Edwards and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 51

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 51

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/1450

GENERAL ADMINISTRATIVE DIVISION		)
Re		GEORGE EDWARDS

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal M J Carstairs, Senior Member

Date17 January 2008

PlaceBrisbane

Decision The Tribunal affirms the decisions under review.

..............................................

Senior Member

CATCHWORDS

SOCIAL SECURITY – age pension debt – failure to notify wife’s earnings – method of calculating the debt   

Social Security (Administration) Act 1999 (Cth) s 180

Social Security Act1991 (Cth) s 9, s 1064, s 1223

Mills and Secretary, Department of Education Employment and Workplace Relations [2007] AATA 2104

REASONS FOR DECISION

17 January 2008   M J Carstairs, Senior Member         

1.      George Edwards seeks review of Centrelink’s decision to raise and recover from him an amount of age pension relating to the period 4 June 2003 to 3 October 2006 (the period).  At the time of the hearing, Mr Edwards had repaid the debt in full. 

2. The Social Security Appeals Tribunal concluded that the debt amount totalled $3,125 for the period. An additional amount - some $312 - was added to the original debt in July 2007. This additional debt post-dated the Social Security Appeals Tribunal hearing. As a result, the $312 had not been reviewed by that Tribunal. It seems sensible, however, to treat the newly added amount as a variation of the total amount of the original debt. Applying s 180 of the Social Security (Administration) Act 1999, both amounts can be reviewed without the need for Mr Edwards to take the matter back for review by the Social Security Appeals Tribunal.

3.      I should observe at the outset that the main factor leading to Mr Edwards incurring the original debt was his decision to cease telling Centrelink what his wife’s casual earnings were.  Mrs Edwards was not receiving Centrelink payments at the time, but Centrelink needed to know her earnings in order to strike the correct rate for Mr Edwards’ age pension, because pension payments are worked out using the combined earnings of a couple, even if one member of the couple is not claiming a Centrelink payment.[1] Mr Edwards admitted that he decided to stop declaring his wife’s earnings because he thought that Centrelink were underpaying his age pension and it appears he was dissatisfied with Centrelink’s lack of readiness to discuss this with him.[2]  

[1] Sections 1064-A2 and 1064-E2 of the Social Security Act 1991.

4.      Mr Edwards insists that the debt should never have been raised and/or was incorrect in its total amount because of the method of its overall calculation, aspects of which he disagrees.  Amongst a number of matters that he has raised in this regard the main ones, as I understand them, are:

§  Centrelink’s application of deeming provisions for financial investments; and

§  the correct figure to be applied as the “income free area” when calculating the rate of age pension.[3]  

[3]        Document T1, Exhibit A1

ISSUES

5.      The main issue therefore in this case can be characterised as whether Mr Edwards has incurred the age pension debt raised against him, and, if so, what its correct amount should be. 

6.      Usually matters relating to debt recovery also raise the question of whether the circumstances warrant invoking the discretions for waiver of the debt, there being two main grounds available under the legislation.  I have concluded, however, that Mr Edwards’ matter does not present any substantial grounds for consideration of waiver.  One such available ground is “administrative error’, but this does not apply here where Mr Edwards made a conscious decision not to report his wife’s earnings.  There was no question of administrative error being the sole cause of the debt; that ground of waiver simply did not arise.

7.      Mr Edwards’ appeal challenged the debt itself.  In other words, he was not pressing for waiver on the other available grounds of “special circumstances” if the debt was found to be correctly raised.  Mr Edwards confirmed that he and his wife are comfortable financially and he did not raise at the hearing any other special circumstances as would justify waiving any part of the debt.

BACKGROUND

8.      During the debt period, Mr Edwards was receiving Australian aged pension payments as well as a pension (based on age) from the United Kingdom.  In addition he had several financial investments that Centrelink took into account in setting his rate of Australian age pension.  Mrs Edwards had casual earnings from different sources including work as a relief teacher and for the Electoral Commission during elections.  About the middle of 2005, Mrs Edwards also commenced receiving a UK pension based on age.  Her receipt of the first payments of her UK pension appears to have triggered Centrelink raising the additional debt amount of $312 in July 2007.

