Harris v Director-General of Social Security

Mrs Harris invoked the jurisdiction of the Administrative Appeals Tribunal to review that decision. Two issues arose: the calculation of the overpayment and the method by which it should be recouped. The second issue has not been argued here. The Tribunal declined to vary the decision to deduct $10 each fortnight from Mrs Harris' pension but, by majority, it set aside the decision and remitted the matter for reconsideration, directing that the amount to be deducted be calculated in accordance with the principles expressed in the reasons for decision of the majority. The dissenting member, Mr W. B. Tickle, held that $1,177.90 did not exceed the correct assessment and he would have affirmed the decision. The Director-General of Social Security appealed to the Federal Court of Australia. The Full Court of that Court set aside the decision of the Administrative Appeals Tribunal and ordered that the matter be remitted to the Director-General to enable him to calculate, in accordance with the reasons for judgment of the majority of that Court (Fox and Northrop JJ.) the amounts paid by way of age pension to Mrs Harris "which should not have been paid to her by reason of her failing to give appropriate notifications under s 45(1)" of the Act. This appeal is brought by special leave from that judgment.

The only question that has been raised on each appeal relates to the calculation of the overpayment. That question has evoked divergent views between the majority and minority in both the Federal Court and the Administrative Appeals Tribunal and between the majority of the Court and the majority of the Tribunal. To answer the question, it is necessary to refer to a mosaic of provisions which do not easily interlock. The provisions will be referred to in the form in which they stood at the material time, though some of them have been amended subsequently and others have been repealed and new provisions inserted in their place.

An age pension is paid from a date determined by the Director-General (s 39). It is paid either "in fortnightly instalments" (s 41(1)) or, if the pension is paid to an account maintained with a bank, credit union or building society, "at such intervals as the Director-General determines" (s 135W(2)). Division 4 of Pt III of the Act governs the rate of pensions. Section 28(1) provides:

Subject to this Part, the rate of an age or invalid pension shall in each case be a rate determined by the Director-General as being reasonable and sufficient, having regard to all the circumstances of the case, but shall not exceed the maximum rate fixed by or in accordance with the next 8 succeeding sub-sections. The eight succeeding subsections fix different maximum rates for different classes of age pensioners, the rates specified in those subsections being subject to adjustment from time to time by a factor derived from variations in the Consumer Price Index (s 28A). Although the Director-General is required by s 28(1) to make a discretionary determination of the rate of a pension, his practice is to determine the rate of each pension at the relevant maximum rate. The rate of Mrs Harris' pension was determined at the maximum rate fixed by s 28(1A) as adjusted. To distinguish between the rates involved in the calculation of pension payments, it will be convenient to call the rate determined under s 28(1) as adjusted by s 28A "the s 28(1) rate". The s 28(1) rate is a component in the calculation required by subs (2) which is not one of "the next 8 succeeding subsections". Subsection (2) provides: The annual rate at which an age or invalid pension is determined shall, subject to subsection (2AA), be reduced by one-half of the amount (if any) per annum by which the annual rate of the income of the claimant or pensioner exceeds -

(a) in the case of an unmarried person - $1,040 per annum; or

(b) in the case of a married person - $897 per annum.

Subsection (2AA) is irrelevant to this case. Section 28(2) confers no discretion. The deduction from the s 28(1) rate that occurs when "the annual rate of income" exceeds the specified amounts per annum does not depend on any decision by the Director-General. The calculation required by subs (2) has two variables: the s 28(1) rate and the annual rate of income of the pensioner. The result of the calculation may be called "the s 28(2) rate". The s 28(2) rate determines "the annual rate of the pension" for the purposes of s 41(2) and therefore determines the amount payable to a pensioner each fortnight. Section 41(2) provides:

Subject to this section, the amount of a fortnightly instalment of a pension shall be ascertained by dividing the annual rate of the pension by twenty-six. In cases where the pension is paid at intervals determined by the Director-General pursuant to s 135W(2), no less than in cases where it is paid pursuant to s 41(2), the pension is payable in instalments (s 135W(7)) and the amount payable on the pension payday is necessarily governed by the annual rate of the pension. To ascertain the amount that should be paid by way of pension on any pension payday, the s 28(2) rate must be known and that rate can be known only when the variables of the s 28(2) calculation are known.

