Ayres and Secretary, Department of Family and Community Services

[2005] AATA 627

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 627

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2005/91

GENERAL ADMINISTRATIVE DIVISION		)
Re		DANELLE AYRES

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms Linda Savage Davis, Member

Date30 June 2005

PlacePerth

Decision The Tribunal sets aside the decision under review and in substitution decides that for the period 24 August 2003 to 31 May 2004 only, Miss Ayres was a member of a couple for the purpose of assessing the entitlement to YA and that the overpayment for that period is a recoverable debt.

.........(sgd L Savage Davis)............

Member

CATCHWORDS

SOCIAL SECURITY – whether applicant in a marriage-like relationship – criteria for forming opinion about relationship – financial aspects – nature of household – social aspects – sexual relationship – nature of commitment – overpayment of Youth Allowance – waiver – solely administrative error – good faith

Social Security Act 1991 ss 4(2), 4(3), 4(3A), 106(7A (ii)), 1067C (1), 1223(1), 1237A (1), 1237AAD

Dranichikov v Centrelink (2003) FCA FC 133

Re Secretary, Department of Family and Community Services and WAP [2000] AATA 7

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 1 86

Jazazieuska v Secretary, Department of Family and Community Services (2000) 65 ALD 424

Heggerty v Department of Education, Training and Youth Affairs (2001) 67 ALD

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

Beadle v Director-General of Social Security (1985) 60 ALR 225

REASONS FOR DECISION

30 June 2005 Ms Linda Savage Davis, Member            

1.      This is an application by Ms Danelle Ayres (“the applicant”) for the review of a decision made by the Social Security Appeals Tribunal (“SSAT”) on 13 December 2004 to affirm a decision made by Centrelink on 30 June 2004, to raise and recover a debt of Youth Allowance of $10,437.65 for the period 24 February 2003 – 4 June 2004 on the basis that the applicant was a member of a couple throughout this period.

2. The applicant was represented by her father, Mr Darren Ayres. Mr Alan Jones represented the Secretary, Department of Family and Community Services (“the respondent”). The Tribunal had before it the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T documents”) (T1 – T38/ 1-222), documents tendered by the applicant dated 8 April 2005 plus attachments (Exhibit A1), and the respondent’s Statement of Facts and Contentions filed 16 May 2005 and attachments (Exhibit R1). Miss Ayres gave oral evidence to the Tribunal.

Issues and Legislation

3.      The first issue that arises in this application is whether the applicant was living in a marriage-like relationship during the period 24 February 2003 to 4 June 2004 and therefore should have been treated as a member of a couple for the purpose of calculating her rate of entitlement under the social security law for that period.  The relevant legislation is the Social Security Act 1991 (“the Act”). Relevant to this matter are sections 4(2), 4(3) and 4(3A) that provide as follows:

“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; or

(b)       all of the following conditions are met:

(i)the person has a relationship with a person of the opposite sex (in this paragraph called the "partner");

(ii)the person is not legally married to the partner;

(iii)the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;

(iv)both the person and the partner are over the age of consent applicable in the State or Territory in which they live;

(v)the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.

Member of a couple—criteria for forming opinion about relationship

4.(3)     In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), 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.

4(3A)  The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage-like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.

4. In reaching a decision the Tribunal has been mindful of the criteria in s 4(3) of the Act which it has taken into account, although not exclusively, in forming the opinion of whether the applicant was in a marriage-like relationship.

Miss Ayres’ Evidence

5.      Miss Ayres told the Tribunal that she met Sean Kenny (“Mr Kenny”) in Vietnam in August 2001 when both of them were employed by the Defence Services.  A relationship developed after she had returned to Australia and went to study at Campbell, ACT.  At this time Mr Kenny was based at Sydney on the HMAS Watson.   Subsequently she decided to leave the Royal Australian Navy (“RAN”) and moved to Western Australia to study podiatry because it was the shortest course available.  Her boyfriend, Mr Kenny, helped to organise for her to live with his parents in Mindarie.  The arrangement was that he would pay his father and that she would pay the amount back to Mr Kenny when she was working and earning an income.

