Di Paolo and Secretary, Department of Social Services (Social services second review) - [2023] AATA 3855

Di Paolo and Secretary, Department of Social Services (Social services second review) [2023] AATA 3855 (24 November 2023)
Division:GENERAL DIVISION
File Number: 2022/5429
Re:Sofia Di Paolo
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Dr L Bygrave, Member
Date:24 November 2023
Place:Melbourne

The decision under review made in the Social Services and Child Support Division of the Tribunal (AAT first review) on 1 June 2022 is set aside and, in substitution, the General Division of the Tribunal decides:
(a)Ms Sofia Di Paolo has been a member of a couple with Mr Antonino Di Paolo from 1 May 2013 to at least 16 September 2021. As Ms Sofia Di Paolo was a member of a couple during this period, she was overpaid family tax benefit and has the following debts that are to be repaid to the Commonwealth pursuant to section 71 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth):
(i)$3,640.33 for the 2013–2014 financial year.
(ii)$3,003.95 for the 2014–2015 financial year.
(iii)$4,692.12 for the 2015–2016 financial year.
(iv)$19,417.75 for the 2016–2017 financial year.
(v)$13,107.01 for the 2017–2018 financial year.
(vi)$15,669.45 for the 2018–2019 financial year.
(vii)$5,157.45 for the 2020–2021 financial year.

(b)Ms Sofia Di Paolo’s family tax benefit debts are not to be written off or waived pursuant to sections 95, 97 and 101 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth).
(c)The reassessment of Ms Sofia Di Paolo’s entitlement to parenting payment single from 18 July 2003 to 7 February 2007 and to disability support pension from 8 February 2007 to 16 September 2021 is remitted to the Respondent to be recalculated on the basis of the following findings:
(i)Ms Sofia Di Paolo was single from 18 July 2003 to 17 January 2009.
(ii)Ms Sofia Di Paolo has been a member of a couple with Mr Antonino Di Paolo from 18 January 2009 to at least 16 September 2021.
(iii)Ms Sofia Di Paolo is to be attributed 50% of the Mandoulidis Family Trust assets from 18 July 2003 to 16 September 2021.
(iv)Ms Sofia Di Paolo’s assets include 100% of [redacted – property address] from 15 December 2008 to 17 April 2009; 75% of [redacted – property address] from 18 April 2009 to 1 April 2013; and 50% of [redacted – property address] from 7 February 2017 to 30 June 2018.
(v)Ms Sofia Di Paolo received 50% of rent payments from [redacted – property address], which is income for the period from 1 March 2017 to 7 May 2018.

(d)The recalculated amounts that Ms Sofia Di Paolo was overpaid parenting payment single and disability support pension in the period from 18 July 2003 to 16 September 2021 are debts due to the Commonwealth pursuant to section 1223 of the Social Security Act 1991 (Cth).
(e)Ms Sofia Di Paolo’s parenting payment single and disability support pension debts are not to be written off or waived pursuant to sections 1236, 1237A and 1237AAD of the Social Security Act 1991 (Cth).

..[sgn]......................................................................
Dr L Bygrave, Member
CATCHWORDS
SOCIAL SECURITY – parenting payment single – disability support pension – family tax benefit – whether Applicant is an attributable stakeholder of a private trust – whether Applicant resigned from trust – whether Applicant is to be attributed assets and/or income from trust – whether Applicant owned other assets – whether Applicant received income – whether Applicant is a member of a couple – whether there is any ‘special reason in the particular case’ not to treat Applicant as a member of a couple – Applicant over the assets value limit – Applicant over the income limit – Applicant overpaid parenting payment single and disability support pension – Applicant is member of a couple – Applicant overpaid family tax benefit – whether debts can be written off or waived – no reason to write off debts – no sole administrative error – no special circumstances – decision under review set aside.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
A New Tax System (Family Assistance) Act 1999 (Cth)
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
Data-matching Program (Assistance and Tax) Act 1990 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Act 2000 (Cth)
Trustees Act 1958 (Vic)
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Briginshaw v Briginshaw (1938) 60 CLR
Dranichnikov v Centrelink [2003] FCAFC 133
Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76
SECONDARY MATERIALS
Explanatory Memorandum, Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Bill 2000 (Cth).
Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023.
John D Heydon and Mark J Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 7^th ed, 2006)
Peter Young, Clyde Croft and Megan Smith, On Equity (Thomson Reuters, 2009).
REASONS FOR DECISION
Dr L Bygrave, Member
24 November 2023
INTRODUCTION

The Applicant, Ms Sofia Di Paolo (also named in documents as Sophia, Sophie and Sofie; with surnames of Mandoulidis (maiden surname) or Napoli (surname of her first marriage)), has been in receipt of various social security payments since 2003.
Relevant to these matters, Ms Di Paolo was in receipt of parenting payment single from 18 July 2003 to 7 February 2007 and disability support pension from 8 February 2007 to 16 September 2021 (paid at the single rate or partnered rate during various periods). She was also in receipt of family tax benefit (based on her being single) from at least 1 July 2013.
On 24 July 2020, Services Australia (Centrelink) commenced an investigation regarding Ms Di Paolo’s past and present eligibility to receive social security payments.[1]
[1] Exhibit T-T91, 801.
On 23 September 2021, Centrelink determined that Ms Di Paolo was not living separately and apart from her husband, Mr Antonino (also named Tino) Di Paolo, from 1 May 2013. Centrelink also made decisions in relation to the assets owned by Ms Di Paolo (separately and jointly with Mr Di Paolo), unexplained deposits into her bank accounts, and the income and assets to be attributed to her from the Mandoulidis Family Trust (the Trust).[2]
[2] Exhibit T-T91, 821-823.
Centrelink subsequently made decisions on 30 September 2021 and 4 October 2021 to raise and recover from Ms Di Paolo the following family tax benefit debts:
·$3,640.33 for the 2013–2014 financial year.
·$3,003.95 for the 2014–2015 financial year.
·$4,692.12 for the 2015–2016 financial year.
·$19,417.75 for the 2016–2017 financial year.
·$13,107.01 for the 2017–2018 financial year.
·$15,669.45 for the 2018–2019 financial year.
·$5,157.45 for the 2020–2021 financial year.[3]
For completeness, there are no records that a family tax benefit debt was raised for the 2019–2020 financial year.
[3] Exhibits T-T87, T101-T103.
These debts, totalling $64,688.06, were affirmed by an Authorised Review Officer (ARO) at Centrelink on 15 November 2021.[4]
[4] Exhibit T-T82, 598.
Centrelink also made decisions and sent correspondence to Ms Di Paolo on 5 October 2021 and 7 October 2021 to raise and recover from her the following debts:
·$44,438.73 for parenting payment paid at the single rate for the period from 18 July 2003 to 7 February 2007.
·$58,094.05 for disability support pension paid in the period from 9 February 2007 to 9 May 2009.
·$188,818.05 for disability support pension paid in the period from 10 May 2009 to 16 September 2021.[5]
[5] Exhibits T-T91, 848; ST-ST103-ST105.
These debts were raised on the basis of Ms Di Paolo’s beneficial interest in the assets and income of the Trust, a finding that she was a member of a couple with Mr Di Paolo from 1 May 2013 and unexplained deposits into her bank accounts.[6]
[6] Exhibit T-T87, 728, 733-734, 754-755.
On 15 November 2021, an ARO at Centrelink affirmed the debt of parenting payment in the amount of $44,438.73 and debt of disability support pension in the amount of $188,818.05, but varied the amount of the disability support pension debt from $58,094.05 to $59,904.97 for the period from 8 February 2007 to 9 May 2009.[7] The ARO also made findings in relation to assets owned by Ms Di Paolo (both separately and jointly with Mr Di Paolo) and the attribution of assets and income to her from the Trust.[8]
[7] Exhibit T-T87, 733.
[8] Exhibit T-T80, 573-577.
Ms Di Paolo sought review of these decisions in the Social Services and Child Support Division (AAT1) of the Administrative Appeals Tribunal (the Tribunal) and, on 1 June 2022, the AAT1:
·set aside the decision that Ms Di Paolo was partnered with Mr Di Paolo from 1 May 2013 and, in substitution, decided that Ms Di Paolo was not partnered with Mr Di Paolo from 1 May 2013;
·set aside the decision that Ms Di Paolo has family tax benefit debts totalling $64,688.06 in respect of the 2013–2014, 2014–2015, 2015–2016, 2016–2017, 2017–2018, 2018–2019 and 2020–2021 financial years and, in substitution, decided Ms Di Paolo did not have family tax benefit debts for those financial years as she was not partnered with Mr Di Paolo;
·affirmed the decision that Ms Di Paolo has a parenting payment single debt in the amount of $44,438.73 for the period from 18 July 2003 to 7 February 2007, but decided to waive recovery of the entire debt pursuant to section 1237A of the Social Security Act 1991 (Cth) (the Social Security Act);
·affirmed the decision that Ms Di Paolo has a disability support pension debt in the amount of $59,904.97 for the period from 8 February 2007 to 9 May 2013, but decided to waive recovery of $28,206.03 of the debt pursuant to section 1237A of the Social Security Act; and
·affirmed the decision that Ms Di Paolo has a disability support pension debt in the amount of $188,818.05 for the period from 10 May 2013 to 16 September 2021, and determined the full amount of this debt is recoverable.[9]
[9] Exhibit T-T1.1.
On 20 June 2022, Ms Di Paolo made an application for review to the General Division of the Tribunal. The basis for this application was, in part, that the AAT1 did not consider the evidence of Mr ‘TP’, the lawyer who prepared the ‘original retirement of deed [from the Trust] in May 1999’.[10]
[10] Exhibit T-T1, 4.
The matter was heard by the Tribunal in Melbourne on 19–22 June 2023. Ms Di Paolo and the Secretary, Department of Social Services (the Secretary) were represented by counsel. The Tribunal received final submissions in relation to the substantive issues and evidence on 2 October 2023. A further and final set of documents that were provided to Ms Di Paolo by Centrelink as part of a request she made for documents under Freedom of Information provisions, and a short submission explaining why these documents were not filed prior to the hearing, were filed with the Tribunal on 10 November 2023.
ISSUES
The issues for determination by the Tribunal are:
·whether Ms Di Paolo has debts for the overpayment of family tax benefit in the 2013–2014, 2014–2015, 2015–2016, 2016–2017, 2017–2018, 2018–2019 and 2020–2021 financial years; and
·whether Ms Di Paolo has debts for the overpayment of parenting payment single and disability support pension in the period from 18 July 2003 to 16 September 2021;
and, if so,
·whether any of these debts should be:
owritten off pursuant to section 1236 of the Social Security Act or section 95 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Family Assistance Administration Act);
owaived pursuant to section 1237A of the Social Security Act or section 97 of the Family Assistance Administration Act on the basis that they are attributable solely to administrative error made by the Commonwealth;
owaived pursuant to section 1237AAD of the Social Security Act or section 101 of the Family Assistance Administration Act on the basis that special circumstances exist.
The determination of these issues requires me to make findings in relation to whether:
·assets and/or income from the Trust are attributable to Ms Di Paolo in the period from 18 July 2003 to 16 September 2021;
·Ms Di Paolo was in a member of a couple relationship with Mr Di Paolo in any period from 1 May 2013;
·Ms Di Paolo held any other assets (separate to the Trust) or received any income separately or jointly in the period from 18 July 2003 to 16 September 2021; and
·any assets and/or income held or received by Ms Di Paolo were above the assets value limit and/or income limit such that she was not eligible for parenting payment single and/or disability support pension, and/or affected the rate that she was paid.
RELEVANT LEGISLATION
Qualification for and payment of parenting payment and disability support pension
Statutory provisions relevant to Ms Di Paolo’s qualification for and the rate of payment of parenting payment and disability support pension are set out in the Social Security Act and the Social Security (Administration) Act 1999 (Cth) (the Social Security (Administration) Act). The Guides to Social Policy Law, Social Security Guide (the Social Security Guide) also sets out government policy regarding eligibility for and payment of social security payments.[11]
[11] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023.
Sections 1068A and 1064 of the Social Security Act respectively outline the rate of parenting payment single and disability support pension paid to a person, and the effect of a person’s income and assets on the maximum payment rate.
The Social Security Act sets out the following relevant definitions of income and assets:
·subsection 8(1) defines ‘income’ in relation to a person as meaning an ‘income amount earned, derived or received’ by a person for their ‘own use or benefit’ or a periodical payment or benefit ‘by way of gift or allowance’ (amounts are excluded under subsections 8(4), (5) or (8), but none of these subparagraphs are relevant to this matter);
·section 9 defines ‘financial assets’ as a ‘financial investment’ or ‘deprived asset’, and ‘financial investment’ includes available money or money that is deposited in a financial institution account (also see subsection 8(1)); and
·section 11 defines ‘assets’ as ‘property or money’.
Sections 1064-G1 and 1068A-A1 of the Social Security Act respectively outline how to calculate the effect of a person’s income and assets on their maximum payment rate of parenting payment single and disability support pension. This involves working out whether a person’s income exceeds the income limit and whether a person’s assets exceed the assets value limit.
The Social Security (Administration) Act sets out the statutory reporting obligations of a person in receipt of a social security payment. Section 66A stipulates a general requirement for a person who has made a claim for a social security payment to inform the Department of ‘an event or change of circumstances’ that may affect their payment within 14 days.
Subsection 68(2) of the Social Security (Administration) Act also states that the Secretary may give a written notice to a person that requires them to inform the Department if a specified event or change of circumstances occurs that may affect their payment. Section 72 of the Social Security (Administration) Act outlines the provisions for a notice under section 68, including that it must be in writing and must specify how the person is to give the information to the Department: pursuant to section 72, a person is required to advise the Department of any changes to their circumstances within 14 days of the change occurring.
Attributability of trust assets
Part 3.18 of the Social Security Act sets out the means test treatment of private companies and private trusts. Section 1207 provides the following ‘simplified outline’ of Part 3.18:
-    This Part sets up a system for the attribution to individuals of the assets and income of private companies and private trusts (sections 1207Y and 1208E).
-    Attribution starts on 1 January 2002.
-    For an asset or income to be attributed to an individual:
(a) the company must be a designated private company or the trust must be a designated private trust (sections 1207N and 1207P); and
(b) the company must be a controlled private company in relation to the individual or the trust must be a controlled private trust in relation to the individual (sections 1207Q and 1207V); and
(c) the individual must be an attributable stakeholder of the company or trust (section 1207X).
-    A company or trust will be a controlled private trust or a controlled private company if the individual passes a control test or a source test.
-    An individual will not be an attributable stakeholder of a trust if the trust is a concessional primary production trust in relation to the individual.
-    The asset deprivation rules and the income deprivation rules are modified if attribution happens.
[emphasis added]
Section 1207P of the Social Security Act states:
Designated private trusts
(1) For the purposes of this Part, a trust is a designated private trust unless:
(a) all of the following conditions are satisfied:
(i) the trust is a fixed trust;
(ii) the units in the trust are held by 50 or more persons;
(iii) the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual or individuals to avoid the application of this Part and/or Division 11A of Part IIIB of the Veterans’ Entitlements Act; or …
The Applicant and the Respondent submit – and I am also satisfied – that the Trust is a designated private trust because it does not fall into the exceptions set out in subsection 1207P(1) of the Social Security Act.[12] Therefore, sections 1207V and 1207X of the Social Security Act need to be considered.
[12] Submissions for the Applicant, 20 March 2023, paragraph 84; Statement of Facts, Issues and Contentions of the Respondent, 4 May 2023, paragraph 211.
Section 1207V states:
Controlled private trusts
(1) For the purposes of this Part, a trust is a controlled private trust in relation to an individual if the trust is a designated private trust and:
(a) the individual passes the control test set out in subsection (2); or
(b) the individual passes the source test set out in subsection (3).
Control test
(2) For the purposes of this section, the individual passes the control test in relation to a trust if:
(a) the individual, or an associate of the individual (other than an associate covered by paragraph 1207C(1)(j)), is the trustee, or any of the trustees, of the trust; or
(b) a group in relation to the individual was able to remove or appoint the trustee, or any of the trustees, of the trust; or
(c) a group in relation to the individual was able to vary the trust deed or to veto the decisions of the trustee; or
(ca) it could reasonably be expected that the trustee of the trust would make an application of the corpus or income of the trust to the individual if the individual could not meet his or her reasonable costs of living (within the meaning of subsection 19C(5)); or
(d) the aggregate of:
(i) the beneficial interests in the corpus or income of the trust held by the individual (whether directly or indirectly); and
(ii) the beneficial interests in the corpus or income of the trust held by associates of the individual (whether directly or indirectly);
is 50% or more; or
(da) either or both of the following apply:
(i) the individual is eligible to receive an application of the corpus or income of the trust;
(ii) one or more of the individual's associates are eligible to receive an application of the corpus or income of the trust;
and the aggregate number of entities covered by subparagraphs (i) and (ii) is 50% or more of the total number of entities eligible to receive an application of the corpus or income of the trust; or
(e) a group in relation to the individual had the power (by means of the exercise by the group of any power of appointment or revocation or otherwise) to obtain, with or without the consent of any other entity, the beneficial enjoyment of the corpus or income of the trust; or
(f) a group in relation to the individual was able in any manner whatsoever, whether directly or indirectly, to control the application of the corpus or income of the trust; or
(g) a group in relation to the individual was capable under a scheme of gaining the enjoyment or the control referred to in paragraph (e) or (f); or
(h) a trustee of the trust was accustomed or under an obligation (whether formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the individual.
…
Source test
(3) For the purposes of this section, an individual passes the source test in relation to a trust if:
(a) the individual has transferredproperty or services to the trust after 7.30 pm, by standard time in the Australian Capital Territory, on 9 May 2000; and
(b) the underlying transfer was made for no consideration or for a consideration less than the arm’s length amount in relation to the underlying transfer.
[emphasis in original]

