Kanelakis and Secretary, Department of Family and Community Servi ces [2003] AATA 72 (24 January 2003)

Last Updated: 28 January 2003

DECISION AND REASONS FOR DECISION [2003] AATA 72

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2002/993

GENERAL ADMINISTRATIVE DIVISION	)
	Re	George Kanelakis

Applicant

And

Secretary, Department of Family & Community Services

Respondent

DECISION

Tribunal

Dr J D Campbell, Member

Date 24 January 2003

Place Sydney

Decision

The Tribunal determines that the decision under review be affirmed.

[SGD] Dr J D Campbell Member

CATCHWORDS

SOCIAL SECURITY - age pension - Applicant overseas at the time of commencement of legislative changes to the Social Security Act 1991 - portability period - whether portability rate correctly calculated - whether savings provisions apply

LEGISLATION

Social Security Act 1991, sections 1217, 1218C, 1220A, 1221, Schedule 1A

REASONS FOR DECISION

24 January 2003

Dr J D Campbell, Member

1. In this matter, Mr George Kanelakis ("the Applicant") seeks review of the decision of the Social Security Appeals Tribunal ("SSAT") dated 5 June 2002 which affirmed the decision of an authorised review officer dated 27 March 2002 to reduce the Applicant's age pension from 9 February 2002. This decision had in turn affirmed earlier decisions dated 26 July 2001, 15 August 2001 and 22 February 2002 made by authorised delegates of the Secretary, Department of Family and Community Services ("the Respondent") that Mr Kanelakis' age pension was to be reduced from 9 February 2002.

2. A hearing was held before the Tribunal on 16 December 2002 at which the Applicant was represented in his absence by his daughter Ms Niki Kottarides. The Respondent was represented by Ms Rachael Quinn, an advocate from the Advocacy and Administrative Law Team at Centrelink.

3. The following material was placed into evidence before the Tribunal:

Exhibit	Description	Date
T1-T33 pp1-66	Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
A1	Medical report of Dr Skanavis	26 August 2002
A2	Medical report of Dr Skanavis	27 September 2002
A3	Medical report of Dr Skanavis	18 November 2002
R1	Respondent's Statement of Facts and Contentions	29 November 2002

ISSUES

4. The relevant issue in this matter is whether the reduction in the rate of payment of the Applicant's age pension from 9 February 2002 was correct.

LEGISLATION

5. The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 1217, 1218C, 1220A, 1221 and Schedule 1A.

BACKGROUND

6. The following factual matters detail the history of this matter and are not contested by the parties:

§ the Applicant was born on 24 April 1926, turning sixteen on 14 April 1942. Applicant migrated to Australia, arriving 22 August 1973 (T10, p21);

§ the Applicant was granted invalid pension on 24 November 1977 (T10, p21) and on 22 July 1984 the Applicant travelled to Greece (T5, p12), returning to Australia on 29 March 1989 (T5, p12), before returning to Greece on 14 June 1989 (T5, p12);

§ on 24 April 1999 the Applicant returned to Australia (T3, p10);

§ on 20 September 2000 the relevant changes to the Social Security portability provisions commenced;

§ on 17 July 2001 the Applicant advised that he would be returning to Greece on 11 August 2001 (T4, p11);

§ on 26 July 2001 Centrelink advised the Applicant that his rate of age pension would reduce from 9 February 2002, being 26 weeks after departure, if he had not returned to Australia by that date (T6, T8, T9);

§ the Applicant returned to Greece on 11 August 2001. Centrelink wrote again to the Applicant in Greece on 15 August 2001, detailing the reduction in age pension after 9 February 2002 (T13, pp27-28);

§ the Applicant's rate of age pension was reduced on 9 February 2002. This decision was affirmed by the original decision maker on 22 February 2002 (T21), by an authorised review officer on 27 March 2002 (T28) and by the SSAT on 5 June 2002 (T2).

EVIDENCE ON BEHALF OF THE APPLICANT :

7. Evidence was submitted on behalf of the Applicant that he was living alone in Greece, following the death of his wife prior to his return to Australia in April 1999. It was indicated that the Applicant had stayed longer in Australia than he intended and did not return to Greece until 11 August 2001. Further evidence had been led at the SSAT hearing that arrangements to have the Applicant's age pension cheque forwarded to his Australian address, with Ms Kottarides indicating, that she had told Centrelink in Hobart that the Applicant would be returning for a short period, and that at no stage was she advised by Centrelink's staff in Hobart of any alteration to the legislation.