6.      On 2 January 2003 Miss Ayres told the Tribunal she went to Centrelink in Joondalup to enquire about her entitlement to Youth Allowance (“YA”).  She had investigated on the internet and understood as a full time student she may be entitled to YA.  At that interview she said she asked specific questions about her relationship with Mr Kenny because she was concerned that it could affect her YA.  On 15 January 2003 she attended Centrelink again and brought in documents that they had requested.  She also completed a claim for YA, which was stamped 17 January 2003 at Centrelink, Joondalup, 20 January 2003 at Centrelink, Students Perth WA and 23 January 2003 at Centrelink, Curtin. 

7.      Miss Ayres said she answered on the claim for Youth Allowance form that she was single to question number 8 because this was appropriate if you had never married and never lived with a partner, and she had not (T4/35).  She told the Tribunal that although they had had a joint bank account, they closed it in early 2003 and had no joint assets such as a house, a car or a boat.  She answered Section C, question 1 “Which of the following best describes your accommodation” as ‘Other’ because she didn’t fit into any other criteria.  She was living with Mr Kenny’s parents at Mindarie at the time and not paying rent and the heading “Other” included as an example, free accommodation (T4/37).   In answer to question 14 she marked “yes” for the question “Do you receive free accommodation” (T4/38).  In Section D, question 1 she had answered “yes” that she had money in a bank, building society or credit union and also provided additional written information of a second account (T5/41).  In that additional written information she wrote “the account is a joint account with boyfriend who lives in Sydney, not with me”.  Miss Ayres said she did not know why all the forms and documents had been date stamped 23.1.03 Centrelink, Curtin as she said she had not been at that time to that office.

8.      Miss Ayres clearly recalled that on 17 January 2002 she spoke to Centrelink about her relationship with Mr Kenny and asked directly about it because she was not sure what effect it would have on her entitlement to YA.  She was asked whether they lived together.  She said she told them that they did not live together and was told that therefore he was not a partner because they were not living together.  She said she took this to mean if she wasn’t living with him then under Centrelink rules she did not have a partner.

9.      Miss Ayres said in answering Section D, question 13 of the Claim for Youth Allowance form, she went to page 11 of the “Notes for Youth Allowance Claim” (Exhibit A1).  Although she had answered ‘yes’ to the question, she subsequently changed it to ‘no’ because she did not fall within any definition as outlined in the notes.  She answered ‘no’ to the questions in Section G “Are you or have you been married, do you have or have you had a dependent child, have you lived or are you living in a marriage-like relationship that has lasted for at least 12 months, or for at least 6 months where the relationship ended because of the death of your partner or because of domestic violence?”  Miss Ayres indicated that the use of the words “lived or living” immediately indicated to her that this was not applicable to her situation.  Miss Ayres said that she was being forthright just as she had previously been about her boyfriend as evidenced by her response to question 1, Section K where she wrote that her boyfriend assisted her to complete the form (T4/40).  She also provided information about her superannuation at that time.

10.     Miss Ayres said that there was nothing on the Claim for Youth Allowance form asking if she lived with her boyfriend’s parents.  On 10 February 2003 she completed the Living Arrangements MOD LA form (T7/45 – 47).  Miss Ayres said she did not think of identifying Mr Kenny as her boyfriend’s father and described him as her friend and landlord.  As before, she had no joint assets with Mr Kenny.  She said that the letter that she attached indicated clearly that she was telling them everything upfront, answering the forms as best she could and would let them know if her marital status altered (T7/47). 

