Bacea and Secretary, Department of Education, Employment and Workplace Relations

[2008] AATA 1080

Administrative Appeals Tribunal

REASONS FOR DECISION [2008] AATA 1080

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/1824

GENERAL ADMINISTRATIVE DIVISION		)
Re		JANINA BACEA

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS  

Respondent

REASONS FOR DECISION

Tribunal   Mr A Sweidan, Senior Member 

Date of Decision               5 November 2008

Date of Written reasons   3 December 2008

Place  Perth

1. At the conclusion of the hearing of this application on 5 November 2008, the terms of the decision intended to be made and the reasons for that decision were stated orally by the Tribunal.
2. On 12 November 2008, the respondent requested the Tribunal to furnish a statement in writing of the Tribunal’s reasons for its decision.           
3. The oral reasons for decision have been transcribed by Auscript Australasia Pty Ltd.
4. An edited copy of the reasons is attached and is forwarded to the applicant and to the respondent as the reasons for the Tribunal’s decision.  

....(sgd) Mr A Sweidan............

Senior Member

CATCHWORDS

Social security – overpayment of Newstart Allowance and Widows Allowance – applicant failed to disclose assets and income – decision under review affirmed   

LEGISLATION

Social Security Act 1991

Social Security (Administration) Act 1999

CASES

Re Falconer and Secretary, Department of Social Security (1996) 41 ALD 187

Re Secretary, Department of Family and Community Services and Jonauskas  (2001) AATA 72

Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435

Re Secretary, Department of Family and Community Services and Temesgen (2002) 72 ALD 563 at 564

Re Balancio and Secretary, Department of Family and Community Services (2003) ALD 204 at 209

R v Evans (1998) NSWCA 60401/1997

SDSS and Bliss (1996) 2(8) SSR 112

Re Waller and Secretary, Department of Social Security (1985) 8 ALD 26

Re Pepi and Director- General ofSocial Security 7 ALD 155

McAullife v Secretary, Department of Social Security 23 ALD 284

Petty and DGSS (1982) 4 ALN N214

Steinberg v Commissioner of Taxation (1976) 50 ALJR 43

Beadle and Director- General of Social Security (1984) 1 AAR 362

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

Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1,114

McKnight and SDSS (1994) 83 SSR 1212

REASONS FOR DECISION

3 December 2008 A Sweidan, Senior Member          

Decision Under Review

1.      The applicant, Ms Bacea, seeks a review of the decision of the Social Security Appeals Tribunal (‘SSAT’) made on 2 April 2008, that affirmed a decision made by a a Centrelink authorised review officer (‘ARO’) on 7 February 2008 to raise and recover debts of newstart allowance (‘NSA’) and widow allowance (‘WDA’) from the applicant (Ms Bacea)  for the period 12 July 2002 to 1 April 2004.

Issues

2.      The issues for the Tribunal are:

a. Whether Ms Bacea has been overpaid NSA and WDA for the period               

from 12 July 2002 to 1 April 2004?

b. If so, are these overpayments debts due to the Commonwealth? and

c. If so, should the debts or any part of the debts be written-off or   waived?

Facts

The following facts are not in dispute:

3.1      Ms Bacea was in receipt of NSA from 12 July 2002 and WDA from 30 May 2003.

3.2      Mrs Bacea was a partner of I Bacea & R.J Bacea Partnership (ABN: 24 432 992 005) which was trading as B John-Paving or BJ Paving.  The ABN for this Partnership was cancelled from 1 July 2003.

3.3      Ms Bacea was also the sole trader known as BJ Braks Pavings (ABN 91 146 626 482) whose ABN was cancelled on 9 August 2004.

3.4      Ms Bacea owns property at 52 Oriole Way, Thornlie (at which she resides) and 39 Cardington Way, Huntingdale (‘Huntingdale property’) both in Western Australia.

3.5      An agreement to purchase the Huntingdale property was entered into on 8 December 2001 for the purchase price of $115,000 and the sale was settled on 11 January 2002 for $119,191.00.

3.6      In the period from 18 June 2003 to 1 April 2004 Ms Bacea received regular deposits of approximately $160 per week to $320 per fortnight into her Commonwealth Bank account No. 10281716.

3.7      On 19 March 2004 a delegate for the Secretary decided that Ms Bacea had been overpaid $3,251.00 WDA for the period 30 May 2003 to 22 January 2004 due to undeclared income.

