Al Ali; Secretary, Department of Social Services and (Social services second review)

Al Ali; Secretary, Department of Social Services and (Social services second review) [2016] AATA 355 (31 May 2016)

Division

GENERAL DIVISION

File Number(s)

2015/3901

2015/3902

Re

Secretary, Department of Social Services

APPLICANT

And

Ali Al Ali

Azhar Hashim

RESPONDENTS

DECISION

Tribunal
Egon Fice, Senior Member

Date 31 May 2016

Place Melbourne
The decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal dated 23 June 2015 is set aside and in substitution the Tribunal decides that
Mrs Hashim has a debt owing to the Commonwealth in the amount of $21,849.72 and
that Mr Al Ali has a debt owing to the Commonwealth in the amount of $22,635.89.

...................................[sgd].....................................
Egon Fice, Senior Member
Catchwords
SOCIAL WELFARE – social security payments – appeal by Secretary against decision of Social Services & Child Support Division – overpayments – whether a debt owed to the Commonwealth – definition of income – whether payments constituted a loan – where insufficient evidence to prove payments were loans – where undeclared income – decision set aside – overpayment recoverable as a debt to the Commonwealth.
Legislation
Social Security Act 1991 (Cth) ss 8, 117(a), 503(b), 1062(1), 1223, 1236(1A), 1236(1C).
REASONS FOR DECISION
Egon Fice, Senior Member
31 May 2016

