Ebady and Secretary, Department of Social Services (Social services second review)
[2017] AATA 1040
•6 July 2017
Ebady and Secretary, Department of Social Services (Social services second review) [2017] AATA 1040 (6 July 2017)
Division:GENERAL DIVISION
File Number(s): 2016/5864; 5887; 5888
Re:Rabee Ebady
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member J F Toohey
Date:6 July 2017
Place:Sydney
The decision under review is affirmed.
........................[sgd]...............................................
Senior Member J F Toohey
Catchwords
SOCIAL SECURITY – whether applicant overpaid Disability Support Pension – whether applicant overpaid Newstart Allowance and Rent Allowance – whether applicant failed to declare income – whether applicant disposed of asset – whether applicant has debt – whether any reason any of debt should be written off or waived – whether special circumstances – decision under review affirmed
Legislation
Social Security Act 1991 ss 8(1), 9, 11, 68, 72, 1064, 1068, 1070B, 1070C, 1072, 1073, 1076, 1123, 1124, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 s 80
Cases
Nassimi and Secretary, Department of Social Services [2015] AATA 423
REASONS FOR DECISION
Senior Member J F Toohey
6 JULY 2017
This matter concerns a decision to cancel Mr Rabee Ebady’s disability support pension (DSP) with effect from 24 March 2016 and to raise a debt of $142,005.97 on account of overpayments to him of DSP, Newstart Allowance and rent assistance at various times between 29 December 2005 and 23 March 2016 (which I will refer to as “the debt period”).
Mr Ebady received Newstart Allowance from 9 September 2005 to 26 May 2008, and from 4 May 2009 to 8 July 2010. From 18 October 2006 to 15 October 2007, his Newstart Allowance payment included rent assistance. From 9 July 2010 to 23 March 2016, he received DSP.
The Secretary says Mr Ebady’s debt comprises overpayment of:
(i)Newstart Allowance of $28,904.76 from 29 December 2005 to 8 July 2010;
(ii)rent assistance of $343.99 from 18 October 2006 to 26 December 2006; and
(iii)DSP of $112,757.23 from 9 July 2010 to 23 March 2016.
The Secretary says Mr Ebady’s debts arose because, during the debt period:
(i)he received, and failed to declare, income of $691,566 in the form of multiple deposits into his bank accounts while receiving, at various times, Newstart Allowance and DSP;
(ii)he did not declare his ownership of a residential property while he was receiving rent assistance; and
(iii)he failed to declare amounts totalling $447,631 which he transferred overseas, which amounts are “deprived assets” for the purposes of social security law and deemed to have produced income.
The Secretary says Mr Ebady has failed to provide a satisfactory explanation for the deposits into his bank accounts or the international funds transfers. The Secretary submits that, taking these amounts into account as income, Mr Ebady was overpaid Newstart Allowance and DSP, and has a debt to the Commonwealth in the amount of the overpayments. Further, that he had no entitlement to rent assistance. Finally, the Secretary submits, there is no reason Mr Ebady should not have to repay all of the debt.
It is not necessary for present purposes to decide whether or not Mr Ebady qualified for DSP or Newstart Allowance during the debt period. The Secretary does not say Mr Ebady did not qualify for either payment. Rather, the Secretary says, he was not entitled to the rate at which he was paid because his income and assets (whether actual or deemed) were above the allowable limit.
Names and bank accounts
Mr Ebady was born Rabei Ebady on 14 June 1969 in Iraq. He has changed his name by registration on five occasions. In about 2000, he changed his name to Robe Mnsor. In 2006, he reverted to Rabei Ebady. In 2008, he changed his name to Waiel Kalf Ebady. In about 2014, he reverted again to Rabei Ebady. In about 2015, he changed his name to Ali Ebady. At all material times his name was recorded by Centrelink as Rabee Abdulnabi Ebadi.