8. Ms Kottarides indicated to the SSAT that the Applicant did receive the letters forwarded to him by Centrelink regarding the reduction in the rate of age pension if he remained outside Australia for more than 26 weeks, but by the time the letters were received, the Applicant had either already paid for his fare or was in Greece.

9. Ms Kottarides indicated to the Tribunal that her father's health is rapidly deteriorating and that she is concerned for his welfare, as he is alone and that the only relative in Greece is an estranged daughter. In furtherance of this issue Ms Kottarides referred to the medical reports of Dr Skanavis which indicated that her father was suffering from the following conditions (Exhibit A2):

§ coronary artery disease with old myocardial infarction

§ chronic heart failure

§ chronic bronchitis

§ severe depression not responding to treatment

§ recently developed dementia

§ venous insufficiency of lower limbs with recurrent thrombosis

§ lumbar spondylosis with nervous involvement (numbness in both limbs across the sciatic nerves and nervous claudication)

§ mild renal failure.

10. Ms Kottarides advised the Tribunal that, while the Applicant acknowledged receiving the letters from Centrelink advising him of age pension rate being decreased after 9 February 2002, unless he returned to Australia, neither she nor the Applicant were ever advised of impending changes of legislation in September 2000, and it is her belief that such advice should have been given.

SUBMISSIONS

the applicant

11. The Applicant's representative submitted that the Applicant had been disadvantaged by not being advised of relevant changes in the Social Security legislation which were introduced on 20 September 2000; further that Centrelink had a responsibility to notify the Applicant of such, as they had been made aware of the temporary nature of his intended stay in Australia.

12. Further it was submitted that the Applicant, because of his many and varied medical conditions was unable to travel and that his current circumstances were affected by his social isolation and his inability to properly care for himself in the light of the myriad of relevant medical conditions.

THE RESPONDENT

13. The Respondent submitted that the Applicant's rate of age pension had been correctly calculated and paid after 26 weeks absence from Australia, following his departure to Greece on 11 August 2001. Further, the Respondent submitted that the Applicant had been notified of such a rate change in correspondence dated 26 July 2001, in response to the Applicant's notification of intention to travel to Greece on 17 July 2001.

14. The Respondent also contended, that while the Applicant was undoubtedly suffering from many medical conditions, such conditions may only be considered by the Secretary in extending the Applicant's portability period for payment where he is satisfied that the person is unable to return to Australia because of particular illness. The Respondent, in noting that the maximum portability period for age pension is unlimited, submitted that no advantage can accrue to the Applicant by seeking such an extension for the portability period which is already unlimited. It was noted by the Respondent that the issue in this matter is the rate of age pension and this pension portability rate is calculated in accordance with section 1221 of the Act.

CONSIDERATION AND FINDINGS

15. The Tribunal notes that the facts in this matter are not in dispute between the parties, and accordingly the Tribunal concludes that the facts listed in paragraph 6 of this decision are the facts pertinent to this matter. The Tribunal also finds that the Applicant had 134 months of working life residence in Australia, again an issue not in contention between the parties.

16. The Tribunal also notes that the Applicant has made a claim for compensation to the Respondent in relation to the failure to advise him at any stage of the impending changes to the legislation introduced on 20 September 2000, when it had been made known to the Respondent that the Applicant's intention was to remain for a short time only in Australia. The Tribunal makes no further comment on this issue, as this particular issue is not before the Tribunal.

STATUTORY FRAMEWORK

17. The Tribunal notes the following statutory framework:

(a) Meaning of maximum portability period, allowable absence and portability period

"Meaning of maximum portability period

1217.(1) The person's maximum portability period for the payment is the period referred to in column 5 of the table at the end of this section (the table) that is applicable to:

(a) the payment (as specified in column 2 of the table), and

(b) the class of persons to which the person belongs (as specified in column 3 of the table).

Meaning of allowable absence

1217. (2) The person's absence is an allowable absence in relation to the payment at a particular time if, at that time, it is an absence specified in column 5 of the table that is applicable to:

(a) the payment (as specified in column 2 of the table); and

(b) the class of persons to which the person belongs (as specified in column 3 of the table).

Meaning of portability period if unlimited maximum portability period

1217.(3) If the person's maximum portability period for the payment is an unlimited period, the person's portability period for the payment, in relation to the period of absence, is an unlimited period beginning at the commencement of the period of absence.