3.8      Dissatisfied with that decision Ms Bacea requested that the debt be reviewed.

3.9      On 7 February 2008 a Centrelink Authorised Review Officer (ARO) reviewed and varied the decision. The ARO decided that Ms Bacea had recoverable debts in respect of overpayments of NSA and WDA for the period from 12 July 2002 to 1 April 2004.

3.10    The ARO’s decision was reviewed and affirmed by the Social Security Appeals Tribunal (SSAT) on 2 April 2008. The applicant now seeks review of that decision by this Tribunal.

Evidence of Applicant and Tribunal’s Findings

4.        The first question is whether the applicant, Ms Bacea, derived income of $41,518 as her share of the partnership profit of a business in which she was in partnership with her former husband.  While Ms Bacea says that she has not received the money she agrees that she is entitled to it and she also has indicated that she is, in fact, suing her ex-husband to recover that amount.  Ms Bacea does not dispute that she did not inform Centrelink of that entitlement and as she failed to inform Centrelink it was not taken into account in calculating her Social Security benefits.  It is quite clear that it should have been taken into account as an entitlement to money derived by her and therefore this Tribunal finds that, in respect of that amount, the Newstart Allowance and Widow Allowance were calculated at a higher rate than Ms Bacea was entitled to receive. 

5.        The second issue of fact relates to the ownership of the house at 39 Cardington Way, Huntingdale, (the Huntingdale property).  That property was transferred into Ms Bacea’s name on 22 January 2002 as the sole owner of the property.  Thereafter she dealt with it as if she were the sole owner at all times, notwithstanding that she alleges that the property is owned by her son.  Her dealings with the property as evidenced by the relevant records before the Tribunal certainly do not support that claim by her. Her son was not called to give evidence and there is nothing to support her claim that he is the owner of the property. In relation to the Huntingdale property, Ms Bacea, it appears, never told Centrelink until at least or at earliest, June 2005 of her ownership of the property.  On at least two prior occasions, she provided false statements to Centrelink during 2003 in which she said that other than the home in which she lived, she did not own any other real property.

6.        Ms Bacea also failed to disclose any rental income relating to this property to Centrelink. Her actions in this regard, coupled with the conflicting nature of the evidence that she has given, lead this Tribunal to the view, for a number of reasons, that she is not a credible witness and the Tribunal does not accept her evidence in relation to these issues in a number of respects.  When she gave evidence before the SSAT, Ms Bacea told the SSAT that her husband had lived in the property for six months after they separated and that he paid $160 per week rent and that no one has lived in the property since.  The SSAT asked Ms Bacea to clarify the history of the renting of that property as Centrelink records refer to a tenant by the name of Andrew as renting the property in 2002.  Ms Bacea said she did not know who Andrew was and that the property was never rented to a person by that name.

7.        This should be contrasted with Centrelink records which show that on 30 November 2007 Mrs Bacea informed an authorised review officer of Centrelink that she rented the property to Andrew for six months after she purchased the property.  She said he would give her $160 and she would put it into the bank.  In a record of a discussion which appears in the Centrelink records, she said she had a tenant in the house for six months after she bought it and he moved out and the house has not been rented since.  She said the tenant’s name was Andrew and she does not remember his other name.  This accords with a document in evidence before the Tribunal which is a lease agreement entered into between Ms Bacea and a tenant by the name of Andrew Kerr, which shows that the property was let from 3 February 2002 to Andrew Kerr at a rental of $160 a week.

8.        This again must be contrasted with Ms Bacea’s evidence to this Tribunal where she told this Tribunal that the property was never rented out and that she never received any rent for the property.  Ms Bacea has given a number of conflicting versions of the position in relation to the letting of this property.   It is clear from the bank statements that have been produced in evidence both before the SSAT and before this Tribunal that during the relevant period there was a constant stream of weekly or fortnightly deposits into Ms Bacea’s bank account of amounts ranging between $160 and $320.

9.        Ms Bacea claims that those amounts were amounts gifted or given to her by her children. However, that must be contrasted with a rental assistance questionnaire, dated 18 October 2004, which was submitted to Centrelink by Ms Bacea’s son, Marius Mowinski, in which he claims to be renting the property in question – at a rental of $160 a week. That form is signed by Ms Bacea in October 2004 confirming that the details in the form are true and correct. 

10.      A further highly unsatisfactory aspect of Ms Bacea’s evidence to this Tribunal relates to a document which she produced to the Tribunal which she claimed in her evidence is her Will which bears the date 12 August 2002.  The document in question is not signed by her.  However, she says it is her current Will. It, amongst other things, appoints her son, Marius, as her executor, giving his address as 39 Cardington Way, Huntingdale.