Mr Al Ali and Mrs Hashim are members of a couple. Mr Al Ali was in receipt of the Disability Support Pension (DSP) from 15 November 2010 and Mrs Hashim received the Parenting Payment from 23 February 2011. Throughout the time that they both received social security payments, Mr Al Ali and Mrs Hashim regularly received notices from Centrelink requiring them to notify Centrelink of any changes in their incomes or assets.
In a letter dated 1 July 2014 sent by Centrelink to National Australia Bank (NAB), Centrelink requested information regarding Mr Al Ali’s bank accounts held with the NAB. In fact, the Secretary obtained information regarding Mr Al Ali’s and Mrs Hashim’s bank accounts held with the Commonwealth Bank of Australia (CBA); National Australia Bank (NAB); Bank of Melbourne; Australian and New Zealand Banking Group (ANZ) and Westpac Banking Corporation (Westpac).
Neither Mr Al Ali nor Mrs Hashim responded to the notices sent by Centrelink requesting further information regarding their income and assets. In a letter dated 26 November 2014 Centrelink advised Mr Al Ali that income from unexplained bank deposits had not been taken into account in calculating the DSP payments made to him. Centrelink calculated that in the period 8 November 2010 to 25 November 2014 Mr Al Ali had received $64,651.65, but was only entitled to receive $16,601.98. Accordingly, Centrelink determined that Mr Al Ali was required to repay to Centrelink $48,049.67. Furthermore, on 26 November 2014 Centrelink determined that Mrs Hashim had received $41,859.65 in excess of her entitlement to the Parenting Payment. She was asked to repay that sum.
Mr Al Ali and Mrs Hashim sought review of Centrelink’s overpayment decisions by an Authorised Review Officer (ARO). In a letter dated 30 March 2015 the ARO determined that Mrs Hashim had been paid $21,849.72 in excess of her entitlement to Parenting Payment while her partner, Mr Al Ali, had been paid $22,635.89 in excess of his entitlement to the DSP. The ARO informed Mrs Hashim and Mr Al Ali that the overpaid amounts constituted debts owed to the Commonwealth which must be repaid.
On 27 April 2015 Mr Al Ali and Mrs Hashim lodged an application with what was then called the Social Security Appeals Tribunal (SSAT). On 1 July 2015 the SSAT amalgamated with the Administrative Appeals Tribunal (AAT) becoming the Social Services & Child Support Division (AAT 1). On 23 June 2015 AAT 1 decided to set aside the decision made by the ARO and in substitution determined that Mr Al Ali and Mrs Hashim had not incurred debts to the Commonwealth.
On 31 July 2015 the Secretary lodged applications with the Tribunal seeking a second review of the decision made by AAT 1 in respect of both Mr Al Ali and Mrs Hashim.
At the hearing of this matter, Mr Al Ali acted for his wife and himself. Mrs Hashim was present throughout the hearing and gave oral evidence. The issues I am required to determine are whether Mr Al Ali’s explanation for the source of significant funds deposited into various bank accounts held both in his name and his wife’s name is supported by objective evidence; and whether Mr Al Ali’s explanation for his ability to obtain a housing loan in the sum of $450,000 from Westpac can be substantiated on the evidence.
On the first hearing date Mr Al Ali attempted to explain that many of the deposits in various bank accounts were simply transfers from one account to another. He also said significant sums of money were lent to him by various persons who had provided Statutory Declarations substantiating those loans. There was also an explanation that some monies were brought into Australia from Iraq in cash carried by his wife and children. However, Mr Al Ali did not intend to call any of those persons who made Statutory Declarations to be cross-examined or to give evidence in chief. I explained to Mr Al Ali that although a person had made a Statutory Declaration about a matter, it did not necessarily follow that the information given in such a Declaration should be regarded as truthful or accurate. I therefore adjourned the hearing of the matter to enable Mr Al Ali to call those persons to give evidence at the Tribunal so that their evidence could be tested.
UNEXPLAINED BANK DEPOSITS
The following bank accounts are in the name of Mr Al Ali:
·ANZ bank variable rate loan account – personal loan
·ANZ bank access basic account
·NAB classic banking account
·Westpac Rocket home loan account
·Westpac Choice account
The following bank accounts are in the name of Mrs Hashim:
·Commonwealth Bank smart access account
·Bank of Melbourne concession account
The Secretary, in his Statement of Issues, Facts and Contentions, identified some 29 deposits in the various bank accounts which required an explanation. Explanations were sought from Mr Al Ali. He and others, including members of his family, gave oral evidence at the hearing. I need to identify each of those deposits and what was said by various witnesses about them. I then then need to make a finding regarding each entry.
15 November 2010 – $5000 – Westpac choice account
The account statement records a deposit at Broadmeadows on 15 November 2010. According to Mr Al Alawi, those monies were received from a person called Rida Al-Badri. Ms Al Badri made a Statutory Declaration on 18 December 2014 stating that she lent the sum of $5000 on 10 October 2010 to Mr Al Ali. The Statutory Declaration states that the loan was interest-free and repayable within 4+ months upon request. Ms Al Badri was not available for cross examination. There was no evidence that the loan had been repaid. No explanation was given for failure to repay even though some five years have now passed since the loan was purportedly made.
I should also add that every statutory declaration which was taken into evidence is identical save for the amount and date of the loan and the period for which the loan was provided. Furthermore, when asked in cross-examination whether he kept a record of monies he owed to those persons who had provided loans, Mr Al Ali said he did not.
