Aylott and Secretary, Department of Family and Community Services

[2004] AATA 1131

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1131

ADMINISTRATIVE APPEALS TRIBUNAL

GENERAL ADMINISTRATIVE DIVISION            N2003/1957

Re: DALE AYLOTT

Applicant

And: SECRETARY, DEPARTMENT OF FAMILY AND COMMUNTIY SERVICES

Respondent

DECISION

Tribunal:       P.J. Lindsay, Senior Member

Date:             28 September 2004

Place:            Gosford

Decision:For the reasons given orally at the hearing, the Tribunal affirms the decision under review.

. . . . . . . . . . . . . . . . . . . . . . . .

P. J. Lindsay, Senior Member

©        Commonwealth of Australia          (2004)

CATCHWORDS

SOCIAL SECURITY – payments of disability support pension and rent assistance -  applicant’s partner is owner of her place of residence – applicant a homeowner and ineligible for rent assistance – applicant failed to inform Centrelink about changes in her husband’s income - overpayments are debts due to Commonwealth – debts not to be written off – right to recover debts not to be waived – decision affirmed

Social Security Act 1991 ss.11(4), 1064-D1, 1236, 1237A, 1237AAD

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1995) 40 ALD 541 

REASONS FOR DECISION

P.J. Lindsay, Senior Member

1.      Dale Aylott (the applicant) has applied to the Administrative Appeals Tribunal for review of a decision by the Social Security Appeals Tribunal on 19 November 2003. The SSAT affirmed two decisions of an authorised review officer at Centrelink. The first decision, dated 11 June 2003, was that the applicant was not living separately and apart from her husband Johnnie Aylott on a permanent or indefinite basis. The second decision by the authorised review officer, dated 13 June 2003, found that the applicant had been overpaid disability support pension and rent assistance, and a recoverable debt of $21,938.55 that arose during the period 23 July 1999 to 20 May 2003, should be repaid.

2. At the hearing, the applicant represented herself and Mr J Kenny from Centrelink represented the Secretary, Department of Family and Community Services (the respondent). The tribunal had before it the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T documents). The matter proceeded on the basis that the applicant was not challenging the SSAT’s decision concerning her relationship with Mr Aylott.

background

3.      The background is that the applicant lodged a claim for disability support pension and began receiving pension from 19 November 1992. She stated therein that she was married to Mr Aylott and she provided her husband’s income. She has also been receiving rent assistance.

4.      In 2002 a discrepancy was noticed between the applicant’s information regarding her husband’s annual income, $22,001, and that held by the Australian Taxation Office, annual salary of $47,336. Centrelink wrote to the applicant on 24 April 2002 requesting confirmation of her husband’s employment details.

5.      Centrelink accepted that any overpayment made prior to July 1999 was due to administrative error in not notifying the applicant how her pension was calculated and her obligations to inform Centrelink about changes in her husband’s income. In her letter of explanation to Centrelink dated 8 May 2003 (T74), the applicant referred to receiving notices from Centrelink, her completing the forms and sending in her husband’s group certificates, which she said Centrelink frequently lost.  Centrelink concluded that the applicant failed to advise about increases in her husband’s earnings during periods in 2002 and 2003. The issue for the tribunal is whether the applicant is indebted to the Commonwealth by reason of receiving amounts of disability support pension and rent allowance to which she was not entitled and if so, whether the amount may be waived or written off, or should be recovered.

evidence

6.      In evidence, the applicant said she probably would have received a letter from Centrelink dated 29 July 1999 (T16) notifying her that her pension was calculated on combined income of $22,002.76. That letter requested her to tell Centrelink if that income figure was incorrect or if her combined income increased. A similar letter was sent by Centrelink on 5 August 1999 (T17). Again, it referred to the need to inform Centrelink if the applicant’s combined income went above $22,002.76. The applicant’s evidence is that she told Centrelink about increases to her husband’s income.  Her evidence is that she would attend the Centrelink office at The Entrance or phone Centrelink to tell them that her husband’s wage had increased. She said she would do so when her husband told her about changes to his income, whether regular reviews or because of a bonus. The applicant was quite sure that she told Centrelink about these changes to her husband’s income and that Centrelink lost the information.  Later in her evidence, however, she admitted she did not read the back of the letters asking for her to contact Centrelink about changes to her husband’s income.