11.     Miss Ayres said that Mr Kenny was “crash posted” to Perth on 28 May 2003.  This meant a move at short notice.  He didn’t move in with his parents because his ship, HMAS Adelaide, went to sea almost immediately and didn’t return until 9 July 2003.  She said he then started visiting on week-ends and staying at his parents.  Miss Ayres said that she was aware in July 2003 that the Navy had classified them as de facto.  She was aware that he had sent in the application as early as February 2003.  She said she went to Centrelink Curtin on 15 July 2003 and spoke to a male called Alan.  She told him that the Navy had classified them as de facto.  He told her this was irrelevant for social security purposes and that the law that Centrelink dealt with was different.  She was given another Living Arrangements (MOD LA) form (T9/53-54).  In response to question 1 she agreed that she had answered that Sean Kenny stayed regularly at her current address, that he was her boyfriend and that he stayed 1-2 days per week.  She does not understand how this was subsequently recorded as 3-4 days.  (T35/195).  She said she answered ‘no’ to question 2 because she had never lived with Mr Kenny before.  In response to question 4 which asked “Have you at any time been legally married or lived as married (de facto) with anyone you listed in question 1” she answered “no”, because although she knew the Navy considered them to be in a de facto relationship, she had been told by Centrelink that this was irrelevant, and in any event, she was not at this time living with Mr Kenny.  She said she honestly answered ‘no’ to question 7 because their joint bank account had been closed. 

12.     Miss Ayres said that from late July 2003 on she and Mr Kenny started to look for rental nearer to Garden Island where Mr Kenny’s posting was because it took nearly two hours to get from Mindarie and back.  She and Mr Kenny both completed and both had their names on the application to lease 4-29 McKenzie Street, Shoalwater (“Shoalwater property”) although the lease was in his name only.  This is because she couldn’t pay the rent.  Miss Ayres said they moved in on 24 August 2003.  She said he needed someone to look after his property when he was not there – it was too far for him to go back and forth to Mindarie and also their relationship had reached the stage where she would describe them as boyfriend and girlfriend.

13.     On 1 September 2003 Miss Ayres notified Centrelink, Curtin of her change of address and that she was living with Mr Kenny, the same person that she had notified them about on 15 July 2003.  She said actually that he had never moved in with her until 24 August 2003 although she had notified them on 15 July 2003 that she was now sharing with him, because it was too far for him to come.  She said she had no further contact with Centrelink as she had no further change to her circumstances.

14.     On 5 March 2004 she went to Centrelink to notify of a change of job.  She provided pay slips and within days was told she could use self service facilities for lodging information about YA.  In a letter dated 29 April 2004, Miss Johnstone, a Centrelink officer, advised Miss Ayres that an interview had been arranged for 5 May 2004 because she had been chosen, she was told, for a random review.  Miss Ayres said at that time she had no reason to believe she was being paid incorrectly.  She attended an interview on 5 May 2004 with Miss Johnstone, who she said completed the Youth Allowance – Random Sample Review (T10/ 55-87). She said she answered question 5 that she was single because she was not married.  She did not consider herself to be in a de facto relationship because of what Alan at Centrelink had said on 15 July 2003.  She indicated that she was living free of charge although she agreed she had told the Tribunal she would have to pay back to Mr Kenny the money that he had provided to allow her to live with his parents and subsequently, because she was not paying any rent.  She said she called Mr Kenny “a Navy friend” in question 25 because she had decided by then that the relationship was not going to work.  She said by approximately early to mid April she considered that Mr Kenny was no longer her boyfriend.  Miss Ayres said she answered ‘no’ to the question “Have you ever been married to or previously lived in a relationship, a marriage-like relationship” because at no time did she consider that she and Mr Kenny were in a marriage-like relationship even when they lived together, because he was away a lot.

