Annie Krepp and Repatriation Commission
[2013] AATA 786
[2013] AATA 786
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/3365
Re
Annie Krepp
APPLICANT
And
Repatriation Commission
RESPONDENT
DECISION
Tribunal G. D. Friedman, Senior Member
Date 7 October 2013 Date of written reasons 7 November 2013 Place Melbourne For reasons given orally at the hearing, the Tribunal affirms the decision under review.
..................................[sgd].....................................
G. D. Friedman, Senior Member
Veterans’ and Military Compensation – Service Pension/Income Support Supplement/Pension Bonus Scheme – Overpayment of Income Support Supplement – Debt Owed To The Commonwealth – Deb Recovery – Decision Under Review Affirmed
Veterans’ Entitlements Act 1986 ss 54, 56B
REASONS FOR DECISION
G. D. Friedman, Senior Member
7 November 2013
EDITED EXTRACT OF TRANSCRIPT PROCEEDINGS
10.04 AM, FRIDAY, 7 OCTOBER 2013
SENIOR MEMBER: The application before me is a decision by a delegate of the Repatriation Commission dated 18 June 2012 to raise an overpayment of $16,875.33 later reduced to $15,244.38 in Income Support Supplement paid to the applicant. The decision to raise the overpayments received by the applicant between 2 November 2000 to 19 October 2006, and 29 May 2007 to 30 September 2010 resulted from a failure of the applicant to notify the Department of Veterans' Affairs (the Department) of a 50 per cent interest in the property at 4 Central Avenue Torquay.
Mrs Krepp was granted a widows pension on 13 August 2000 after the death of her husband. Aged pension was later cancelled because she was granted the war widows' pension. She was invited to claim the Income Support Supplement, the claim was lodged with the Department on 16 January 2004. On 4 June 2004 the Department requested further information regarding her tax return and her farm, or her hobby farm. On 17 June 2004 Mrs Krepp's daughter, Kay Cox, provided the completed form regarding the 50 per cent share of the farm at 329 North Station Road Mortlake. The Department contacted Centrelink regarding details of the aged pension and on 22 June 2004 Income Support Supplement was granted on an interim basis. The basis of the interim grant of Income Support Supplement was a half-share of the total farm value of $352,680, half of that being $176,340; total income of $16,000 per annum; date of effect: 21 August 2000. Therefore, the basis of the Income Support Supplement was only the farm that had been included in the Assets Test. On 7 August 2006, Ms Cox enquired about possible sale of the farm and the effect upon the Income Support Supplement, and on 20 October 2006 the Australian Valuation Office valued the farm at $850,000. The house and curtilage was $175,000.
On 25 October 2006 the Department valued Mrs Krepp's 50 per cent share at $342,500, therefore no change was made to the Income Support Supplement. On 29 May 2007, Ms Cox advised the Department that Mrs Krepp had sold her 50 per cent share of the farm for $450,000 and purchased Lot 30 in Scott Street Mortlake for $350,000. There was an ANZ balance of $100,000 and $10,000 was received per annum from the late Mr Krepp's estate. On 1 June 2007, the Department updated its assessment for the applicant’s Income Support Supplement, it increased from $108.49 to $129.62 per fortnight, and the Department changed the applicant to a low asset limit because she was now a home owner. On 19 February 2009, the Statement of Circumstances included in the 2007/2008 form was given to the Department by the applicant's accountant. Question 56: "Do you have an interest in real estate?" Answer: "Yes. 50 per cent interest in 4 Central Avenue Torquay. Rental income: $9,600 for 2007/2008. "
The Department said it had no prior knowledge of the Torquay property and the Australian Valuation Office valued the property at $475,000 as of 28 April 2009. On 29 April 2009 a delegate of the Department reviewed the assessment and reduced the Income Support Supplement to nil, bank account details/trust section of the assessment at Torquay included, effective on 5 May 2009. On 22 January 2010 the Department updated the assessment and removed the rental income as there had been no rent received since 2008, therefore the Income Support Supplement was restored and increased effective as at 20 May 2009 and arrears were paid.
On 1 October 2010 the Torquay property was sold, but according to Departmental records the Department was not notified. On 21 April 2011 Mrs Krepp's accountant provided an Income Tax Return for 2009/2010 including bank account details, the sale of Torquay and the estate of the late Mr Krepp. On 23 May 2011, the Department updated the assessment, the Income Support Supplement was reduced to nil effective on 1 October 2010, being the date of sale of Torquay, and overpayment of $2,633.21 has been paid. On 29 June 2011, a delegate from the Overpayment Management Unit of the Department determined the overpayment of the Income Support Supplement at $16,875.33 and that was advised to the applicant and a review was sought. On 18 June 2012 a review officer varied the decision and referred it for recalculation, and on 17 July 2012 the overpayment amount was reduced to $15,244.38 and that decision is the one before me today.
The issues I have to decide are: (1) is there an overpayment of the Income Support Supplement; and if so, what is that amount and is it a debt to the Commonwealth? And (2) if the answer to Question (1) is yes, there is a debt; should the debt be recovered from Mrs Krepp?
