Kirov and Secretary, Department of Education, Employment and Workplace Relations [2011] AATA 50 (2 February 2011)

Last Updated: 3 February 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 50

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/2914

GENERAL ADMINISTRATIVE DIVISION		)
	Re		DAVID KIROV

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Ms K Hogan, Member

Date 2 February 2011

Place Perth

Decision

The Tribunal affirms the decision of the Social Security Appeals Tribunal under review.

..(sgd) Ms K Hogan.......
Member

CATCHWORDS

SOCIAL SECURITY - Youth Allowance - Cancellation of Youth Allowance - Payment of Arrears

LEGISLATION

Social Security Act 1991

Social Security (Administration) Act 1999 ss 85, 109(2), 68(2)(b), 95(1)(2), 137(1)

CASES
Rafiee and the Secretary, Department of Family and Community Services [2002] AATA 816

Thiagarajan and Secretary, Department of Employment and Workplace Relations [2007] AATA 2065

REASONS FOR DECISION

2 February 2011

Ms K Hogan, Member

HISTORY

1. Mr. Kirov was in receipt of youth allowance payments from Centrelink in February 2003.
2. Mr. Kirov was required to lodge fortnightly application for payment forms as part of his reporting obligations for the receipt of youth allowance.
3. Centrelink sent Mr Kirov an application for payment form on 3 February 2003 to his usual address. This form was not lodged with Centrelink, and as a result, Mr Kirov’s youth allowance was cancelled.
4. Mr Kirov was sent a notification of the cancellation of his youth allowance on 28 February 2003 and advised to contact Centrelink if he thought this decision was incorrect.
5. Mr Kirov did not contact Centrelink about the cancellation of his youth allowance until 22 August 2003.
6. Centrelink decided that it could not back date Mr Kirov’s youth allowance to the date of cancellation and required him to lodge a new claim for youth allowance.
7. Centrelink recommenced Mr Kirov’s youth allowance payment from 22 August 2003.
8. Mr Kirov requested a review of Centrelink’s decision to cancel his youth allowance from 31 January 2003 until the date of recommencement of youth allowance being 22 August 2003.
9. Centrelink’s decision was reviewed by an Authorised Review Officer (ARO) on 19 January 2004 and the decision to cancel youth allowance from 31 January 2003 was affirmed. The reasons given included that:

“When you failed to meet the obligation of lodging fortnightly forms your payments were properly cancelled”

10. The ARO further indicated that even if a decision had been made in favour of Mr Kirov in relation to the cancellation issue, no payment of arrears would be made for reasons as follows:

“There are further sections of the same legislation which detail what would happen if I found that you did have a sufficient reason for failing to lodge the form due on 13 February 2003. They say that if you request us to review a decision more than 13 weeks after the decision is notified to you, then the date of effect of any favourable decision is the date you request the review. In this case even if I were to find in your favour, YAL would only be reinstated from 22 August 2003, the day you requested a review of decision (section 109(2) SSAA). You have already been paid YAL from that date.”

11. Mr Kirov appealed the decision to the SSAT on 17 May 2010 which on 11 June 2010 affirmed the decision under review.
12. Mr Kirov applied to review that decision to this Tribunal.

ISSUES FOR DETERMINATION

13. The issues to be considered by the Tribunal are:
    • (i) whether Mr Kirov’s youth allowance payments should have been cancelled from 31 January 2003; and if not, whether there are any restrictions which prevent arrears being paid to him; and,
    • (ii) whether Mr Kirov can be paid youth allowance from a date prior to 22 August 2003.

LEGISLATION

14. A determination in this matter requires consideration of the Social Security Act 1991 ("the Act") and the Social Security (Administration) Act 1999 ("the Administration Act").
15. Section 85 of the Administration Act deals with the resumption of payment after cancellation or suspension and as relevant states:

"85 Resumption of payment after cancellation or suspension

(1) If:

(a) a social security payment ceases to be payable to a person under section 93 or the Secretary cancels or suspends a person's social security payment under section 80, 81 or 82; and

(b) the Secretary reconsiders the decision; and

(c) as a result of the reconsideration, the Secretary is satisfied that, because of the decision:

(i) the person did not receive a social security payment that was payable to the person; or

(ii) the person is not receiving a social security payment that is payable to the person;

the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.