15.     Miss Ayres said that when she was sent a further form in regard to her living arrangements which had to be completed within 14 days to avoid cancellation, she decided she had had enough of the complexities and pressure that she was experiencing from Centrelink and threw it in the bin, understanding that her YA would be cancelled.  Mrs Sue English then contacted her and advised her to complete the form or a debt would be raised and so she filled it in.  In filling in the form she indicated that Mr Kenny was a friend, as they were no longer boyfriend and girlfriend.  Miss Ayres said she read question 9 incorrectly and ticked ‘yes’ to the question “Do you pay rent”, because she physically paid the rent.  She agreed there was a benefit to her by being able to use Mr Kenny’s car because it saves her the 2 ½ hours it would take her to get to Curtin.  However she pays for petrol.  It also ensures the car is used regularly.  She said she has never seen Mr Kenny’s will.  Miss Ayres said she has a will and she has left everything to her sister.  Miss Ayres said she and Mr Kenny have always lodged separate taxation returns; Miss Ayres said they divide the telephone bill exactly according to who has used it; they have no joint assets and Mr Kenny pays the rent and the bills by the internet or directly when he is home.  She does most of the household jobs because he is often away and even when he is based in Western Australia, he works long hours.  She said they have not holidayed together and she doesn’t see them as a couple.  Miss Ayres said she believes she has told Centrelink of every change and was shocked when she was presented with a debt letter.

16.     In cross-examination Miss Ayres said in response to question 4 of the Claim for Youth Allowance, she didn’t say how much Mr Kenny was paying his father because it was still being discussed.  She thought it was about $80 per week.  She believed she had scratched out the answer to question 13 after consulting the Notes for Youth Allowance Claim about income.  In regard to the Notes for Youth Allowance Claim she said she had circled the dot point “You are or have been living in a marriage-like relationship for 12 months or more” so she could ask a question about Section G.  In particular, she wanted to ask what question 6 meant by a “marriage-like relationship”.  In regard to question 11 of the Notes for Youth Allowance Miss Ayres said she did not think that the loan Mr Kenny was making to her by paying for her to live with his parents was the loan envisaged under the income test because it was an arrangement between friends, not a formal loan like a car loan.  At the time she didn’t think it fitted into the income category although she would now concede maybe it was a loan.

17.     Miss Ayres said she first got access to Mr Kenny’s Redicard in April 2004.  Miss Ayres was referred to Australian Defence Credit Union bank statements (“the bank statements”) from 1 February 2003 to 5 June 2004 that showed withdrawals from Bankwest Curtin in February 2003 and March 2003 for example.  (Confirmation that they were for these periods was subsequently provided to the Tribunal as noted in paragraph in 23). Miss Ayres said it could have been her, but later said she could not recall making the withdrawal.  She agreed that a number of the transactions occurred in the Perth Metropolitan area during periods when it was likely Mr Kenny was away.  She said that the bank statements would also record all Visa and Redicard transactions and she believed that his parents and sister may have also had access to his accounts.  Miss Ayres was referred to the Living Arrangements (MOD LA) form (T7/45-46) dated 19 February 2003.  She said she did not list Mr Kenny in question 1, as a person who worked away from home, of which a member of the armed forces was used as an example, because she did not think he lived away.  All his belongings at that time were on the HMAS Watson.  She said again at that time there was no joint account because it was being closed.  She said that she was flustered and confused when she answered question 9 and what she meant was that she mainly paid the rent.  Miss Ayres maintained that she did not know that Mr Kenny was treated as a de facto until July 2003 and did not know that he was receiving extra income because she was classed as a de facto.  She said she was aware it had been lodged in February 2003 as she had told the SSAT.  She said in any event this was not relevant for Centrelink purposes because she understood from them that he was not her partner until they were living together.

18.     Miss Ayres said in answer to the form completed by Miss Johnstone (T10) she recalled answering house sitting in response to question 21. In completing the form she did not volunteer information she just answered questions put to her.  She only became aware that Mr Kenny was paid on the basis of being a de facto after the overpayment arose.  She believed he claimed to be a de facto so he could get back to Perth.  She did not know what boxes he had ticked on the form seeking de facto status but understood the fact that he paid for her room in Mindarie was enough for the Navy.  She said again that she didn’t think it applied to her in relation to YA because Centrelink required you to be living together.  She said the application for de facto status specifically said at para. 20 it was not relevant to anything outside the Australian Defence Force.  She said that by the time they took the lease in August 2003 it didn’t matter that her name was on the lease application, because he had already had his de facto status recognised.

