Chen and Secretary, Department of Social Services (Social services second review)
[2016] AATA 109
•26 February 2016
Chen and Secretary, Department of Social Services (Social services second review) [2016] AATA 109 (26 February 2016)
Division
GENERAL DIVISION
File Number(s)
2014/5022
Re
Rui Chen
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member J F Toohey
Date 26 February 2016 Place Sydney The Tribunal affirms the decision under review.
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Senior Member J F Toohey
CATCHWORDS
SOCIAL SECURITY – newstart allowance – carer payment – whether applicant overpaid – assets – whether funds in bank account were applicant’s assets – disposal of assets – whether applicant disposed of assets – whether special circumstances – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 1123(1), 1124, 1126A, 1236, 1237A, 1237AAD
CASES
Beadle and Director-General of Social Security (1984) 6 ALD 1
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Groth and Secretary, Department of Social Security [1995] FCA 1708
Re Ivovic and Director-General of Social Services [1981] AATA 57
REASONS FOR DECISION
Senior Member J F Toohey
26 February 2016
INTRODUCTION
This matter concerns a decision by Centrelink that Ms Rui Chen was overpaid newstart allowance and carer payment as follows:
(a)$16,229.16 in newstart allowance from 9 December 2011 to 11 August 2013;
(b)$735.19 in carer payment from 12 August 2013 to 24 October 2013.
There is no dispute that Ms Chen qualified for both payments during the relevant periods. At issue is whether, during those periods, her assets exceeded the allowable amount in the Social Security Act1991 (Cth) (the Act). In particular, Centrelink says Ms Chen’s assets should be calculated to include amounts of $260,000.00 and $207,383.78 which she withdrew from her bank accounts on 9 December 2011 and 14 January 2013 respectively.
Ms Chen acknowledges she made the withdrawals in question but says both amounts comprised funds lent to her mother by friends in China for the purposes of investing in businesses in Australia. In effect, she maintains she held them on trust for her mother and they should not be taken into account in calculating the value of her own assets.
THE EFFECT OF DISPOSAL OF ASSETS ON THE RATE OF PAYMENT
The rate at which a person is paid newstart allowance and carer payment is determined according to his or her income and assets. Newstart allowance is paid by reference to a calculator in s 1068 of the Act: s 643. Carer payment is paid by reference to a calculator in s 1064: s 210.
Asset means property or money, including property or money outside Australia: s 11(1). Certain assets, such as a person’s principal residence, are exempt assets for the purposes of calculating the value of a person’s assets: s 1118(1). There is no suggestion that the money in Ms Chen’s accounts was an exempt asset.
If a person disposes of assets, their value may be taken into account in calculating the rate at which newstart allowance or carer payment is payable. A person disposes of assets if he or she disposes of all or some of his or her assets and receives no, or inadequate, consideration in money or money’s worth in return for that disposal: s 1123(1). Ms Chen acknowledges she received no consideration for the amounts withdrawn from her accounts.
If the value of assets disposed of exceeds $10,000, a person’s assets are calculated to include so much of the value as exceeds $10,000 for a period of five years starting on the day on which the disposal took place: ss 1124 and 1126AA.
The Secretary contends that the withdrawals from Ms Chen’s accounts on 9 December 2011 and 14 January 2013 are disposals within the meaning of the Act because the funds withdrawn were assets that belonged to her, and she disposed of them by giving them to another person for no consideration.
THE ISSUES
I have to determine whether the funds withdrawn from Ms Chen’s accounts on 9 December 2011 and 14 January 2013 were her assets. If they were, the effect will be that she was overpaid newstart allowance and carer payment, and has the debts claimed by Centrelink.
If I find that Ms Chen was overpaid, I will have to determine whether there is any reason she should not have to repay some or all of the debts.
THE EVIDENCE
Ms Chen gave evidence before the Tribunal at a hearing on 12 January 2016. Her mother, Gong Xiang Xuan, gave evidence through an interpreter. Also before the Tribunal are documents submitted by Ms Chen including written statements by her and Ms Xuan, and documents which purport to be from various individuals in support of their claims.
Centrelink has provided a large bundle of documents (the “T-documents”) which include bank records for Ms Chen and Ms Xuan.
