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

Hanna and Secretary, Department of Social Services (Social services second review) [2022] AATA 3772 (9 November 2022)
Division:GENERAL DIVISION
File Numbers: 2020/2039, 2020/3791
Re:Anne Hanna
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Mrs J C Kelly, Senior Member
Date:9 November 2022
Place:Sydney

In proceedings 2020/2039, the reviewable decision made on 2 March 2020 is set aside and substituted is the decision that the Applicant has a liability for overpayment of age pension for the period from 21 April 2018 to 14 December 2018 in the sum of $14,822.86.
In proceedings 2020/3791, the reviewable decision is set aside and the matter is remitted for reconsideration with the direction that Mrs Hanna’s assessable income during the period 21 November 2017 to 23 March 2018 included any of her gross Belgium pension payments attributable to that period.
................................[sgd]........................................
Mrs J C Kelly, Senior Member
Catchwords
SOCIAL SECURITY – age pension – debt – whether there was an overpayment of social security payment – Belgium pension – whether applicant declared employment income – whether applicant can deduct business-related deductions from gross income – whether there was an administrative error – whether there are special circumstances to waive debt – reviewable decision set aside and substituted – pension rate – whether amount of arrears paid was correct – decision set aside and remitted
Legislation
Income Tax Assessment Act 1997
Income Tax Assessment Act 1936
Social Security Act 1991
Social Security Act 1947
Social Security (Administration) Act 1999
Cases
Read v Commonwealth (1988) 167 CLR 57
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
9 November 2022

The Applicant, Mrs Anne Hanna, has two proceedings before the Tribunal: 2020/2039 and 2020/3791. Proceedings 2020/2039 will be referred to as the debt matter, and proceedings 2020/3791 will be referred to as the pension rate matter.
The debt matter is about an age pension (AP) debt that the Respondent, the Secretary, Department of Social Services, claims Mrs Hanna owes because she did not disclose the income she was receiving from working during the period 21 April 2018 to 14 December 2018 (the debt period). The decision to raise the debt of $14,905.54 was made on 10 September 2019.
Mrs Hanna applied for review of that decision to an Authorised Review Officer (ARO). She was unsuccessful, and then applied to the Social Services and Child Support Division of this Tribunal (AAT1) which decided on 2 March 2020 to set aside the decision and remit the matter for reconsideration with the direction that Mrs Hanna’s entitlement to AP for the period 21 April 2018 to 14 December 2018 be recalculated.
The debt has been recalculated to be $14,822.86.[1]
[1] Letter dated 3 July 2020.
The reviewable decision in the pension rate matter was made by AAT1 on 25 May 2020 affirming a decision made by an ARO on 15 October 2019, which affirmed a decision made on 13 April 2018 to pay the Applicant $1,792.91 in age pension back payment for the period 21 November 2017 to 23 March 2018.
The Applicant’s husband, Mr Hanna, represented the Applicant, Mrs Hanna, in both proceedings. They have many grievances with Centrelink. I only address those which are relevant to the two decisions I am reviewing.
In the debt matter, the Respondent conceded that the Tribunal has jurisdiction to consider the debt as recalculated. It did not press the submission that Mrs Hanna was a member of a couple.
The hearing ended when Mr Hanna requested, and the Respondent agreed, that the Tribunal review the decisions on the material lodged with the Tribunal. Mrs Hanna did not give evidence. I was satisfied that the issues for determination could be adequately determined in the absence of the parties.
The relevant legislation
The rate of AP is calculated in accordance with section 1064 of the Social Security Act 1991 (the Act) and is affected by a person’s income. Income is defined in section 8 of the Act as an amount earned, derived or received by the person for the person’s own use or benefit.
Section 1223(1) of the Act states that an overpayment of a social security payment is a debt to the Commonwealth.
Relevantly, section 1237A of the Act requires waiver of 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 the payment or payments in good faith, and the debt is not raised within a period of 6 weeks from the first payment that caused the debt or, where 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.
Section 1237AAD of the Act provides that the Secretary may waive the right to recover all or part of a debt if satisfied that the debt did not result wholly or partly from the debtor or another person knowingly make a false statement or representation or fail or omit to comply with the Social Security (Administration) Act 1999 (the Administration Act) or the Social Security Act 1947 Act.