19.     In further questions Miss Ayres confirmed that when she moved into the Shoalwater property with Mr Kenny on 24 August 2003 she did consider him as her boyfriend and that they were living together.  She said they shared a bedroom.  She said his parents thought they were boyfriend and girlfriend.  Miss Ayres confirmed that they broke the phone bill down exactly – he paid most of it.  He paid bills by internet from his account and if necessary, she did internet banking on their behalf.  She did the majority of cooking and cleaning which was primarily because he was away a lot.  He had an insurance policy for the contents he owned.  She said when the relationship broke down in April/May 2004 they moved into separate bedrooms.  He was away between July and November 2004.  When he returned they moved into 8 Sevilla Terrace together.  They still share a house because they are good friends, but they are not boyfriend and girlfriend.  She did not believe their relationship had ever been marriage-like because they had no assets in common and although they moved in together it was not what she envisaged a marriage-like relationship would be as they were just getting to know each other.  She said even if it was considered to be marriage-like she believed she told Centrelink everything.

20.     Miss Ayres said she has not repaid any of the debt.  She is in her third year of podiatry and currently doing no paid work.  She is currently undertaking a swimming teacher’s course.  Mr Kenny is helping her financially and she is living on her savings.  She has no debts and has been able to pay her HECS upfront from working and receiving YA.  She thought that the debt owed to Mr Kenny would be approximately $10,000.  She had no assets and could identify nothing unusual about her situation. 

Final Submissions on behalf of the Applicant

21.     Final submissions were made by Mr Ayres on behalf of the applicant.  These submissions were also provided to the Tribunal in writing and can be summarised briefly as follows:

·it was submitted that there was no evidence that a marriage-like relationship existed because there were no joint bank accounts, no joint assets and nothing in both names at all;

·it was submitted that the enduring Power of Attorney dated 3 June 2004 in favour of Mr Kenny’s father supported the finding that there was no marriage-like relationship;

·it was submitted that s 1067C of the Act was relevant to this matter. In particular it was submitted that for the purposes of YA, section 1067C(b)(iii) requires that the relationship must have existed for a continuous period of 12 months and the effect of s 1067C(b)(iv) required the relationship to be marriage-like. Twelve months had not elapsed when the debt was raised on 30 June 2004 and so the Secretary could not form the opinion that the relationship between Miss Ayres and Mr Kenny had been marriage-like during the period of the debt;

·if a marriage-like relationship was found to exist and so a debt, it was submitted it should be waived in accordance with s 1237A(1) and s 1237A (1A) of the Act. Miss Ayres, it was submitted, had received the YA in good faith because she had told a Centrelink officer on 15 July 2003 that she was in a de facto relationship and been told “that it was irrelevant to Centrelink what Sean’s employer thinks, as different people interpret the rules differently and incorrectly”;

·it was submitted that the administrative errors lay entirely with Centrelink as Miss Ayres advised them of her change in relationship and living arrangements, employment and income.  It was submitted that it was Centrelink’s responsibility to seek more information if necessary;

·the Tribunal was referred to Dranichikov v Centrelink (2003) FCA FC 133, in particular paragraph 61.

Submissions by the Respondent

22.     Submissions were made on behalf of the respondent and can be summarised briefly as follows:

·it was submitted that s 1067C(1) of the Act was irrelevant as it was concerned with the definition of a current member of a youth allowance couple for the purpose of deciding whether or not someone is independent and therefore was not applicable in this case;

·it was submitted that although Mr Kenny spends a considerable amount of time away he has provided ongoing financial support for Miss Ayres which was evidence of significant financial commitment and pooling of resources;

·it was submitted that the action of paying board for Miss Ayres to live at his parents’ house was evidence of an ongoing and substantial commitment;

·whilst Miss Ayres has given evidence that she must repay the money that Mr Kenny has spent to help support her, there was no evidence, it was submitted, that it would be repaid;

