Cashmore and Secretary, Department of Social Services (Social services second review)

[2016] AATA 844

Cashmore and Secretary, Department of Social Services (Social services second review) [2016] AATA 844 (26 October 2016)

Division	GENERAL DIVISION
File Number(s)	2016/3160
Re	Tom Cashmore
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Dr L Bygrave, Member
Date	26 October 2016
Place	Sydney

The decision under review is affirmed.

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

Dr L Bygrave, Member

CATCHWORDS

SOCIAL SECURITY – age pension – debt arising from overpayment – failure to notify Centrelink about change to circumstances – change to marital status – applicant paid single rate rather than partnered rate – whether grounds for writing off debt – whether grounds for waiving debt – no administrative error – no special circumstances – decision affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 8(1), 9, 1064, 1064-A2, 1223(1), 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) ss 68(1) and (2), 72

CASES

Groth v Secretary Department of Social Security [1995] FCA 1708

SECONDARY MATERIALS

Guide to Social Security Law

REASONS FOR DECISION

Dr L Bygrave, Member

26 October 2016

INTRODUCTION

1. The applicant, Mr Tom Cashmore, was granted the age pension when he reached 65 years of age on 22 October 2000. The rate of age pension paid to Mr Cashmore at that time was calculated on the basis that he was a single person.

2. Mr Cashmore married Ms Susanti Cashmore on 27 January 2008.

3. On 11 March 2015, Centrelink became aware that Mr Cashmore was married after Ms Cashmore lodged a claim with Centrelink for paid parental leave. From this date, Mr Cashmore was paid the age pension at the partnered rate.

4. On 3 July 2015, Centrelink decided to raise and recover an age pension of $46,224.81 for the period of 27 January 2008 to 10 March 2015 because Mr Cashmore was paid the age pension at the rate of a single person rather than the partnered rate during this period. This decision was affirmed in an internal review by Centrelink on 27 July 2015.

5. Mr Cashmore appealed to the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal. The SSCSD affirmed Centrelink’s decision on 19 May 2016.

6. On 17 June 2016, Mr Cashmore applied to the General Division of the Administrative Appeals Tribunal for a review of the SSCSD decision.

7. The matter was heard in Sydney on 11 October 2016. Mr Cashmore attended the hearing in person and was self-represented.

   ISSUES

8. The determinative issues for the Tribunal are:

   (a)whether Mr Cashmore was overpaid the age pension in the amount of $46,224.81 for the period 27 January 2008 to 10 March 2015; and

   (b)if so, whether there are any grounds for waiving all or part of the debt.

   RELEVANT LEGISLATION AND CONSIDERATION

9. The rate of a person’s age pension is calculated in accordance with s 1064 of the Social Security Act 1991 (Cth) (the Act) and is affected by factors such as marital status, income and assets.

10. The age pension consists of payments that include a pension supplement, telephone allowance, pharmaceutical allowance and rent assistance. The partnered rate of these payments is less than the single rate because, as set out in s 1064-A2 of the Act:

    Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis… They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis…

11. An income test and assets test also determines a person’s rate of payment. ‘Income’ is defined in s 8(1) of the Act as an amount ‘earned, derived or received’ by a person for the person’s ‘own use or benefit’. ‘Financial assets’ is defined in s 9 of the Act as including available money or money that is deposited in a financial institution account.

12. Pursuant to s 72 of the Social Security (Administration) Act 1999 (Cth) (Administration Act), Mr Cashmore received notices from Centrelink that set out his requirement under ss 68(1) and (2) of the Administration Act to advise Centrelink of any changes to his circumstances within 14 days of the change occurring.

13. Centrelink sent notices to Mr Cashmore on the following dates: 6 August 2007; 5 August 2008; 4 August 2009; 17 August 2010; 16 August 2011; 27 September 2011; 6 December 2011; 29 February 2012; 22 May 2012; 14 August 2012; 6 November 2012; 29 January 2013; 30 July 2013.[1] These notices stated that Mr Cashmore must notify Centrelink about changes to his circumstances including changes to his marital status, and his or his partner’s income and assets.

    [1] Exhibit T1 at T4.

14. At the Tribunal hearing, Mr Cashmore said that he had received notices from Centrelink although he could not recall dates and the details set out in the notices. Mr Cashmore confirmed that he married Ms Cashmore on 27 January 2008 and accepted that he should have informed Centrelink about the change in his marital status.[2]

    [2] Exhibit A2.

15. I note that the Guide to Social Security Law (the Guide) at s 2.2.5.50 states:

    The discretion to treat a person as NOT being a member of a couple should be exercised ONLY where a full consideration of all the circumstances relevant to the individual’s case would make it unjust or unreasonable not to do so.