11.      Under cross-examination Ms Bacea maintained that the date on this document, that is 12 August 2002, is correct.  However, it is clear that this document which is part of a bound “prepare your own will pack” as sold by stationers was only printed in February 2007.  That is, some five years after the date which, according to Ms Bacea, is the date on which she filled it in. 

12.      The Tribunal has no hesitation in rejecting Ms Bacea’s evidence and finding that she is not a credible witness.

13.      Whatever the truth of the matter may be as to the occupation and letting of the Huntingdale property, and it is virtually impossible to determine this in the face of the web of untruths that have been told, the Tribunal finds that there is no doubt that Ms Bacea owned this property.  There is no doubt that she was receiving payments relating to this property over the relevant period. 

14.      Ms Bacea produced to the Tribunal various photographs which she says are of the property and which she says show that the property is uninhabitable. Be that as it may, the fact of the matter is, as already indicated, that she has been receiving payments which clearly relate to this property.  So, whether the property is now uninhabitable and whether the property was occupied or not during the relevant period is in the Tribunal’s view not relevant to the issue of ownership.

15.      The Tribunal notes in this regard the statement tendered in the form of an unsworn letter signed by Linda Mansfield saying that the property has not been occupied since 2002, to which the Tribunal attaches very little weight given that this person has not made this statement under oath and was not called to give evidence.

16.      Whatever the truth of the matter in relation to occupation of the property may be, the Tribunal finds as a fact that (a) Ms Bacea owns the property; (b) she received rental payments in relation to the property as shown in the bank statements; and (c) she failed to disclose her ownership to Centrelink and she also failed to disclose the receipt of those payments to Centrelink until the matter was under investigation by Centrelink. 

Relevant law

17. The law relevant to this case is contained in the Social Security Act 1991 (‘the Act’) and the Social Security (Administration) Act 1999 (‘the Administration Act’).

Calculating rate of NSA & WDA payments

18. In accordance with sections 643 and 408FA of the Act, a person’s rate of NSA and WDA respectively is calculated using the Benefit Rate Calculator B specified in section 1068 of the Act. Pursuant to section 1068A-A1, to determine a persons rate of payment 'apply the ordinary income test using Module G below to work out the income reduction' (step 5).

19. Module G of section 1068A of the Act contains the ordinary income test calculations and requires that a person’s ordinary income is taken into account in determining their rate of payment.

20. Section 8 of the Act defines ordinary income to be determined as "income", in relation to a person, to mean:

(a) an income amount earned, derived or received (emphasis added) by the person for the person's own use or benefit; or

(b) a periodical payment by way of gift or allowance; or

(c) a periodical benefit by way of gift or allowance.

21. The affiliated note 1 states that s1074 and s1075 of the Act are to be used for business income.

22. Subsection 1075(1) of the Act permits certain deductions, depreciation and allowances, provided for in the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, to be offset against income for social security income test purposes, but only where the person ‘carries on a business’ and only in respect of deductions, depreciation and allowances in relation of that business.

23. Subsection 1075(3) of the Act provides rental income from a property that is not business income, is to be reduced by losses and out goings that relate to the property and are allowable deductions for the purposes of section 8-1 of the Income Tax Assessment Act 1997 for that period. The Tribunal notes that Ms Bacea has not declared any rental income or deductions to the Australian Tax Office (‘ATO’), and while paragraph 4.3.8.30 of the Guide to Social Security Law allows for an estimation of deductions where no tax return is available, this is used only in exceptional cases, such as when a person first purchases a property within the financial year prior to completing their tax return.

24. Subsection 68(2) of the Administration Act provides that Centrelink can send notices to a person requiring the person to notify Centrelink if specified events or changes in circumstances occur.

Has Ms Bacea has been overpaid NSA and WDA from the period from 12     July 2002 to 1 April 2004?

25.      On 20 August 2002 Ms Bacea was granted NSA effective from the date she contacted Centrelink, being 12 July 2002.  On 30 May 2003 Ms Bacea was granted WDA and continued to receive the maximum rate of payments.

26.      Ms Bacea has clearly received overpayments of both NSA and WDA for the reasons stated above.  

Are Ms Bacea’s social security overpayments debts due to the

Commonwealth?

27. Section 1223 of the Act, provides that if a social security payment is paid to a person and the person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, the amount of the payment is a debt due to the Commonwealth.