SUMMARY OF DECISION
For the reasons that follow, I am not satisfied by Ms Chen’s claim that, in effect, she held the funds in question on trust for her mother. Her evidence and that of Ms Xuan about the source and purpose of the funds was vague, and in parts inconsistent or implausible. I doubt the authenticity of the documents purporting to be from various individuals but, even accepting they were written by the persons whose names attach to them, their contents are at odds in many respects with Ms Chen’s evidence. I give them no weight.
The St George and Bank of China accounts from which the funds were withdrawn were in Ms Chen’s name. Although she and Ms Xuan claim they were joint signatories, both banks have confirmed that Ms Chen was the sole signatory. Although she claims the accounts were solely for her mother’s use, bank statements show numerous transactions, including cash deposits, during the relevant period. Ms Chen’s evidence about the source of the cash deposits was vague and inconsistent. Although she claims Ms Xuan made the cash deposits, or she made them on Ms Xuan’s behalf, evidence shows that Ms Xuan was out of the country at the time.
Taking into account all of the evidence, I find that the funds withdrawn were Ms Chen’s assets, that she disposed of them for no consideration and, consequently, that she was overpaid and has the debts claimed by the Secretary. I am not satisfied there are special circumstances by reason of which Ms Chen should not have to repay all of the debt.
BACKGROUND
Ms Chen has lived in Australia since 2001 and is an Australian citizen. Her parents are permanent residents. Her father suffered a stroke some time ago. He receives special benefit. Ms Xuan receives carer payment.
Ms Chen obtained a master’s degree from Sydney University in 2007. Since then, she has been completing a doctorate of philosophy. Her studies have been interrupted by a motor vehicle accident in 2007, and an incident in 2008 and its lengthy consequences. She has not been employed since around 2007.
Ms Xuan first came to Australia in late 2007. In February 2008, she and Ms Chen were arrested. The circumstances are not clear but the charges were apparently withdrawn or dismissed at trial. Subsequently, Ms Chen and Ms Xuan took action against the state of New South Wales in connection with the actions of the arresting officers. Their claim was unsuccessful at first instance and on appeal. Costs orders totalling approximately $249,000 have recently been made against them.
Records obtained by Centrelink show that, during the time Ms Chen had the St George and Bank of China accounts, she also operated St George Complete Freedom and Direct Saver accounts, and five NAB Flexi Account and i-saver accounts. The NAB records in particular show frequent transfers between the accounts of amounts up to $32,000.00. Ms Chen has not provided a satisfactory explanation of how she accumulated large balances in her accounts while she was a student and not employed, or why she required the number of accounts she held.
Ms Chen’s bank statements show numerous deposits and withdrawals, and transfers of money between her various accounts, some in thousands of dollars. She maintains most were transfers between accounts in order to obtain favourable interest rates. Bank records of some transactions appear to support her claim but there are numerous transactions for which she was unable to give any, or any satisfactory, explanation.
For Ms Chen it is submitted that the only transactions relevant for present purposes are the withdrawals in December 2011 and January 2013, and that the Tribunal should not be concerned with others. That submission is only good up to a point. It is true that the issues for determination concern those two transactions, but Ms Chen’s evidence about her accounts generally forms the background to her evidence about the transactions in question. Her inability or unwillingness to provide satisfactory explanations about her accounts in general raises questions about the credibility of her evidence in general including about the transactions in question.
THE ST GEORGE ACCOUNT
On 5 August 2011, Ms Chen opened St George Power Saver account 446836574. Ms Chen claims the following deposits were for the purpose of Ms Xuan’s business ventures:
(a)22 August 2011 $138,780
(b)7 November 2011 $ 95,400
(c)7 November 2011 $ 9,300
Bank records show numerous transactions between August and December 2011. On 9 December 2011, an internet withdrawal of $260,000 was made from the account. A St George Term Deposit Opening Confirmation Certificate shows a deposit of $260,000 on 9 December 2011 for a 6-month term in Ms Xuan’s name. I accept that the funds withdrawn from Ms Chen’s account went into the term deposit in Ms Xuan’s name.