7.      The applicant was asked if she recalled receiving Centrelink’s letter dated 24 April 2002 (T26), which informed her that the Australian Taxation Office had received a Tax File Number Declaration Form from her husband and that Centrelink therefore wanted confirmation from her of her husband’s employment details. Although she could not recall getting the letter, the applicant said she probably would have received it. In answer to Mr Kenny, she said she agreed with the Centrelink record that her husband phoned Centrelink on 30 April 2002 to say he had signed a new Tax File Number Declaration Form and that he would provide pay slips within 21 days in verification of his income.

8.      The applicant said her husband gave her an envelope containing pay slips for two weeks in April 2002, and she dropped them in to Centrelink. She said she did not know if the amounts shown on the payslips were correct. She added that she did not know how much he earned at the time. She was asked whether she could explain the discrepancy between the weekly wages of $778 shown on the pay slips and the information provided later to Centrelink by her husband’s employer. The employer’s information showed weekly wages of $1,010 for the same periods (T57-109). Her evidence was that she did not know whether the employer’s amounts are true and the pay slips are incorrect. Nevertheless, the applicant agreed with the content of a Centrelink note of a call she made on 16 July 2003 stating that the wages information from the employer was correct because she knew her husband’s “regular wage has been $1,010 per week for at least the last couple of years.” (T130) But in oral evidence she contradicted that record when she said that she had hitherto been unaware of how much her husband received. At a later stage in her evidence she was again contradictory. She told the tribunal that her husband would tell her about changes in his wages, yet he did not tell her about the income he was being paid during the period covered by the two pay slips from April 2002.

9.      As for the claim to entitlement for Rent Assistance, the applicant did not dispute that she occupies a residence in Gwandalan owned by her husband. She has lived there since 13 March 1999. Her son also lives there. The applicant said she pays an amount of rent, calculated as one third of her husband’s monthly mortgage. She denied that this amount is simply her contribution to household expenses. She makes the payment to a Mrs Petfield, who in fact is her daughter, and not to her husband because her husband asked her to do so since he owes his daughter some money. The applicant said that Mrs Petfield would fill in the landlord’s declaration in the rent certificate form relating to the Rent Assistance claim.

10.     Centrelink is recovering the debt claimed by withholdings and thus the applicant receives only very small amounts, such as quarterly telephone allowance, but no pension. She said she has no assets, other than a car. Her husband bought the car but it is in her name so that it may be registered at the rate payable by pensioners. She owes about $7,000 or $8,000 on bankcard and gets some assistance from her son towards repayments. The applicant said her son looks after her food and electricity expenses, and her daughter makes sure she has adequate clothing. Accommodation and the car are made available to her by her husband.

findings and consideration

11.     I make the following findings of fact:

·     Since 13 March 1999 the applicant, her husband and their son have occupied the family home at 34 Pinaroo Road, Gwandalan, title to which is solely in the husband’s name.

·     The applicant is a member of a couple and her husband has title to the principal home of both of them.

·     The applicant received correspondence from Centrelink, in particular letters dated 29 July 1999 and 5 August 1999, notifying her that she must tell Centrelink if her and her husband’s combined income exceeded $22,002.76. I am satisfied that she failed to inform Centrelink at the time, that the amount was incorrect. She also failed to keep Centrelink informed of changes to her husband’s income.

10.     A person is not qualified for Rent Assistance if they are an ineligible home owner (s. 1064-D(1) of the Social Security Act 1991). The term ‘ineligible homeowner’ is defined to mean a homeowner, other than a number of specific exemptions, none of which is applicable here. The applicant is a homeowner under s.11(4) of the Act because her husband, her partner, has title to their principal home. The applicant has received rent assistance and accordingly, has been over paid.