Given the lack of evidence regarding the source of the $5000 deposit made on 10 October 2010, I find Mr Al Ali’s explanation regarding the source of those monies to be unacceptable.
21 December 2010 – $1000 – Westpac choice account
Mr Al Ali’s bank statement records a deposit made at Campbellfield on 21 December 2010 in the sum of $1000. The Secretary states that Mr Al Ali, in a letter dated 30 November 2015, said that $500 was transferred from his ANZ account on 22 March 2012.
While there certainly was a withdrawal made by Mr Al Ali from his ANZ access basic account on 22 March 2012 in the sum of $500, it clearly cannot be the transaction or any part of it given that it was more than one year after the event. According to the Secretary, Mr Al Ali then provided an ANZ bank statement showing a withdrawal of $700 on 22 November 2010. The problem with that statement is that the amounts do not match up and, in any event, the dates are more than 12 months apart. There is no obvious relationship as suggested by Mr Al Ali. I find that Mr Al Ali’s explanation of this deposit is illogical and therefore unacceptable.
30 December 2010 – $2000 – Westpac choice account
Mr Al Ali’s Westpac bank statement records a deposit of $2000 made at Campbellfield on 30 December 2010. Although Mr Al Ali did not provide an explanation for the source of those monies at the outset, he subsequently provided an ANZ bank statement showing a withdrawal of $700 on 3 December 2010.
Once again, there plainly was a withdrawal of $700 made from the ANZ account on
3 December 2010. However neither the sum nor the dates correspond in any way with the $2000 deposit made on 30 December 2010. I find the explanation to be unsatisfactory.
5 January 2011 – $1000 – Westpac account
Mr Al Ali’s Westpac account discloses a deposit at Broadmeadows in the sum of $1000 on 5 January 2011. Mr Al Ali’s explanation was that these monies were transferred from both his NAB and ANZ accounts. He said $800 was withdrawn from his NAB account on 23 December 2010 and $200 from his ANZ account 3 December 2010.
Mr Al Ali’s NAB account does disclose a cash withdrawal of $800 on 23 December 2010. However, there is no $200 withdrawal from his ANZ account on 3 December 2010. It seems Mr Al Ali then claimed that the $200 came from Mr Al Hassnawi’s loan account on 4 January 2011. While Mr Al Hassnawi provided a Statutory Declaration stating he had made a $5000 loan to Mr Al Ali 4 January 2011, no explanation was given for the link between the loan and the deposit or why it was made in the first place. I find the explanation unsatisfactory.
12 January 2011 – $2000 – Westpac account
The bank statement for this account discloses a deposit of $2000 made at Broadmeadows on 12 January 2011. According to the Secretary, Mr Al Ali said that the sum of $1100 came from a withdrawal from his Westpac account on 3 December 2010 and a further $900 from his NAB account withdrawn on 7 January 2011. There was no $1100 withdrawal from his Westpac choice account on 3 December 2010, although there was a withdrawal of $1744. There was a $900 withdrawal from his NAB account 7 January 2011.
However, once again there was no explanation linking the withdrawals with the deposit on 12 January 2011. I find this explanation is unacceptable.
18 January 2011 – $2000 – Westpac account
Mr Al Ali’s Westpac bank account statement discloses a deposit of $2000 made at Broadmeadows on 18 January 2011. Mr Al Ali said this money came, in part, from a personal loan account with the ANZ drawn down on 21 January 2011 and also from the loan provided by Mr Al Hassnawi on 4 January 2011.
Mr Al Ali’s ANZ personal loan account was fully drawn down on 21 January 2011. That was a withdrawal of $8000. No explanation was provided for the application of some of those funds to his Westpac choice account or why a sum would also be provided from the claimed loan of $5000 made by Mr Al Hassnawi. I find the explanation is unsatisfactory.
17 March 2011 – $7000 – Westpac choice account
Mr Al Ali’s Westpac choice account discloses a deposit made at Broadmeadows on 17 March 2011 in the amount of $7000. According to Mr Al Ali, this money came, in part, from his ANZ loan account withdrawn on 21 January 2011 and part from his NAB account withdrawn on 1 February 2011.
Mr Al Ali’s ANZ loan account was fully drawn down on 21 January 2011. That is, $8000 was drawn down on that day and those monies were deposited in his ANZ access basic account. On the same day, $7000 was withdrawn from that account. Mr Al Ali’s NAB classic account discloses a $3000 withdrawal 1 February 2011. However, just how those withdrawals are related to the $7000 deposit on 17 March 2011 is anything but clear. This is particularly so given that there was also a $14,000 withdrawal on 17 March 2011 from his Westpac choice account. This does not sit comfortably with Mr Al Ali’s claim that he moved money between accounts for the purposes of supporting any credit claims he may have particularly regarding the issue of a credit card. I have more to say about that below.
There is no logical connection between Mr Al Ali’s claim that the loan drawdown sum or a part of it together with the $3000 withdrawal from his NAB classic account is in any way related to the $7000 deposit made to his Westpac classic account on 17 March 2011. There is no match-up in amounts, no explanation for why the transfers took place and some month’s separation between the events.
21 November 2011 – $1200 – Westpac choice account
Mr Al Ali’s Westpac choice account statement records a deposit of $1200 made at Broadmeadows on 21 November 2011. According to Mr Al Ali, that money came from Mrs Hashim’s CBA account and, in particular, withdrawals made on 4 and 6 November 2011. Mrs Hashim’s statement of account discloses a withdrawal of $1000 on
4 November 2011 and a further $300 on 6 November 2011.
The is no logical reason why any part of the $1300 withdrawn from Mrs Hashim’s account was deposited in Mr Al Ali’s Westpac account some three weeks later.
5 December 2011 – $1000 – Westpac choice account
This deposit is recorded on Mr Al Ali’s Westpac choice account. Mr Al Ali says this transfer came from Mrs Hashim’s CBA account and, in particular, a withdrawal of $1000 recorded on 17 November 2011.
