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

[2015] AATA 479

Djokovic and Secretary, Department of Social Services (Social services second review) [2015] AATA 479 (3 July 2015)

Division	General Division
File Number(s)	2014/1622
Re	Robson Djokovic
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Dr P McDermott RFD, Senior Member
Date	3 July 2015
Place	Brisbane

The decision under review is affirmed.

.............................[Sgd]...........................................

Dr P McDermott RFD, Senior Member

CATCHWORDS

SOCIAL SECURITY – recovery of debt – overpayment – parenting payment – whether debt should be written off – whether debt should be waived – whether debt is attributable solely to an error of the Commonwealth – whether special circumstances exist – decision affirmed.

LEGISLATION

Social Security Act 1991 (Cth) ss 4, 24, 1223, 1236, 1237, 1237A, 1237AAD

CASES

Lynam v Director-General of Social Security (1983) 52 ALR 128

Main v Main (1949) 78 CLR 636
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531

Cocks v Centrelink [2000] FCA 1248

REASONS FOR DECISION

Dr P McDermott RFD, Senior Member

3 July 2015

INTRODUCTION

1. The applicant has sought review of the decision of Centrelink dated 11 September 2007 to raise and recover a parenting payment debt of $34,107.45. The rate of parenting payment depends on whether or not the person entitled to the benefit is partnered. A person who is partnered is entitled to receive a rate of pension which is less than the single rate of pension. Any income of the partner is also taken into account when the rate payable is calculated.

   BACKGROUND

2. On 28 April 2000 the applicant was granted Newstart Allowance at the single rate on the basis that his wife, who he married in 1995, was living overseas and had no income. On 16 June 2000 the applicant was granted Parenting Payment at the single rate on the basis that his wife was still overseas.

3. On 22 September 2005 Centrelink investigated the entitlement of the applicant to receive Parenting Payment at the single rate. On 14 December 2005 the applicant provided Centrelink with an Assessment of Living Arrangements form in which he stated that he was separated from his wife. Centrelink also sent requests for information to a number of companies and government authorities.  On 14 October 2006 a decision was made to cancel the payment of parenting payment at the single rate because the applicant had not returned to Australia after an absence of 13 weeks.

4. On 11 September 2007 Centrelink made a decision to raise and recover a parenting payment debt of $34,107.45. It was not until 13 July 2012 that the applicant sought review of the decision to raise and recover the debt. On 14 June 2013 the authorised review officer made a decision to affirm the decision. On 21 February 2014 the Social Security Appeals Tribunal (“SSAT”) affirmed the decision. On 28 March 2014 the applicant made an application for the review of the decision by this Tribunal.

   LEGISLATION

5. The relevant legislation is the Social Security Act 1991 (Cth) (“the Act”) and the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”).

6. What is important is whether the applicant is a member of a couple. Section 4(11) of the Act provides that a person is “partnered” if the person is a “member of a couple”. A person is a “member of a couple” if the person is legally married to another person and is not living separately and apart from the other person on a permanent or indefinite basis.[1]

   [1] Social Security Act 1991 (Cth) s 4(2)(a).

7. Section 4(3) of the Act provides that when determining whether a person is a “member of a couple”, all the circumstances of a relationship must be considered, including the following:

   (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.

8. This list is certainly not exhaustive.

9. Section 24(1) of the Act provides that the Secretary may treat a person as not being a member of a couple: the subsection provides:

   (1)  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;

10. Section 1223 of the Act provides that if a social security payment is made and the person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, the amount of the payment is a debt due to the Commonwealth and is taken to arise when the person obtains the benefit of the payment.

11. Section 1236(1A) of the Act provides that a debt may be written off in the following circumstances:

    (a)  the debt is irrecoverable at law; or

    (b)  the debtor has no capacity to repay the debt; or

    (c)  the debtor's whereabouts are unknown after all reasonable efforts have   been made to locate the debtor; or

    (d)  it is not cost effective for the Commonwealth to take action to recover   the debt.

12. Section 1236(1C) of the Act determines when a person has “capacity to repay” the debt:

    (1C)  For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

    (a)  deductions from the debtor's social security payment; or

    (b)  deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 ; or

    (c)  setting off under section 84A of that Act;

    the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

13. Under s 1237 of the Act, the Secretary may waive recovery of a debt in limited circumstances. Under s 1237A the Secretary must waive a debt attributable solely to an administrative error made by the Commonwealth.

14. The Secretary may waive a debt under s 1237AAD of the Administration Act which provides:

    Waiver in special circumstances

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

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

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

    (ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and

    (b)  there are special circumstances (other than financial hardship alone)   that make it desirable to waive; and

    (c)  it is more appropriate to waive than to write off the debt or part of the   debt.

    Whether the applicant was a member of a couple

15. I have to determine whether the applicant was a member of a couple with his wife in the relevant period from 9 May 2002 until 14 October 2006.

