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

[2010] AATA 898

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 898

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/4686

GENERAL ADMINISTRATIVE DIVISION		)
Re		KLMC

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondents

DECISION

Tribunal Regina Perton, Member

Date15 November 2010

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

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

Member

SOCIAL SECURITY – parenting payment (single) – whether member of a couple – debt to Commonwealth – decision affirmed.

Administrative Appeals Tribunal Act 1975 s 37

Social Security Act 1991 ss 4(2), 4(3), 1237AAD

Jones v Dunkel (1959) 101 CLR 298

Lynam v Director-General of Social Security (1983) 52 ALR 128

Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546

Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92

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

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164

REASONS FOR DECISION

15 November 2010 Regina Perton, Member     

1.      KLMC married her husband in 1991.  They have not divorced.  KLMC received social security payments from 8 February 2005 as a single parent to three children.  This followed KLMC’s advice to Centrelink, which administers social security benefits on behalf of the respondents, that she and her husband had separated and that she was unaware of his whereabouts.

2.      On 23 July 2008 Centrelink cancelled the payment of parenting payment (single) to KLMC on the basis that she and her husband had been living as a couple during the period KLMC had been paid as a single parent.  Centrelink determined that it had overpaid KLMC more than $43,000 in parenting payments and more than $2,500 in family tax benefit between February 2005 and June 2008 and that the overpayment constituted a debt to the Commonwealth.

3.      KLMC disputes Centrelink’s finding that she was a member of a couple during the relevant period.

4.      An authorised review officer affirmed Centrelink’s decision on 17 September 2008.  On 30 June 2009, the Social Security Appeals Tribunal (SSAT) determined that KLMC was a member of a couple in the period from 8 February 2005 to 19 June 2008 (the relevant period) and affirmed the decision to raise and recover the debt for parenting payment.  The SSAT set aside the decision concerning the amount of family tax benefit, finding that there was a debt for the same period, but directing that the amount of the debt be recalculated by excluding from the debt the amounts of child support recorded for that period.

5.      KLMC lodged a late application for review with this Tribunal on 1 October 2009 having sought and been granted an extension of time.

6.      The issues before the Tribunal are:

·Was KLMC a member of a couple during the relevant period?

·If so, was KLMC paid social security benefits to which she was not entitled?

·If so, are the overpayments a debt to the Commonwealth?

Was KLMC a member of a couple during the relevant period?

7. Section 4 of the Social Security Act 1991 (the Act) sets out the criteria for deciding whether a person is a member of a couple:

(2)Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:

(a)the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;…

…

(3)In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a),…, the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters: 

(a)the financial aspects of the relationship, including: 

(i)any joint ownership of real estate or other major assets and any joint liabilities; and 

(ii)any significant pooling of financial resources especially in relation to major financial commitments; and 

(iii)any legal obligations owed by one person in respect of the other person; and 

(iv)the basis of any sharing of day-to-day household expenses; 

(b)the nature of the household, including: 

(i)any joint responsibility for providing care or support of children; and 

(ii)the living arrangements of the people; and 

(iii)the basis on which responsibility for housework is distributed;

(c)the social aspects of the relationship, including: 

(i)whether the people hold themselves out as married to,…, each other; and 

(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and 

(iii)the basis on which the people make plans for, or engage in, joint social activities; 

(d)any sexual relationship between the people; 

(e)the nature of the people’s commitment to each other, including: 

(i)the length of the relationship; and 

(ii)the nature of any companionship and emotional support that the people provide to each other; and 

(iii)whether the people consider that the relationship is likely to continue indefinitely; and 

(iv)whether the people see their relationship as a marriage-like relationship…

…

8.      In determining whether two people are living in a marriage-like relationship under the Act, O’Loughlin J, in Staunton‑Smith v Secretary, Department of Social Security (1991) 32 FCR 164 at 170, referred to the list of circumstances in s 4(3) of the Act:

It is not suggested that this list is exhaustive nor will each of these subjects fall to be considered in every case.  It must also be emphasised that a particular answer to a single subject will rarely, if ever, supply a final solution.  The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators.  The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.