In fact, Mrs Hashim’s CBA account records regular withdrawals of $1000 approximately every fortnight for some years. The withdrawal referred to by Mr Al Ali simply appears to be part of that regular amount withdrawn from Mrs Hashim’s account. Mr Al Ali’s explanation is illogical.
8 March 2012 – $1500 – Westpac choice account
A deposit of $1500 made at Broadmeadows on 8 March 2012 is recorded in Mr Al Ali’s Westpac choice bank statement. Mr Al Ali contended that this money came from withdrawals from his NAB account on 5 and 6 March 2012 in the amounts of $300 and $500 respectively; and from his ANZ access basic account on 8 and 24 February 2012.
Mr Al Ali’s NAB classic account discloses a withdrawal of $300 on 5 March 2012 at the Broadmeadows shopping centre. It also discloses a withdrawal of $500 on 6 March 2012 from Broadmeadows. Mr Al Ali’s ANZ access account statement does not disclose withdrawal on 8 February 2012. It does disclose two withdrawals on 24 February 2012 in the amounts of $100 and $400.
Plainly, in this case, the figures do not add up. The withdrawals amount to $1300 while the deposit is $1500. I find that Mr Al Alawi’s explanation in this case cannot be correct.
10 April 2012 – $1100 – Westpac choice account
This deposit is recorded in the Westpac choice account statement for Mr Al Ali. Mr Al Ali claimed that the monies were transferred from his NAB and ANZ accounts on 3 April 2012 and 22 March 2012 respectively.
Mr Al Ali’s NAB classic account statement records a withdrawal of $600 made at Broadmeadows 3 April 2012. His ANZ access account statement records a withdrawal made at Broadmeadows on 22 March 2012 in the sum of $500.
While the figures in this case do add up, the was no coherent explanation for the two withdrawals, which are weeks apart in any event, and the subsequent deposit made on 10 April 2012, one week after the ANZ bank withdrawal. If these were intended to be transfers to bolster one account at the expense of another, logically, they would have occurred simultaneously.
14 February 2014 – $25,000 – Westpac choice account
This deposit is recorded in Mr Al Ali’s Westpac choice bank statement as having occurred on 14 February 2012. Mr Al Ali’s explanation for the source of those funds was that he had received an interest free loan from Mr Al Mosawi.
I had in evidence a cheque drawn on Mr Al Mosawi’s Westpac bank account dated 14 February 2014. I also had in evidence a Statutory Declaration made by Mr Al Mosawi in which it is stated that he lent the sum of $25,000 to Mr Al Ali on 14 February 2014. He also said that the loan was an interest free loan and would be payable within 6+ months upon his [Mr Al Mosawi’s] request.
Mr Al Mosawi did not attend the hearing and therefore was not cross-examined about what he said in his Statutory Declaration. Except for one Statutory Declaration, all of the others were in precisely the same form as that provided by Mr Al Mosawi.
No reasons were given for why Mr Al Mosawi would provide Mr Al Ali $25,000 interest-free, repayable within six or more months upon request. There was no evidence that this sum had been repaid even though more than two years have passed since those monies were given to Mr Al Ali. That certainly raises serious doubts about whether the money given to Mr Al Ali was in fact a loan. The evidence regarding this deposit is not sufficiently strong to enable me to come to a conclusion that $25,000 was in fact a loan.
It appears that $23,361.63 of the $25,000 sum was used as part of the settlement monies for the purchase of a house, which is referred to below.
A loan is generally understood as being something lent, particularly a sum of money, to be returned normally with interest (The Australian Concise Oxford Dictionary). From a legal perspective, there must exist an obligation to repay the monies lent. While the Statutory Declaration states that the loan will be repayable within 6+ months upon [the lender’s] request, it is clear that there is no legal obligation on the borrower to repay in those circumstances. The description within 6+ months upon my request is insufficiently precise to create such an obligation. Furthermore, as I understood Mr Al Ali’s evidence, the loan had not been repaid.
15 November 2010 – $5000 – NAB classic account
This $5000 sum is recorded in Mr Al Ali’s NAB classic account as a cash deposit. Mr Al Ali claimed this was a loan from Mr Chaiwan. Mr Chaiwan made a Statutory Declaration on 18 December 2014 in which he said he lent sum of $5000 on 11 October 2010 to Mr Al Ali. The Statutory Declaration claimed the loan was interest-free and repayable within 4+ months upon request.
Mr Chaiwan did not attend the hearing and was not made available for cross examination. Without the opportunity to ask Mr Chaiwan some questions about the source of those monies, and given the unsatisfactory nature of what is described as a loan agreement set out in the Statutory Declaration, it is not possible for me to conclude that this $5000 deposit was in fact a loan as claimed by Mr Al Ali.
24 November 2010 – $2000 – NAB classic account
This deposit is recorded in Mr Al Ali’s NAB classic account as a cash deposit. According to Mr Al Ali, those monies were sourced from Mr Al Buswalim who he claimed gave him the sum of $6000 on his return to Australia, presumably from Iraq.
Mr Al Buswalim provided a Statutory Declaration made on 20 to December 2014. Mr Al Buswalim said:
I handed Ali K Alali the sum of $6000.00 (six thousand dollars) that was sent from his brother Ismail K Alali on 23/11/2010, when I returned to Australia on 22/11/2010.
No mention was made of a loan. Mr Al Buswalim was not available cross examination and therefore there was no way of establishing the source of those monies or whether an obligation to repay was attached. Furthermore, three further deposits were made by Mr Al Ali in his NAB classic account in the amounts of $2000, $1000 and $1000 on 25 November 2010, 2 December 2010 and 7 December 2010 respectively. All of these deposits were said by Mr Al Ali to have been the proceeds of the $6000 given to him by Mr Al Buswalim.

