Sallan and Department of Family and Community Services [1999] AATA 539 (20 July 1999)

Last Updated: 5 August 1999

DECISION AND REASONS FOR DECISION [1999] AATA 539

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. T1998/154

GENERAL ADMINISTRATIVE DIVISION )

Re ALFRED SALLAN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms A F Cunningham

Date 20 July 1999

Place Hobart

Decision The decision under review is affirmed.

[Sgd A Cunningham]

Part-Time Member

CATCHWORDS

Social Security - disability support pension - meaning of income - applicability of International Agreement.

Social Security Act 1991 - ss.8(1)(2), Article 9

REASONS FOR DECISION

20 July 1999 Ms A F Cunningham

1. This is a review of a decision made by an authorised review officer on 20 February 1997 which affirmed a decision of a Commonwealth Service Delivery Agency (Centrelink) delegate of the Secretary of the Department of Social Security on or about 28 August 1996 to reduce the applicant's rate of disability support pension. The decision was subsequently affirmed by the Social Security Appeals Tribunal on 13 August 1998.

2. The hearing was conducted on the basis of the written material before the Tribunal. This included the T documents submitted pursuant to s.37 of Administrative Appeals Tribunal Act 1975 and various letters from the applicant setting out his grounds of appeal of previous decisions. No new material has been received by this Tribunal from the applicant who resides in Spain.

3. The decision under review was to decrease the fortnightly rate of the applicant's disability support pension on the basis of the income that he receives from his Spanish age pension. As a result of the information received by Centrelink from the Spanish authorities, the applicant's Australian disability support pension was adjusted from $342.60 per fortnight to $238.30 per fortnight.

4. The history of the appeal and correspondence between the respondent Department and the applicant is set out in detail in the decision of the authorised review officer and the reasons for decision of the Social Security Appeals Tribunal.

5. The applicant's grounds for appeal to this Tribunal can be summarised from an undated letter received from him as follows:

"(i) According to Australian law foreign pensions are not to be taken into account.

(ii) I believe that this estimate is incorrect according to Article 9.2 in the Spanish-Australian Agreement.

(iii) According to the agreement between both countries two complete pensions may be drawn as long as the necessary conditions and requirements are complied with. In short, a pension may be drawn in both countries independently and without one affecting the other.

(iv) Under the agreement, in order for a pensioner to receive the maximum pension he/she must have resided and worked in Australian for a period of 25 or 300 months. If I fulfill this requirement why has my pension been reduced?

(v) Considering that I have been in Spain since 1992 with the agreement of the Australian Social Security Services while also maintaining my Australian residency, the period until the lst of June 1997 should be considered as working life residence.

(vi Date of first arrival in Australia 28/3/1971 until 1/6/1997 equals 26 years and two months or 314 months."

6. Each of the issues set out in the above grounds of appeal had been considered by the authorised review officer.

7. In relation to the first ground, this Tribunal confirms that the respondent is obliged to take into account the amount received by the applicant in determining what amount of disability support pension he should be paid. The provisions of s.8 of the Social Security Act 1991 ("the Act") are quite specific in their terms. Section 8(1) states as follows:-

"8(1). In this Act, unless the contrary intention appears:

'income', in relation to a person, means:

(a) an income amount earned, derived or received by the person for the person's own use or benefit; or

(b) a periodical payment by way of gift or allowance; or

(c) a periodical benefit by way of gift or allowance

but does not include an amount that is excluded under subsection (4),(5) (7A) or (8);

'income amount' means:

(a) valuable consideration; or

(b) personal earnings; or

(c) moneys; or

(d) profits; (whether of a capital nature or not);

'income from personal exertion' means an income amount that is earned, derived or received by a person by way of payment for personal exertion by the person but does not include an income amount received as compensation for the person's inability to earn, derive or receive income through personal exertion;

'ordinary income' means income that is not maintenance income.

8(2) A reference in this Act to an income amount earned, derived or received is a reference to:

(a) an income amount earned, derived or received by any means; and

(b) an income amount earned, derived or received from any source (whether within or outside Australia)."

