The claim for an increased rate of AP under the hardship provisions, made on 12 August 2005 commenced the process of review, initially by a decision of the ARO and the application to the SSAT which convened on 1 March 2006. The decision of the ARO, made on 6 January 2006, is the decision the applicant sought to challenge before the SSAT on 9 November 2012 and which is under review in this application.
The information above with respect to the claim for compensation for defective administration is recorded to demonstrate the ambit of the entitlement sought by the applicant by her challenge to the ARO decision of 6 January 2006. This Tribunal does not have jurisdiction to review decisions concerning compensation. The applicant and her representatives were given that advice during the hearing.

Administrative Appeals Tribunal of Australia|2013-09-09

The applicant applied to the Department of Human Services for compensation for defective administration, alleging negligence and economic loss. The period of loss was alleged to have been from 24 August 2005 to 14 May 2012. The basis for the claim was the provision of incorrect advice concerning the asset hardship provisions.
On 2 July 2013 the applicant was notified that her claim was partially successful. An officer of the Department of Human Services determined that she had an entitlement to an additional payment of AP for the period 1 November 2010 to 14 May 2012. Within that period she should have been paid the maximum rate of AP under the asset hardship provisions because the Preston property should have been valued as if it were to be leased commercially. The officer advised that consideration would not be given to compensation being paid for the period between 12 August 2005 and 31 October 2010 because this period was the subject of an appeal (this application) to the AAT which, if successful, exposed a potential entitlement to an increased rate of pension during the same period. Therefore, if compensation had been paid for that period and the applicant succeeded in her review, the officer advised that she was at risk of overpayment and recovery action.
On 11 February 2013, an ARO decided that the applicant should have been advised to seek a commercial lease valuation and if that had been undertaken it would have resulted in a valuation of the Preston property at nil ($0.00) and fortnightly pension would have been paid at a higher rate. Under the asset hardship rules, an entitlement to increased pension can be backdated for a maximum period of 6 months. Accordingly, the applicant was advised that the rate of AP would be reassessed and paid at a higher rate from 15 May 2012.
The applicant contended in these proceedings that compensation should have been paid from 12 August 2005, when an application was made for increased pension under the hardship provisions until 31 October 2010, being the day preceding the commencement of a period within which compensation was paid.

The claim for an increased rate of AP under the hardship provisions, made on 12 August 2005 commenced the process of review, initially by a decision of the ARO and the application to the SSAT which convened on 1 March 2006. The decision of the ARO, made on 6 January 2006, is the decision the applicant sought to challenge before the SSAT on 9 November 2012 and which is under review in this application.
The information above with respect to the claim for compensation for defective administration is recorded to demonstrate the ambit of the entitlement sought by the applicant by her challenge to the ARO decision of 6 January 2006. This Tribunal does not have jurisdiction to review decisions concerning compensation. The applicant and her representatives were given that advice during the hearing.

An issue which needs to be determined is whether the applicant withdrew her appeal before the SSAT on 1 March 2006. If it was withdrawn, it is taken never to have been made (s 130(2) Administration Act).
The applicant's representative said she and her mother walked out from the SSAT during the currency of its hearing in 2006. She said the application was not withdrawn.
On 28 March 2006 an officer of the SSAT wrote to the applicant and confirmed that she had withdrawn her appeal. She was advised that she was entitled to again apply for review of the same decision. The officer wrote that if her appeal was successful at a later date, she may be disadvantaged because there are time limits on payments of arrears (T1, p.148).
The SSAT reasons for decision made on 9 November 2012 (T1, p.6) record that the previous application to it was withdrawn due to Mrs Stergiopoulos' ill-health.
I am satisfied and find as a fact that the application was withdrawn before the SSAT in 2006. I make that finding on the basis of the letter of 28 March 2006 from an officer of the SSAT and the decision of the SSAT Member of 9 November 2012.
At paragraph 11 of the SFCs lodged on behalf of the applicant, it is recorded my mother did not withdraw from the appeal, it was on the information discussed at the SSAT (which was that she may be worse off).
I interpret that comment to mean that the SSAT Members gave the applicant advice that the legislation then existing and the extent of her assets might have caused those Members to conclude that the rate of her pension could be reduced.
That information and the evidence of the applicant's representative during the hearing that she and her mother walked out satisfies me that the applicant understood the advice that the SSAT Members gave her, she acknowledged the risk of proceeding and decided to discontinue and therefore, withdrew from the appeal.
There is no time limit for lodging an application for review with the SSAT of a decision made by an ARO. Additionally, the SSAT did not make a decision in the application that was before it in 2006. The applicant was therefore, not prohibited from applying to the SSAT on 6 September 2012 for review of the ARO decision made on 6 January 2006.
Accordingly, whilst the applicant is entitled to again seek a review of the ARO decision made on 6 January 2006, any entitlement to pension will be subject to s 152(4) of the Administration Act which is reproduced as follows:

