Khaled and Secretary, Department of Family and Community Services
[2004] AATA 702
•1 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 702
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/1335
GENERAL ADMINISTRATIVE DIVISION ) Re
Kassien Khaled
Applicant
And
Secretary, Department of Family and Community Services
Respondent
DECISION
Tribunal Mr RP Handley, Deputy President Date1 July 2004
PlaceSydney
Decision The Tribunal sets aside the decision under review and remits the matter to the Respondent with the direction that the Applicant’s overpayment should be recalculated by deducting from his gross income as a taxi driver in the relevant period, the cost of fuel used and any car washes necessary in earning that income. Recovery of the recalculated debt should continue by withholdings from the disability support pension paid to Mr Khaled subject to periodic review to take account of his circumstances. The Tribunal found no basis on which recovery of the debt might be written off or waived. ..............................................
RP Handley
Deputy President
CATCHWORDS
SOCIAL SECURITY – disability support pension overpayment – whether an overpayment was made to the Applicant – examination of the Applicant’s work history and wage records – examination of taxi owner’s records relating to driver’s daily work sheets, day books and fuel dockets – whether the Applicant accurately reported to the Respondent particulars of his earnings – whether there are “special circumstances” in relation to the recovery of any overpayment – held that the Applicant did not accurately report his earnings to the Respondent and an overpayment occurred – the Tribunal accepted that the Applicant had paid fuel and car wash expenses out of the income earned and these expenses should be deducted in calculating his earnings – held that the debt should be recalculated to take into account expenses paid by the Applicant as a taxi driver – no special circumstances found to allow for the debt to be written off or waived – decision of the Respondent set aside and remitted to the Respondent for recalculation and recovery.
Social Security Act 1991 ss 132, 1302A(1), 1223, 1236(1), 1237(1), 1237A(1), 1237AAD and 1230C(1)
Beadle and Director-General of Social Security (1985) 60 ALR 225
Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 545
REASONS FOR DECISION
1 July 2004 Mr RP Handley, Deputy President 1. This is an application by Kassien Khaled (“the Applicant”) for a review of a decision of the Social Security Appeals Tribunal (“the SSAT”) made on 25 July 2002 which affirmed a decision of a delegate of the Secretary of the Department of Family and Community Services (“the Respondent”) to raise and recover a disability support pension debt of $15,534.80 for the period 28 November 1996 to 28 May 1998.
2. At the hearings, held in Wollongong, the Applicant was self-represented and the Respondent was represented by Marian Buckley and latterly Susan Mantaring, Centrelink advocates. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with supplementary documents produced by the Respondent (“the S Documents”) and evidence tendered by the parties at the hearings, at which Mr Khaled gave oral evidence.
Background
3. The Applicant, Kassien Khaled, was born on 20 May 1960 and is aged 44. He is married (T p5). On 26 April 1990, he was granted a disability support pension (“DSP”) (T p47). On 20 July 1993, Centrelink forwarded Mr Khaled a notice advising him of his obligations. On 28 November 1996, Mr Khaled commenced employment as a casual taxi driver but failed to advise the Respondent of this.
4. On 18 December 1996, Centrelink forwarded Mr Khaled a letter notifying him of his obligations to advise Centrelink if he was in receipt of any earnings (T4 p14). Mr Khaled did not respond to this letter. On 5 June 1997, Centrelink notified Mr Khaled that it was conducting a medical review of his DSP and requesting that he undergo a medical examination and complete a questionnaire (T5 p16). In answering that questionnaire, he advised that he was working as a taxi driver, part- time, earning a gross weekly wage of $100 (T p19).
5. On 31 March 1998, Centrelink requested information from Wollongong Radio Cabs as to Mr Khaled’s earnings as a taxi driver (T p31). In response to that request, Wollongong Radio Cabs informed Centrelink that Mr Khaled was employed as a driver by Peter Jamieson, a taxi owner of Figtree (T p32). On 28 May 1998, in response to a request for information from Centrelink, Mr Jamieson advised that Mr Khaled had been engaged by him as a driver, undertaking six night shifts per week from 17 November 1996 to 16 May 1998, earning the sum of $52,598.89 (T pp34 - 36). On 3 July 1998, Mr Jamieson confirmed that the information he had previously provided as to Mr Khaled’s earnings was correct (T p60).
6. On 10 June 1998, Centrelink advised Mr Khaled that his DSP had been cancelled with effect from 9 June 1998 (T p56). Centrelink also advised him that as the Department was unaware of his employment as a taxi driver during the period 28 November 1996 to 28 May 1998, he had received an overpayment of his DSP in the sum of $15,534.80 (T p57). Mr Khaled sought a review of this decision and, on 20 July 1998, it was affirmed by a delegate of the Secretary of the Department (T p62). On 6 August 1998, an Authorised Review Officer of Centrelink also affirmed the decision (T p67).