The Director-General, to whom the general administration of the Act is confided subject to any direction of the Minister (s 7), knows the s 28(1) rate but he must ascertain the annual rate of income of the pensioner. As variations in the excess of an annual rate of income over one or other of the amounts per annum specified in s 28(2) result in variations in the amount which should be paid by way of pension from time to time, a particular power to reduce or increase the rate of the pension which is being paid is conferred on the Director-General by s 46(1). That subsection provides:

(b) by reason of the failure of a pensioner to comply with either of the last two preceding sections; or

the Director-General considers that the pension which is being paid to a pensioner should be cancelled or suspended, or that the rate of the pension which is being paid to a pensioner is greater or less than it should be, the Director-General may cancel or suspend the pension, or reduce or increase the rate of the pension, accordingly. Implicit in the duty to make the calculation required by s 28(2) and in the power conferred by s 46(1) is the authority to ascertain administratively what the pensioner's annual rate of income is and the amount, if any, by which that rate exceeds one or other of the sums per annum specified in s 28(2).

The s 28(2) rate changes whenever either of the variables in the s 28(2) calculation changes, that is to say, whenever the s 28(1) rate is adjusted or whenever the annual rate of income over the relevant sum per annum specified in s 28(2) changes. Variations in the s 28(1) rate do not occur, or do not necessarily occur, at the same time as variations in the pensioner's annual rate of income. The s 28(1) rate may change at six-monthly intervals, but the annual rate of income may change at any time: it is not an annual amount, but an annual rate. When there is a change in either the s 28(1) rate or in the excess of the annual rate of income over the relevant specified sum per annum in s 28(2), it is necessary to exercise the powers conferred by s 46(1) in order that the pension which is being paid conforms with the s 28(2) rate. The powers conferred by s 46(1) may be exercised at any time. An occasion for exercising those powers is when the s 28(2) rate so changes that the rate of pension which is being paid is greater or less than it should be.

Provision is made in the Act to enable the Director-General to be given or to obtain the information necessary to ascertain the pensioner's annual rate of income. In addition to his general powers to summon witnesses, receive evidence on oath or affirmation and require the production of documents (s 16), the Act confers on the Director-General a power to require written information from a pensioner of his income. Section 44 provides:

A pensioner, not being a permanently blind person, shall, whenever so required by the Director-General, furnish to such officer, and within such time, as the Director-General specifies, a statement, in accordance with a form approved by the Director-General, relating to the income of the pensioner and of his spouse (if any).

Under s 45(1) a pensioner is obliged, without prior request, to give information. That subsection provides: Where the average weekly rate of the income, other than pension, received in any period of 8 consecutive weeks by a pensioner who -

(a) is not married, or is married but is living apart from his spouse;

(c) is not a person in receipt of an allowance under section 30A,

is higher than $20 per week and is higher than the average weekly rate of the income last specified by him in a claim, statement or notification under this Part, the pensioner shall, within 14 days after the expiration of that period, notify a Director of the amount of the income received by him in that period.

The Act thus provides for notification of what may be significant increases in average weekly rates of income and arms the Director-General with powers to obtain further information. Upon such information as the Director-General is given and obtains, he must ascertain from time to time the pensioner's annual rate of income. That is a question of fact, but the difficulty in this case arises from uncertainty as to what is meant by "the annual rate of income of the claimant or pensioner" in s 28(2).

The distinction between an annual amount of income and an annual rate of income is critical to an understanding of s 28(2). If an annual amount of income were a component in the s 28(2) calculation, it would be necessary to identify a commencing date of the income year in order to ascertain what receipts fell into one year and what into the next. But a rate of income, like a rate of interest, may vary within any annual period though it is expressed as an annual rate. It is a current rate of income, expressed as so much per annum. An annual rate of income may not subsist for a year: an annual rate of income that obtains in one week may change in the week following. Annual income is the sum of the products of each annual rate of income that obtained during any part of the year multiplied by the fraction of the year during which it obtained.