For the reasons that I set out below, I am satisfied that Ms Di Paolo passes the control test at subsection 1207V(2) of the Social Security Act.
Section 1207X states:
Attributable stakeholder, asset attribution percentage and income attribution percentage
…
Trust
(2) For the purposes of this Part, if:
(a) a trust is a controlled private trust in relation to an individual; and (b) the trust is not a concessional primary production trust in relation to the individual (see section 1208U);
then:
(c) the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and
(d) if the individual is an attributable stakeholder of the trust--the individual's asset attribution percentage in relation to the trust is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the trust--that lower percentage; and
(e) if the individual is an attributable stakeholder of the trust--the individual's income attribution percentage in relation to the trust is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the trust--that lower percentage.
Notably, the Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Act 2000 (Cth), with date of effect from 1 January 2002,[13] aimed to:
ensure that customers who hold their assets in private companies or private trusts receive comparable treatment under the means test to those customers who hold their assets directly. The assets and income of the structure will be attributed to the person or persons who control the company or trust, or to the person or persons who were the source of the capital or corpus of the company or trust.[14]
[13] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.12.
[14] Explanatory Memorandum, Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Bill 2000 (Cth).
The Social Security Guide provides the following policy guidance regarding resignation from a trust:
Resignation from a discretionary trust before 1 January 2002
As discretionary trust assets and income were not assessable until 1 January 2002, the deprivation provisions DID NOT apply if a person resigned from the trust before that date.
…
Resignation from a fixed unit trust or private company before 1 January 2002
If a person resigned from a fixed unit trust or private company before 1 January 2002 and relinquished their units or shares for LESS THAN the value assessed (using the net asset backing method), the deprivation provisions apply.[15]
[15] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.12.9.20.
Resignations from a Controlled Private Trust or Controlled Private Company On or After 01/01/2002
…
General provisions
An attributable stakeholder who resigns control of a private trust or private company ON or AFTER 1 January 2002 will be treated in a manner comparable to other people who gift or relinquish assets. That is, the deprivation provisions will apply from the date of resignation (subject to the percentage of the assets of the structure attributed to the stakeholder)…
Assessment of income upon resignation
An attributable stakeholder who receives a final distribution on resigning control of an entity on or after 1 January 2002 will not have any attributable income or distribution income from this final distribution assessed against them.
If prior to resignation an attributable stakeholder receives an income distribution it continues to be assessed for 12 months from the date of receipt…
Genuine resignation
A genuine resignation will be accepted as having occurred where both the attributable stakeholder and their partner:
-    relinquish ALL formal roles and control in respect of the entity, AND
-    if applicable, relinquish their shares and directorships, AND
-    relinquish all beneficial interest i.e. they cannot be income or asset beneficiaries of the entity. This could be evidenced by an alteration to the trust deed stipulating that they could not be an income or asset beneficiary or by creating a separate deed to renounce the beneficial interest of the person and their partner in the trust, AND
-    make a written declaration that they will not exert any control over, or benefit in any way from, the entity.
This requirement can be satisfied in one of 2 ways:
-    by amending the trust deed to remove the person and their partner as beneficiaries of the trust, or
-    by creating a separate deed to renounce the beneficial interest of the person and their partner in the trust. (A separate deed for each person is required.)
…
Exception: The resigning attributable stakeholder/s will also be able to retain a life interest in their principal residence if the residence is part of the assets of the trust or company.
Note: If new attributable stakeholders are associates, the associate rule will NOT apply.[16]
[16] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.12.9.10.
Determining member/s of a couple
Section 4 of the Social Security Act defines ‘family relationships’ for couples: subsection 4(11) provides that for the purposes of the Act, a person is partnered if they are a member of a couple. Subsection 4(2) of the Social Security Act states that a person is a member of a couple if they are legally married or in a relationship with another person and they are not living separately or apart from each other on a permanent or indefinite basis.
Subsection 4(3) of the Social Security Act lists the criteria for forming an opinion about a relationship for the purpose of subsection 4(2) and states that all the circumstances of the relationship are to be considered, in particular:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to, or in a de facto relationship with, each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage-like relationship or a de facto relationship.
Subsection 24(1) of the Social Security Act provides that a person may be treated as not being a member of a couple as defined in subsection 4(2) of the Act where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple.
Application of proceeds of sale of principal home
Section 1118 of the Social Security Act sets out the application of proceeds of sale of a person’s principal home as follows:
Application of proceeds of sale of principal home
(1B) Subsection (2) applies if:
(a) a person sells the person’s principal home; and
(b) either:
(i) the person does not have a right or interest in a principal home; or (ii) the person has a right or interest in a principal home that the Secretary is satisfied does not give the person reasonable security of tenure in the home; and
(c) before the end of 12 months, or any longer period determined under subsection (2B), after the sale, one or more of the following applies:
(i) the person intends to apply the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home
(ii) the person applies the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;
(iii) the person intends to apply the whole or a part of the proceeds of the sale to purchase another residence that is to be the person’s principal home.
(2) For the purposes of this Act (other than Division 1B of Part 3.10):
(a) if subparagraph (1B)(c)(i) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to build, rebuild, repair or renovate the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention; or
(b) if subparagraph (1B)(c)(ii) applies—disregard the value of the following, until the end of the period mentioned in paragraph (1B)(c), to the extent that the person applies those proceeds to build, rebuild, repair or renovate that other residence:
(i) the value of the other residence;
(ii) the value of the land on which the other residence is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home;
(iii) the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying those proceeds; or
(c) if subparagraph (1B)(c)(iii) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to purchase the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention.
…
(2B) For the purposes of subsection (1B), the Secretary may determine, in writing, a period of up to 24 months if:
(a) a person who has sold his or her principal home is making reasonable attempts to purchase, build, repair or renovate another residence; and
(b) the person has been making those attempts within a reasonable period after selling the principal home; and
(c) the person has experienced delays beyond his or her control in purchasing, building, repairing or renovating the other residence.
[emphasis in original]
The Social Security Guide also provides:
·policy guidance regarding sale proceeds exemption for homes sold between 1 July 2007 and 31 December 2022, and relevantly includes:
othe definition of principal home sale proceeds;
owhen the principal home sale proceeds exemption can apply;
othe 12-month exemption of principal home sale proceeds; and
othe exemption of principal home sale proceeds beyond 12 months.[17]
·definitions of a homeowner and a non-homeowner.[18]
[17] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.6.3.80.
[18] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.6.3.20.
Payment of family tax benefit
The statutory provisions relevant to the payment of family tax benefit are set out in the A New Tax System (Family Assistance) Act 1999 (Cth) (the Family Assistance Act) and the Family Assistance Administration Act.
Section 21 of the Family Assistance Act sets out when ‘an individual is eligible for family tax benefit in normal circumstances’: subsection 21(1) requires the individual to have ‘at least one FTB [family tax benefit] child’ in their care.
The Respondent does not dispute that Ms Di Paolo was eligible to receive family tax benefit on the basis that she always had a ‘FTB child’ in her care in the period from 2003 to 2021. However, the issue of the rate of family tax benefit paid to Ms Di Paolo from 1 July 2013 has been raised because she was paid family tax benefit on the basis that she was not a member of a couple with Mr Di Paolo.
Family tax benefit is means tested; a person’s rate of family tax benefit is calculated as an annual entitlement and paid on the basis of their estimate of their adjusted taxable income (or combined adjusted taxable income if a member of a couple) for the coming financial year. At the end of each financial year, Centrelink reconciles the estimated taxable income with the actual taxable income as assessed by the Australian Taxation Office (ATO). If it is decided that Ms Di Paolo was in a member of a couple relationship with Mr Di Paolo from 1 July 2013 (or during any period from the 2013–2014 to 2020–2021 financial years), then the rate of family tax benefit Ms Di Paolo was eligible to receive also requires Mr Di Paolo’s income to be taken into account.
Provisions to write off or waive debts
Section 1223 of the Social Security Act provides that, where a person obtains the benefit of a social security payment they were not entitled to, the amount of the payment is a debt due to the Commonwealth.
Section 70 of the Family Assistance Administration Act lists family assistance payments where ‘the amount is a debt due to the Commonwealth only to the extent to which a provision of’ the Family Assistance Administration Act or the Data-matching Program (Assistance and Tax) Act 1990 (Cth) ‘expressly provides that it is’. A debt in relation to family tax benefit arises by operation of subsection 71(2) of the Family Assistance Administration Act, which relevantly states that: if an amount has been paid to a person by way of assistance and the received amount is greater than the correct amount that should have been paid to the person under family assistance law, the difference between the received amount and the correct amount (the overpayment) is a debt due to the Commonwealth.
Provisions to write off or waive parenting payment single and disability support pension debts are set out in sections 1236, 1237A and 1237AAD of the Social Security Act. Provisions to write off or waive family tax benefit debts are outlined at sections 95, 97 and 101 of the Family Assistance Administration Act.
CHRONOLOGY
The following chronology and relevant facts are set out in documents before the Tribunal and Ms Di Paolo’s oral evidence at the hearing:
·Ms Di Paolo is 54 years old. She sustained significant injuries, including a fracture dislocation of her thoracic spine T8/9, when she was involved in a motor vehicle accident aged 17 years.[19] She subsequently underwent surgery (Harrington rods were inserted at T5 to T12 of her spine and a bone graft of T8/9 was performed), and received compensation from the Transport Accident Commission (TAC).[20]
[19] Exhibit A1, 302.
[20] Exhibit A1, 305.
·Ms Di Paolo married Mr Fulvio Napoli in 1992; they have three living children who are now aged 27 years, 25 years and 21 years.[21]
[21] Exhibit T-T120, 1375.
·In 1998, Ms Di Paolo’s father died. Ms Di Paolo was also involved in a second motor vehicle accident in 1998 that exacerbated the injuries she sustained in 1987, particularly in relation to pain in her neck and spine.[22]
[22] Exhibit A1, 150.
·On 7 April 1999, a discretionary trust named the ‘Mandoulidis Family Trust’ (the Trust) was established by deed of settlement. (Details about the Trust and Ms Di Paolo are set below.)
·Ms Di Paolo and Mr Napoli separated in 2002[23] and divorced in June 2005.[24] (Details about the separation of assets between Ms Di Paolo and Mr Napoli following their separation and divorce are set out below.)
[23] Exhibit T- T139, 1499.
[24] Exhibit T-T37, 359.
·Ms Di Paolo lodged a claim for parenting payment single on 1 August 2003. This claim was rejected by Centrelink, both initially and on review, on the basis that her assets were above the allowable limit because, as the sole trustee of the Trust, she was attributed 100% of the Trust income and assets.[25] Ms Di Paolo received correspondence from Centrelink dated 9 October 2003 and 18 November 2003 that stated:
[25] Exhibit ST-ST94.
othe value of her total assets was ‘above the allowable limit’; and
oas the sole trustee of the Trust, ‘100% of the Trust income and assets will be attributed to [her]’.[26]
[26] Exhibit T-T7, 52, 56.
This decision was affirmed by an ARO at Centrelink on 12 December 2003.[27]
[27] Exhibit T-T10.1, 61.
·On 6 January 2004, Ms Di Paolo provided Centrelink with documents to support her claim that she retired from the Trust in 1999.[28] A Centrelink record dated 31 December 2004 noted that Ms Di Paolo had provided documents that ‘she resigned from the Trust back in 1999’ and her solicitor had ‘advised that gifting/deprivation expires after 5 years’.[29]
[28] Exhibit T-T139, 1556.
[29] Exhibit T-T139, 1599.
·On 19 April 2004, the Social Security Appeals Tribunal (SSAT) made a decision affirming the decision to reject Ms Di Paolo’s claim for parenting payment single on the basis that she was still a trustee of the Trust.[30] (Details of the SSAT decision are set below.)
[30] Exhibit T-T10.1.
·Centrelink records show that:
oMs Di Paolo again applied for parenting payment single on 20 April 2004.[31]
[31] Exhibit T-T139, 1571.
oMs Di Paolo advised Centrelink on 29 April 2004 that she wished to use her maiden name, ‘Mandoulidis’, for Centrelink purposes.[32]
[32] Exhibit T-T139, 1575.
oOn 31 March 2005, Centrelink decided that Ms Di Paolo was entitled to receive parenting payment single from 18 July 2003 on the basis that it accepted she relinquished control of the Trust from May 1999. Consequently, the gifting deprivation on the Centrelink system was deleted (this had previously been that she relinquished control in January 2004) and Ms Di Paolo subsequently received backpayment of parenting payment for the period from 18 July 2003 to 7 April 2005.[33]
[33] Exhibit T-T139, 1602, 1606.
oOn 8 February 2007, Ms Di Paolo lodged a claim for disability support pension.[34] This claim was accepted and she was paid disability support pension from 8 February 2007.
[34] Exhibit T-T139, 1698.
oOn 4 August 2008, Ms Di Paolo commenced employment on a part-time basis at Ray White Manningham; she provided details about this employment to Centrelink on 20 August 2008.[35]
[35] Exhibit T-T139, 1799.
·On 18 January 2009, Ms Di Paolo married Mr Di Paolo; they have a child together who is now 14 years old. Centrelink records show that:
oMs Di Paolo advised Centrelink about this relationship on 4 February 2009.[36]
oMs Di Paolo continued to be paid disability support pension at the partnered rate on the basis that she and Mr Di Paolo declared their combined assets as: bank account savings – $900; assets (home and car) – $21,000; and combined taxable income for 2009–2010 as Ms Di Paolo – $10,000 and Mr Di Paolo – $36,000.[37] (Details about this assessment by Centrelink of the assets and income of Ms Di Paolo and Mr Di Paolo as at January 2010 are set out below).
oOn 13 May 2013, Ms Di Paolo advised Centrelink that she was separated from Mr Di Paolo.[38] Ms Di Paolo was paid disability support pension at the single rate from 1 May 2013. (Details about whether Ms Di Paolo and Mr Di Paolo are or have been members of a couple since 1 May 2013 are set below.)
·Ms Di Paolo told the Tribunal she was hospitalised from 26 April 2017 to 20 June 2017. A medical letter from Dr ‘MC’ (consultant physician and nephologist) dated 18 May 2017 stated Ms Di Paolo was admitted to hospital on 26 April 2017 and was ‘unlikely to be discharged for at least seven days’ and ‘then may well need up to six weeks of convalescence’.[39] A report by Dr ‘BH’ (general practitioner) dated 15 June 2023 referred to Ms Di Paolo having ‘small bowel volvulus and perforation’ and pneumonia in 2017.[40]
·Ms Di Paolo travelled overseas from:
o22 June 2017 to 8 September 2017; and
o1 August 2019 to 29 September 2019.[41]
[36] Exhibit T-T139, 1805.
[37] Exhibit T-T139, 1834-1835.
[38] Exhibit T-T139, 1890.
[39] Exhibit A1, 117.
[40] Exhibit A1, 683.
[41] Exhibit T-T125, 1396.