16. There is no information before the Tribunal to suggest that there are any circumstances to treat Mr Cashmore as not being a member of a couple. Mr Cashmore told the Tribunal that when he married in 2008, he looked after Ms Cashmore financially and they lived together in the same house. The reason he gave for not telling Centrelink about his marriage was:

    Not quite sure what the CES [sic] would have done… could’nt [sic] class her as a pensioner, so they would have placed her on the dole, and paid her money, and paid me mine as a married pensioner – bit messy – but on the money side her dole money and my pension as a single pensioner would have been approx [sic] the same…[3]

    [3] Exhibit A2.

17. The Tribunal was provided with no evidence to show that Ms Cashmore would have been eligible to receive either Newstart Allowance or other government payments following her marriage to Mr Cashmore. Mr Cashmore told the Tribunal that he did not make any enquiries with Centrelink about his wife’s eligibility to receive Newstart Allowance following their marriage. I note that Ms Cashmore would not have met the criteria of ‘looking for suitable paid work’ required to receive Newstart Allowance because Mr Cashmore stated his wife was not looking for paid employment from 2008 to 2012.

18. The Tribunal heard that Ms Cashmore commenced a business on 28 March 2012 and earned income as follows: $2,500 for 2011/2012; $23,500 for 2012/2013; $21,345 for 2013/2014; and $30,254 for 2014/2015.[4] Mr Cashmore also earned $4,285 income in 2013/2014.

    [4] Exhibit T1 at T16, page 288.

19. Mr Cashmore did not provide Centrelink with either his or Ms Cashmore’s company or individual tax returns until Centrelink requested Mr Cashmore to do so in 2015.[5]

    [5] Secretary’s Statement of Issues, Facts and Contentions dated 22 September 2016, para 50.

    Is there a debt for the period of 27 January 2008 to 10 March 2015?

20. Subsection 1223(1) of the Act provides:

    1223    Debts arising from lack of qualification, overpayment etc.

    (1)Subject to this section, if:

    (a)a social security payment is made; and

    (b)a 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 by the person and the debt is taken to arise when the person obtains the benefit of the payment.

21. Based on the evidence before the Tribunal, I am satisfied that Mr Cashmore was married for the period of 27 January 2008 to 10 March 2015. I am also satisfied that Mr Cashmore failed to disclose to Centrelink that he was married during this period as required by ss 68(1) and (2) of the Administration Act. He was consequently paid the rate of age pension applicable to a single person rather than a partnered rate.

22. I am satisfied that Mr Cashmore was overpaid the age pension in the amount of $46,224.81 for the period 27 January 2008 to 10 March 2015.

    Are there any grounds for writing off or waiving all or part of the debt?

    Should the debt be written off?

23. Section 1236 of the Act provides, in part:

    1236Secretary may write off debt

    (1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

    (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.

24. There is no evidence to suggest that any of the conditions set out in s 1236(1A) are met. I am not satisfied that the debt should be written off.

    Should the debt be waived by reason of ‘administrative error’?

25. Pursuant to s 1237A of the Act, a debt arising from error may be waived:

    1237A Waiver of debt arising from error

    Administrative error

    (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.

26. There is no evidence of sole administrative error by the Commonwealth in relation to this debt. As set out in paragraphs 21 and 22, the debt arose solely because Mr Cashmore failed to disclose the change in his marital status to Centrelink after he married Ms Cashmore on 27 January 2008. I am not satisfied the debt should be waived due to administrative error.

    Should the debt be waived by reason of ‘special circumstances’?

27. Subsection 1237AAD of the Act provides:

    1237AAD Waiver in special circumstances

    The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

    (a)The debt did not result wholly or partly from the debtor or another person knowingly:

    (i)making a false statement or a false representation; or

    (ii)failing or omitting to comply with a provision of this Act, the Administration 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.

28. In Groth v Secretary Department of Social Security the Federal Court said:

    … The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss… it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied... [emphasis added].[6]

    [6] [1995] FCA 1708.

29. At the Tribunal hearing, Mr Cashmore accepted that he should have informed Centrelink about his changed marital status and that he was overpaid the age pension because he was paid at the rate of a single person rather than the partnered rate. However, he did not feel that the government was entitled to request that he repay the money.

30. Mr Cashmore told the Tribunal that he is in financial hardship. He acknowledged that he currently receives the age pension, which pays him $661.20 gross per fortnight. As Centrelink debits his pension $15 per fortnight as repayment of his debt and $15 per fortnight for a fine repayment, Mr Cashmore receives $631.20 net per fortnight. Mr Cashmore said that he also receives a pension from the United Kingdom, which pays approximately $2,500 to $2,600 per annum, and earns approximately $4,285 per annum from working as an electrician.

31. Unfortunately for Mr Cashmore, there is nothing which takes his situation out of the ‘usual or ordinary case’ and no occurrence that is ‘unfair, unintended or unjust’ that would support him experiencing ‘special circumstances’. I am not satisfied that any or all of Mr Cashmore’s debt should be waived.

    CONCLUSION

32. The decision under review is affirmed.

I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member

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Associate

Dated 26 October 2016

Date(s) of hearing	11 October 2016
Applicant	In person
Solicitors for the Respondent	G Lozynsky, Department of Human Services