Income can be derived from various sources, as the definition of income in s 18 makes clear. Some items of income may be received at frequent and regular intervals during a year (for example, weekly or fortnightly wages paid to an employee), some intermittently (for example, profits of a business) and others at lengthy intervals (for example, annual dividends on shares). Subject to the exceptions stated in the s 18 definition and subject to the limitations expressed in s 29, no income derived from any source is to be left out of account in ascertaining the annual rate of income. At the time when an annual rate of income is ascertained, it is necessary to have regard to the pensioner's sources of income at that time and to find what each of those sources would yield over the period of a year assuming the current yields from those sources were to continue. It is not necessary to predict whether the pensioner will retain his sources of income for the year or whether the current yields will be maintained, for the annual rate of income is the current rate of income though it is calculated and expressed as an annual rate. If the current income from a current source is receivable as so much per week or per month, it must be calculated and expressed as an amount per annum. But an annual rate of income is not ascertained merely by extending to a year the income receipts of a shorter period without considering the period in respect of which the particular item of income has been received. A pensioner whose only income apart from his pension is $1,000 paid annually as a dividend on an investment has an annual rate of income of $1,000. It is wrong in law as it is absurd in fact to say that he has an annual rate of income of $52,000 in the week in which he receives the dividend and a nil annual rate of income for 51 weeks of the year. His investment, the source of his income, yields an annual sum and, so long as the pensioner retains the investment, his annual rate of income from that source will be $1,000. If that source of income were lost, the annual rate of income from that source would be reduced to nil from the time of the loss. When a pensioner is in receipt of weekly wages from employment, however, his annual rate of income from that source is calculated on the assumption that his earnings at the current rate will continue for the year. If he were to retire from work, that source of income would be gone and the annual rate of income attributable to that source would be nil. In cases where pensioners or claimants are employed intermittently, it may be appropriate in some cases to treat the intermittent work as a continuing source of income and to take an average of earnings over a period as the yield from that source, and in other cases to treat each employment as a separate source of income yielding its particular amount of earnings. The former method would establish a comparatively constant annual rate of income; under the latter method, the annual rate of income would change as the pensioner or claimant went into and out of employment. The circumstances of the particular case would show which method is more appropriate.

Similarly, if a change occurs in the level of income derived from a particular source, the new level is the basis on which, from the time of the variation, the annual rate of income attributable to that source is to be calculated. If a pensioner is in casual employment earning different amounts each week, as Mrs Harris was, it may be appropriate - it is a question of fact - to determine the annual rate of income attributable to casual employment by striking an average of earnings over a period. Section 45(1) refers to a period of eight consecutive weeks. Although that provision relates to notification, not to calculation, it may be administratively sound in many cases to strike an average over a period of eight weeks. But the circumstances of the case must determine what is a fair method of ascertaining the current rate of income at a particular time. The rolling periods of eight weeks referred to in s 45(1) do not impose a restriction on the fair methods of ascertaining the current rate of income.

An annual rate of income, at whatever time it is ascertained for the purposes of s 28(2), is the aggregate of those income payments which would be received by the pensioner during the ensuing year on the assumption that he retains all his current sources of income for the year and that they continue to yield income at the current level. The annual rate thus ascertained endures until something occurs which falsifies the assumption on which the particular annual rate was ascertained - that is, until a source of income is gained or lost, or the level of income yielded by a source of income changes. Then a new annual rate of income must be ascertained on a new set of assumptions that accord with the then current sources of income and the then current levels of income yielded by those sources. If the s 28(2) rate changes, the pension that is being paid should be changed pursuant to s 46(1).

The majority in the Federal Court (Fox and Northrop JJ.), placing emphasis on the notification of increases in the weekly rate of income required by s 45(1), held that the s 28(2) calculation should be based on the total amount received in the eight-week period referred to in s 45(1). The difficulty with this approach is twofold: first, that the receipts in an eight-week period notified by a pensioner may be treated as though they represent the eight-weekly income from all sources of income, whether or not a source of annual income has yielded a payment in the eight-week period and whether or not a continuing source of income has not yielded a payment in that period; and secondly, that the circumstances of the case may make the rolling eight-week period method unfair or inaccurate.

