Ashlin and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Anor - [2008] AATA 522

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 522

ADMINISTRATIVE APPEALS TRIBUNAL Nº 2006/1176

GENERAL ADMINISTRATIVE DIVISION

Re:PAULETTE LESLEY ASHLIN

Applicant
And:SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS; AND
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondents

DECISION

Tribunal: Regina Perton, Member

Date: 24 June 2008

Place: Melbourne

Decision:The Tribunal affirms the decision under review.

……….[Sgd].………..
Regina Perton
Member

SOCIAL SECURITY - overpayment of disability support pension and age pension - whether member of a couple - debt to Commonwealth - write-off or waiver – decision affirmed.

Social Security Act 1991 ss 4(2), 4(3), 1064-E2, 1236, 1237A, 1237AAD

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546

Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92

Lynam v Director-General of Social Security (1983) 1 AAR 197

Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164

REASONS FOR DECISION

24 June 2008 Regina Perton, Member

Paulette Ashlin applied to Centrelink for a disability support pension (DSP) in December 2000. Centrelink provides services for the Department of Families, Housing, Community Services and Indigenous Affairs and for the Department of Education, Employment and Workplace Relations. In her claim form, she indicated that she was separated from her husband, Errol Ashlin. They married in 1963 and have not divorced. Mrs Ashlin was paid DSP at the single rate from 2001 to 2005 and then age pension (AP) at the single rate when she qualified for that payment. In 2006, following a review of her circumstances, Centrelink decided that Mrs Ashlin had been wrongly paid as a single pensioner and should have received payments as a member of a couple. Centrelink determined that she had been overpaid $29,715.56 in DSP between 4 July 2001 and 3 May 2005 and $8212.01 in AP between 18 May 2005 and 16 May 2006. Mrs Ashlin disputes Centrelink’s finding that she was a member of a couple during that period.
The issues before the Tribunal are:

Was Mrs Ashlin a member of a couple during the relevant period?
If so, was Mrs Ashlin overpaid DSP and AP and if so, are the overpayments a debt to the Commonwealth?
If so, are there grounds to write off or waive the debt?

Was Mrs Ashlin a member of a couple during the relevant period?