·although Miss Ayres and Mr Kenny have no significant assets this is not significant as they are both very young and it would be unlikely in most cases that such a young couple would have assets;

·Mr Kenny has provided financially and trusted Miss Ayres to pay the bills which, it was submitted, was indicative of a significant amount of trust and substantially more than just a boyfriend and girlfriend relationship;

·it was submitted that Miss Ayres’ poor recall as to what access she had to  Mr Kenny’s Redicard prior to June 2004 was self serving in contrast to her clear recall of interactions she had with Centrelink;

·Miss Ayres’ evidence was that she had been aware, since at least February 2003, of Mr Kenny’s claim that he be treated as being in a de facto relationship and had been aware that this claim had been accepted from mid 2003;

·whilst it was submitted that the household was not typical of most households, in the context of a naval career it was typical and therefore not unusual that Mr Kenny would leave for substantial periods and she would be responsible for looking after their shared household;

·it was submitted that Miss Ayres had conceded that they shared a bedroom from the time they moved into the Shoalwater unit until approximately April/May 2004.  Even since the breakdown of the relationship Mr Kenny has continued to provide significant financial support for Miss Ayres and they still shared accommodation;

·it was submitted that there were no grounds to waive the debt as no special circumstances existed.  In addition, it was submitted that it was not solely administrative error on the part of the respondent because Miss Ayres contributed to the debt by way of omitting information.  In particular, it was submitted, that in MOD LA form dated 15 July 2003 (T9) Miss Ayres contributed by describing Mr Kenny as her boyfriend and not de facto although at that time she knew the Navy had classified Mr Kenny as being in a de facto relationship.

23.     The respondent undertook to provide written verification that the Australian Defence Credit Union bank statements were for the period 1 February 2003 to 5 June 2004.  This verification was subsequently provided to the Tribunal and placed on the file.

Consideration and Decision

24. In reaching its decision the Tribunal has considered the oral and documented evidence, the cases referred to, other relevant decisions and the relevant provisions of the Act. The first issue for the Tribunal to consider is whether Miss Ayres was in a marriage-like relationship with Mr Kenny between 24 February 2003 and 4 June 2004. As Miss Ayres and Mr Kenny are not married the relevant provision is s 4(2)(b) of the Act. The Tribunal notes that the applicant satisfies sections 4(2)(b)(i), (ii), (iv) and (v) of the Act. In determining whether s 4(2)(b)(iii) is satisfied the Tribunal must have regard to all the circumstances of the relationship. In Re Secretary, Department of Family and Community Services and WAP [2000] AATA 7, the Tribunal said at paragraph 11:

“… in deciding whether a person is a ‘member of a couple’ for the purposes of s 4(2) of the Act, an opinion is formed having regard to all circumstances of the relationship including in particular, those matters enunciated in paragraphs 4(3)(a) to (c) exclusively. Those provide objective criteria, which can be determined on the evidence In the circumstances, it falls to the Tribunal to make a value judgement giving weight to each criterion having regard to all the circumstances of the relationship. The criteria must be considered as a whole in context”.

25. The Tribunal has considered the statutory criteria in s 4(3) of the Act having regard to the evidence before it, to establish whether the evidence supports a conclusion that the applicant was in a marriage-like relationship for the period in question.