Ellicott J. in the Federal Court and the majority of the Administrative Appeals Tribunal (Messrs R. K. Todd and M. J. Cusack), placing emphasis on the annual rate of pension prescribed by s 28(1) and the automatic reduction effected by s 28(2), thought that each pension year commencing on the anniversary of the date of grant of the pension was a discrete period and that the income received in each pension year determined the adjustment that had to be made pursuant to s 28(2) at the end of that year. However, Ellicott J. found in s 46 a power to enable the Director-General to make a provisional adjustment pending the end of the pension year assessment. Messrs Todd and Cusack regarded the goal of fixing the correct fortnightly instalment to be paid through-out the year to a pensioner in receipt of fluctuating income as "unattainable". It is not necessary to fix a pension year to ascertain an annual rate of income and it is erroneous to regard either the s 28(1) rate or the s 28(2) rate as importing a need to assess the amounts of income actually received in any annual period. In our respectful opinion, although Ellicott J. was right to reject an approach which required a prediction to be made of the future income that the pensioner was likely to receive, he was in error in thinking that it was necessary to predict future income. Current income from all current sources expressed as an annual rate is the variable to be ascertained for the purposes of s 28(2).

The fixed year approach, as Mr Tickle demonstrated in his reasons for decision, is productive of the gravest anomalies if income is received at different times. If annual receipts are treated as the receipts of a particular week, the results are equally anomalous. But an annual rate of income that is calculated and expressed on the assumption that current sources of income and levels of income - whether annual or not - will continue, being a rate that subsists only until the assumption is changed, removes the anomalies to which the Full Court and the Administrative Appeals Tribunal referred. This was substantially the approach favoured by Mr Tickle. He rightly emphasised that the ascertainment of the annual rate of income from time to time is a question of fact once the meaning of "annual rate of income" is defined. As Mrs Harris' income from her casual employment fluctuated widely, and as the issue for the Tribunal's determination was the amount of overpayment in past years, Mr Tickle thought it right to aggregate her earnings into two periods: the year following her commencement of employment, and the following 49 weeks until she ceased work. There is no error of law in a finding based on such a calculation, though retrospective calculation is impossible when an adjustment is to be made under s 46(1) to the amount of a pension being paid. Section s 46(1) would have permitted more frequent reviews of Mrs Harris' annual rates of income and more frequent changes pursuant to s 46(1) in the pension she was being paid, but the knowledge of hindsight removes the need to reconstruct intermittent reviews and adjustments which, in theory, ought not to produce a substantially different result.

It was common ground that, once the s 28(2) rate was calculated, the correct result of the proceedings before the Administrative Appeals Tribunal could be determined. It is unnecessary, therefore, to consider the limits of the right to recoup under s 140(2). For our part, we would reserve for future consideration the question of what is required to satisfy the criterion of a pension, etc., "which should not have been paid", and particularly whether that criterion is any wider than the elements of the right of recovery conferred by s 140(1).

Though the right of recoupment was conceded in this case, it does not follow that the Court should undertake the calculation of the amount which should be recouped under s 140(2). The jurisdiction of the Federal Court of Australia is limited to appeals from the Tribunal on questions of law (s 44(1) of the Administrative Appeals Tribunal Act 1975 Cth), though that Court "may make such order as it thinks appropriate by reason of its decision" (s 44(4)). Where the decision under review by the Tribunal turns on a question of fact, the Federal Court (or this Court on appeal from the Federal Court) should by its order leave to the Tribunal the function of finding the facts if the Tribunal has not already found them. The Tribunal is bound to find the facts in accordance with the principles expressed by the judgment of the Court. In the light of those principles, the Tribunal decides the order it should make under s 43 of the Administrative Appeals Tribunal Act. In this case, if the calculations made by Mr Tickle are correct in fact, it would be appropriate for the Tribunal to affirm the decision under review; if the Tribunal is unable to determine whether that calculation is right or not, it may be appropriate for the Tribunal to remit the matter to the Director-General for reconsideration in accordance with the principles expressed by the judgment of this Court.