9.      French J in Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 dealt with ss 4(2) and 4(3) of the Act in the context of an application for a carer payment. He referred to the decision in Staunton‑Smith and to the decision of Fitzgerald J in Lynam v Director‑General of Social Security (1983) 52 ALR 128. He stated that in determining whether a marriage‑like relationship exists under the Act, the nature of the exercise is much the same as that required under the statutory formula used in Lynam and Staunton‑Smith.  In Lynam, Fitzgerald J said, at 131:

Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other.  What must be looked at is the composite picture.  Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error.  The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration.  In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.

10.     The Full Federal Court, in Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92 (Pelka No. 2) (which followed a rehearing by a differently constituted Tribunal following the 2006 Pelka decision by French J) stated (at paragraph 24):

There is nothing  in s 4(3) that requires the relevant decision maker to make a finding of fact as to any of the matters specified in that provision.  Rather, the decision maker is required to have regard to all the circumstances of the relationship, including the specified matters, in forming an opinion about the relationship between two people.  Having regard to a matter does not require making a finding of fact about that matter…

11.     At paragraph 30 of Pelka No. 2, the Court stated:

The matter to which s 4(3) of the Social Security Act requires a relevant decision maker to have regard is the nature of the commitment of two people to each other. That regard is to include, in particular, four specific matters. Clearly, the Tribunal had regard to those four specific matters in terms. The essential requirement of the provision, however, is that the decision maker must have regard to the nature of the commitment of two people to each other.  It is clearly relevant to that matter to have regard to the fact that a commitment that each of those persons has to each other is different from the commitment that each person has to any other person…

12.     KLMC attended the scheduled hearing at the Tribunal but declined to give oral evidence or to call other witnesses.  She had also chosen not to give oral evidence before the SSAT.  She was counselled that a failure to subject herself or any relevant witnesses to questioning could be to her detriment in that there may be adverse inferences drawn (Jones v Dunkel (1959) 101 CLR 298). Nonetheless, she maintained her stance. She presented a written statement. The Tribunal has drawn on the documentary evidence provided to it pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, and to KLMC’s statement.

13.     KLMC had been married for almost 14 years at the commencement of the relevant period.  At the end of the relevant period, she was still married and conceded that at that time, she was living in the same house as her husband.  She claimed that even though her husband had returned to the marital home, they were not living as husband and wife.  In deciding whether KLMC was living separately and apart from her husband on a permanent or indefinite basis, the Tribunal takes into account the matters below.

Financial aspects of the relationship

14.     KLMC and her husband were joint proprietors of the house in Narre Warren in which KLMC lived during the relevant period.  In July 2006, her husband lodged an application to refinance the home.  KLMC signed a bank initiated document as a personal guarantor.  In March 2008, KLMC again agreed to be a guarantor for a loan sought by her husband.

15.     KLMC’s husband owned another property that was in his name only.  The address for remittal of the rental throughout the period was the jointly owned home in Narre Warren.

16.     The home insurance on the Narre Warren property is in joint names.  The utilities were registered in both names.  KLMC told Centrelink that her husband paid for rates and utilities and that she paid for food and household items.

17.     Centrelink undertook investigations concerning banking arrangements.  The ANZ Bank advised that during the relevant period KLMC had a bank account in her name which her husband also had authority to operate.  That account was opened in 1998.  KLMC held a St George Bank account in her own name from 20 November 2007.

18.     Two cars were registered in KLMC’s name at the concession rate.  Her husband did not have a car registered in his name.  Surveillance reports in March 2008 indicated that, over the period of the surveillance, he used both cars to drive to work from the Narre Warren home.  In May 2008, KLMC conceded that her husband drove one of the cars and that he had 100% interest in that car.  Both cars were insured in KLMC’s name.

19.     KLMC’s husband lodged a tax return in the 2005/2006 financial year claiming KLMC as a dependant spouse.  He lodged an amended tax return in May 2008 removing KLMC as a dependent spouse.  The Tribunal notes that the amended return was lodged after he became aware of the Centrelink investigation into KLMC’s status.