7. Mr Khaled was prosecuted by the Director of Public Prosecutions in respect of the overpayment of DSP. The Magistrate hearing the matter dismissed the charges in June 2000 “because she was not satisfied beyond reasonable doubt that he had knowingly received monies to which he was not entitled” (S p174 – letter to the SSAT dated 22 July 2002 from Megan Pikett, Solicitor for Legal Aid).
8. On 10 May 2002, Mr Khaled sought a review of the Authorised Review Officer’s decision by the Social Security Appeals Tribunal (“SSAT”) which, on 25 July 2002, affirmed the decision (T p3), finding that Mr Khaled had knowingly failed to disclose his income and finding that his circumstances were not so “special” as to invoke the discretion to waiver recovery of the outstanding debt (T p11). On 11 September 2002, Mr Khaled lodged an application for a review of the SSAT decision with the Tribunal. The debt is currently being recovered by withholdings from his fortnightly DSP payment.
Relevant Legislation
9. The relevant legislation is the Social Security Act 1991 (“the Act”). Mr Khaled’s entitlement to disability support pension was calculated in accordance with s 1064 of the Act.
10. Section 1223 provides that an overpayment constitutes a debt to the Commonwealth. However, provision is also made for the recovery of whole or part of the debt to be waived in limited circumstances as follows:
1237(1) On behalf of the Commonwealth, the Secretary may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor only in the circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD.
11. The relevant provision in Mr Khaled’s case is s 1237AAD which states:
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 a 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.
Mr Khaled’s Evidence
12. Mr Khaled said he left school at the age of 16 in order to help support his family financially: there were 11 children in the family and only his father was working. Although, initially, he suffered several minor injuries at work, he was able to continue working. Then on 8 March 1978, while working on the nightshift at Australian Iron and Steel (“AIS”) at Port Kembla, his right leg was trapped in a crane accident, injuring his right knee. He was subsequently put on light duties which he undertook for over a year until he was dismissed on 2 July 1979 over a misunderstanding when he left work to see AGC about a loan.
13. Mr Khaled was unable to maintain another job because of the difficulty he experienced with pain in his right leg after standing. He therefore claimed unemployment benefit. In 1996, his family pressed him to get a taxi driver’s licence and lent him $5,000 to pay his fines and undertake the course to obtain his licence. He drives using his left foot. In November 1996, he started driving a taxi owned by Peter Jamieson, casually on one day a week. For about four weeks, he drove one day a week. Then, because he got on well with Mr Jamieson and had proved to be a trustworthy driver, Mr Jamieson asked him to drive two days a week. Gradually, Mr Jamieson gave him more days a week until he was working full-time. Mr Khaled said Mr Jamieson told him that he would help Mr Khaled earn more money, but it was also helping Mr Jamieson.
14. Mr Khaled said he kept the Department informed as to how many days he was working. He recalls phoning the Department on two occasions but he does not recall when it was in 1997 that he was working full-time. Mr Khaled was asked about the DSP Medical and Other Information form (T5 Part A) which he signed on 23 May 1997. He had no specific recollection of the form but said he had undertaken taxi driver training with Wollongong Radio Cabs at a cost of $500, involving his attending on two Saturdays and two Sundays to learn the system. He borrowed money from his family to pay the fee. He acknowledged that this might be the first time he informed Centrelink of this and of his earnings as a part-time taxi driver. He often gets help completing such forms and could have completed it at the Centrelink office. He assumes the $100 gross earnings per week he stated on the form was correct but cannot now remember this.
15. When the Department cancelled Mr Khaled’s DSP in June 1998, his father advised him to repay the alleged overpayment and await the outcome of the court proceedings. His parents, who receive the age pension, both helped him with this financially. After the cancellation, Mr Khaled had an interview with a departmental officer who asked whether Mr Khaled would assist in identifying other drivers who were receiving Social Security benefits but not declaring their earnings. Mr Khaled said he refused because he is not a “dobber”. He was subsequently charged by the Director of Public Prosecutions but the charge was dismissed
16. Mr Khaled disputed the records produced by Mr Jamieson included in the T documents (T19). He produced a “Taxi Driver’s Daily Worksheet” (A1) which each driver is required by law to complete for each shift. This details the kilometres driven, expenditure on fuel and car washing etc, together with details of the gross takings and the taxi operator’s (as opposed to the taxi driver’s) percentage and the total pay received by the taxi driver. Mr Khaled asked that Mr Jamieson be required to produce the daily worksheets completed by Mr Khaled when he was driving Mr Jamieson’s taxi during the relevant period so that the worksheets can be compared with the records already produced by Mr Jamieson contained in the T Documents (T19). Mr Khaled contends that the records produced by Mr Jamieson are wrong.