The following is a timeline of properties owned by Ms Di Paolo (individually and jointly) between 2003 and 2021:
Property ‘A’ [redacted – property address]
·Property ‘A’ was the ‘matrimonial home’ of Ms Di Paolo and Mr Napoli. Ms Di Paolo continued to live at property ‘A’ after she separated from Mr Napoli and was living at this property from the date she was paid parenting payment single on 18 July 2003.
·Documents before the Tribunal show:
oMs Di Paolo refinanced the mortgage on property ‘A’ on 13 April 2004.[42]
[42] Exhibit ST-ST6, 2124-2125.
oProperty ‘A’ was transferred ‘by endorsement’ from ‘Fulvio Napoli and Sophia Napoli’ to ‘Sophia Mandoulidis’ on 26 May 2004: a transfer of land document dated 12 May 2004 stated this transfer was ‘as per Family Court Orders dated 25 February 2004’.[43]
[43] Exhibits ST-ST2, 2089-90, 2129, ST-ST29, 2423.
·Ms Di Paolo sold property ‘A’ on 31 October 2008 for $1,815,000.[44]
[44] Exhibits ST-ST10, 2137 and ST-ST29, 2415.
·Centrelink records show:
oMs Di Paolo’s address history states she lived at property ‘A’ from 30 June 2001 to 24 October 2008.[45]
[45] Exhibit T-T117, 1360.
oMs Di Paolo updated her address details with Centrelink on 22 October 2008 and 30 October 2008 (her address was updated but ‘rent details’ still needed to be verified for ‘RA’ (rent assistance)).[46]
[46] Exhibit T-T139, 1802-1803.
·There are no Centrelink (or other) records that show Ms Di Paolo:
oreported the date of sale of property ‘A’ to Centrelink;
oreported the amount property ‘A’ was sold for to Centrelink; or
ocompleted any written forms or provided any documentation about the sale of property ‘A’ to Centrelink.
Property ‘B’ [redacted – property address]
·Ms Di Paolo and Mr Napoli jointly owned property ‘B’. After Ms Di Paolo and Mr Napoli separated in 2002, Ms Di Paolo lived at property ‘A’ and Mr Napoli lived at property ‘B’.[47]
[47] Exhibit A1, 4.
·Ms Di Paolo told the Tribunal that, in their divorce settlement, she received property ‘A’ and Mr Napoli received property ‘B’.[48] This was because she had made a substantial financial contribution towards property ‘A’ from her TAC compensation monies. Ms Di Paolo referred to an incomplete transcript of proceedings in the Family Court dated 25 February 2004 that noted Mr Napoli was then living at their jointly owned property ‘B’ and Ms Di Paolo was living at their jointly owned property ‘A’.[49] This document does not set out the actual division of assets between Ms Di Paolo and Mr Napoli.
[48] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 32.
[49] Exhibit A1, 200-201, 569-573.
·While there are Centrelink records dated 13 February 2004 and 17 July 2006 that refer to the division of assets (including property ‘A’ and property ‘B’) between Ms Di Paolo and Mr Napoli, [50] there is no documentary evidence before the Tribunal about the final division of assets and finances as part of their divorce in 2005.
[50] Exhibit T-T139, 1562.
·A desktop assessment for property ‘B’ provided a market value of $290,000 for the property as at 28 February 2007.[51]
[51] Exhibit ST-ST77, 3408-3410.
·A title history search for property ‘B’ shows the property was transferred by endorsement from ‘Fulvio Napoli Sophia Napoli’ to ‘Fulvio Napoli’ on 21 June 2007 (and then transferred from Mr Napoli to another party in January 2008).[52]
[52] Exhibit ST-ST73.
Property ‘C’ [redacted – property address]
·Property ‘C’ was purchased by Ms Di Paolo for $1,175,000 in August 2008 with the land title transfer on 15 December 2008.[53] A real estate advertisement for property ‘C’ filed by Ms Di Paolo (presumably from 2008) stated the ‘existing house comprises: entrance hall, living room, 3 bedrooms, kitchen with meals area, bathroom and laundry’.[54]
[53] Exhibits ST-ST30, 2438, 2442; T-T19, 280.
[54] Exhibit A1, 222.
·A transfer of land document dated 17 April 2009 records Ms Di Paolo gifted to Mr Di Paolo one quarter share of property ‘C’ in consideration of ‘natural love and affection’.[55]
[55] Exhibit T-T19, 283.
·Ms Di Paolo told the Tribunal she did not live in or rent out property ‘C’ after she purchased the property because it had previously been used as a medical centre. She said it was demolished ‘just after we [sic] purchased it’ and they had hoped to have the building ‘finished’ in 12 months.[56] She said she did not rent out property ‘C’ in 2009 and provided a letter from a real estate agent dated 10 May 2022 confirming this information.[57]
[56] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 48.
[57] Exhibit A1, 83.
·Ms Di Paolo lived in rental accommodation from October 2008 to about March 2013.[58]
[58] Exhibit T-T139.
·Documents before the Tribunal show:
oMs Di Paolo received consent as owner-builder for the ‘construction of a new home’ with ‘estimated cost of works $600,000’ on property ‘C’ on 8 January 2010,[59] more than 12 months after she purchased property ‘C’.
[59] Exhibit A1, 221.
oA building permit was issued to Ms Di Paolo on 15 February 2010 for property ‘C’ that set out an ‘estimated project value’ of ‘$750,000’ for construction of a new ‘dwelling’ and ‘swimming pool’.[60]
[60] Exhibit ST-ST41, 2548.
oThe process of building at property ‘C’ stalled due to a dispute with a neighbouring property and a subsequent stop order that was issued on 15 July 2011.[61]
[61] Exhibit A1, 77-82, 231-233, 235-241.
oMs Di Paolo moved into property ‘C’ in about April 2013 and all building orders for property ‘C’ were withdrawn as at 17 August 2015.[62]
[62] Exhibit A1, 241.
·Ms Di Paolo and Mr Di Paolo sold property ‘C’ in May 2016 (with the date of settlement in September 2016) for $5.5 million.[63] A statement of adjustment dated 9 September 2016 set out ‘settlement cheques’ were distributed as follows:
[63] Exhibit ST-ST20, 2308-2310.
Tino Di Paolo $960,305.82
Sophie Di Paolo $988,000
The Mandoulidis Family Trust $1,892,917.45[64]
[64] Exhibit A1, 73.
·A ‘Parenting Plan Agreement’ between Ms Di Paolo and Mr Di Paolo dated 25 May 2016 in relation to their shared ownership of property ‘C’ stated Mr Di Paolo’s investment to property ‘C’ ‘reflects on title as 25%’ ownership and Ms Di Paolo’s investment ‘reflects on title 75%’ ownership.[65]
[65] Exhibit A1, 401.
·There are no contemporaneous Centrelink (or other) records that show Ms Di Paolo advised Centrelink about:
oher purchase of property ‘C’ in 2008;
othe process of demolishing and building a house at property ‘C’ from 2009 to 2013;
othe estimated cost and value of the construction of building a house and swimming pool at property ‘C’;
oher agreement with Mr Di Paolo about their respective ownership shares in property ‘C’; or
othe sale amount of property ‘C’ in 2016.
·Centrelink records for the period from October 2008 to August 2016 regarding Ms Di Paolo’s accommodation show she provided updates to Centrelink about changes to her address, received rent assistance during at least some of this period, and was the subject of a ‘tip off’ about her ownership of property ‘C’ on 23 March 2016 that was resolved.[66] Ms Di Paolo gave oral evidence that the reference to a ‘tip off’ in the Centrelink records showed she told Centrelink about the settlement of property ‘C’.[67] However, I find no Centrelink record that shows she advised Centrelink about the sale of property ‘C’ following settlement in September 2016, almost six months after the ‘tip off’.
[66] Exhibit T-T139, 1941-1943.
[67] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 61.
Rental property ‘PC’ [redacted – property address]
·Ms Di Paolo signed:
oa Residential Tenancy Agreement for rental property ‘PC’ on 30 August 2016 that stated monthly rent as $2,200;[68] and
[68] Exhibit A1, 427.
oa Bond Lodgement form for rental property ‘PC’ on 7 September 2016.[69]
[69] Exhibit A1, 429.
·Ms Di Paolo’s oral evidence about when she moved from rental property ‘PC’ to property ‘D’ was unclear and she gave different dates, variously 2017 and 2018.[70]
[70] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 61 and 20 June 2023, 120-121.
·A joint [redacted – name of bank] ‘C’ Bank account [redacted – account number] in the name of account holders, ‘Tino Di Paolo and Sofia Mandoulidis’, shows $2,200 was deposited from the ‘RTBA [address of rental property ‘PC’]’ on 4 July 2018.[71] I accept this is the bond release for rental property ‘PC’ from the Residential Tenancy Bond Authority as the amount of $2,200 and the address is consistent with details in the Residential Tenancy Agreement and the Bond Lodgement.
[71] Exhibit ST-ST27, 2380.
·This evidence shows that Ms Di Paolo lived at rental property ‘PC’ from October 2016 to June 2018 (apart from the periods she was hospitalised in April–June 2017 and travelled overseas from June–September 2017).
Property ‘D’ [redacted – property address]
·Ms Di Paolo (individually) signed documents to purchase property ‘D’ on 23 November 2016 for $3 million.[72] An undated document titled Statement of Funds for property ‘D’ filed by Ms Di Paolo has a handwritten ‘sale’ amount of ‘$2,950,000’.[73]
[72] Exhibits ST-ST24, 2349; A1, 261.
[73] Exhibit A1, 215
·The transfer of land for property ‘D’ dated 18 January 2017 was signed by both Ms Di Paolo and Mr Di Paolo.[74] Land transfer records show Ms Di Paolo has owned property ‘D’ as ‘joint proprietors’ with Mr Di Paolo from 7 February 2017.[75] (Details about whether property ‘D’ was rented in the period from February 2017 to June 2018 are set out below).
[74] Exhibit T-T56, 414.
[75] Exhibit ST31, 2457.
·Ms Di Paolo has lived at property ‘D’ from about July 2018 to the present.