THE BANK OF CHINA ACCOUNT
On 3 August 2011, Ms Chen opened Bank of China (Australia) account 365-363-1229-000. On 8 August 2011, two deposits of $46,250 were made. On 12 August 2011, $92,510 was withdrawn from the account by bank cheque payable to “R D Clarke”. Ms Chen claims the payment was at her mother‘s request “for an intended business venture that never happened”.
The balance in the account remained close to nil until December 2012, when a series of deposits totalling $176,850 was made. Bank records show cash deposits between $29,800 and $29,950 on five days between 12 and 20 December 2012 and deposits of $57,400 and $29,950 on 21 December 2012, bringing the balance to $206,800.
Ms Chen claims the deposits in December 2012 comprised $57,400 returned by R D Clarke after the intended business venture did not work out, and “some other money was paid into the account, in the form of 5 deposits of cash and one internet transfer”. Her evidence about the balance of the $92,510 given to Mr Clarke was vague except to say that the proposed venture did not work out. She claims the other deposits were transferred from Ms Xuan’s term deposit after it matured, and were made in those amounts in order to avoid bank fees. While that explanation is plausible, there is no evidence before the Tribunal to verify that claim.
Bank of China (Australia) records show that, on 14 January 2013, $207,383.78 was withdrawn from Ms Chen’s account and paid into Bank of China (Australia) account 3675181229000 in Ms Xuan’s name. On 29 January 2013, $207,383.78 was withdrawn from Ms Xuan’s account and paid into an account in her name at the Bank of China (Shanghai). It is not clear where the money was between those dates but I accept that it appears to have gone into Ms Xuan’s account on 29 January 2013.
WHERE DID THE FUNDS COME FROM?
Other than the $9,300 deposited into the St George account on 7 November 2011 which Ms Chen says was cash brought to Australia by her father, she and Ms Xuan claim the withdrawals in question comprised money lent by family and friends to Ms Xuan for possible business ventures in Australia.
In particular, Ms Chen claims the following deposits were funds lent to her mother:
(a)8 August 2011 $ 92,500 (Bank of China)
(b)22 August 2011 $138,780 (St George)
(c)7 November 2011 $ 95,400 (St George)
In a letter dated 18 August 2014 to the Social Security Appeals Tribunal (the SSAT, now the Social Services and Child Support Division of the Administrative Appeals Tribunal), Ms Chen stated:
In 2011 August 22nd, a friend Bernard Wong …brought three checks and total amount is $138,780.00 and each checque (sic) is about $46,260.00. The three cheques were from another three people …
and on 7 November 2011:
$95,400.00 [was] deposited to Power Saver which was brought from China by two cheques $47,700 each at that time, two cheques were from China (not my mother herself).
Ms Chen says she believes, although she cannot be sure, that she provided this letter and supporting documents to the SSAT. For reasons that follow, I do not accept she provided the letter or the documents to the SSAT before the hearing which took place on 20 August 2014 but that is not important for present purposes.
In a written statement dated 17 December 2015 to this Tribunal, Ms Chen said the money deposited in the St George accounts comprised $138,780 “from Bernard Wong” and the deposit of $94,500 (sic) was “from 2 people in China in the form of 2 cheques each of $47,700”. She said the $92,500 deposited in the Bank of China was “transferred from China by two persons (Lin Ting Wei and Cheng Hang Ji)”. Ms Chen maintained these claims in her oral evidence.
DOCUMENTS
In support of her claims, Ms Chen submitted copies of the following:
(a)a letter dated 19 August 2014 addressed “To whom it may concern” purporting to be signed by Bernard Wong;
(b)a “Statement of Explanation” in Chinese dated 10 October 2014, bearing the names Zhang Wei Dong, Liu Ting Wei, Chen Hong Li, Ye Zong Xi and Long Zheng Kang, purportedly signed by Zhang Wei Dong;
(c)a further “Statement of Explanation” in Chinese dated 11 November 2014 bearing the same names and purportedly signed by Zhang Wei Dong;
(d)a further “Statement of Explanation” in Chinese dated 27 December 2015, bearing the same names as above, and purportedly signed by all five persons named;
(e)translations of the Statements ;
(f)a Chinese identity card for Zhang Wei Dong;
(g)letters from David Haley and Simon Au.
