Koutsouras and Secretary, Department of Education, Employment and Workplace Relations

[2011] AATA 165

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 165

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/2450

GENERAL ADMINISTRATIVE DIVISION		)
Re		Mr John Koutsouras

Applicant

And Sec, Department of Education, Employment and Workplace Relations

Respondent

DECISION

Tribunal  M D Allen, Senior Member

Date25 February 2011

PlaceSydney

Decision The Decision under Review is AFFIRMED.  

.................................................

M D Allen, Senior Member

CATCHWORDS

SOCIAL SECURITY:  Overpayment of Newstart Allowance.  Debt correctly calculated. Omission in declaring income distributions, rental income and deemed income from bank account. Provisions to write off or waive debt do not apply.  

CATCHWORDS

Social Security Act 1991, Ss 1224(1), (2), 1237AAD

Administrative Appeals Tribunal Act 1975, Ss 42C(1), 37 43(2A)

REASONS FOR DECISION

25 February 2011

1. At the conclusion of this hearing of the above matter the terms of the decision intended to be made and the reasons therefore were stated orally. After service upon the Applicant and Respondent of a copy of the decision that was in fact made, the Applicant, pursuant to subsection 43(2A) of the Administrative Appeals Tribunal Act 1975, requested that the Tribunal furnish to them a statement in writing of the reasons of the Tribunal for the decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service. Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reason for the said decision.

3.      The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reason for the Tribunal’s decision.

I certify that this and the following paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.

Signed:         ......................................................
  K. Lynch, Associate

Date of Hearing  25 February 2011
Date of Decision  25 February 2011
Date of Written Reasons  14 March 2011
Representative for the Applicant           Mr J Koutsouras (self)
Representative for the Respondent      Centrelink Advocacy Service

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

MR ALLEN:   By application made 17 June 2010, the Applicant sought review of a decision of the Social Security Appeals Tribunal (“SSAT”) on 14 May 2010 affirming a prior determination that the Applicant was indebted to Centrelink in the sum of $5,230.72 – or, rather, I will reverse that, the sum was $5,797.46.  The SSAT actually amended the debt under review.  I might say the outset that the debt has again been recalculated and is now at the amount of $5,535.11.  That is because the Respondent now concedes that income from the trust fund should be calculated as going forward rather than just on 30 June.

The matter has a long history. Originally, the debt was in the vicinity of some $12,000 based on an assets test calculation. However, on 18 June 2009, pursuant to a decision under subsection 42C(1) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”), the decision of the SSAT was set aside and the matter remitted to the Respondent with directions that:

(a) the Applicant receive adequate consideration for the transfer of the 12 Collins Street property to Pedmack Pty Ltd and that no deprivation or gifting is to be assessed;
(b) the Applicant is to be assessed as a non-home owner and that during the debt period from 1 January 1994 to 25 August 1995, the applicant was under the assets threshold for apartment non-home owner; and
(c) the matter is remitted to Centrelink with directions that the Applicant’s entitlements to Newstart Allowance during the debt period be considered under the allowance income test.

Various calculations were made and if one goes to document T21, page 84, of the documents prepared for the Tribunal pursuant to section 37 of the AAT Act, the final calculation will be ascertained, namely, at that stage the sum of $5,797.46. During these proceedings, the Applicant has taken issue, in great detail, with the Centrelink calculations. They have been explored in some painstaking detail before me this morning and all I will say is that I am satisfied, on the material which is available to me, that the debt has been correctly calculated, and that the Applicant is under a misapprehension as to the means of calculation.

The debt itself arose out of relevantly simple circumstances, in that the Applicant at all relevant times was in receipt of Newstart Allowance.  However, at no time did he disclose to the Respondent income distributions from the Pedmack Trust paid to him and his wife in the financial years 1993/94, 1995/96 and 1996/97, nor rental income received by his wife, and also deemed income from the sum of $165,000.00 held in a bank account from about 17 January 1994 until the purchase of real estate property on 21 July 1994.  There was extensive discussion as to how the interest on that sum was to be calculated and, after much consideration, I am satisfied that it was correctly calculated.

Because these amounts were not declared, the Applicant was overpaid Newstart Allowance. Subsection 1224(1) of the Social Security Act 1991 (“SSA”) provides, inter alia, if an amount has been paid to a recipient by way of social security payment under this Act and the amount was paid because the recipient or another person failed or omitted to comply with the provision of the Act - and in this case, the Applicant failed to comply with the provision of the Act in that he didn’t declare the income from the trust, the deemed income from the bank account and the rental income - then amount is a debt due by the recipient to the Commonwealth.

Subsection 1224(2) SSA provides for recovery, including recovery by garnishee. I mention garnishee because in this case certain sums were garnishee but amounts recovered have been repaid, I am informed from the bar table, to the Applicant. It is quite clear that the overpayments had to be recovered. I would also mention that the Applicant has argued about permissible income, but they do not figure in the calculations of the debt due because any permissible income for a recipient of Newstart Allowance in 1994-96 had to be from wages or income received, and the amounts received were not from that source.

The only other matter that could be considered is whether the debt should be written off, however, that provision does not apply, so the debt is being recovered.  As to the question should the debt be waived, there has been no administrative error in this case.

However, section 1237AAD SSA refers to waiver in special circumstances. The section begins:

“The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied:
(a)  that 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.”

In this case, the debt arose from an omission by the Applicant, which I have discussed in some detail, and it is quite clear that that omission was made knowingly.  Therefore, the waiver provisions don’t apply. 

The sum result is, however, that this decision under review is affirmed.

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