·A ‘RP Data’ report printed on 21 May 2020 states property ‘D’ was sold on 23 November 2016 for $3 million and a development permit was submitted in July 2018 for a ‘swimming pool/spa’ with a ‘build value’ of ‘$350,000’.[76]
[76] Exhibit ST-ST31, 2449.
·Ms Di Paolo obtained an owner-builder certificate of consent for property ‘D’ on 3 July 2018.[77]
·A written statement by Ms Di Paolo on a Centrelink form dated 25 February 2022 stated property ‘D’ is her primary residence and has been ‘for some time’ and she has ‘50% ownership’ in the property.[78]
·Ms Di Paolo told the Tribunal that she owns ‘75%’ of property ‘D’ and Mr Di Paolo owns ‘25%’ of property ‘D’,[79] which is based on the ‘Parenting Plan Agreement’ made by her and Mr Di Paolo dated 25 May 2016 in relation to property ‘C’.[80]
·There are no documents before the Tribunal that verify Ms Di Paolo owns 75% of property ‘D’ and Mr Di Paolo owns 25% of property ‘D’.
·There are no contemporaneous Centrelink (or other) records that show Ms Di Paolo informed Centrelink about:
oher purchase of property ‘D’;
othe amount that she paid for property ‘D’;
oher agreement with Mr Di Paolo about their respective ownership shares of property ‘D’; and
oher ownership of property ‘D’ as joint proprietors with Mr Di Paolo from 7 February 2017.
[77] Exhibit T-T61, 422.
[78] Exhibit A1, 284.
[79] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 21 June 2023, 221-223.
[80] Exhibit A1, 401.
CONSIDERATION
The evidence before the Tribunal comprises extensive documentation filed by the parties, the oral evidence of Ms Di Paolo over three hearing days and the oral evidence of six further witnesses for the Applicant.
The Applicant’s counsel made detailed written submissions regarding the evidentiary onus and standard of proof required in this matter; in particular, the ‘significant obligations’ of the Respondent as a model litigant and the ‘grave consequences’ for Ms Di Paolo.[81] The Applicant’s counsel submitted that the Tribunal must maintain a neutral position and that there is ‘no legal onus of proof on either party’; the ‘best evidence’ is to be preferred; and, as articulated in by the High Court in Briginshaw v Briginshaw (Briginshaw)[82], the ‘affirmative of an allegation’ should be made out to the ‘reasonable satisfaction’ of the Tribunal, and ‘“reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect references’.[83] Closing submissions by the Applicant’s counsel included a view that the Respondent ‘failed to identify, obtain statements from, or call witnesses’ including Mr Chris Mandoulidis (Ms Di Paolo’s brother) and Mr Tino Di Paolo to give evidence at the hearing,[84] and assumed ‘a highly adversarial approach to the proceedings’.[85]
[81] Closing Submissions for the Applicant, 8 August 2023, 25.
[82] Briginshaw v Briginshaw (1938) 60 CLR at [361]-[362].
[83] Submissions for the Applicant, 20 March 2023, 35, 40; Closing Submissions for the Applicant, 8 August 2023, 15.
[84] Closing Submissions for the Applicant, 8 August 2023, 25-39.
[85] Reply Closing Submissions for the Applicant, 2 October 2023, 3.
In closing submissions, the Respondent’s counsel contended that it ‘was always open to the Applicant to summon any witness she considered would assist her case…[and her] failure to do so’ was not the responsibility of the Respondent.[86] The Respondent also made serious claims about the credibility of Ms Di Paolo based on the documentary evidence and her oral evidence at the Tribunal hearing.
[86] Respondent’s Closing Submissions, 18 September 2023, 32.
At the outset of my consideration of this matter, I make the following observations.
First, I accept unequivocally the premise of the Applicant’s submissions that the Tribunal must uphold a neutral and objective position in the matter, and consider and weigh all the relevant evidence to ensure the correct or preferable decision is made in accordance with the objectives and requirements of the Administrative Appeals Tribunal Act 1975 (Cth). This includes making findings based on my ‘reasonable satisfaction’ of the evidence consistent with the decision of Briginshaw.
Second, despite extensive documentation filed with the Tribunal prior to, at and after the hearing, many documents were presented as disjointed or incomplete; or multiple versions of similar (but not identical) documents were filed. These gaps and/or inconsistencies in documents filed by both parties made the process to determine the facts in this matter difficult and time-consuming. Ultimately, in my consideration of the evidence, I have carefully identified these gaps and inconsistencies in the evidence and noted where this has limited the findings that I have been able to make.
Third, related to submissions by the Applicant’s counsel regarding the evidentiary onus and my observations about gaps in the documentary evidence, I note that Ms Di Paolo was in receipt of social security payments from 2003 to 2021 – a period of more than 18 years. As set out in multiple letters from Centrelink to Ms Di Paolo during this 18-year-period and stipulated in the Social Security (Administration) Act, Ms Di Paolo’s continued eligibility for these payments required her to declare all her personal and financial circumstances to Centrelink as well as any changes to her circumstances within 14 days.
Clearly, Ms Di Paolo is the only person with all the relevant information about her circumstances over this 18-year-period. I consider, particularly where there are gaps and inconsistencies in the documentary evidence, that there is clear onus on Ms Di Paolo – as the person whom this matter is about and who has been advised of her obligations to inform Centrelink about her circumstances – to assist (as best as she is able) to fill in the gaps and explain inconsistencies in the documents.
Ms Di Paolo said at the Tribunal hearing that she told Centrelink ‘every part of [her] life’, questioned the accuracy of Centrelink’s records and said that she had kept her own notes in ‘either a diary or piece of paper’ of her interactions and phone calls with Centrelink staff.[87] Despite these statements, however, Ms Di Paolo did not file any records of notes she said she maintained from her interactions with Centrelink with the Tribunal. I note these records may have assisted to clarify facts in this matter. I also consider the responsibility for filing these records held by Ms Di Paolo – if they exist – to be directly with her.
[87] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 42 and 20 June 2023, 156.
Fourth, Ms Di Paolo’s oral evidence over three days was frequently ambiguous, opaque and abstruse. Ms Di Paolo did not directly answer various questions during evidence-in-chief, or her responses were to affirm or reject leading questions. In cross-examination, Ms Di Paolo either did not answer many of the questions asked of her or became defensive, argumentative and emotional. I note that this occurred despite patient questioning by the Respondent’s counsel, who repeated questions multiple times to allow Ms Di Paolo the opportunity to provide her evidence. As detailed in relevant sections below, I find that Ms Di Paolo’s credibility was seriously undermined by her oral evidence. For these reasons, I have considered but placed minimal weight on her oral evidence where it is inconsistent with contemporaneous documentary evidence and/or credible witnesses.
Fifth, given the issues with the evidence that I have outlined, Ms Di Paolo may have been assisted by evidence at the hearing from Mr Mandoulidis, who could have given evidence about Ms Di Paolo’s involvement (or not) in the Trust, and Mr Di Paolo, who could have provided evidence about his relationship with Ms Di Paolo.
At a telephone directions hearing prior to the substantive Tribunal hearing, the Respondent requested Mr Mandoulidis attend the hearing in person to give oral evidence and put the Applicant on notice that his ‘credit would be an issue’.[88] However, the Applicant’s counsel advised on the first day of hearing that Mr Mandoulidis had ‘been in hospital’ and was ‘not available to give evidence’, including by telephone.[89] A medical certificate filed with the Tribunal stated that Mr Mandoulidis ‘has a medical condition and will be unfit to continue his usual occupation from 19 June 2023 to 23 June 2023 inclusive’.[90] As the Applicant filed no further evidence, the only evidence from Mr Mandoulidis before the Tribunal is a half-page letter dated 16 March 2004, and one-and-a-half-page list of written questions and brief answers dated 20 March 2023.[91]
[88] Respondent’s Closing Submissions, 18 September 2023, 19.
[89] Applicant’s Counsel, Transcript of Proceedings, 19 June 2023, 2.
[90] Exhibit A1, 707.
[91] Exhibits A1, 1-2; ST-ST96, 3585.
In relation to whether Mr Tino Di Paolo could attend the hearing to give evidence, Ms Di Paolo told the Tribunal she had most recently spoken with Mr Di Paolo by telephone the day prior to the hearing commencing but did not ask him whether he would give evidence to the Tribunal about their relationship.[92] This means there is no evidence before the Tribunal from Mr Di Paolo except for a brief letter dated 6 May 2014.[93]
[92] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 128-129.
[93] Exhibit A1, 342.
In conclusion, while I make no adverse findings about the absence of Mr Mandoulidis and Mr Di Paolo as witnesses at the Tribunal hearing, I reiterate my view that their evidence may have assisted to clarify or complete gaps in the evidence presented by the Applicant.
A. THE MANDOULIDIS FAMILY TRUST
The issue is whether assets and/or income from the Trust are attributable to Ms Di Paolo in the period from 18 July 2003 to 16 September 2021.
Evidence

