El-Mawas and Secretary, Department of Social Services (Social services second review)

[2019] AATA 3199

El-Mawas and          Secretary, Department of Social Services (Social services second review) [2019] AATA 3199 (7 August 2019)

Division:GENERAL DIVISION

File Number(s):      2018/1912

Re:Samia El-Mawas

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mrs J C Kelly, Senior Member

Date:7 August 2019

Date of written reasons:        2 September 2019

For the reasons given orally on 7 August 2019, the Tribunal sets aside the reviewable decision and in substitution, decides that the Applicant received overpayment of carer payment in the sum of $119,897.66 for the period 17 May 2004 to 24 January 2017 which is a debt due to the Commonwealth.

.................................[SGD].......................................

Mrs J C Kelly, Senior Member

CATCHWORDS

SOCIAL SECURITY –  debt arose due to undisclosed jointly owned property - whether all or part of the Applicant debt can be waived or written off - Applicant’s evidence lacks clarity, was evasive and inconsistent – Applicant unable to reliably set out circumstances – Applicant currently in receipt of carer allowance with debt repayment deductions – Tribunal not satisfied that the debt did not result wholly or partly from the Applicant knowingly making a false statement or false representation or failing or omitting to comply with a provision of the Act – Tribunal not satisfied that there are special circumstances - Tribunal not satisfied that debt should be waived pursuant to s 1237AAD - Tribunal not satisfied that debt should be written off pursuant to s 1236 - reviewable decision set aside and in substitution it is decided that the Applicant received overpayment of carer payment

LEGISLATION

Social Security Act 1991 (Cth) ss 1064, 1118, 1236, 1237AAD

Social Security (Administration) Act 1999 (Cth) s 66A(2)

CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

Mrs J C Kelly, Senior Member

2 September 2019

Introduction

1. Ms El-Mawas owes a debt resulting from overpayment of carer payment during the period 17 May 2004 to 24 January 2017 (the debt period) currently estimated to be $119,897.66.  She is not disputing the debt but wishes to have the debt waived.  In the alternative, she requested that it be written off for a further period. There was no suggestion that it was caused solely by administrative error.

2. The reviewable decision made by the Social Services and Child Support Division of the Tribunal (AAT1) on 13 February 2018 wrote off the debt until 31 August 2018 pursuant to section 1236 of the Social Security Act1991 (Cth) (the Act). At that time, the debt was calculated to be $105,039.75.

3. The debt arose primarily because Ms El-Mawas did not disclose that she was a joint tenant in a property purchased in Condell Park for $550,000 on 27 March 2004 (Condell Park).  Rental income was earned from those premises during the debt period.  There has never been a mortgage on that property.

4. In summary, Ms El-Mawas claims that she does not have the means to repay the debt and will be on the street if she does have to repay it.  She claims that she did not know she owned a share of Condell Park until advised by Centrelink in December 2016 and did not know about her husband’s finances.

   Background

5. The reviewable decision set aside a decision made by an Authorised Review Officer on 29 September 2017 which affirmed the decision made by the Department of Human Services (the Department) on 8 August 2017 to raise and recover a debt of $105,039.75.  The Authorised Review Officer did not consider writing off the debt.  He did consider waiving the debt but found that there were no special circumstances.  The debt was recalculated on 18 December 2018 based upon historical valuations of Condell Park and the debt was increased to $119,897.66 which is what it was as of the date of this hearing.

6. Ms El-Mawas’s application for review was received by the Tribunal on 12 April 2018.  She had been in receipt of carer payment since 14 December 1999 for the care she provided to her husband.  During the debt period, Ms El-Mawas resided with her husband and two children at their home in Bass Hill.  There is no mortgage on that property. 