The entries in Mr Al Ali’s NAB classic account indicate that the $2000 deposit made on 25 November 2010 was reversed out of that account on 29 November 2010. The remaining two $1000 deposits are recorded as cash deposits. Other than the $2000 deposit which was reversed out of the account, there is no explanation which connects the remaining $4000 with any particular source.
21 December 2010 – $1000 – NAB classic account
Mr Al Ali’s NAB classic account statement records a cash deposit of $1000 made on 21 December 2010. According to the Secretary, Mr Al Ali first claimed that this sum came from his ANZ access account being a withdrawal of $700 on 3 December 2010 and $300 on 20 December 2010. The obvious problem with that statement is that his ANZ access account discloses a withdrawal of $700 on 20 December 2010 and not the $300 claimed.
Mr Al Ali then claimed that the money was the proceeds received from Mr Al Buswalim. Later, Mr Al Ali suggested again that the money came from his ANZ access account and he referred to a withdrawal of $800 made on 23 September 2010. While I accept that it is a simple matter to point to withdrawals made from other accounts shortly prior to the deposit which is the subject of investigation, the fact of a withdrawal from another account in those circumstances does not establish that the proceeds we used for the subsequent deposit without a cogent explanation for the transactions. In this case, cogent explanations are totally absent.
5 January 2011 – $1000 – NAB classic account
Mr Al Ali’s NAB classic account records a cash deposit of $1000 on 5 January 2011. Mr Al Ali at first explained this deposit as coming from the money brought back to Australia by Mr Al Buswalim. Subsequently, he pointed to withdrawals from his ANZ access account including $700 on 23 September 2010 and $300 on 20 December 2010. The first point to note is that this explanation duplicates those previously given for other deposits. The second point is that the withdrawal on 23 September 2010 was in fact $800. However, once again, there is no cogent or logical explanation for any of these transactions.
12 January 2011 – $1000 – NAB classic account
There seems to be some confusion about this deposit. Mr Al Ali’s NAB classic bank statement discloses a withdrawal on 12 January 2011 in the sum of $1000 and a cash deposit on 13 January 2011 in the same sum. There was no evidence that these transactions were related. It appears Mr Al Ali attempted to explain the deposit by stating it was money received from Mr Al Buswalim. That cannot be correct and in any event, the source of the monies Mr Al Buswalim is said to have brought to Australia remains unclear.
There is another deposit said to have been made on 18 January 2011 although Mr Al Ali’s NAB classic account does not disclose any deposit made on that day. There is a cash deposit of 24 January 2011 in the sum of $4950. That deposit is said to have been sourced from Mr Al Ali’s NAB classic account by withdrawals of $3000 and $1000 made on 11 January 2011 and 18 January 2011 respectively, with a further $950 from his ANZ access account on 21 January 2011. Again, the problem is there is no explanation, let alone a cogent explanation, for these transactions. The withdrawal from the ANZ access account on 21 January 2011 was in the sum of $7000 which has already been taken into account.
There are a further two deposits identified by the Secretary, both in the sum of $1000, made on 17 March 2011 and 13 November 2011. Although there are no deposits identified on those days in Mr Al Ali’s NAB classic account, the explanation recorded from Mr Al Ali is that that money was received from Mr Al Buswalim.
21 November 2011 – $1400 – NAB classic account
Although the Secretary identified this transaction as having occurred on 21 November 2011, that seems to be incorrect but there is a cash deposit of $1400 made in Mr Al Ali’s NAB classic account on 9 February 2012. It appears Mr Al Ali’s explanation for this deposit is that $1000 was withdrawn from Mrs Hashim’s CBA account on 30 January 2012 and a further $350 from the same account on 31 January 2012. Putting aside the fact that the amounts do not add up to $1400, in any event, there is no proper explanation for linking the $1400 deposit with the two withdrawals said to have come from Mrs Hashim’s CBA account. The lack of connection is highlighted by the fact that there is a $1000 withdrawal from Mrs Hashim’s CBA account about every two weeks and the $1000 withdrawal relied on does not appear to be in any way exceptional.
5 December 2011 – $330 – NAB classic account
There is no such deposit recorded in the NAB classic account bank statements. However, there is a $330 deposit recorded on 12 October 2012 which may be the deposit to which Mr Al Ali referred. It appears to have resulted from a cheque drawn by a Mr D Delavinias. No explanation has been offered by Mr Al Ali for why those monies were provided by Mr Delavinias.
9 February 2012 – $1400 – NAB classic account
Mr Al Ali’s NAB classic account statement discloses a cash deposit of $1400 made on 9 February 2012. According to Mr Al Ali, these funds came from withdrawals from Mrs Hashim’s CBA account. The CBA account statement records a $1000 withdrawal on 30 January 2012 and a $350 withdrawal on 31 January 2012.
Putting aside the fact that these withdrawals do not amount to $1400, as I have already indicated above, Ms Hashim’s CBA account records a $1000 withdrawal on a fortnightly basis. Furthermore, more often than not, it is followed by a $350 or $300 withdrawal on the following day. There was no logical explanation provided by Mr Al Ali for why those particular withdrawals, in part, comprise the deposit made on 9 February 2012.
1 August 2013 – $49,000 – NAB classic account
Mr Al Ali’s NAB classic account statement records a cash deposit made on 1 August 2013 in the amount of $49,000. This sum of money relates to a deposit Mr Al Ali made on the purchase of a residential property in Roxburgh Park. The purchase of the property was funded by Westpac bank.
I had in evidence documents from the Westpac bank which deal with Mr al Ali’s application for a loan in the amount of $405,000. Those documents indicate that the contract price for the purchase of the house was $450,000 plus five per cent costs, totalling $472,500. The loan amount was to be $405,000 which resulted in a contribution of $67,500 required from Mr Al Ali. The entry in the Westpac bank document, which is dated 10 December 2013, indicates that a deposit of $45,000 had been paid by that date (in fact, it appears to have been paid on 29 November 2013 according to a receipt from Raine & Horne real estate agents); that $21,000 was to come from his NAB account and a further $1500 to be clarified by the mortgage broker and to be made available at settlement.