Mr Wong describes himself as a friend of the Chen family and an elder at a Sydney church. He states that his job required him to travel between China and Australia and, in August 2011, he helped Ms Xuan, who was in Shanghai at the time “in bringing back to Australia three cheques along with some personal items…”. Ms Chen did not call Mr Wong, who gives his address as suburban Sydney, to give evidence.
The “Statements of Explanation” as translated are identical as to the amounts of money given to Ms Xuan on various dates. The first and second conclude with “We are also entitled to ask the money to be turned (sic) at any time”. The third concludes with “Also we recovered this money in January 2013”. No satisfactory explanation has been provided as to why this latest document was not made available at an earlier date, in particular to the SSAT.
The writers state they are Ms Xuan’s friends; they wanted to help her because she and Ms Chen had been “bullied by the police in Australia”, Ms Chen was studying, her father had various disabilities, and Ms Xuan did not speak English and could not find employment; they talked and decided they would “contribute some money to Ms Xuan so that she could put the money into a business in Australia”; if it was profitable, they would all gain. Accordingly:
… on 8th August 2011, Liu Ting Wei and Chen Hong Ji remitted AUD$46,250 each. On 12th August, Ye Zong Xi and Long Zheng Kang remitted AUD$46,260 each. On 1st November, I wrote a money order of AUD$95,400. As Ms Xuan was in Shanghai, rather than in Australia at that time, the money had to be put into her daughter’s account. This money does not belong to her daughter. We only let her to have it for safe keeping.
INCONSISTENCIES BETWEEN MS CHEN’S EVIDENCE AND THE DOCUMENTS
Ms Chen’s and Ms Xuan’s evidence as to the means by which the various funds were transferred was vague. They could not recall which were by cheque and thought some could have been by electronic transfer. Further, they have not, or not adequately, explained the following:
(a)If the deposit of $138,780 into the St George account on 22 August 2011 comprised three amounts of $46,260 each, it could account for the three cheques that Mr Wong states (and Ms Chen claims) he brought to Australia in August 2011. It does not explain what happened to all four amounts “remitted” in August 2011 according to the “Statement of Explanation”.
(b)Ms Chen claims two deposits of $46,250 were made into the Bank of China account by Lin Ting Wei and Cheng Hang Ji on 8 August 2011. If that is true, it does not explain whose were the three cheques deposited in the St George account.
(c)According to the “Statement of Explanation”, on 10 November 2011 Zhang Wei Dong “wrote a money order of AUD$95,400”. According to Ms Chen, the deposit in November 2011 for that amount comprised “2 cheques each of $47,700”. If Ms Chen’s evidence is to be believed, it raises further questions about the (up to five) sums of approximately that amount deposited in August 2011, as well as where Mr Zhang’s money order went.
In light of Ms Chen’s inability to explain these discrepancies satisfactorily, I am not satisfied the “Statements of Explanation” are authentic. Even if they were written by the persons whose names appear on them, I do not accept their contents are true.
Bank of China records show two applications for overseas funds transfers and two “outward remittances” of $AUD46,260 dated 12 August 2011. The interpreter at the hearing advised that each translated as a “demand draft”. The payers are identified as Ye Zong Xi and Long Zheng Kang. The first payee is Xuan Gong Xiang and the second Chen Rui.
There is no evidence before the Tribunal as to what form of transaction a “demand draft” is but, if Ms Chen and Mr Wong are to be believed, they must be a form of cheque or money order. It is not clear why similar documents are not available about the other purported transactions. Neither Ms Chen nor Ms Xuan could explain why one amount was payable to Ms Chen. The fact that one is payable to Ms Xuan raises the possibility that at least that much in Ms Chen’s accounts was genuinely Ms Xuan’s. However, given how unsatisfactory all of the evidence is, I am not persuaded by that document alone that the money was not Ms Chen’s.
