Denhard and Secretary, Department of Families, Communitity Services and Indigenous Affairs and Anor
[2007] AATA 1165
•23 March 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1165
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2006/138
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | DALE DENHARD | ||
Applicant
| And | SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS Respondent SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS |
| DECISION | Respondent |
| Tribunal | Dr KS Levy RFD, Senior Member |
Date23 March 2007
PlaceBrisbane
| Decision | The Tribunal affirms the decision under review. |
..................[Sgd]............................
Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – carer payments – Telebet betting account in applicant’s name – whether the applicant was overpaid – consideration of what is ‘income’ – whether debt is a debt due to the Commonwealth – consideration of whether debt can be written off or waived – whether special circumstances exist – decision affirmed
Social Security Act 1991 (Cth) ss 8, 1064, 1223, 1224, 1236, 1237A, 1237AAD
Administrative Appeals Tribunal Act 1975 (Cth) s 37
Rose v Secretary, Department of Social Security (1990) 21 FCR 241
Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35
Dellis v Secretary, Department of Social Security (1990) 21 ALD 252
Sekhon v Secretary, Department of Family Services (2003) 76 ALD 105
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Dranichnikov v Centrelink (2003) 75 ALD 134
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
REASONS FOR DECISION
| 23 March 2007 | Dr KS Levy RFD, Senior Member |
Introduction
The applicant in this case, Dale Denhard, has had a social security debt raised against him for the period 1 May 1997 to 17 November 2004. For all of that period, Mr Denhard was in receipt of social security benefits, predominately in the form of disability support pension, but also in the form of carer payments. Throughout this period, letters were forwarded to the applicant reminding him of his obligation to report changes in his circumstances within 14 days of any change and specifically, to report any changes in income. There were approximately 18 such notices forwarded to the applicant.
Centrelink commenced an investigation into the applicant’s affairs in August 2004 (T10, folio 92-94). This investigation revealed that the applicant had a Telebet betting account with UNiTAB Limited, which was registered in the name of the applicant only. That account was opened on 29 November 1988 (see report of Marcia G Rae – T18, folio 131). On 20 April 2005 Centrelink raised a debt in the amount of $29,086.75 for the debt period determining that this was an overpayment of social security benefits.
The applicant sought a review of that decision (T42, folio 1389). The original decision-maker affirmed his decision on 3 May 2005 (T44, folios 1391 and 1392). The applicant requested a further review by an Authorised Review Officer (“ARO”), and after such reconsideration, the ARO affirmed the decision on 15 July 2005 (T59, folios 1410-1415).
The applicant then appealed to the Social Security Appeals Tribunal (“SSAT”). On 16 January 2006, the SSAT determined to set aside the decision of Centrelink to remit the matter for further consideration with directions to get further particulars about each occasion on which deposits were verified as being transferred from an account held in the applicant’s name; and in addition the SSAT directed Centrelink to obtain information as far as possible from the applicant’s brother Mr Paul Denhard.
The applicant then applied for a review of that decision to the Administrative Appeals Tribunal on 27 February 2006. However, between that time and the matter being heard in this Tribunal, Centrelink made further investigations as directed by the SSAT and then reconsidered its decision concerning the social security debt. The amount of the debt was affirmed. However, at the opening of the hearing, the respondent’s advocate advised the Tribunal that this amount has now been calculated more accurately and the debt now stands at $30,168.85.
The applicant appeared in person and represented himself. The respondent was represented by its Advocate, Ms Sarah Oliver, of the Australian Government Solicitor’s Office.
the Issues
The issues which have been referred to the Tribunal for determination are:
(a) Has the applicant received social security benefits in excess of his entitlement during the period of 1 May 1997 to 17 November 2004?
(b) If so, whether that overpayment is a debt due to the Commonwealth of Australia?
(c) Whether all or part of any debt due to the Commonwealth by the applicant should be written off, waived or recovered?