20.     Based on the available evidence, the Tribunal views the financial aspects of the relationship as those expected of parties in an ongoing marital relationship.  The Tribunal would have liked to probe further into some of the issues cited above.

The nature of the household

21.     In her application for parenting payment lodged on 11 February 2005, KLMC stated that she and her husband had separated on 6 November 2004.  She stated that she did not believe there was any chance of reconciliation.  She indicated that she did not know his whereabouts.  She later told Centrelink that they had separated in February 2005.

22.     Surveillance undertaken in March 2008 indicated that KLMC’s husband lived at the property.  He was observed driving both of the cars to work on different days during the surveillance period, in the mornings and returning two of the three children home after school.  After becoming aware of the surveillance report, KLMC stated that he had returned to live at the house for the children’s sake in January 2008.

23.     Her husband’s employment records show that he took carer’s leave quite frequently after February 2005.  There is no evidence that he was caring for anyone other than his children.  KLMC indicated that one of their children is disabled and needed extra care.  She later stated that he had learning difficulties and that he was not sufficiently disabled for one of the parents to qualify as a carer for him.

24.     KLMC’s husband continued to give his address as the Narre Warren property after November 2004.  He did not change his address on his driver’s licence.  When applying for loans he stated that the Narre Warren address was his home address.  His telephone number was that at the home address.

25.     The Tribunal notes that there are many indicators pointing to a household where both KLMC and her husband were still part of the same household as a couple throughout the relevant period.  However, there was no opportunity to explore the situation further due to KLMC choosing not to give oral evidence before the Tribunal.

The social aspects of the relationship

26.     KLMC told Centrelink that her husband had moved back to the Narre Warren house in January 2008 for the sake of the children.  This concession was made after KLMC became aware of investigations into her status.

27.     Despite stating that she did not know her husband’s whereabouts after he moved out in either November 2004 or February 2005, there appears to have been contact between them during the relevant period.  KLMC’s husband did not change his address for his driver’s licence, bank records or the like.  His employer continued to have the Narre Warren home as his address.  No alternative address has been given as to where he lived between early 2005 and January 2008.  All his mail was sent to the Narre Warren address.

28.     KLMC and her husband took holidays together during the relevant period.  They went to the Gold Coast in October 2007 and Perth in February 2008.

29.     When applying to refinance their home in 2006, both KLMC and her husband described themselves as married.  As indicated earlier, the accounts relating to their home remained in the same names after the alleged separation.  KLMC’s husband drove a car registered in KLMC’s name, and shared the use of her vehicle.

30.     There has been no evidence provided by witnesses as to their relationship apart from statements made by friends of KLMC in February 2005 that the couple had separated before Christmas 2004.

31.     KLMC’s husband claimed KLMC to be his spouse on his tax return for the financial year 2005/2006.  After becoming aware of the investigation, KLMC’s husband, through his accountant, amended the return.

32.     Based on the evidence before it, the Tribunal is satisfied that there were indicators that, objectively, point in the direction of KLMC still being considered as a member of a couple.

Any sexual relationship between the people

33.     KLMC’s husband is the father of KLMC’s three children.  KLMC told Centrelink that there was no sexual relationship with her husband since he left the family home in early 2005.  She indicated that when he returned to share the Narre Warren home in January 2008, they slept in separate bedrooms and had not resumed a sexual relationship.  The Tribunal is not in a position to make any findings on this aspect of their relationship.

The nature of the people’s commitment to each other

34.     KLMC and her husband have an ongoing commitment to each other due to their responsibilities for the children.  Their decision to live in the same home they have owned since 1992 is not a factor that of itself leads to a finding that they are not living separately and apart on a permanent or indefinite basis.  Their choice not to divorce, of itself, also does not lead to a finding of an ongoing partnership.

35.     KLMC and her husband remained married to each other during the relevant period.  They continued to describe themselves as married in financial transactions (such as the loan applications).  They continued to merge their financial affairs during the relevant period in such things as rates, insurance, bank transactions etc.  KLMC’s husband drove a car registered in his wife’s name.

