DQGR and Secretary, Department of Social Services (Social security second review)
[2025] ARTA 1297
•10 April 2025
DQGR and Secretary, Department of Social Services (Social security second review) [2025] ARTA 1297 (10 April 2025)
Applicant:DQGR
Respondent: Secretary, Department of Social Services
Tribunal Number: 2023/6130
Tribunal:Senior Member J Walsh (second review)
Place:Brisbane
Date of Decision: 10 April 2025
Decision:The Tribunal sets aside the decision under review and remits the matter to the Respondent for reconsideration in accordance with the orders and recommendations set out in paragraphs 20 and 21 of the reasons for decision. The recalculated debt is to be repaid by the Applicant.
Statement made on 10 April 2025 at 10:03pm
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A)–201(1B) of the Social Security (Administration) Act 1999.
Catchwords: SOCIAL SECURITY – age pension debt – partner’s superannuation assessable as an asset at age pension age not taken into account during debt period – approach to value of superannuation and new motor vehicle purchase during debt period considered - whether debt due to sole administrative error – whether waiver for special circumstances appropriate – decision remitted for reassessment of valuation of assessable assets.
Social Security Act 1991, ss 9(1C), 1223, 1237A, 1237AAD
Social Security (Administration) Act 1999, s 66A
Statement of Reasons
In May 2022, Centrelink informed the Applicant that he had been overpaid almost $17,000 in age pension. This came as a shock to him, given his practice was to regularly advise Centrelink of his wife’s casual income; he had no reason to think there was any problem with his age pension payments. The cause of the debt related to his wife’s superannuation, which became an assessable asset under the assets test when she turned age pension age on 6 September 2018. The value of her superannuation had not been taken into account in assessing the rate of age pension, if any, paid to the Applicant after this date. The problem came to light when his wife made her own claim for age pension in March 2022.
The Respondent Secretary’s case is that the Applicant has been overpaid age pension from 6 September 2018 to 21 March 2022 due to the level of the couple’s combined assessable assets. The result was a debt of $16,937.90 which the Applicant was required to repay. The original decision to this effect was made in May 2022; it was affirmed both on internal review and by the Administrative Appeals Tribunal (AAT) on first review. The Applicant then applied for AAT second review in August 2023.
On 14 October 2024, the AAT was replaced by the Administrative Review Tribunal (ART). AAT applications for review not finalised before that date transitioned to the ART to be considered and finalised in a manner the ART considered efficient and fair: clause 24, Schedule 16 to the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024. As far as possible, such applications were to be continued under the ART legislation.
The Applicant’s position has been to deny any responsibility for the debt; he considers the fault lay with Centrelink. The various notices sent to him before and during the debt period did not specify he was required to tell Centrelink of the value of his wife’s superannuation once she reached age pension age; the requirement to advise about changes to the value of their combined assets was too general and vague to put him on notice of this requirement. He says any debt is solely Centrelink’s fault and he received any overpayments in good faith so that recovery of any debt should be waived. I have some sympathy for the Applicant’s position here; however, I am satisfied there is a debt and have found against him on the causation argument.
The Applicant also complains that the data inputs in the debt calculations are inaccurate; he contends the debt should be recalculated on an accurate basis. I accept there is force in his position in this respect.
Finally, at my request, the Applicant gave evidence as to circumstances he suggested might be considered special in the context of whether waiver of recovery of some or all of the debt was appropriate. I am not persuaded there are any proper grounds for waiver in this case. My reasons for my conclusions follow.
The debt
At hearing on 11 March 2025, the Applicant accepted that he had been overpaid during the debt period because the value of his wife’s superannuation was assessable from 6 September 2018 and had not been taken into account. On the available evidence, I accept this is the case. I find any overpayments made during the debt period constitute a debt due to the Commonwealth under section 1223 of the Social Security Act 1991 (Act).