Meaning of portability period if maximum portability period limited

1217.(4) If the person's maximum portability period for the payment is a period of weeks, the person's portability period for the payment, in relation to the period of absence, is the period:

(a) beginning at the commencement of the period of absence; and

(b) ending at the earlier of the following times;

(i) the first time during the period of absence at which the absence is not an allowable absence in relation to the payment;

(ii) the end of the period of weeks that is person's maximum portability period for the payment.

Note: People will be required (under the Social Security (Administration) Act 1999) to notify changes in circumstance.

Portability of social security payments

Column 1 Column 2 Column 3 Column 4 Column 5

Item Payment Person Absence Maximum portability

Period

___________________________________________________________________ 1 Age pension All persons Any absence Unlimited period

2 Disability Severely Any absence Unlimited period

support disabled

pension person

(b) Extension of person's portability period

"1218C.(1) The Secretary may extend the person's portability period for the payment if the Secretary is satisfied that the person is unable to return to Australia because of any of the following events:

(a) a serious accident involving the person or a family member of the person;

(b) a serious illness of the person or a family member of the person;

(c) the hospitalisation of the person or a family member of the person;

(d) the death of a family member of the person;

(e) the person's involvement in custody proceedings in the country in which the person is located;

(f) a legal requirement for the person to remain outside Australia in connection with criminal proceedings (other than criminal proceedings in respect of a crime alleged to have been committed by the person);

(g) robbery or serious crime committed against the person or a family member of the person;

(h) a natural disaster in the country in which the person is located;

(i) political or social unrest in the country in which the person is located;

(j) industrial action in the country in which the person is located;

(k) a war in the country in which the person is located.

1218C.(2) The Secretary must not extend the person's portability period under subsection (1) unless:

(a) the event occurred or began during the period of absence; and

(b) if the event is political or social unrest, industrial action or war - the person is not willingly involved in, or willingly participating in the event.

1218C.(3) If the Secretary extends a person's portability period under subsection (1), the person's portability period for the payment, for the purposes of this Part, is the extended period."

(c) Rate of age pension

Section 1220A of the Act as it applied from 20 September 2000 states:

"1220A. A person's rate of age pension is to be calculated using the Pension Portability Rate Calculator at the end of section 1221 if:

(a) the person has been continuously absent from Australia, throughout a period (the period of absence) of more than 26 weeks; and

(b) either:

(i) immediately before the period of absence commenced, the person was receiving the age pension; or

(ii) during the period of absence, the person's claim for the age pension is granted under the Social Security (Administration) Act 1999."

(d) Calculation of rate of age pension (pension portability rate calculation)

"PENSION PORTABILITY RATE CALCULATOR

MODULE A - OVERALL RATE CALCULATION PROCESS

Overall rate calculation process

1221-A1. This is how to calculate a person's portability rate:

Method statement

Step 1 Work out the period of the person's Australian working life residence using Module B: the result is called the residence period.

Step 2 Use the person's residence period to work out the person's residence factor using Module C below.

Step 3 Work out the rate that would be the person's pension or allowance rate if this Rate Calculator did not apply to the person: the result is called the person's notional domestic rate.

Step 4 Multiply the person's notional domestic rate by the person's residence factor: the result is the person's portability rate.

1221-A2. If a person's portability rate as calculated under point 1221-A1 would exceed the rate (the notional rate) that would be the person's notional domestic rate under that point if the person had a residence factor of 1, the person's portability rate is the rate that equals the notional rate.

MODULE B - AUSTRALIAN WORKING LIFE RESIDENCE

Working life

1221-B1. For the purposes of this Module, a person's working life is the period beginning when the person turns 16 and ending when the person reaches pension age.

Note: For 'pension age' see subsections 23(5A), (5B), (5C) and (5D).

Australian working life residence (general)

1221-B2. Subject to points 1221-B3 and 1221-B4, a person's period of Australian working life residence as at a particular time is the number of months in the period, or the aggregate of the periods, during the person's working life during which the person has, up to that time, been an Australian resident.

Note: for the method of calculating the number of months in the period see points 1221-B3 and 1221-B4 below.

Calculation of number of months

1221-B3. If a person's period of Australian working life residence would, apart from this point, be a number of whole months, the period is to be increased by one month.

1221-B4. If a person's period of Australian working life residence would, apart from this point, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.

MODULE C - RESIDENCE FACTOR

Residence factor (period of Australian working life residence 25 years or more)

1221-C1. If a person's period of Australian working life residence is 300 months (25 years) or more, the person's residence factor is 1.

