and the form, was to obtain information about Mr Byrnes's real estate holdings so that a review of his Centrelink entitlements could be carried out. Mr Byrnes failed to send in a completed form.
3. On 14 December 2005 Centrelink sent a second request, and a second "Real Estate Update" form. Once again Mr Byrnes was asked to return the completed form within 21 days.
4. On 11 January 2006, Centrelink suspended Mr Byrnes's age pension because he still had not provided the completed form. Three months later, on 12 April 2006, Centrelink cancelled Mr Byrnes's pension.
5. Eventually Mr Byrnes provided the real estate information and lodged a new claim for age pension. The claim was accepted by Centrelink, and age pension was restored with effect from 23 December 2008. This meant that Mr Byrnes had gone without receiving the pension for almost three years.
6. Mr Byrnes sought to have the payment of the age pension backdated to a date earlier than 23 December 2008. However, the decision not to backdate the payments was affirmed, first internally by an Authorised Review Officer and then by the Social Security Appeals Tribunal. Mr Byrnes now seeks further review of that decision.

1. The main issue is whether Mr Byrnes can be paid age pension from a date earlier than 23 December 2008. Ultimately that depends on whether his pension was properly suspended in January 2006; was properly cancelled in April 2006; and whether he sought review of either of those decisions within 13 weeks.

1. Mr Byrnes had been employed for many years by the New South Wales railways as a sleeper cutter. In the late 1980s or early 1990s, as a result of injuries sustained at work, he started receiving periodic workers' compensation. Mr Byrnes understood that State Rail would "look after him" for the rest of his life.
2. In 1997, when he was 66 years old, the State Rail compensation manager claimed the age pension from Centrelink on Mr Byrnes's behalf. The pension was granted, and the workers' compensation payments stopped. It seems that Mr Byrnes still carries some residual resentment towards State Rail for not continuing to pay him workers' compensation but putting him on the age pension instead. He has also held the view that if he is to receive support from Centrelink it should be by way of the disability support pension (DSP) rather than the age pension. This view seems to be driven by a perception that if he were receiving the DSP, he would not be subject to income and assets testing, just as he had not been subject to any testing while receiving workers' compensation. Regardless of whether that perception is right or wrong, it is clear, however, that Mr Byrnes is not eligible for DSP because he has reached age pension age (in his case, 65 years).
3. Everything appears to have gone smoothly with Centrelink for several years, until the letters of November and December 2005 were sent to him. He failed to provide the information and the pension was suspended and then cancelled, as mentioned in [2]-[4] of these reasons.
4. On 18 January 2006, Mr Byrnes attended the Centrelink office in Kempsey in relation to the suspension of his pension. The Secretary concedes that this contact can be considered to be an application for review of the decision under s 129 of the Social Security (Administration) Act 1999 (the Administration Act).
5. Over the next three years Mr Byrnes contacted Centrelink, either in person or by phone, on at least 27 separate occasions to enquire about, or discuss, a range of issues, including the age pension, DSP (despite consistent advice from Centrelink that he did not qualify for DSP), drought assistance, the pension bonus scheme, a low income card, a senior health care card, and a concession card. These contacts are not relevant to Mr Byrnes's application to the Tribunal, although his repeated queries about DSP demonstrate his continuing confusion about his entitlements.

1. The event that triggered the suspension, and then the cancellation, of the pension was Mr Byrnes's failure to provide the real estate information to Centrelink in response to the letters dated 2 November and 14 December 2005. The first of those letters states:

Real Estate Update

Centrelink regularly updates customers' details in order to pay correct amounts and provide appropriate services. Please complete the enclosed real estate update. If you have a partner, married or de facto, you should answer the questions for both of you.

The authority to request this information is contained in social security law. Please return the completed update with copies of the requested documents within 21 days of the date of this letter.

If you do not reply to this letter within 21 days your payments may be stopped.

1. The follow-up letter dated 14 December 2005 is relevantly identical to the first letter.
2. Although the letters themselves do not specify which provision of the social security law contains the "authority to request this information", the Secretary's Statement of Facts and Contentions makes plain that the Secretary relies for that authority on s 68(2)(b) of the the Administration Act. The Statement of Facts and Contentions also asserts that the suspension and the cancellation of the pension were activated under s 81 of the Administration Act and that the date of effect of the cancellation, in accordance with s 118(11) of the Administration Act, was the date of suspension, namely 11 January 2006.