Evidence before the Tribunal relating to Ms Di Paolo’s involvement with the Trust includes:
·documents regarding the establishment of the Trust and Ms Di Paolo’s involvement with the Trust;
·the evidence of Mr ‘TP’;
·the decision of the SSAT dated 8 April 2004;
·the oral evidence of Ms Di Paolo;
·the evidence of Mr Chris Mandoulidis and Mrs Theodora Mandoulidis;
·financial documents and records relating to the Trust and Ms Di Paolo; and
·the assets of the Trust.
Documents relating to the Trust and Ms Di Paolo’s involvement with the Trust
The ‘Discretionary Trust Deed: The Mandoulidis Family Trust’ (Trust Deed) was prepared by lawyers ‘BMC’, signed by Ms Di Paolo (as she was then named, ‘Sofia Napoli’) on 7 April 1999 and date stamped with a State Revenue Victoria stamp on 20 April 1999.[94] The Schedule to the Trust Deed names:
·the Trustee as ‘Sofia Napoli’;
·specified beneficiaries as ‘Sofia Napoli and Chris Mandoulidis’;
·‘general beneficiaries’ as including ‘every grandparent, parent, parent-in-law, spouse, brother, brother-in-law, sister, sister-in-law, niece, nephew and child of a specified beneficiary’; and
·the ‘Appointor’ as Sofia Napoli, Chris Mandoulidis and Theodora Mandoulidis.[95]
[94] Exhibits T-T2, 25, 27, 35; A1, 18-37.
[95] Exhibit T-T2, 35.
The Trust Deed definitions state that ‘Appointor’ means the persons named and, if there are more than one person, then ‘such persons shall act jointly’. Subclause 25(1) of the Trust Deed relevantly sets out, ‘The Appointor has power to appoint in writing a new of additional Trustee…and to remove any Trustee’.[96] The powers of the Trustee are outlined in clauses 47–52 of the Trust Deed and include that the Trustee has ‘all the powers over and in respect of the trust fund and the investments thereof which it could exercise if it were the absolute and beneficial owner…’[97]
[96] Exhibit T-T2, 33.
[97] Exhibit T-T2, 37.
There are various documents (including different versions and dates of similar documents) before the Tribunal that Ms Di Paolo says show that she resigned from the Trust on 9 May 1999. These include:
(a)An unsigned and incomplete ‘Deed of Amendment The Mandoulidis Family Trust, Trust Deed’ made on the ‘9 day of May 1999’.[98]
[98] Exhibit T-T3, 43-46.
(b)A different version of the ‘Deed of Amendment The Mandoulidis Family Trust, Trust Deed’[99] at (a) above signed by ‘Sophie Napoli’ and Chris Mandoulidis, and attached to minutes of a meeting of the ‘Trustees of the Mandoulidis Family Trust’ held on 9 May 1999. These minutes record (amongst other matters) that Sophie Napoli and Chris Mandoulidis were present and include statements about:
[99] Exhibit A1, 13.
(i)amending the ‘deed by the addition of clause 39 [sic]’ where clause 39 refers to ‘Change of Trustee’ and references ‘tax concessions under the Act [sic]’;
(ii)proposing the trustee ‘Sophie Napoli’ ‘retire as trustee of…the Trust’ and Chris Mandoulidis ‘be the only Trustee’;[100]
[100] Exhibit A1, 14.
(iii)Sophie Napoli giving ‘notice to resign as the Trustee of the…Trust’.[101]
[101] Exhibit A1, 15.
(c)A different version of ‘minutes’ of a meeting ‘held at the registered office on 9 day of May 1999’ to (b) above that include the following resolutions and is signed by ‘Sofia Napoli’:
Resolution:
1.    Sofia Napoli and [sic] to be removed as a specified beneficiary
2.    Sofia Napoli shall resign as joint Appointor
3.    Sofia Napoli shall resign as trustee of the trust…[102]
[102] Exhibit A1, 16.
(d)A ‘Deed of Retirement of Trustee and Appointor & Amendment The Mandoulidis Family Trust, Trust Deed’ signed by Sofia Napoli and Chris Mandoulidis, witnessed by ‘A/Sgt BT’ that refers to the ‘original deed’ dated ‘3 [sic] April 1999’ and sets out:
(i)Sofia Napoli is a ‘retiring appointor’ and ‘retiring trustee’ and Chris Mandoulidis is a ‘continuing appointor’ and ‘new trustee’;
(ii)this ‘deed’ is made the ‘9^th day of May….2003’ (handwritten except ‘20’) with ‘2003’ crossed out and ‘1999’ handwritten and initialled ‘SN’; and
(iii)declarations including amendments to the deed and schedule of trust deed, Sofia Napoli is removed ‘as a named beneficiary’ and ‘shall renounce all rights to receive income or capital distributions from the trust’ and the ‘joint appointors’ accept the retirement of Sofia Napoli.[103]
(e)Another version of the ‘Deed of Retirement of Trustee and Appointor & Amendment The Mandoulidis Family Trust, Trust Deed’ at (d) above ‘prepared by [Mr ‘TP’] lawyer’ that states ‘this deed’ is made the ‘9 day of May 1999’.[104]
The following documents were also filed with the Tribunal on 11 November 2023:
(f)A further version of the ‘Deed of Retirement of Trustee and Appointor & Amendment The Mandoulidis Family Trust, Trust Deed’ at (d) and (e) above ‘prepared by [Mr ‘TP’] lawyer’ that states ‘this deed’ is made the ‘9 day of Feb 2003’, with ‘day of’ and ‘20…’ typed.[105]
(g)Another version of the ‘minutes’ of a meeting set out at paragraph (c) above that is not signed by ‘Sofia Napoli’ and stated the meeting was ‘held at the registered office on the 8 day of Feb 2003’.[106]
(h)An undated ‘notice of retirement as Appointor’ signed by ‘Sofia Napoli’.[107]
[103] Exhibit T-T4, 47-49.
[104] Exhibit A1, 8-11.
[105] Exhibit ST-ST88, 3514-3517.
[106] Exhibit ST-ST87, 3512.
[107] Exhibits A1, 17 and ST-ST87, 3513.
Evidence of Mr ‘TP’ (lawyer)
Ms Di Paolo filed emails from Mr ‘TP’ including an email dated 30 April 2022 that stated he had received instructions from ‘M’ accountants, the accounting firm that manages the Trust accounts, to ‘prepare a deed reflecting that [Ms Di Paolo was] to retire from the Mandoulidis Trust’. He explained this occurred within the context of:
considerable confusion and injustice because Centrelink announced [it] would consider beneficiaries to own all the assets of a family trust and be denied benefits to which they would otherwise have been entitled to [with the introduction of] … the Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Act 2000.[108]
[108] Exhibit A1, 57.
Mr ‘TP’ gave oral evidence at the Tribunal hearing on 21 June 2023, confirming that he was instructed by ‘M’ accountants to ‘prepare a deed of retirement and appointment’ and ‘M’ accountants then forwarded him the Trust Deed. He said he prepared a template deed of retirement and appointment, which he ‘emailed or posted’ back to the accountant with the ‘original deed’.[109] He recalled this happened ‘twenty years ago’.[110] He explained that he did not prepare a ‘bundle of documents’, rather, only ‘a deed of retirement and appointment’.[111]
[109] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 243.
[110] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 243.
[111] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 246.
Mr ‘TP’ said he was ‘not a party to the signing of these documents’ and did not ‘know who signed it’.[112] He said he has never met Ms Di Paolo and she (or other members of her family) never attended his solicitors’ office.[113] Mr ‘TP’’s evidence in this regard differs to a written statement by Ms Di Paolo dated 2 May 2022, in which she stated the deed of retirement was executed by Mr ‘TP’ and another solicitor.[114]
[112] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 245.
[113] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 255.
[114] Exhibit A1, 194.
Mr ‘TP’ was taken to various documents set out at paragraph 61 above. He confirmed he prepared the documents as a template and prior to execution at pages 8-11 and 16-17 of Exhibit A1 (at (e)) but did not prepare the document at (b) that was filed by Ms Di Paolo as supporting her retirement from the Trust. He explained that the document he prepared ‘would have comprised the requirements to amend the deed and also a trust minute’.[115]
[115] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 247.
The question of the date of any deed effecting the retirement of Ms Di Paolo from the Trust and in particular, whether it was dated in 1999 or 2003 or another date commencing ‘20…’, was plainly answered by Mr ‘TP’ in his oral evidence to the Tribunal. He said amendments to social security legislation (the Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Act 2000) led to people resigning as trustees and beneficiaries of trusts so as to ensure they could continue to be eligible for and receive social security benefits. He repeatedly said he could not have prepared the deed of retirement for Ms Di Paolo in 1999 because amendments to social security legislation were not introduced until the year 2000 or later.[116]
[116] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 256, 259-260.
Mr ‘TP’ told the Tribunal that it ‘looks as though [the deed] dated ‘9 May 2005’ [sic] has ‘been retrospectively amended to 1999’.[117] He said the template was ‘brought in at least [the year] 2000’ and ‘that’s when [he] was making all the changes’.[118] He said he did not date documents that he prepared but was ‘in the habit of including the first two years of the year’ and would head a document date as ‘blank day of blank [month], 20…[year]’.[119] Mr ‘TP’ stated that ‘someone has removed the ‘20’ from the date’ on the deed document he prepared because ‘20…’ was in his ‘draft copy’ he sent to the accountants and still has on file.[120]
[117] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 255, 258.
[118] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 258.
[119] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 248, 254.
[120] Oral evidence of Mr ‘TP’, Transcript of Proceedings, 21 June 2023, 261.
Decision of the Social Services Appeals Tribunal dated 8 April 2004
