Kruusamagi; Secretary, Department of Social Services and
[2016] AATA 561
•2 August 2016
Kruusamagi; Secretary, Department of Social Services and [2016] AATA 561 (2 August 2016)
Division
GENERAL DIVISION
File Number(s)
2016/0087
Re
Secretary, Department of Social Services
APPLICANT
And
Inna Kruusamagi
RESPONDENT
DECISION
Tribunal Dr L Bygrave, Member
Date 2 August 2016 Place Sydney The Tribunal decides that the decision of the Social Security and Child Support Division (SSCSD) of the Administrative Appeals Tribunal made on 11 December 2015 is set aside and in substitution the Tribunal decides that Ms Kruusamagi incurred a seniors supplement debt for the period of 20 December 2011 to 20 September 2014 in the amount of $3,352.17.
.........................[sgd]...............................................
Dr L Bygrave, Member
CATCHWORDS
SOCIAL SECURITY - seniors health card - seniors supplement payments - whether seniors health card was correctly cancelled because applicant did not satisfy the income test - whether automatic cancellation on cessation of qualification - application of s106A of Social Security (Administration) Act 1999 - interpretation of s 123(2) of the Act - found that seniors health card was cancelled by force prior to decision by department - whether debt can be written off - whether debt can be waived - whether special circumstances exist - lack of knowledge of income test calculator - lack of understanding about nature of payment - special circumstances not found - decision under review set aside and substituted
LEGISLATION
Acts Interpretation Act 1901 ss 15AA, 15AB
Social Security Act 1991 ss 6A(1), 1061ZG, 1071, 1223, 1236, 1237AAD
Social Security (Administration) Act 1999 ss 86, 106A, 123
CASES
Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115
Groth v Secretary Department of Social Security [1995] FCA 1708.
Ivor Biddlecombe and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 451SECONDARY MATERIALS
DC Pearce and RS Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014)
Social Security Legislation Amendment (Concession Cards) Bill 2001 Revised Explanatory Memorandum
REASONS FOR DECISION
Dr L Bygrave, Member
2 August 2016
INTRODUCTION
On 29 January 2008, Ms Kruusamagi successfully applied for a seniors health card in accordance with the provisions of the Social Security Act 1991 (Cth) (Social Security Act).
Between 20 December 2011 to 20 September 2014, Ms Kruusamagi received seniors supplement payments in respect of her energy bill, which were payable to her as a holder of the seniors health card. The payments were made at quarterly intervals.
In a conversation with Centrelink on 15 December 2014, Ms Kruusamagi advised that her total income (taxable income plus superannuation contributions) for 2013–14 was $53,978. As this amount exceeded the income test requirements for a seniors health card, Centrelink notified Ms Kruusamagi on 15 December 2014 that her seniors health card was cancelled from 20 September 2014.
On 19 August 2015, Centrelink raised a debt against Ms Kruusamagi of $3,352.17 on the basis that Ms Kruusamagi was not eligible for seniors supplement payments from 20 December 2011 to 20 September 2014. This decision was affirmed in an internal review by Centrelink on 3 October 2015.
DECISION UNDER REVIEW
Ms Kruusamagi applied to the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal for a review of Centrelink’s decision on 14 October 2015.
On 11 December 2015, the SSCSD set aside the decision made by Centrelink and substituted its decision that there was no debt of seniors supplement paid to Ms Kruusamagi in the period 20 December 2011 to 20 September 2014.
The Secretary has applied to the Tribunal to review whether this decision, that Ms Kruusamagi does not have a seniors supplement debt, is the correct and preferable decision.
The matter was heard in Sydney on 14 June 2016. Ms Kruusamagi was self-represented and gave sworn evidence to the Tribunal by telephone.
RELEVANT LEGISLATION AND ISSUES
The issue before the Tribunal is whether Ms Kruusamagi has a debt of seniors supplement for the period of 20 December 2011 to 20 September 2014, and if so, whether that debt is recoverable. This requires me to consider whether:
(i)Ms Kruusamagi’s seniors health card was correctly cancelled on 15 December 2014 with effect from 20 September 2014;
(ii)there is a debt for the period of 20 December 2011 to 20 September 2014; and
(iii)any debt is recoverable.