16. In considering the financial aspects of the relationship between the applicant and his wife, I have considered the contention of the applicant that there are no joint bank accounts. There are records from 2005 which show significant transfer of funds from 23 September 2005 to 31 October 2005. The applicant made 8 transfers of funds which total $2605 to his wife at a time when the applicant was in the Solomon Islands. The applicant in his written submission contends that these payments were for “general expenses to assist with living costs within Australia and abroad but mostly for the children’s benefit”. I regard these regular transfers of funds within the space of approximately six weeks to be a significant indication that the applicant was a member of a couple with his wife.

17. In considering the nature of the household I have reviewed documents from government departments as well as tenancy documents which indicate the applicant and his wife were members of a couple within the relevant period. Prior to the commencement of the relevant period, records indicate the applicant and his wife were both residing at the same address in Wentworth Place, Narangba. Passport applications dated 10 May 2002 indicate that the applicant and his wife and their children lived at that same address. This address was then listed in Queensland Transport records as being the address of the applicant and his wife. I regard these records as evidence that at the outset of the relevant period the applicant and his wife were living under the same roof.

18. On 11 May 2002 the applicant and his wife jointly signed a tenancy agreement for a property at Palmer Place, Narangba. On 2 April 2004 the applicant and his wife signed the bond release form. I regard these documents as evidence that the applicant and his wife both lived at the same Palmer Place address from May 2002 until April 2004. His wife was not called as a witness to give evidence as to his living arrangements. I do not accept the contention of the applicant that he did not reside there. In his application to rent a property at Figwood Court the applicant disclosed his address as the Palmer Place property.

19. On 27 March 2004 the applicant’s wife signed a tenancy agreement for the property at Figwood Court, Narangba. The applicant was listed as an approved occupant. From 3 May 2005 until 28 November 2005 the applicant listed this address as his address on Queensland Transport records. The fact that the applicant notified Queensland Transport that he lived at the Figwood Court address is inconsistent with his assertion that at this time he was living apart from his wife. The property manager reported that “both parties appeared to have personal possessions at property” and that sometimes at inspections the wife was present and at other times the applicant was present. I have concluded that from March 2004 until February 2006 the applicant and his wife both lived at the Figwood Court property. I note that on 18 November 2005 the applicant made an assertion to Centrelink (which I do not accept) that he did not know where his wife lives when in Australia. This assertion is clearly false have regard to the fact that the applicant had previously signed the tenancy agreement for the Figwood Court property. The fact that the applicant made this false statement has caused me to come to the conclusion that I cannot rely on his uncorroborated assertions that he was not a member of a couple.

20. On 31 January 2006 the applicant and his wife jointly signed an application to rent a property at Tamarillo Circuit, Narangba. In that application form it is stated that two vehicles will be kept at the property. On 6 February 2006 the applicant and his wife signed a tenancy agreement for that property at Tamarillo Court, Narangba. On 21 November 2006 the wife requested that the applicant be taken off the tenancy agreement. This was more than a month after Centrelink made a decision to cease payment of parenting payment to the applicant. I have formed the opinion that the applicant and his wife both lived at the Tamarillo Circuit address. This is because the evidence before me is that they each own a vehicle and the children were then too young to have a driver’s license.

21. There is evidence that the applicant and his wife held themselves out as a married couple at birthdays, Christmas and family events. The applicant’s wife indicated to her employers that she was married. The applicant was listed with one employer as being the next-of-kin of the wife. There is evidence that the applicant and his wife often travelled overseas. There is one occasion in September 2005 in which the applicant and his wife travelled on the same flight. It is not plausible that the applicant was not aware his wife was on that flight.

22. The applicant in his revised statement asserts “we had very limited sexual contact during the period in question”. This revised statement is evidence that the applicant and his wife did have a sexual relationship although it might have been limited. The wife of the applicant was not called as a witness and so was unable to give evidence on this matter.

23. The evidence supports a conclusion that the applicant and his wife maintained a commitment to their marriage both before and after the relevant period. I consider that during the relevant period they continued to live in the same homes. While the applicant’s wife appears to assume the primary responsibility for the children and the household, the applicant has certainly made some contribution and informed Centrelink in December 2005 that whenever either party was unavailable the other person would look after the children. This is despite asserting to Centrelink in the previous month that he did not know where his wife lived in Australia. There is no issue that the applicant and his wife have held themselves out as being members of a couple. The applicant has pointed to the strong religious beliefs of his wife who would want to maintain the marriage. This is despite his assertion to Centrelink in 2005 that he would file for divorce.

24. In considering whether the applicant was a member of a couple during the relevant period I have been guided by the remarks of Fitzgerald J. in  Lynam v Director-General of Social Security (1983) 52 ALR 128 who emphasised (at 131): “What must be looked at is the composite picture”. The applicant has asserted that during the relevant period he was separated from his wife. I do not accept the uncorroborated account of the applicant who will benefit if this Tribunal makes a decision to set aside the decision of the SSAT. What is significant is that the wife of the applicant did not give evidence before this Tribunal. This has the consequence that she could not be asked questions about aspects of her relationship with the applicant as well as answer questions about her employment and residence in Australia during the relevant period. Having regard to all of the evidence I find that the applicant was a member of a couple during the relevant period.