The appeal should be allowed, the order of the Full Court of the Federal Court of Australia set aside and in lieu thereof the matter should be remitted to the Administrative Appeals Tribunal to proceed in accordance with the principles expressed by the judgment of this Court. There should be no order as to costs.

The appellant has been in receipt of an age pension since 29 April 1976. She was not then in employment and her only income at that time was about $400 per annum in the form of interest on savings bank deposits and other investments. Consistently with his general practice, the Director-General of Social Security determined, in accordance with s 28(1) of the Social Services Act 1947 Cth as amended (the Act), that the appellant was entitled to receive a pension at the maximum rate permitted by the Act. On 9 September 1977 she commenced employment on a casual basis as a nursing aide at a nursing home. This employment ceased on 2 September 1979. During this period she received a gross amount of $3,276.62 in wages, paid fortnightly but in irregular amounts. There were some fortnights when she did not receive any wages at all and at other times her fortnightly wage varied from $35.65 to $231.16. The receipt of this income was significant because the appellant's pension was subject to the means test prescribed by s 28(2) of the Act. Unfortunately, the appellant failed to notify the Department as she should have done in accordance with s 45 of the Act, with the result that the Department remained unaware of the change in her circumstances until she furnished upon request an entitlement review form in July 1979. Thereafter, the Director-General, as he was empowered to do by s 140(2) of the Act determined that there should be deducted from her pension the amount of the overpayment, that being an amount "which should not have been paid".

The question which has agitated the Department, the Social Services Appeals Tribunal, the Administrative Appeals Tribunal, the Full Court of the Federal Court and now this Court is the manner in which the amount which should not have been paid is to be determined. The history of the proceedings reveals a bewildering array of conflicting theories as to how that question is to be answered, all of them claiming support from the provisions of the Act. Although in this case the question arises in the context of s 140(2), the answer will be found in the construction of those provisions of the Act which govern the operation of the means test itself. It should be noted that no question arises for decision in the present case touching the circumstances surrounding overpayments of pension which attract the operation of s 140(1) and s 140(2) and the precise manner of that operation. It is common ground that the appellant received by way of pension an amount "which should not have been paid" within the meaning of those words in s 140(2). The only issue is as to the method of determining the quantum of that amount. It is therefore unnecessary for me to decide whether Ellicott J. was correct in concluding that the Director-General must make a revised determination pursuant to s 14 of the Act before it can be said that the overpament to the appellant "should not have been paid" so as to attract the provisions of s 140(2). As at present advised, I would have thought that the automatic operation of s 28(2) provided sufficient basis for a conclusion that the payment to the appellant of the pension at the rate determined by the Director-General without the adjustment required by s 28(2) included an overpayment "which should not have been paid".

The principal provisions of the Act which are said to be relevant to the question which falls for decision may be described briefly. Section 28(1) provides for the Director-General to determine a rate of an age pension which shall be reasonable and sufficient in all the circumstances of the case but which shall not exceed the maximum rate fixed by or in accordance with the eight succeeding subsections. As I have said, his practice is to determine a rate at the maximum rate permitted or prescribed by those subsections. Section 28(1A) fixed the maximum rate of age pension in the case of the appellant at $2,766.40 per annum. Section 28(2), which is not one of the eight succeeding subsections referred to in s 28(1), provides as follows:

28.(2) The annual rate at which an age or invalid pension is determined shall, subject to subsection (2AA), be reduced by one-half of the amount (if any) per annum by which the annual rate of the income of the claimant or pensioner exceeds -

(a) in the case of an unmarried person - $1,040 per annum; or

Both pension rates and the means test provisions are to be adjusted in accordance with movements in the consumer price index (s 28A). The actual figures mentioned in the sections to which I have referred varied during the period under consideration but the variation is immaterial to the issue. Pensions are to be paid in fortnightly instalments, the amount of an instalment being ascertained by dividing the annual rate of the pension by 26 (s 41). A pensioner may be required at any time to furnish a statement to the Director-General relating to his income (s 44). Sections 45 and 46, so far as they are relevant, provide:

45.(1) Where the average weekly rate of the income, other than pension, received in any period of 8 consecutive weeks by a pensioner who -

is higher than $20 per week and is higher than the average weekly rate of the income last specified by him in a claim, statement or notification under this Part, the pensioner shall, within 14 days after the expiration of that period, notify a Director of the amount of the income received by him in that period.