MS XUAN’S PROPOSED BUSINESS VENTURES
Ms Chen’s evidence about Ms Xuan’s proposed business ventures was vague. Giving evidence, she said her mother had various ideas including developing some cheap land, and they went to their church elder’s place where some neighbours had built a duplex and sold one for profit. Asked about other possible ventures, Ms Chen said:
--- She had found different sorts of – you know, she is – I think she is – she was actively mentally thinking a lot of things, maybe restaurant even, but you know like different ideas, but I wasn’t really ---
Pressed further, Ms Chen said her mother was also thinking of a travel agency.
In its statement of reasons, the SSAT said the evidence of Ms Chen and Ms Xuan at the hearing in August 2014:
… could at best be described as vague since, for example, neither Ms Chen nor her mother could describe the actual nature of the business to be established in Australia. In circumstances where the nature of the hypothetical business was not even known, but where significant funds were nonetheless advanced and deposited to Miss Chen’s bank accounts, the Tribunal finds the reason given for the advance of those funds to be incredulous (sic) …
Before this Tribunal, Ms Xuan gave the following evidence (through an interpreter):
Some time towards the end of 2010 I visited one or more of my elders of the church place. That was during Christmas where we waited for gatherings. And I was told to look at the adjacent or neighbouring land which was bought at the price of something like $500,000. So plus the cost to build which should be $400,000 roughly, and then the total cost would be around 1 million. That’s about - that’s two duplexes. And then each of such duplex, it sold at the price of $670,000. So that’s roughly more than $1.3 million. If you take out the cost being 1 million roughly, then that’s a total gain of $300,000.
Ms Xuan gave evidence that she also talked to her friends in China about
“possibilities such as raising dogs [and] opening tourist companies, but all of these areas that I’m not quite familiar with. However, designing and building houses is something I’m quite familiar with having worked in this industry for more than 30 years.”
I think the transcript, from which this quote is taken should read “possibilities such as raising doves ..”
Ms Xuan claimed she had not “decided completely, wholeheartedly” which business to pursue but her friends nevertheless lent her the money.
Giving evidence before this Tribunal, Ms Xuan claimed she told the SSAT about her possible business ventures in the same detail she gave this Tribunal, including the property development and the possible restaurant business and travel agency. I do not accept her evidence about this. I find it implausible that the SSAT would have described her evidence as it did if Ms Xuan had given the detailed evidence she gave this Tribunal.
In her letter dated 18 August 2014 to the SSAT, Ms Chen stated her mother “really hoped to use the funds to do some business here”. She stated:
My mother found it difficult to do the business after a year’s investigation and discussion with some friends including Mr David Haley for the travel agency business (please see attached letter from Mr Haley for your consideration) and Mr Simon Au about the opportunity for property investment and pigeon farming. Therefore, she gave up the idea of doing the business and returned the money.
Ms Chen produced copies of the letters in these proceedings. She says she believes, but could not be sure, that she gave the originals to the SSAT. Mr Haley’s letter, dated 14 August 2014, states that he has worked in the travel agency industry for more than 30 years and is a friend of Ms Xuan and Ms Chen, and he discussed with Ms Xuan “back to 2010 about some possibilities of doing some business together”. It states:
As far as I know Ms Xuan tried to get some fund in 2011 and we tried to take the opportunity to organize the tour in Shanghai at that time based on my expertise from the travel industry, however due to some issues, it didn’t work out as it expected. Therefore we didn’t proceed to the end.
Mr Au‘s letter, dated 16 August 2014, is unsigned. He states that he discussed some potential possibilities for Ms Xuan to do business in Australia; he “tried to introduce some business opportunities for her to enter” including “property investment and pigeon farming etc” but none seemed to work out and as far as he knows, in the end, Ms Xuan returned all the funds.
Given that neither document was mentioned in the SSAT decision, I find it improbable that they were produced to that Tribunal but, in any event, I give them no weight. I doubt the authenticity of the documents but even allowing they were written by Mr Haley and Mr Au, neither provides any detail of the business ventures and neither was made available to confirm their contents even though both appear to live in Sydney.
Other than her background in design and architecture, there is no evidence that Ms Xuan has any experience in business. There is no evidence that she had any firm plans for the money lent to her. Other than the documents purporting to be from Mr Haley and Mr Au, which I give no weight, there is no evidence that she actually undertook any investigations into possible ventures. She gave evidence that she had not decided what venture to pursue. She claimed she needed to get the money first from her friends and then decide which business to pursue. She acknowledged she has no business experience and had only “heard” that property development is “quite profitable”.
