GABOR and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2011] AATA 384

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 384

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/4113

GENERAL ADMINISTRATIVE DIVISION		)
Re		RENEE GABOR

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms Regina Perton, Member

Date25 February 2011

PlaceMelbourne

Decision For reasons given orally at the hearing, the Tribunal remits the matter under review to the respondent to recalculate Ms Gabor’s entitlements on a fortnightly basis.  The parties have liberty to apply.

..................[signed].......................

Member

SOCIAL SECURITY – Newstart allowance – overpayment – debt to Commonwealth – definition of income – remitted for recalculation of debt.

Social Security Act 1991 ss 8, 1068, 1223

Gabor v Secretary, Department of Education, Employment and Workplace Relations [2010] FCA 706

REASONS FOR DECISION

3 June 2011 Ms Regina Perton, Member

1.The Tribunal provided oral reasons for its decision at a hearing of this application on 25 February 2011.  The applicant subsequently requested written reasons for decision.  The reasons for the Tribunal’s decision are set out below.

2.Renee Gabor is a recipient of Newstart Allowance (NSA).  She worked as a casual employee for various market research companies including AC Nielsen Australia (the employer).  She was required to work in various locations, travelling to the designated site in her own car.  The employer paid her a travel allowance based on the kilometres travelled (the kilometres reimbursement).  The employer also paid Ms Gabor at an hourly rate for time taken to travel to the relevant location (the travel time reimbursement).

3.      Centrelink administers NSA for the respondent.  Ms Gabor regularly reported her income to Centrelink.  However, she did not report the travel time reimbursement as part of her income.  She believes that the travel time reimbursement did not comprise part of her taxable income and that she was not required to declare it as income to Centrelink.

4.In September 2008, Centrelink wrote to the employer and other companies for which Ms Gabor had worked, seeking information on her earnings for the period 5 April 2005 to 31 December 2007.  The details that the employer provided differed from the income that Ms Gabor had declared.  In October 2008, Centrelink raised a debt of $5,083.95 on the basis that Ms Gabor had under-declared her income from the employer in the period 19 April 2005 to 8 December 2007 (the relevant period).

5.      Ms Gabor applied for a review of the decision, and the original decision-maker reduced the debt to $4,151.19 after deducting from Ms Gabor’s income applicable travel and telephone allowances and a credit from overpayment of a previous debt.  Ms Gabor sought a review of this decision by an authorised review officer (ARO) from Centrelink.  The ARO agreed with the original decision-maker’s revised decision that Ms Gabor owed a debt of $4,151.19.  On 16 August 2010 the Social Security Appeals Tribunal (SSAT) affirmed the ARO’s decision.  On 24 September 2010 Ms Gabor lodged an application for review with this Tribunal.

6.      The issues considered by the Tribunal are:

·     Did Ms Gabor fail to declare all relevant income to Centrelink during the relevant period?

·     If so, does Ms Gabor owe a debt to the Commonwealth?

·     If so, has the debt been correctly calculated?

RELEVANT LEGISLATION

7.A person’s NSA entitlement is affected if she earns more than a prescribed amount of income in a particular payment period. Section 1068 of the Social Security Act 1991 (the Act) sets out how NSA is calculated and the impact of income on the calculation of the payment.

8.What constitutes income is set out in s 8 of the Act:

(1)  In this Act, unless the contrary intention appears:

"employment income”, in relation to a person, means ordinary income of the person that comprises employment income under subsection (1A)…

…

"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;

…

“ordinary income” means income that is not maintenance income or an exempt lump sum.

…

(1A)A reference in this Act to employment income, in relation to a person, is a reference to ordinary income of the person:

(a)   that is earned, derived or received, or that is taken to have been earned, derived or received, by the person from remunerative work undertaken by the person as an employee in an employer/employee relationship; and

(b)   that includes, but is not limited to, salary, wages, commissions and employment-related fringe benefits that are so earned, derived or received or taken to have been so earned, derived or received;

…

(2)A reference in this Act to 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).

MS GABOR’S REIMBURSEMENTS FOR EMPLOYMENT-RELATED TRAVEL

9.Centrelink acknowledged that the kilometres reimbursement should not be considered income for the purposes of calculating Ms Gabor’s NSA entitlements.  This payment is considered to be reimbursement for expenses.  The Tribunal agrees.

10.Centrelink submitted that the travel time reimbursement should be considered employment income.  The agency argued that the payments comprised part of her overall income, paid at an hourly rate.  It was irrelevant whether the hourly payments were for the time Ms Gabor spent travelling or undertaking other aspects of her work.