The relevant legislation is the Veterans' Entitlement Act 1986 (The Act) section 56B states:
Automatic rate reduction--recipient not complying with section 54 notification obligations
Where:
(a) a person who is receiving a service pension or income support supplement is given a notice under section 54; and
(b) the notice requires the person to inform the Department or a specified officer of the occurrence of an event or change in circumstances within a specified period (in this section called the notification period ); and
(c) the event or change in circumstances occurs; and
(d) the person does not inform the Department or specified officer of the occurrence of the event or change in circumstances within the notification period in accordance with the notice; and
(e) because of the occurrence of the event or change in circumstances, the person's rate of pension or income support supplement is to be reduced;
then, except where otherwise provided for by this Act, the pension or income support supplement becomes payable to the person at the reduced rate on the day on which the event or change in circumstances occurs.
Now in consideration of the first issue, the Department has told me that it was not aware of the existence of the 50 per cent ownership held by Mrs Krepp when it granted the Income Support Supplement. I have looked at the form that was completed by Mrs Krepp, or on her behalf, on 27 December 2003. Question 28 asks whether there is any interest in real estate held in Australia, the answer contains no reference to the property at Torquay.
I have read in some documents on the file that Mrs Krepp might have thought that it referred to initial assets other than the ones that had already been notified to Centrelink. I do not accept that argument. Question 28 is specific, and the property at Torquay should have been included. I am satisfied that the relevant notices were given under section 54 of the Act, those notices set out, in detail and in very clear language, the basis upon which Income Support Supplement calculations were made. They included assets such as bank account details, they did not include the property at Torquay. Mrs Krepp, when she received those notices, which included a provision that she was required to notify if there had been any changes or the information contained in the notices was incorrect, should have notified the Department that in fact the notices were incomplete or incorrect in that they did not include the property at Torquay. She should have been aware, by reading those particular notices, that Torquay was not included, and it should have been included.
On that basis I am satisfied that in failing to respond to those notices and including the Torquay property, the calculation of Income Support Supplement should have been made at a reduced rate. I am satisfied, on looking at all the documents on the file that the revised calculation carried out by the Review Officer was correct, and that is that the amount of $15,244.38 paid to Mrs Krepp by way of Income Support Supplement should not have been paid. I am satisfied that the amount received represents an overpayment, and therefore is a debt to the Commonwealth in that amount.
The second issue is should the debt be recovered. On behalf of Mrs Krepp, it was argued that notice of the ownership of the Torquay property was given to Centrelink in the context of an application for aged pension, and therefore Centrelink should have told the Department and by inference that means that Mrs Krepp should not have to pay the debt. I do not accept that argument. It may well be in the best interests of public administration that if one government agency receives details of a particular matter, there would be benefit in that agency sharing the information to a second agency.
However, there is no legislative requirement for Centrelink to provide the information to the Department because aged pension applications are subject to an income and assets test; war widows pensions are not subject to an income or assets test. While it would have been helpful, there is certainly no legislative requirement for such information to be transferred between agencies. Given that, there is no justification for saying that the failure by the agencies to share information results in Mrs Krepp not having to repay the debt. In fact, there is no waiver provision in the Act that would enable me to waive the debt even if I considered that it should have been waived on that basis.
The other matter that has been raised with me is the question of natural justice, that an departmental officer had said to either Mrs Krepp, or to one of her daughters, that the property at Torquay had no effect on the Income Support Supplement unless it was sold. Mr Douglass, on behalf of the respondent, said that there is no corroborative evidence of that advice being given, and that it would be most unusual for an officer to mention that, because the advice would have been incorrect. The Tribunal does not know exactly what advice was given in the conversation with the department officer. But even if incorrect advice were given, that does not change the legislative required income and assets test being applied in calculating the applicant’s entitlement to Income Support Supplement, and there is no provision in the legislation for the Tribunal to waive the debt even if it were inclined to do so.
Mrs Krepp and her daughters have maintained all along that the Department has not acted appropriately, involving serious failures in their administration, not only because they should have received information from Centrelink, but also the general way that they have approached this whole issue. It is not for the Tribunal to comment on whether those comments are correct or not correct, that is a matter of administration which the Tribunal has no jurisdiction over. A body such as a Commonwealth Ombudsman is there to look at complaints about government administration. The Tribunal can only apply the relevant legislation under section 56 of the Act. Given that there has been an overpayment resulting from a failure to notify, on both the application form and in failing to respond appropriately to subsequent notices, as to the property at Torquay, it is the Tribunals conclusion and the basis of its decision that Mrs Krepp received Income Support Supplement payments to which she was not entitled. She is required to repay the debt. I affirm the decision under review.
END OF EXTRACT [10.28 am]
CONCLUSION
The Tribunal affirms the decision under review.
I certify that the preceding 15 (fifteen) paragraphs are a true copy of the reasons for the decision of G. D. Friedman, Senior Member. ..............................[sgd].........................................
Associate
Dated 7 November 2013
Date of hearing
7 October 2013
Advocate for the Applicant
David Drennan, Geelong & Surf Coast Veteran’s Center
Advocate for the Respondent
Mr R Douglass
Solicitors for the Respondent
Repatriation Commision
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