17. At the final hearing on 23 June 2004, the Tribunal had before it copies of the Taxi-Drivers Work Cards for Mr Jamieson’s taxi on the days when it was driven by Mr Khaled during the relevant period. These were obtained from documents produced by Mr Jamieson in other court proceedings. The Tribunal took an example of the Work Card for 19 May 1997. The gross takings for Mr Khaled’s shift (3pm to 1.15am) were $154 including both cash and taxi dockets (for example Cabcharge) of $21. Mr Khaled said that he, as the driver, received 50% of the gross takings, ie $77. However, he also had to pay the cost of any LPG gas used during his shift and, if a car wash was required at the end of the shift, the cost of the car wash. Mr Khaled’s net takings from this shift were therefore $77 - $12 (paid for LPG, noted on the Work Card), ie $65.
18. Mr Khaled disputed the statement by Mr Jamieson made on 18 June 1999 that Mr Jamieson paid for the fuel. Mr Khaled said Mr Jamieson only paid for the fuel on his own shift driving the taxi. Each driver is responsible for leaving the taxi with a full tank of fuel at the end of their shift and pays for that fuel from their own pocket.
19. Mr Khaled said that in 1999, several relatives in Lebanon passed away and he and other family members went to Lebanon. While there, Mr Khaled got married, but he then encountered great difficulty in getting a visa for his wife to come to Australia, which involved an appeal to the Immigration Review Tribunal. The appeal cost him $1,400 which he borrowed from his brother-in-law. Mr Khaled later borrowed further money from his brother-in-law whom he now owes about $4,000. He is repaying this loan at the rate of $50 per fortnight.
20. Mr Khaled said his wife arrived in Australia on 26 April 2000 and they had to wait until 17 December 2000 before she received any Social Security benefits when Centrelink recognised that he had made out a special case. Mr Khaled now has four children under the age of three: his oldest child is nearly three, his second child is 16 months old and his wife recently birth to twins on 21 September 2003.
21. In 2001, Mr Khaled had a total knee reconstruction at Royal Prince Alfred Hospital, spending nine days in hospital. Unfortunately, the operation was not very successful and Mr Khaled has worn a leg brace ever since and has not been able to work.
22. On 8 March 2004, Mr Khaled received a common law settlement of $63,000 in his claim for compensation following a motor vehicle accident. However, from this sum $9,272.17 was paid to Centrelink in respect of a benefit preclusion period and he had to pay a Health Insurance Commission charge and significant medical and legal fees. Mr Khaled said he received a net amount from his solicitor of about $17,000 in mid to late April 2004. This money was used for the deposit on the purchase of a house in Cringila. He and his family were formerly living in a Housing Commission house.
23. The purchase price of the house was $239,000. He and his wife borrowed $150,000 from the bank in respect of which they are making payments of $1,000 per month. Mr Khaled and his family moved into the house in early June 2004. Mr Khaled said he is now slightly worse off than when they were living in the Housing Commission house because he has the additional cost of maintaining his house. In particular, at present, he needs to erect new fencing so that his children can play safely in the backyard.
24. Mr Khaled said he finds it very hard to manage financially. He has sought assistance from various charities from time to time, including the Smith Family (A2 – undated letter), Anglicare (letter dated 24 January 2003) and the Salvation Army (letter dated 22 January 2003). He is unable to work because of the injury to his right leg. It is likely he will need to wear a leg brace on this leg for life. Mr Khaled also suffers from severe migraine headaches for which he takes Pethidine, at a cost of $60 per month. He has suffered from severe migraine headaches ever since a road accident on 7 June 1999. His family doctor, Dr Sajid Azam is treating him with Tramal injections. (The Tribunal sighted a letter from Dr Azam dated 10 November 2003.) Mr Khaled is also seeing a neurologist at the Piccadilly Centre in Wollongong who prescribed the Pethidine tablets. Apart from the housing loan and the loan from his brother-in-law which he is repaying at the rate of $50 per fortnight, he has no other debts. He has all the usual expenses associated with supporting his family and running a household and car.
25. Mr Khaled currently receives the following fortnightly payments:
DSP $390.50
Family Tax Benefit $555.94Total $946.44
Less withholding in respect of overpayment
of DSP $ 54.40
$892.04
His wife receives the following fortnightly payments:
Carer allowance $390.50
Carer payment $ 90.10
$480.60
Thus, their total income after deduction of the withholding of $54.40 is $1,372.64 per fortnight.