Issue I: Was Ms Kruusamagi’s seniors health card correctly cancelled at 15 December 2014?
The application of section 106A of the Administration Act
It is not in dispute that Ms Kruusamagi qualified for a seniors health card between 29 January 2008 and 22 August 2011.
I note that Ms Kruusamagi has previously disputed whether she held a senior health card from 22 August 2011.[1]
[1] See paragraph 7 of the SSCSD decision.
The Secretary submits that Ms Kruusamagi received a senior health card on 22 August 2011, 20 August 2012, 20 August 2013 and 20 August 2014. The Secretary has not been able to produce any correspondence sent to Ms Kruusamagi between 2011 and 2014 relating to her receipt of a senior health card. However, the decision by Centrelink dated 3 October 2015 refers to this correspondence.
During the Tribunal hearing, Ms Kruusamagi said that she did not recall receiving a seniors health card between 2011 and 2014, but accepted that she would have used it if it was sent to her. Ms Kruusamagi confirmed that she had received payments from government during this time but contended that she did not know that these payments were related to her holding a seniors health card.
The Secretary has provided me with a table that sets out 12 ‘seniors health card’ payments made to Ms Kruusamagi between 20 December 2011 and 20 September 2014, which total $3,352.17.
I am satisfied that Ms Kruusamagi held a seniors health card from 22 August 2011 until 20 September 2014. I am also satisfied that Ms Kruusamagi, because she held a seniors health card, received payments between 20 December 2011 and 20 September 2014 that totalled $3,352.17.
Subsection 123(2) of the Social Security (Administration) Act 1999 (Cth) (Administration Act) provides:
(2)A determination that a person is qualified for a concession card continues in effect until:
(a)a further determination under subsection 76(1B) or 77(1B) or section 86 or 87 takes effect; or
(b)the person ceases to be qualified under section 104 or 105.[2]
[2] Subsection 6A(1) of the Social Security Act defines ‘concession card’ to include a seniors health card.
There is also no dispute that Ms Kruusamagi was not qualified for a seniors health card on 15 December 2014. Section 1061ZG of the Social Security Act sets out the rules for qualification, which include the requirement that the person ‘satisfies the seniors health card income test’. This test is set out in s 1071 of the Social Security Act. Ms Kruusamagi did not satisfy this test on 15 December 2014.
Section 86 of the Administration Act provides:
Cancellation – person not qualified
(1)If the Secretary is satisfied that a person to whom a concession card has been granted is not qualified for the card, the Secretary is to determine that the card is to be cancelled.
Note: The Secretary must cancel a seniors health card in certain circumstances if the Secretary makes a request under subsection 75(2) or (3) of the holder (about providing tax file numbers): see subsections 76(1B) and 77(1B).
(2)Subsection (1) does not authorise the Secretary to make a determination if:
(a)the card has been cancelled by the operation of another provision of the social security law; and
(b)the determination would take effect at or after the time at which the cancellation referred to in paragraph (a) would take effect.
On the basis that Ms Kruusamagi’s income exceeded the seniors card income limit for 2013–14 and therefore she did not satisfy the rules set out in s 1061ZG, the decision by Centrelink to cancel Ms Kruusamagi’s card on 15 December 2014 with effect from 20 September 2014 was correct.
Subsection 86(2) of the Administration Act contemplates that a card may have been cancelled previously by operation of another provision of the social security law. In that circumstance the Secretary is not authorised to determine that a card has been cancelled pursuant to s 86(1).
Section 106A of the Administration Act provides:
Automatic cancellation on cessation of qualification
If a person who is the holder of a concession card ceases, otherwise than by virtue of section 104 or 105, to be qualified for the card, the card is cancelled by force of this section on the day on which the person ceases to be so qualified.
Counsel for the Secretary argued that s 106A is inconsistent with s 123(2). Subsection 123(2) of the Administration Act provides for the continuation of a determination that a person is qualified for a concession card until certain specified events occur, including cancellation by the Secretary under s 86 and s 87. Cancellation by force of s 106A is not included in s 123(2).