Legislation
“Social Security Act 1991
Income test definitions
8.(1) In this Act, unless the contrary intention appears:
"income", in relation to a person, means:
(a)an income amount earned, derived or received 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;
but does not include an amount that is excluded under subsection (4), (5) or (8);
"income amount" means:
(a) valuable consideration; or
(b) personal earnings; or
(c) moneys; or
(d) profits;
(whether of a capital nature or not).
8.(2) A reference in this Act to an income amount earned, derived or received is a reference to:
(a) an income amount earned, derived or received by any means; and
(b) an income amount earned, derived or received from any source (whether within or outside Australia).
1064. Rate of age, disability support, wife pensions and carer payment and of disability wage supplement (people who are not blind)
1064.(1)
The rate of:
(a) age pension; and
(b) disability support pension or disability wage supplement of a person who has turned 21; and
(c) wife pension; and
(d) carer payment; and
(f) mature age allowance under Part 2.12A; and
(g) mature age partner allowance;
is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.
Section current up to 1 October 1997
Sect 1224 – Debts arising from recipient’s contravention of Act
(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b) the amount was paid because the recipient or another person:
(i) made a false statement or a false representation; or
(ii) failed or omitted to comply with a provision of this Act of the 1947 Act;
The amount so paid is a debt due by the recipient to the Commonwealth.
1 October 1997 to 30 June 2001
As at 1 October 1997 (History: s.1223(5) repealed and substituted by No. 84, 1996, s. 3, Sch. 18, Part 2(41); commenced 1 October 1997) -
Sect 1223(5)
If:
(a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person under this Act;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
As at 20 March 2000 (History: s.1223(5)(b) amended by Act No. 192, 1999, by s.3, Schedule 1(191); commenced 20 March 2000) -
Sect 1223(5)
If:
(a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
As at 6 July 2000 (History s.1223(5) amended by Act No. 106, 2000, by s.3, Schedule 1(14, 15,16); commenced 6 July 2000) -
Sect 1223(5)
If:
(a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997 or by way of fares allowance; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator or other provision for calculating the amount, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment or fares allowance that should have been paid to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
This subsection was repealed on 1 July 2001 by Act No. 47, 2001, by s.3, Schedule 1(8).
1 July 2001 to 17 November 2004
Sect 1223 Debts arising from lack of qualification, overpayment etc.
History
S.1223 (Heading) amended by Act No. 192, 1999, by s.3, Schedule 1(193) (Note);
1223.(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.
1236. Secretary may write off debt
1236.(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.
History
S.1236(1) amended by Act No. 116, 1991, by s.3 as set out in Schedule 1;
S.1236(1) repealed and substituted by No. 84, 1996, s. 3, Sch. 18, Part 4(101);
1236.(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.
History
S.1236(1A) inserted by Act No. 116, 1991, by s.4 as set out in Schedule 2;
S.1236(1A) repealed and substituted by No. 84, 1996, s. 3, Sch. 18, Part 4(102);
S.1236(1A)(d) amended by Act No. 47, 2001, by s.3, Schedule 1(26);
1236.(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
History
S.1236(1B) inserted by No. 84, 1996, s. 3, Sch. 18, Part 4(102);
S.1236(1B)(a) amended by Act No. 106, 2000, by s.3, Schedule 4, Part 2(79);
S.1236(1B)(a) amended by Act No. 47, 2001, by s.3, Schedule 1(27) (Misdescribed);
S.1236(1B)(aa) inserted by Act No. 47, 2001, by s.3, Schedule 1(28);
S.1236(1B)(c) amended by Act No. 47, 2001, by s.3, Schedule 1(29);
1236.(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor's social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
1237A. Waiver of debt arising from error
Administrative error
1237A.(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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
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 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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.