1. Section 68 of the Administration Act is in Subdivision B of Division 6, in Part 3 of the Act. Subdivision B is headed "Requirement to give information about change of circumstances etc." and comprises ss 67 to 74 inclusive (although s 71 no longer exists, having been repealed in 2000). Apart from s 68, the noteworthy provisions of Subdivision B for the purposes of this application are ss 72 and 74. These sections, together with s 68, are set out below:

68 Person receiving social security payment or holding concession card

(1) Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or seniors supplement) is being paid.

(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:

(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or

(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;

(c) give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.

(3) Subsection (4) applies to a person who is the holder of a concession card.

(4) The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or

(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department a statement about a matter that might affect the person's qualification for the concession card.

(5) An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might:

(a) affect the payment of the social security payment or the person's qualification for the concession card, as the case requires; or

(b) affect the operation, or prospective operation, of Part 3B in relation to the person.

...

72 Provisions relating to notice

(1) A notice under this Subdivision:

(a) must be given in writing; and

(b) may be given personally or by post or in any other manner approved by the Secretary; and

(c) must specify how the person is to give the information or statement to the Department; and

(d) must specify:

(i) in the case of a notice under section 68 that requires the giving of more than one statement, each relating to the payment of the social security payment in respect of a period - the date by which the person is to give each statement to the Department; or

(ii) in any other case - the period within which the person is to give the information or statement to the Department; and

(e) must specify that the notice is an information notice given under the social security law.

(2) A notice under this Subdivision is not invalid merely because it fails to comply with paragraph (1)(c) or (e).

(2A) A date specified for the purposes of subparagraph (1)(d)(i) must be no earlier than 7 days after:

(i) the day on which the notice under section 68 is given; or

(ii) the day on which the period specified in the notice in relation to that first mentioned date begins;

whichever is the later.

(3) Subject to subsections (4), (6) and (7), the period specified for the purpose of subparagraph (1)(d)(ii) must:

1. It will be seen that s 72 is highly prescriptive of the matters which need to be set out in a notice under s 68. Much care is taken in s 72 to specify (among other things) the manner of giving notices, and the time periods to be given for the provision of information and statements. There can be no doubt that the legislature sees the issue of a notice under s 68 as a very serious exercise of administrative power.
2. Section 74 further highlights the serious nature of a notice issued under s 68, and the serious nature of refusing or failing to comply with one. Any person capable of complying with such a notice, and who has no reasonable excuse for not complying with it, is liable to six months imprisonment for failure to comply.
3. A further consequence of non-compliance with a notice under s 68 is that, in reliance on s 81, "the Secretary may determine" that the person's social security payment is to be cancelled or suspended. In addition, ss 94 and 95 provide for automatic cancellation of the person's social security payment for failure to provide information or a statement required by a notice under s 68. However, ss 94 and 95 do not apply in Mr Byrnes's case, for the following reasons:
   • (a) s 94 - both subsections (1) and (2) have, as an essential condition (in paragraph (b) in each case), that the particular notice requires a person to inform the Department of "the occurrence of an event or change of circumstances" within a specified period. That is not the subject matter of either of the letters sent to Mr Byrnes;
   • (b) s 95 - an essential condition, specified in paragraph (1)(b), is that the notice "relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice". The letters to Mr Byrnes do not satisfy that condition.
4. It is clear from ss 74, 81, 94 and 95 of the Administration Act that the legislature expects social security claimants and recipients to take seriously any notice issued under s 68 of the Administration Act.

ARE THE LETTERS DATED 2 NOVEMBER 2005 AND 14 DECEMBER 2005 NOTICES UNDER S 68?