Discussion
26. The Tribunal is satisfied that Mr Khaled did not properly declare his earnings from his work as a casual taxi driver during the relevant period from 28 November 1996 to 25 May 1998. As a result, he received an overpayment of DSP which constitutes a debt due to the Commonwealth.
27. As to the amount of the overpayment, the Respondent submitted that the Tribunal should accept Mr Jamieson’s statement that he and Mr Khaled shared the takings from Mr Khaled’s shift and Mr Jamieson paid for the taxi’s fuel. However, the Tribunal prefers Mr Khaled’s evidence, which seems to make more sense, that he paid for the fuel used by him on his shift while Mr Jamieson only paid for the fuel when he was driving the taxi. The consequence of the Tribunal’s finding is that the overpayment will have to be recalculated by reference to the Taxi-Drivers Work Cards for the shifts worked by Mr Khaled during the relevant period, deducting from Mr Khaled’s 50% of the gross takings the cost of the fuel (LPG gas) and any car washes paid for Mr Khaled, to determine his net earnings for each shift. It is likely this recalculation will result in the overpayment, and therefore the debt, being slightly reduced.
28. The Tribunal must then consider whether the debt should be recovered. In the Tribunal’s opinion, writing off the debt under s 1236(1A) of the Act is not appropriate because Mr Khaled has some capacity, albeit limited to repay the debt. The issue then is whether the debt can be waived. There is no evidence that Mr Khaled’s debt arose because of an administrative error made by the Commonwealth. Indeed, the debt arose as a result of his failure to advise the Department regularly and accurately of his earnings from his employment as a casual taxi driver. Thus, waiver is not available under s 1237A(1) because the debt is not attributable to administrative error.
29. In Mr Khaled’s case, the only relevant provision permitting waiver is s 1237AAD, quoted above. This applies where the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or representation or failing or omitting to comply with a provision of the Act, and where there are “special circumstances” relating to the person. The Tribunal makes no conclusive findings as to whether Mr Khaled knowingly failed or omitted to comply with a provision of the Act. However, he should, at the very least, have appreciated that declaring casual earnings of $100 per week gross on the form completed on 23 May 1997 (T5), lacked the necessary accuracy to enable the Department to assess his entitlement to DSP.
30. Waiver is, in any event, not available to Mr Khaled because, in the Tribunal’s view, there are no special circumstances that make it desirable to waive the debt. The phrase “special circumstances” has been considered in many decisions of the Tribunal and the Federal Court. The Tribunal has described “special circumstances” as “unusual, uncommon or exceptional” – “they must have a particular quality of unusualness that permits them to be described as special”: Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, endorsed by the Full Federal Court in Beadle and Director-General of Social Security (1985) 60 ALR 225. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle (supra 1985), observed that special circumstances:
would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case … it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
31. The Tribunal has no doubt that Mr Khaled’s financial situation is straitened and is not made easier by the withholdings from his DSP. A letter dated 23 March 2004 received from Jennie George, the federal MP for Mr Khaled’s electorate, made this point. The Respondent has already recovered $8,172.98 by withholdings. Mr and Mrs Khaled have four children under the age of three and are entirely dependant on Social Security benefits financially as a result of Mr Khaled being unable to work because of the injury to his right leg which requires that he wear a brace. Mr Khaled has recently purchased a house using a modest compensation settlement for the deposit. He and his wife are currently repaying their housing loan of $150,000 at the rate of $1,000 per month. They have all the usual expenses associated with a young family and running a house and car, including the need for additional fencing for their backyard so that this is a safe and secure place for their children. Mr Khaled is also repaying a small loan from his brother-in-law at the rate of $50 per fortnight and has the additional cost of medication for the severe migraines he suffers amounting to approximately $60 per month.
32. While Mr Khaled’s financial situation is straitened and difficult, there are many others in the community in a similar situation and the Tribunal does not regard his situation as “special” in the sense described in previous Tribunal and Federal Court decisions.
33. The Tribunal notes that the rate of recovery of a debt by withholdings can be varied according to a person’s financial circumstances. The Tribunal considers that it is appropriate for recovery of Mr Khaled’s debt by withholdings to continue, subject to periodic review depending on his circumstances. He may submit a Statement of Financial Circumstances form to his local Centrelink office to enable this review to be conducted.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President
Signed: .....................................................................................
AssociateDate/s of Hearing 16 October 2003, 30 January 2004 and 24 June 2004
Date of Decision 1 July 2004
Representative for the Applicant Self-representedRepresentatives for the Respondent Ms M Buckley and Ms S Mantaring, Advocates for Centrelink
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