History
S.1237AAD repealed and substituted by Act No. 143, 1995, by s.3 as set out in Schedule 3;
S.1237AAD (Note) amended by Act No. 122, 2003, by s.3, Schedule 3, Part 2(12);
S.1237AAD (Note 2) inserted by Act No. 122, 2003, by s.3, Schedule 3, Part 2(13);”
Evidence
The following documentary exhibits were admitted into evidence:
·Exhibit 1 T Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (4 volumes of T documents plus 1 volume of supplementary T documents)
·Exhibit 2 Statement of Dale Denhard dated 24 November 2006
·Exhibit 3 Statement of Norris Bloor dated 24 November 2006
·Exhibit 4 Letter from Australian Government Solicitor to Mr Denhard dated 5 January 2007
·Exhibit 5 Revised debt calculator prepared 12 December 2006
·Exhibit 6 Statement of deposits of amounts greater than $500 into applicant’s Telebet account
·Exhibit 7 Letter dated 17 December 1992 from the Citizens’ Commission on Human Rights
·Exhibit 8 Statement by the Commonwealth Bank dated 12 April 2006
·Exhibit 9 Statement by Bedser Automotive indicating the purchase of a vehicle, dated 28 June 2004
·Exhibit 10 Statement by Bedser Automotive dated 18 June 2004.
The material upon which the respondent relied for its decision was extensive. The T documents (Exhibit 1) consisted of 1434 pages in four volumes of the T documents together with supplementary T documents comprising 287 pages. In addition, there were nine other exhibits of relevant statements and financial records of the banks, UNiTAB, and other correspondence in relation to the various transactions involved in the decision under review.
Mr Denhard informed the Tribunal that he was self represented as Welfare Rights Centre Inc had withdrawn from representing him late last year. The Tribunal was conscious of Mr Denhard’s diagnosed conditions of anxiety, depression and social phobia. He informed the Tribunal he also had been diagnosed as a borderline schizophrenic. The Tribunal offered him every opportunity to present his case in terms of time, to present information with a minimum of stress as far as possible. He was also advised that he could seek an adjournment at any time or ask for further explanations if he was unclear about any aspect of the evidence presented by the respondent. It became apparent early in the hearing that Mr Denhard was somewhat agitated, but he quickly demonstrated a capacity to understand and present his facts intelligently (albeit defensively at times), but without the need for any support.
Ms Oliver opened the case by outlining information from the respondent’s Statement of Facts and Contentions. She also referred to a statement of Ms Marcia Rae from UNiTAB (ST6, folio 151) who had advised that the applicant had opened a UNiTAB account in his name on 29 November 1988 and that withdrawals from the account required a signature on a withdrawal slip together with the presentation of his Telebet withdrawal card to verify the signature. The respondent’s advocate said there was evidence in the UNiTAB account, of large amounts being deposited and withdrawn throughout the period 1 January 1997 to 31 December 2004. The respondent also referred the Tribunal to a summary document (prepared by Ms Marcia Rae of UNiTAB) and which set out a summary of withdrawals in cash, deposits, investments (that is, bets placed) and dividends (that is, winnings) from bets, which were transactions on this account for each of the calendar years of the debt period (that is, the calendar years 1997 through to 2004) (ST7 folio 155). More recently, Ms Oliver advised that her client, the respondent, had reviewed the amount owing and that the debt outstanding was currently said to be $30,168.85 (Exhibit 5).
Mr Denhard
The applicant Mr Dale Denhard, gave sworn evidence. He stated that the account with UNiTAB included amounts of bets for his father, Mr Victor Denhard, (now deceased) and his brother Mr Paul Denhard. He also said that a lot of the deposits in the account may have been the same amounts which were withdrawn and then deposited more than once. He also said that some of the money in the account after his father died were amounts which were not his income. He referred particularly to four B-pay transfers from UNiTAB account in 2004 which were raised in the respondent’s Statement of Facts and Contentions. These amounts were:
(a) $30,000 on 3 May 2004
(b) $20,000 on 23 June 2004
(c) $20,000 on 28 June 2004
(d) $1,300 on 19 August 2004.
