Hanna and Secretary, Department of Social Services (Social services second review)

[2024] AATA 1192

Hanna and Secretary, Department of Social Services (Social services second review) [2024] AATA 1192 (6 March 2024)

Division:GENERAL DIVISION

File Number(s):      2023/9828

Re:Amell Hanna

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak

Date:6 March 2024

Place:Sydney

The extension of time application is refused.

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

Senior Member A Poljak

Catchwords

PRACTICE AND PROCEDURE — Extension of time — Application for review of decision filed out of time — Disability support pension (rent assistance) debt— 5 years and 15 days out of time — Length of delay — Whether the applicant has an acceptable explanation for the delay — Prospects of success — Prejudice — alternative avenues of relief — Whether reasonable in all the circumstances to grant the extension of time — Extension of time refused.

Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)

Cases

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

REASONS FOR DECISION

Senior Member A Poljak

15 May 2024

1. The applicant seeks an extension of time to apply for review of a decision of the Social Services and Child Support Division of this Tribunal (SSCSD) made on 26 October 2018. The decision at the SSCSD was to affirm the decision by Services Australia (the Agency) to raise and recover a disability support pension (rent assistance) debt of $13,288.33 in relation to the period from 16 October 2013 to 29 September 2017.

2. These interlocutory proceedings concern the applicant’s request for an extension of time within which to make the applications for review pursuant to subsection 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). The respond opposes the application.

3. The applicant and the respondent made written and oral submissions and an oral decision was given at the interlocutory hearing. The applicant has sought to have the reasons distilled to writing. They have been recreated as follows.   

   Principles To Be Applied

4. The Tribunal may extend the time for lodging an application if it “is satisfied that it is reasonable in all the circumstances to do so” pursuant to subsection 29(7) of the AAT Act.

5. The principles generally applied in determining an application for an extension of time are well-known.  In Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344, Wilcox J said, at [348] and [349], that the principles guiding the exercise of the discretion could be distilled from the authorities as including, “although not in any exhaustive manner”:

   (a)it is the prima facie rule that proceedings commenced outside the prescribed period will not be entertained, and an applicant must show an “acceptable explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time;

   (b)a distinction is to be made between an applicant who has “rested on his rights”, allowing the decision-maker to believe that the matter was finally concluded, and one who has continued to make the decision-maker aware that he or she contests the finality of the decision;

   (c)any prejudice to the respondent caused by the delay is a material factor militating against granting an extension;

   (d)the mere absence of prejudice is not enough to justify an extension; the “unsettling of other people” or of established practices is “likely to prove fatal to the application”;

   (e)the merits of the substantial application are properly to be taken into account; and

   (f)“considerations of fairness as between the applicant and other persons” in a similar position are relevant.

6. These principles are not to be applied mechanically.

7. The factors relevant for consideration in these proceedings are the length of delay; whether the applicant has an acceptable explanation for the delay; prospects of success; prejudice and alternative avenues of relief.

   Background Facts

8. The respondent set out the background facts for the matter in their written submissions and they are included below.

9. The applicant lodged a claim for disability support pension on 10 February 2011, which was subsequently granted from that date.

10. In an “Income and Assets” form dated 15 February 2011, the applicant indicated that in December 2009, she had given away a residential property worth $535,000 “to live rent free in [a] new residential property” and be cared for by her daughter.

11. On 10 March 2011, the applicant and her daughter provided a signed statement to the Agency confirming that the applicant had an interest to live in the property in Castle Hill [address reacted] (the Castle Hill property) unconditionally for the rest of her life.

12. Also on 10 March 2011, the Agency found the applicant was to be treated as a homeowner on the basis that she had a granny flat interest in the Castle Hill property as her contribution of $480,212 was greater than the extra allowable amount of $131,500. In particular, the Agency found the applicant sold her property at in Fairfield East [address reacted] and gave the proceeds of $480,212 to her daughter to purchase the Castle Hill property in exchange for a right to occupy the Castle Hill property for life.

13. Following a contact with the Agency on 16 October 2013, the Agency sent the applicant a rent certificate. On 1 November 2013, the applicant provided a rent certificate to the Agency advising that she paid $150 in rent per week for the Castle Hill property.

14. On 15 November 2013, the Agency decided that from 16 October 2013, the applicant’s rate of disability support pension included a component for rent assistance.

