Giampietro and Secretary, Department of Education, Employment and Workplace Relations and Anor

[2012] AATA 15

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Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2012] AATA 15

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/2947

GENERAL ADMINISTRATIVE DIVISION		)
Re		FRANK GIAMPIETRO

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal G.D. Friedman, Senior Member

Date16 January 2012

PlaceMelbourne

Decision The Tribunal affirms the decision under review.   

....................[sgd]................

Senior Member

SOCIAL SECURITY – newstart allowance, carer payment and parenting payment ‑ failure to disclose rental income ‑ overpayment ‑ debt to Commonwealth - write-off and waiver of debt  

Social Security Act 1991 s 8, 68, 72, 1064, 1068, 1068A, 1223(1), 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

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

REASONS FOR DECISION

16 January 2012  G.D. Friedman, Senior Member

1.      Frank Giampietro was in receipt of newstart allowance and other social security benefits from 19 June 2001.  A data match between Centrelink and the Australian Tax Office (ATO) in 2009 revealed a discrepancy between Mr Giampietro’s taxable income and the income he had declared to Centrelink.  Subsequently he was found to have been overpaid $43,636.36 in benefits.  The Social Security Appeals Tribunal (SSAT) found that the overpayments were a recoverable debt to the Commonwealth, but that the debts should be re-calculated, this reduced the debts to the following amounts, totalling $15,340.16, which is the decision under review:

·newstart allowance debt of $7382.63 for the period 3 July 2001 to 27 June 2005;

·carer payment debt of $539.94 for the period 28 June 2005 to 14 November 2005;

·parenting payment (single) debt of $7417.63 for the period 16 November 2005 to 17 June 2010.

2.      Mr Giampietro claims that he has always provided correct information when asked, and that any debt should be waived.

ISSUES

3.      The issues before the Tribunal are whether Mr Giampietro has been overpaid social security benefits and, if so, whether these represent debts to the Commonwealth that should be recovered or written off or waived. 

HAS MR GIAMPIETRO BEEN OVERPAID SOCIAL SECURITY BENEFITS?

4.      Mr Giampietro told the Tribunal that there may have been some small adjustment to his benefits arising from the receipt of rental income a number of years ago, but these amounts do not constitute a debt to the Commonwealth.  He agreed that he was in receipt of newstart allowance from 19 June 2001 to 27 June 2005; carer payment on 28 June 2005; and parenting payment (single) on 16 November 2005 until 16 October 2010.  He said that he and his former wife had owned an investment property in Heathcote, and that he had informed Centrelink that there was no rental income from 5 November 2003.  He agreed that his tax returns for 2001/02 to 2007/08 showed that income had been received from renting the property, but stated that in various discussions with Centrelink he must have mentioned this.  He said that, in any case, Centrelink should have realised that this income had been received because the real estate agent, the bank and the ATO all knew about the rent that he had received.

5.      In relation to a property in Kilmore, Mr Giampietro agreed that he had received rent during the relevant periods, and Centrelink should have known about the income for reasons similar to the Heathcote property as Centrelink knew about the rental properties.  He maintained that he has never sought to mislead Centrelink or to claim benefits to which he was not entitled.  He agreed that he had been sent notices between 2001 and 2010 setting out the basis on which benefits were being paid and requiring him to inform Centrelink of any changes in circumstances, such as income received (including rental income), but he believed that he had fulfilled his obligations and he did not respond to the notices.             

6.      Mr Giampietro did not dispute any of the individual calculations of benefits received or benefits payable to him, but blamed incompetence by Centrelink for any overpayments, particularly as he had signed rental assistance forms for certain tenants, so Centrelink must have been aware that he was in receipt of rental income.

7.      Entitlement to social security benefits is governed by the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act). The rate of newstart allowance is calculated by using the rate calculator in s 1068 of the Act; carer payment by using the rate calculator in s 1064 of the Act and parenting payment (single) by using the rate calculator in s 1068A of the Act. According to the rate calculators a person’s income affects entitlement to these benefits and the income test requires the inclusion of ordinary income as defined in s 8 of the Act.

8.      The Tribunal finds that Mr Giampietro’s rental income from the two properties in the relevant periods constitutes ordinary income for the purposes of calculating entitlement to social security benefits, and that the amounts of rental income as set out in his tax returns, including deduction in full of interest payments on the Kilmore property, result in overpayments totalling $15,340.16 as re-calculated following the decision by the SSAT. The Tribunal finds further that the overpayments to Mr Giampietro constitute money received to which he was not entitled and are debts to the Commonwealth under s 1223(1) of the Act.

SHOULD THE DEBTS BE WRITTEN-OFF OR WAIVED?

9. Section 1236 of the Act provides for a write-off of the debt under certain circumstances. The Tribunal finds that Mr Giampietro is receiving social security payments, he has the capacity to repay the debts, and the debts are not irrecoverable at law. Therefore there are no grounds to write off the debts.

10. Section 1237A of the Act provides for waiver of a debt arising from administrative error:

1237A.(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

1237A.(1A)     Subsection (1) only applies if:

(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

11.     Mr Giampietro told the Tribunal that the debts should be waived in full because Centrelink is entirely to blame.  He said that a data match with the ATO should have been undertaken years earlier than it was, and that the inaction by Centrelink resulted from its incompetence despite his frequent contact with Centrelink officers over the years.  He denied any responsibility for his failure to respond to the many notices sent to him or to notify Centrelink of changes in income that led to the overpayments.

12. The Tribunal does not accept Mr Giampietro’s submissions. Although the data match with the ATO took several years, the various notices sent to him by Centrelink before and during the debt periods satisfy the requirement of notices set out in s 68 and s 72 of the Act requiring Mr Giampietro to provide information to Centrelink regarding changes in income arising from rent received in respect of the two properties. He failed to do so, which caused the overpayments. Therefore the debts were not attributable solely to an administrative error made by the Commonwealth, so the debts cannot be waived under s 1237A(1A) of the Act.

13. Section 1237AAD of the Act provides for waiver of a debt in certain circumstances:

1237AAD.  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 false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.

14.     In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held that the special circumstances, referred to in s 1237AAD(b) of the Act, must be unusual, uncommon or exceptional. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 the Federal Court of Australia referred to the need to distinguish a case from the ordinary or usual. The Tribunal accepts that Mr Giampietro has found the matter to be stressful and that he is dealing with a number of personal issues. He believes that he has always fulfilled his obligations and blames Centrelink for the overpayments. However the Tribunal is satisfied, on balance, that the circumstances in this case are not unusual, uncommon or exceptional, and that the case is not to be distinguished from the ordinary or usual. Therefore the circumstances do not constitute special circumstances (other than financial hardship alone), so the waiver provisions of s 1237AAD of the Act cannot apply.

15.     Consequently Mr Giampietro has debts to the Commonwealth totalling $15,340.16, which cannot be written off or waived.

DECISION

16.     The Tribunal affirms the decision under review.

I certify that the sixteen [16] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

....................[sgd]..................

Michael Heffernan

Associate

Date of hearing:  11 January 2012

Date of decision:  16 January 2012
Advocate for applicant:                Self‑represented

Advocate for respondent:            Mr A Carson, Centrelink