There is no suggestion by Ms Chen or Ms Xuan that the people who lent the money required any security. Asked whether there was any agreement for interest to be paid, Ms Xuan claimed there was an oral agreement to that effect. Asked whether the money was repaid with interest, she did not answer directly and said her friends wanted to help her.
I find it implausible in these circumstances that people lent Ms Xuan large sums of money for the purposes she and Ms Chen claim.
WHO WAS OPERATING THE ST GEORGE AND BANK OF CHINA ACCOUNTS?
Ms Chen and Ms Xuan claim Ms Xuan had been unable to open an account in her own name for reasons including that she did not speak English and could not find a bank with a Chinese-speaking teller, and she was told she had insufficient points for identification purposes.
In a written “Declaration” to the Tribunal Ms Xuan stated:
The bank [staff] said to me for the time being I can just use my daughter’s accounts. Hence, I just thought I could use my daughter’s bank account. The bank [staff] also helped me to be the signature as her account, so I can access her account easily.
I do not accept that evidence. As set out above, both banks have confirmed, in response to inquiries by the Secretary, that Ms Chen was the sole signatory on each. Copies of deposit and withdrawal slips provided by both banks appear to show Ms Chen’s signatures. As I understand her evidence, she does not dispute the signatures are hers.
In any event, it is difficult to see why, in four years since coming to Australia, Ms Xuan should have difficulty opening an account in her own name when she had Ms Chen to help her. Moreover, Ms Xuan apparently had no difficulty in December 2011 opening the term deposit in her own name. She gave evidence that she was “passing by” a St George branch and saw a Chinese girl who opened the account for her.
Asked by the Tribunal why she did not put her mother’s money into one of her many existing accounts, Ms Chen claimed it was to attract the highest interest rate. I find that implausible. The bank statements show repeated transfers between accounts which Ms Chen says she made in order to attract the highest interest rate at the time. Her evidence does not explain why she did not put all, or more, of her money into the St George account if it attracted such interest rates.
In the letter to the SSAT, Ms Chen claimed:
As I was aware of that the money did not belong to me, it was not easy for my mother to get the funds and she really hoped to use the funds to do some business here. She never let me use the money so I never touched the money and you can see from the transactions and I never spent the money for buying anything. In fact, I have been struggling to pay the living cost.
In her “Declaration” Ms Xuan stated that Ms Chen was aware the money did not belong to her and she “never accessed the money”.
When pressed at the hearing about various transactions on St George bank statements for August 2011 to November 2011, Ms Chen acknowledged she made internet deposits and withdrawals totalling $27,735. She claimed they were transfers between her various accounts in order to obtain the best interest rate. Statements from Ms Chen’s other accounts confirm some, but not all, of these transfers.
Leaving aside the deposit of $138,780 on 22 August 2011, the same bank statement shows cash deposits of $21,826 which Ms Chen claims were made by Ms Xuan, or by Ms Chen on her behalf. Neither could explain clearly where those cash deposits came from.
A Centrelink record of a conversation between Ms Chen and a Centrelink officer on 29 October 2013 shows she was asked about regular cash deposits into her St George accounts, some in thousands of dollars, labelled “rent”. Ms Chen stated they were deposits from friends to help with her rent. According to the record, when asked to obtain statements from her friends to verify her claim, she said she was no longer talking to them and did not wish to make contact with them. Giving evidence in these proceedings, Ms Chen said she recalled this conversation and maintained that she told the officer she would try to get statements from her friends. I have no reason to doubt the Centrelink record.
Giving evidence, Ms Chen also claimed the cash came from the son of a friend of her father who repaid money he had borrowed. From what I can see, the first time she made this claim was in these proceedings. I do not accept this evidence.
Ms Chen and Ms Xuan both claimed that Ms Xuan occasionally worked making dumplings, and she made the cash deposits with help from Ms Chen who would write the deposit slip for her to take to the bank. Information obtained by the Secretary from the Department of Immigration and Border Protection shows that Ms Xuan was out of Australia from 23 March 2011 to 6 November 2011. Ms Xuan agrees she was in China during that time. It follows that all those cash deposits had to be made by Ms Chen.
