Fuss and Department of Family and Community Services

[2002] AATA 544

DECISION AND REASONS FOR DECISION [2002] AATA 544

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2002/7

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      GLEN HASTED FUSS      
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Senior Member J.A. Kiosoglous MBE    

Date4 July 2002

PlaceAdelaide

Decision      The Tribunal affirms the decision under review.          

(Signed)

J.A. KIOSOGLOUS

(Senior Member)

CATCHWORDS
SOCIAL SECURITY - age pension - overpayment – failure to notify Centrelink of all changes in shareholdings – dividends donated to charity.
Social Security Act 1991 ss.9, 1064, 1075, 1076, 1223, 1237A, 1237AAD

REASONS FOR DECISION

4 July 2002     Senior Member J.A. Kiosoglous MBE  

1. This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 18 October 2001 (T2) which affirmed a decision of an Authorised Review Officer (ARO) dated 7 August 2001 (T85) to raise and recover an overpayment of age pension debts of $1234 for the period 6 October 1995 to 24 June 1999, and $965.96 for the period 25 June 1999 to 29 March 2001.

2. The Tribunal received in evidence the documents lodged by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T1 to T90), together with six exhibits tendered by the respondent (Exhibits R1 to R6). The applicant did not tender any exhibits. The Tribunal heard evidence from the applicant, Mr Glen Hasted Fuss, who represented himself whilst the respondent was represented by Ms Lee-Anne Odgers, a departmental advocate.

3. The issues before the Tribunal are whether or not:

(a) the applicant has been overpaid in the two periods for which debts have been raised;

(b) the debts are recoverable; and

(c)  the recovery of the whole or part of the debts be waived.

1. Mr Fuss is a very pleasant and sincere person aged 71 years, his date of birth being 5 August 1930. He has been in receipt of an age pension since August 1995 and prior to this he was in receipt of a disability support pension. Also, he has a number of investments and particular he had invested money with two companies, Argo Investments Ltd ("Argo") and Wakefield Investments (Australia) Ltd ("Wakefield").

2. The first lot of 6,500 Wakefield shares were acquired on 13 July 1990 (T62/156). Over a period of several years the shares fluctuated according to transfers and share purchase plans. Similarly, the same applied to the Argo shares with the first lot of 3,000 shares having been acquired on 9 November 1989 (T63/158). On about 17 November 2000 the Wakefield shares were transferred into Argo shares.  The fluctuation of the shares from time to time, firstly in both companies and secondly after the transfer of the Wakefield shares to Argo, saw movement resulting in interest gained from the shares. His age pension rate by him is determined by an income test which includes income deemed to have been received on his shares and of the bank interest he was receiving.

3. The respondent through its Centrelink office sent various rate notices to the applicant informing him that he was under an obligation to inform Centrelink if he bought or sold any shares or other instruments in a company or received any bonus shares. On 30 May 2001 an officer of Centrelink determined that the applicant had failed to accurately advise of changes to his shareholdings in Argo and Wakefield as required (T77/297). As a result of this failure to advise the applicant's pension rate was incorrectly calculated and he was advised of this by two letters each dated 30 May 2001 (T76/295 and 296). One letter (T76/295) stated that an overpayment was raised as a recoverable debt for the period 6 October 1995 to 24 June 1999 amounting to $1234. The other letter (T76/296) raised a recoverable debt for the period 25 June 1999 to 29 March 2001 amounting to $965.96.

4. The applicant sought a review of these decisions by the original decision-maker who as a result of reconsidering those decisions affirmed them on 13 June 2001 (T80/301). An Authorised Review Officer (ARO) reconsidered them and decided to affirm them on 7 August 2001 (T85/308). The applicant then sought a review by the SSAT (T87/312) which on 18 October 2001 (T2/4) also decided to affirm the previous decisions. It was from the SSAT decisions that the applicant now seeks review by the Tribunal (T1/1).

5. In her submissions for the respondent Ms Odgers submitted that Mr Fuss is deemed to receive income from his investments through the shareholding in both Argo and Wakefield. As a result of receiving incorrect information recorded about these investments an incorrect amount of deemed income was calculated resulting in his receiving a higher rate of pension than he should have received between 6 October 1995 and 29 March 2001. Whilst Mr Fuss reported changes in his shareholding to Centrelink as required it was submitted that some of the changes in his shareholding were not reported. It was on this basis that the decisions of 30 May 2001 were made, reconsidered and affirmed.

6. Ms Odgers in her submissions contended that the rate of age pension is determined by, among other things, an income test. The Tribunal is satisfied that at no time did Mr fuss question nor dispute this. She submitted that the debts arose because the details of the applicant's investments were not correctly recorded hence his deemed income from those investments was not calculated correctly resulting in his being paid more than he was entitled.

7. The Tribunal does not propose to set out the applicant's investments in both Argo and Wakefield as set out in the Section 37 Documents (T62/156 and T63/158). However, what is evident is that over the years his shareholdings in each of the companies has increased. The Tribunal notes a scheme of arrangement in the year 2000 which saw the Wakefield shareholding being absorbed into and resulting in his being allotted 3,120 Argo shares for his original 6000 Wakefield shares. He no longer has any shareholding in Wakefield.

8. It was submitted that the applicant's shareholdings in the Argo and Wakefield companies are set out on the Security and Investments Listed Security (SILS) screens (Exhibits R4 and R5) in the records of both Centrelink and the respondent. These also reveal information concerning any change in market value. Centrelink recorded his shareholding in Argo as being 4500 from 17 August 1992 to 1 September 1999 (Exhibit R5 page 21) when it was increased to 5630. It was further submitted that this figure was maintained until 17 November 2000 when the number of shares was reduced to 2630 (Exhibit R5 page 11). This figure was maintained until 28 March 2001 when it was increased to 9594 (Exhibit R5 page 6) and which figure continues to be maintained.

