LEMON and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

[2010] AATA 250

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 250

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/5512

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ROBERT LEMON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date9 April 2010

PlaceBrisbane

Decision The Tribunal remits the matter to the Secretary to be considered in accordance with these reasons.

...................[Sgd]...............

Senior Member

CATCHWORDS

SOCIAL SECURITY – Benefits and entitlements – Age pension – Failure to declare personal earnings – Whether any special circumstances exist – Matter remitted to the Secretary

Social Security Act 1991 (Cth) ss 8, 1064, 1223, 1237AAD

Social Security (Administration) Act 1999 (Cth) ss 68, 100

REASONS FOR DECISION

9 April 2010 Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      Mr Robert Lemon has sought review of three decisions made by Centrelink to raise and recover debts that resulted from the overpayment of his age pension benefits due to his failure to declare personal earnings.

PRIOR DECISIONS

2.      On 8 August 2005, Centrelink made a decision to raise and recover an age pension debt of $6,128.93 for the period 16 November 2004 to 13 June 2005.  For that period the applicant received $7,217.50 when he was entitled to receive $1,142.57.  On 21 May 2007, Centrelink made a decision to raise and recover an age pension debt of $14,631.78 for the period 3 December 2005 to 18 May 2007.  For that period the applicant received $19,689.54 when he was entitled to receive $5,057.76.  On 1 November 2007, Centrelink made a decision to raise and recover an age pension debt of $829.83 for the period from 6 August 2007 to 21 August 2007.  For that period the applicant was paid $829.83 when he was receiving income from employment.  In the statement of facts and contentions of the respondent it is stated that these debts amount to $21,588.54, although the total of the debts appears to be $21,590.54.  The applicant has repaid some of the debt by instalments being deducted from his age pension payments.

3.      The applicant sought review by an Authorised Review Officer.  On 12 December 2007, an Authorised Review Officer affirmed the decision dated 1 November 2007.  On 9 September 2009, an Authorised Review Officer affirmed the decisions dated 8 August 2005 and 21 May 2007.  On 12 October 2009, these decisions were affirmed by the Social Security Appeals Tribunal.

ISSUES

4.      In determining this application, I have to decide whether the applicant was overpaid age pension.  If I decide that there is an overpayment, I then have to consider whether the overpayment is a debt to the Commonwealth which should be recovered.

RELEVANT LEGISLATION

5.      The relevant legislation that I am required to administer is the Social Security Act 1991 (Cth) and the Social Security (Administration) Act1999 (Cth).

BACKGROUND

6.      For all periods associated with the debts, the applicant ran a farm.  I accept the applicant’s evidence that due to the drought he had to work as a taxi driver in order to gain income.  I should state that the applicant is a person who appears to be always gainfully employed.  He is currently unable to drive a taxi until difficulties with his licence are resolved.  The applicant drove taxis during the three periods for which the debt was raised.

7.      To his credit, the applicant has admitted that at various times he failed to report when he commenced work and the amount of income he received.  However, he had disclosed to Centrelink that he intended to drive taxis before he derived any income from that activity. 

OBLIGATION TO REPORT INCOME

8. The applicant was required to inform Centrelink about a matter that might affect his social security payment within 14 days of receiving any notice from Centrelink. This obligation to report is imposed by s 68(2) of the Social Security (Administration) Act1999 (Cth). This subsection provides:

68.(2)  The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a)       inform the Department if:

(i)        a specified event or change of circumstances occurs; or

(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;

(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment.

9.      Information notices which required the applicant to report his income within 14 days were sent to the applicant on 28 June 2002, 23 February 2004, 23 April 2004, 24 February 2005, 1 November 2005, 9 November 2005, 13 February 2007, 21 May 2007 and 15 June 2007.