As to the debt calculations, Ms Forsyth for the Secretary explained that the value attributed to the Applicant’s wife’s superannuation during the debt period was $134,475 as disclosed by her when she claimed age pension in March 2022. I do not accept this to be a proper basis, since it is almost certain that the value of her superannuation from September 2018 varied by reason of contributions made and fund performance during the debt period. Indeed, the Applicant indicated his wife’s superannuation was about $100,000 or less early in this period. His material states its value was $110,089 as at 30 June 2020. I will remit the debt quantum aspect of this matter to the Secretary to obtain further and better information concerning the value of the Applicant’s wife’s superannuation from time to time during the debt period.
The Applicant also complains about an amount of $35,000, which he has said was withdrawn from joint funds in December 2019 to pay for a new car for his wife. He contends the value of the car has been included in the assets assessment but there has been no corresponding decrease in funds (savings) used for its purchase. A table of assets assessed during the debt period in the Secretary’s Statement of Facts, Issues and Contentions shows that an adjustment of $30,000 was made from 31 January 2022; each of the couple’s personal savings was reduced by $15,000 and the value of the Applicant’s wife’s other assets was increased by $30,000: see paragraph 39 of the Statement. It can safely be assumed these adjustments related to the subject vehicle.
At the conclusion of the hearing, I directed the Applicant to provide evidence as to the purchase of the car in December 2019 as well as bank statements or the like which would disclose the source of funds used for this purchase. I allowed two weeks. Copies of receipts relating to the purchase of the car for $34,500 in December 2019 show payment was made by way of $1,000 on a credit card on 20 December 2019 and two Westpac bank cheques, for $23,500 and $10,000 respectively, on 21 December 2019. The Applicant initially failed to produce evidence as to the source of funds used in the purchase, providing evidence of current savings and home loan accounts instead. Eventually, he provided additional information and stated that the $23,500 amount came from his wife’s account and the $10,000 amount was borrowed from their daughter. I accept that $10,000 was borrowed; this would not affect the couple’s level of assets until and unless repayment was made. As to the $23,500 amount, the Applicant provided an image of a bank statement with many details covered up. The statement concerned was for a joint account and was headed “Rocket Statement”. An online search indicates a Westpac Rocket account is likely to be a home loan account. It therefore seems that there may have been access to advance payments on the couple’s home loan to fund the cheque for $23,500. In the circumstances, I will remit this aspect to the Secretary for further investigation.
Sole administrative error
The Applicant‘s position has been to deny responsibility for the overpayment and to attribute sole blame to Centrelink. He points to:
· An income and assets form dated 29 March 2017 where the value of his wife’s superannuation with Australian Super of more than $82,000 was disclosed: T4, p 146. He contends that Centrelink was therefore on notice of his wife’s superannuation, even though a staff member had crossed out these answers on the form. The information provided on this part of the form instructed to include his wife’s superannuation only if she was over age pension age or claiming age pension. Since she was below age pension age in March 2017, the value of her superannuation did not count under the assets test: see subsection 9(1C) of the Act. I consider it was therefore appropriate that information about her superannuation was crossed out. This information was not then relevant and it would have been a breach of Privacy Principles for Centrelink to have retained and recorded this information for potential use should it become relevant in the future. I do not accept the Applicant’s contention here.
· He frequently spoke with Centrelink staff in the context of reporting his wife’s casual income and was never told of the need to report his wife’s superannuation. To follow the logic of this contention, Centrelink staff would have had to have been aware of her having superannuation and then flagging with the Applicant that he had to report it when it became assessable on his wife reaching age pension age. I do not accept the Applicant’s contention here; there was no obligation on Centrelink’s staff to alert him as suggested.
· The various notices Centrelink sent him relevant to the debt period were too general in their terms to inform him of any obligation to report his wife’s superannuation. This contention requires closer consideration and will be dealt with below.
· Centrelink’s computer system should have included a flag about his wife’s superannuation needing to be taken into account from 6 September 2018 so that he could have been specifically informed of this beforehand. Despite this contention having some superficial attraction, it would have involved Centrelink obtaining and recording private information of an individual without this being required, in breach of privacy legislation Centrelink was obliged to comply with. Again, I do not accept the Applicant’s contention here.