28. Section 100 of the Administration Act provides for an automatic retrospective rate reduction where a person fails to comply with notices issued under subsection 68(2) of the Administration Act. In Ms Bacea’s case this can occur from 12 July 2002 in relation to her NSA and from 30 May 2003 in relation to her WDA.

29.      As a result of Ms Bacea’s undeclared income and assets, her rates of NSA and WDA were calculated at a higher rate than she was entitled to receive in the period from 12 July 2002 to 1 April 2004 (‘the relevant period’).  This has resulted in Ms Bacea being overpaid $8,688.59 of NSA for the period from 12 July 2002 to 29 May 2003, and $4,124.38 of WDA from 30 May 2003 to 1 April 2004.

30. Accordingly, the Tribunal finds that Ms Bacea’s overpayments of NSA and WDA in the period from 12 July 2002 to 1 April 2004 are debts due to the Commonwealth under subsection 1223(1) of the Act.

31.      The Tribunal notes that while the SSAT reviewed the correct period that Ms Bacea was overpaid, it erred in the determining that the NSA debt of $8,688.59 also included the overpayment of WDA. 

32.      The ARO initially reviewed the decision that Ms Bacea had a recoverable debt of WDA $2,251.00 for the period of 30 May 2003 to 22 January 2004, and varied the decision by extending the period resulting in an increase of the WDA debt and a NSA debt.  At that time the amounts of the debts were to be calculated. 

Should the debts or any part of the debts be written-off or waived?

33. Subsection 1236(1) of the Act states that: 'the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise'.

34.      Subsection 1236(1A) provides that:

s1236.(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

35.      The Tribunal finds that none of the above situations apply in this case. Ms Bacea is currently in receive of social security payments, has a number of assets that can be disposed or borrowed against and has the capacity to repay the debt.

36. The Tribunal finds that the SSAT correctly found that the debt should not be waived under subsection 1237A(1) of the Act as it did not arise solely due to Centrelink’s administrative error.

37. It has been established that “solely” under the Act means that there must have been no other contributing factors that either caused or contributed to the debt: Re McKnight and SDSS (1994) 83 SSR 1212.

38.      Ms Bacea was sent numerous notices throughout the period of the debt requiring her to notify Centrelink within 14 days of any change of circumstances, such as receiving income, or the income or assets changes.  Income is defined, among other things, as the net profit from a business and income from rent.  Assets include, but not limited to, cars, furniture, money and real estate [T4-25: pp. 19-112]. There is no record of Ms Bacea declaring any income or an increase in her assets to Centrelink prior to the compliance investigation, and her contact on 16 September 2004.

39.      On 30 May 2003 Ms Bacea lodged a claim form for WDA.  In the claim form Ms Bacea ticked ‘No’ to the boxes relating to having any money in the bank, being involved in trust, business or company, and owning real estate.  Ms Bacea also lists her only vehicle as a Mazda RX7.

40.      On 21 November 2003 Centrelink wrote to Ms Bacea asking whether she owns any property, apart from her residential home, or if she receives any rent.  Again Ms Bacea answered ‘No’ to these questions.

41.      As the debt arose solely from Ms Bacea’s failure to notify Centrelink of her income and assets, the Tribunal finds that the recovery of the debt cannot be waived under this provision, as there was no error by the Commonwealth that resulted in this debt.

42. Subsection 1237A(1) of the Act also requires the Tribunal to consider whether the overpayment was received in good faith. In Re Falconerand Secretary, Department of Social Security (1996) 41 ALD 187 it was found that if a person knows she is not entitled to the payment, then it cannot be said she received the payment in good faith.

43. A person can also be unaware that payments have been made to them and can still be said, pursuant to the Act, not to have received payments in good faith. In Re Secretary, Department of Family and Community Services and Jonauskas (2001) AATA 72, Mr Jonauskas did not know that there could be an error in the amount of Age Pension that he was paid because he did not read the back of the letter requiring him to notify the Department if there was an error.Not knowing was not sufficient for the Tribunal to find that Mr Jonauskas received the payment in good faith, as he had reason to know that there might be an error and that reason was in the letter. 

