Cuddy and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 1661

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1661

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/0495

GENERAL ADMINISTRATIVE DIVISION		)
Re		DOUGLAS CUDDY

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Dr M Denovan, Member

Date13 August 2007

PlaceBrisbane

Decision           

Tribu  The Tribunal:

           (1) affirms the decision to cancel Mr Cuddy’s age pension; and

           (2) sets aside the decision of the Social Security Appeals Tribunal, and in its place substitutes a decision that Mr Cuddy had a debt for all age pension he received from 1 February 2006 to 3 April 2006; and

           (3) remits the matter back to Centrelink to calculate the debt outstanding, if any.

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

Member

CATCHWORDS

SOCIAL SECURITY – age pension – applicant claimed he was living permanently in Australia – applicant not considered to be an Australian resident during the time he was paid age pension – debt due to Commonwealth – debt cannot be waived

Social Security Act 1991 (Cth) ss 7, 43, 1223, 1237A, 1237AAD

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Davy v Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693

REASONS FOR DECISION

9 August 2007    Dr M Denovan, Member

Introduction

1.Mr Cuddy was in receipt of age pension when Centrelink cancelled that benefit and decided to recover a debt.  I have to decide whether Mr Cuddy’s age pension should have been cancelled, and if so, whether he now owes a debt to the Commonwealth.

Background

2.Mr Cuddy turned 65 years of age in February 2004.

3.On 27 January 2006 Mr Cuddy returned to Australia having lived continuously in Thailand from late 1994, albeit returning for short visits to Australia from time to time.  (T2 and T21).

4.On 8 February 2006 Mr Cuddy made a claim for age pension (T7). In the claim he stated that he was living permanently in Australia.

5.Mr Cuddy travelled to Thailand on 10 February 2006 and returned to Australia on 7 March 2006.

6.In a decision dated 16 March 2006, Centrelink granted age pension to Mr Cuddy with effect from 1 February 2006 (T10). A copy of the decision granting age pension was sent to Mr Cuddy on 16 March 2006, and included notice that he would need to advise Centrelink within 14 days if he decided to travel outside of Australia (T15).

7.Mr Cuddy travelled to Thailand on 22 March 2006 and has not returned to Australia since.

8.In a decision dated 11 April 2006 Centrelink decided to cancel Mr Cuddy’s age pension and recover an age pension debt of $1,388.13 for the periods 10 February 2006 to 7 March 2006 and 22 March 2006 to 3 April 2006.

9.On 26 July 2006 an authorised review officer reduced the debt to $469.39, covering the period 22 March 2006 to 3 April 2006 (T21 and T34). The reason for this decision was that Mr Cuddy was not told by Centrelink to advise of any overseas travel until 16 March 2006, and so it was determined that no recoverable debt exists for the period 10 February 2006 to 7 March 2006.

10.Mr Cuddy appealed to the Social Security Appeals Tribunal (SSAT) on 13 September 2006. On 23 January 2007 the SSAT affirmed the decisions to cancel Mr Cuddy’s age pension and to recover a debt of $469.39 for the period 22 March 2006 to 3 April 2006 (T2).

11.Mr Cuddy applied to the Administrative Appeals Tribunal on 23 February 2007 (T1).

Issues for Determination and Relevant Legislation

12.I have to consider:

·Whether Mr Cuddy’s age pension should have been cancelled,

·Whether Mr Cuddy has been overpaid age pension,

·Whether an overpayment is a debt due to the Commonwealth, and

·Whether any debt must be repaid.

13.The relevant law is included in the Social Security Act 1991 (the Act), which provides that to qualify for age pension, a person, unless claiming under an International Social Security Agreement, must:

·be an Australian resident, and

·be in Australia on the day the claim is lodged; and

·have been an Australian resident for a total of at least ten years, five of those years must have been spent in continuous residence (s 43(1) of the Act).

14.Section 7(2) of the Act states that to be an Australian resident, a person must

·     reside in Australia; and

·     be an Australian citizen or the holder of a permanent visa or the holder of a special category visa.

15.In deciding whether a person is residing in Australia, regard must be had to circumstances listed in section 7(3) of the Act. These are:

·the nature of accommodation used by the person in Australia; and

·the nature and extent of the family relationships the person has in Australia; and

·the nature and extent of the person’s employment, business or financial ties with Australia; and

·the nature and extent of the person’s assets located in Australia; and

·the frequency and duration of the person’s travel outside Australia; and

·any other matter relevant to determining whether the person intends to remain permanently in Australia.

Findings of Tribunal

Should Mr Cuddy’s age pension have been cancelled?