I must determine the source of the $67,500 contribution made by Mr Al Ali.
Mr Al Ali claimed that $27,000 was sourced from three of his family members (wife and two children), each of which brought from Iraq the sum of $9000 in cash when they came to Australia in February 2011. In a telephone conversation with the ARO on 12 March 2015, Mr Al Ali told the ARO that $27,000 was brought into Australia by three people who came in together and each had $9000. He also said that only amounts greater than $10,000 had to be declared to customs on entry and therefore the three persons did not declare that they were carrying those sums of cash on their person at the time. Mr Al Ali also apparently said that the money came from family overseas. He denied having had any income or assets overseas which he had not declared.
Mr Al Ali then explained to the ARO that the money was moved between various bank accounts to make it look as if he had more money than he did to enable him to get a Visa card and loans. The ARO said he told Mr Al Ali that if the money was distributed as he claimed, then it would show up as being withdrawn from one account and deposited into another account but that Centrelink did not have that information. Those bank accounts were subsequently provided but the ARO had difficulty in reconciling the monies Mr Al Ali claimed to have shifted between bank accounts with the sums of money Mr Al Ali claimed to have brought into Australia.
In a telephone conversation between the ARO and Mr Al Ali on 25 March 2015, Mr Al Ali was asked how he accumulated the money for the deposit on his current house. Mr Al Ali said that $27,000 came from friends overseas and the remainder he could not remember because it was some time ago. The ARO then advised Mr Al Ali that the deposit of $49,000 would be assessed as income.
I also had in evidence three Statutory Declarations made by Mrs Hashim and Mr Al Ali’s two children in which they stated that each brought the sum of $9000 into Australia on 28 February 2011 and that the money came from Iraq. The Statutory Declarations do not disclose the source of the monies given to them in Iraq to bring to Australia. However, all three of those persons attended the adjourned hearing and were cross-examined.
Each of the statutory declarations have an identical (save for their relationship to Mr Al Ali) statement which declares:
Upon my arrival to Australia on 28 February 2011 I brought the sum of $9000 ($9000) in cash from Iraq.
AND I handed that sum of money mentioned above $9000 ($9000) in cash to my [father/husband] Ali K Al Ali on 30^th Jul 2013.
Mrs Hashim, in the course for cross-examination, was asked why she brought the $9000 to Australia. Her response was that it was to help the family get started in Australia. When it was put to her whether she had exactly $9000 she said: yes. When asked if she had $10,000 it would have had to be declared, she said she did not know that. Mr J Lessing, a solicitor acting on behalf of the Secretary, then suggested to Mrs Hashim that it was simply a coincidence that both she and her two children each had $9000 which they brought to Australia. Mrs Hashim said that she in fact had more but that she spent time in Syria before coming to Australia and some of that money was spent.
Mr Lessing then put to Mrs Hashim that the money was in fact family money which belonged to Mr Al Ali. Mrs Hashim said that was not the case. She said her husband was a refugee in Syria for some seven years and he was unable to help the family during that time. Mrs Hashim also said that in 2004 the family sold all of its assets in Iraq and moved into a small house owned by her parents.
Mr Ayat Al Ali, Mr Al Ali’s son, confirmed that he brought $9000 in cash into Australia of 28 February 2011. When asked where the money came from, he said he went to a place where he collected the money but that he had $10,000 although he spent some and gave the remainder to his father. He could not recall which currency that money was in.
Mr Ayat Al Ali also said that he spent time in Syria before coming to Australia. He said he gave the money to his father about two days after his arrival in Australia. When asked who contributed the money, Ayat AL Ali said he had no idea. When it was put to him that his parents may have saved the money, he said six aunties helped him out. When asked where he got the Statutory Declaration from he agreed it came from his father and he thought that they went to a pharmacy to have the Declaration witnessed.
Ms Seifeldine A Al Ali, Mr Al Ali’s daughter, was also cross-examined regarding her Statutory Declaration made on 21 December 2014. Mr Lessing asked Ms Al Ali where the Statutory Declaration was witnessed and she responded that she could not recall. She confirmed that she brought exactly $9000 into Australia in cash. When Mr Lessing asked her where the money came from, she explained that she worked in Iraq and saved some of the money, and some came from an uncle. She said that about half of the money was in Iraqi currency which she converted to US dollars in Iraq. The remainder was apparently in US dollars and was converted into Australian dollars after a couple of weeks.
Ms Al Ali also claimed to have spent some time in Abu Dhabi and in Syria where some money was spent but $9000 remained for her to bring to Australia. Mr Lessing put to her that the money belonged to the family, but Ms Al Ali maintained that she saved some of the money and some came from an uncle. She rejected the suggestion that the money was a gift to her father but rather said that the money was for the family.
I have already referred to the fact that Mr Al Ali spoke with Centrelink on 12 March 2015 and he told the ARO about three people who came in together each having $9000 in cash on them when they arrived in Australia. He then said that he moved the money between various bank accounts to make it look like he had more money than he in fact did so that he could get a Visa card and loans. However, having searched all of the bank account statements in evidence, I can find no trace of any deposits which might be linked to the cash said to have been brought into Australia by the three persons on 28 February 2011. There was a deposit of $25,000 made to Mr Al Ali’s Westpac choice account on