If s 123(2) is interpreted as setting out an exclusive list of the circumstances in which a person’s qualification for a concession card ceases, s 106A has no effect. I do not accept that this was the intention of Parliament when s 106A was enacted, despite the existence of s 123 at the time.
Section 15AA of the Acts Interpretation Act 1901 (Cth) provides:
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
Subsection 15AB of the same Act provides in part:
Use of extrinsic material in the interpretation of an Act
(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
…
(b) to determine the meaning of the provision when:
…
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
The Administration Act was amended by the insertion of s 106A in 2001.[3] The Explanatory Memorandum accompanying the amending legislation refers to s 106A as follows:
Item 15 – Automatic cancellation on cessation of qualification
This item inserts proposed section 106A that deals with automatic cancellation when a person ceases, otherwise than because of section 104 or 105 of the Social Security (Administration) Act 1999, to be qualified for the concession card.
[3] The amendment was made by the Social Security Legislation Amendment (Concessions Cards) Act 2001 (Cth).
Clearly it was the intention of Parliament to add automatic cancellation (in the circumstances set out) as a means by which a person’s qualification for a concession card ceases to be in effect. Section 106A should be interpreted in accordance with the ordinary meaning of the words used and in the context in which they are used, to give effect to the intention of Parliament. This is so, notwithstanding the provisions of s 123.
This interpretation also accords with the principle stated by Professors Pearce and Geddes that:
as a general principle, the courts have pointed out that they are not at liberty to consider any word or sentence as superfluous or insignificant. All words must prima facie be given some meaning and effect …… This principle is more compelling if the word (or phrase) in question has been added by amendment: Transport Accident Commission v Treloar [1992] 1 VR 447 at 462 per Brooking J.[4]
[4] D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) 62-3.
If there was a cancellation by force of law prior to 15 December 2014, the purported cancellation on that date was of no effect.
Was Ms Kruusamagi’s senior health card cancelled by force of section 106A of the Administration Act prior to 15 December 2014?
Sections 104 and 105 of the Administration Act rely on the automatic cancellation of a seniors health card in relation to the compliance, or not, with a s 68(4) notice. A s 68(4) notice requires Ms Kruusamagi to inform Centrelink of an event or change of circumstances occurs that might affect her qualification for the seniors health card.
The Secretary contends that Ms Kruusamagi should have informed Centrelink of any changes in financial circumstances that would have affected her qualification for a seniors health card.
There is no evidence before me to show that Ms Kruusamagi was sent any s 68(4) notices. The Secretary cannot produce any correspondence in relation to s 68(4) notices that may have been sent to Ms Kruusamagi. At the Tribunal hearing, Ms Kruusamagi could not recall receiving any relevant notices. In submissions, the Secretary relied on a brief record of a telephone call with Ms Kruusamagi on 31 July 2009, which states ‘CSHC Review form – A1816 returned’. Counsel for the Secretary informed me that ‘A1816’ is a notice that complies with s 68(4) of the Administration Act. This is not sufficient evidence to satisfy me that Ms Kruusamagi received any s 68(4) notices from Centrelink.
As I am not satisfied that Ms Kruusamagi received a s 68(4) notice from Centrelink, I find that ss 104 and 105 of the Administration Act are not relevant to this application.
It is therefore necessary to determine whether Ms Kruusamagi’s seniors health card was cancelled by force of s 106A prior to 15 December 2014.
The Secretary did not argue that Ms Kruusamagi’s card was automatically cancelled by reason of any factor other than her exceeding the income limit to qualify for a seniors health card.
The test for determining whether a person satisfies the income test for a seniors health card is set out in s 1071 of the Social Security Act. Section 1071-12 assesses a single person’s income limit as $50,000 per year. This means that Ms Kruusamagi qualifies for the senior health card providing that her income does not exceed $50,000 per year.
Notices of Ms Kruusamagi’s taxable income produced by the Australian Taxation Office show that her taxable income was:
(i)$52,094 as of 28 November 2011;
(ii)$54,329 as of 7 November 2012;
(iii)$55,175 as of 6 November 2013; and
(iv)$53,978 as of 21 November 2014.