16.Mr Cuddy satisfies the second and third elements of the requirements for age pension of the Act that is, being in Australia on the day that he claimed age pension, and having been a resident of Australia for at least ten years (five of which were in continuous residence). The issue of his eligibility turns on the question of whether Mr Cuddy was an Australian resident during the time he was paid age pension.

17.Mr Cuddy is an Australian citizen. The threshold question that I have to decide is whether Mr Cuddy was residing in Australia during the period he was paid age pension. Having regard to the matters listed at Section 7(3) of the Social Security Act 1991, I have decided that Mr Cuddy was not residing in Australia during the period he was paid age pension, and has not been an Australian resident at any time since 26 October 1994 for the following reasons. It follows that he has never qualified for age pension, and that his pension should have been cancelled.

·The nature of accommodation used by Mr Cuddy in Australia is not consistent with him residing in this country, and is indicative of him being an overseas visitor

18.Mr Cuddy has no home in Australia. He has stated that when he is in Australia he lives with his sister (T7). In Part 2 of his application for aged pension he stated that he “lives with sister, does not pay rent.”

19.Mr Cuddy stated in the claim form that his home address (described in the form as “the address where you live”) is 11 Athlone Street North Rockhampton 4701. That address is his sister’s address. Mr Cuddy answered YES to the question “Are you living permanently in Australia?” in the same form he stated that he has lived in Thailand from 1993 to 2006, a period of 13 years.

20.Mr Cuddy advised the SSAT that he stays with his sister and brother-in-law when in Australia and has also stayed with friends and his son (who is now deceased).

The nature and extent of the family relationships of Mr Cuddy suggest he does not reside in Australia·     

21.Mr Cuddy has one sister and brother-in-law living in Australia and no other relatives. Mr Cuddy previously travelled back to Australia to see his now deceased son.

22.Mr Cuddy advised Centrelink that he maintains an ongoing personal relationship in Thailand which he is responsible for (T30). Mr Cuddy used similar words in his letter of 6 June 2006 (T27) wherein he requested a review of the decision to cease payment of his pension. Mr Cuddy advised the SSAT that his son’s death was one of the reasons he remained living in Thailand from 2001 onwards.

·The nature and extent of Mr Cuddy’s employment, business or financial ties are not consistent with him residing in Australia, but are consistent with him residing in Thailand

23.Mr Cuddy worked in Thailand in excess of ten years as a marketing manager (T2 and T7). Mr Cuddy told the SSAT that when in 2001, his employer Artbusters closed down, he took over a company known as Futuretech Foam, and arranged a joint venue with Futuretech Australia. Mr Cuddy told the SSAT that Futuretech has had no projects or profits for the last two years, however it remains registered and he hopes for a turnaround in fortunes. Mr Cuddy said that what keeps him in Thailand are the work and friendship relationships, and that his business opportunities, because of the contacts developed over time, are in Thailand and Asia, rather than Australia.

24.Mr Cuddy maintains one bank account in Australia and also one in Thailand. Mr Cuddy has a line of credit, secured by a mortgage over land which he owns at Yeppoon (T2). Mr Cuddy has been using that line of credit to pay his living expenses in Thailand.

·The nature and extent of Mr Cuddy’s assets located in Australia are inconsistent with him residing in Australia

25.Mr Cuddy owns a vacant block of land in Yeppoon, Queensland, which he told the SSAT is currently worth around $360,000 (T2). He owns a Mercedes Benz motor vehicle (Mr Cuddy estimates its worth at $6,000), which is registered however has a blown out engine (T2 and T5). He has a bank account with the Bank of Queensland which had a balance at the time of application of $228.33 (T5). Mr Cuddy told the SSAT that he disposed of all furniture and personal effects which he had left in Australia, after three to five years of moving to Thailand, once he realised that he could make a living overseas. Mr Cuddy owns furniture in Thailand which may not be of much value (T2), however significantly, he has not disposed of this.

·The frequency and duration of Mr Cuddy’s travel outside Australia are inconsistent with him being an Australian resident, and indicate when in Australia he is an overseas visitor

26.Mr Cuddy stated at the SSAT hearing that he has lived outside of Australia since 1993. The respondent cites Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) records showing departures and arrivals since 26 October 1994 (T11). These records indicate that Mr Cuddy has been in Australia for a total of approximately 164 days over a twelve year period from October 1994 (about 4400 days). Since the date of his application for age pension he has been in Australia for only 24 days out of a period of about 450 days.

27.The percentage of time that he has been in Australia has not changed significantly during the time he was paid age pension. Over the twelve year period to 2006 he was in Australia about 3% of the time and since 1 February 2006 he has been in Australia about 5% of the time.

