Bisada and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2011] AATA 451

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 451

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/4962

GENERAL ADMINISTRATIVE DIVISION		)
Re		Angel Bisada

Applicant

And Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Respondent

DECISION

Tribunal Senior Member A K Britton

Date28 June 2011

PlaceSydney

Decision The decision under review is set aside and remitted to the Secretary for reconsideration to determine whether the debt said to be owed by Mrs Bisada has been correctly calculated, specifically whether payments under s 58 of the Transport Accident Act 1986 (Vic) made to Mrs Bisada constitute “income” within the meaning of the Social Security Act 1991 (Cth).

........................[sgd]........................

Senior Member A K Britton

CATCHWORDS

SOCIAL SECURITY – overpayment – calculation of debt – meaning of “income” and excluded amounts – decision set aside and remitted

Social Security Act 1991 (Cth) – ss 5(4), 8(1), 8(8), 8(8)(j), 1064

Transport Accident Act 1986 (Vic) – ss 35(1), 58(2), 58(3), 58(5), 58(6)

REASONS FOR DECISION

Senior Member A K Britton           

1.Mrs Angel Bisada seeks review of a decision made by a Centrelink Authorised Review Officer and affirmed by the Social Security Appeals Tribunal, to raise and recover from her a debt in the sum of $25,070.72.  The debt is the result of an alleged overpayment of disability support pension (DSP) throughout the period, 3 December 2003 to 22 June 2010.  

2.The rate of DSP payable to a person is calculated in accordance with a formula set out in s 1064 of the Social Security Act 1991 (Cth) (the Act). Among other things, the formula takes into account the person’s “gross income”. The respondent Secretary asserts that the alleged overpayment is the result of the net rather than the gross “income”, received by Mrs Bisada from the Victorian Transport Accident Commission (the Commission), being used to calculate her rate of DSP. Mrs Bisada contends that Centrelink erred in calculating the alleged overpayment by counting as income “excluded amounts”.

3.The question I must answer in this matter is whether the payments received made to Mrs Bisada from the Commission constitute income within the meaning of the Act.  

Definition of income

4.Section 8(1) of the Act defines “income” in relation to a person to mean:

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

…

but does not include an amount that is excluded under subsection (4), (5) or (8).

5.Section 8(8) provides:

Excluded amounts--general

(8)  The following amounts are not income for the purposes of this Act:

…

(j)  a payment made to the person for or in respect of a dependent child of the person;

…

6.There is no argument that throughout the subject period, Mrs Bisada’s now 21-year-old daughter, Justine, was a “dependent child” as defined by s 5(4) of the Act.

Nature of payments made by the Victorian Accident Commission

7.The parties agree that the payments received by Mrs Bisada from the Transport Accident Commission throughout the period of the alleged debt constitute “income received [by Mrs Bisada] for her own use or benefit” and thus fall within the scope of s 8(1)(a) of the Act. They differ, however, on whether those payments include an “excluded amount”, namely payments received by Mrs Bisada for or, in respect of, Justine: s 8(8)(j) of the Act.

8.As I understand it, the Secretary agrees with the proposition that the payments made by the Commission to Mrs Bisada include payment “for or in respect of” Justine.  However the principal submission made for the Secretary is that, it is not possible to determine what proportion (if any), of the payments made to Mrs Bisada  is attributable to the amount paid “for or in respect of” Justine. 

9.The Transport Accident Act 1986 (Vic) (the Transport Act) establishes a statutory compensation scheme “in respect of persons who are injured or die as a result of transport accidents”. The Act also established the Transport Accident Commission whose functions include the payment of compensation to persons entitled to compensation under that Act.

10.Mrs Bisada is entitled to compensation under the Transport Act because she was a dependant of her husband who, but for his death as a result of a “transport accident”, would have been entitled to compensation under that Act: s 35(1) of the Transport Act. As a consequence, among other things, she is entitled to receive periodical payments under s 58 of the Transport Act: s 58(1). Section 58 relevantly provides:

Surviving partner-periodical payments

58. Surviving partner-periodical payments

…

(2) Subject to subsection (3), the amount of the weekly payment under this

section is-

(a)  80 per centum of the earner's assessed earnings; or

(b)  if the surviving partner has no dependent children-$304; or

(c)  if the surviving partner has dependent children, an amount equal to the sum of-

(i)  $304; and

(ii) $85 for one dependent child; and

(iii) $27 for each other dependent child-

whichever is the greater.