7. On 8 December 2016 the Department wrote to the Applicant advising that it had come to the Department’s attention that she had not declared real estate that she owned and requesting that she complete a Real estate details MOD(R) form.  On 3 January 2017, the Applicant’s carer payment was suspended as she had failed to provide the requested information to the Department.  On the same day she provided the completed form in which she indicated that she and her husband purchased Condell Park for $550,000 in 2007.  The couple owned the property in equal shares and leased the property for $450 per week.   The Applicant estimated that the property had a value of $750,000. 

8. On 20 January 2017 the Applicant’s carer payment was restored.  Her rate of carer payment was reduced based on the Condell Park property having a value of $750,000. On the same day the Department sent a letter to the Applicant requesting further information about her assets.

9. On 24 January 2017, the Applicant contacted the Department by telephone to question why her payments had been suspended.  The Department’s electronic file note of the conversation states:

   Queried where money came from to purchase the property at (Condell Park) and she advised she received an inheritance from her mum. Queried amounta [sic], and she said was years ago but thinks $120 to $150k. The balance of the purchase was from the husband’s comp payment from Heritage.

10. On 25 January 2017, the Applicant’s carer payment was cancelled as the Department determined that she had combined assets of $1,103,050.00 which exceeded the asset test cut-out limit.

11. On 31 January 2017, the Department obtained a valuation assessment of Condell Park, which indicated the historical valuations of the property for various years from 17 May 2004 when the valuation was $550,000.  The Tribunal will not detail all the other valuations but notes on 1 July 2016 and 31 January 2017 it was $1,100,000. On 6 February 2017 an Authorised Review Officer of the Department affirmed the decision to cancel the Applicant’s carer payment. 

12. The Department subsequently obtained information in relation to money held in bank accounts by the Applicant and her husband.  The bank records revealed that her husband had sums of money in multiple accounts that had not been declared to the Department.  In the period around March 2017, the total was approximately $100,000.

13. On 31 May 2017, the Department sent the Applicant a letter requesting information in relation to her income and assets.  In response she advised the following:  Her husband had been receiving fortnightly payments of $800 from GIO Insurance from 2004.  The couple had received $134,990 in rental income between July 2010 and June 2016.  Deposits totalling $61,000 between 11 November and 16 November 2011 were received by Mr El-Mawas as an AMP shareholder.  The Tribunal notes that at that time the bank balances of $100,000 were not disclosed, although the $61,000 deposits in 2011 were.

14. The Applicant also provided letters from the real estate agency which was managing Condell Park from about 2010, and which showed that it had been rented out at $480 per week.  In addition, she provided owner income and expenditure reports for the property, which showed that her husband received rental income in the financial years 2012 to 2016 inclusive of $134,990, as previously referred to.

15. Until the Department’s request on 8 December 2016, the Applicant did not advise the Department at any time that Condell Park had been purchased by her and her husband, that they were receiving rental income from that property, or that her husband had large amounts of money in multiple bank accounts, as shown by the evidence before the Tribunal. 

16. On 8 August 2017 the Department decided to raise and recover from the Applicant the debt totalling $105,039.75 for the debt period.  The Department used the following values of Condell Park:  $550,000 from 17 May 2004 to 2 January 2017; $750,000 from 3 January 2017 to 24 January 2017.  On 17 August 2017 a decision was made and the Applicant notified, that the debt would be written off for a period of three months, to allow her to reorganise her finances before the repayment was required.

    Relevant legislation

17. The statutory provisions relevant to this review are contained in the Act.  As a recipient of carer payment, the Applicant’s rate of carer payment was required to be calculated under the rate calculator in section 1064 of the Act.  The rate calculator requires that both an income and asset test be applied.  Recipients of social security payments are required to disclose all their income and assets, and notify Centrelink of any changes.

18. If a person is a member of a couple, the obligation extends to notifying Centrelink of the partner’s financial circumstances.  Those requirements are set out in letters to recipients, of which the Applicant has received at least 30.  The value of a person’s principal home is to be disregarded in calculating the value of their assets, according to section 1118 of the Act. 

