ANNA RABAHI AND MILED RABAHI and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2009] AATA 756

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 756

ADMINISTRATIVE APPEALS TRIBUNAL      )

)No 2008/2955, 2008/2956

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ANNA RABAHI AND MILED RABAHI

Applicants

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr B H Pascoe, Senior Member

Date1 October 2009

PlaceMelbourne

Decision The Tribunal affirms the decisions under review.  

(sgd) B.H. Pascoe

Senior Member

SOCIAL SECURITY - raise and recover debts - failure to disclose investments - whether debt can be waived - whether special circumstances.

Social Security Act 1991 ss 1236, 1237A, 1237AAD

REASONS FOR DECISION

1 October 2009 Mr B H Pascoe, Senior Member   

1.      This is an application to review the decision of the Social Security Appeals Tribunal (SSAT) of 11 June 2008 which affirmed the decision of the respondent to raise and recover debts in respect of the following overpayments:

(a)$21,022.49 in respect of newstart allowance paid to the first applicant, Mrs A Rabahi, between 31 July 2000 and 6 April 2001 and 1 July 2005 and 10 August 2007;

(b)$23,930.02 in respect of parenting payment paid to Mrs Rabahi between 7 April 2001 and 30 June 2005; and

(c)$38,896.44 in respect of newstart allowance paid to the second applicant, Mr M Rabahi, between 31 July 2000 and 10 August 2007.

The decision to raise and recover the debts was the result of a finding that the combined assets of Mr and Mrs Rabahi exceeded the allowable limits during the period from 31 July 2000 to 10 August 2007 when newstart allowance to both was cancelled.

2.      At the hearing Mr and Mrs Rabahi were unrepresented.  The respondent was represented by Mr T Noonan, principal legal services officer with Centrelink.

3.      There was no dispute that during the relevant period, Mr and Mrs Rabahi had reported as their only financial asset, the cash at bank.  They failed to disclose other investments.  In particular they had invested $100,000.00 with BT Financial Group (BT) in an Australian Growth Share Fund on 22 February 2001.  The value of this investment fluctuated over the years but had a value of $216,930.11 at 1 July 2007.  In addition they had invested $28,000.00 in a Commonwealth Cash Management Trust on 31 July 2000.  With regular monthly deposits of $1,000.00 and reinvestment of income, the value of that investment was $69,479.10 on 30 July 2003.  They withdrew $64,000 on 26 August 2003 and the final balance of $23,507.24 was withdrawn on 21 July 2004.  It was not until an income and assets questionnaire was completed on 10 August 2007 that the full value of assets was provided.

4.      As a result of the 10 August 2007 details, Centrelink immediately recognized that the value of assets exceeded the allowable limit and cancelled newstart allowance for both Mr and Mrs Rabahi.  As a result of a review of the level of assets in prior periods, the overpayments and debts set out above was advised to Mr and Mrs Rabahi by letters dated 30 October and 1 November 2007.

5.      The primary arguments of Mr and Mrs Rabahi were that they had not deliberately withheld disclosure of their investment and had made inquiries of Centrelink without obtaining assistance sought.  They had believed, prior to August 2007, that it was only cash at banks that had to be disclosed.  They said that they did not regard the investment with BT as an asset because it was not readily accessible and akin to superannuation.  They referred to an occasion where they were advised by Centrelink after making some enquiry not to worry as it would all come out in the tax return.  It can be assumed, perhaps, that if this advice was given, it was in relation to a question relating to income rather than assets.

6.      In the SSAT decision it was said that:

…the Tribunal found Mr and Mrs Rabahi to be somewhat unreliable witnesses, although the Tribunal concluded that this was a result of confusion rather than any attempt to deceive. 

This Tribunal had a similar problem.  Much of the evidence of Mr and Mrs Rabahi was a criticism of Centrelink, a failure to provide assistance and failure to record disclosures which were said to have been made.  However, this evidence lacked any specificity as to time or details of alleged questions or disclosures.  Certainly, there are no Centrelink records to confirm their assertions.  In addition, their apparent naivety in understanding the meaning of assets, investments, managed investments, investment trusts, etc appears to be somewhat at odds with their actual investment in an Australian Growth Share Fund and cash management trusts without any apparent investment advice.  It is clear that they received regular letters from Centrelink advising of the requirement to disclose assets or transfers of investment and failed to comply with the requirements.

7.      Mr and Mrs Rabahi did not seek to dispute the calculation by Centrelink of the value of their assets, the resulting overpayments and the consequent debt.  Their primary arguments were that special circumstances justified waiver of all or part of the debt.  Mr Rabahi said that his back condition limited his work as a car mechanic for which he was qualified.  He has done some work as a waiter.  Mrs Rabahi said that she suffered from anxiety and stress although is not receiving treatment or taking any medication.  Apart from the stress resulting from advice of the debt she is facing a court proceeding relating to the death and funeral of her late father.  She said that she is facing a debt of $20,000.00 and legal costs of $10,000.00 relating to that issue.  She said that her parents were separated and she recently discovered a half sister.  She has responsibility for the care of her mother and the father of Mr Rabahi.  Both said that they had been raised in families beset with debt and had been very prudent, themselves, in making sacrifices to keep free of debt.

8. It is clear that the debt cannot be written off pursuant to section 1236 of the Social Security Act 1991 (the Act). Further, I am satisfied that the debt is not solely attributable to administrative error to allow the debt to be waived under section 1237A of the Act. The sole remaining provision is section 1237AAD which allows the waiver of all or part of a debt where it did not result from the person knowingly making a false statement or failing to comply with a provision of the Act and there are special circumstances that make it desirable to waive the debt. While the term special circumstances is not defined, previous decided cases have made it clear that the circumstances must be such that it would be unjust, unfair or unreasonable to recover the debt because of circumstances which are out of the ordinary.  In this case, I am unable to find that the circumstances of Mr and Mrs Rabahi are so extraordinary that waiver of the debt or any part of it is desirable.

9.      It is appropriate, perhaps, to comment on the failure to advise Centrelink of the assets not previously disclosed following receipt of the regular reminder letters.  One difficulty of these letters is that they concentrate on reminding social security recipients of their obligation to advise of changes in assets or investments.  In a case such as this, where there was an early failure to disclose an asset, the letter does not remind a recipient of the need to review whether all assets have been disclosed and some may argue that, as there was no change of asset during the relevant period there was no failure to properly respond to the letter.  It may be appropriate for Centrelink to review the contents of the standard letter to include the requirement to review and disclose any existing assets.

10.     It follows from the foregoing that the decisions under review should be affirmed.

I certify that the ten [10] preceding paragraphs are a true copy of the reasons for the decision herein of  

Mr B H Pascoe, Senior Member

Signed:  Olympia Sarrinikolaou

Clerk

Date of Hearing  14 September 2009
Date of Decision  1 October 2009
Advocate for the Applicants        Unrepresented
Advocate for the Respondent       Mr T Noonan