Decision: The Tribunal sets aside the decision under review and, in substitution, determines that the Respondent's claim for age pension lodged on 2 August 2022 must be rejected.

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999.

AGE PENSION - Payability - qualification period - deemed refusal - arrears limitation - treatment of family trust distribution - assessment as weekly income - decision set aside and substituted

Administrative Appeals Tribunal Act 1975

Administrative Review Tribunal Act 2024 (Cth)

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Social Security (Attribution of Income) Principles 2017

G v MIBP [2018] FCA 1229

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Re Duckworth and Secretary, Department of Social Security [1995] AATA 179

Australian Government, Guides to Social Policy Law, Social Security Guide

1. On 2 August 2022 BSJJ submitted a claim for age pension to Services Australia - Centrelink (the Agency).
2. The Agency rejected this claim on 30 January 2023 on the basis that his income exceeded the applicable threshold for the pension to be paid.
3. On 13 February 2023 BSJJ requested review of the decision and submitted new evidence regarding his income. On 20 April 2023 the Agency (again) rejected the claim for the same reason as before.
4. BSJJ requested internal review of the decision on 14 June 2023.
5. On 11 September 2023 an authorised review officer affirmed the decision to reject BSJJ's age pension claim. The decision also advised BSJJ of his appeal rights to the Administrative Appeals Tribunal (AAT) and emphasised that it is important to request a review within 13 weeks of being notified of the decision.
6. On 19 December 2023 BSJJ applied to the Social Security and Child Support Division of the AAT (the Tribunal at first review) for an independent review of the decision.
7. On 7 May 2024 the Tribunal at first review set aside the authorised review officer's decision and remitted the matter to the Chief Executive Officer of Centrelink for reconsideration in accordance with a direction that BSJJ's distributions from the C Family Trust ceased on 30 June 2023 and, providing that BSJJ was otherwise qualified, he was to receive age pension from 1 July 2023.
8. On 17 June 2024 the Secretary, Department of Social Services lodged an application for review of that decision in the General Division of the AAT.
9. On 23 August 2024 a member of the AAT issued an order pursuant to subsection 41(2) of the Administrative Appeals Tribunal Act 1975, to stay the decision made by the Tribunal at first review until the resolution of the substantive application.
10. From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). This decision and statement of reasons is made by the Tribunal. [1]
11. The hearing took place on 11 February 2025. The Secretary was represented by Ms Claire Campbell from HWL Ebsworth. BSJJ was represented by Mr Samuel Brouff. Ms Campbell and Mr Brouff appeared by MS Teams audio. The Tribunal had before it the documents provided by the Agency and the Secretary's Statement of Facts, Issues and Contentions.

1. The statutory provisions relevant to this review are contained in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
2. The issues requiring determination in this matter are:

(a) was BSJJ qualified to receive age pension on 2 August 2022; and, if so > > (b) from what date is age pension payable to him.