11.Ms Gabor disagreed.  She raised a number of points, including that the employer had not fully reimbursed her for the hours she actually spent travelling.  She stated that there were taxation rulings allowing for such income to be tax-deductible and that Centrelink should pay heed to the relevant taxation legislation.

12.Ms Gabor also described the payments as reimbursement for expenses already incurred.  The Tribunal accepts that the kilometres reimbursement could be classified as such, but not the travel time reimbursement.

13.Ms Gabor referred to an earlier matter in which she was the applicant (Gabor v Secretary, Department of Education, Employment and Workplace Relations [2010] FCA 706). In September 2009, Ms Gabor sought an extension of time to institute an appeal from a decision of the Tribunal, differently constituted, handed down in March 2003. That case involved similar issues to the present matter. On 6 July 2010, the Federal Court refused the extension of time. Ms Gabor cited comments in the judgement which suggested that there may well be merit in her arguments concerning income. Ms Gabor argued that these comments supported her submissions in the present case. The Tribunal notes that, notwithstanding his encouraging comments, the judge stated that it was unnecessary for him to form a definitive view on Ms Gabor’s prospects of success in the earlier Centrelink dispute, given that he was refusing the extension of time.

14.The Tribunal does not accept Ms Gabor’s submissions concerning the travel time reimbursement. The Tribunal is satisfied that the travel time reimbursement was employment income for the purposes of s 8 of the Act. The Tribunal agrees with Centrelink that the definitions in s 8 of the Act are the relevant definitions for the Tribunal to take into account in determining income. The definitions in taxation legislation may well differ to those in social security legislation, but it is the definitions in the Act that are pertinent in this matter.

DOES MS GABOR OWE A DEBT TO THE COMMONWEALTH?

15.     Regardless of the reason for Ms Gabor’s failure to declare all of her employment income, the Tribunal must consider that income when calculating the amount of NSA to which she was entitled during the period of overpayment.

16. Section 1223(1) of the Act allows the Commonwealth to raise a debt against a person if that person is paid a higher social security payment than that to which she is entitled.

17. Ms Gabor submitted that the finding of a disparity in the amount declared was insufficient to trigger the provisions of s 1223. She suggested that Centrelink must find that she had committed an offence before it could impose a debt. She also suggested that the agency was not entitled to obtain the information it had about her by contacting her employer. She cited a number of provisions of the Act and other legislation to support her arguments.

18. The Tribunal does not accept Ms Gabor’s submissions. Section 1223(1) of the Act allows the Commonwealth to raise a debt where a person is paid more than their entitlement. The reason for the failure to declare, whether deliberate or, as appears possible in this matter, due to a mistake on Ms Gabor’s part, is irrelevant to whether Centrelink can raise a debt.

19.     Based on the evidence presented, the Tribunal is satisfied that Ms Gabor did not declare all of her income to Centrelink.  As a result, she was overpaid NSA.  Centrelink is therefore entitled to raise a debt based on the difference between the amount of NSA she actually received and that to which she was entitled.  The Tribunal is satisfied that Ms Gabor incurred a debt to the Commonwealth for the relevant period.

20.     The ARO and the SSAT calculated a debt of $4,151.19 for the relevant period.  That is most likely correct.  However, the documentation provided to the Tribunal, known as ADEX calculations, did not provide details of how the original decision-maker calculated the debt.  Only the adjustments taking account of the kilometres reimbursement were shown in the documents.  Centrelink has been unable to locate the original calculations.

21.     In light of the lack of detail in the available documents, the Centrelink advocate said he would not resist a decision by the Tribunal to remit the matter so that Ms Gabor could be satisfied that Centrelink had correctly calculated the debt.  The Tribunal therefore decided to remit the matter so that the amount of the debt could be checked on a fortnightly basis during the relevant period, taking into account the two different types of payment for travel.  These were the kilometres reimbursement, which is not income for NSA purposes, and the travel time reimbursement, which is income for NSA purposes.

DECISION

22.For these reasons, the Tribunal remitted the matter under review to the respondent to recalculate Ms Gabor’s entitlements on a fortnightly basis.  The parties have liberty to apply.

I certify that the twenty-two [22] preceding paragraphs are a true copy of the reasons for the decision herein of:
Ms Regina Perton, Member

Signed:…………………[signed]………………………………………

Associate                  Grace Horzitski

Date of Hearing  25 February 2011
Date of Decision  25 February 2011
Date of Written reasons               3 June 2011
Advocate for the Applicant          Self-represented 
Advocate for the Respondent       Mr T de Uray, Centrelink Advocacy