Centrelink's 'absurd and wrong' decision to cancel pension

A tribunal has found that Centrelink’s decision to cancel the pension of an 80-year-old living with dementia in a nursing home was “absurd and wrong”.

The Administrative Appeals Tribunal (AAT) released a judgement this week that found Centrelink incorrectly cancelled the pension of David Fry, who did not “have the capacity to comprehend that a decision to suspend his pension had been taken”.

Mr Fry was first granted the Age Pension in January 2006 when he had been in the advanced stages of dementia for a number of years. In January 2016, he was assessed as mentally incapacitated by the South Australian Civil and Administrative Tribunal.

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After he was pulled over by police for driving on the wrong side of the road, an order was made to appoint his son John Fry as his legal guardian.

In March 2018, Centrelink sent notices to both Mr Fry and his son seeking updated information regarding his income stream, with a response not forthcoming, which resulted in the suspension of his pension.

In May, John Fry made a phone call to Centrelink to explain the situation and how he was having difficulty accessing his father’s information; his pension was reinstated.

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Then in July, and again in August, further notices were sent to Mr Fry and his son requesting the provision of information about the income stream within 21 days, which again was not provided and his pension was suspended from 25 September.

Centrelink then cancelled Mr Fry’s pension in December 2018 after sending further requests for communication, but this time the letters were only sent to Mr Fry and not his son.

AAT member Roger Maguire said it was “difficult to contemplate a person who might be more vulnerable than a hospitalised septuagenarian suffering from dementia”.

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While the AAT accepted that John Fry had not complied with Centrelink notices in a timely fashion, they also accepted that he had no knowledge of his father’s financial affairs and had become guardian against his father’s will.

In this situation, his father had not been forthcoming with information, which placed him in a difficult predicament.

“He (John) had not been aware that his father had two pension accounts until he was advised by a Centrelink representative when making the application for his new pension. He expressed frustration at time-consuming dealings with Centrelink, and having to re-explain the circumstances on each occasion that he was able to establish contact,” Mr Maguire said.

Centrelink determined, once the information was provided, that Mr Fry had been eligible to receive a pension throughout the time in which his payment was suspended. Furthermore, the AAT found that the treatment of the 80-year-old was “absurd and wrong”, rather than “rational and proportionate”.

The AAT explained that Centrelink had always had the power to obtain the information directly from Mr Fry’s financial institution, which it did not do.

While Centrelink also argued that Mr Fry should not be eligible for back pay for the period he was without his pension because the cancellation was not appealed within 13 weeks, the AAT ruled against the agency on this point because John Fry had contacted the agency three times in October.

While Centrelink had not recorded the reasons for those phone calls, Mr Maguire said it was “fairly obvious he wasn’t phoning up to try and organise a golf game”.

Services Australia general manager Hank Jongen said that the department would fully implement the AAT’s decision and explained that there was a new process in place to ensure that similar situation did not occur now.

“This decision relates to a payment cancellation in 2018,” Mr Jongen said. “From 1 January 2019, we introduced a new process for our income stream reviews to make it easier for customers.

“This made it mandatory for all providers of income streams to supply information to us, rather than asking customers to supply it, to complete reviews. Our staff then review if a discrepancy is identified.”

Mr Jongen also emphasised the importance of nominated legal guardians contacting the agency if they are struggling to fulfill their commitments.

“We encourage anyone who is struggling to fulfil their commitments as a nominee to contact us so we can provide guidance on the best options,” Mr Jongen said.

“When a person is appointed as a nominee, it’s expected that they will act in the best interests of the customer in all their dealings with us.

“Nominees are required to confirm that they accept and understand their obligations and responsibilities as an authorised nominee. This includes responding to requests for information.”

The case is one of many recent examples of Centrelink problems and errors occurring around the Age Pension.

Last month, YourLifeChoices reported on how a data entry error had cost a West Australians couple $20,000 in pension payments. There was also a case of Centrelink chasing a decades-old debt from a woman who had passed away and threatening to withdraw the pension of a 102-year-old woman at the height of the pandemic.

Independent MP Andrew Wilkie told The Guardian that Centrelink was “out of control”.

“That Centrelink thinks it’s okay to just go and take the pension off an elderly man in the advanced stages of dementia is either cruel and mindless or symptomatic of an agency that is still beholden to useless automated systems despite the robo-debt debacle,” Mr Wilkie said.

“Maybe taxpayers should suddenly and arbitrarily stop paying the minister responsible for Centrelink from time to time because that looks like the only way to jolt some sense into the government.”

Have you had a recent dispute with Centrelink? Are you concerned about the growing reports of mistakes and incorrect rulings by the department? Why not share your thoughts in the comments section below?

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Written by Ben



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