Centrelink commonly sends people receiving social security payments notices which include recipient notification obligations. It is useful to consider two of the slightly different types of notices sent to the Applicant before and during the debt period.
The first notice is dated 29 November 2017; it required the Applicant to tell Centrelink if he or his wife had, or were likely to have, any changes of circumstances included in a long list of potential changes to income or assets. In relation to changes to assets, it obliged the Applicant to advise if “the value of your assets or financial investments changes by more than $2,000.” The Secretary’s submission is that, once the Applicant’s wife turned age pension age on 6 September 2018, the value of her superannuation became assessable under the assets test so that the value of the couple’s combined assessable assets increased on that day. It followed the Applicant was obliged to tell Centrelink about this; he failed to do so and this was the real cause of the excess pension payments made to him during the debt period. I do not accept this submission. There is nothing on the face of the general obligation as framed which, in terms, referred to or required the Applicant to advise Centrelink about his wife’s superannuation once it became assessable under the assets test. I consider it goes beyond what can reasonably be expected of a recipient of such a notice that they should understand, or be taken to understand, the different treatment of amounts in superannuation under the assets test, depending on whether or not the owner of the superannuation asset has reached age pension age. None of the content of the notice detailed this differing treatment. In those circumstances, I do not accept that the Applicant was required to tell Centrelink about his wife’s superannuation on and from 6 September 2018 by reason of this particular notification obligation. The notice also required that Centrelink be told if the couple “get money from superannuation”. There is no evidence they did since the Applicant’s wife’s superannuation was not accessed when she turned age pension age.
However, that is not an end of the consideration of the notice of 29 November 2017. Fairly construed, it did require the Applicant to inform Centrelink if the value of the couple’s assets or financial investments increased by more than $2,000. I observed at hearing that commonly available superannuation fund performance data indicated average increases from investment returns of 9.4% in 2018/19 and 18.0% in 2020/21. In the absence of an explanation in the notice about what the term “financial investments” meant, I consider that both the Applicant and his wife’s superannuation constituted financial investments as that term is ordinarily understood (which is different to its meaning as a defined term in the Act). Their superannuation also constituted “assets” as that term is commonly understood. It is almost certain that the value of the couple’s combined superannuation increased by more than $2,000 on a number of occasions during the debt period. In this respect, since the notice included no specific detail about the treatment of money in superannuation, I consider their superannuation was within the scope of the notice’s requirements, notwithstanding that the Applicant’s wife’s superannuation did not become assessable until 6 September 2018. Had the Applicant complied with his obligation to inform Centrelink of requisite changes to the value of the couple’s financial investments from September 2018, all or most of the overpayments would not have occurred.
Another notice dated 12 March 2018 detailed that Centrelink had assessed the couple’s total combined assets at $697,645.62 and combined annual come at $20,652.22; the assets assessment did not include the Applicant’s wife’s superannuation. The notice contained a requirement that he was required to tell Centrelink, within 14 days, “if the value of you and your partner’s combined assessable assets changes by $1,000 or more.” Absent an explanation in this notice about what the term “assessable assets” meant, I consider the Applicant was required to inform Centrelink of changes to the value of the couple’s combined assets, including their superannuation, for the reasons given above.
The analysis above also applies to various other notices sent to the Applicant during the debt period. The result is I am satisfied the Applicant failed to meet his notification obligations under various notices he received, both before and during the debt period. Had I not been so satisfied, I note that section 66A of the Social Security (Administration) Act 1999 (Administration Act) imposes a general obligation on those claiming or receiving social security payments to inform Centrelink, within 14 days, of the occurrence of any event or change of circumstances which might affect their payments. The Applicant’s turning age pension age on 6 September 2018 so that her superannuation became assessable was an event or change of circumstances section 66A obliged him to tell Centrelink about. He did not do so. As might readily be understood, the Applicant considers the obligation under this provision to be unreasonable. In my view, this is an instance where ignorance of the law is no excuse. The Applicant’s failure to notify Centrelink as required contributed to the overpayments he received during the debt period.
