Walker and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 629 (24 August 2009)

Last Updated: 25 August 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 629

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/1299

GENERAL ADMINISTRATIVE DIVISION		)
	Re		ROBERT WALKER

Applicant

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

Dr K S Levy, RFD, Senior Member

Date 24 August 2009

Place Brisbane

Decision

The Tribunal affirms the decision under review.

...............[Sgd]...............................
Senior Member

CATCHWORDS

SOCIAL SECURITY – Pension Bonus Scheme – Amount of pension bonus was correctly calculated – Decision affirmed.

Social Security Act 1991 (Cth), ss 92A, 92C, 92D, 93D, 93E, 93F, 93G, 93H, 93J

REASONS FOR DECISION

24 August 2009

Dr K S Levy, RFD, Senior Member

INTRODUCTION

1. Mr Walker, the applicant, applied for and was paid an amount of pension bonus. The amount paid was $3,983.70. Mr Walker had anticipated that he would be paid the highest amount of pension bonus, as he had worked eight full-year pension bonus periods. He sought review of the decision by Centrelink. An Authorised Review Officer affirmed the decision on 3 December 2008. He then appealed to the Social Security Appeals Tribunal and, on 27 January 2009, that Tribunal also affirmed the original decision. Mr Walker now seeks review by this Tribunal.

ISSUE

2. The issue before the Tribunal is whether the amount of $3,983.70 is the correct amount of pension bonus in respect of Mr Walker.

EVIDENCE

3. Mr Walker attained the age of 65 years on 21 April 1999. He applied for a pension bonus on 11 December 2000 and was advised that he was not registered for the scheme. He subsequently lodged a registration form on 22 August 2001. On 4 September 2001, he was advised that he was registered with effect from 28 November 2000. However, Centrelink subsequently accepted that Mr Walker’s registration as a member of the pension bonus scheme should be effective from 21 April 1999.
4. Mr Walker worked for the equivalent of eight full-year pension bonus periods following the effective commencement date of 21 April 1999. On 16 October 2007, he lodged a claim for age pension and for pension bonus. He supplied a statement of income and assets, which included a car, a boat, a rural residential property, a vacant block of land, cash, superannuation and shares. In the course of assessing his application for pension bonus, questions arose about the value of Mr Walker’s real estate assets. With respect to the rural property, Mr Walker provided a valuation of $82,000 with effect from 30 June 2005. The Australian Valuation Office on 30 October 2007 valued it at $280,000. In respect of a vacant block of land at Turkey Beach, Mr Walker had provided the latest valuation as at 30 June 2005 of $52,000. On 26 October 2007, the Australian Valuation Office valued that property at $140,000. Mr Walker accepted the valuations of the Australian Valuation Office.
5. In evidence Mr Walker described how, with the help of his daughter, he had got a payout from a former employer that went into receivership. He noted that the Government received an extra $35,000 in tax from him that year. He also mentioned that he had paid $218,000 in tax during the period he worked after being registered for the pension bonus. He believed that the pension bonus amount of $3,983.70 paid to him was very unfair in those circumstances. He did not dispute the rate of his age pension payments, only the amount of the pension bonus.

CONSIDERATION

6. The facts of this case show there is no dispute about Mr Walker’s eligibility for the pension bonus under any of the statutory provisions. Equally, Mr Walker does not dispute the rate of age pension he has received. His dispute is that he wants what he thinks he is legally entitled to. At one stage, when his wife had cardiomyopathy, he received carer payments while he looked after her. When her condition stabilised, his family agreed that they would help his wife while he went to work. He believes $3,983.70 is not commensurate as a pension bonus for him working a further eight years.
7. The relevant statutory provisions are contained in the Social Security Act 1991 (“the Act”). The relevant provisions are ss 92A, 92C, 92D, 93D, 93E, 93F, 93G, 93H and 93J. There is nothing contentious about the application of any of these provisions to Mr Walker except where it relates to the calculation of the amount of pension bonus payable to him. Section 93D of the Act provides the basis of calculating the amount of pension bonus, which process involves working out a person’s “pension multiple”. Section 93G of the Act provides that a pension multiple is calculated by using the following formula:

0.094 x number of years in the person’s overall qualifying period

There are five years in Mr Walker’s overall qualifying period and therefore the pension multiple applicable is 0.47.

8. Section 93H of the Act instructs how to calculate a person’s annual pension rate. In s 93J of the Act, the amount of pension bonus is then calculated by the following formula:

Annual pension rate x pension multiple x number of years in the person’s overall qualifying period

Mr Walker’s annual pension rate is $1,695.20 and the number of years in his overall qualifying period is five. Therefore, applying the annual pension rate to the pension multiple (0.47) by the number of years in the overall qualifying period (5) results in an annual pension bonus payable of $3,983.70.

9. It is apparent that the amount calculated by Centrelink in respect of Mr Walker’s pension bonus is correct according to the legislative provisions.
10. It is apparent that Mr Walker, who stated he is seeking what he is legally entitled to, has already been paid his legal entitlement. It is clear he is aggrieved because he regarded the pension bonus payment he received as morally wrong. Statutory interpretation can result in a legal outcome upon which most legal minds will agree; what is morally correct may differ from person to person. However, even where individuals agree that an outcome may appear unfair in some circumstances, the law made by Parliament binds everybody. It seems that when Mr Walker applied to be registered for the pension bonus scheme, he was not told that the pension bonus was means tested. Consequently, he had a perception that he would get the maximum amount payable.
11. Although he may have increased his assets working over five full-year pension bonus periods by more than he may have received in pension bonus, that is not an issue for Mr Walker. Regrettably for Mr Walker, there is an inverse proportional relationship between the quantum of assets people have accumulated and the annual pension rate to which they are entitled. Because of the increase in Mr Walker’s assets over the five full-year pension bonus periods, the annual pension rate to which he is entitled has reduced (the inverse proportional relationship). Despite the pension multiple and the number of years to which that multiple is applied, the amount of pension bonus payable is also ultimately affected by the value of Mr Walker’s assets - the pension rate amount is less because of the increased value of his assets, there is a corresponding reduction in the annual pension rate and, as a consequence, the amount of pension bonus payable.

DECISION

12. I am satisfied that the decision made by Centrelink is correct legally. The decision under review is therefore affirmed.
    

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Dr K S Levy, RFD, Senior Member.

Signed:...................[Sgd]...........................................................

Mátyás Kochárdy, Research Associate

Date of Hearing 31 July 2009

Date of Decision 24 August 2009

The Applicant was self-represented

For the Respondent Michelle Brazier, Departmental Advocate