8. The provisions of sub-section (2) as outlined above make it abundantly clear that the amount received by the applicant from his Spanish pension is "income" according to the above definition and would thus be included for the purpose of calculating the rate of pension payable in accordance with the provisions of s.1064. The provisions of s.1072 state:-

"A reference in this Act to a person's ordinary income for a period is a reference to the person's gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A."

9. The remaining grounds of appeal refer to the International Agreement between Australia and Spain. The decision of the authorised review officer confirmed the calculation done by the delegate of the Secretary of the Department of Social Security in accordance with the provisions of the Act. He did not take into account any calculations for the purposes of the International Agreement between Australia and Spain. Neither did the SSAT in its decision concluding that it had no jurisdiction to specifically look at the Agreement as no formal decision by a delegate of the Secretary had been made in relation to this issue.

10. This Tribunal has the jurisdiction to determine all matters properly in issue before it. The applicant has raised the applicability of the provisions of the International Agreement. Section 1208 of the Act provides that the provisions of a Scheduled International Agreement override the provisions of the Act.

11. The applicant has specifically referred the Tribunal to the provisions of Article 9 and in particular paragraph 2 thereof, which reads:

"2. Notwithstanding the provisions of the previous paragraph, when assessing the income of a person for the purposes of calculating the rate of benefit only a proportion of any Spanish benefit (or benefits) shall be regarded as income.

That proportion shall be calculated by multiplying the total number of months of that person's period of residence in Australia, which shall not exceed 300, by the amount of that Spanish benefit and dividing that product by 300."

The previous paragraph states that the benefit shall be determined according to Australian legislation.

12. The applicant contends that he is entitled to receive "two complete pensions" providing that the necessary conditions and requirements are complied with. His grounds of appeal then refer to his working life residence in Australia. The decision of the delegate of the Secretary included calculations for payment of the pension in accordance with the International Agreement, and in accordance with the provisions of paragraph 2 of Article 9 the period of the applicant's residence in Australia was calculated as 255 months, being that he first arrived in Australia 18 March 1971 and departed on 17 June 1992. The Secretary then went on to calculate the benefit in accordance with the proportionalisation of the applicant's Spanish pension.

13. The applicant's calculations in relation to his working life residence in Australia however, incorrectly include the period since he departed Australia up to 1 June 1997 as he maintains that he has resided in Spain with the consent of the Australian Government, and continues to hold Australian citizenship.

14. The T documents reveal that the delegate of the Secretary had previously responded to the applicant's contentions by way of a letter to him dated 17 July 1997 and in which he explained the difference between residence and citizenship and the fact that the pension that he currently received from the Australian was not dependent on his working life residency. Further that if an assessment was done in accordance with the Agreement, then the amount that he would thus receive would be less than he is currently receiving.

15. This Tribunal agrees with the determinations of the delegate and the authorised review officer in response to the applicant's contentions and dismisses the applicant's grounds of appeal for his pension to be paid in accordance with the International Agreement. The delegate correctly calculated the applicant's working residence in accordance with provisions of the Agreement. The Tribunal has carefully considered the calculations of the authorised review officer at T16 and agrees with the delegate's conclusion that a pension payable pursuant to the International Agreement with Spain would be less in the circumstances of the applicant's case than if he was paid in accordance with s.1064 which sets out the module for calculating the applicant's rate of disability support pension. Module E refers to other sources of income in its calculations, details of which have been set out in the decision of the authorised review officer at T14. The applicant's claim for a disability support pension was made pursuant to the Act and was not referable to the terms of the International Agreement.

16. As the applicant has not disputed any of the calculations of the delegate and the Tribunal affirms their correctness, the Tribunal dismisses the grounds of appeal in relation to the International Agreement, affirms the decision under review.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham

Signed: .....................................................................................

Personal Assistant

Date/s of Hearing Matter decided on the papers.

Date of Decision 20 July 1999