The statement of reasons of the Social Services and Child Support Division of the Tribunal (SSCSD) show that Mr Ebady acknowledged at a hearing on 21 October 2016 that he had also used the names Wael (Kalf) Ebady, Rabeia Al Mansouri, Ebady Ali and Ali Ebady. He denies ever using any name other than those in which he was lawfully registered, in particular the names Asami Mahod, Khalil Ibrahim Alibrahimy and Khalil Abrahim.
Mr Ebady frankly admitted to the SSCSD and this Tribunal that he changed his name each time in order to open bank accounts and obtain credit cards for the purpose of gambling. He did not pay his credit card debts and would change his name when it got to the point that he defaulted on the loan and debt collectors were after him. Then he would open an account with a different bank and obtain a further credit card.
To satisfy the banks that he had an occupation and income and could repay loans, Mr Ebady registered a business in the name ‘All Perfect Services’. He made transfers between his accounts in the name of the business to give the appearance that it was paying him wages. In fact, the company never operated a business at all, and was a sham.
Mr Ebady also admitted setting up bank accounts in his wife’s name to which he had access while she and their children were overseas for eight months. During that time, for reasons which are not clear, Centrelink continued to pay her and Mr Ebady drew on her account without her knowledge.
During the debt period, Mr Ebady had multiple bank accounts with different banking institutions. The Secretary has obtained statements and details of the various accounts. Consequently, there are several large volumes of nearly 2,000 pages before the Tribunal with information about the accounts as well as detailed calculations of Centrelink payments to Mr Ebady and alleged overpayments.
It is not clear whether the Secretary has been able to identify all of the bank accounts opened by Mr Ebady during the debt period but nothing turns on this for now. Documents provided to the Tribunal include:
(i)Commonwealth Bank statements or account details relating to 14 accounts in the names Robe Mnsor, Rabei Ebady, Waiel Kalf Ebady, Khalil Ibrahim Alibrahimy, Asami Mahod, Ebady Ali and Ali Ebady;
(ii)Bankwest statements and account details relating to three accounts in the names Rabee Abdulnabi Ebady, Waiel Kalf Ebady and Ebady Ali;
(iii)National Australia Bank statements and account details for nine accounts in the names Waiel Kalf Ebady, Rabee Abdulnabi Ebady, Waiel K Ebady, Rabee Abdulnabi Ebady, Rabei Ebady, Robe Mnsor and Ali Ebady;
(iv)St George Bank statements and account details for three accounts in the names Ali Ebady, Khalil Alibrahimy and Asami Mahod;
(v)Westpac Bank statements and account details for four accounts in the names Waiel Kalf Ebady and Ali Ebady; and
(vi)ANZ bank statements and account details for 25 accounts in the names Rabei Ebady, Brady Rabee Abdulnabi, Erady Rabei, Ebady Rabee, Ebady Waiel K, Brady Waiel, Brady Waiel K, Waiel K Ebady, Waiel Ebady, Brady Ali, Ebady Ali, Ali Ebady, and Rabei Ebady T/as All Perfect Services.
Mr Ebady has offered no explanation for most of the deposits into his accounts. He denies making the international transfers in question. Where transfers appear to have been made in his name he says he was the victim of identity theft. He says he lost his wallet on up to six occasions, and someone must have used his motor driver’s licence and other forms of identification to make transfers in his name. He could not recall the dates on which he lost his wallet. He thinks one of the people with whom he was sharing a house may have stolen his wallet or made a copy of his identification documents.
Relevant legislation
The relevant legislation is in the Social Security Act1991 (Cth) (SS Act) and the Social Security (Administration) Act1999 (Cth) (SSA Act).
The rate at which Newstart Allowance and DSP are paid to a person who qualifies for either payment is determined according to calculators in ss 1068 and 1064 respectively of the SS Act. Factors in the calculations include a person’s income (including “ordinary income”) and assets, depending on which the rate of payment may be reduced or may be nil. The formulae on which calculations are based are complex and it is not necessary to set them out in detail here. They are reproduced, correctly in my view, in the Secretary’s statement of facts, issues and contentions filed with the Tribunal and given to Mr Ebady.