Whatever the source of the cash deposits and the money transferred between accounts, it is clear that Ms Chen was the sole operator of both.
DID MS CHEN DISPOSE OF ASSETS?
I accept the possibility that one amount of $46,250 deposited into Ms Chen’s St George account was intended for Ms Xuan. I also accept the possibility that some of the money withdrawn from Ms Chen’s Bank of China account came from Ms Xuan’s term deposit. On the information before me, however, neither is more than a possibility. It would be speculation to find those amounts were actually Ms Xuan’s, and not Ms Chen’s, assets.
Both accounts were in Ms Chen’s name. She was the sole signatory. She operated both accounts and made numerous transactions on both. The evidence given by Ms Chen and Ms Xuan lacked credibility and I see no reason to conclude otherwise than that the funds withdrawn were Ms Chen’s assets. I am satisfied they were her assets, that she disposed of them for no consideration and, as a result, that she was overpaid newstart allowance and carer payment and has incurred the debts raised by the Secretary.
IS THERE ANY REASON MS CHEN SHOULD NOT HAVE TO REPAY THE DEBTS?
A debt may be written off if the debtor has no capacity to repay, if the debt is irrecoverable at law, if the debtor’s whereabouts are unknown or if recovery is not cost-effective: s 1236 of the Act. As there is no evidence to suggest that any of these applies in this case, there is no ground for writing off the debt, whether temporarily or permanently.
A debt must be waived where it is wholly attributable to administrative error and the debtor received the payment in good faith: s 1237A. There is nothing to suggest that payment to Ms Chen was attributable to administrative error and I am not satisfied that she received the payment during the relevant period in good faith. There is, therefore, no requirement that the debt be waived.
Section 1237AAD of the Act provides that the Secretary may waive the right to recover all or part of a debt if 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.
I will assume that the overpayment did not result wholly or partly from Ms Chen knowingly making a false statement or a false representation, or failing or omitting to comply with social security legislation. It remains to consider whether there are special circumstances, other than financial hardship alone, that make it desirable to waive any of Ms Chen’s debt.
The meaning of the expression “special circumstances” for the purposes of the Act has been considered by the Tribunal and the courts on many occasions. It is “by its very nature incapable of precise or exhaustive definition” and contemplates circumstances that are “unusual, uncommon or exceptional”: Beadle and Director-General of Social Security (1984) 6 ALD 1. Other formulations are circumstances that distinguish an applicant’s case from others’ and take it “out of the usual or ordinary case”: Groth and Secretary, Department of Social Security [1995] FCA 1708.
In other cases, the Tribunal has looked to whether strict enforcement of liability would be “unjust, unreasonable or otherwise inappropriate”: Re Ivovic and Director-General of Social Services [1981] AATA 57; and whether any injustice or unfairness would be visited upon the applicant that is not visited upon all other recipients of social security payments: Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
Ms Chen asks that consideration be given to the following circumstances: since being involved in a motor vehicle accident in 2007, and the arrest in 2008 and its aftermath, she has suffered depression which has affected her health and wellbeing; her financial situation and mental health have been affected and she has been admitted to hospital several times; she did not realise that it was wrong to put others’ money into her account; she is struggling to pay everyday bills and has had to call charities for emergency assistance; she cannot possibly pay the costs award recently made against her; she has overdue student fees; she and her parents live in rented accommodation; her father has multiple disabilities and they are facing eviction.
I accept that Ms Chen is facing very real financial difficulties. However, the Act makes clear that financial hardship alone cannot of itself constitute special circumstances.
I am not satisfied that Ms Chen’s circumstances are sufficiently unusual or uncommon so as to warrant waiver of all or any of her debt on the basis of special circumstances.
CONCLUSION
For these reasons, I affirm the decision under review.
I certify that the preceding 79 (seventy-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey .................................[sgd].......................................
Associate
Dated 26 February 2016
Date(s) of hearing 12 and 22 January 2016 Counsel for the Applicant Michael Rollinson Solicitors for the Respondent Department of Human Services
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