In relation to the $30,000 in (a) in the previous paragraph, he said this was a gift from his father, who had sought advice from Centrelink that he could make a gift up to that amount for a period of five years without affecting entitlement to social security benefit. In relation to the items in (b), (c) and (d) in the previous paragraph, he maintained these were amounts on account of his brother. In relation to the three latter amounts, he provided some evidence that these amounts in fact came from his brother’s bank account.
The applicant explained aspects of familial history of psychiatric difficulties and poor health for members of his family. His father was a World War II veteran and had asbestosis. His mother had a brain tumour and died at 68 years of age. He stated that while he had anxiety, depression, social phobia and was a “borderline schizophrenic”, the role of caring for his parents up to their deaths was a cause of trauma for him. He also provided evidence that he had never worked and had always been on a Disability Support Pension.
His brother Paul who is now 60 years of age, suffers from schizophrenia, has hepatitis C and has required a liver transplant. He also has always been on a Disability Support Pension. His other brother John is about 47 or 48 and is the only one of his siblings who has ever worked. However, he too, is on a Disability Support Pension but lives in Sydney. The applicant said that he previously cared for his brother Paul and lived in his father’s house with his brother, but following debt collectors coming to the house, he has since moved out and cares for another person where he lives, at Palm Beach.
The applicant said his father gambled all his life. His mother also gambled, but only on the pokies. The applicant said he himself has gambled since 10 years of age and learned this from his father. He left school at 14 years of age and apart from the Disability Support Pension, he has gained income by gambling but only to the extent allowed by his Disability Support Pension. He maintained that other amounts in his account were amounts provided by his father. His father died on 30 April 2004 and was 80 years of age when he died. He was bedridden at the time of death.
Under cross-examination, he said all of the large amounts in his UNiTAB account were amounts provided by his father in cash, but avoided giving specific answers to questions in this regard. The applicant was referred to some of the documentary evidence and he said his father had given him a gift of $30,000 on the day he died. He provided evidence that he had to pay for his father’s funeral expenses out of this amount, which he initially thought was $15,000. But Ms Oliver drew the applicant’s attention to a withdrawal from the Commonwealth Bank account of Victor Denhard (his father) on 3 May 2004 for an amount of $14,000. This was three days after the applicant’s father’s death. The applicant later said that his father was buried in the same plot as his mother and that he had been paying off the cost of the funeral, in advance, for some years. The applicant said his father also gave him $1,000 in cash on the day he died.
Subsequently, in relation to the funeral expenses, the applicant was referred to T26, folio 1206 where on 3 May 2004 (three days after the death of Mr Victor Denhard, the applicant’s father), an amount of $3,180 was remaining in the applicant’s UNiTAB account late in the afternoon of that day following a bet and a dividend return. The amount of $3,180 was withdrawn from the account at approximately 5.00pm that day leaving a balance in the account of 25c. It would appear that was the amount used to pay for the applicant’s father’s funeral.
Another area of enquiry pursued before the Tribunal was the issue of reward credits. On 30 April 2004, reward credits of $3,292.55 was credited to the applicant’s UNiTAB account. This was a credit based on the volume of activity used in the account. The applicant said it was used by himself, his father and his brother. The Tribunal observed that reward credits were credited to the account every three months, with the following credit being in July 2004 (T26, folio 1251). Ms Oliver suggested to the applicant that it was this amount in effect which was used to pay for his father’s funeral expenses.
In relation to the $30,000 which the applicant claimed his father gave him as a gift, Ms Oliver drew the applicant’s attention to his account at the Commonwealth Bank (ST3, folio 102). The applicant did not deny that this was his account although his evidence to the Social Security Appeals Tribunal was that he did not have an account with the Commonwealth Bank. That record shows a deposit into a Commonwealth Bank account in the applicant’s name. A deposit of $30,000 was made on 3 May 2004 (ST3, folio 102) and is consistent with a statement also provided by the Commonwealth Bank independently showing a deposit of that amount (Exhibit 8). This was three days after the applicant’s father’s death. On the same day, that is 3 May 2004, the amount of $30,000 deposited into the applicant’s Commonwealth Bank account is transferred out of that account by phone B-pay to the applicant’s UNiTAB account (ST3 folio 102). There is a corresponding entry in the applicant’s UNiTAB account on 4 May 2004 (T26, folio 1206).