Income
By s 8(1) of the SS Act, "income", in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person's own use or benefit; or
(b)a periodical payment by way of gift or allowance; or
(c)a periodical benefit by way of gift or allowance;
By subsections (4), (5) and (8), certain amounts are excluded from the meaning of income for the purposes of the SS Act. None of the exclusions are relevant in this case.
"Income amount" means valuable consideration, or personal earnings, or moneys, or profits, whether of a capital nature or not: s 8(1). By s 8(2), an income amount earned, derived or received is a reference to:
(a)an income amount earned, derived or received by any means; and
(b)an income amount earned, derived or received from any source (whether within or outside Australia).
"Ordinary income" means income that is not maintenance income or an exempt lump sum: subsection 8(1).
“Income” for the purposes of social security legislation is given a wide meaning. In Nassimi and Secretary, Department of Social Services [2015] AATA 423 at [9], Deputy President Tamberlin observed:
In Read v Commonwealth [1988] HCA 26 at [3] the High Court noted that the definition of “income” in the Act is in the widest terms “to ensure that public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide”. The purpose of the definition is to ensure that it brings within its net as wide a range of categories and sources of income as possible: see Frederick George Rose v Secretary, Department of Social Security [1990] FCA 52 at [12].
Mr Ebady’s income for the purposes of calculating his entitlement to Newstart Allowance and DSP during the debt period means his ordinary income during that period.
Save for an exception which is not presently relevant, s 1072 of the SS Act provides that a reference in the Act to a person’s ordinary income for a period is a reference to his or her gross ordinary income from all sources for the period calculated without any reduction. Provisions concerning permissible reductions of business income do not apply in this case because Mr Ebady acknowledges that All Perfect Services was not in fact carrying on any business.
By s 1076(2), a person who has financial assets is deemed to have received ordinary income on those assets at the rates set out in that section.
Section 1073 of the SS Act provides that, if a person receives an amount that is not income in the form of periodic payments, or ordinary income from remunerative work undertaken by the person, he or she is taken to have received 1/52 of the amount as ordinary income during each week of the following year.
As set out below, I am satisfied that Mr Ebady earned income during the debt period as calculated by the Secretary.
Disposal of assets
Asset for the purposes of the SS Act means property or money, including property or money outside Australia: s 11. Financial asset means a financial investment or a deprived asset: s 9. By s 9(4), an asset is a deprived asset if a person has disposed of the asset and its value is included in the value of the person's assets by reason of provisions concerning disposal of assets.
Section 1123(1) of the SS Act provides that, for the purposes of the Act, a person disposes of assets of the person if:
(a)the person engages in a course of conduct that directly or indirectly:
(i) destroys all or some of the person's assets; or
(ii) disposes of all or some of the person's assets; or
(iii) diminishes the value of all or some of the person's assets; and
(b)one of the following subparagraphs is satisfied:
(i) the person receives no consideration in money or money's worth for the destruction, disposal or diminution;
(ii) the person receives inadequate consideration in money or money's worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the person's purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.
Section 1124 provides:
If a person disposes of assets, the amount of the disposal or disposition is:
(a)if the person receives no consideration for the destruction, disposal or diminution--an amount equal to:
(i) the value of the assets that are destroyed; or
(ii) the value of the assets that are disposed of; or
(iii) the amount of the diminution in the value of the assets whose value is diminished; or
(b)if the person receives consideration for the destruction, disposal or diminution--an amount equal to:
(i) the value of the assets that are destroyed; or
(ii) the value of the assets that are disposed of; or
(iii) the amount of the diminution in the value of the assets whose value is diminished;
less the amount of the consideration received by the person in respect of the destruction, disposal or diminution.