Sections 68 and 72 of the Administration Act require a person to inform Centrelink about any changes to their circumstances within 14 days.
The documentary evidence
On 13 April 2018, Mrs Hanna was granted AP at the single rate. The department sent her a letter advising her that her AP had been granted from 21 November 2017. It advised her that she would be paid $1,792.91 as back payment from 21 November 2017 to 23 March 2018. It set out the information used for calculating her regular payment: Annual income $120.97 and her regular fortnightly earnings $2,799.55.
The letter also notified Mrs Hanna of her statutory obligations:
What you must tell us
You must tell us within 14 days … if any of the changes listed below happen or are
likely to happen to you and/or your partner (if you have one)…
This is an information notice given under social security law.
• Income. Your … gross income changes. Changes means your income starts,
stops, recommences or amounts vary. Gross income includes but is not limited
to:
- Earnings: Employment income …
- Business: Net profit from sole trader or business operation, private
company or trust that you control; director’s fees …
- Pensions: … pensions from other countries.
- Other income: … or any other income from any source (including income
from other countries).
…
• Compensation: Tell us within seven days if you … will receive, have received or
are likely to receive compensation.
…
How to tell us
You can tell us about these changes by …
The Applicant was sent a Reporting Statement on the same day which included the following (bold letters in the original):
This Reporting Statement is an information notice given under social security law. You have an obligation to provide us with all the information that is relevant to your payment. Giving false or misleading information is a serious offence. Information provided by you may be checked under our data matching programs.
You must report every 2 weeks for each Reporting Period on the dates below. Once your reporting requirements have been met, your payment will be issued for each Reporting Period.
The letter specified fortnightly reporting dates from 20 April 2018 to 29 June 2018 and stated in bold ‘What you must report for each Centrelink reporting period’. It referred to any circumstances that have changed, as listed on the back of the page, and if you were employed, ‘the business where you worked’ and the amount earned during the reporting period ‘before tax and other deductions’.
The changes in circumstances information on the back of the page included the requirement to tell Centrelink of any change on the reporting day immediately after the change and if ‘you do not tell us about changes, you could have a debt. If you have a debt, you may have to pay all or some of the money back …’. The list of circumstances included ‘employment income’ and ‘any money from any source’.
Another letter to the Applicant dated 13 April 2018 requested information about her living arrangements so a decision could be made as to whether she was living as a member of a couple.
In another letter dated 13 April 2018, the Department advised Mrs Hanna that she may be entitled to a Belgium pension and should claim for it.
She did not make her fortnightly report on 20 April as she was required to.
On 24 April 2018, the department sent the Applicant a letter setting out her regular payment from 8 May 2018 which showed the components of the payment and the information used to calculate it which was: ‘Annual income … $120.97’. Under the heading ‘What you must tell us’, detailed guidance was given, and time frames for doing so, including in relation to “income”. The detailed information was introduced by: ‘This is an information notice given under social security law’ and was in the same terms as in the letter dated 13 April 2018.
The Applicant attended a Centrelink office on 30 April 2018 ‘regarding Change in Earnings Details for Age Pension’ to report for the period 7 to 20 April 2018 (the day before the debt period began) (emphasis added). She reported no change in her circumstances and that there were earnings to declare for that period.
It seems from the account Mr Hanna gave and from undated documents in the T documents, Mrs Hanna attended in person because she had tried to complete the overdue information using the computer system, which advised her that her ‘current circumstances don’t allow you to use this service to report your details. Visit our nearest Customer Service Centre or contact us to arrange for your details to be reviewed.[2]
[2] T11, 236.
Also on 30 April 2018, the Department wrote to Mrs Hanna advising her that ‘As your circumstances have changed, you are no longer required to report every two weeks to get paid unless you start working again. If you start working again you must notify us within 14 days’. (Emphasis added). The letter enclosed a form listing the changes she must report. It began:
This information notice is given under social security law by a Commonwealth entity. You have an obligation to provide us with all the information that is relevant to your payment.
The letter also stated in bold:
If you don’t tell us about any changes, you could have a debt. If you have a debt you may have to pay all or some of the money back.
On 1 May 2018, Mrs Hanna lodged a statement complaining about the decision made on 13 April 2018 to pay her back payment of $1,792.91 for the period 21 November 2017 to 23 March 2018. She argued that she was managing a company and that fortnightly reporting was inappropriate because her income and losses can only be seen when she lodged a tax return.