The applicant was then referred to the transaction dated 13 August 2004 where he received a bereavement payment from the Department of Social Security for $4,880. He said he could not recall what he did with that amount. Ms Oliver referred the applicant to T26, folio 1265 which revealed a deposit of $5,300 to his UNiTAB account on 13 August 2004. Part of the bereavement payment appears to be included in that deposit. That deposit was then “invested” in a bet and a dividend of $5,671 was paid on the same day.
At that stage of the hearing, Ms Oliver explained that the amounts included in the debt calculation were based only on deposits in the UNiTAB account which were greater than $500. This was a discretionary decision made by Centrelink to adopt $500 as the threshold as this was approximately the amount of the fortnightly Disability Support Pension. But the records in the UNiTAB account showed numerous deposits and withdrawals in case, quite separately from investments and dividends from betting activities.
Mr Norris Bloor
This witness gave sworn evidence. He provided a statement (Exhibit 3) and confirmed that his signature appeared on that statement. He explained he had met the applicant’s father about 14 years ago when living in a block of flats. He said he knew the applicant’s father and his wife for a number of years. He thought the applicant’s mother died in about 1996 or 1997. He was not living in the block of flats then. However, he reacquainted himself with the applicant’s father at some time after moving out of the block of flats. He also stated that Mr Victor Denhard and himself were members of a punting syndicate which was formed about a year after the death of Mr Victor Denhard’s wife. When asked about the members of that syndicate the applicant said he did not want to mention names, but it included a girlfriend and a couple of friends who did not wish to be identified.
He also said that he used the account in question, that is the UNiTAB account of Mr Dale Denhard, and put amounts into that account. He also used overseas bookmakers, in particular the Number 1 Betting Shop in Vanuatu. He also had an account at the TAB in Brisbane. He used his TAB account when needing to pay overseas bookmakers.
When asked about how he made deposits to the UNiTAB account, he said he filled out a slip and put it in the TAB. He said it was a practice he used, and he knew that Mr Denhard and other friends also made deposits. For withdrawals, he would withdraw money from the UNiTAB account and write cheques. When asked about the bank where he had his cheque account, he thought it might have been the Heritage Building Society or perhaps another bank, but he said he could not recall.
When asked how much he would ordinarily bet, he said probably about $50,000 over a five or six year period. When asked how much Mr Denhard would bet, he thought about the same amount.
Ms Oliver also pursued with this witness how withdrawal slips were prepared. He said that he got them from Mr Victor Denhard and he completed them. He said as far as he was aware it was his account. Ms Oliver put it to the witness that it was a bit odd the account was kept in the name of Mr Dale Denhard. In response, the witness merely shrugged his shoulders and did not respond. Ms Oliver also told the witness that evidence had been received from the applicant saying that for withdrawals from the UNiTAB account not only was a withdrawal slip required but a signature verification card also had to be produced. The witness did not have a satisfactory answer in relation to this.
Consideration
The Tribunal has taken into account all of the oral and written evidence presented to the Tribunal. It has also analysed and considered all of the statutory and case law requirements in assessing the evidence.
The determinations made by the Tribunal in this case have been based on the following findings of fact:
(a) The applicant fully understood the facts but was inconsistent and evasive. His evidence was shown to be untruthful on the balance of probabilities.
(b) Mr Denhard has never worked but has been in receipt of Disability Support Pension at all times covered by the debt period.
(c) Considerable independent evidence has been provided in the form of records of the UNiTAB account in the applicant’s name as well as bank records of the applicant and the applicant’s father.