19. The scope of this review is narrow. The Applicant sought to have the debt waived pursuant to section 1237AAD, or as a second position, written off pursuant to section 1236 because she has no capacity to repay the debt. Section 1237AAD provides:

    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…

20. Subsection 66A(2) of the Social Security (Administration) Act 1999 (Cth) states that where a person is being paid a social security payment and an event or change of circumstances occurs that might affect that payment, the person must, within 14 days of the day on which the event or change occurs, inform the Department of the occurrence of the event or change.

    The Applicant’s position

21. Before AAT1 on 13 February 2018, the Applicant said the following.  She and her husband live essentially separate lives.  He is away a lot and she does not know where he goes.  AAT1 asked whether she had considered separating from her husband.  She said that she had considered it but that her children had persuaded her not to.  By the time the matter came before this Tribunal on 5 August 2019, the Applicant claimed that she and her husband had separated under the one roof in 2016. 

22. An application had been made to the Family Court, first on 16 June 2019, and then on 16 July 2019, for consent property orders.  The first application had been rejected.  The orders had not been made at the time of the hearing.  The effect of the orders was that the Applicant would become the sole owner of Bass Hill, the family home, and her husband the sole owner of Condell Park.  She told the Tribunal that her husband had moved out of the family home to Condell Park in May 2019. 

23. The Applicant contends that: 

    (a)she had no actual knowledge of her responsibility to inform the Department of her partner’s income; 

    (b)she had no actual knowledge of her responsibility to inform the Department of her partner’s asset position; 

    (c)she had no actual knowledge that she co-owned Condell Park with her partner until December 2016;  and

    (d)she had no actual knowledge of her responsibility to inform the Department of income through boarding and lodging at her home in Bass Hill.

24. The Applicant claimed the following constituted special circumstances, and in doing so referred to the case of Beadle v Director-General of Social Security (1984) 6 ALD 1. She claimed her financial position is relevant for the consideration by the Tribunal, even though financial hardship alone could not constitute special circumstances, she has special circumstances because of a combination of the following factors. She did not know about her husband’s assets and was not in a position to avoid the debt. Her husband is uncooperative, unsupportive and difficult to talk to. The relationship is not good and she is not receiving any direct financial assistance from him.

25. While she does not pay accommodation, her only income is the carer allowance which is not enough for most of her needs.  While she was separated from her husband under the same roof, he only paid the most necessary household bills, and did not contribute to food or other household needs.  Since May 2019, her former partner does not make any contribution towards household bills or food, or other household needs.  Her adult son is deaf, and in receipt of disability support pension.  Her daughter is in receipt of carer payment for looking after him.  They have to assist her with the bills, as she does not have enough money for basic personal items like cigarettes or medical needs.

26. She did not know she had to tell Centrelink about her husband’s assets or income.  She has a number of health issues, including diabetes, high blood pressure, cholesterol, arthritis, hernia, lower back pain travelling to her left leg, and a heart condition.  She is not well enough to work.  She takes medication for hernia and diabetes, and high blood pressure, according to her evidence.  She claimed that it was hard to cover the costs of her medicines, particularly because she no longer had a health care card, to which she was entitled when she was receiving a carer payment.

27. She last worked over 20 years ago when the children were small, and cannot work as she is frequently bedridden due to pain.  Her current income is $127.10 per fortnight, by way of carer allowance.  She is assisted by contributions in kind by her daughter towards payments of bills and household needs.  She has no other income.  She has no other assets other than the family home at Bass Hill.  Should the Bass Hill property be sold, the Applicant, her deaf son and her daughter, would be homeless.

28. At the hearing, Ms El-Mawas said that she was unaware that she was receiving the carer allowance.  In fact, she was receiving only about $7 a fortnight because the Department was deducting $120.74 for repayment of the debt.  As of the date of the hearing, the Applicant was an owner, as a joint tenant, of both Condell Park and Bass Hill.  The legal representative invited the Tribunal to adjourn the hearing until the consent orders had been made by the Family Court, and the transfers of properties had occurred, if it was not satisfied that the application to the Family Court was genuine.  He strongly opposed any suggestion that that application was contrived for the purpose of these proceedings.  Rather, he said that it was a consequence of the breakdown of the relationship with her husband and his moving out of the family home.