Financial Aspects of the Relationship

26.     The applicant and Mr Kenny do not jointly own any real estate nor do they have any joint liabilities.  The lease of the Shoalwater property although in Mr Kenny’s name only, was applied for in joint names.  The applicant did have a joint account with Mr Kenny for some period, but the Tribunal accepts Miss Ayres’ evidence that it was closed in early 2003.  The Tribunal was less convinced by her evidence in regard to Mr Kenny’s Australian Defence Credit Union bank statement showing withdrawals from Bankwest, Curtin in February and March 2003.  Miss Ayres initially said she could have made the withdrawals and then later said she could not recall.  It seemed likely to the Tribunal that she did have access to his account as she gave evidence that when they moved into the Shoalwater property she did internet banking on his behalf.  The latter was evidence of a significant level of trust and co-operation as was the previous arrangement to a lesser extent where Mr Kenny arranged for Miss Ayres to live with his parents and he paid board for her.  Although Miss Ayres says she must pay this back, as well as other financial assistance he has provided, this is not a documented loan nor could Miss Ayres provide an exact amount that was to be repaid.  The arrangement appears to have been of mutual benefit.  Miss Ayres has been able to pursue her studies and she has also been able to pay her HECS upfront.  Whilst household expenses such as the phone bill were split according to use, Mr Kenny paid rent and bills and allowed Miss Ayres to use his car in return for her maintaining the household and caring for his possessions when he is away from the Shoalwater property.  I accept the respondent’s submission that the absence of joint assets or evidence of any significant assets is not unusual for young people.  I give little weight to the fact that Mr Kenny senior was given Power of Attorney on Mr Kenny’s behalf from 3 June 2004 as this is only one day prior to the end of the period in question.  The Tribunal concludes that from the time Miss Ayres moved to Mr Kenny’s father’s home their financial relationship was significant and still is.

Nature of Household

27.     Prior to moving in with Mr Kenny in August 2003, Ms Ayres stayed at Mr Kenny’s parents’ home and Mr Kenny visited from time to time when he was not overseas on duty.  The applicant and Mr Kenny shared a house as boyfriend and girlfriend from 24 August 2003 when they moved in together to the Shoalwater property.  Miss Ayres said this arrangement ended in April/May 2004 when they moved into separate bedrooms.  Miss Ayres said she did the majority of housework and cooking because Mr Kenny worked long hours and was away a lot.  Throughout their relationship Mr Kenny has spent periods overseas.

Social Aspects of the Relationship

28.     Miss Ayres said she was aware in February 2003 that Mr Kenny had applied to be recognised as being in a de facto relationship, but maintained that until July 2003 did not know he was classed as a de facto by the Navy, or the benefits he received as a result.  Miss Ayres said she regarded them as boyfriend and girlfriend when they moved in together in August 2003.  She believed his parents also considered them boyfriend and girlfriend.  Miss Ayres never described their relationship to the Tribunal as de facto and did not respond to Departmental forms in the affirmative asking questions about de facto relationships because she did not consider them to be de facto.  In fact she always described Mr Kenny as being either her boyfriend or not currently her boyfriend.  She also said she believed after talking to “Alan” on 15 July 2003, that the Navy classification of their relationship was irrelevant.  She gave evidence on a number of occasions that she believed that living together was significant to the status of her relationship with Mr Kenny and understood from her interview of 17 January 2002 at Centrelink that because they were not living together he was not classified as her partner. 

Sexual Relationship

29.     Miss Ayres gave evidence that she and Mr Kenny shared a bedroom at the Shoalwater property from 24 August 2003 till at the latest the 31st May 2004.

The Nature of the People’s Commitment to each other

30.     Miss Ayres has maintained a close relationship with Mr Kenny, including living with him from August 2003, since at least 2002.  Mr Kenny arranged for Miss Ayres to live at his father’s home.  Since breaking up as girlfriend and boyfriend they have moved into another property together.  Miss Ayres described them as good friends.  Mr Kenny is still assisting her financially although she still sees it as a debt she will have to repay.  There was no evidence as to when this arrangement will end.  Miss Ayres gave no evidence about other relationships.  The current arrangement is mutually beneficial and reflects a very significant level of trust and sustaining friendship despite the breakdown of their girlfriend/boyfriend relationship.

31.     In the opinion of the Tribunal, the weight of evidence supports the finding that from 24 August 2003 until the end of May 2004, Miss Ayres was in a marriage-like relationship with Mr Kenny. During this period they lived together, Miss Ayres considered them to be girlfriend/boyfriend and they provided emotional and practical support to each other.  Miss Ayres knew that the Navy considered them to be in a de facto relationship and did nothing to alter this view.  Prior to 24 August 2003 the Tribunal accepts that Miss Ayres had never established a joint home with Mr Kenny, and that although boyfriend and girlfriend the opportunity had not arisen for them to establish a relationship that could be described as marriage-like.  The Tribunal accepts that their relationship ended at the latest at the end of May 2004.