25. The applicant has pointed out that his total absences from Australia from April 2004 until October 2006 total more than 12 months in a 30 month period. However the High Court of Australia has held that the mere physical separation of members of a couple does not lead to a conclusion that those members are living separately and apart.[2]

    [2] Main v Main (1949) 78 CLR 636.

    Should the applicant not be treated as a member of a couple

26. The applicant has sought the exercise of the discretion under s 24(1) of the Act which provides that the Secretary may treat a person as not being a member of a couple. Before this discretionary power can be exercised it is necessary the Secretary be satisfied that the person should, for “a special reason in the particular case” not be treated as a member of a couple. In Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 French J has provided guidance on the relevant considerations in determining whether special reasons exist. His Honour remarked (at [18]):

    The word "special" conditioning "reasons" or "circumstances" guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened… Circumstances or reasons will not necessarily fall outside the designation of "special" because they fall within a class which is widely defined or because they are circumstances or reasons which can be foreseen before they arise… The core of the requirement for "special circumstances" or "special reasons" is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course. But that does not require that the case be extremely unusual, uncommon or exceptional

27. In considering whether it is appropriate for this Tribunal to exercise the discretion under

    
    

    s 24(1) of the Act it is necessary for the decision-maker to consider the circumstances of the person who is claiming to be paid the benefit of the single rate. The assertions of the applicant are that he and his wife did not live as a couple during the relevant period because they were separated. If these assertions are accepted (which is not the case) they do not disclose something that is unusual or different so as to take this case out of the ordinary course. The applicant has not shown any special reason why the discretion should be exercised. It would not be appropriate in my view to exercise the discretion where the applicant asserts that there are circumstances which do not satisfy s 24(1)(b) of the Act. That provision refers to circumstances where “the person is not living separately and apart from the other person on a permanent or indefinite basis” and applies to a situation where a married couple decide to remain together for some reason such as for the sake of children or for financial purposes.

28. One case where it would be appropriate to exercise the discretion is where spouses are unable to pool resources. In Cocks v Centrelink [2000] FCA 1248, O’Loughlin J remarked that it may be appropriate to exercise the discretion where a couple could not pool resources. However, this is not the situation in this case.

29. Having regard to these considerations I am not satisfied there is evidence of “a special reason” or that there are circumstances which satisfy s 24(1)(b) of the Act. I therefore consider that I am not able to exercise the discretion in favour of the applicant so that he could be paid parenting payment at the single rate. Even if it was possible to exercise the discretion I would not exercise the discretion in favour of the applicant because the applicant gave information to Centrelink that is simply not correct, such as that on 18 November 2005 he did not know where his wife lived. There is also evidence before me that in his application to rent the Figwood Court property, the applicant disclosed that he had earned $600 per week for the last 5 years; this income was not disclosed to Centrelink. The applicant asserts that the undisclosed income did not breach any taxation laws because it was used abroad mainly to support his living expenses, however no accounts which disclose his income and expenses have been filed by the applicant.

    Whether the debt should be written off

30. The Secretary has discretion under s 1236 of the Act to write off a debt if the debt is irrecoverable at law or if a debtor has no capacity to repay the debt. I do not consider that this debt should be written off as it has been recovered by instalments.

    Whether there should be waiver of the debt

31. I do not consider that there is any evidence of an administrative error giving rise to an overpayment. Accordingly, s 1237A is not applicable and the debt cannot be waived on this basis.

1. The applicant also contends that the debt should be waived under s 1237AAD of the Act because Centrelink officers were negligent in encouraging him to claim parenting payment. However, for that provision to apply the Secretary must be satisfied the debt did not result from the debtor knowingly making a false statement or representation or failing (or omitting) to comply with the requirements of the Act or the Administration Act. The applicant has failed to provide information requested by Centrelink. The applicant, by failing to advise Centrelink of a change in his circumstances, has not complied with s 68 of the Administration Act. The applicant was required to advise Centrelink if he “start[ed] living with someone of the opposite sex as if [he were] married”. A letter advising the applicant of his obligations was sent to him on a number of occasions including on 27 December 2001 and 24 October 2002. The applicant did not disclose when he was living with his wife. I am also not satisfied there are special circumstances as required by

   
   

   s 1237AAD of the Act to enable there to be waiver of the debt. The provision requires that there must be special circumstances, other than financial hardship alone, that make such waiver desirable. There is no evidence of those special circumstances.

2. I affirm the decision under review.

I certify that the preceding 33 (thirty - three) paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott RFD, Senior Member

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Associate

Dated 3 July 2015

Date(s) of hearing	04 May 2015
Applicant	In person
Solicitors for the Respondent	Sparke Helmore Lawyers