Note: If a person's residence factor is 1, the person's pension will be payable outside Australia at the full domestic rate.

Residence factor (period of Australian working life residence under 25 years), the person's residence factor is:

Person's Australian working life residence

300"

(e) Savings provisions (Schedule 1A of the Act)

"Saving provision - portability rules relating to rates of pension

128. Despite the amendments of sections 1213A, 1215, 1216, 1220A, 1220B and 1221 of this Act made by the Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Act 2000, if:

(a) a person was absent from Australia immediately before 20 September 2000; and

(b) at a time (the post-start time after 20 September 2000, the person had not returned to Australia for a continuous period of 26 weeks or more since 20 September 2000;

those provisions continue to apply to the person at the post-start time as if those amendments had not been made.

Saving provision-other portability rules

130. Despite the amendments of this Act made by Part 1 of Schedule 1 to the Social Security and Veterans' Entitlements Legislation Amendment (Miscellaneous Matters) Act 2000, other than:

(a) the amendments mentioned in clauses 128 and 129 of this Schedule; and

(b) the amendments of sections 1216B, 1218, 1218A, 1218B, 1218C and 1219; and

(c) the amendments of Module A of the Rate Calculator at the end of section 1221;

if:

(d) a person was absent from Australia immediately before 20 September 2000; and

(e) at a time (the post-start time) after 20 September 2000, the person had not returned to Australia since 20 September 2000;

this Act continues to apply to the person at the post-start time as if the amendments (other than those mentioned in paragraphs (a) to (c) had not been made."

18. The Tribunal, in applying the facts as nominated in this matter against the statutory framework as outlined, comes to the following conclusions:

(a) Section 1217(1) of the Act defines the maximum portability period for age pension as an unlimited period. Section 1217(2) defines any absence as an allowable absence for age pension. Section 1217(3) defines an unlimited portability period for the payment as an unlimited period beginning at the commencement of the period of absence.

The Tribunal concludes that the Applicant had an unlimited portability period for payment of his age pension commencing 11 August 2001.

(b) Section 1218C(1) of the Act allows for the extension of a person's portability period for payment in particular circumstances, where the Secretary is satisfied that the individual is unable to return to Australia for various reasons including serious illness of the person.

The Tribunal finds that even if it was concluded that the Applicant was unable to return to Australia because of serious illness, no benefit would accrue to the Applicant as the portability period for payment is already unlimited pursuant to section 1217 of the Act.

(c) Section 1220A of the Act, as applying from 20 September 2000 states that the rate of age pension is to be calculated using the Pension Portability Rate Calculator when an individual, who is in receipt of age pension, is continuously absent from Australia for a period of 26 weeks.

The Tribunal concludes that section 1220A applies to the Applicant once he has been absent from Australia for 26 weeks; the Applicant having left Australia on 11 August 2001.

(d) Pension Portability Rate Calculator is contained within section 1221 of the Act.

The Tribunal concludes that the Applicant's rate of age pension payment should be calculated using the Pension Portability Rate Calculator. The Tribunal also concludes that at 9 February 2002, the Applicant had 134 months of working life residence and a residence factor of 134/300, namely 0.447, and that the age pension portability rate payable from 9 February 2002 is the notional domestic rate multiplied by the residence factor.

(e) The savings provisions contained within Schedule 1A of the Act apply in circumstances where an individual was absent from Australia immediately before 20 September 2000. In such circumstances the amendments relating to portability rules relating to rates of pension do not apply.

The Tribunal concludes that as the Applicant was residing in Australia between 24 April 1999 and 11 August 2001, the savings provisions do not apply to assist the Applicant.

19. In summary the Tribunal concludes that while the Applicant's portability period for age pension is unlimited, the Applicant's portability rate of age pension payment is subject to calculation using the Pension Portability Rate Calculator, and that age pension payments should be paid at this rate after the Applicant has been absent from Australia for 26 weeks. In this matter the effective date is 9 February 2002 and payment should be thereafter made at the calculated pension portability rate for such time as the Applicant remains absent from Australia.

DETERMINATION

20. The Tribunal determines that the decision under review be affirmed.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of DR J D CAMPBELL, Member

Signed: H Sim .......................................................................................

Associate

Date of Hearing 16 December 2002

Date of Decision 24 January 2003

Representative for the Applicant Ms Niki Kottarides

Advocate for the Respondent Ms Rachael Quinn