Section 4 of the Social Security Act 1991 (the Act) sets out the criteria for deciding whether a person is a member of a couple:
4(2)Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;…
…
4(3)In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a)…, the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a)the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)any legal obligations owed by one person in respect of the other person; and
(iv)the basis of any sharing of day-to-day household expenses;
(b)the nature of the household, including:
(i)any joint responsibility for providing care or support of children; and
(ii)the living arrangements of the people; and
(iii)the basis on which responsibility for housework is distributed;
(c)the social aspects of the relationship, including:
(i)whether the people hold themselves out as married to each other; and
(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d)any sexual relationship between the people;
(e)the nature of the people’s commitment to each other, including:
(i)the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage-like relationship.
…
Mrs Ashlin described the history of her marriage. She and Mr Ashlin met in the Lismore area and were married in December 1963. They have lived in various parts of Australia, including around 12 years in Wollongong when their two sons were young. Mr and Mrs Ashlin’s sons now live in Western Australia and Canberra respectively. Among other occupations, Mr and Mrs Ashlin managed a small motel and ran a takeaway food outlet for a time. For around 10 years, they lived in a caravan while moving around the country working in various occupations including fruit picking. For a time, they spent the dry season in northern Australia and came back south during the wet season. In the early 1990s, Mrs Ashlin went back to Lismore where her mother lived with one of Mrs Ashlin’s two sisters. That sister died, so Mrs Ashlin stayed with her mother for around a year. Mr Ashlin returned to the Mildura area for work and supported Mrs Ashlin while she stayed with her mother, until her mother moved to a nursing home.
Mr Ashlin took up a position as the caretaker of a caravan park that provided accommodation for block workers in the Mildura region during the fruit picking season. After returning from Lismore, she moved into her husband’s on-site caravan. She eventually assisted with cleaning in the caravan park and worked in nearby packing sheds. Her mother and her remaining sister died within a few months of each other. Losing her two sisters and mother within a relatively short period affected both her health and her relationship with her husband. Mrs Ashlin said that she subsequently developed a number of medical conditions. Mrs Ashlin described difficulties she had with her husband around that time. She moved out of his caravan and into another in the same park in around 1996.
Mrs Ashlin said that she inherited some money from her recently-deceased sister and wanted to buy a house. However, she could not get a mortgage by herself due to a lack of income. She told the Tribunal that she and Mr Ashlin jointly bought a house about 11 years ago for $87,000, with a mortgage of $60,000. Mrs Ashlin told the Social Security Appeals Tribunal (SSAT) that she had also hoped for reconciliation with her husband at the time.
Mr and Mrs Ashlin had a joint bank account until 2006. Mrs Ashlin usually paid the mortgage, council rates and utilities costs. Mr Ashlin reimbursed her for half the mortgage. She said that Mr Ashlin left most of the financial management to her before and after the purchase of the house.
At the end of the relevant period, Mr Ashlin still managed a caravan park about 36 kilometres from their home. He lived at the caravan park during the week. He returned to the house each Saturday night and stayed until Sunday afternoon. He bought his groceries to take to the caravan park on Sundays. Mr and Mrs Ashlin agreed that since he owned half the house, it did not make sense for him to pay for accommodation elsewhere on the one night a week he came into Mildura.
Mr Ashlin has now retired and is in ill health. Mr and Mrs Ashlin are now sharing the house, although they have separate bedrooms. Mrs Ashlin said that he has no one else who could care for him so she is prepared to do so.
Mrs Ashlin said that during the relevant period, she and Mr Ashlin took out a joint loan to purchase a motor vehicle for Mr Ashlin. She stated that she made the repayments and Mr Ashlin reimbursed her. She said that Mr Ashlin had told her that he needed a statement of her Centrelink payments in relation to the car loan. Both the housing loan and car loan have now been paid out. She said that she closed their joint bank account on 29 May 2006 at Centrelink’s suggestion.
In respect of living arrangements, Mrs Ashlin said that she and Mr Ashlin each have their own bedroom and share the rest of the house and appliances. She did the cleaning but not his room. Most of the time Mr Ashlin cooked for himself. She stated that they occasionally go out together with friends for a meal at the local services club. Their oldest son lives in Perth and about four years ago they travelled together to visit him. Mrs Ashlin said that she and Mr Ashlin did not have a sexual relationship during the relevant period.
Under cross-examination Mrs Ashlin agreed that she did not inform her children at the time of separation that the marriage had ended, but they have since been told. She also stated that she thinks she is Mr Ashlin’s beneficiary under his will but she is not sure. In any case, the only substantial asset is the house, which the children will eventually inherit. Mrs Ashlin said that her financial situation is desperate and she receives no money from Mr Ashlin. She said that her health has deteriorated further due to the stress of the imposition of the debt. She provided a doctor’s report confirming the impact of stress on her health. Mrs Ashlin said that at the time of separation no-one from Centrelink assisted her or explained the consequences of separation.
Mr Ashlin’s evidence was that until 2006 his only bank account was the joint account, which Mrs Ashlin managed. It was Mrs Ashlin who arranged the repayments for the housing loan and the car loans he had over the years. Mrs Ashlin used the joint credit card more than he did. He gave Mrs Ashlin cash from time to time for expenses. He helped to maintain their house although he worked seven days a week and spent only one night a week there. He did not keep records of payments and cannot recall amounts of money he may have given Mrs Ashlin or the dates upon which he might have done so.
Mr Fumberger, Mr Ashlin’s accountant, indicated that Mr Ashlin’s income tax returns since 2001/02 did not nominate Mrs Ashlin as his spouse, although in 2004/05 he mistakenly included her name. He said that this was corrected in 2006. Mr Fumberger blamed himself for misunderstanding his client’s marital situation.
In determining whether a marriage‑like relationship under the Act exists between two people, O’Loughlin J, in Staunton‑Smith v Secretary, Department of Social Security (1991) 32 FCR 164 at 170, referred to the list of circumstances in s 4(3) of the Act:
It is not suggested that this list is exhaustive nor will each of these subjects fall to be considered in every case. It must also be emphasised that a particular answer to a single subject will rarely, if ever, supply a final solution. The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators. The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.
French J in Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 dealt with ss 4(2) and 4(3) of the Act in the context of an application for a carer payment. He referred to the decision in Staunton‑Smith and also to the decision of Fitzgerald J in Lynam v Director‑General of Social Security (1983) 1 AAR 197 and stated that in determining whether a marriage‑like relationship exists under the Act, the nature of the exercise is much the same as that required under the statutory formula used in Lynam and Staunton‑Smith. In Lynam, Fitzgerald J said, at 200:
Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
The Full Federal Court, in Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92, which followed a rehearing by a differently constituted Tribunal following the 2006 Pelka decision by French J, stated (at paragraph 24):
There is nothing in s 4(3) that requires the relevant decision maker to make a finding of fact as to any of the matters specified in that provision. Rather, the decision maker is required to have regard to all the circumstances of the relationship, including the specified matters, in forming an opinion about the relationship between two people. Having regard to a matter does not require making a finding of fact about that matter…
At paragraph 30 of the 2008 Pelka decision, the Court stated:
The matter to which s 4(3) of the Social Security Act requires a relevant decision maker to have regard is the nature of the commitment of two people to each other. That regard is to include, in particular, four specific matters. Clearly, the Tribunal had regard to those four specific matters in terms. The essential requirement of the provision, however, is that the decision maker must have regard to the nature of the commitment of two people to each other. It is clearly relevant to that matter to have regard to the fact that a commitment that each of those persons has to each other is different from the commitment that each person has to any other person….
In respect of the financial aspects of the relationship between Mr Ashlin and Mrs Ashlin, the Tribunal accepts that during the relevant period there was a joint bank account into which Mr Ashlin’s paid much of his wages. The account was used for the payment of joint house and car loans and joint household expenses. Mr Ashlin gave Mrs Ashlin cash from time to time as well. These arrangements and the joint loans taken out after the claimed date of separation, demonstrate that the financial affairs of Mrs Ashlin and Mr Ashlin were closely linked during the relevant period.
In respect of the nature of the household, the Tribunal accepts that during the relevant period Mr Ashlin was away from the family home six nights each week because of his work commitments. However there was no dispute that he returned to the family home each Saturday and that Mr Ashlin considered this to be his residence. The evidence is clear that both Mrs Ashlin and Mr Ashlin contributed to the household: Mr Ashlin carried out maintenance while Mrs Ashlin performed household tasks such as cleaning. Apart from separate bedrooms, they shared other parts of the house and appliances. These arrangements demonstrate that Mrs Ashlin and Mr Ashlin continued to share responsibility for the various aspects of the household during the relevant period.
In respect of the social aspects of the relationship the Tribunal takes into account that Mr Ashlin and Mrs Ashlin occasionally went out together with friends at the local social club. They also travelled to Perth together to visit their son. There is conflicting evidence as to whether their children were told of the separation. Some of their friends are of the view that they are good friends. The Tribunal accepts that there was no sexual relationship between them during the relevant period.
In respect of the nature of the commitment to each other, the Tribunal takes into account that there has been no application for dissolution of the marriage. At the SSAT, Mrs Ashlin said that in purchasing a house together, Mrs Ashlin had harboured hope of reconciliation. There appears to be a level of mutual emotional support and Mrs Ashlin and Mr Ashlin have expressed a joint interest in their children’s welfare by making arrangements for the house to pass to the children. Mrs Ashlin’s management of the finances also reflects an ongoing commitment to Mr Ashlin. Mr Ashlin has now retired and moved back into the house full time. His health has deteriorated and Mrs Ashlin has been taking care of him. While his retirement and return to the family home occurred after the period under examination, it nonetheless illustrates the likelihood of an ongoing commitment by Mr Ashlin and Mrs Ashlin to each other during the relevant period. The Tribunal is satisfied that there was an ongoing commitment to each other during the relevant period.
Taking all factors into account the Tribunal finds that during the relevant period Mrs Ashlin and Mr Ashlin maintained a close relationship. Although there was, in all likelihood, no sexual relationship between them, they lived in the same house when Mr Ashlin was not working at the caravan park. They appear to have maintained an emotional attachment. They attended occasional social functions together. They shared household tasks. On balance, the Tribunal finds that Mrs Ashlin was a member of a couple during the relevant period.