(2) The reconsideration referred to in paragraph (1)(b) may be a reconsideration on an application under section 129 or a reconsideration on the Secretary's own initiative.

...."

16. Section 109 of the Administration Act deals with the date of effect of a favourable determination resulting from review and subsection 109(2) of the Administration Act deals with the circumstances of a person being given notice of a decision to cancel the Youth Allowance. Subsection 109(2) of the Administration Act states:

"109 Date of effect of favourable determination resulting from review

(2) If:

(a) a decision (the original decision) is made in relation to a person's social security payment; and

(b) a notice is given to the person informing the person of the original decision; and

(c) more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d) the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the application for review was made.

..."

17. Section 68 of the Administration Act refers to notices that may be given by the Secretary to a person receiving a social security payment or holding a concession card as relevant states:

"68 Person receiving social security payment or holding concession card

(1) Subsection (2) applies to a person to whom a social security payment is being paid.

(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or

(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department a statement about a matter that might affect the payment to the person of the social security payment.

(3) Subsection (4) applies to a person who is the holder of a concession card.

(4) The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or

(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department a statement about a matter that might affect the person's qualification for the concession card.

(5) An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might affect the payment of the social security payment or the person's qualification for the concession card, as the case requires.

..."

18. Section 137 of the Administration Act deals with certain decisions which are not to be revived. It states:

" 137 Certain decisions not to be revived

(1) This section has effect if:

(a) the Secretary makes a determination (the first determination) that:

(i) a social security payment is granted or is payable to a person; or

(ii) a social security payment is payable to a person at a particular rate; and

(b) the Secretary makes a determination (the second determination):

(i) cancelling the social security payment; or

(ii) reducing the rate at which the social security payment is payable; and

(c) notice of the second determination is given to the person; and

(d) the person applies under section 129 for review of the second determination; and

(e) the application is made more than 13 weeks after notice of the second determination was given; and

(f) a decision (the review decision) is made by the Secretary, an authorised review officer, the Social Security Appeals Tribunal or the Administrative Appeals Tribunal; and

(g) the review decision, or the effect of the review decision, is:

(i) to set aside the second determination; or

(ii) to affirm a decision setting aside the second determination.

(2) This section has effect if:

(a) the Secretary makes a determination (the first determination) that:

(i) a social security payment is granted or is payable to a person; or
(ii) a social security payment is payable to a person at a particular rate; and

(b) the Secretary makes a determination (the second determination):

(i) cancelling the social security payment; or

(ii) reducing the rate at which the social security payment is payable; and

(c) notice of the second determination is given to the person; and

(d) the Secretary reviews the second determination under section 126 without any application under section 129 for review of the decision having been made; and

(e) the decision of the Secretary on the review is to set aside the second determination; and

(f) the decision on the review is made more than 13 weeks after notice of the second determination was given.

(3) This section has effect if:

(a) the Secretary makes a determination (the first determination) that:

(i) a person's claim for a concession card is granted; or

(ii) a person is qualified for a concession card; and

(b) the Secretary makes a determination (the second determination) cancelling the concession card; and

(c) notice of the second determination is given to the person; and

(d) the person applies under section 129 for review of the second determination; and

(e) the application is made more than 13 weeks after notice of the second determination was given; and

(f) a decision (the review decision) is made by the Secretary, an authorised review officer, the Social Security Appeals Tribunal or the Administrative Appeals Tribunal; and

(g) the review decision, or the effect of the review decision, is:

(i) to set aside the second determination; or

(ii) to affirm a decision setting aside the second determination.

(4) This section has effect if:

(a) the Secretary makes a determination (the first determination) that:

(i) a person's claim for a concession card is granted; or

(ii) a person is qualified for a concession card; and

(b) the Secretary makes a determination (the second determination) cancelling the concession card; and

(c) notice of the second determination is given to the person; and

(d) the Secretary reviews the second determination under section 126 without any application under section 129 for review of the declaration having been made; and

(e) the decision of the Secretary on the review is to set aside the second determination; and

(f) the decision is made more than 13 weeks after notice of the second determination was given.