(d) Mr Bloor was not regarded as a witness of truth.
Mr Denhard showed his version of events were inconsistent with the evidence he provided to the SSAT. It may be possible that he did place bets for his father from that account at times, but as the applicant gave evidence he began gambling at ten years of age, and looked after his father and his brother, as well as their gambling activities, Mr Denhard appears to have had more control and access to his father’s money than he acknowledges.
The amount of deposits, withdrawals, investments and dividends as provided by the evidence from UNiTAB Ltd, is summarised in ST 7 as follows:
QUESTIONS
ANSWERS
Please provide a summary of account number 2722296 showing the total deposits, withdrawals, investments and dividends made for the following years:
1. 1 January 1997 to 31 December 1997
1. 1 January 1997 to 31 December 1997
Deposits
Withdrawals
Investments
Dividends
$11,246.55
$7,070.10
$71,666.00
$67,479.90
2. 1 January 1998 to 31 December 1998
2. 1 January 1998 to 31 December 1998
Deposits
Withdrawals
Investments
Dividends
$44,510.05
$24,789.00
$312,808.00
$292,345.00
3. 1 January 1999 to 31 December 1999
3. 1 January 1999 to 31 December 1999
Deposits
Withdrawals
Investments
Dividends
$17,840.35
$8,018.00
$110,167.50
$100,281.30
4. 1 January 2000 to 31 December 2000
4. 1 January 2000 to 31 December 2000
Deposits
Withdrawals
Investments
Dividends
$6,584.35
$7,520.00
$18,321.50
$19.182.15
5. 1 January 2001 to 31 December 2001
5. 1 January 2001 to 31 December 2001
Deposits
Withdrawals
Investments
Dividends
$14,537.80
$11,937.50
$33,071.50
$30,210.20
6. 1 January 2002 to 31 December 2002
6. 1 January 2002 to 31 December 2002
Deposits
Withdrawals
Investments
Dividends
$8,439.90
$3,335.00
$8,952.50
$8,802.65
7. 1 January 2003 to 31 December 2003
7. 1 January 2003 to 31 December 2003
Deposits
Withdrawals
Investments
Dividends
$54,917.10
$33,719.00
$657,970.00
$627,706.65
8. 1 January 2004 to 31 December 2004 8. 1 January 2004 to 31 December 2004
Deposits
Withdrawals
Investments
Dividends
$166,070.50
$124,613.00
$481,766.50
$430,061.15
Of the amount of cash deposits shown for each of the calendar years above, Centrleink has extracted from the individual transactions, only those amounts which are greater than $500. These are shown in Exhibit 6. That Exhibit reveals that the amount upon which the assessment of income is based, is less than the total deposits shown in the summary by UNiTAB Ltd (ST 7, folio 155).
All of the sources of significant monies in the UNiTAB account has not come to light from the evidence. It may be that most of the monies involved were monies of the applicant’s father. Nevertheless, it clearly could not have come from bets using the applicant’s disability support pension alone.
In any event, significant amounts were “invested” (that is used for bets) and significant “dividends” (that is winnings from bets) were received. It is the legal position with these amounts which the Tribunal must determine in assessing Mr Denhard’s entitlement to Disability Support Pension for the debt period.
Issue 1 – Was Mr Denhard overpaid social security benefits for the debt period?
Section 1064(1) of the Act relevantly points to the rate of Disability Support Pension and the rate of Carer Payment payable to a person and is calculated by use of the rate calculator at the end of that section. The relevant rate calculator is “pension rate calculator A”, and the relevant income test is contained in Module E of pension rate calculator A.