On 10 May 2018, Mrs Hanna applied for a Belgium pension. She answered ‘No’ to the question ‘Have you stopped all your employment activities’.
On 17 June 2018, Mr and Mrs Hanna departed Australia together and returned on 5 July 2018.
In addition to the letters dated 13 April 2018, 24 April 2018, and 30 April 2018, the department sent letters to the Applicant advising her to notify the department within 14 days if she started work or her income increased on 6 July 2018, 21 August 2018, and 11 September 2018.
There was no documentary evidence supporting Mr and Mrs Hanna’s claim that she reported her income to the Department ‘by computer’ each fortnight during the debt period. On 30 December 2018 she did lodge payslips dated from 10 October 2018 until 19 December 2018 which set out Mrs Hanna’s pay from 24 September 2018 to 16 December 2018. She also lodged her Income Tax Return for the year ending 30 June 2018 which disclosed her income earned from her employment as a nurse and income earned and expenses incurred, as a ‘sole trader’ in a business of book publishing.
A search of the ABN for the business shows that it was registered to ‘the Trustee’ for (name) Publishing Group Trust’ and was active since 2006. The registered entity is a ‘discretionary trading trust’ and its source of income was ‘trading activities’.
On 10 June 2019, Mrs Hanna made a statement which included the following. She had been paid a Belgium pension of $6,253.59 for the period from July 2017 to April 2019 and $632.76 for May 2019 ‘including holiday pay’. She was working two nights per week as a registered nurse ‘but I have a propriety limited company as well’.
The notice that the Applicant owed a debt of $14,905.54 for the period 21 April 2018 to 14 December 2018, was issued on 10 September 2019.
Mrs Hanna’s evidence to AAT1 decision-makers
In the debt matter AAT1 decision dated 2 March 2020, Dr Bygrave wrote that ‘Mrs Hanna was adamant that she reported her earnings to Centrelink (from her employment as a nurse) by computer each fortnight in the period 21 April 2018 to 14 December 2018. Mrs Hanna said that she understood that she could not offset the losses incurred in the business against her income earned as a nurse.
In the pension rate decision dated 25 May 2020, Member Carson recorded the following. Mrs Hanna said that the monthly payment of her Belgium pension was $290 to $310, backdated to 3 June 2017. In April 2019 she received a back payment of $6,253.59 for the period July 2017 to April 2019.She also said that the compensation payment from the National Roads and Motorists’ Association (NRMA) insurance was deposited into her bank account and used to pay various expenses. She claimed that her business expenses should have been taken into account.
Other evidence
On 18 July 2020, Mrs Hanna signed and lodged the claim form for Carer Payment and Carer Allowance with respect to Mr Hanna. She indicated that she had never claimed or received compensation or damages due to personal injury or accident. She declared the contents of the form to be true and correct.
The debt matter
The question to be decided in the debt matter is whether AAT1’s decision made on 2 March 2020 was the correct or preferable decision. The fundamental question is whether Mrs Hanna is liable for an overpayment of AP during the debt period. The Respondent has raised some new matters relevant to that question. The questions to decide are therefore, whether, during the debt period:
(i)Mrs Hanna declared her employment income as a nurse;
(ii)Mrs Hanna’s assessable income during the debt period included:
(i)any of her gross Belgium pension payments attributable to the debt period; and
(ii)any compensation payments received from NRMA Insurance attributable to the debt period.
(iii)Mrs Hanna can deduct from her gross income, (whether from her employment, her Belgium pension or the NRMA) business related deductions?
(iv)If I find the debt calculation is correct or I recalculate the debt, whether the debt was attributable solely to an administrative error on the part of the Commonwealth, or there are ‘special circumstances’ to allow for waiver of the whole or part of the debt.
Consideration
Did Mrs Hanna declare her income as a nurse during the debt period?
Mr Hanna and Mrs Hanna claim that she did report her income that she received from her employment fortnightly as required during the debt period. Mr Hanna referred to pages 128 to 147 of the T documents in these proceedings to support that claim. They are pay slips from her employer dated from 13 September 2017 to 11 April 2018, prior to the debt period. A departmental record dated 12 April 2018 shows the following. Mrs Hanna’s AP claim was on hold. Mrs Hanna was advised that all payslips from 21 November 2017 to ‘now’ and the current lease agreement were required. On the same day, Mrs Hanna went to the Baulkham Hills office to report that she had uploaded the requested documents.