29. AAT1 found the Applicant to be a credible witness, and expressed sympathy for her, and accepted that she had little sway over her husband when it comes to making financial decisions.  For example, it accepted that he refused to entertain the idea of selling Condell Park because it was purchased with his compensation money.  However, it found that she had not consulted a financial counsellor, social worker or sought advice about her rights or how to assert them, and in the short to medium-term had little chance of using assets directly to provide herself a reliable source of financial support.

30. It also found that she did not have the capacity to make repayments towards the debt and, therefore, wrote off the debt until 31 August 2018, to allow her time to seek advice, and stated that her situation should be reviewed after the period before any deductions were put in place. 

31. Ms El-Mawas sought review in this Tribunal as she is entitled to do.  On 30 October 2018 directions were made that she advise the Tribunal on or before 13 November 2018, whether she intended to proceed with the application, and if she did, that on or before 27 November 2018 she had to give to the Tribunal and to the Respondent, a witness statement from all witnesses proposed to be called at the hearing, and all reports, records and any other documents on which she intended to rely.  She did not comply with those directions.

32. On 31 January 2019 the Tribunal sent the Applicant a listing notice that the hearing was on 30 April 2019.  On 10 April 2019 the Tribunal received a notice that she was legally represented.  On 30 April 2019 her legal representative appeared and provided a medical certificate for the Applicant in relation to a lower back condition which had been diagnosed a day or so before.  Consequently, the hearing was adjourned and rescheduled for 6 and 7 August 2019, and the Applicant was directed to file any evidence by 25 June 2019, and to advise whether she accepted that she owned the assets attributed to her by the Department.  The directions were not complied with.

33. In May 2019 it is said that Mr El-Mawas moved out of the family home to Condell Park.  The first application for consent property orders was made to the Family Court on 16 June 2019 and rejected, and the second application was made on 16 July 2019.  Ms El-Mawas told the Tribunal that she continued to care for Mr El-Mawas until he moved out of the family home in May, which included helping him dress and shower, sometimes to feed him, and to cook for him, although she also said that he did cook some meals, particularly eggs.  She also said that he could not dress himself in the beginning, but now he can and is getting better, although he is “still a bit crazy”.  He suffers from cognitive impairment and a back injury. 

34. Ms El-Mawas had been given two clear opportunities to take steps to get advice in relation to her financial circumstances.  First on 17 August 2017 when the decision was made, and the Applicant notified that the debt would be written off for a period of three months, to allow her to reorganise her finances before any repayment was required.  Her second opportunity was provided by AAT1 on 13 February 2018, when it wrote off the debt until 31 August 2018, to enable her to get advice.  She apparently sought no advice until April 2019.  Thereafter, it is said that her husband moved to Condell Park and they applied to the Family Court for the consent orders referred to above.

35. The Tribunal found the Applicant to be evasive and her evidence to be inconsistent and unpersuasive.  She has provided unreliable information to the Department and to this Tribunal.  She had told the Tribunal that she had not contributed inheritance money of $120,000 to $150,000 to purchase Condell Park, because her parents had died after 2004.  She had told the Department that she had received that inheritance and put it towards the purchase.  On 24 January 2017 the Applicant told the Department that she did not know her husband’s bank balances.  At that time his bank balances were approximately $100,000. 

36. On 24 January 2017 she also told Centrelink her husband lived at Condell Park, then that he lives between Condell Park and Bass Hill.  Sometimes she sees him week-on and week-off, sometimes three times a week, and that he had people living with him.  She was advised that information about his bank balances and the rent was required.  The information was provided about the rent, but not about the bank balances. She did not say at that time that she was unable to provide that information because her husband would not provide it.  She told this Tribunal the property had been rented out from 2004, and that her husband had moved there in May 2019.  She did not say that he had lived at the property before May 2019. 