15. On 27 July 2017, an authorised review officer requested for the applicant’s rent assistance to be reviewed. This was on the basis that the Applicant sold her home in Fairfield in 2010 and used the proceeds to purchase a new home in her daughter’s name in Castle Hill, where the Agency had previously determined in 2011 that the granny flat provisions applied. They noted that in 2013 that coding was changed and rent assistance was granted.

16. On 12 January 2018, the applicant updated her address and accommodation details online. Following this, on 19 January 2018, a service officer noted the previous request from July 2017 had not been actioned. The service officer requested the applicant to confirm her rent details and arrangement so it could be determined if she was qualified for rent assistance.

17. On 22 January 2018, the Agency raised a disability support pension (rent assistance) debt of $13,288.33 for the period from 16 October 2013 to 29 September 2017 but waived the recovery of $614.35 due to the Agency’s sole administrative error, resulting in a recoverable debt amount of $12,673.98.

18. On 16 February 2018, an Authorised Review Officer (ARO) varied the recoverable debt amount to $13,288.33 on the basis that the debt was not in part caused by the Agency’s sole administrative error and that the applicant did not receive the incorrect payments in good faith.

19. On 26 October 2018, the SSCSD affirmed the ARO’s decision. The decision was emailed to the applicant on 2 November 2018, and also posted on 3 November 2018.

20. On 16 November 2018, this Tribunal notified the Secretary that the Applicant had lodged an application for review of a decision with this Tribunal. On 26 September 2019, this Tribunal advised the application was dismissed from 25 September 2019 as they had received written notification from the Applicant that she wanted to withdraw her application.

21. On 15 December 2023, the applicant lodged a further application for review of a decision and an application for extension of time to this Tribunal. These proceedings concern this application.

22. In relation to the debt for these proceedings, there is $13,069.23 outstanding. The applicant, at the time of this review, was not in a repayment arrangement.

    Submissions

23. In summary, the Secretary submitted that the discretion to extend time ought not be exercised for the following reasons.

24. The SSCSD decision was taken to be received by the applicant on 2 November 2018. The applicant’s application for review of a decision and extension of time application as received by this Tribunal on 15 December 2023. As such, the applicant’s application was 5 years and 15 days outside of the 28-day time limit for lodging the appeal. The Secretary contends that the significant length of delay in this matter weighs against granting an extension of time. The Secretary also contends that the applicant’s stated reason does not provide a reasonable explanation for her delay. The applicant was aware of her appeal rights, as demonstrated by her initial application for review of the decision lodged with this Tribunal and notified to the Secretary on 16 November 2018 but later withdrawn on 25 September 2019.

25. As for merits, the Secretary contends that the applicant’s proposed appeal has limited prospects of success. In order to succeed in her substantive application, the applicant would need to show that she was not overpaid or that there were grounds for the debt not be recovered.

26. The Secretary contends the applicant was a granny flat resident of the Castle Hill property as the Castle Hill property is a private residence, and the applicant paid $480,212 to her daughter in exchange for to live in the Castle Hill property unconditionally for the rest of her life. In accordance with sections 1147 and 1148 of the Social Security Act 1991 (the Act), the applicant’s entry contribution was $480,212 and the extra allowable amount (as at 16 October 2013 when the applicant began receiving rent assistance) was $142,500. As the applicant’s entry contribution exceeded the extra allowable amount, the applicant is taken to be a homeowner and is therefore not qualified for rent assistance. The Secretary therefore contends the applicant was overpaid disability support pension (rent assistance) in the amount of $13,288.33 for the period from 16 October 2013 to 29 September 2017.

27. The Secretary contends that there are no grounds to write-off the debt under section 1236 of the Act. The debt is legally recoverable, the applicant’s whereabouts are known, and it is cost-effective for the Agency to recover the debts. The Secretary also contends the applicant has capacity to repay the debts through reasonable deductions from her social security payments.

28. The Secretary concedes there was some administrative error as the Agency was aware, and had previously determined, that the applicant was a homeowner as she was a granny flat resident in the Castle Hill property. However, the debts were not caused solely by the Agency’s error in circumstances where the applicant stated she was paying rent for the Castle Hill property in the amount of $150 per week since 18 January 2010.