9.      With regard to the latter amount, Mr Edwards maintains that from 2005, when Mrs Edwards turned 60, his rate of UK pension had reduced.  Prior to that, there was a component of his UK pension that was referable to her.  A document from the UK pension office appears to confirm this.[4]  However it was unclear from that document exactly when any changes to Mr Edwards’ pension might have taken effect.  Despite Centrelink asking Mr Edwards for evidence such as bank statements or a print out of his UK pension payments - documents that might demonstrate the pension reduction to which he referred as occurring in 2005 - Mr Edwards did not provide any such evidence.  Centrelink simply raised the debt amount of $312 because it appeared that Mrs Edwards had received (as a lump sum in 2006) arrears dating back to 2005, and there was no countervailing evidence of any earlier reduction in Mr Edwards’ rate of UK pension. 

[4]        Document ST2, dated 16 March 2006

CALCULATION OF DEBT

10.     Mr Edwards acknowledges that he decided not to report his wife’s income.  This seems to have been from late 2004, according to evidence before the Social Security Appeals Tribunal.  Mr Edwards did not contest the amounts of income which Centrelink had confirmed as Mrs Edwards’ earning, ascertained from enquiries made with several of her employers, as well as from her tax returns.

11.     In relation to the overall calculation process, Mr Daniel Blackmore, an officer from Centrelink’s Rockhampton office who dealt with Mr Edwards’ debt in its initial review stages, gave evidence at the hearing that the computerised debt calculator used to calculate the debt was a system called ADEX.  Two different debt calculation tools have been used in the review process, however it is significant that, however calculated, the total amount of the debt has not varied by more than $8.  Mr Blackmore explained that this variation may be accounted for by the use of two debt calculation tools – that is, ADEX and MultiCal.

12.     I have looked at the materials and from the information available to Centrelink I could see no error in the Social Security Appeals Tribunal’s conclusions about the amount of the debt.  The Social Security Appeals Tribunal carefully checked the total amount received by Mr Edwards in the debt period, and concluded that the amount of age pension Mr Edwards received in the period was $25,466.42.[5]  That amount was paid without including Mrs Edwards’ earnings.  Once those were factored in there would be a situation whereby Mr Edwards had been paid too much age pension.  As Mr McQuinlan, who appeared for the respondent on the second occasion, pointed out, the debt calculation process allows a retrospective look at what the real circumstances of earnings were once all information is at hand. 

[5]        T2 at [10]

13.     On the evidence presented to me I was satisfied that the overpayment calculations[6] have been correctly carried out.  There was no evident error in the information relied upon to re-work the calculation of the amount of age pension to which Mr Edwards was entitled.  I was satisfied that the most up-to-date and accurate information was factored into working out the correct rate of Mr Edwards' payment throughout the period.  I have no reason to doubt the calculations that have been completed using the Centrelink ADEX system and now checked multiple times for accuracy.

[6]        T15 and T16

14.     Once Mrs Edwards’ earnings were recorded and entered into the system to make the necessary adjustments to Mr Edwards’ rate of age pension, it necessarily would mean that the amount to which he was entitled would be less than he had been paid, as he had not notified his wife’s income from employment.

15.     Mr Edwards raised a number of other matters in his submission[7] and at the hearing.  The Social Security Appeals Tribunal carried out a detailed check of the matters that Mr Edwards raised with them, and provided him with full explanations.  Ms Wallis Dunn, who appeared for the respondent on the first day of hearing, provided Mr Edwards with further explanations, some of which cover the same ground as was covered in the Social Security Appeals Tribunal decision.[8]  Mr Edwards appears unready to accept the explanations given to him. 

[7]        Exhibit A1

[8]        Exhibit R1

16.     The main matters raised by Mr Edwards challenged aspects of Centrelink’s use of formulae applied when working out a person’s income.  In particular Mr Edwards takes issue with:

§  the deeming rate applied to his investments, this being unfair, because actual receipts were rather less than the rate deemed; and

§  the failure of Centrelink to apply $228 as the income free area, this being set out in the Centrelink publication Australian Pension News.[9]

[9]        Volume 19, December 2006 – Annexure 1 to Exhibit R1

17.     Mr Edwards referred to a number of other issues in his application and submission.[10]  However I was satisfied that those matters have been dealt with fully by the Social Security Appeals Tribunal, and his continued attempts to ventilate these issues are without substance.

