Eminoglu and Secretary, Department of Social Services (Social services second review)
[2020] AATA 2217
•14 July 2020
Eminoglu and Secretary, Department of Social Services (Social services second review) [2020] AATA 2217 (14 July 2020)
Division:GENERAL DIVISION
File Number(s): 2018/3683
Re:Juneyt Eminoglu
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member A Poljak
Date:14 July 2020
Place:Sydney
The decision under review is affirmed.
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Senior Member A Poljak
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – debt – overpayment of benefit – ordinary income – unexplained deposits – whether debt can be written off – whether debt can be waived – special circumstances – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 8, 1068, 1072, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) s 68
CASES
Beadle and the Director-General of Social Security (1984) 6 ALD 1
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
REASONS FOR DECISION
Senior Member A Poljak
14 July 2020
Mr Eminoglu (the applicant) has been in receipt of Newstart Allowance (NSA), now known as “jobseeker payment”, on and off since 12 March 2008. Most recently, the applicant was granted NSA from 25 August 2014.
On 23 September 2016, the Department of Human Services (Department), now known as Services Australia, undertook a review to determine the applicant’s past and present eligibility to receive NSA.
Information received by the Department revealed a series of unexplained deposits into two bank accounts of which the applicant was the account holder during the period 1 September 2014 to 10 May 2017 (debt period).
On 4 October 2017, the Department sent the applicant a notice requesting that he provide information in relation to the unexplained deposits. The applicant did not respond to this request.
Based on the Department’s review and calculations, the applicant received $32,707.29 in NSA during the debt period but was only entitled to receive $3,169.25. On 9 February 2018, Department raised a debt $29,538.03 (debt) against the applicant.
On 31 May 2018, the Social Services and Child Support Division of Administrative Appeals Tribunal (SSCSD) affirmed the decision made by an authorised review officer of the Department dated 27 March 2018, that the applicant was overpaid NSA during the debt period and has a recoverable debt of $29,538.03. This is the decision under review in these proceedings.
ISSUES
The issues for determination in these proceedings are as follows:
(a)whether the amounts deposited into the applicant’s bank accounts during the debt period should be classified as:
(i)“income” or “ordinary income” as those terms are defined in subsection 8(1) of the Social Security Act 1991 (Cth) (Act); or
(ii)proceeds of loans to the applicant;
(b)whether the applicant has a debt of $29,538.03 for overpayment of NSA for the debt period; and
(c)whether all or part of the debt is recoverable.
BACKGROUND
On 11 June 2011, the applicant purchased property in Glenmore Park (the property). The purchase price was $620,000 of which the applicant held 100% interest. On 3 November 2014, the applicant sold the property for $685,000. This sale was not disclosed to the Department. On 6 April 2016, the applicant received $114,505.40 in proceeds from the sale of the property.
The applicant has owned and operated several businesses. He is the sole director and shareholder of “Yazzy Pty Ltd”, who has not lodged an income tax return since 2015. He previously worked for himself in the business trading as “Hazelbrook Kebab House”, which he sold for $50,000 on 16 July 2014. The applicant also operated “Monte Italia”, a pizza restaurant, prior to claiming NSA. He claims that he walked away from the business in 2014 as it was not making any money.
The applicant claims he has not worked since 1 July 2014 except for a period of 4 to 5 weeks in 2015 when he worked for Uber.
CONSIDERATION
Were the bank deposits income?
The NSA is means tested by an income test and an assets test. The income test applied to the applicant during the debt period.
The rate of NSA payable to the applicant is calculated by applying the Rate Calculator contained in section 1068 of the Act. The income test is contained in section 1068-G1 (Module G) and considers a person’s “ordinary income”, and the ordinary income of a person’s partner, on a fortnightly basis for the purpose of determining the person’s rate of NSA. Section 1072 of the Act provides that “ordinary income” for the purpose of the income test is gross ordinary income rather than net ordinary income.
Subsection 8(1) of the Act defines “income” as:
(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;
but does not include an amount that is excluded under subsection (4), (5) or (8).
…
An “income amount” is defined exhaustively in subsection 8(1) to mean “valuable consideration; or personal earnings; or monies; or profits; (whether of a capital nature or not)”. The subsection also defines “ordinary income” as “income that is not maintenance income or an exempt lump sum”.
The applicant’s regular NSA payments during the debt period and the proceeds from the sale of the property of $110,248.67 deposited on 6 April 2016 are disregarded for the purpose of the income test, in accordance with subsection 8(8) of the Act. Two further deposits of $9,995 (totalling $19,990) made into the NAB account on 24 and 29 April 2015 are also excluded.
The Contract for Sale of the Hazelbrook Kebab House reveals that the applicant sold the business on 16 July 2014 for $50,000, just prior to the start of the debt period. The applicant advised at hearing that the proceeds were deposited into his bank account and used to pay legal fees. This figure is not included in the debt calculation.
During the debt period, the applicant was relevantly the account holder of two bank accounts; a CBA account and a NAB account. The evidence reveals that a series of unexplained deposits were made into these accounts during the debt period. The deposits included amounts of:
(a)cash deposits of $123,912 deposited into the CBA account;
(b)cash deposits of $39,370 deposited into the NAB account; and
(c)income from Uber of $5,031.99 deposited into the NAB account.
The applicant claims that the cash deposits received into his accounts were from numerous friends and family he borrowed money from to help pay for his rent, food and with legal costs associated with his divorce proceedings and a family law matter. The applicant has not provided any supporting evidence to demonstrate that the money deposited into his accounts were loans, nor has he provided any details about any feature of the loan agreements such as a re-payment plan or term.