29. The Secretary contends that the Secretary would suffer substantial prejudice if an extension of time were to be granted. The ability to defend the application, obtain relevant information/documents and elicit reliable evidence from witnesses has been fatally affected by the significant passage of time.

30. As for alternative avenues of relief, it is open for the applicant to contact the Debt Management team at any time to discuss her options in relation to the recovery of this debt. Further, the applicant can approach the Agency at any time to request a new decision regarding the waiver of her debt in whole, or in part, due to special circumstances.

31. The applicant advised that her reasons for not seeking an appeal earlier was due to her difficulties in securing legal assistance which is why she is relying on the services of an Advocate. She further advised that she is now 69 years old. To repay a debt of over $13,000 at a potential repayment of around $100 a fortnight would take 5 years to repay this debt. She feels that this is an arduous expectation, given that she relies solely on the disability support pension to meet all her needs. The applicant submitted, amongst other things:

    …she believes that there was an incidence of an administrative and procedural error in this matter… she believes that it was not her sole decision or actions which determined her suitability for rent assistance. This determination was made by Centrelink in accordance with its own accessibility criteria. As such, she believes, it is unfair that the entire debt has been solely attributed to her. … believes that, at a minimum, there should be a shared responsibility of the debt between herself and the agency.

32. The applicant further submitted that she had no knowledge of the appeal that was submitted in 2019. She’s advised me that she actually did not submit that appeal.

33. As for prospects, the applicant believed that the reasonable test amount was not used to determine if she had a granny flat interest, and alternatively, she believes that if the reasonable test amount, which allows for a higher threshold of $783,000 as opposed to around $131,000, had been applied then it would have in fact found her eligible.

    Oral Decision

34. Oral reasons given in this matter are relevantly distilled below.

35. Usually, an application for review in this tribunal needs to be made within the 28 days.  In this instance, we have surpassed that 28 day period by over five years, which is a very significant delay. 

36. Referencing Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344, the key factors in this case are the ones that have been addressed in submissions by both the applicant and respondent, namely, the extent of the delay, and the reason for why there is that delay; prospects of success; any prejudice to the parties – in this instance it would be prejudice to the respondent; and if there are any other avenues of relief.

37. Five years out of time is a very extensive delay. The applicant has previously lodged an application to this tribunal, and sought review of the decision back in 2018, but for reasons that I am not aware of the applicant withdrew that in 2019. As such, it is plain that the applicant was aware of her appeal rights. I do note that the applicant is now saying that she has no knowledge of lodging that appeal, or any idea that that actually occurred in 2019, but even if that is accepted, there is no other reasonable excuse put forward as to why it has taken over five years to now come to the Tribunal to seek review.

38. Looking at the prospects, I have read the submissions that the applicant has filed, and I have heard oral submissions made on behalf of the applicant. It does look like one of the main issues that the applicant wants to deal with at hearing is waiver of the debt due to sole administrative error, and the respondent is correct in saying that this is a very strict test, and the error does have to be solely that of the Agency.

39. While it is neither necessary nor appropriate to me to make finding on the substantive application for the purposes of the interlocutory application, it appears that the applicant did declare at some time to Services Australia that she was paying rent. As such, there does appear to be some contribution from the applicant.

40. As for other matters put forward on prospects, my impression at this stage is that the applicant does not have strong prospects of success. This is particularly important when looking at possible different avenues of relief that are available to the applicant.

41. The respondent is correct in saying that the applicant can contact the Agency to discuss ways to deal with the debt in regard to payments, but she can also request that a new decision is made in regard to her circumstances, particularly whether they are special enough to waive parts or all of the debt. 

42. Finally, I do accept that there is significant prejudice to the respondent should an extension of time be granted.  The reason why we have these timeframes in place for review, is that there has to be some finality to decision making.  In this instance, the decision was made over five years ago, so it is understandable for the Agency to accept that that decision has been made and finalised. To go back and defend the matter now that is of such an age could possibly pose problems for them in defending the matter, in the sense that it would be difficult for them to obtain some of the evidence that they may need to deal with this matter properly.

    Decision

43. For these reasons, the extension of time application was refused.

I certify that the preceding 43 (forty-three) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

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

Associate

Dated: 15 May 2024

Date of hearing:	6 March 2024
Advocate for Applicant:	Ms N Thompson
Solicitor for the Respondent:	Ms E Smith, Australian Government Solicitor