Mrs Hanna claimed that she advised Centrelink in person on 30 April 2018 that there was no change in her circumstances and that she was still employed. The record, supported by Mr Hanna’s evidence, shows that Mrs Hanna attended Centrelink in person on 30 April 2018 because she had not reported as she was required to on 20 April 2018 for the reporting period beginning 7 April and was not permitted to do so using the computer system. On 30 April 2018 she was therefore reporting for the previous reporting period and not in respect of her circumstances as of 30 April 2018. She did not attend to address the incorrect information in the Centrelink letter dated 24 April 2018. After 20 April 2018, her next reporting date was 3 May 2018.
The letter dated 24 April 2018 stated her ‘Annual income … $120.97’ because she had not reported her income from her employment on 20 April 2018. It was clearly not a correct statement of her annual income. Consequently, the letter of 30 April 2018 was sent which stated that as her circumstances had changed, she was no longer required to report every two weeks to get paid unless she started working again. If she did, she was required to notify Centrelink within 14 days.Mrs Hanna knew that she was working.
The letter Mrs Hanna wrote on 1 May 2018 is significant. She stated that fortnightly reporting was inappropriate because she was managing a company and her income and losses can only be seen when she lodged a tax return.
Not reporting from then until 30 December 2018, when she provided her tax return and payslips for the period 24 September 2018 to 16 December 2018, is consistent with her stated opinion that fortnightly reporting was inappropriate.
Further, the fact that she did provide payslips which set out her income for the period 24 September 2018 to 16 December 2018 on 30 December 2018 supports the finding that she was not reporting fortnightly on the computer during the debt period as she claimed.
I am satisfied Mrs Hanna did not advise Centrelink of her income from her employment as a nurse during the debt period as she was required to do because she decided that it was inappropriate to do so for the reason stated in her letter of 1 May 2018. She knew that Centrelink therefore did not have the correct information about her income during the debt period.
I do not accept the unsupported claims made by Mr Hanna that the lack of evidence that Mrs Hanna reported fortnightly was attributable solely to the department’s administrative error. The debt arose because Mrs Hanna decided not to report as she was required to and had done. The last period for which she reported was 7 to 20 April 2018.
It is therefore unnecessary to address Mr Hanna’s claims about the lengthy delay between the raising of the debt and the first payment that caused the debt, which depends on there being sole administrative error by the Commonwealth.
I emphasise that I am only concerned about the debt period. Mr Hanna pointed to incidents outside the relevant time period to show that the Department had made mistakes and that Mrs Hanna had always done what was required of her. What has happened at other times is not relevant.
Did Mrs Hanna’s assessable income during the debt period include her gross Belgium pension and/or compensation payments received from NRMA Insurance attributable to the debt period?
On 31 May 2019 Mrs Hanna advised Centrelink that she was receiving income of $632.76 per month in the form of her pension from Belgium. In her statement dated 10 June 2019, Mrs Hanna advised Centrelink of the two payments she had received from her Belgium pension, one of which included the debt period.
The letter advising the recalculated debt was dated 3 July 2020. It is included in the Supplementary T documents and is followed by a ‘MultiCal – Centrelink Debt Calculator’ and a ‘Debt Determination and Submission’. The latter document shows the debt period and ‘Excess Payment $14,822.86’. Next to the date ‘21/04/2018’ is included: ‘Customer Other Income (Forgn Pension) $3089.75 ANN’. The document also refers to “AAT1DEC to recalculate CUS entitlement for this period – refer to SCAN 09/03/2020’.

I infer from those documents, that the Belgium pension payment Mrs Hanna received that was attributable to the debt period, has been taken into account and included in the recalculated debt.
Given that the Belgium pension income was included in the recalculated debt, it seems unnecessary to make a finding, but for abundant caution, I am satisfied that the payments Mrs Hanna received from her Belgium pension is ‘income’ as defined in section 8(1) of the Act. It does not fall within any of the exclusions in section 8.
