Todorovic and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 519 (1 July 2010)

Last Updated: 12 July 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 519

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/0944

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Milan Todorovic

Applicant

And

Secretary, Department of Families, Housing, Community Services & Indigenous Affairs

Respondent

DECISION

Tribunal

M D Allen, Senior Member

Date 1 July 2010

Place Sydney

Decision

For the reasons given orally at the conclusion of the hearing on 1 July 2010, the decision under review is AFFIRMED.

....................[sgd]....................
M D Allen, Senior Member

CATCHWORDS

SOCIAL SECURITY – Claim for part of age pension bonus payment denied. Applicant did not satisfy work test. Absence on annual and long service leave does not constitute gainful work. Decision under review affirmed.

LEGISLATION

Social Security Act (1991), section 92.

CASES

Repatriation Commission v Vietnam Veterans Association [2000] NSWCA 65; (2000) 48 NSWLR 548.

REASONS FOR DECISION

12 July 2010

M D Allen

1. At the conclusion of the hearing of this matter the terms of the decision intended to be made and the reasons therefore were stated orally. After service upon the Applicant and the Respondent of a copy of the decision that was in fact made, the Applicant, pursuant to subsection 43(2A) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”), requested that the Tribunal furnish to them a statement in writing of the reasons of the Tribunal for the decision.
2. The oral reasons for the decision have been transcribed by Auscript, the Commonwealth Reporting Service. Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reason for the said decision.
3. The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reason for the Tribunal’s decision.

I certify that these and the following paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.

Signed: ......................[sgd]...................................

K. Lynch, Associate

Date of Hearing 1 July 2010

Date of Decision 1 July 2010

Date of Written Reasons 12 July 2010

Representative for the Applicant Mr M Todorovic (self)

Representative for the Respondent Ms Bain, Centrelink Advocacy Service

EXTRACT OF TRANSCRIPT OF PROCEEDINGS:

MR ALLEN: By application made the 9th day of March 2010, the Applicant seeks review of a decision by the Social Security Appeals Tribunal, made the 5th day of February 2010, affirming a prior determination not to pay part of the pension bonus scheme to the applicant.

The facts in the matter are relatively straightforward. The Applicant turned 65 years of age on 8 January 2004. On 6 December 2005, he completed a registration for the pension bonus scheme and on 12 December 2005, he was notified that he had been accepted as a member of that scheme, as from 7 January 2004. On 23 February 2009, he lodged a claim for age and pension bonus. The result was that he was paid a pension bonus amount of $4,735.50, followed later by a further amount of $7,640.80. This was much less than the Applicant had expected and the reason for this is that it was held that the Applicant had ceased to meet the work test, as and from 1 January 2007.

The work test, in respect of the pension bonus scheme, is set out in section 92T of the Social Security Act (1991) (“the Act”). Subsection (3) of section 92T states, inter alia:

“a bonus period accrues to a person if the person passes the work test for that period”.
Section 92U of the Act then provides that a person passes the work test if the total number of hours gainfully worked by the person, during a four year period, was at least 960 hours. It is to be noted that the section refers to hours gainfully worked. In this matter, the Applicant followed a course which is quite common amongst working people. In January 2007, he took his accrued long service leave and that lasted from 7 January 2007 until 14 April 2008, and then took annual leave from 14 April 2008 until 8 January 2009, then he retired in April 2009.

At all relevant times, the Applicant was employed by the Royal Hospital for Women, Randwick, New South Wales. As I have said, the matter of an employee taking accrued long service leave prior to retirement is well recognised in Australian society, and during the period the Applicant was on long service leave and also on annual leave, he continued to be employed, continued to draw his wages and paid tax on those wages. Unfortunately for the Applicant, section 92X of the Act reads as follows:

“For the purpose of this part, gainful work is work for financial gain or reward, whether as an employee, a self-employed person or otherwise where (a) the work involves a substantial degree of personal exertion on the part of the person concerned.”

One might have thought, in the normal course, that where a person is on long service leave and even more so, annual leave, but continuing to draw wages from his employer, the whole purpose of the statute has been met. That is to say, that although not actually attending work, for the purposes of section 92U, is engaged in gainful work. I have sought to apply a purposive interpretation to the statute. However, it seems to me that section 92X restricts gainful work to the actual performance of duties. In approaching the interpretation of the section, I kept in mind the judgment of Spigelman CJ in Repatriation Commission v Vietnam Veterans Association [2000] NSWCA 65; (2000) 48 NSWLR 548 at 575. His Honour said, speaking of the Repatriation Medical Authority and the sections regarding its investigations:

“They provide part of the context internal to the legislative scheme in which the words must be construed. The Australian law of statutory interpretation requires a court to consider context in the first instance, not merely after ambiguity is identified.”

Section 92X occurs in subdivision B of division 5 of the Act and contains the other following sections, such as section 93 which states that:

“Management of family financial investments does not count as gainful work.”

But more to the point, is section 92Z, which reads:

“For the purposes of this part, if a person is engaged in gainful work, the total hours gainfully worked by the person during a period are to be determined as if the person had been engaged in gainful work during any absences from the workplace that are irregular, infrequent and minor.”

It seems to me that section 92Z must be read in context with section 92X, so that absences from the workplace that are not infrequent and/or minor, do not count as gainful work. I am strengthened in this opinion by the explanatory memorandum that accompanied the Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Bill 1998 at page 14, reads:

“New subsection 92X(1) provides the general rule that gainful work is work for financial gain or reward, whether as an employee, a self-employed person or otherwise, where the work involves a substantial degree of personal exertion by the person.”

At page 15, the explanatory memorandum reads;

“New section 92Z inserts a special rule to provide that absences from a workplace that are irregular, infrequent and minor may be treated as gainful work. These conditions are cumulative: the rule operates only in relation to absences that meet all of the conditions. It is intended that this provision will treat an absence from the workplace as gainful work where the person is considered to be “on duty” despite their absence.”
I would just state, for completeness, that the second reading speech does not assist me. The crux of the matter is, however, that I am satisfied that under section 92X, as it affects section 92U, absence on annual leave or long service leave does not constitute gainful work for the purposes of the pension bonus scheme. Consequently, the decision under review must be AFFIRMED.

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