1. Relevant to this application, section 43 of the Act states that a person is qualified for age pension if they have reached pension age and have 10 years qualifying Australian residence. It is not in dispute, and I so find, that BSJJ satisfies paragraph 43(1)(a) of the Act. Therefore, he is qualified to receive age pension.
2. Subsection 37(1) of the Administration Act states that age pension is to be granted if the claimant is both qualified for the pension and it is payable. Section 44 of the Act dictates that age pension is not payable if the pension rate is nil. Therefore, I must determine the rate of age pension that was payable to BSJJ at the date of his claim.
3. Section 55 of the Act provides that a person's rate of age pension is determined in accordance with the Pension Rate Calculator found in section 1064 of the Act. That provision provides that the rate of age pension is paid having regard to an asset test or an income test. The test that results in the lower rate of age pension is the applicable test.
4. The Tribunal makes the following findings of fact, noting that they are not in dispute between the parties:
   • BSJJ was the sole shareholder of H Pty Ltd (the company) until 13 November 2022;[2]
   • BSJJ and his wife (from whom he is separated) are both directors of the company;[3]
   • H Pty Ltd is the trustee of the C Family Trust (the Trust), [4] which trades as ABC Consultants;[5]
   • BSJJ received distributions from the Trust of $112,776[6] and $88,413[7] in the 2021 and 2022 financial years;
   • BSJJ lodged his 2021 income tax return on 17 May 2022[8] and the Trust lodged its 2021 income tax return on 18 May 2022[9];
   • BSJJ lodged his 2022 income tax return on 8 December 2022[10];
   • On 14 November 2022 BSJJ transferred H Pty Ltd to his wife from whom he is separated;[11]
   • BSJJ ceased to derive any income from the Trust from 1 July 2022;[12] and
   • On 22 January 2024 BSJJ was granted age pension with effect from 8 December 2023 on the basis that he advised the Agency of his intent to claim the age pension on 5 December 2023,[13] lodged this claim on 18 December 2023 and on 8 December 2023 the attribution period in respect to the 2022 financial year Trust income ended.[14]
5. Section 1073 of the Act states that income that is not income from financial assets, income streams, periodic payments, ordinary income or an exempt lump sum is to be treated as ordinary income of the person during each week in the 12 months commencing on the day that the person becomes 'entitled' to receive that amount.
6. I am satisfied that the income received by BSJJ by way of trust distributions in the 2021 and 2022 financial years is not income from financial assets, income streams, periodic payments, ordinary income or from an exempt lump sum. Therefore, the income is to be treated as his ordinary income during each week in the 12 months commencing on the day that he became entitled to receive that amount.
7. I next turned my mind to the date on which BSJJ became entitled to receive the trust distributions. This may result in different periods depending on whether the person is an attributable stakeholder or a non-attributable stakeholder.
8. Part 3.18 of the Act provides for the attribution to individuals of the assets and income of private companies and trusts.
9. At the time of lodging his age pension claim on 2 August 2022 BSJJ was the co-director and sole shareholder of the company, and the company is a controlled private company within the meaning of section 1207N of the Act. I am satisfied that BSJJ was an attributable stakeholder of the company by reason that his is a co-director and the sole shareholder of the company.
10. The company is the corporate trustee of the Trust. The Trust is a controlled private trust within the meaning of section 1207V of the Act, because it is a designated private trust. In the Mod PT form dated 14 September 2022[15] BSJJ declared that his wife was the appointer of the Trust.[16] Without evidence to the contrary before me, I accept that this is the case. That it is his wife who is the appointer of the Trust leads to the conclusion that BSJJ is not an attributable stakeholder, as he would not pass the control test set out in subsection 1207V of the Act.
11. The Guides to Social Policy Law - Social Security Guide (the Guide) provides assistance to decision-makers in implementing the law. While I may be guided by this policy, I am not bound to follow it: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634. In the recent case of G v MIBP [2018] FCA 1229 the Federal Court observed that it is clear from earlier authorities, that in the absence of any statutory indication to the contrary, any lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task.
12. The Guide states at Chapter 4.12.7.50[17] that distributions made to non-attributable stakeholders are considered income for 12 months from the date of resolution to distribute.
13. I am satisfied that BSJJ became entitled to receive the trust distributions on the date of at the Trust's application of Trust income meetings held on 30 June 2021[18] and 30 June 2022.[19] These minutes state that BSJJ is to receive 50% of the net income of the Trust. Whilst the exact quantum was not known until such time that the Trust's tax returns were prepared, nevertheless, BSJJ became entitled to receive the distribution at the time of the declaration: Re Duckworth and Secretary, Department of Social Security [1995] AATA 179.[20] In reaching this conclusion I also had regard to the factors set down in the Social Security (Attribution of Income) Principles 2017.
14. At the time BSJJ lodged his claim, the fortnightly income free threshold was $190 and the fortnightly income limit was $2,165.20 (or $56,295.20 per annum).[21] Application of my findings as to the attribution of BSJJ's income during the period 1 July 2022 to 30 June 2023 means that his income exceeded the applicable income test limit for a single person as at the date of his claim. Consequently, pursuant to section 44 of the Act, the pension was not payable to him as his rate was nil.
15. Subsection 37(1) of the Administration Act states that age pension must be granted if the claimant is both qualified for the pension and it is payable. Therefore, BSJJ's 2 August 2022 claim for age pension was correctly rejected by Centrelink. I will therefore set aside the decision under review on this basis.
16. I make the following comments in respect to the decision under review for completeness, though not necessary for the determination of this application.
17. The Tribunal at first review determined that BSJJ was entitled to receive age pension from 1 July 2023 (providing other qualifying requirements were met). This finding was legally incorrect for the following reasons.
18. Section 42 of the Administration Act states that a person's start day for a payment is determined in accordance with Schedule 2 to the Administration Act. Subclause 3(1) to that Schedule states that if a person is qualified for the payment on the day of claim, that is the person's start date. Clearly, this does not assist, as the pension was not payable to BSJJ on the date of his claim as his rate was nil.
19. The Applicant submits that subclause 4(1) to the Schedule is also relevant. This requires that a person 'will' become qualified for the payment within a 13 week period from the date of claim. Putting aside whether this provision is relevant, as it is not established that there was an inevitability to BSJJ becoming qualified during this 13 week period this provision does not provide BSJJ with any relief.
20. Subsection 39(1) of the Administration Act states that if the Secretary does not make a determination regarding a claim within 13 weeks after the day on which a claim is made, the Secretary is taken to have rejected the claim. That is, it is a deemed refusal of the claim. Subsection 39(4) of the Administration Act allows for the counting of the 13 week period to be suspended where further information is requested by the Agency. I accept the Agency's submissions that this suspension period occurred between 8 November and 9 December 2022. Therefore, BSJJ's age pension claim was deemed to be refused on 13 January 2023.
21. It follows that for BSJJ to be granted age pension from 1 July 2023 he would be required to lodge a new claim. He did not automatically become entitled to the pension from 1 July 2023, as the Tribunal at first review decision suggests, even though the evidence suggest that the pension would have been payable to him from this date. To be paid from this date, BSJJ would have had to lodge a new claim on or before this date.
22. I also note that the Tribunal at first review also failed to consider the fact that BSJJ did not lodge his application to the AAT until more than 13 weeks had expired after he received written notice of the authorised review officer's decision. Item 8 to section 147 of the Administration Act states where an application for review is not lodged with the Tribunal within 13 weeks of notice of the decision, that the date of effect of a favourable review is the day on which the application is made to the Tribunal, being in this case 19 December 2023.

The Tribunal sets aside the decision under review and, in substitution, determines that the Respondent's claim for age pension lodged on 2 August 2022 must be rejected.

[1] Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT.

[6] T5, folio 115, T6, folio 130, T31, folio 229

[12] T9, folio 141, T16, folio 189, T24, folios 201 to 202, T27, folios 213 to 221 and T29, folio 141

[17] https://guides.dss.gov.au/social-security-guide/4/12/7/50

[21] And not $180/$2,155.20 per fortnight as the Tribunal at first review determined at paragraph 10