(5) If this section has effect:

(a) the second determination does not become void from the time when it was made; and

(b) the mere setting aside of the second determination does not of itself revive the first determination.

(6) For the purposes of this section, a person is taken to have applied for review of a determination (the primary determination) if:

(a) the person applies for review of another determination or decision; and

(b) a review of the primary determination is necessary to resolve the issues raised by the review of that other determination or decision.

...."

EVIDENCE

19. The Tribunal was provided with a number of documents including the section 37 documents and written submissions from the parties.
20. The Tribunal heard oral evidence and submissions from Mrs Olga Kirov; Mr Kosta Kirov, Ms Elly Kirov and oral submissions from Mr Holt.
21. Mr David Kirov was not in attendance at the Tribunal.
22. The Tribunal considered the documents, oral evidence and submissions of Mrs Olga Kirov; Mr Kosta Kirov, Ms Elly Kirov and Mr Holt.

CONTENTIONS

SECRETARY’S CONTENTIONS

23. The Secretary contended that it was appropriate to concede that there were special circumstances in relation to whether Mr Kirov’s payments of youth allowance should have been cancelled from 31 January 2003.
24. Subsection 68(2)(b) of the Administration Act requires a person in receipt of a Social Security payment to provide Centrelink with statements about a matter which might affect their entitlement.
25. If such a person fails to respond to a notice given under subsection 68(2)(b) of the Administration Act without sufficient cause, then subsection 95(1) of the Administration Act applies and their Social Security payment can be cancelled from the first day of the period specified in the notice.
26. On 13 February 2003 Mr Kirov failed to return the Application for Payment form sent to him on 13 January 2003 and as a result his youth allowance payments were automatically cancelled from 31 January 2003.
27. Subsection 95(2) of the Administration Act could be applied if the Secretary was satisfied that in the special circumstances of the case the payment should not be cancelled. At the date of cancellation of Mr Kirov’s payments and at the time of the ARO review, there was no evidence that Mr Kirov satisfied subsection 95(2) of the Administration Act. However, on 11 June 2010 Mr Kirov provided the SSAT with medical evidence which indicated that there were special circumstances why the payment should not have been cancelled.
28. The Secretary accepted that Mr Kirov was under extreme stress which affected his ability to lodge the Application for Payment form on 13 February 2003 and therefore his medical condition constituted a special circumstance as contemplated by subsection 95(2) of the Administration Act. The Secretary contended that Mr Kirov’s youth allowance payments should not have been cancelled from 13 January 2003.
29. The Secretary contended that whilst it was satisfied that Mr Kirov’s youth allowance payments should not have been cancelled, the Secretary agreed with the SSAT decision that it is not appropriate to apply subsection 95(2) of the Administration Act to reinstate Mr Kirov’s payments prior to 22 August 2003.
30. There is more than a six year gap between the ARO letter sent to Mr Kirov on 19 January 2004 informing him of his review rights and the consequences of not pursuing an appeal within 13 weeks of the decision and 12 April 2010 when Mr Kirov finally requested a further review.
31. Whilst Mrs Kirov had explained to the SSAT that this delay was due to Centrelink informing her that she did not have authority to take action in regard to the cancellation of her son’s payments because she had no power of attorney or guardianship in relation to him, the Secretary disagreed. Mrs Kirov and her husband were authorised nominees from 22 August 2003, their Centrelink FOI request was granted on 18 November 2004 and Mr Kirov received copies of his medical reports from the Department of Health on 3 December 2004. The Secretary submitted that Mr Kirov had the opportunity to pursue the review much earlier but failed to do so.
32. The decision to cancel Mr Kirov’s payments was correct at the time of the cancellation and at the time of the ARO review and it was only after medical information was made available six and a half years later that a new decision could be made that his payments should not have been cancelled. Consequently the Secretary contended that it would not be appropriate to apply subsection 95(2) of the Administration Act prior to 22 August 2003.
33. The Secretary contended that subsection 137(1) of the Administration Act was relevant to this matter and should be applied. This subsection provides that arrears are not payable if a person is notified of a cancellation decision and fails to request a review of it within 13 weeks. This section of the law was discussed at paragraph 71 in the matter of Rafiee and the Secretary, Department of Family and Community Services [2002] AATA 816, 70 ALD 605 and in the latter decision of Thiagarajan and Secretary, Department of Employment and Workplace Relations [2007] AATA 2065.
34. In the latter case, the Tribunal commented at paragraph 62:

“The express terms of SSAA section 137(1) and 137(5) unequivocally declare the legislative intention that setting aside a cancellation decision, at least if the original decision was validly made, does not result in reviving a past entitlement to payment of arrears. That intention is unequivocally expressed. It carries no suggestion that lack of fault on the part of a Social Security Applicant at least one who had been given notice of the relevant decision, provides a justification for not applying the ‘date of effect’ rules according to their tenor. Secondly, SSAA section 135(5) precludes the Tribunal decision from operating of its own force to revive the effect of the original decision. Consequently even if the Tribunal came to the conclusion that the cancellation decision should be set aside, and even it ordered that its own decision setting aside the cancellation should take effect before 11 April 2005, not even that decision of itself revives the effect of the original decision under which Mrs Thiagarajan was granted parenting payment.”

35. The Secretary contended that arrears of youth allowance could not be paid to Mr Kirov for the period 14 January 2003 to 21 August 2003.
36. The Secretary made submissions in relation to the appropriate start date of the youth allowance claim made on 22 August 2003.
37. Section 44 of the Administration Act provides that the start date of a payment is worked out in accordance with Schedule 2.
38. Clause 3(1) of Schedule 2 provides that if a person was qualified on the day they made a claim for payment, their payments would commence from that date.
39. Part 3 of Schedule 2 contains the circumstances that allow a start date to be back dated. Clause 34 provides for a youth allowance claim to be back dated for up to 5 weeks, if the person became incapacitated for full-time study as a result of a medical condition and the person continued to suffer with that medical condition until the day the claim was made.
40. The Secretary contended that clause 34 cannot be applied to Mr Kirov’s claim for youth allowance made on 22 August 2003 because there is evidence that he studied full-time during the first semester of 2003 and therefore the lodgement of his claim was not delayed as a result of being incapacitated for full-time study due to a medical condition.
41. The Secretary contended that although Mr Kirov’s youth allowance payments should not have been cancelled from 13 January 2003 pursuant to section 95(2) of the Administration Act, it was not appropriate to reinstate his payments prior to 22 August 2003 and alternatively, arrears were not payable pursuant to section 137 of the Administration Act.
42. The Secretary contended that as at 22 August 2003 there were no circumstances to allow the later claim of youth allowance to be back dated.

APPLICANT’S CONTENTIONS

43. Mrs Kirov, on behalf of the Applicant, explained to the Tribunal the very difficult circumstances which existed prior to and at the beginning of 2003. Mrs Kirov advised [Exhibit A1, page 3, paragraph 12]:

“David was experiencing debilitating levels of stress and sickness by the end of February 2003. He had become increasingly hostile, demanding and violent and was unable to cope with the impending pressure. The behavioural issues associated with ADD coupled with the addition of a heart monitor ...made normal information processing difficult, and this translated into an inability to cope.”

44. Mrs Kirov, in oral evidence and in her written submission, detailed the occasions on which she had approached Centrelink to seek reinstatement of Mr David Kirov’s payments, for example:

Exhibit A1, Page 5;

“The third time I (Mrs Kirov) spoke to Mr Gentelli directly on his phone number ... he was sympathetic as I explained my son’s ongoing medical problems. He suggested that the only thing that might help was if there were medical records that could explain and/or clarify David’s problems and/or actions. I informed him that this was certainly possible, but that it would take time to collate the many documents that accumulated over time. Mr Gentelli also explained that in order to take the matter further, we would need to write a letter to the Social Security Appeals Tribunal. We had not been provided with an opportunity by Mr Gentelli to provide any medical records, when his review decision was made in his letter dated 19 January 2004.”