36.     In a submission to the Tribunal dated 26 March 2010, KLMC stated that the SSAT wrongly applied the statutory criteria without looking at the unique facts of my case.  She indicated that she had suspected infidelity on her husband’s part for several months before she told him to move out.  She reconciled the different dates for the separation, namely November 2004 and February 2005, on that basis they were legally separated under the same roof from the earlier date but that the physical separation occurred on the latter date.  KLMC also argued that the SSAT had reversed the burden of proof by expecting me to prove my innocence.  She submitted that the SSAT had based its decision upon speculation and conjecture, rather than evidence.  However, as the Tribunal has already stated, KLMC was given the opportunity to present further evidence before the SSAT and the Tribunal and declined to do so.  The Tribunal, in determining whether KLMC was a member of a couple in the period in the relevant period, is required to objectively look at the relationship between her and her husband based on the available evidence.  It was KLMC who chose to limit the amount of evidence before the SSAT and the Tribunal.

37.     The Tribunal would have welcomed the opportunity to question KLMC and other pertinent witnesses about many aspects of her relationship with her husband.  They include matters cited and others.  For example, the Tribunal would have liked to explore the reasons for the ongoing financial relationship after separation.  It would also have welcomed the opportunity to find out more from KLMC’s husband during that period, including where he lived and how often he saw the children between February 2005 and January 2008, when he was purported to return.  Other issues to explore would have included their holidays and if they shared the children’s social and school activities.  In the Tribunal’s experience, oral evidence can produce relevant information to help assess a relationship that neither the applicant nor the respondent had considered pertinent.  KLMC’s intransigence in not allowing herself or others to be questioned may well have hindered, rather than assisted, her cause.

38.     Based on the material before it, the Tribunal finds that during the relevant period, KLMC was legally married to her husband and that she was not living separately and apart from him on a permanent or indefinite basis.  The Tribunal therefore finds that KLMC was a member of a couple during the relevant period.

Was KLMC overpaid social security payments and if so, are the overpayments a debt to the Commonwealth?

39.     In view of the Tribunal’s finding that KLMC was a member of a couple during the relevant period, she was not entitled to payment of a social security benefit as a single parent.  The Tribunal is satisfied that during the relevant period KLMC received $43,609.98 in parenting payments to which she was not entitled.  The Tribunal was not provided with the recalculations of family tax benefit that followed the SSAT’s decision.  It therefore affirms the SSAT’s decision that the debt be recalculated.  The Tribunal finds that the amounts overpaid to KLMC during the relevant period represent a debt to the Commonwealth.

SHOULD PART OR ALL OF THE DEBT BE WAIVED?

40. Section 1237AAD of the Act (and a similar provision in family tax legislation) provides for waiver of the debt in special circumstances:

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.

41.     The term special circumstances is not defined in the legislation.  For the Tribunal to use its discretion to determine that KLMC’s situation constitutes special circumstances, it must be satisfied that there is something to make her situation stand out from the usual or the ordinary.  An often cited description of special circumstances is found in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, where the Tribunal held that the special circumstances referred to in the Act, must be unusual, uncommon or exceptional.  The term has been considered in many other Federal Court and Tribunal cases.  In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 Branson J stated at paragraph 26 that the circumstances of a particular case must give rise to hardship or unfairness sufficient to justify departure from the general rule.

42.     Given the limited evidence provided by KLMC, the Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone).  Hence, the waiver provisions of the Act do not apply.

DECISION

43.     The Tribunal affirms the decision under review.

I certify that the forty-three [43] preceding paragraphs are a true copy of the reasons for the decision of:

Ms Regina Perton, Member

Signed:  ………………………[signed]…………………………

Associate  Grace Horzitski

Dates of hearing:  28 July 2010

Date of decision:  15 November 2010

Applicant’s advocate:                  Self-represented

Respondents’ advocate:             Mr T de Uray, Centrelink Legal Services Branch