Was Mrs Ashlin overpaid DSP and AP and if so, were the overpayments a debt to the Commonwealth?

In view of the Tribunal’s finding that Mrs Ashlin was a member of a couple during the relevant period, her income is taken to be 50 per cent of the combined income of herself and Mr Ashlin under s 1064-E2 of the Act. The Tribunal is satisfied that during the relevant period Mrs Ashlin received $29,715.56 in disability support pension and $8212.01 in age pension in excess of her entitlement. and the Tribunal finds that these amounts represent a debt to the Commonwealth under s 1223(1) of the Act.

Should the debt be written off or waived?

Section 1236 of the Act provides for a write‑off of the debt under certain circumstances. However, Mrs Ashlin is receiving social security benefits from which the debt may be repaid over an extended period and the debt is not irrecoverable at law. Therefore, the circumstances under which the debt may be written-off do not exist.
Section 1237A of the Act provides for waiver of a debt to the Commonwealth where the debt arose solely due to administrative error by the Commonwealth, if the payment was received by the debtor in good faith. The Tribunal finds that the debt was not attributable solely to administrative error by the Commonwealth, so the debt cannot be waived on this ground.
Section 1237AAD of the Act provides for waiver of a debt in certain other circumstances:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.
In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 Besanko J stated, in respect of special circumstances (at paragraph 33):
… I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances… It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case…there must be something that distinguishes the case from the ordinary or usual case ….

The Tribunal accepts that Mrs Ashlin has health problems and that she is in financial difficulty. However, the Tribunal is not satisfied that the situation that she finds herself is vastly different from the situation of other social security recipients who have incurred debts due to overpayments. Many social security recipients experience health, financial and personal difficulties. Mrs Ashlin remains on a social security benefit and is able to repay the debt in instalments taken out of her fortnightly payments. The amount to be withheld per fortnight is negotiable.
The Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone). Hence, the Tribunal finds that the waiver provisions of s 1237AAD of the Act should not be invoked.
In conclusion, Mrs Ashlin was paid $29,715.56 in disability support pension and $8212.01 in age pension in excess of her entitlement. These amounts represent a debt to the Commonwealth. There are no grounds to write off the debt. The debt was not attributable solely to administrative error by the Commonwealth, so the debt cannot be waived on this ground. The debt cannot be waived for special circumstances either. Therefore, the SSAT reached the correct decision.

Decision

The Tribunal affirms the decision under review.

I certify that the thirty-two [32] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)

Clerk

Date of hearing:  18 October 2007
Date of decision:  24 June 2008
Advocate for applicant:            Mr J. Fumberger, Accountant
Advocate for respondent:         Mr T. Noonan, Centrelink Legal services