The issue of whether, or when, Ms Di Paolo resigned from the Trust was considered by the SSAT in its decision dated 8 April 2004 (dispatched on 19 April 2004).[121] The SSAT decision included information generally consistent with Ms Di Paolo’s oral evidence to this Tribunal including that her father died in 1998, the Trust was established in 1999 to manage assets from her father’s estate, the family had a meeting later in 1999 and decided Ms Di Paolo would resign as trustee, and they subsequently saw ‘a solicitor and the minutes of the meeting and her resignation were drawn up’.[122]
[121] Exhibit T-T10.1, 60.
[122] Exhibit T-T10.1, 62-63.
However, the SSAT decision set out a different oral record from Ms Di Paolo regarding the date on documents relating to the family meeting and her resignation as trustee of the Trust. This is because the SSAT decision referred to documents containing information consistent with documents filed with this Tribunal but dated as being signed in 2003:
·Minutes of a meeting of the Trust ‘dated 8 February 2003’, where it was ‘resolved to remove Sofia Napoli as a specified beneficiary, joint appointor and trustee’ and ‘resolved to appoint Chris Mandoulidis as trustee and amend the trust deed accordingly’.
·A deed of retirement and appointor dated ‘9 February 2003’.
·An undated document signed by Ms Napoli and Mr Mandoulidis and witnessed by ‘A/Sgt BT’.[123]
I note these documents dated 8 and 9 February 2003 appear to be the documents received that I have outlined at paragraph 61 (f) and (g); these were included in the set of documents filed with the Tribunal on 10 November 2023.
[123] Exhibit T-T10.1, 63-66.
The SSAT decision outlined ‘a number of problems with these documents’ including:
Miss Napoli asserts that the meeting of the appointors and her resignation as trustee, appointor and beneficiary all occurred in 1999 and she has nothing to do with the Trust. However the documents supporting this are all dated February 2003 and appear to be a copy printed for her to use with Centrelink. She stated to the tribunal that she dated them herself when she took them in to Centrelink. There is no document before the tribunal actually dated 1999.
The 1999 trust deed states that the appointors must act jointly – the tribunal takes this to mean all 3 appointors – Miss Napoli, her brother and her mother, Theodora Mandoulidis must act together. The minutes of the trust meeting only show Miss Napoli and her brother making the resolution to remove Miss Napoli as trustee, appointor and beneficiary therefore the action does not seem to meet this requirement of the Trust deed. This makes it difficult for the tribunal to find that these documents are legally valid. [124]
[emphasis added]
[124] Exhibit T-T10.1, 66.
The SSAT decision also referred to and commented on various tax returns of the Trust that listed Ms Napoli as a beneficiary and concluded that there ‘is no evidence to support [Ms Di Paolo’s] claim that she has had nothing to do with the Trust’ since 1999.[125]
[125] Exhibit T-T10.1, 67.
Evidence of Ms Di Paolo
Ms Di Paolo gave oral evidence at the hearing that she has not had any involvement in the Trust since 1999. She said that, although she could not recall signing the Schedule to the Trust Deed in April 1999 as ‘everything was quite vague at the time’, she accepted it was her signature on the document.[126]
[126] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 24.
Ms Di Paolo understood that she was listed as Trustee for the Trust because she was clear that she ‘retired’ from the Trust in May 1999 as a way of ‘correcting what initially happened’.[127] She said she, her mother and her brother (and ‘a witness’, who she could not recall) held a meeting on ‘9 May 1999’ at their mother’s house where it was decided that she would retire from the Trust.[128] Ms Di Paolo agreed that ‘all the documents were signed all at the same time’ except for one document that involved her and Mr Mandoulidis attending a solicitors’ office to execute the document.[129] This was the document signed by ‘A/Sgt BT’, who she described as ‘a lawyer’.[130] She said she could not recall the name or location of the solicitors’ office;[131] however, she said documents she filed with the Tribunal (summarised at paragraph 61 (b), (c) and (e)) were the documents she signed on 9 May 1999.
[127] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 27.
[128] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 28.
[129] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 28.
[130] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 19 June 2023, 29 and 20 June 2023, 164-165.
[131] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 172.
During cross-examination, Ms Di Paolo was repeatedly asked – in view of the differences between her oral evidence to this Tribunal and her reported evidence in the SSAT decision about dates on documents regarding her retiring from the Trust – whether she had altered any of the documents before the Tribunal that related to her retirement from the Trust. She prevaricated and quibbled with the question before stating that she did not agree with the assertion that she had altered the date on the deed of retirement so she would remain entitled to social security benefits.[132]
[132] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 21 June 2023, 208-212.
Ms Di Paolo continually said she has had nothing to do with the Trust and has not received any financial or other benefit from the Trust since she retired as a trustee and as appointer of the Trust on 9 May 1999.[133] Her oral evidence was that she has never ‘received one distribution’ from the Trust.[134] Further:
My understanding is, I retired as a trustee, as appointer, or anything to do with that original – if that’s that original deed. I’ve had nothing to do with the trust, I’m going to repeat that a million times, until I die. I had nothing to do with that trust. I’ve signed no tax returns, I’ve paid no bills, I had no – I’ve had nothing to do with that. I don’t know how much clearer I have to make it.[135]
[133] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 21 June 2023, 193.
[134] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 98.
[135] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 171.
While Ms Di Paolo was definite in her oral evidence to this Tribunal that she retired from the Trust on 9 May 1999, I note that there is other evidence from her referring to a different date of retirement. This is a written statement signed by her as ‘S Mandoulidis’, dated 30 December 2004 and provided to Centrelink, that referred to a ‘gift deprivation date of 6/1/04’ and noted this ‘should be February/March 1999 as this is when [she] lost any rights to the Trust’.[136] It is unclear how Ms Di Paolo could have resigned from or ‘lost any rights’ in the Trust in February/March 1999 given she did not sign the Trust Deed until 7 April 1999, which is after this period. This inconsistency in Ms Di Paolo’s evidence about the date she says she retired from the Trust – and the connection of this with the notion of gift deprivation – reinforces questions about the credibility of her oral evidence regarding the date she says she retired from the Trust.
[136] Exhibit A1, 157.
Other documents completed by Ms Di Paolo and filed with the Tribunal on 10 November 2023 are also inconsistent with her oral evidence that she resigned from the Trust on 9 May 1999 and subsequently had nothing to do with the Trust. These documents include:
(a)‘Mod R Real estate details’ Centrelink forms provided to Centrelink and date stamped on 18 April 2002 for property ‘E’ [redacted – property address], property ‘F’ [redacted – property address] and property ‘G’ [redacted – property address]: these forms were completed and signed by ‘S Napoli’ and declared she owned these properties with ‘others’ as part of the Trust.[137]
(b)‘Mod R Real estate details’ Centrelink forms provided to Centrelink and date stamped on 1 August 2003 for property ‘F’ and property ‘G’: these forms were completed and signed by ‘S Napoli’ and declared she owned ‘15%’ of these properties.[138]
(c)A ‘Mod PT Private Trust’ Centrelink form provided to Centrelink, signed by ‘S Napoli’ but undated, that declared information about the Trust including that: ‘Sophie Napoli’ is the ‘contact person for future annual financial statements of the trust’; the ‘trustees’ are ‘Sophie Napoli’ and ‘Chris Mandoulidis’; the beneficiaries of the Trust include ‘Sophie Napoli’ and ‘Chris Mandoulidis’; ‘Chris Mandoulidis’ has ‘informal control of the trust’ and ‘use and enjoyment of the assets and/or income of the trust’; ‘Sophie Napoli’ has the ‘power to veto a trustee’s decision [or] replace the trustee [or] control the trustee’s actions [or] change the trust deed’; and lists real estate owned by the Trust.[139]
(d)A ‘Mod PT Private Trust’ Centrelink form provided to Centrelink, date stamped on 1 August 2003 and signed by ‘S Napoli’, that declares information about the Trust including that: ‘Sophie Napoli’ is listed as a ‘trustee’ and beneficiary’ of the Trust’.[140]
[137] Exhibit ST-ST83, 3475-3485.
[138] Exhibit ST-ST83, 3518-3527
[139] Exhibit ST-ST90, 3530-3545.
[140] Exhibit ST-ST91, 3550-3564.
Evidence of Mr Chris Mandoulidis and Mrs Theodora Mandoulidis
A letter by Mr Chris Mandoulidis dated 16 March 2004 stated that ‘any matter’ relating to the Trust should be referred to him.[141] Mr Mandoulidis wrote that:
·his parents decided to ‘commence a family trust’ in 1998 and it was his father’s wish that he ‘take control of all family matters’;
·after the death of his father in 1999 and ‘conferring with [his] mother, Dora and sister, Sophie Napoli’ they decided to sell the ‘original residential home’ and asked their ‘solicitor to amend the Trust to [his] full control’; and
·he ‘is responsible for all properties and matters relating to the trust such as payment of taxes, utilities etc.’[142]
[141] Exhibit ST-ST96, 3585.
[142] Exhibit ST-ST96, 3585.