The Applicant’s substantive case has been that recovery of any debt should be waived on the basis Centrelink was solely responsible for the debt and he received the overpayments in good faith. The Secretary concedes the good faith aspect. However, I have found that his failure to meet his obligations, both under various notices sent to him and under section 66A of the Administration Act, contributed to the overpayments made to him. In those circumstances, it is not open to find sole administrative error by the Commonwealth. Waiver under section 1237A of the Act is not available.
Special circumstances
At hearing, the Applicant accepted that his overall financial position is better than many who rely on social security payments for their income. Based on a copy of a housing loan statement provided after the hearing, the couple owes just over $29,000 on their home loan and have more than $51,000 in available funds on this facility. He estimated their house was worth about $800,000 to $900,000. The Applicant’s evidence was that the home loan payments were well in advance and he makes withdrawals to fund his usual expenses. He owes more than $5,000 on a credit card which has a credit limit of $16,000. He has more than $700,000 in his personal superannuation account but is very reluctant to withdraw money from this fund; he would have to withdraw all of his funds which he does not wish to do. He is concerned about what might go wrong in the future. He mentioned having health issues requiring investigation and that he and his wife are not on good terms. They used joint funds to buy a new car for his wife in late 2019 but he drives a very old car himself.
I am not persuaded that the Applicant’s overall circumstances are special in the context of considering waiver under section 1237AAD of the Act. Whilst there has been no repayment to date, he has ready access to funds to be able to repay any debt. I find that any debt amount is to be repaid.
Conclusion
I am satisfied that the Applicant has been overpaid during the debt period and that the total amount of any overpayment constitutes a recoverable debt to the Commonwealth. I do not accept that the approach adopted in calculating the couple’s combined assessable assets during the debt period is appropriate. The matter will be remitted to the Secretary with directions concerning the assessment of the Applicant’s wife’s superannuation and her car. As to the superannuation, I consider it appropriate that the Secretary obtain information as to the balance of her Australian Super superannuation account at the end of each month from August 2018 to February 2022, with each monthly balance amount to apply for the following month. So, for example, for the first part of the debt period, her monthly superannuation balance as at 31 August 2018 is to apply for September 2018, the balance as at 30 September 2018 is to apply for October 2018 and so on.
In relation to the approach to the Applicant’s wife’s car and related funds used for its purchase, the value of the car and the related reduction in the couple’s savings, if any, is to be assessed from 21 December 2019. The Secretary should require the Applicant to provide appropriate evidence of the source of the funds used to fund the cheque for $23,500 referred to previously. Should some or all of this amount have come from advance payments on their home loan, since the value of the home is not assessable as an asset, any reduction in the level of available funds against the home loan will not affect their assessable asset position. There should also be consideration given to any reasonable allowance for depreciation of the car’s value in the debt period, noting that supply constraints during the COVID-19 pandemic period resulted in increased resale values of used vehicles generally, compared with the pre-pandemic position.
It is open to the Applicant to satisfy the Secretary, with appropriate evidence, that the $10,000 borrowed from their daughter or any funds withdrawn from the home loan used to purchase the car were subsequently repaid from the couple’s assessable funds in the debt period. Should such evidence be provided, the Secretary is to take this into account in calculating the value of the couple’s assessable assets in the debt period.
DECISION
The Tribunal sets aside the decision under review and remits the matter to the Respondent for reconsideration in accordance with the orders and recommendations set out in paragraphs 20 and 21 of these reasons for decision. The recalculated debt is to be repaid by the Applicant.
Date of hearing: 11 March 2025 Date final submissions received: 10 April 2025 Applicant: In person Solicitors for the Respondent: Ms J Forsyth, Moray & Agnew Lawyers
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