In a Mod C Centrelink ‘Compensation and damages’ form she filled out on 20 November 2017, Mrs Hanna disclosed that she had claimed or would claim compensation from NRMA for injuries arising from a motor vehicle on 7 September 2015. She answered ‘No’ to the questions whether regular compensation payments had been paid or pursued and whether lump sum compensation had been paid. She answered ‘Yes’ to the question whether lump sum compensation was being pursued. She had a solicitor acting for her in respect of the claim. It appears that the form was part of the documentation provided when she applied for AP in November 2017.
In answer to a question from Member Carson recorded in the AAT1 pension rate decision, Mrs Hanna said that the compensation payment from NRMA insurance was deposited into her bank account and used to pay various expenses. I was taken to no other information about that payment. I do not know when it was received or the amount.
There is no entry in the debt recalculation documentation that indicates that any compensation payments were taken into account. I am being asked to make a finding based on an assumption that such a payment was received and was attributable as income to some extent to the debt period. I do not know. That is not a proper basis for making the finding. I am unable to make a finding on the material before me.
Can Mrs Hanna deduct from her gross income, business-related deductions?
I have reframed the question about whether Mrs Hanna can deduct the business-related expenses from her income from employment because the Respondent has raised additional sources of income, her Belgium pension and NRMA Insurance, and made the same submission in respect of them. The relevant question is whether Mrs Hanna can deduct the business-related deductions from her gross income, whatever its source, for the purpose of AP?
‘Ordinary income’ in point 1064-E1 (Module E) means gross ordinary income from all sources for the period calculated ‘without any reduction, other than a reduction under Division 1A’.[3]
[3] Social Security Act 1991 (Cth), s 1072.
Section 1073 of the Act requires that lump sum amounts of ordinary income, which are not periodic or from employment must be assessed on a sum per week basis for 52 weeks, starting when the payment was received.
Division 1A of Part 3.10 of the Act relates to reductions of business income. Section 1074 of the Act sets out the circumstances in which a person’s ‘ordinary income’ for a tax year may be adjusted where the person carries on a business.
Section 1075 of the Act allows a person’s ‘ordinary income’ from a business the person carries on, to be reduced by certain losses and deductions related to the business and allowable under the Income Tax Assessment Act 1997 (the TAA).
During the debt period, Mrs Hanna was not carrying on a business, the named business was, and incurring losses and deductions in its own right. The corporate personality of the business is separate and distinct from Mrs Hanna’s legal personality as a natural person. The distinction, fundamental to corporations law, is the applicable concept in social security law.
The Act and relevant authorities make it clear that the concept of ‘income’ in the TAA and the Income Tax Assessment Acts of 1936 is not the concept of ‘income’ in the Act. They are separate and distinct statutory schemes.[4]
[4] Read v Commonwealth (1988) 167 CLR 57.
The treatment of the business for the purposes of the TAA is irrelevant to how it is treated for the purposes of the Act.
Mrs Hanna’s claim that she is carrying on a business and the losses and deductions can be offset against her gross income, whatever the source, is misconceived in the context of social security law.
Has there been an error or errors solely attributable to the Commonwealth, or are there any ‘special circumstances’ that allow waiver of the whole or part of the debt?
Before addressing whether there has been sole administrative error or whether there are ‘special circumstances’ that allow for waiver of the whole or part of the debt, for completeness, I address the Secretary’s discretion to write off a debt, although I did not understand Mr and Mrs Hanna to seek to rely on this discretion.
A debt may be written off, although it will still exist and may be recovered later, if the debt is irrecoverable at law, or the debtor has no capacity to repay the debt, or their whereabouts is unknown, or it is not cost effective for the Commonwealth to take action to recover the debt.[5]
[5] Social Security Act 1991 (Cth), s 1236.
The evidence does not establish any of the circumstances in which a debt may be written off.
For the reasons given above in the section headed Did Mrs Hanna declare her income as a nurse during the debt period?, I am not satisfied that the debt is solely attributable to an administrative error by the Commonwealth pursuant to section 1237A of the Act.
I now turn to whether there are any special circumstances to allow for waiver of the whole or part of the debt pursuant to section 1237AAD of the Act.
The provision does not apply if the debt results wholly or partly from relevantly, the debtor, knowingly failing or omitting to comply with a provision of the Act or the Administration Act.[6]
[6] Social Security Act 1991 (Cth), s 1237AAD(a)(ii).