Exhibit A1, Page 6, paragraph 17;

“I (Mrs Kirov) wrote a letter to the Social Security Appeal Tribunal dated 16 March 2004. The letter, along with Dr Ng’s letter, was submitted to the Morley Centrelink Office on 22 March 2004. The letter was received, stamped and given to ‘Karen’ on 14 May 2004. Centrelink explained that they would forward this letter to the Tribunal which is why we delivered it to Centrelink.

45. On 30 September 2004 Mrs Kirov discovered that the letter addressed to the Social Security Appeals Tribunal had not reached them. She was provided with a number and advised to phone the Welfare Rights and Advocacy Service in Edwards Street, East Perth. She and her husband sought advice and it was recommended that an application to Centrelink under the Freedom of Information Act should be made. This was done on 11 October 2004.
46. Attached to Exhibit A1 was a copy of the Centrelink records dated 30 September 2004 at which time the Centrelink Officer provided Mrs Kirov with the SSAT telephone number and advised her to call to enquire about the progress of an appeal.
47. Mrs Kirov gave evidence of difficult family circumstances which included losing a grandparent in 2003 and another in 2004 and the significant heart condition her mother developed in May 2005 which required considerable care on an ongoing basis by the family. Mrs Kirov stated, Exhibit A1, page 7 that she and her husband were prescribed antidepressants.
48. Mrs Kirov gave evidence that in 2007 a Croatian translator named Jim, who was assisting the family with a Centrelink enquiry regarding Mr Kosta Kirov’s Centrelink entitlements, advised her that the situation regarding Mr David Kirov’s payments could be reviewed. Mrs Kirov gave evidence that she contacted Centrelink in April 2008.

FINDINGS

49. The Tribunal formed the view on the basis of the evidence and the submissions of both parties that it is appropriate to consider that Mr Kirov’s medical condition at the time of his failure to lodge the Application for Payment form in February 2003 did constitute a “special circumstance” as contemplated by subsection 95(2) of the Administration Act and that in a special circumstances of this case, it has the power to exercise the discretion to determine that an automatic cancellation should not have occurred as a result of the failure to lodge.
50. The next question for consideration is whether the Tribunal should determine that the automatic cancellation under subsection 95(1) of the Administration Act should not apply from a date specified. The relevant legislative authority in relation to this is section 109(2) of the Administration Act. The Tribunal has considered the provisions of that section and does not find that it applies to an automatic cancellation of payment under section 95(1).
51. The Tribunal must decide whether it has the power to determine that arrears of youth allowance may be paid to Mr Kirov from the date of cancellation (31 January 2003) or any other later date up to 22 August 2003. The Tribunal must decide whether it is satisfied that that is an appropriate determination in the circumstances of this case.
52. Power to determine that arrears should be payable under subsection 95(2) is a discretionary power and the Tribunal must therefore weigh the factors for and against the exercise of its discretion.
53. In favour of the decision to exercise the discretionary power is:
    • (i) The finding that the original decision maker and the ARO made an error of law.
    • (ii) The difficult circumstances of the Applicant and the Applicant’s family.
54. However, there are two factors weighing against the decision to exercise discretionary power:
    • (i) Documents from Mr Kirov’s records were provided to Mr & Mrs Kirov as authorised persons under a Freedom of Information request on 18 November 2004.
    • (ii) Mr Kirov did not bring an application for review of this decision or the fresh evidence on which the discretion in section 95(2) may be based until more than 7 years after the original decision was made and 6 years after the ARO decision was made.
55. Taking those factors into account the Tribunal finds that it would not be proper to exercise the discretion under subsection 95(2) of the Administration Act to determine that youth allowance should now be payable to Mr Kirov for any of the period from 31 January 2003 to 21 August 2003.

DECISION

56. The Tribunal affirms the decision of the Social Security Appeals Tribunal under review.

I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Ms K Hogan, Member

Signed: ..(sgd) T Freeman..........

Associate

Date/s of Hearing 14 December 2010

Date of Decision 2 February 2011

Representative for the Applicant Mrs O Kirov and Mr K Kirov

Representative for the Respondent Mr A Holt

Departmental Advocate