14 February 2014, but that is some three years after the money was allegedly given to Mr Al Ali and is more likely to have been the claimed loan from Mr Almosawi.
The obvious problem with the above evidence given about the source of the deposit monies provided for the purchase of the house is that it is vague, obscure and not supported in any objective way by the other evidence. It cannot carry much weight.
A further sum of $13,100 was said to have come from an insurance payout which Mr Al Ali received following the loss of a motor vehicle described as 2001 Land Rover Freelander. The accident was said to have occurred on 25 December 2011. Those monies were deposited, by cheque, in Mr Al Ali’s NAB classic account on 16 February 2012. At that time, the balance of that account stood at $15,705.93 CR. If one then follows the debits in that account after 16 February 2012 it is clear that the moneys were withdrawn on a regular basis, in the main, for everyday expenditure. There are no large withdrawals from that account and by 12 June 2013 the balance stood at $34.54. Some two months later, on 1 August 2013, there was the cash deposit of $49,000 into that account.
Plainly, no part of the $49,000 can be sourced to the $13,000 insurance payment. Furthermore, no part of the $49,000 can be attributed to monies held in Mr Al Ali’s ANZ access account. The balance in that account in the two years preceding August 2013 never exceeded about $900.
It appears that Mr Al Ali, in a letter dated 26 October 2015, said what he told the AAT 1 about the source of those monies in respect of the insurance payment was incorrect. He then apparently stated that part of the $49,000 was made up from a transfer from Mr Al Ali’s Westpac choice account in the sum of $14,000 on 17 March 2011. The problem with that explanation is that the deposit was not paid until some two and a half years after that withdrawal. Again, there is no obvious connection between the two.
At an earlier point in time Mr Al Ali also claimed that some of the moneys for the house deposit came from an ANZ personal loan in the amount of $8000 which was approved on 21 January 2011. The ANZ variable rate loan statement which was in evidence discloses that the loan drawdown occurred on 21 January 2011. On the same day, those monies were deposited in Mr Al Ali’s ANZ access account. On 21 January 2011 Mr Al Ali withdrew $7000. Although Mr Al Ali’s NAB classic account statement discloses a cash deposit into that account of $4950 on 24 January 2011, by 10 February 2011, the balance in that account stood at $173.82. Mr Al Ali’s Westpac choice account discloses a deposit of $7000 made on 17 March 2011. While it is possible that those deposit monies were sourced from the personal loan, on 17 March 2011 Mr Al Ali made a $14,000 withdrawal from that account. As I have already mentioned above, that withdrawal took place some two and a half years before the deposit was paid on the housing loan. It is not possible to make a logical connection between those sums without a proper explanation. That explanation was not forthcoming.
There are further problems with Mr Al Ali’s evidence regarding the source of monies used to pay the deposit on the housing loan. The loan was sourced through an intermediary, a mortgage broker, Mr Fatih Deniz. Mr Deniz provided a written statement of evidence which was made on 18 February 2016 and he made himself available for cross examination by telephone in the course of the hearing.
In his written statement of evidence Mr Deniz said he met and interviewed Mr Al Ali at the offices of Raine & Horne, real estate agents in late November or early December 2013. He said he did an asset and liabilities fact find and explained the loan process to him. He said he then advised Mr Al Ali of the required deposit amount and the supporting documents which would be required. He said he gave Mr Al Ali a choice of lenders and some interest rates which were on offer. Mr Al Ali chose to go with Westpac. Mr Deniz said Mr Al Ali provided him with information which he used to complete a home loan application for a Westpac home loan. Mr Deniz lodged the application and said he relied on the information and supporting documents provided to him by Mr Al Ali.
The Westpac loan application form which was in evidence disclosed that Mr Al Ali was employed by Jim’s Cleaning between October 2010 and May 2011. It listed his property assets as amounting to $174,536 and it included motor vehicles to the value of $20,000. The total value of his cash/bank accounts was said to be $21,036. The application form stated that Mr Al Ali’s base monthly income was $4623. That was, in fact, a net figure.
Although Mr Deniz said that he met with Mr Al Ali and that in fact he met all of his customers face-to-face, Mr Al Ali denied ever having met Mr Deniz face-to-face. Mr Deniz identified where the meeting took place and that he believed there were two meetings altogether. He did not recall having discussions with Mr Al Ali over the telephone. Mr Deniz recalled providing the loan application documents to Mr Al Ali at the second meeting, having told him previously at the first meeting what information was required for the purposes of submitting the loan application.
Despite what was said by Mr Al Ali and Mr Deniz, the summary of the process of his application to Westpac for a loan documents an entry made on 10 December 2013 which states:
Ali Al Ali $71,240 gpa [gross per annum]/$4622.62 npm [net per month] per base weekly salary (40 hrs by $30.25 is $1370) on payslips dated 17/11/2013 and 24/11/2013.
In his oral evidence, Mr Al Ali said he did not hand any payslips to anyone. He went on to explain that he only dealt with the person by the name of Ali and had never seen Mr Deniz previously. He said he had not asked Mr Ali to give evidence in support of his application.
Mr Deniz said that Mr Al Ali paid an initial $500 cash deposit when he made his offer to purchase the house and later a bank cheque for $45,000 being the balance of the deposit at the time of interview. Mr Deniz also said he obtained from Mr Al Ali documents to establish 100 points for identification; the contract for the sale of the house; receipts for the deposit paid; a bank statement showing funds to complete the purchase; and two consecutive payslips. Mr Al Ali denied the above. Furthermore, Mr Deniz denied that he fabricated the information contained on the home loan application.
It is not possible for me to determine whose account above should be accepted. Nor am I required to do so. It is sufficient for me to observe that the evidence may disclose the obtaining of a loan by the use of dubious documents. The Westpac loan authority document and the mortgage document appear to have been signed by Mr Al Ali. At the end of the day, it was his responsibility to ensure that the information contained therein was accurate. While Mr Al Ali said that he did not read the documents in detail and that his English was not particularly good, that of course does not excuse him from obtaining assistance to gain a proper understanding of what he was signing for.
SOURCE OF FUNDS – SUMMARY