It follows from my findings at [41] to [47] above, that I am satisfied that Mrs Hanna knowingly failed to comply with her statutory reporting obligations for AP by failing to declare her income from her employment during the debt period. She decided not to comply because she did not think it was appropriate to do so for the reason she gave in her letter of 1 May 2018. She maintained that position although she received letters after 1 May 2018 reminding her of her obligation to report her income if she was working. She knew that she was not reporting her income from her employment as she had done previously and therefore that it was not being taken into account to assess her rate of pension. That was apparent from the letter of 24 April 2018. The letter of 30 April 2018 was clearly based on the understanding that Mrs Hanna had stopped working, which she had not.
Mrs Hanna knowingly failed or omitted to comply with her statutory reporting requirements under section 68(2) of the Administration Act. Section 1237AAD of the Act does not apply to her.
It is therefore unnecessary to consider whether there are special circumstances. However, because Mr Hanna has put so much time and effort into contesting both proceedings, I address this matter.
Financial hardship alone does not constitute special circumstances that make it desirable to waive a debt.
The Respondent referred to authorities from the Full Court of the Federal Court, the Federal Court and the AAT and then usefully stated the following. All of Mrs Hanna’s circumstances should be taken into account, including her circumstances during the debt period and at any other time before the Tribunal makes its decision. The circumstances must be special, not the individual’s experience of them. Circumstances might be special though they apply to more than one person or to a class of persons, provided they are not of universal application.
The Respondent submitted that there were no special circumstances in this case.
Mr Hanna’s principal submission was that his and Mrs Hanna’s medical conditions constituted special circumstances.
Mrs Hanna had suffered a significant medical incident sometime before the hearing. Mr Hanna was particularly concerned about one of his significant ongoing health issues. It is unnecessary to specify those conditions. The Respondent has the relevant correspondence.
Mr Hanna has received disability support pension since 2009 because of his medical conditions and impairments. Mrs Hanna receives AP and carer allowance as his carer. The evidence did not address whether Mrs Hanna’s recent medical episode had resulted in that ceasing.
I am not satisfied that Mr and Mrs Hanna’s medical conditions are special circumstances for the purposes of section 1237AAD of the Act.
Mrs Hanna’s financial circumstances are not unusual. She lives with her husband Mr Hanna but receives benefits on the basis that they are separated under one roof.
It is important to ensure the integrity of the social security system in the public interest. It is generally expected that recipients who have received monies to which they are not entitled repay those monies. The legislation sets out circumstances in which monies do not have to be repaid, including special circumstances. I am not satisfied that Mrs Hanna’s circumstances are special as required by section 1237AAD of the Act.
For those reasons, in proceedings, 2020/2039, the reviewable decision made on 2 March 2020 is set aside and substituted is the decision that the Applicant has a liability for overpayment of age pension for the period from 21 April 2018 to 14 December 2018 in the sum of $14,822.86.
The pension rate matter
The issues
The question to be answered in the pension rate matter is whether the amount of arrears paid for the period 21 November 2017 to 23 March 2018 (the arrears period) was correct.
Mr Hanna raised the following issues with respect to that question:
(a)Whether the losses the business made should be taken into account in assessing Mrs Hanna’s income.
(b)Whether the arrears payment was a “Robot” calculation based incorrectly on only one fortnightly gross payment of $2,799.55 received during the Christmas Public holiday period, the highest gross payment she received, rather than an average of her actual earnings.
(c)Whether Mrs Hanna’s car accident compensation was taken into consideration wrongly because her assets are much less than the allowable assets of $456,750 because she is not a home owner.
(d)The payment of two years of arrears from her Belgium pension in April 2019 had been taken into account to show that she has some money which has nothing to do with her entitlement to AP.
Consideration
I apprehend that Mr and Mrs Hanna’s concern that the calculation of the arrears was based on a fortnightly gross payment of $2,799.55 arises from the statement in the letter dated 13 April 2018 notifying Mrs Hanna of the payment. It states that the information used for calculating her regular payment was annual income of $120.97 and Regular Fortnightly Earnings … $2,799.55.
While not an answer to those concerns, it is relevant that a departmental record dated 29 August 2019 states that Mrs Hanna was not eligible for AP from 16 December 2017 to 29 December 2017 ‘due to high earnings’.[7] I understand that is the period Mr Hanna referred to during the hearing when Mrs Hanna earned a lot of money because of public holidays. Another departmental document lists a number of other occasions when Mrs Hanna’s earnings were too high and precluded payment of AP.[8]
[7] T19, 241, 2020/3791.