28.Since 1994 Mr Cuddy has visited Australia on approximately 15 separate occasions, the longest being for 15 days, and the average visit being 11 days.

·Mr Cuddy intended to return to Thailand, and had no intention of remaining in Australia at the time he lodged his application and also at the time he lodged  information necessary for the processing of his application for age pension

29.Although in the initiating claim form Mr Cuddy expressed an intention to remain permanently in Australia, with the exception of necessary business trips to Thailand for work commitments, in the same document he recorded his postal address “as above” (referring to his sister’s address), “OR 44/4 Soi Pipat 1 Silom Bangkok Thailand 10500. Further, he gave his sister’s phone number as the phone number where he lives, and at item B12 gives as “other numbers you can be contacted on” a mobile number that is Thai, a second number (landline) that is Thai, and an email address that is Thai. Mr Cuddy therefore illustrated a clear intention to return to Thailand at the time he completed the application.

30.Mr Cuddy returned to Thailand on 10 February 2006, two days after lodging his application for age pension. In his letter dated 6 June 2006 Mr Cuddy said that he returned to Thailand on that occasion to complete his responsibilities and to collect tax information requested by Centrelink.

31.Mr Cuddy said that he fractured his arm and wrist whilst in Thailand on that occasion. Mr Cuddy returned to Australia on 7 March 2006, after which time he provided Centrelink with information necessary to process his claim for age pension.

32.Mr Cuddy said that he had agreed in conjunction with his Thai doctor to return to Thailand to continue medical treatment and x-rays and replacement plaster casts (T27). Mr Cuddy departed Australia for Thailand on 22 March 2006, and has not returned to Australia since.

33.It is clear therefore that at the time Mr Cuddy lodged the documentation which he knew to be necessary to process his application, that is in March 2006, he had no intention of remaining in Australia in the immediate future. Although Mr Cuddy told the SSAT that he does not want to remain permanently in Thailand, he also said that he had no immediate intention of returning to Australia.

34.In his letter of 22 February 2007 requesting an appeal to this Tribunal (T1), Mr Cuddy gave his address as “44/4 Soi Pipat 1 Silom Bangkok 10500 Thailand”. An alternative address of “c/o 11 Athlone Court North Rockhampton Queensland Australia 4701”. That is given as a secondary mailing address. The only telephone numbers given in that letter are international numbers described by Mr Cuddy as “International mobile” and “Thailand”.

Has Mr Cuddy has been overpaid age pension?

35.Because Mr Cuddy has not qualified for age pension at any time, all of the age pension payments that he has received amount to an overpayment.

Is the overpayment a debt?

36.Where a person obtains the benefit of Centrelink payments to which they are not entitled, a debt arises to the Commonwealth under section 1223(1) of the Act. All of the age pension that Mr Cuddy has been paid is therefore a debt to the Commonwealth.

Must the debt be repaid?

37.Section 1237A of the Act provides that the Secretary must waive the recovery of a debt arising solely because of administrative error and where payments constituting the debt have been received in good faith.

38.Centrelink made its decision based on the information provided by Mr Cuddy’s application, in particular his statement that he intended to reside in Australia. The granting of a pension was therefore not an administrative error of Centrelink. Further, as I have found that Mr Cuddy intended to return to Thailand, and had no intention of remaining in Australia at the time he lodged his application, and also at the time he lodged information necessary for the processing of his application for age pension in March 2006, he did not receive the payment in good faith. Section 1237A therefore does not apply.

39.Section 1237AAD provides a discretion to waive a debt when special circumstances apply. That section 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 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 orpart of the debt.

40.The discretion is to be exercised only in unfair, unintended or unjust circumstances: Re Beadle and Director-General of Social Security (1984) 6 ALD 1; Groth v Secretary, Department of Social Security(1995) 40 ALD 541; Davy v Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693.In the present case the debt arose as a result of a false representation made by Mr Cuddy and there are no special circumstances that would displace the presumption that a person who has received payments to which they were not entitled should repay such money. Section 1237AAD therefore does not apply.

Decision

41.The Tribunal:

(1) affirms the decision to cancel Mr Cuddy’s age pension; and

(2) sets aside the decision of the Social Security Appeals Tribunal, and in its        place substitutes a decision that Mr Cuddy had a debt for all age pension he       received from 1 February 2006 to 3 April 2006; and

(3) remits the matter back to Centrelink to calculate the debt outstanding, if          any.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Dr M Denovan, Member

Signed:         ..................[sgd].........................................................
           F. Kamst, Legal Research Officer

Hearing on the Papers              5 July 2007
Date of Decision  13 August 2007 
The Applicant was unrepresented
For the Respondent                  Mr R Hamilton