Having examined in considerable detail the claims made by Mr Al Ali about the source of monies deposited in the various bank accounts held either in his name or his wife’s name, I am unable to conclude, on the balance of probabilities, that the funds were sourced as claimed by Mr Al Ali. The explanations for withdrawals made on some accounts and subsequent deposits in others have no logical connection. It is a simple matter for any person to point to withdrawals of sums of money in various accounts prior to a deposit in another account and state that the withdrawals represent the money subsequently deposited.
If there was a logical connection and explanation given, then the finding would speak of the connection. However, in all of the matters I have examined where Mr Al Ali claimed earlier withdrawn monies were the source of subsequent deposited moneys, a logical connection and explanation did not exist. At times the withdrawn sums were different from those which were subsequently deposited and, often, the time separating the two sets of transactions was significant. No explanation was offered for those delays.
Mr Al Ali did provide a general explanation for shuffling sums of money between accounts. In a telephone conversation with the ARO on 12 March 2015 Mr Al Ali said he moved money between various bank accounts to make it look like he had more money than he did in order to get a visa card and loans.
With respect to Mr Al Ali, I do not understand how moving money between various bank accounts would make it appear that he had more money than was the fact. A lender would generally ask for a net position at a particular point in time in respect of all bank accounts or other sources of money. That was the case in respect of his housing loan. In other words, simply shuffling money between accounts at different points in time would not provide the information sought by a lender. Furthermore, I did not have in evidence any credit cards applied for or held by Mr Al Ali. Generally, credit worthiness is assessed by the ability to repay past or existing debts. Unencumbered assets may also form the basis of such an assessment. There was no evidence of an asset assessment having taken place except in respect of his housing loan. Also, in his oral evidence, Mr Al Ali said that he did not keep substantial sums of money in cash at home. He has not claimed that to be the source of his funds.
Although Mr Al Ali produced a number of Statutory Declarations dealing with monies claimed to have been lent to him, those Declarations by themselves do not disclose a legal obligation to repay the monies to which they referred. The frequently used expression in the Declarations was: will be payable in 6+ months upon my request. No sensible meaning can be given to the expression 6+ months and, in any event, the request to repay the monies may never be made.
On the first day of the hearing it appeared that Mr Al Ali believed a Statutory Declaration was all that was required to prove that loans had been made as stated. He had not planned to call any of the makers of those Declarations to be available to be cross-examined. Any evidence which is admitted on the hearing of a matter must be tested unless the parties and the Tribunal agree that it is unnecessary to do so. That would only occur in circumstances where the evidence was uncontroversial and fully supported by objective evidence. Simply because a Statutory Declaration is tendered in evidence does not give rise to the conclusion that what is stated in that Declaration is correct or accurate. It may well be the honest belief of the maker of the Declaration but that does not make it correct or accurate.
In any event, when the makers of some of those Statutory Declarations were called to be examined on the second hearing day, the explanations given were inadequate. There was no explanation by either the lender or Mr Al Ali as to the purpose of the loans. Ordinarily, I would have expected some explanation for seeking to borrow monies. Furthermore, the claimed source of the monies, except in the case of Mr Al Mosawi, provided by way of so-called loans was vague and no corroborative evidence was offered.
I also had in evidence three Statutory Declarations regarding the monies said to have been brought into Australia in cash by his wife and two children. With respect to those persons, the explanations given are anything but clear, citing vaguely that monies were given by relatives or associated persons. Such claims do not substantiate the source of the monies.
I find that the evidence before me regarding the source of monies to which Mr Al Ali had access during the relevant period does not disclose a rational explanation. The only remaining question is whether those monies should be regarded as income for the purposes of the Social Securities Act 1991 (Social Security Act).
EFFECT OF INCOME ON RATE OF PAYMENT
The General Provisions dealing with the payability and rates of social security payments are set out in s. 1062(1) of the Social Security Act. It provides:
1062 Steps in rate calculation
1The following are the usual steps in the rate calculation process:
(a)start with a maximum basic rate;
(b)add any additional amounts that are subject to income or assets testing;
(c)apply the income and assets tests;
(d)add any additional amounts that are not subject to income or assets testing.
The rate of parenting payment is worked out in accordance with s. 503 of the Social Security Act. Relevantly, it provides:
503 How to work out a person’s parenting payment rate
A person’s parenting payment rate is worked out using:
(a)… or
(b)if the person is a member of a couple – the Benefit PP (Partnered) Rate Calculator at the end of section 1068B (see Part 3.6A).
The daily rate of payment is worked out using the calculator located at 1068B-A1 of the Social Security Act. The Method Statement at Step 5 states that the income test using Module D must be used to work out the income reduction. The income reduction is taken away from the maximum payment rate. Clearly, effect must be given to any income that a person has derived in the course of any payment period.
Mr Al Ali is receiving the DSP. Section 117 sets out how the rate of a person’s DSP payment is calculated. In Mr Al Ali’s case, s. 117 provides:
117 How to work out a person’s disability support pension rate
A person’s disability support pension rate is worked out:
(a)if the person is not permanently blind and paragraph (b) does not apply to the person – using Pension Rate Calculator A at the end of section 1064 (see Part 3.2); or…
The method of calculating the rate of DSP payable is set out in Module A and it includes, in Step 5, applying the ordinary income test using Module E to work out the income reduction; and to apply the assets test using module G to work out the reduction for assets. Plainly, account must be taken of assets and income when calculating the rate of DSP payments made to a recipient.
Section 8(1) of the Social Security Act defines income in the following way:
income, in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person’s own use or benefit; or
(b)a periodical payment by way of gift or allowance; or
(c)a periodical benefit by way of gift or allowance;
but does not include an amount that is excluded under subsection (4), (5) or (8).
None of those exclusions apply in this case. Furthermore, the expression earned, derived or received is explained in s. 8(2) in the following way:
Earned, derived or received.
2A reference in this Act to an income amount earned, derived or received is a reference to:
(a)an income amount earned, derived or received by any means; and
(b)an income amount earned, derived or received from any source (whether within or outside Australia).
Modules E and G, which are used to calculate the income reduction in both cases, require what is described as ordinary income to be taken into account.
The expression, ordinary income, is explained in s. 8(1) the Social Security Act as:
ordinary income means income that is not maintenance income or an exempt lump sum.
The monies received for the benefit of Mr Al Ali and Mrs Hashim could not be described as maintenance income and they were not an exempt lump sum. Accordingly, any monies received for the benefit of Mr Al Ali or Mrs Hashim should be regarded as income for the purposes of calculating the rates of their respective social security payments. While bona fide loans are not usually considered to be income, for the reasons I have expressed above, I find that the monies claimed by Mr Al Ali to have been provided by way of loans cannot be described as bona fide loans.
It follows I must find that the unexplained amounts lodged in Mr Al Ali’s bank accounts and in Mrs Hashim’s bank accounts are properly described as ordinary income for the purposes of the Social Security Act. Those monies must be taken into account when making an assessment of the rate of parenting payment which should have been paid to Mrs Hashim and the rate of Mr Al Ali’s DSP payments.
DEBTS DUE TO THE COMMONWEALTH
Part 5.2 of the Social Security Act deals with amounts recoverable under the Social Security Act. Section 1223 deals with debts arising from lack of qualification or overpayment. It provides:
1223 Debts arising from lack of qualification, overpayment etc.
1Subject to this section, if:
(a)a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
…
1ABWithout limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who has obtain the benefit of the Social Security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a)…
(b)The payment was made as result of a contravention of the Social Security Law, a false statement or a misrepresentation;…
There can be no doubt about the fact that Mr Al Ali and Mrs Hashim received social security payments to which they were not entitled because they had misrepresented the amounts of ordinary income which they were receiving during the periods when the Social Security payments were made. Therefore, the difference between the amounts which were paid and the amounts to which they were entitled are debts due to the Commonwealth and are recoverable.
While Mr Lessing made submissions about waiver of debt and the discretion which the secretary has to write debts off, there is no basis in the evidentiary material for making any decisions about waiver or write-off. Furthermore, while there are provisions for the Secretary to write off a debt, he or she can only do so in limited circumstances. Relevantly, they include with the debt is irrecoverable at law or the debtor has no capacity to repay the debt (s. 1236 (1A) of the Social Security Act). I did not have any evidence before me to support those grounds for writing off the debt. In fact, because both Mr Al Ali and Mrs Hashim are in receipt of social security payments, there is no reason why the debts cannot be recovered by way of deductions made from their social security payments in accordance with s.1236 (1C) of the Social Security Act.
CONCLUSION
I find that Mrs Hashim has a debt owing to the Commonwealth in the amount of $21,849.72 as a result of overpayments of the parenting payment (partnered) between 23 February 2011 and 25 November 2014. I also find that Mr Al Ali has a debt owing to the Commonwealth in the amount of $22,635.89 as a result of overpayments of DSP between 15 November 2010 and 25 November 2014.
Accordingly, I find that the decision made by the Administrative Appeals Tribunal, Social Services & Child Support Division, on 23 June 2015 was not the correct decision. I set aside that decision and in substitution determine that Mrs Hashim has a debt owing to the Commonwealth in the amount of $21,849.72 and Mr Al Ali has a debt owing to the Commonwealth in the amount of $22,635.89. I also find that there are no grounds for the waiver or write-off of those debts.

113. I certify that the preceding 112 (one–hundred-and-twelve) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member

..........................[sgd]............................
Associate
Dated 31 May 2016

Date(s) of hearing

22 January 2016, 24 February 2016

Advocate for the Applicant

Mr Joshua Lessing

Solicitors for the Applicant

Sparke Helmore Lawyers

Respondents In Person

[2016] AATA 355

31 May 2016

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Statutory Construction

Standing

Remedies

Division	GENERAL DIVISION
File Number(s)	2015/3901 2015/3902
Re	Secretary, Department of Social Services
APPLICANT
And	Ali Al Ali Azhar Hashim
RESPONDENTS

Tribunal	Egon Fice, Senior Member
Date	31 May 2016
Place	Melbourne

Date(s) of hearing	22 January 2016, 24 February 2016
Advocate for the Applicant	Mr Joshua Lessing
Solicitors for the Applicant	Sparke Helmore Lawyers
Respondents	In Person