(4) If:

(a) a person is given written notice of a decision under the social security law; and

(b) the person applies to the SSAT more than 13 weeks after the notice was given for review of the decision; and

(c) the SSAT varies the decision or sets the decision aside and substitutes a new decision; and

(d) the effect of the decision of the SSAT is:

(i) to grant the person's claim for a social security payment or a concession card; or

(ii) to direct the making of a payment of a social security payment to the person or the issue of a concession card to the person, as the case may be; or

(iii) to increase the rate of the person's social security payment;

the social security law has effect as if the decision under review had taken effect on the day on which the application was made to the SSAT for review of that decision.

In the present application, the SSAT, on 9 November 2012, reviewed the application lodged on 6 September 2012. That was more than 13 weeks after notice of the decision made on 6 January 2006. Any entitlement by a decision varied or substituted would take effect from the date the application to the SSAT was made namely, 6 September 2012.
On 6 September 2012, the applicant did not have any entitlement greater than she was then receiving because of the decision made by an ARO on 11 February 2013 (attachment 5 of her SFCs and paragraph 22 earlier) which entitled her to AP at the maximum rate under the hardship provisions from 15 May 2012.
The AAT is empowered by s 179 of the Administration Act to review decisions made by the SSAT. It is not empowered to review the reasons for a decision. In conducting its review, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing either affirming, varying or setting aside the decision under review and if the latter, either make a decision in substitution or remit the matter for reconsideration (s 43(1) Administrative Appeals Tribunal Act 1975 (the AAT Act)).
The SSAT concluded that even if it had found that the decision made on 9 September 2005, which was ultimately affirmed by the ARO on 6 January 2006, was incorrect, arrears of AP could not be paid to the applicant because of the operation of s 152(4) of the Administration Act. In those circumstances, the SSAT decided to affirm the decision under review.
With respect, the SSAT affirmed the ARO's decision of 6 January 2006 without reviewing that decision. It found that the provisions of s 152(4) prohibited entitlement, if any, before 6 September 2012, the date on which the applicant applied for review by the SSAT. The applicant was entitled to a review of the ARO's decision, even if there was no practical benefit to the applicant of a successful outcome.
In the event that this Tribunal accepts the applicant's submissions and finds that she was receiving the AP at a rate less than her proper entitlement between 12 August 2005 and 31 October 2010, s 152(4) will prevent her from obtaining any arrears.
In preparing these reasons for my decision which follow, I have had regard to the documents lodged by the respondent pursuant to s 37 of the AAT Act, the submissions lodged by both parties prior to the hearing and the evidence and submissions heard during the hearing.
Ordinarily, the rate of a person's pension is calculated using the Pension Rate Calculator A in s 1064 of the Social Security Act 1991 (the Act). The calculation takes into account the lower value of either the applicant's assets or income. However, in this case, the respondent accepts that the applicant's rate should be calculated in accordance with the hardship provisions found in s 1129 of the Act on the basis that the Preston property is an unrealisable asset that should be disregarded under s 1130 of the Act (respondent's SFCs at [4.5]).
Section 1130(2) provides that there is to be deducted from the person's social security pension maximum payment rate an amount equal to the person's adjusted annual rate of ordinary income. Section 1130(3) sets out the formula for calculating the person's adjusted annual rate of ordinary income which includes the greater of either:

(i) the person's annual rate of ordinary income from unrealisable assets; or

(ii) the person's notional annual rate of ordinary income from unrealisable assets...