9. Ms Odgers also submitted that the shareholding in Wakefield was recorded by Centrelink as being 6,500 from 17 August 1992 to 26 September 1995 (Exhibit R4 page 33) which was then reduced to 1500 and maintained until 1 September 1999 when increased to 2272 (Exhibit R4 page 17). This figure was maintained until 28 March 2001 (Exhibit R4 page 2) when reduced to zero and which accordingly ties in with the conversion of this shareholding to Argo. A zero holding continues to be maintained in Wakefield.

10. It was submitted that the applicant's shareholding in both Argo and Wakefield were also wrongly recorded in the periods 6 October 1995 to 29 March 2001. Ms Odgers also submitted that the applicant  had advised of certain changes in his shareholding in Argo and Wakefield (T40/120 and T55/144) but that he had not notified all of the changes. She stated that his failure to do so was despite the many notices given to him requiring him to advise if he bought or sold any shares or managed investment or received any bonus shares. In fact Mr Fuss in his oral evidence maintained that at all times he had notified changes made. However, when this was put to him by the Tribunal in simple terms namely, if in fact he did so notify changes at all times, Mr Fuss agreed he may not have done so, but that he did notify only when in his opinion he believed this was necessary to do so.

11. A record of where neither notice nor notification was given was obtained from the Customer Record Access Monitor (CRAM) by the SSAT and set out in its decision (T2/10-11). These CRAM reports (T4/24-42) indicate when a person's computer records have been accessed during each time the computer records have been accessed. They summarise the contact by the applicant at the time of the changes being made.

12. Mr Fuss in his evidence stated that the interest payable as a result of his shareholdings is paid straight into his bank account and that he does not actually receive it personally in to his hands. It is not disputed that the applicant is a very kind and charitable person donating a large proportion of the monies received by way of dividends from his investments to worthwhile charitable institutions. This is the core of the problem concerning Mr Fuss who stated on many occasions that the dividends received cannot be termed as income because the money is paid straight into the bank account and it is the bank on instructions from him that sends out the donations.

13. Mr Fuss during cross-examination stated that he told Centrelink of all changes by 'ringing' them. When put to him that the SSAT in its decision said that a number of times that there were changes and no record of his contacting Centrelink, Mr Fuss stated that everyone is human and makes mistakes and that he was not the only one who makes mistakes. He further stated that in his mind he told Centrelink everything it needed to know and he agreed that he only did so if he thought it necessary. He further stated that if he felt it not necessary then he did not do so.

14. Mr Fuss further stated that due to his shareholdings he was not in receipt of the full age pension and hence over the years he has saved Centrelink something like $18,000. He also stated that when he received the dividends these were paid straight into his bank account and that the bank then distributed the donations to charity as instructed by him. He stated that he had not wanted to benefit in any way and that all money goes to charity and he wanted by his example to encourage others to do likewise.

15. The Tribunal is satisfied on the facts and on the evidence of Mr Fuss himself that monies were received by him through dividends by virtue of his shareholdings. The Tribunal is further satisfied on the evidence that Mr Fuss, without any deliberate intent on his part, did not notify Centrelink of all changes and certainly not for the amounts nor periods in issue in this matter.

16. The age pension is calculated in accordance with Rate Calculator A at the end of section 1064 of the Social Security Act 1991 (the Act) which Rate Calculator contains in Module E an income test (Exhibit R6). Furthermore section 1076 of the Act provides that a person is taken to receive ordinary income from '"financial assets" in accordance with that section. The term "financial asset" is defined in section 9 of the Act to include "financial investment" which in turn is defined to include a "listed security". The Tribunal is satisfied and so finds that a share in a company listed on a stock exchange is a "listed security". Accordingly, Mr Fuss is taken to receive ordinary income from his shares in Argo and Wakefield and that these impact on his rate of age pension.

17. The fact that Mr Fuss commendably chooses to donate the dividends he receives from his investments is irrelevant. There are no provisions within the Act for donations to charity to be deductable from the deemed income. In fact sub-section 1075(2) of the Act specifically provides that deemed income from a financial investment cannot be reduced by expenses incurred because of the investment. When the correct shareholding was known, and the applicant's deemed income therefrom was calculated, the Tribunal is satisfied and so finds that he had been overpaid $1,234.00 for the period 6 October 1995 to 24 June 1999 and $965.96 for the period 25 June 1999 to 29 March 2001. Hence the amounts so overpaid are debts to the Commonwealth pursuant to section 1223 (the "catch all provision") as at the time the debts were raised on 30 May 2001.

18. On the evidence before it the Tribunal is also satisfied that there are no grounds which make it appropriate to waive the debts. In particular, the debts are not required to be waived pursuant to section 1237A of the Act, as they did not arise solely as a result of administrative error. The Tribunal is further satisfied that it is not appropriate to waive the debts pursuant to section 1237AAD of the Act as there are no "special circumstances" which make it appropriate to waive them.

19. Accordingly, the Tribunal affirms the decision under review as decided by the SSAT on 18 October 2001.

    I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A. Kiosoglous MBE.

    Signed:   (Signed)
      Barbara Armstrong, Associate

    Date/s of Hearing  22 May 2002
    Date of Decision  4 July 2002
    Counsel for the Applicant        In person
    Solicitor for the Applicant         -
    Counsel for the Respondent    Ms Lee-Anne Odgers
    Solicitor for the Respondent    Centrelink