Based on the evidence, I make the following findings of fact:
(a)I am satisfied that were substantial amounts of money being deposited into, transferred between and withdrawn from ‘A’ Bank and ‘B’ Bank accounts held by Ms Di Paolo individually. However, I consider there is not sufficient evidence to find that these transactions are income as defined in section 8 of the Social Security Act. This is based on a beneficial interpretation of Ms Di Paolo’s oral evidence that many of the transactions related to the sale, build/renovation and purchase of properties.
(b)Given gaps and inconsistencies in the evidence, I have not determined amounts for ‘gifts’ as income in accordance with section 8 of the Social Security Act. I have also not considered amounts that could be described as earned interest.
(c)There is no evidence before the Tribunal that shows Ms Di Paolo declared financial transactions related to the sale and purchase of properties to Centrelink.
Conclusion
I am satisfied that other assets held and income received by Ms Di Paolo (individually and jointly) from 18 July 2003 to 16 September 2021 include the following:
(a)Ms Di Paolo’s interest in property ‘C’ from 15 December 2008 to 1 April 2013 is an assessable asset in accordance with section 11 of the Social Security Act. Ms Di Paolo’s interest in property ‘C’ was:
(i)100% from 15 December 2008 to 17 April 2009; and
(ii)75% from 18 April 2009 to 1 April 2013.
(b)Ms Di Paolo’s interest in property ‘D’ from 7 February 2017 to 30 June 2018 is an assessable asset in accordance with section 11 of the Social Security Act. As Ms Di Paolo owned property ‘D’ as joint proprietors with Mr Di Paolo, I attribute her 50% ownership of property ‘D’.
(c)Rental payments for property ‘D’ totalled $97,944 from 1 March 2017 to 7 May 2018 and comprise income as defined in section 8 of the Social Security Act. As Ms Di Paolo owned property ‘D’ as joint proprietors with Mr Di Paolo, I attribute Ms Di Paolo 50% of this income.
I now turn to considering Ms Di Paolo’s attributable share of the Trust assets, and the assets held and income received by Ms Di Paolo individually and jointly.
D. AMOUNTS OF ASSETS AND INCOME ATTRIBUTABLE TO MS DI PAOLO
The issue is deciding the amounts of assets and/or income attributable to Ms Di Paolo to determine:
·whether her assets and income are above the assets value limits and/or income limits relevant to her circumstances; and, if so,
·whether she was eligible to receive parenting payment single from 18 July 2003 to 7 February 2007 and disability support pension from 8 February 2007 to 16 September 2021.
Asset value limits are affected by whether a person is single or a member of a couple, and whether they are a ‘homeowner’ or a ‘non-homeowner’.
I have already set out my reasons for finding Ms Di Paolo was a member of a couple from 1 May 2013 to at least 16 September 2021 at paragraphs 113–189 above.
In relation to the periods that Ms Di Paolo is a homeowner or a non-homeowner, the Social Security Act at subsection 11(4) defines a member of a couple who is a ‘homeowner’ as follows:
(4) For the purposes of this Act:
…
(b) a person who is a member of a couple is a homeowner if:
(i) the person, or the person’s partner, has a right or interest in one residence that is:
(A) the person’s principal home; or
(B) the partner’s principal home; or
(C) the principal home of both of them; and
(ii) the person’s right or interest, or the partner’s right or interest, in the home gives the person, or the person’s partner, reasonable security of tenure in the home; and
(c) a person (whether a member of a couple or not) is a homeowner while:
(i) the whole or a part of the proceeds of the sale of the person’s principal home are disregarded under subsection 1118(2); or
(ii) the value of a residence, land or a structure is disregarded under subsection 1118(2).
[emphasis in original]
Based on the evidence before the Tribunal, I am satisfied that:
·Ms Di Paolo was a non-homeowner at the following assessment dates:
o18 January 2009, 1 July 2009, 1 July 2010 and 1 July 2017 on the basis that she was paying rent for accommodation as at these dates.
·Ms Di Paolo was a homeowner for the following relevant assessment dates:
o18 July 2003, 1 July 2004, 1 July 2005, 1 July 2006, 1 July 2007 and 1 July 2008 on the basis that she was living at property ‘A’, which she owned, as at these dates;
o1 July 2013, 1 July 2014, 1 July 2015 and 1 July 2016 on the basis that she was living at property ‘C’, which she jointly owned with Mr Di Paolo, as at these dates; and
o1 July 2018, 1 July 2019, 1 July 2020 and 1 July 2021 on the basis that she was living at property ‘D’, which she jointly owned with Mr Di Paolo, as at these dates.
In relation to the assessment dates of 1 July 2011 and 1 July 2012, the Respondent made submissions that Ms Di Paolo was a homeowner as at these dates because she was living at property ‘G’.[349] I am satisfied that the evidence shows Ms Di Paolo was registered as the sole proprietor of property ‘G’ from 13 December 2000 to 26 July 2022 and property ‘G’ has been assessed as an asset held by the Trust. I therefore find that Ms Di Paolo was a homeowner as at the assessment dates of 1 July 2011 and 1 July 2012 because she had a ‘right or interest’ in property ‘G’ that gave her ‘reasonable security of tenure in the home’.
[349] Statement of Facts, Issues and Contentions of the Respondent, 4 May 2023, paragraph 202.
I have also considered the home ownership status of members of couples if they are temporarily ‘estranged’ as set out in the Social Security Guide.[350] Consistent with my reasons at paragraphs 113–189 above, I am satisfied that Ms Di Paolo was a member of a couple with Mr Di Paolo from 1 May 2013 to at least 16 September 2021 and she continued to live in the home/s that they owned, including during any periods Mr Di Paolo was at ‘R’.
[350] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.6.3.20.
I have listed Ms Di Paolo’s attributable share of the Trust assets at paragraph 111 above. I have determined at paragraph 223 that Ms Di Paolo’s assets included 100% of property ‘C’ from 15 December 2008 to 17 April 2009; 75% of property ‘C’ from 18 April 2009 to 1 April 2013; and 50% of property ‘D’ from 7 February 2017 to 30 June 2018. I have also determined at paragraph 223 that 50% of the rental payments for property ‘D’ that totalled $97,944 are attributed as income to Ms Di Paolo for the period from 1 March 2017 to 7 May 2018. To be very clear, I have only considered assets attributed to Ms Di Paolo from the Trust or otherwise and income received by Ms Di Paolo where I am satisfied the evidence is indisputable. Consistent with the decision in Briginshaw, I have been careful not to draw adverse inferences except where I have ‘reasonable satisfaction’ regarding the evidence.
The relevant assets value limit for Ms Di Paolo between 2003 and 2021 were:[351]
[351] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.10.3.
·On 18 July 2003, the assets value limit for a single homeowner was $149,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive parenting payment single at this assessment date because her attributable share of the Trust assets was $360,000.
·On 1 July 2004, the assets value limit for a single homeowner was $153,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive parenting payment single at this assessment date because her attributable share of the Trust assets was $360,000.
·On 1 July 2005, the assets value limit for a single homeowner was $157,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive parenting payment single at this assessment date because her attributable share of the Trust assets was $410,000.
·On 1 July 2006, the assets value limit for a single homeowner was $161,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive parenting payment single at this assessment date because her attributable share of the Trust assets was $410,000.
·On 1 July 2007, the assets value limit for a single homeowner was $166,750.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $422,500.
·On 1 July 2008, the assets value limit for a single homeowner was $171,750.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $422,500.
·On 18 January 2009, the assets value limit for a partnered non-homeowner was $368,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $422,500 and her assets as at this date also included her 100% interest in property ‘C’ ($1,175,000); that is, Ms Di Paolo’s total assets were $1,597,500.
·On 1 July 2009, the assets value limit for a partnered non-homeowner was $381,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $482,500 and her assets as at this date also included her 75% interest in property ‘C’ ($1,175,000 x 75% = $881,250); that is, Ms Di Paolo’s total assets were $1,363,750.
·On 1 July 2010, the assets value limit for a partnered non-homeowner was $389,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $482,500 and her assets as at this date also included her 75% interest in property ‘C’ ($1,175,000 x 75% = $881,250); that is, Ms Di Paolo’s total assets were $1,363,750.
·On 1 July 2011, the assets value limit for a partnered homeowner was $265,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $572,500 and her assets as at this date also included her 75% interest in property ‘C’ ($1,175,000 x 75% = $881,250); that is, Ms Di Paolo’s total assets were $1,453,750.
·On 1 July 2012, the assets value limit for a partnered homeowner was $273,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $572,500 and her assets as at this date also included her 75% interest in property ‘C’ ($1,175,000 x 75% = $881,250); that is, Ms Di Paolo’s total assets were $1,453,750.
·On 1 July 2013, the assets value limit for a partnered homeowner was $279,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $547,500.
·On 1 July 2014, the assets value limit for a partnered homeowner was $286,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $547,500.
·On 1 July 2015, the assets value limit for a partnered homeowner was $291,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $647,500.
·On 1 July 2016, the assets value limit for a partnered homeowner was $296,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $647,500.
·On 1 July 2017, the assets value limit for a partnered non-homeowner was $583,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $557,500 and her assets as at this date also included her 50% interest in property ‘D’ ($3 million x 50% = $1.5 million); that is, Ms Di Paolo’s total assets were $2,057,500.
·On 1 July 2018, the assets value limit for a partnered homeowner was $387,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $557,500.
·On 1 July 2019, the assets value limit for a partnered homeowner was $394,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $532,500.
·On 1 July 2020, the assets value limit for a partnered homeowner was $401,500.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $532,500.
·On 1 July 2021, the assets value limit for a partnered homeowner was $405,000.
I am satisfied that Ms Di Paolo was over the assets value limit to be eligible to receive disability support pension at this assessment date because her attributable share of the Trust assets was $582,500.[352]
[352] Statement of Facts, Issues and Contentions of the Respondent, 4 May 2023, paragraphs 190, 203, 206.
I have also found that Ms Di Paolo received income for property ‘D’ in the amount of $97,944 x 50% = $48,972 for the period from 1 March 2017 to 7 May 2018. As the permissible income limit for each member of a couple on 1 July 2017 was $3,900,[353] I am satisfied that Ms Di Paolo was over the income limit to receive disability support pension at this assessable date.
[353] Guides to Social Policy Law, Social Security Guide, Version 1.313 released 6 November 2023, 4.10.3.
Conclusion
As I find Ms Di Paolo was over the assets value limit from 18 July 2003 to 16 September 2021 and over the income limit from 1 March 2017 to 7 May 2018, I am satisfied that she was overpaid:
·parenting payment single from 18 July 2003 to 7 February 2007; and
·disability support pension from 8 February 2007 to 16 September 2021.
However, Ms Di Paolo may be eligible for a part pension payment during some periods depending on her particular circumstances at the assessment dates; that is whether she was single or partnered, a homeowner or non-homeowner, and her attributable assets and income. For this reason, Ms Di Paolo’s entitlement to parenting payment single from 18 July 2003 to 7 February 2007 and to disability support pension from 8 February 2007 to 16 September 2021 is to be recalculated by the Respondent on the basis of my findings. (This is discussed further in the next section.)
E. WRITE OFF OR WAIVER OF MS DI PAOLO’S DEBTS
Ms Di Paolo’s debts
I have considered the debt calculations for family tax benefit set out in documents filed by the Respondent. I am satisfied that Ms Di Paolo was paid family tax benefit from 1 May 2013 to 30 June 2021 on the basis that she was single and not a member of a couple.
As I have determined that Ms Di Paolo was a member of a couple with Mr Di Paolo from at least 1 May 2013 to 16 September 2021, I find that she was overpaid family tax benefit during this period and, consistent with the debt calculations, she has the following debts:
·$3,640.33 for the 2013–2014 financial year.
·$3,003.95 for the 2014–2015 financial year.
·$4,692.12 for the 2015–2016 financial year.
·$19,417.75 for the 2016–2017 financial year.
·$13,107.01 for the 2017–2018 financial year.
·$15,669.45 for the 2018–2019 financial year.
·$5,157.45 for the 2020–2021 financial year.[354]
[354] Exhibits T-T87; T-T101-T103.
In accordance with section 71 of the Family Assistance Administration Act, I find that these amounts are debts due to the Commonwealth.
I have also considered the debt calculations for Ms Di Paolo’s overpayment of parenting payment single and disability support pension set out in documents filed by the Respondent. I am satisfied these calculations of Ms Di Paolo’s debt amounts (parenting payment single in the amount of $44,438.73 from 18 July 2003 to 7 February 2007,[355] disability support pension in the amount of $59,904.97 from 8 February 2007 to 9 May 2009,[356] and disability support pension in the amount of $188,818.05 from 10 May 2009 to 16 September 2021[357]) are based on different factual findings.
[355] Exhibits T-T87; T-T146, 2027.
[356] Exhibit T-T87.
[357] Exhibits T-T87; T-T146, 2024-2026.
Therefore, the reassessment of Ms Di Paolo’s entitlement to parenting payment single from 18 July 2003 to 7 February 2007 and disability support pension from 8 February 2007 to 16 September 2021 is remitted to the Respondent to be recalculated on the basis of my following findings:
(a)Ms Di Paolo was single from 18 July 2003 to 17 January 2009.
(b)Ms Di Paolo has been a member of a couple with Mr Di Paolo from 18 January 2009 to at least 16 September 2021.
(c)Ms Di Paolo is to be attributed 50% of the Trust assets from 18 July 2003 to 16 September 2021.
(d)Ms Di Paolo assets include 100% of property ‘C’ from 15 December 2008 to 17 April 2009; 75% of property ‘C’ from 18 April 2009 to 1 April 2013; and 50% of property ‘D’ from 7 February 2017 to 30 June 2018.
(e)Ms Di Paolo received 50% of rent payments from property ‘D’ ($97,944 x 50% = $48,972), which is income, for the period from 1 March 2017 to 7 May 2018.
I am satisfied that the amounts Ms Di Paolo has been overpaid parenting payment single and disability support pension are debts due to the Commonwealth in accordance with section 1223 of the Social Security Act.
Are there grounds to write off Ms Di Paolo’s debts?
Section 95 of the Family Assistance Administration Act and section 1236 of the Social Security Act sets out the circumstances in which a debt may be written off: these circumstances include if the debt is irrecoverable at law, or the person has no capacity to repay it, or the person’s whereabouts are unknown, or it is not cost-effective for the Commonwealth to try to recover the debt.
Based on the evidence before the Tribunal, I am not satisfied there is any discretion to apply any of these circumstances to Ms Di Paolo. This is because I find the debts are recoverable at law, Ms Di Paolo has capacity to pay the debts and her whereabouts are known, and there is no evidence that it would not be cost-effective for the Commonwealth to recover the debts. I therefore find there are no grounds to write off Ms Di Paolo’s:
·family tax benefit debts in accordance with section 95 of the Family Assistance Administration Act; or
·parenting payment single and disability support pension debts in accordance with section 1236 of the Social Security Act.
Are there grounds to waive Ms Di Paolo’s debts due to sole administrative error?
Section 97 of the Family Assistance Administration Act sets out that 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 either:
(a)the person received the payment/s in good faith that gave rise to the administrative error proportion of the debt and would suffer severe financial hardship if the debt were not waived (subsection 97(2)); or
(b)the payment was made in respect of the person’s eligibility for family assistance for a period or event in an income year, and the debt is raised after the end of the person’s next income year after the period or event or the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made (whichever ends last), and the person received in good faith the payment/s that gave rise to the administrative error proportion of the debt (subsection 97(3)).