44.      Mr Jonauskas also stated that he was old, suffered from ill health, had difficulties in managing his affairs, and lack comprehension of the English language.  In response, the Tribunal commented:

I am not satisfied that Mr Jonauskas’ circumstances are special.  Many people who are on the Age Pension suffer from ill health and have difficulties in managing their affairs because of it.  Many have some degree of difficulty in reading letters whether because of lack of English or because of problems caused by ill health.  This does not justify their being careless or reckless about the manner in which they manage their affairs.  They may seek assistance from family members although they are not obliged to.  There are avenues of assistance available to them and one of those is to telephone the Department, and now Centrelink, for assistance and guidance as to a person’s obligations.  People who have difficulties and have the capacity to understand their difficulties use those avenues or at least make some attempt to.  Mr Jonauskas neither used them nor made any attempt to do so.  I am satisfied that he had the capacity to understand his situation.  He also had the capacity to understand any obligations that he might have known he was under but, by making no attempt to read the letter of 22 July 1997 (or subsequent letters) chose not to know about them (at 79) [Emphasis added].

45.      The Tribunal finds that Ms Bacea did not receive the NSA and WDA payments in good faith as she knew, or had reason to know, that she was not entitled to the payments.

46.      Ms Bacea was put on notice by the letters that were sent to her that income and assets needed to be declared as it could affect her payments, but failed to declare this to Centrelink.

47.      The Tribunal finds that Ms Bacea was willfully blind to the fact that her income and assets would affect her rate of social security payments and failed to contact Centrelink regarding these or how her income and assets would be assessed.  Ms Bacea failed to inform herself or consider the letters Centrelink sent to her and therefore cannot be considered as receiving the social security payments in good faith.

48. Section 1237AAD states as follows:

1237AAD.  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 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.

49.      The meaning of the word “knowingly” was considered in the Administrative Appeals Tribunal case Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435:

(48) There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission' (at 30).

(49)…Mr Callaghan has acknowledged that he had received notices under section 727 of the Act and that he had read at least one of them. I am satisfied both on the material in the T documents and on his oral evidence that he received more than one of them and that he read the first one. On the basis of the notices themselves I am satisfied that they clearly set out his obligation to advise the department should his income, or that of Mrs Callaghan, change. I am also satisfied from the notice that it quite clearly stated that income included AUSTUDY benefits. Taking into account Mr Callaghan's knowledge of the notice and of his having read at least one of them, I find that he knew that he had an obligation to advise of a change in Mrs Callaghan's income. Therefore, when he failed to advise of the change he knowingly omitted to comply with a provision of the Act.

50.      As noted above, the Tribunal has recognised that the presence of actual knowledge may be inferred from the circumstances where a debtor had the opportunity to gain that knowledge and there were no obstacles preventing her acquiring that knowledge (also see Re Secretary, Department of Family and Community Services and Temesgen (2002) 72 ALD 563 at 564 and Re Balancio and Secretary, Department of Family and Community Services (2003) ALD 204 at 209).

51.      The Tribunal finds that Ms Bacea understood her obligations to notify Centrelink of her income and assets and the impact these had on her rate of social security payments.  Centrelink also sent Ms Bacea numerous letters notifying her to inform Centrelink if her circumstances changed. The Tribunal finds that Ms Bacea remained silent as to the fact that she had been receiving rental income and owned the Huntingdale Property.

52.      In R v Evans (1998) NSWCA 60401/1997 the NSW Court of Criminal Appeal held that deliberate silence could amount to a "representation".

53. Ms Bacea received valid notices under section 68 of the Administration Act and knew or had the opportunity to acquire the knowledge from the letters she received, which clearly set out her obligation to advise Centrelink should her income or assets change. The Tribunal also finds that Ms Bacea not only failed to advise of the changes in her income and assets, she knowingly omitted to comply with a provision of the Act and made a false statement or representation. Therefore subsection 1237AAD(a) of the Act is not satisfied in these circumstances.

54.      In SDSS and Bliss (1996) 2(8) SSR 112 Senior Member Allen referred to Re Waller and Secretary Department of Social Security (1985) 8 ALD 26 in which the Tribunal held that:

“In this matter the applicant has received public moneys to which he was not entitled.  The overpayment did not arise either as a result of innocent mistake or of fraud but arose because of Mr Waller’s failure to make a full disclosure of the circumstances of his employment to officers of the Department....”

55.      The Tribunal finds that Ms Bacea received public money which she knew that she was not entitled to as a result of her failure to properly inform Centrelink of her income. 