Section 1130(5) of the Act provides that the notional annual rate of ordinary income from an unrealisable asset is:

(a) the amount per year equal to 2.5% of the value of the person's and the person's partner's unrealisable assets; or

(b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person's and the person's partner's unrealisable assets

whichever is the less.

Part 4.6.7.90 of the Guide to Social Security Law (the Guide) modifies s 1130(5) when the unrealisable asset is a property occupied by a near relative or a long term tenant with a low income. In this instance_,_ the commercial lease value is calculated as the amount the occupier would pay under the State Housing Authority rental rebate formula (25 per cent of the occupier's income). The Guide is not binding on decision-makers and should generally be applied unless there are cogent reasons not to do so (Re Drake and Minister of Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634).
The main issue for the applicant is the amount the respondent used to determine her notional rate of ordinary income for the purpose of calculating her adjusted rate of ordinary income. It would appear that the original decision-maker and the ARO felt compelled to adopt the formula in the Guide on the basis that her son had been occupying the Preston property since 1992.
The Preston property was valued at $235,000 by the Australian Valuation Office (AVO) in August 2005. The AVO's report was not in the documents provided to the Tribunal. Parts of it are found within the decision of the ARO. It appears that the AVO attributed to the property a commercial lease value of $5,600. Again, in the absence of the report, it is difficult to understand the basis for these values. It is unclear how or whether the AVO addressed the presence of asbestos in their valuation.
It is inconceivable that the Preston property, apparently riddled with asbestos, could have any rental value in either the residential or commercial market. The lethal consequences of exposure to asbestos have been well known for many years. Equally, it is inconceivable that any prospective residential or commercial tenant would occupy it.
A letter from Nelson Alexander, local real estate agents, dated 3 October 2005 records that the Preston property cannot be offered for rental because it has a serious ASBESTOS problem that would be a public liability if it were tenanted (T11, p. 180). In these circumstances and in the absence of further evidence, I have concluded, in addition to the property being unrealisable in August 2005, the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person's and the person's partner's unrealisable assets (s 1130(5)(b)of the Act) was nil ($0.00). Put another way, it had no capacity to attract any rental income. This is the same finding made by an ARO in the recent decision of 11 February 2013 (refer paragraph 22).
It was submitted on behalf of the applicant, that the respondent preferred to apply the policy found in the Guide rather than the legislation. This submission has merit. The Act does not require a calculation of notional income based on the State Housing Authority's rebate formula nor does it make provision for relatives who occupy the unrealisable asset. I acknowledge that in some circumstances and given the beneficial nature of the Act, it may be appropriate to apply the exception found in the Guide. However, in this case, the Guide was preferred over the Act to the detriment of the applicant. There was no cogent reason to do so. As recorded earlier, an entitlement to compensation consequent on this finding is outside the jurisdiction of this Tribunal. That application must be pursued elsewhere.
In summary, I have no option but to affirm the decision under review because of the operation of s. 152(4) of the Administration Act. However, had the applicant sought review by the SSAT within 13 weeks of the ARO's decision on 6 January 2006, the outcome would have been different. For reasons expressed above, it is likely that I would have set decide the decision under review and substituted a decision that the notional annual rate of ordinary income for the unrealisable asset (the Preston property) was nil ($0.00) at 12 August 2005.

The Tribunal affirms the reviewable decision dated 9 November 2012.

I certify that the preceding 52 (fifty -two) paragraphs are a true copy of the reasons for the decision herein of

Centrelink, Program Litigation and Review Branch

Security (Administration) Act 1999

Appeals Tribunal Act 1975

Stergiopoulos and Secretary, Department of Social Services (formerly Families, Housing, Community Services and Indigenous Affairs) [2013] AATA 720 (9 September 2013)

Re Drake and Minister of Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634

Stergiopoulos and Secretary, Department of Social Services (formerly Families, Housing, Community Services and Indigenous Affairs) [2013] AATA 720 (9 September 2013)

At a glance

Court

Decision date

Source

Judgment (16 paragraphs)

Legislation Cited (3)

Cases Cited (2)

Stergiopoulos and Secretary, Department of Social Services (formerly Families, Housing, Community Services and Indigenous Affairs) [2013] AATA 720 (9 September 2013)