[8] T21, 251, 2020/3791.
The ARO made the following findings. Mrs Hanna’s annual income from all sources as of 21 November 2017, that is, from her employment and from bank accounts, was $57,592.41. The Belgium foreign pension was not taken into account when the AP was granted because it was updated to her record on 26 June 2019.
It is clear that the ARO did not take into account any income from the Belgium pension.
The ARO did not mention any compensation payment.
That the income from all sources was $57,592.41 demonstrates that the fortnightly earnings of $2,799.55 were not the basis of the calculation. That figure multiplied by 26 is $72,788.30. The only two sources of income taken into account were bank accounts and Mrs Hanna’s employment.
The ARO affirmed the primary decision and did not include in the calculation of gross income either the Belgium pension or any compensation payment.
AAT1’s decision was succinct. It set out a brief history of Mrs Hanna’s AP application, referred to the Belgium pension monthly payment and the arrears she received in June 2019, and to Mr Hanna’s concern that the ARO had not taken into account the losses from her company and her pay statements setting out her irregular pay. It referred to Mrs Hanna’s evidence about receiving and using the NRMA Insurance compensation.
AAT1’s findings referred to the pay statements for the relevant period, considered Mrs Hanna’s earnings as a nurse during that period, and concluded that the arrears calculation was correct. With respect to the business expenses, AAT1 concluded that they may be relevant for tax purposes but were not relevant for social security purposes.
As AAT1 affirmed the ARO’s decision, it is clear that the decision was made on the same basis as the ARO’s decision. Although both the Belgium pension and NRMA compensation were mentioned during the hearing, neither was included in Mrs Hanna’s gross income.
Mr and Mrs Hanna’s belief that AAT1 did take into account income from those two sources is not correct.
For the reasons given at [57] to [64] in relation to the debt decision, Mr Hanna’s argument that the business expenses can be deducted from Mrs Hanna’s income is misconceived.
Similarly, the Respondent’s contention that Mrs Hanna was not paid the correct rate of AP during the rate period because there should have been no deduction from her gross income from her employment of expenses incurred by the business is also misconceived. No such deduction was made.
I understood the Respondent to contend that I should make findings that during the arrears period, Mrs Hanna’s assessable income for AP included any gross Belgium pension payments attributable to the rate period and any compensation payments attributable to that period and remit the matter for reconsideration with a direction to that effect.
For the reasons given with respect to the debt matter, I decline to consider the compensation payment.
The payment in arrears of the Belgium pension was attributable in part to the arrears period and should properly be taken into account in calculating the amount of arrears payable to Mrs Hanna for that period. Neither the ARO nor AAT1 did so. That is the only error I have identified in the reviewable decision. I will confine the direction I make to correct that error.
It is unfortunate for Mr and Mrs Hanna that this matter should drag on any longer, however, the correct decision is to set aside the reviewable decision and remit the matter for reconsideration with the direction that Mrs Hanna’s assessable income during the period 21 November 2017 to 23 March 2018 included any gross payments of her Belgium pension attributable to the arrears period.
Decision
In proceedings 2020/2039, the reviewable decision made on 2 March 2020 is set aside and substituted is the decision that the Applicant has a liability for overpayment of age pension for the period from 21 April 2018 to 14 December 2018 in the sum of $14,822.86.
In proceedings 2020/3791, the reviewable decision is set aside and the matter is remitted for reconsideration with the direction that Mrs Hanna’s assessable income during the period 21 November 2017 to 23 March 2018 included any of her gross Belgium pension payments attributable to that period.

I certify that the preceding 104 (one hundred and four) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

...........................[sgd].............................................
Associate
Dated: 9 November 2022

Date of hearing: 6 December 2021

Advocate for the Applicant: Mr F Hanna

Counsel for the Respondent: Mr S Thompson, Sparke Helmore Lawyers

Solicitor for the Respondent: Ms G Heggen

[2022] AATA 3772

9 November 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Date of hearing:	6 December 2021
Advocate for the Applicant:	Mr F Hanna
Counsel for the Respondent:	Mr S Thompson, Sparke Helmore Lawyers
Solicitor for the Respondent:	Ms G Heggen