[10]        Document T1 and Exhibit A1.

THE LEGISLATION

18.     A person will incur a debt under the Social Security Act 1991 if they receive a level of pension at a rate to which they were not entitled. This is the effect of s 1223 of the Act. There was no question that Mr Edwards would incur a debt once he took the action of declining to advise Centrelink of his wife’s earnings. This meant that after data matching with the Australian Taxation Office, Centrelink would obtain Mrs Edwards earnings and re-calculate the amount paid to Mr Edwards. Taken globally, Mr Edwards’ submissions were more an “in-principle” objection than a criticism of particular parts of the calculation process or the data relied upon to calculate the debt.

19.     I do not accept Mr Edwards’ submissions that his debt has been calculated incorrectly, or that Centrelink has applied incorrect formulae in assessing amounts of combined income in Mr and Mrs Edwards’ circumstances.

20. Applying s 1064(1) of the Act, Mr Edwards’ age pension had to be calculated using Pension Rate Calculator A and the process, given that Mr Edwards had financial investments as well as an overseas pension, had to take into account the deeming provisions in the Act. The deeming provisions in the Act provide a formula such that financial assets are assessed according to a rate set from time to time and applied by Centrelink. Actual earnings from the investments are irrelevant. A pensioner couple[11] (which includes the circumstances where only one member of the couple receives a pension) has their combined financial investments taken into account for purposes of deeming.

[11] Section 9(1) of the Act

21.     Whatever Mr Edwards’ views of the unfairness of deeming provisions, Centrelink has to apply the legislation, as indeed does this Tribunal.  I was satisfied, accepting the evidence of Mr Blackmore, that Mr and Mrs Edwards’ financial investments have been correctly calculated and the correct deeming rate applied to them in the period.  There is no discretion to use actual earnings in preference to applying the deeming rate when calculating a debt. 

22.     Mr Edwards also maintains that he should have the benefit of the higher taper rate of $228 in assessing his income.  The taper rate provides an income free area.  Below this amount of income there is no effect on the rate of pension, and above the amount pension is reduced by 40c in the dollar for every dollar exceeding the income free area.  For some reason, the Centrelink publication Australian Pension News provided the incorrect information that income free area of a pensioner couple where only one received pension, was $228.  This does not accord with the provisions in the Act.  The Act provides at s 1064-E4 that the income free area for a partnered person where the partner is not getting a Centrelink payment is $114. Should this ever have been in doubt, the Tribunal decision in Mills and Secretary Department of Education Employment and Workplace Relations [2007] AATA 2104 confirms this as correct. I was satisfied that the correct income free area and taper rate of 40c in the dollar has been applied.

23.     Mr Edwards has not made out his case that Centrelink has committed any error in calculating the debt amount.

24.     As to the debt of $312 raised in relation to Mrs Edwards commencing to receive UK pension, Mr Edwards provided Centrelink with the letter from the UK pension authority telling Mrs Edwards that an amount of arrears would be credited to her bank account.  Mr Edwards now says that against this should be balanced a reduction of his UK pension that Mr Edwards claimed had taken effect in 2005.  He was asked to bring some evidence of this.  The hearing was adjourned to enable him to do so.  He said he would provide it.  He did not do so.  I was satisfied, there being no evidence before me that Mr Edwards UK pension reduced in 2005, that the debt of $312 was correctly raised and recovered.

25.      For these reasons I conclude that the age pension debt, now fully recovered, properly was recoverable from Mr Edwards.  I was satisfied that there are and were no grounds for waiving the debt.

DECISION

26.     The Tribunal affirms the decisions under review.

I certify that the preceding 26 paragraphs are a true copy of the reasons for the decision herein of Senior Member M J Carstairs.

Signed:         …………………………………………………..
  Joan Torbey, Associate

Dates of Hearing  18 September, 16 October, 4 December 2007  
Date of Decision  17 January 2008

The Applicant was unrepresented

For the Respondent                  Ms H Wallis Dunn on 18 September; Mr R McQuinlan, on 16 October and 4 December 2007