(b) by reason of the failure of a pensioner to comply with either of the last two preceding sections; or

the Director-General considers that the pension which is being paid to a pensioner should be cancelled or suspended, or that the rate of the pension which is being paid to a pensioner is greater or less than it should be, the Director-General may cancel or suspend the pension, or reduce or increase the rate of the pension, accordingly.

A pension may be paid to the credit of the pensioner's bank, credit union or building society account at such intervals as the Director-General determines (s 135W).

The appellant's contention is that the description of the maximum rate of pension in s 28(1A) and s 28(2) in terms of an annual sum indicates the legislative intent that the means test provisions are to be administered on the basis of a yearly period, commencing on the date from which the pension is first payable (the pension year). The opposing contention, advanced by the Department, is that the means test provision revolves around the concept of a fortnightly equation of pension and income, with the comparison being made on what is described as a "rolling eight-weeks" period. It is frankly admitted by counsel for the Director-General that his submission is not the same as that advanced on behalf of his client at earlier stages in the proceedings and that it is not the only view that is reasonably open on the material provisions of the Act but he argues that the construction for which he contends is attended with fewer anomalies and difficulties than any alternative approach and that it both advances the evident purpose of the Act and conforms to its language.

It seems to me that the solution offered by the respondent encounters a substantial difficulty at the outset. The solution provides no explanation for the prescription of the maximum rate of age pension in terms of an annual amount. If an annual period was not intended to be of significance, the Act could have fixed a weekly or fortnightly rate of pension and provided a means test threshold of an amount of income received in each week or fortnight as the case may be. A scheme expressed in that form when coupled with the eight-week period referred to in s 45 would fit the respondent's contention admirably. However, the Act does not do that. Having expressed the maximum allowable pension rate in terms of an annual amount, the Act requires that the annual rate of the pensioner's income be ascertained in terms of an amount which can then be measured against the stated ceiling of $1,040 per annum. The amount by which the sum so ascertained exceeds that ceiling is then halved to yield the amount by which the rate of pension entitlement for that year is to be reduced (s 28(2)). In defence of his submission, counsel for the respondent relies on the fixation in terms of a rate as rendering the reference to an annual rate as of only formal significance in providing a basis for calculation of the pension entitlement for any particular period and he points to the provision for payment in fortnightly instalments (s 41) in this regard. But the reference to an annual rate of pension identifies that amount of pension which will be received in the course of a year if the rate remains unchanged and it is this amount which must be divided by 26 to yield the amount of each fortnightly instalment. I regard s 41 as no more than a machinery provision directed to the manner in which the pension is to be paid. It falls into the same category as s 135W which, as I have already noted, allows for a pension to be paid into a bank account at such intervals as may be determined. Turning to s 45, the argument for the respondent advances this section as the linch-pin for the whole scheme because from it is gleaned the entitlement of the pensioner to whatever, on the basis of an eight-week period, the means test rate of income allows him. But, in my opinion, s 45 is plainly no more than another machinery provision, obliging the pensioner to notify the Department of an increase in income beyond the stipulated sum so that the actual amount of pension paid to him during the course of the year will maintain a general correspondence with whatever entitlement is ultimately determined.

I accept that the general purpose of the age pension scheme may be described as one of income maintenance but that does not mean that the pensioner is to be assumed to spend his entire income, when it exceeds the amount allowed by the means test, in the period when it is received. The extreme case was mentioned in argument of a pensioner who receives his entire annual income of $7,000 in dividends in one month of the year. On the argument advanced for the respondent that pensioner would be entitled to receive his pension at the determined rate (on current practice, the maximum rate) for the other ten months of the year. I do not think the principle of income maintenance should be understood to require such a result. Of course, there may be other powers available to the Director-General, for example in s 46, which would enable him to adjust the pension rate in such a case but such action would merely demonstrate the limitations necessarily implicit in the income maintenance principle.