11.     In relation to disability support pension, I find that the applicant’s evidence was contradictory, at times saying her husband told her about changes to his income and at other times maintaining she did not know how much he earned. I consider that it more likely than not that the applicant did not make contact with Centrelink by phone or in person to advise about changes to her husband’s earnings prior to her responding to an enquiry from Centrelink in April 2002. I am unable to accept her evidence that she informed Centrelink about changes to her husband’s income subsequent to receiving the letters of July and August 1999 and Centrelink lost the information. Accordingly, on the evidence before me, I am satisfied that the applicant received payments of disability support pension in excess of her entitlement.

12.     The applicant has been paid rent assistance to which she was not entitled and received disability support pension at a higher level than her proper entitlements. I find that under s.1223 of the Act, the rent assistance and overpaid disability support pension are debts due to the Commonwealth because the payee was not entitled to the payments. There was no dispute concerning the calculation of the several amounts.

13.     Part 5.2 of the Act deals with recovery of over payments. Section 1236 of the Act permits the respondent to write off a debt in certain situations:

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a)       the debt is irrecoverable at law; or

(b)       the debtor has no capacity to repay the debt; or

(c)       the debtor's whereabouts are unknown after all reasonable efforts have been made to      locate the debtor; or

(d)       it is not cost effective for the Commonwealth to take action to recover the debt.

The applicant is entitled to disability support pension and she has the capacity to repay the debt. Recovery of the debts can be effected, and is being effected, by making deductions from those payments pursuant to s. 1231 of the Act. It would not be appropriate, therefore, to write off the debt.

14.     Section 1237A of the Act provides that the respondent must waive the debts in certain circumstances. It reads:

1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

I am satisfied that the overpayments are not due solely to the Commonwealth’s administrative error. Waiver under s.1237A thus is not available.

15.     Section 1237AAD gives the respondent a discretion to waive the right to recover all or part of the debt where the respondent is satisfied that there are special circumstances other than financial hardship alone that make waiver desirable. But waiver is not available under s.1237AAD where the debtor or another person knowingly made a false statement or representation or failed to comply with the Act. The section reads:

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.

Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the       Commonwealth.

In considering whether s.1237AAD(b) applies, I note that the tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 decided that an applicant’s circumstances must be unusual, uncommon or exceptional to be considered special circumstances. More recently, Kiefel J in Groth v. Secretary, Department of Social Security (1995) 40 ALD 541 (at 545) has said of the expression ‘special circumstances’ that:

… it would require something to distinguish [an Applicant’s] case from others, to take it out of the usual or ordinary case… It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

16.     The rate of withholding from the applicant’s entitlement to disability support pension leaves her with nothing over. Against that I note the respondent’s submission that the current level of the debt of $21,228.84 will not be recovered in full for very many years at this rate of withholding. I accept the submission that the applicant’s conduct has not been blameless in relation to the apparent subterfuge of paying rent to her daughter while living in a home, with her husband and son, that is owned by her husband. More significantly, however, I note also that the applicant is being looked after by her family. Her needs for food and accommodation, as well as clothing and transportation, are being provided by her husband and her children.  On the whole, these circumstances present the applicant with some difficulties, but they are not unusual, exceptional or uncommon. I am satisfied that her circumstances do not constitute special circumstances, other than financial hardship alone, that make it desirable to waive the debts. Accordingly as she does not satisfy s. 1237AAD(b) it is not necessary to consider whether the debts resulted from her knowingly having made a false statement or having failed to comply with the Act (s.1237AAD(a)) or whether it is more appropriate to waive than to write off the debt or part of the debt (s. 1237AAD(c)). The result is that the right to recover the debt wholly or in part may not be waived.

17.     It follows that the decision under review should be affirmed and the debt should be recovered.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of P.J. Lindsay, Senior Member:

Signed:         .....................................................................................

Date of Hearing  28 September 2004
Date of Decision  28 September 2004
Applicant  Self-represented

Respondent’s representative  Centrelink