Read together, sections 1123, 1124 and 1125 of the SS Act mean that, if a person disposes that some or all of their assets without receiving adequate consideration for the value of the asset, any amount of the $10,000 disposed of in a calendar year continues to be assessed as an asset for a period of five years.
As set out below, I am satisfied that Mr Ebady disposed of assets in the amounts calculated by the Secretary and that those amounts are properly included in the calculation of his assets.
Requirement to notify Centrelink of change of circumstances
By ss 68 and 72 of the SSA Act, a person is required to inform Centrelink of changes in their circumstances within 14 days. Copies of letters sent to Mr Ebady during the debt period are before the Tribunal. Each included the following:
What is income
Income has a very broad meaning for Social Security purposes. Some examples of income are earnings from employment (including fringe benefits), business income (including farms), income from rental properties, deemed income from financial investments, income from superannuation pensions and other income streams, income paid from overseas including pensions, most compensation payments. If you have a partner, that person’s income may affect your payment
Mr Ebady recalls receiving some letters but does not recall their contents. Whether or not he bothered to read Centrelink’s letters, they leave no doubt as to the obligation to notify Centrelink of income received.
Deposits into Mr Ebady’s accounts
Bank statements obtained by the Secretary show numerous deposits into Mr Ebady’s various bank accounts during the debt period. At no time during the debt period did he declare any income to Centrelink despite the notices sent to him at different times advising that he was required to notify Centrelink of any relevant changes in circumstances including getting any money from “any source”.
Mr Ebady has offered no explanation about most of the deposits. He said, and I accept, that one deposit of $5,950 was the proceeds of the sale of his car. He claimed one deposit of $1,778.39 by the Australian Taxation Office was a friend’s tax return and deposits totalling approximately $61,000 were given to him by his father. Mr Ebady has not provided any evidence to support his claims.
A number of the deposits into Mr Ebady’s accounts were substantial. For example, deposits of $10,000 and $30,028 were made into one of his accounts on 29 December 2006. Mr Ebady claims a friend asked him to deposit the money into his account and then to transfer the funds to him overseas. He had no satisfactory explanation for why his friend asked him to make this or similar transactions on other occasions.
It is not possible, and in my view not necessary, to examine all of the transactions in all of the accounts in any detail in order to be satisfied that they were Mr Ebady’s accounts. A sufficient pattern is disclosed that satisfy me that all of the accounts in question were owned and operated by Mr Ebady.
For example, although he denies using the name Asami Mahod (in whose name a number of international funds transfers were made), a St George account in the name Asami Mahod was opened in July 2010 and closed in March 2014. On 2 December 2010, All Perfect Services deposited $1,000 into the account. Asami Mahod’s postal address from December 2012 to June 2013 was the same address that Centrelink held for Mr Ebady. In February 2013, $190.00 was deposited into the account by Waiel K Ebady. In February and April 2013, four deposits were made by Ebady Rabei. In April 2013 a deposit was made by Kalf Ebady. Mr Ebady denied making any of those deposits.
Giving evidence, Mr Ebady acknowledged that statements for Asami Mahod’s accounts were sent to the address at which he was then living. He claimed someone must have been using his address. He acknowledged that a St George bank account in the name Khalil Alibrahimy was recorded against the address at which he was living but denied the account was his.
I do not accept Mr Ebady’s evidence that he never used either name Asami Mahod or Khalil Alibrahimy. The coincidence of names and addresses of account-holders, and movements of funds between the accounts, is too great. I am satisfied that, more probably than not, Mr Ebady owned and operated all of accounts relied on by the Secretary.
International funds transfers
The Secretary says that, in the period 20 October 2006 to 1 September 2015, Mr Ebady made international funds transfers totalling $447,631, comprising:
(i)$3,899.00 on 20 December 2006 to Recon Chemicals Est in Dubai;
(ii)$12,628.00 on 5 March 2007 to Michael Yung Ng, Hong Kong;
(iii)$2,204.00 on 5 December 2009 to Mohammed Adel Abdul-Karim, Iraq;
(iv)$11,158.00 on 2 March 2010 to Saad Baqr Ibrahim, Iran; and
(v)$9,347.00 on 1 November 2010 to Mohammed Abbas Fazil, Iraq.