56.      Senior Member Allen in the Bliss case also noted (at 20) that:

'Further, as was pointed out by the Honourable J.B.K. Williams (Senior Member) in Re Pepi and Director-General of Social Security 7 ALD 155 at 158 in a passage cited with approval by Von Doussa J in McAuliffe v Secretary, Department of Social Security 23 ALD 284 at 296: “It appears to me that s140(1) is not confined in its operation to those cases in which a criminal offence of making a false or misleading statement may be established.  Section 140(1) does not, in its literal terms, make reference to the author of the false statement or representation, nor does it connect the person to whom, or on whose account, money is paid in consequence of the false statement or representation with the author of that statement.  The policy underlying the subsection appears to me to be the protection of revenue against unjustified payments out of public funds made in consequence of false information supplied to the administering Department.”'

57. The Tribunal is of the view that the same principle should apply in considering section 1237AAD of the Act when a person knowingly makes a false statement or misrepresentation by deliberately failing to provide information about their income or assets in order to gain a financial advantage. On Ms Bacea‘s application for WDA and response to letter regarding the review of payments Ms Bacea falsely declared that she had no rental or business assets and received no income.

58.      The Tribunal finds that little or no weight should be placed on Ms Bacea‘s evidence as she has been shown to have given misleading or false information.

59.      Further examples are Ms Bacea’s loan application form to Pepper Home Loans which lists Ms Bacea involvement in her business, and assets including a 1990 Porsche valued at $60,000.

60.      On 20 August 2002 Ms Bacea informed Centrelink that she no longer had the Porsche as it belonged to her husband.  However, the State Motor Vehicle registration records show that the Porsche has been and still is registered to Ms Bacea since 29 August 2000 at a value of $15,000, as is the Mazada RX7 and a Ford Falcon, purchased in April 2008 which Ms Bacea has also not advised Centrelink of.

61.      The above further illustrates Ms Bacea‘s preparedness to misrepresent her circumstances and as noted by the Tribunal in Petty and DGSS (1982) 4 ALN N214 at paragraph 36:

‘Our conclusion, in the final analysis, is that we cannot accept either Miss Petty or Mr. Davis as witnesses of truth on any of the critical issues in these cases. The proper administration of the social welfare system depends upon applicants making a full and true disclosure of their circumstances... ...Where applicants make an untruthful or misleading statement concerning their relationship, they must realise that the inference is likely to be drawn against them, that they are endeavoring to conceal the true nature of their relationship (cf. Steinberg v Commissioner of Taxation (1976) 50 ALJR 43).’

62.      Although that case related to whether or not a person was in a relationship, the same principles regarding providing false information can be applied in this instance. 

63. As the Tribunal finds that Ms Bacea did knowingly make a false statement and failed or omitted to comply with a requirement under the Act, the issue of whether or not there are special circumstances that make it desirable to waive the recovery of the debt need not be considered. However the Tribunal will proceed to do so for the sake of completeness.

64. The term “special circumstances” is not defined in the Act however it has been extensively considered in case law and the most frequently cited cases are:

§  Beadle and Director-General of Social Security (1984) 1 AAR 362 where the Administrative Appeals Tribunal stated as follows:

'...An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special...'

§  Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25 where the Federal Court stated as follows:

'…There is less overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case…'

§  Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1,114 where Deputy President Forgie stated at paragraph 80 in part as follows:

'…“special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances… that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it… He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement… The system of administration of the Social Security Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act…'

65.      In the Tribunal’s view it is clear that there are no special circumstances that make it desirable to waive the recovery of Ms Bacea’s debt.

66. Ms Bacea‘s circumstances are not extraordinary and cannot be distinguished from many other Centrelink customers who are obligated to repay their debts to the Commonwealth. In fact, Ms Bacea’s current assets, including an investment property, three cars and household contents indicate that she is better off than many other social security recipients. Accordingly, Tribunal finds that Ms Bacea is not entitled to have her debts waived under section 1237AAD of the Act.

decision

67.      The decision of the SSAT, dated 2 April 2008, is affirmed but varied in that the Tribunal finds that Ms Bacea was overpaid NSA of $8,688.59 for the period from 12 July 2002 to 29 May 2003, and WDA of $4,124.38 for the period from 30 May 2003 to 1 April 2004. These overpayments are recoverable debts due to the Commonwealth.

I certify that the 67 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A Sweidan

Signed: ……(sgd) T Freeman..........
  Associate

Date/s of Hearing  5 November 2008
Date of Decision  5 November 2008
Date of Written Reasons          3 December 2008
Applicant  Self represented
Respondent’s Representative  Mr A Holt
  Centrelink Legal Services