(3) A weekly payment under this section must not exceed-

(a)  $621; or

(b)  100 per centum of the earner's assessed earnings-

whichever is the lesser.

…

11.Put simply, s 58 provides that the rate payable to a person such as Mrs Bisada, namely a surviving spouse with one dependent child, is determined by:

(i) Calculating 80 per cent of the “earner’s assessed income” as defined by s 58(6) of the Act, capped at the figure specified in s 58(3), currently $1061.

(ii) Adding the amounts in ss 58(2)(i) and 58(2)(ii), currently, $520 and $147. This gives a total of $667.

(iii) Determining whichever of the figures in (i) and (ii) above, is the greater.

12.The earner's assessed earnings is defined by s 58(6) to mean the amount calculated in accordance with the formula –

where-

A is the amount determined as the total amount that, but for the transport

accident, the earner would have had the capacity to earn in employment

reasonably available to the earner in view of the earner's training, skills

and experience during the period of twelve months after the death of the

earner, but does not include any employer superannuation contribution.

13.The weekly gross figure currently paid to Mrs Bisada by the Commission is $852 (see letter to Mrs Bisada from the Commission, 8 April 2011).  The information provided by the Commission does not detail how that figure was arrived at, however it seems plain that as it is higher than the minimum amount payable to a surviving spouse with one dependent, that is $667 (s 58(2)(b) of the Act), it probably represents 80% of the “earner’s assessed income” (s 58(2)(a) of the Act).

14.My preliminary view is that the payments made to Mrs Bisada by the Commission were probably calculated under s 58(2)(a) of the Act. Neither party has had an opportunity to comment on whether my understanding of the operation of the provision is correct.

15.It seems to me that as a necessary first step to the proper resolution of this issue, the Commission ought be requested to explain how the payment made to Mrs Bisada was calculated. It will then be necessary to consider whether some or all of that payment is an excluded payment within the meaning of s 8(8)(j) of the Act and the further submission advanced on behalf of Mrs Bisada, that s 58(5) may operate to make the entire payment she has received an “excluded amount”. Section 58(5) provides that weekly payments to a surviving partner cease five years after the death of the earner, unless the surviving partner has a dependent child in which case payments continue until the surviving partner ceases to have a dependent child. Mrs Bisada points out that but for the operation of s 58(5) her entitlement to any payment under s 58 would have ceased as five years have passed since the death of her husband. She contends that it is arguable therefore that all payments made under s 58, are payments “by or in respect of” Justine and therefore excluded from the definition of income. The Secretary made no submissions on this point.

Appropriate course

16.While the Secretary agrees that further enquiries ought to be made of the Commission about how the payments made to Mrs Bisada were calculated, he contends that the matter should be remitted for further consideration. It is argued for Mrs Bisada that the more appropriate course would be for the decision to be set aside and remitted. 

17.The issue of whether payments made by the Commission to Mrs Bisada are excluded from the definition of income under the Act was not addressed by the original decision-maker or the Authorised Review Officer.  While raised by Mrs Bisada before the SSAT, the Tribunal did not decide the issue, dismissing it, erroneously in my opinion, on the basis of insufficient evidence. It is disappointing that a matter of potentially wide significance having been raised by Mrs Bisada was not addressed by the Secretary in his Facts and Contentions.

18.The issue of the character of the payments made by the Commission to Mrs Bisada warrants further consideration. Self-evidently, it may have wider implications than this matter. Until such time as further information is available about how Mrs Bisada’s weekly payments were calculated, and the Secretary has had the opportunity to consider the implications of the operation of s 58(5), in my opinion it would be premature to determine whether the alleged debt has been correctly calculated.

19.In these circumstances I have decided that the most appropriate course is to set aside the decision under review under s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth) and remit the matter to the Secretary for reconsideration to determine whether the debt has been correctly calculated, specifically whether payments under s 58 of the Transport Accident Act 1986 (Vic) made to Mrs Bisada constitute “income” within the meaning of the Social Security Act 1991 (Cth).

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton.

Signed: ....................................[sgd].....................................
  Associate to Senior Member Britton

Date of Hearing:  22 June 2011
Date of Decision:   28 June 2011
Solicitor for the Applicant:         S. Hodges, Stephen Hodges Solicitors

Solicitor for the Respondent:     A. Rado, Centrelink Program Litigation and Review Branch