The fundamental comparison in answering the question in Issue 1 is whether the amounts included in the calculations by Centrelink are, in fact, income. The definition is section 8(1) of the Act defines income very broadly and includes in the definition of income:
(a) …an income amount earned, derived or received by the person for the person’s own use or benefit; …
The phrase “income amount” in the definition of “income” means valuable consideration or personal earnings or moneys or profits whether of a capital nature or not. The phrase “earned, derived or received” from the definition of the term “income” in s 8(1) is also very broadly defined and includes any “income amount” which is “earned, derived or received.” The latter phrase is amplified in s 8(2) to refer to amounts earned, derived or received “by any means” and “from any source (whether within or outside Australia)”.
The statutory definition of income clearly encompasses “…as wide a range of categories and sources of income as possible, thus giving full scope to the exclusionary provisions of the Act…” (see Rose v Secretary, Department of Social Security (1990) 21 FCR 241 at 243). The definition also extends to gifts. There is also no necessity that the amount received also involves a net gain for the recipient (see Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35 at page 44).
The test to be applied in determining whether amounts received are “income” within the meaning of the definition in the Act, is to be an objective test (Dellis v Secretary, Department of Social Security (1990) 21 ALD 252 at page 253. Considering the statutory and case law in relation to whether the amounts in the applicant’s UNiTAB account are income for the purposes of the Social Security Act 1991, the Tribunal has taken into account the $30,000 “gift” which the applicant says his father gave to him. That amount clearly is income within the definition as outlined by the authorities above. However, the other three B-pay amounts totalling to $41,300 in June and August 2004, are excluded from the applicant’s income as the Tribunal is satisfied that those amounts belong to activities relating to the applicant’s brother Mr Paul Denhard. Even excluding those amounts, the total income received by the applicant to his UNiTAB account would still exceed the threshold determined under the rate calculator in section 1064(1) (having regard to ST10, folio 159). Therefore, the applicant would not be entitled to Disability Support Pension for each of the relevant periods. The Tribunal determines therefore that the applicant has been paid in excess of his entitlements for the debt period commencing 1 May 1997 to 17 November 2004.
Issue 2 – Is the amount of the overpayment a debt due to the Commonwealth
The relevant legislative provisions of the Act are in s 1224 (relevant up to 1 October 1997); s 1223(5) (relevant for the period 1 October 1997 to 30 June 2001); and s 1223(1) from 1 July 2001 to 17 November 2004. These sub-sections reveal a continual widening of the law such that the Parliament ultimately has intended to capture almost all income as being assessable, when a person seeks to have the benefit of the Disability Support Pension.
The Tribunal determines that the overpayments are debts due to the Commonwealth and have arisen under the statutory provisions above for the respective time periods. This is subject to the assessment in Issue 3 below.
Issue 3 – Should the debts be written off, waived or recovered?
Writeoff
There is power under s 1236 of the Act for the Secretary to write off a debt.
Section 1236(1A) enables the use of the write off provision only in the very limited circumstance where it is not recoverable at law, where the debtor is impecunious or has no capacity to repay the debt; where the debtor’s whereabouts is unknown; or where it is not cost effective for the Commonwealth to recover the debt.
On the face of it, this applicant’s circumstances are difficult if one takes account of his Disability Support Pension only. However, he has inherited from his father’s Estate; he clearly has had access to a considerable amount of cash from his father, and it is uncertain whether all of the funds of his father and which the applicant seems to have had control of, have been declared; and the fact that the applicant has paid off a mere $5 per week from his Disability Support Pension, the Tribunal concludes that there may be other information which the Commonwealth may become aware of and which would justify recovery of the overpayment to the applicant in the future. In these circumstances, the Tribunal determines that it would be inappropriate to write off the debt under s 1236.
Waiver
Waiver is dealt with in s 1237A (for waiver due to administrative error) or s 1237AAD (where there are special circumstances).
Waiver due to Administrative Error
Section 1237A(1) provides that waiver under this section can only be used for the proportion of a debt “that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith, a payment or payments that gave rise to that proportion of the debt.”