I therefore broadly agree, with respect, with the view taken by the majority in the Administrative Appeals Tribunal and by Ellicott J. in the Federal Court to the effect that the means test requires that attention be given to the actual income of the pensioner during the pension year. As Ellicott J. expressed it in colloquial terms, it means that a pensioner is permitted to earn up to $1,040 in each year without affecting the amount of his or her pension. I agree with his Honour in thinking this is what Parliament intended.

I have not yet mentioned all the considerations which lead me to this conclusion. I regard it as important that the means test provision (s 28(2)) is not incorporated into those provisions of the Act whereby the rate of pension is determined. It operates by force of the Act, independently of the exercise of any discretion by the Director-General, to reduce that rate, being an annual rate, by one-half of the amount (if any) per annum by which the annual rate of the income of the appellant exceeds $1,040 per annum. The Act is not explicit as to the meaning of the phrase "the annual rate of the income". It is not comparable in meaning to the phrase "the annual rate at which an age pension is determined". The latter phrase is quite explicit. It is the annual rate which at any particular time has been determined. Such a rate may vary from time to time in the course of a year by reason of a change in the rate in accordance with s 14 or with s 46 or there may be an automatic variation by reason of a change in the consumer price index (s 28A). The former phrase, however, is not the subject of any determination under the Act. It merely identifies an objective fact. In my opinion, in the absence of any selection by the Act of any shorter period by reference to which the income earned within that period permits an annual rate to be determined, the annual rate of income is simply the total income received over the year. The word "rate" is a flexible term, of which many definitions are to be found, and what it means in a particular instance must depend on the context and subject matter. The term "rate" may be defined as meaning amount, degree, proportional or comparative amount or degree, proportion, proportion or standard, percentage, ratio. The further definition of the term includes price, charge, sum, value, valuation, and also a charge, payment, or price fixed according to a ratio, scale, or standard. The "rate" may be a measure or the measure of a thing. Similarly, the term may be employed to mean a fixed measure of estimation, the measure of a thing by its ratio or relation to some fixed standard, a rule or measure of assessment, or a proportional estimation according to some standard: See generally 75 Corpus Juris Secundum, "Rate", pp. 607-608. "Rate" and "amount" have been held to be synonymous (see Smith v Board of Trustees (1947) 25 NW. (2d) 858 at 859), but the terms have also been distinguished: see 3A Corpus Juris Secundum, "Amount", p. 441. Accordingly, the word "rate" in some circumstances may simply mean "amount" as for example where one speaks of an income rate of $1,000 per annum to describe the total amount of income received during that period. This construction finds support in the use in the subsection of the phrase "one-half of the amount (if any) per annum" (my emphasis). This phrase suggests that the calculation required by the means test must result in a determination of the actual sum of money by which the person's pension for that year is to be reduced. I have already described ss 41 and 45 as machinery provisions designed to facilitate the payment of pensions during the year (s 41) and to ensure that those fortnightly payments are reduced from time to time to correspond with increased income.

It will have been noticed that s 45 applies only when the average weekly rate of income received in any period of eight consecutive weeks increases. A pensioner is not required to notify the Department of a decrease in his earnings, yet the administration by the Department of the means test provision on the basis of a rolling eight-week period cannot be implemented with any accuracy or fairness unless that information is available. Counsel for the respondent was obliged to rely on what he described as an enlightened self-interest to activate a pensioner to supply the information and so enable the scheme to operate. On the other hand, the construction which I prefer would enable any impairment of that enlightened self-interest to be accommodated by the review that in appropriate cases I would expect to be undertaken at the end of each pension year. Section 44 empowers the Director-General to secure from the pensioner all the information that may be relevant to that review.

I would allow the appeal with costs, set aside the decision of the Full Court of the Federal Court and restore the decision of the Administrative Appeals Tribunal.