37. When asked about a file note dated 27 January 2009 which recorded that her son was giving her a sum of money per fortnight, she said that he had stopped a few months ago, and now he and her daughter get their own food and share with her.  At the same time of the 2009 file note she said that only her son, her husband and herself lived at Bass Hill.  When the Department rang her about others living at the address, she was unsure how much each person paid per week, and she said it was for food only.  On 13 February 2009, the Department had information that two other people were living there, and paying $200 and $120 per week each. 

1. The Tribunal concludes that the Applicant has been reluctant to disclose information to Centrelink, and to the Tribunal.  Why only a few months ago her son suddenly stopped paying $200, and the Tribunal infers that her daughter also stopped paying her directly, and began to do their own shopping for food, was not explained.  It is consistent with the Applicant seeking to maximise her financial difficulties.

2. The Tribunal finds her statement that she provides the care for her son inconsistent with the fact that her daughter is receiving carer payment and carer allowance for looking after him.  Although how a single daughter looks after three children, five years, two years and one year old, as well as her brother, is difficult to conceive.

3. The Tribunal notes that if the Condell Park and Bass Hill properties are transferred as proposed, the Applicant and her husband will have principal places of residence which ordinarily would not be taken into account as an asset for the purpose of any social security payment.  It also notes that the proposed consent orders in the Family Court do not reflect the bank balances of approximately $100,000 held by the husband in January to March 2018.  Even taking into account the period that has elapsed, given the pattern of careful financial management by the husband that is apparent in the evidence, that there should no longer be a bank balance in the order of $100,000, is most curious.  It is also curious that her husband would purchase Condell Park in joint names while making it clear to his wife that it was his, purchased with his compensation money.

4. The Tribunal finds it significant that the Applicant has had no difficulty with the Department deducting money from her carer allowance for repayment of the debt, because she did not even notice that she was receiving it.  That circumstance alone would be sufficient to determine that there are no special circumstances, and that she has a capacity to pay debt, and therefore it should not be written off. 

5. The other circumstances upon which she relies, the Tribunal does not accept constitute special circumstances.  For example, her claimed health conditions are not supported by any medical evidence, apart from the medical certificate which only referred to a back condition which seemed to have been only diagnosed a few days before.

6. The Tribunal is also not persuaded, because of the nature of the Applicant’s evidence, that she really has a clear understanding of the family situation at the moment, including whether indeed she and her husband have separated.  It is, therefore, not satisfied on the evidence, because of the lack of clarity, the evasiveness and inconsistency, that what it has before it is a reliable picture of the Applicant’s circumstances and, as it has said, the fact that she has not missed the carer allowance, and the deduction therefrom, persuades it that this is not a case where there are special circumstances that the debt should be waived or that it should be written off.

7. The debt may not be written off pursuant to section 1236 of the Act because the Tribunal is not satisfied that it is irrecoverable at law, or that the debtor has no capacity to repay the debt, or that her whereabouts are unknown, or that it is not cost effective for the Commonwealth to take action to recover the debt.

8. The Tribunal is not satisfied that the debt did not result wholly or partly from the Applicant knowingly making a false statement or false representation or failing or omitting to comply with a provision of the Act.  Further, it is not satisfied that there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt.

   Decision

9. For those reasons, the Tribunal sets aside the reviewable decision and in substitution, decides that the Applicant received overpayment of carer payment in the sum of $119,897.66 for the period 17 May 2004 to 24 January 2017 which is a debt due to the Commonwealth.

I certify that the preceding 46 (forty-six) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

..................................[SGD]......................................

Associate

Dated: 2 September 2019

Date of hearing:	6 August 2019
Solicitors for the Applicant:	Mr S Diab, Simon Diab & Associates
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services