Records obtained by the Secretary show that the first three transfers were made in the name Waiel Ebady and the remaining transfers in the name Alibrahimi. Although it is not clear on the face of the records, each the transfer was apparently made through the informal “hawallah” system.
Mr Ebady acknowledges having made international funds transfers on occasions in the past but denies making any of those in question. He says he did not change his name to Waiel Ebady until sometime in 2008 and any transfers in that name before 2008 could not have been made by him. He says the transfers in his name after that date were by someone using his identity, and any other transfers were made by a person or persons unknown. He maintains that a corrupt hawallah agent in Auburn, who has since left the country after numerous complaints, allowed anyone to make transfers without proper identification.
There is no evidence before the Tribunal about the hawallah system but it is well-known to operate widely throughout the Middle East and Africa. I accept as plausible that an agent may operate and allow transfers without proper documentation but I am not satisfied that explains the transfers in dispute.
The Secretary has prepared a 13-page schedule of 1,183 transactions between 7 December 2005 and 9 January 2016 including deposits and withdrawals from accounts which Mr Ebady acknowledges were his, and records of international funds transfers. They include the following:
(i)on 20 October 2006 and 20 December 2006, international transfers of $500 and $3,899 respectively were made by Waiel Ebady;
(ii)on 5 March 2007, transfers of $2,000 and $10,000 were made between Mr Ebady’s bank accounts; on the same day, an international funds transfer of $12,628.00 was made to Michael Yung Ng in Hong Kong in the name Waiel Ebady;
(iii)on 28 November 2012, $598.00 was withdrawn from Mr Ebady’s NAB account; on the same day an international funds transfer of $598.00 was made to Kousar Mohammed Reza in Iran in the name Asami Mahod; and
(iv)on 7 March 2011, $13,130 was withdrawn from Mr Ebady’s Westpac account; on the same day, an international transfer of $12,815.00 to Abd Sid Salman in Iran in the name Asami Mahod.
The Secretary submits that an inference can reasonably be drawn that Mr Ebady made the international funds transfers. I agree. I do not accept, merely because he did not change his name to Waiel Ebady until sometime in 2008, that Mr Ebady did not make the international transfers in that name in 2006 and 2007.
The coincidence in even the small number of transactions described above is too great to accept they were made by someone other than Mr Ebady. The Secretary refers to other transactions in which withdrawals and international transfers were made that appear to be close in time but which, in my view, do not give rise to the same strong inference. Nevertheless, the overall pattern of withdrawals from bank accounts and transfers satisfies me that, more probably than not, Mr Ebady made all the transfers, totalling $447,631, during the debt period.
I am satisfied that, in making the international funds transfers, Mr Ebady disposed of assets that should have been included in the calculation of his entitlement to Newstart Allowance and DSP.
Rent assistance
Rent assistance is a supplement to Newstart Allowance that may be paid to a person who pays rent and is not an ineligible homeowner: ss 1070B and 1070C of the SS Act. Homeowner and ineligible homeowner are defined in ss 4 and 13 respectively. An ineligible homeowner’s principal home is not treated as an asset for the purposes of the assets test: s 11. The effect of these provisions is that a person cannot have the benefit of the exemption of his or her principal home from the assets test and receive rent assistance while living in the property.
Mr Ebady was paid rent assistance from 18 October 2006 to 28 December 2006, while living at a property in Kenyon Street, Fairfield. The Secretary has obtained from the NSW Department of Lands a copy of a mortgage to the Commonwealth Bank by Robe Mnsor dated 21 September 2006 and a transfer of that property to Robe Mnsor dated 10 October 2006. A further transfer shows that Robe Mnsor sold the property and transferred it on 30 June 2008.