I am satisfied that Ms Di Paolo’s family tax benefit debts arose because she first declared to Centrelink on 13 May 2013 that she was separated from Mr Di Paolo and she continued to declare to Centrelink that she had separated from Mr Di Paolo from 1 May 2013. On the basis of these declarations, Ms Di Paolo was paid a higher rate of family tax benefit than she was entitled to as a member of a couple with Mr Di Paolo.
Relevantly, Centrelink sent Ms Di Paolo multiple written notices dated from 8 May 2013 that set out her circumstances and payment of family tax benefit.[358] These notices included information about Ms Di Paolo’s income estimates, care arrangements for her children, amounts of family assistance payments and supplementary payments, and the requirement for her to inform Centrelink about any changes to her family’s income and her/her family’s circumstances including whether she reconciles with a former partner. For example, Centrelink notices dated 26 June 2013, 11 October 2013 and 29 July 2020 specifically informed Ms Di Paolo that she must tell Centrelink ‘about any changes that may affect [her] payment’ within 14 days of the change occurring, and changes to her (or her partner’s) circumstances include ‘a change in income, relationship status, address details, current employment…’[359]
[358] Exhibit ST-ST67.
[359] Exhibit ST-ST67, 2931, 2953, 3059.
I am satisfied that there is no evidence before the Tribunal that Ms Di Paolo’s family tax benefit debts are attributable to an administrative error made by the Commonwealth. I therefore find there are no grounds to waive her family tax benefit debts in accordance with section 97 of the Family Assistance Administration Act.
Section 1237A of the Social Security Act sets out that the Secretary must waive the right to recover the portion of a debt that is attributable solely to an administrative error made by the Commonwealth if the person received the payment/s in good faith that gave rise to that proportion of the debt.
In the decision of Secretary, Department of Family and Community Services v Sekhon, Wilcox J stated: ‘Administrative error must be the sole cause, not merely one of multiple causes.’[360] I am satisfied the provisions in section 1237A of the Social Security Act require that I must be satisfied the debts occurred solely due to administrative error made by the Commonwealth and the person correctly believed they were entitled to receive the payment/s.
[360] [2003] FCA 76 [41].
Centrelink sent Ms Di Paolo multiple written notices from 9 October 2003 that set out her claim for parenting payment single and disability support payments, details about her total assets and annual income, and her requirement to tell Centrelink about any changes to her circumstances.[361] I particularly note, given my findings at paragraphs 96 and 98 about Ms Di Paolo’s involvement with the Trust, that there are numerous letters from Centrelink about the effect of Trust assets on her claims for parenting payment and disability support pension.
[361] Exhibit ST-ST68.
For example, Centrelink advised Ms Di Paolo in writing:
·on 9 October 2003 and 18 November 2003 that her claim for parenting payment had been refused because the value of her assets was ‘above the allowable limit’ on the basis that ‘100% of the Trust income and assets [were] attributed to’ her;[362] and
·on 17 June 2004 that her claim for disability support pension was rejected on the basis that the value of her assets was ‘above the allowable limit’.[363]
[362] Exhibit ST-ST68, 3072-3073.
[363] Exhibit ST-ST68, 3084.
Centrelink also sent correspondence to Ms Di Paolo on 20 April 2004, the day after the date the SSAT decision was dispatched, that noted her intention to claim parenting payment and changes she should tell Centrelink about, which included any assets and provided a definition of assessable assets.[364] Multiple Centrelink notices sent to Ms Di Paolo (variously in the names of ‘Napoli’ and, after 5 May 2004, ‘Mandoulidis’) advised her that she must tell Centrelink within 14 days of changes including changes to her income and assets, which included if she is ‘involved in, or receive benefit from, a private trust or private company’.[365] On 23 May 2006, Centrelink wrote to Ms Di Paolo specifically requesting information about any benefit she may have received from the Trust.[366]
[364] Exhibit ST-ST68, 3076.
[365] For example, see ST-ST68, 3085.
[366] Exhibit ST-ST68, 3087.
Based on the written notices Centrelink sent to Ms Di Paolo, I am satisfied that Ms Di Paolo was aware that her involvement in the Trust and the attribution of Trust assets to her meant that she was over the allowable assets limit to be eligible to receive social security benefits.
Ms Di Paolo’s involvement in and status regarding the Trust are set out in my findings of fact at paragraphs 96 and 98. These include my finding that the date on documents filed by Ms Di Paolo with Centrelink and the Tribunal to verify her retirement from the Trust on 9 May 1999 was knowingly and deliberated altered. I have also considered the findings in the AAT1 decision that Ms Di Paolo was paid parenting payment single due to an administrative error made by the ARO on 31 March 2005 based on Centrelink advising that ‘the ARO failed to turn his mind to the SSAT decision and accepted [Ms Di Paolo] had relinquished control of the Trust and no deprivation was applied’.[367]
[367] Exhibit T-T1.1, 20.
In circumstances where I am satisfied that the date on a document has been knowingly and deliberately altered to the benefit of Ms Di Paolo, I do not find there was any ‘error’ in the ARO’s decision dated 31 March 2005. This is because the decision of the ARO on 31 March 2005 was based on a false statement in a document filed by Ms Di Paolo to show that she relinquished control of the Trust in 1999. For these reasons, I also find that Ms Di Paolo did not receive payments of parenting payment single or disability support pension in good faith from 18 July 2003 to 16 September 2021.
Finally, I make the following observations in view of Ms Di Paolo’s oral evidence that she informed Centrelink about ‘every’ aspect of her life and there was administrative error because Centrelink did not keep accurate records.
In setting out the documentary evidence about Ms Di Paolo’s properties at paragraph 42, I have identified where there are no contemporaneous Centrelink (or other) records about the purchase, building and/or sale of these properties. In particular, I have found no documentary evidence that shows Ms Di Paolo informed Centrelink at the relevant time about (for example):
·the sale date and sale amount of property ‘A’ in 2008;
·the purchase date and purchase amount of property ‘C’, the demolition of the original house and the cost to build a new house at property ‘C’ from 2008 to 2015;
·the sale date and amount of property ‘C’ in 2016; and
·the purchase, settlement of property ‘D’ in 2016–2017 and subsequent renovations of property ‘D’.
A review of Centrelink records from 2003 to 2021 shows that Ms Di Paolo had regular contact with Centrelink: these records document her contact regarding other social security and associated payments (carer allowance, rent assistance) she was receiving, changes to her addresses, and details about the care arrangements of her three older children. It is unclear why Centrelink appears to have maintained comprehensive records about many aspects of Ms Di Paolo’s circumstances but not her purchase, building and sale of properties. This is particularly the case in the absence of any contemporaneous notes or records Ms Di Paolo says she maintained from her interactions with Centrelink. Weighing all the evidence, I am not satisfied that Ms Di Paolo’s parenting payment single and disability support pension debts can be solely attributed to Centrelink not keeping accurate records of Ms Di Paolo’s situation.
I am not satisfied there are grounds to waive Ms Di Paolo’s parenting payment single and disability support pension debts pursuant to section 1237A of the Social Security Act.
Waiver of debts for special circumstances
Section 101 of the Family Assistance Administration Act and section 1237AAD of the Social Security Act provides that all or part of a debt may be waived where:
·the debt ‘did not result wholly or partly’ from a person ‘making a false statement or a false representation’ or failing to comply with a provision of the Family Assistance Administration Act or the Social Security Act (whichever is relevant); and
·there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt; and
·it is more appropriate to waive rather than write off the debt.
The term ‘special circumstances’ is not defined in the Family Assistance Administration Act or the Social Security Act; however, decisions by the Tribunal and the Federal Court have considered the issue of special circumstances on many occasions. In every case, the individual circumstances of the case were examined to determine whether the circumstances were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. Reduced to its simplest, the decision-maker is required to consider whether there are circumstances in the particular case that suggest an exception should be made and the usual rule should not apply: see, for example, Dranichnikov v Centrelink [2003] FCAFC 133 at [65]-[66]; see also Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33].
I make two further observations about these provisions.
First, all the limbs in section 101 of the Family Assistance Administration Act or section 1237AAD of the Social Security Act must be satisfied to waive a debt by reason of ‘special circumstances’. This means I must be satisfied that a person did not make any false statements or representations or fail to comply with a provision of the Family Assistance Administration Act or Social Security Act and that it is appropriate to waive rather than write off the debt, as well as find there are special circumstances in the case.
Second, a debt can only be waived by reason of special circumstances where there are circumstances in addition to financial hardship; financial hardship on its own is not sufficient to make a finding of special circumstances. I note that most recipients of social security benefits are likely to experience some level of financial hardship, and this is not unusual in isolation from other factors.
Consistent with my reasons above to not waive Ms Di Paolo’s debts under section 97 of the Family Assistance Administration Act or section 1237A of the Social Security Act, I am not satisfied that Ms Di Paolo’s debts did not result from a person making a false statement or false representation. I find that Ms Di Paolo’s family tax benefit debts arose from her false representation to Centrelink that she was separated from Mr Di Paolo, which is not consistent with the evidence and my findings at paragraphs 113–189. Further, my finding that the date on documents filed by Ms Di Paolo with Centrelink and the Tribunal to verify her retirement from the Trust on 9 May 1999 was knowingly and deliberated altered is consistent with a person making a false statement or a false representation. For this reason alone, I am satisfied that:
·Ms Di Paolo’s family tax benefit debts cannot be waived under section 101 of the Family Assistance Administration Act; and
·Ms Di Paolo’s parenting payment single debt and disability support pension debts cannot be waived under section 1237AAD of the Social Security Act.
For completeness, I also considered submissions from the Applicant’s counsel that Ms Di Paolo’s family tax benefit debts should be waived in accordance with section 101 of the Family Assistance Administration Act and her parenting payment single and disability support pension debts should be waived pursuant to section 1237AAD of the Social Security Act. These submissions included that Ms Di Paolo was injured in motor vehicle accidents and sustained permanent disabilities, and she has required multiple surgeries.[368] These submissions are supported by the reports of Dr ‘BH’ and Dr ‘JA’; in particular, the report of Dr ‘BH’ dated 15 June 2023 set out that she has been treating Ms Di Paolo for management of chronic pain, mental health issues associated with chronic pain and stress relating to her current Centrelink debt.[369] I do not dispute the credible medical reports and evidence of Dr ‘BH’ and Dr ‘JA’. I also note and accept Ms Di Paolo’s oral evidence regarding her current mental health, which is ‘not very good’, and the support she is currently receiving from Dr ‘JA’ and her psychiatrist, Dr ‘JG’.[370]
[368] Submissions for the Applicant, 20 March 2023, paragraphs 112-117.
[369] Exhibit A1, 683-685.
[370] Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 110.
The Applicant’s counsel further submitted that Ms Di Paolo went through ‘significant court proceedings from 2003 to 2007’, has been a ‘victim of family violence’ and has ‘significant debts’.[371] Ms Di Paolo also gave oral evidence that she is financially reliant on and has borrowed money from her daughter and mother. She acknowledged that she purchased property ‘D’ for almost $3 million, but her ‘share’ is now valued at $1.6 million and she is unable to sell property ‘D’ because she has not completed the renovations and does not have an occupancy certificate.[372]
[371] Submissions for the Applicant, 20 March 2023, paragraphs 118-122.
[372] Exhibit A1, 92. Oral evidence of Ms Di Paolo, Transcript of Proceedings, 20 June 2023, 125.
I do not find that Ms Di Paolo is in financial hardship in circumstances where she purchased property ‘D’ for $3 million in November 2016, has undertaken renovations at property ‘D’, and could sell property ‘D’ if required.
DECISION
The decision under review made in the Social Services and Child Support Division of the Tribunal (AAT first review) on 1 June 2022 is set aside and, in substitution, the General Division of the Tribunal decides:
(a)Ms Sofia Di Paolo has been a member of a couple with Mr Antonino Di Paolo from 1 May 2013 to at least 16 September 2021. As Ms Sofia Di Paolo was a member of a couple during this period, she was overpaid family tax benefit and has the following debts that are to be repaid to the Commonwealth pursuant to section 71 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth):
(i)$3,640.33 for the 2013–2014 financial year.
(ii)$3,003.95 for the 2014–2015 financial year.
(iii)$4,692.12 for the 2015–2016 financial year.
(iv)$19,417.75 for the 2016–2017 financial year.
(v)$13,107.01 for the 2017–2018 financial year.
(vi)$15,669.45 for the 2018–2019 financial year.
(vii)$5,157.45 for the 2020–2021 financial year.
(b)Ms Sofia Di Paolo’s family tax benefit debts are not to be written off or waived pursuant to sections 95, 97 and 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth).
(c)The reassessment of Ms Sofia Di Paolo’s entitlement to parenting payment single from 18 July 2003 to 7 February 2007 and to disability support pension from 8 February 2007 to 16 September 2021 is remitted to the Respondent to be recalculated on the basis of the following findings:
(i)Ms Sofia Di Paolo was single from 18 July 2003 to 17 January 2009.
(ii)Ms Sofia Di Paolo has been a member of a couple with Mr Antonino Di Paolo from 18 January 2009 to at least 16 September 2021.
(iii)Ms Sofia Di Paolo is to be attributed 50% of the Mandoulidis Family Trust assets from 18 July 2003 to 16 September 2021.
(iv)Ms Sofia Di Paolo’s assets include 100% of [redacted – property address] (property ‘C’) from 15 December 2008 to 17 April 2009; 75% of [redacted – property address] (property ‘C’) from 18 April 2009 to 1 April 2013; and 50% of [redacted – property address] (property ‘D’) from 7 February 2017 to 30 June 2018.
(v)Ms Sofia Di Paolo received 50% of rent payments from property ‘D’, which is income for the period from 1 March 2017 to 7 May 2018.
(d)The recalculated amounts that Ms Sofia Di Paolo was overpaid parenting payment single and disability support pension in the period from 18 July 2003 to 16 September 2021 are debts due to the Commonwealth pursuant to section 1223 of the Social Security Act 1991 (Cth).
(e)Ms Sofia Di Paolo’s parenting payment single and disability support pension debts are not to be written off or waived pursuant to sections 1236, 1237A and 1237AAD of the Social Security Act 1991 (Cth).

I certify that the preceding 270 (two hundred and seventy) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member

...[sgn].....................................................................
Associate
Dated: 24 November 2023

Date of hearing: 19 – 22 June 2023

Applicant: Ms Sofia Di Paolo

Counsel for the Applicant: Mr Bryn Overend

Counsel for the Respondent: Ms Lucy Kirwin

Solicitors for the Applicant: Australian Government Solicitor

Date of hearing:	19 – 22 June 2023
Applicant:	Ms Sofia Di Paolo
Counsel for the Applicant:	Mr Bryn Overend
Counsel for the Respondent:	Ms Lucy Kirwin
Solicitors for the Applicant:	Australian Government Solicitor