1. The answer to this question depends on the meaning of the word "require".
2. The ordinary meaning of the word is to demand, insist upon, order or instruct (Oxford English Online Dictionary, definition 5a; Macquarie Dictionary, Federation Edition (2001), definitions 2 and 3). The word has a number of other dictionary meanings but I have no doubt that in the context of s 68 the appropriate meaning of the word is one which carries with it an element of mandatory obligation placed on the person to whom the notice is addressed.
3. The Secretary's written submissions directed me to the decision of the Tribunal in Re Department of Family and Community Services and Gray and Witchard [1999] AATA 541 where it was held that a notice sent by Centrelink in the honest and reasonable belief that it will be understood by the recipient will be a notice "requiring" certain things, even if the recipient does not understand the notice. I agree with the Tribunal's decision, but it provides no assistance to the resolution of the issue before me. The notices in Gray and Witchard used mandatory language; the question was whether the Secretary should have taken into account the recipients' inability to understand that language when the notices were issued. The issue before me is not whether Mr Byrnes understood the letters that were sent to him, but whether, as a threshold question, the letters were notices of the kind contemplated by s 68.
4. The written submissions also referred to the judgment of the Federal Court in Gidaro v Secretary, Department of Social Security [1998] FCA 400. In that case, Burchett J considered what was then s 69A of the Social Security Act 1991, which contained the words "the Secretary may give the recipient a notice that requires the recipient to take reasonable action to obtain the payment" - words that are for practical purposes identical to those in s 68(2) of the Administration Act ("The Secretary may give a person ... a notice that requires the person to do any or all of the following ..."). His Honour said:

On the face of them, these words authorize the imposition of a mandatory requirement.

1. Later, his Honour referred to the "essential statutory demand authorized by the section" and then said:

The letter of 26 June 1997 nowhere describes itself as a "notice" under s 69A. In the last paragraph, it refers to itself as "this letter". It contains an incorrect statement, as I have already pointed out, about the legal obligations imposed by s 69A, a statement of the Secretary's satisfaction of a matter falling short of what would be a precondition of his right to issue a notice under the section, and then a politely couched request to return certain forms after they will have been received: "Please return the forms within 42 days." That is not a requirement to do so. Politeness is, certainly, a virtue. But not if it masks the intended effect of an official document, rendering it ambiguous and misleading. (His Honour's emphasis)

1. It is clear that his Honour had more than one concern about the letter of 26 June 1977 in Mr Gidaro's case. But there is no doubting that one of those concerns was that the letter did not impose upon Mr Gidaro the mandatory obligation that s 69A authorised. This was not because the language in the letter was polite, but because it did not compel the doing of anything.
2. The letters sent to Mr Byrnes suffer from the same shortcoming. It may be accepted that it is not necessary for the letters to use the word "require"; if they had said "We need you to provide this information", or "You must provide this information", or words to similar effect, then there is little doubt that they would have amounted to the Secretary's having required Mr Byrnes to give the information stated. But they did not do that. They did not require Mr Byrnes to do anything. They imposed no obligation on him. They asked him to complete a questionnaire about a particular property that he owned, but in reality the letters amounted to nothing more than polite requests for information.
3. Of course, there is nothing to prohibit the Secretary's polite questioning of social security recipients in an attempt to secure information that the Secretary considers necessary for the proper administration of the law. But when the polite requests do not secure that information, the next step is to require it, as s 68 authorises. Only upon failure to respond to a section 68 notice is the person liable to the very serious consequences set out in ss 74, 81, 94 and 95. It is unimaginable that a person in Mr Byrnes's circumstances is potentially liable to six months' imprisonment for failure to respond to the letters of request dated 2 November 2005 and 14 December 2005, and yet that would be the case if the letters were found to be proper notices under s 68.
4. Since the letters are not proper notices under s 68 of the Administration Act, there is no foundation in s 81 of that Act for the Secretary's suspension and subsequent cancellation of Mr Byrnes's pension.

1. The Secretary now accepts that Mr Byrnes sought review of the decision when he attended the Centrelink office in Kempsey on 18 January 2006 (see [11] above). At that time, of course, the operative decision was the decision to suspend payment of the pension; the decision to cancel was not made until 12 April 2006.
2. Section 109(1) of the Administration Act says that if a person seeks review of a decision within 13 weeks, and the review results in a decision that is favourable to the person, then the favourable decision takes effect on the date on which the original, unfavourable decision was made.
3. In Mr Byrnes's case, since:

• he sought review of the suspension decision within 13 weeks of being notified of it; and
• I have found that the suspension of the pension was not justified;

the payment of the age pension to him should be reinstated with effect from 11 January 2006 - that is, from the date of suspension.

1. The decision under review is set aside. The Tribunal decides instead that the payment of age pension to Mr Byrnes:

• should not have been suspended on 11 January 2006;
• should not have been cancelled on 12 April 2006; and
• is to be reinstated with effect from 11 January 2006.

I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S E Frost, Senior Member

Signed: ................................[SGD].............................................

Applicant self-represented, assisted by his son Mr J Byrnes

Appearance for the Respondent Ms R Prasad, Centrelink Legal Services