From 28 November 2011, Ms Kruusamagi’s income exceeded the limit for qualification for the seniors health card. During the Tribunal hearing, Ms Kruusamagi did not contest the amount of her taxable income between November 2011 and November 2014 but stated that she did not know that qualification for a seniors health card was contingent on her taxable income not exceeding $50,000.
I am satisfied that from 28 November 2011, Ms Kruusamagi did not meet the qualification rules for a senior health card as she did not satisfy the seniors health card income test required by s 1061ZG(1)(d). By force of s 106A of the Administration Act, I find that Ms Kruusamagi’s seniors health card was automatically cancelled on 28 November 2011.
Issue II: Is there a debt for the period of 20 December 2011 to 20 September 2014?
Subsection 1223(1) of the Social Security Act provides:
1223 Debts arising from lack of qualification, overpayment etc.
(1)Subject to this section, if:
(c)a social security payment is made; and
(d)a person who obtains the benefit of the payment was not entitled for any reason to obtain the benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
In accordance with s 1061U of the Social Security Act as then was in force, Ms Kruusamagi, as a holder of a seniors health card, received senior supplement payments from Centrelink between 20 December 2011 and 20 September 2014 in the total amount of $3,352.17.
As I have found that there was an automatic cancellation of the seniors health card on 28 November 2011, there was an overpayment of senior supplement payments to Ms Kruusamagi for the period of 20 December 2011 to 20 September 2014 when payments ceased.
Issue III: Should the debt be recovered?
Subsection 1236 of the Social Security Act provides, in part:
1236Secretary may write off debt
(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
There is no evidence to suggest that any of the conditions set out in s 1236(1A) are met. I am not satisfied that the debts should be written off.
Should the debt be waived by reason of ‘special circumstances’?
Subsection 1237AAD of the Social Security Act provides:
1237AAD Waiver in special circumstances
The secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(e)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, the Administration Act or the 1947 Act; and
(f)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(g)it is more appropriate to waive than to write off the debt or part of the debt.
In Groth v Secretary Department of Social Security[5] the Federal Court said:
… The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss… it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied...
[5] [1995] FCA 1708.
Ms Kruusamagi said at the Tribunal hearing that she was not aware that her qualification for the seniors health card was affected by her income level and did not know that the payments she received from the government between December 2011 and September 2014 were because she held a seniors health card. She also expressed confusion about how Centrelink calculated taxable income and whether this included her late husband’s superannuation payments. Understandably, given the time that has passed, she could not recall telephone conversations with Centrelink in April 2009 and July 2009 in which these issues were discussed with her. She also could not recall receiving any written notices from Centrelink which set out information about calculating taxable income for the purposes of receiving a seniors health card, but acknowledged that this may have happened.
In relation to any requirement for Centrelink to inform Ms Kruusamagi about her on-going eligibility for the seniors health card, I have regard to previous decisions of this Tribunal[6] which said that ‘Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment’.[7]
[6] Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115; Ivor Biddlecombe and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 451.
[7] Brian Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115 at [9].
It was not until 5 December 2014 that Ms Kruusamagi was notified by Centrelink that her income may have exceeded the limit to qualify for a seniors health card. During the time the Secretary claims Ms Kruusamagi was ineligible, Centrelink continued to issue her with a card on an annual basis. While I accept that Ms Kruusamagi may not have been aware of the need to advise Centrelink of any change in her financial circumstances, by reason of her unawareness, Centrelink remained ignorant that her circumstances had changed in a manner that affected her entitlement to hold the card.
Unfortunately for Ms Kruusamagi there is nothing which takes her situation out of the ‘usual or ordinary case’. I therefore am satisfied that there are no special circumstances that warrant waiving the debt.
CONCLUSION
The decision of the SSCSD of the Administrative Appeals Tribunal made on 11 December 2015 is set aside and in substitution the Tribunal decides that Ms Kruusamagi incurred a seniors supplement debt for the period of 20 December 2011 to 20 September 2014 in the amount of $3,352.17.
I certify that the preceding 51 (fifty -one) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member ............................[sgd]............................................
Associate
Dated 2 August 2016
Date(s) of hearing 14 June 2016 Solicitors for the Applicant
Respondent
Department of Human Services
In person (by telephone)
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Statutory Construction
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Jurisdiction
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Appeal
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Remedies
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Standing
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