When can a debt be said to be attributable “solely” to an administrative error of the Commonwealth? “Solely” must be viewed within the ordinary meaning of that term which would seem to be that the only cause which could be attributed to the debt, would be an administrative error of the Commonwealth. In Sekhon v Secretary, Department of Family Services (2003) 76 ALD 105 at 113, Selway J said:
“The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to administrative error’ can be paraphrased as meaning the only cause that objectively can be ascribed to the relevant debt is an administrative error.”
For the applicant to have the benefit of this provision, it must be shown that there is no culpability on his part for the origin of the debt. However, in this case there is virtually no evidence that there has been any administrative error on behalf of the Commonwealth in the overpayment being made. On the contrary, the only evidence is that the applicant has earned significant amounts of income from betting activities from an account in his name and he failed to provide any advice to Centrelink, as was his obligation. I therefore find waiver due to sole administrative error is not proven by the applicant.
Waiver due to special circumstances
Section 1237AAD empowers the Tribunal to order waiver of the whole or part of the debt where there are “special circumstances”. This term is an imprecise one but must be viewed in the context of the facts of the case. The circumstances must be sufficiently unusual to be regarded as “special circumstances” (see Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at page 3). But importantly, the assessment of this term must look at how the error occurred (Dranichnikov v Centrelink (2003) 75 ALD 134). The cause of the error might take into account personal circumstances, the health of the applicant, his financial circumstances or any other relevant fact. The respondent referred the Tribunal to Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 at N97 where the Tribunal said inter alia:
“…[i]n the exercise of the discretion…, the decision maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the … Act.”
Balancing these considerations, “special circumstances” should relate to the whole of the evidence and context of the applicant, rather than certain aspects of evidence only (see Secretary, Department of Social Security v Thompson (1994) 53 FCR 580). Also, the Federal Court described the assessment of special circumstances as being intended “…to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness” (see Secretary, Department of Social Security v Hales (1998) 153 ALR 259 at 267 per French J.
The Tribunal has considered the convoluted nature of the operation of the applicant’s UNiTAB account, taking account of the evidence available. In particular, the Tribunal has noted the large number of deposits in the applicant’s UNiTAB account, most of which are unexplainable from the resources available to the applicant himself. In addition, the applicant is an experienced punter and he had the capacity and opportunity to operate the account. The only reasonable conclusion which can be drawn is that the applicant had access to other funds, at least from his father, and gambled those amounts. Even ignoring the dividends that might have been received, the deposits to the account are very significant over the debt period and well above the threshold limits permitted by the Act.
The fact that the Tribunal has found that the applicant and Norris Bloor are both unreliable witnesses, reinforces the conclusion that not only have there been overpayments but that they are recoverable debts. In addition, there seems to be no evidence which would indicate that the applicant did not have control of the UNiTAB account in his name, or that he did not understand the effect of the transactions or that he has any financial detriment which would constitute “special circumstances”. There was no evidence presented by Paul Denhard, the applicant’s brother, as suggested by the SSAT, and the applicant clearly dealt with his father’s bank account before and immediately after his father’s death. He clearly had control of those monies and the Tribunal has concluded that he substantially had control of those assets for some time.
The Tribunal notes that the applicant has been paying $5 per week from his pension in relation to his debt. It also notes that he has a psychiatric disability and lives with and cares for, another person. These combined facts, do not of themselves, create any “special circumstances” but, as the respondent informed the Tribunal, Centrelink has the capacity to review the applicant’s circumstances periodically and provide any further relief or make any other legal determination (in relation to debt recovery or in favour of the applicant), if it appears necessary in the future.
The Tribunal therefore determines that the three issues above are to be answered in favour of the respondent. The Tribunal therefore affirms the decision under review.
I certify that the 54 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, Senior Member
Signed: .....................................................................................
F. Kamst, Legal Research Officer
Date/s of Hearing 30 January 2007
Date of Decision 23 March 2007
The Applicant was self represented
Solicitor for the Respondent Ms S Oliver, Australian Government Solicitor
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