The only friend identified by the applicant as a person who loaned him money during the debt period is Tunay Erdemli. In January 2017, the applicant received several significant unexplained deposits into his CBA account from Tunay Erdemli and Concept Windows Pty Ltd totalling $53,000. A further deposit of $10,000 was made on 4 February 2016 by Tunay Erdemli into the applicant’s NAB account. At hearing the applicant said that Tunay Erdemli was a friend in Melbourne who he asked for help. He claimed the money deposited into his accounts were not gifts or earnings but loans. He could not provide any further details about the terms of the agreement.
The only evidence from Tunay Erdemli is a statement dated 7 June 2017, in which he states that the applicant never worked for Concept Aluminium Windows Pty Ltd but was a very close family friend.
In regards to the other cash deposits made into the applicant’s CBA and NAB accounts, he has not provided any details about who made the deposits.
On 7 and 8 April 2016, the applicant made several significant withdrawals from his NAB account totalling $110,000. At hearing, the applicant claimed he used this money to pay back his friends and family that had loaned him money. He said he visited friends and gave them “whatever he could”, but he could not provide any further detail about who he paid, the amounts paid and how much he still owed.
Based on the available evidence, I am not satisfied that the cash deposits made into the applicant’s bank accounts during the debt period represent amounts loaned to him by friends and family. The frequency and pattern of the cash deposits can be attributed to income. I am satisfied that they were derived or received for the applicant’s own use or benefit and are income as defined by subsection 8(1) of the Act.
The debt
Subsection 1223(1) of the Act provides:
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a 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.
Subsection 1223(1AB) of the Act provides a non-exhaustive list of circumstances in which a person is taken not to be entitled to obtain the benefit of a payment. Relevantly, subsections 1223(1AB)(c) and (d) provide that a person is not entitled to the benefit of a payment if “the payment was not payable”; and/or “the payment was made as a result of the contravention of the social security law, false statement or a misrepresentation”.
Despite receiving numerous letters from the Department about his reporting obligations, the applicant failed to disclose his income during the debt period as required by subsection 68(2) of the Social Security (Administration) Act 1999 (Cth).
The debt was properly raised against the applicant in accordance with subsection 1223(1) of the Act. There does not appear to be any challenge to the Department’s calculations of the debt.
Writing off or waving the debt
The Secretary may, on behalf of the Commonwealth, write off a debt, for a stated period or otherwise, in certain circumstances. Subsections 1236(1) and (1A) of the Act provide:
(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(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.
There is no evidence that the applicant’s debt is irrecoverable at law or that he has no capacity to repay the debt. The applicant’s whereabouts are known, and he is currently on Family Tax Benefit (FTB). At hearing, the applicant advised that he was working casually and receiving cash in hand payments which paid for his living expenses. For these reasons, the applicant’s debt should not be written off.
Subsection 1237A(1) of the Act provides:
(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
For the debt to be waived under subsection 1237A(1) of the Act, it must be found that the debt was caused solely by administrative error; see Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126 at [35]. There is no evidence before me to suggest that there was any administrative error by the Department that caused the overpayment of the applicant’s NSA to arise. The applicant did not receive the payments in good faith because he ought to have known to disclose the cash deposits and his income with Uber to the Department. Accordingly, the applicant’s debt should not be waived under s 1237A(1) of the Act.
Section 1237AAD of the Act provides for the possibility of waving all or part of a debt on the grounds of special circumstances. Special circumstances are not defined in the Act however the Tribunal is provided some guidance by a number of Federal Court and Administrative Appeals Tribunal cases. In the decision of Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3:
An expression such as “special circumstances” is, by its very nature, incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances of unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.
(emphasis added)
The applicant claims that he doesn’t have any money, is still renting and “struggles with everyday life”. He says he is unable find a full-time job and owes a lot of money. He also claims that because of his financial issues and his failure to pay his friends back, he has lost many friendships. The applicant has provided numerous medical certificates completed by his general practitioner in 2014 to 2018 which record a diagnosis of, inter alia, depression and anxiety. While I accept the applicant has some issues with anxiety and depression, I give the available medical evidence limited weight as there is no medical evidence from a registered psychologist or psychiatrist addressing the applicant’s current wellbeing, prognosis and the impact (if any) his health may have on his daily life and prospects of employment.
At hearing, the applicant advised that for approximately a year and a half he has been working casually and is paid cash in hand. He said on average he works 15-20 hours a week and receives between $19-20 an hour. He said that he uses the cash to live off and doesn’t put any of it into his bank accounts. At the date of hearing, the applicant was receiving FTB and he advised his expenses included $400 a week for rent and $50 a week for food. He provides no persuasive evidence to support a finding that he is in severe financial hardship and there is nothing to suggest that his circumstances are unusual or uncommon compared to other NSA recipients.
There is nothing in the circumstances described by the applicant, which are unusual or uncommon that would warrant the exercise of the discretion to waive all or part of the applicant’s debt. Accordingly, I am not satisfied that the applicant’s circumstances are sufficiently special to warrant exercising the discretion to waive all part of the debt under section 1237AAD of the Act.
DECISION
The decision under review is affirmed.
I certify that the preceding 35 (thirty-five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak
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Associate
Dated: 14 July 2020
Date of hearing: 20 May 2019 Applicant: In person Solicitors for the Respondent: Services Australia
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