Giving evidence before the Tribunal, Mr Ebady claimed never to have paid the mortgage or outgoings on the property. He said he paid rent to an agent while living at the property but never received rate notices. He acknowledged that the signature on the mortgage document was probably his.
I am satisfied that Mr Ebady was the owner of the property in Kenyon Street, Fairfield and lived there during the time that he was paid rent assistance. As he was not entitled to that payment, he has a debt in the amount paid to him of $343.99.
Calculation of the debt
The Secretary has provided extensive, detailed calculations of the overpayments to Mr Ebady during the debt period. They run to nearly 20 pages and calculate the overpayment by reference to what was paid to him less what he was entitled to according to the calculation of his income and assets. Mr Ebady does not challenge the accuracy of the calculations. I accept they are correct and accurately reflect the amount of overpayment to him during the debt period.
Subject to exceptions which do not apply in this case, 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 by the person and the debt is taken to arise when the person obtains the benefit of the payment: s 1223.
Is the any reason Mr Ebady should not repay all of the debt?
A debt may be written off if the debtor has no capacity to repay, if the debt is irrecoverable at law, if the debtor’s whereabouts are unknown or if recovery is not cost‑effective: s 1236 of the SS Act. As there is no evidence to suggest that any of these applies in this case, there is no ground for writing off the debt, whether temporarily or permanently.
A debt must be waived where it is wholly attributable to administrative error and the debtor received the payment in good faith: s 1237A. There is nothing to suggest that payment to Mr Ebady was attributable to administrative error and I am not satisfied, on the information before me, that he received the payment during the relevant period in good faith. There is, therefore, no requirement that the debt be waived.
Section 1237AAD of the Act provides that the Secretary may waive the right to recover all or part of a debt if satisfied that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation; or failing or omitting to comply with a provision of the SS Act or SSA Act; and there are special circumstances (other than financial hardship alone) that make it desirable to waive; and it is more appropriate to waive than to write off the debt or part of the debt.
Mr Ebady failed on a number of occasions to declare the true state of his financial affairs to Centrelink despite acknowledging receiving notices requiring him to do so. His failure to comply with legislation requiring him to provide this information means that the discretion in s 1237AAD is not available to him.
In any event, Mr Ebady has not provided evidence of any special circumstances by reason of which the discretion should be exercised. He says only that he is in financial difficulty, being presently without an income and reliant on family members for financial support. Section 1237AAD specifically precludes financial hardship alone from being considered “special circumstances”.
For these reasons, I am satisfied there is no ground for reducing any of Mr Ebady’s debt.
CONCLUSION
If a social security payment is made to a person who is not qualified for that payment or to whom it is not payable (by reason of income or assets above the allowance limit) the Secretary must cancel the payment: s 80 of the SSA Act.
I am satisfied, on the information before me, that deposits totalling $691,566.00 were made into Mr Ebady’s accounts during the debt period and that those amounts are properly characterised as income and ordinary income for the purposes of the SS Act. I am satisfied that his entitlement to Newstart Allowance and DSP during the debt period should be calculated accordingly. I am satisfied he made the international funds transfers in question and in so doing disposed of assets on the basis of which he is deemed to have earned income.
I am satisfied that the Secretary correctly cancelled Mr Ebady’s DSP and has correctly calculated the amount of the overpayments to him, and that he has a debt in that amount. There is no reason why he should not have to repay all of that debt.
For these reasons, I affirm the decision under review.
I certify that the preceding 64 (sixty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey
...............................[sgd].........................................
Associate
Dated: 6 July 2017
Date(s) of hearing: 15 May & 27 June 2017 Applicant: In person Solicitors for the Respondent: Department of Human Services
Key Legal Topics
Areas of Law
-
Administrative Law
-
Statutory Interpretation
Legal Concepts
-
Judicial Review
-
Statutory Construction
-
Remedies
-
Jurisdiction
0
2
0