32. On behalf of the applicant it was argued that for the purposes of YA a relationship must have lasted at least 12 months before it could be described as marriage-like (s 1067C). This is not correct. S 1067 of the Act applies only to s 1067A and s 1067B of the Act to establish when a person is “independent” for the purposes of those sections.

33. Having found that Miss Ayres was in a marriage-like relationship from 24 August 2003 to 31 May 2004 this means she was not entitled to be paid YA as a single person during that period. The amount paid to her during this period on the basis that she was a single person becomes a debt due to the Commonwealth in accordance with s 1223(1) of the Act.

34. There are a number of provisions under the Act that allow for the waiving of a debt. Section 1237A(1) provides:

“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 give rise to that proportion of the debt”.

35.     The respondent has submitted that Miss Ayres contributed to the administrative error by describing Mr Kenny as her boyfriend and not her de facto in MOD LA dated 15 July 2003 (T9/53-54).  I do not agree as I think her description of Mr Kenny as her boyfriend was an honest and widely understood description of a relationship such as theirs, and one she used consistently.  Notwithstanding the Navy’s classification of them as being in a de facto relationship I see no reason why Miss Ayres would be misleading the Department by describing her relationship as boyfriend/girlfriend rather de facto.  It is of concern however that the mere choice of the word “boyfriend” rather than de facto appears to have been significant in affecting the response by the Department.

36.     In relation to the issue of good faith, required for s 1237A to apply, the Tribunal noted the decision in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186 that :

“… if a person knows or has reason to know that he or she is not entitled to a payment received … that person does not receive the payment in good faith.  Absent such knowledge or reason to know, the receipt would be in good faith” (at p. 189).

37.     A lack of ‘good faith’ can be said to exist when:

“… for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment when he or she receives the payment and decides to exercise control over it by retaining it …” (Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 at 435-6).

And further that ‘good faith’ is absent where:

“… there is a positive belief that the payment has been made by mistake.  It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt” (Heggerty v Department of Education, Training and Youth Affairs (2001) 67 ALD 129 at 534).

38.     The Tribunal, applying these decisions, noted that it was the state of mind of the individual concerned regarding the payment in dispute – rather than that of the supposed imaginary recipient – that was critical to the determination of ‘good faith’.  I do not believe Mss Ayres could be said to have received the YA at the single rate for the period 24 August 2003 to 30 May 2004 in good faith.  On a number of occasions she gave evidence to the Tribunal that she understood from Centrelink that living with Mr Kenny was crucial in their assessment of their relationship (see paragraphs 8, 11, 17 and 18).  This indicates that she had ample reason to know or have reason to know that her entitlement was affected.

39. The Tribunal also considered the special circumstances waiver provisions contained within Section 1237 AAD of the Act. In considering the term “special circumstances” the Tribunal took into account appropriate case law on the subject. The Federal Court found in Groth v Secretary, Department of Social Security(1995) 40 ALD 541, after referring another Federal Court’s decision in Beadle v Director-General of Social Security (1985), that special circumstances:

“would require something to distinguish … [the] 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”.

There is nothing in Miss Ayres’ case that amounts to special circumstances as envisaged by the Act.

40.     The Tribunal therefore sets aside the decision under review and in substitution decides that for the period 24 August 2003 to 31 May 2004 only Miss Ayres was a member of a couple for the purpose of assessing the entitlement to YA and that the overpayment for that period is a recoverable debt.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Linda Savage Davis, Member

Signed: .................(sgd D Brodie)................................
  Associate

Date/s of Hearing  1 June 2005
Date of Decision  30 June 2005
Representative for the Applicant    Mr Darren Ayers
Advocate for the Respondent        Mr Alan Jones