CONSIDERATION

10. Section 8 of the Social Security Act 1991 (Cth) defines a person’s income as an “income amount” earned, derived or received by a person for the person’s own use or benefit. The expression “income amount” is also defined in s 8 to mean “personal earnings”. I consider that any personal earnings that the applicant received from taxi driving to be income for the purposes of that Act. On the state of the material before me, the basis of calculation of the actual income that was received by the applicant for taxi driving for the respective periods is not apparent having regard to any insurance instalments that may be deducted from payments made to the applicant. There is also the minor discrepancy, that I have earlier averted to, as to the total amount of the debt. Mr Hamilton quite properly stated that the matter could be remitted to verify the calculation of the income in question.

11.     I have considered the complaint of the applicant, which was raised in his letter to the Prime Minister, that Centrelink has not considered his expenditure on caravan accommodation and meals.  However, during the hearing, I observed that the applicant had not claimed any payments for such accommodation and meals as deductions in his tax returns.  During the hearing, the applicant was given an opportunity to consult with his accountant to verify that these items of personal expenditure are not deductible.

12.     On the state of the material before me, I consider that there certainly has been an overpayment made to the applicant.  The actual amount of the overpayment can be verified by the Department.  I am of the opinion that the amount of any overpayment is a legally recoverable debt pursuant to subsection 1223(1) of the Act.

RETROSPECTIVE RATE REDUCTION 

13.     The applicant is paying for the debt through deductions from his age pension payments.  The Social Security (Administration) Act1999 (Cth) provides for a retrospective rate reduction where a person fails to comply with a notice issued under subsection 68(2) of that Act. Subsection 100(1) of that Act provides:

100.(1) Subject to subsection (2), if:

(a)a person who is receiving a social security payment is given a notice under subsection 68(2); and

(b)the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and

(c)       the event or change of circumstances occurs; and

(d)the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

(e)because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances.

WHETHER THERE CAN BE WAIVER OF RECOVERY OF THE DEBT DUE TO AN ADMINISTRATIVE ERROR

14. Section 1237A of the Social Security Act 1991 (Cth) provides for the waiver of a debt in circumstances of administrative error. I accept the submission of the Secretary that there is no evidence of any administrative errors by Centrelink. This is therefore not a case in which to waive the debt under s 1237A.

WHETHER THERE ARE SPECIAL CIRCUMSTANCES

15. Section 1237AAD of the Social Security Act1991 (Cth) provides that the Secretary may waive all or part of a debt on the grounds of special circumstances. One difficulty that is faced when determining whether special circumstances are present is the lack of complete information concerning the affairs of the applicant. I accept the submission of Mr Hamilton that this is a case where it is appropriate for the applicant to complete a new Financial Information Form.

16.     Mr Hamilton has quite properly submitted that the applicant may not have disclosed all of his pharmacy expenses in his last Financial Information Form that was signed on 19 January 2010.[1]  Certainly the applicant has not included costs of antibiotics.  The Secretary has not had the opportunity to investigate the credit card debt and a personal loan.  At the hearing, there was a suggestion that the applicant may have real estate but the applicant on oath, and in his Financial Information Form has stated that he does not now have any real estate.  The Secretary should be given the opportunity to ascertain whether the applicant has any real estate.  At the hearing there was an issue concerning the expenditure of the applicant in purchasing groceries.  The applicant in giving evidence referred to his difficulties in paying for his groceries and drew my attention to the fact that he predominantly purchases groceries that are about to reach their expiry date and pays the butcher for his meat using a post-dated cheque from which he also draws cash.

[1] Exhibit E

17.     On the evidence of the applicant, he is insolvent having liabilities that greatly exceed his assets.  The only assets that are disclosed by the applicant are a 1973 Bedford truck and a 1971 Holden sedan.  The applicant also stated that he is unable to afford all of the medication that he requires to relieve pain.  This is a matter of concern.  The applicant has received some pain-killing medication as a sample from his doctor: the medication being Glucosamine 750 and chondroitin.  Although this medication is effective, he cannot afford to purchase this.

18.     The applicant has also given evidence of his personal circumstances and stated that he is unable to afford to visit his relatives.

19.     I consider that this application should be remitted to the Secretary for consideration of whether there are special circumstances present in this case.

WRITE OFF THE DEBT

20. Section 1236 of the Social Security Act 1991 (Cth) enables the Secretary to write off a debt for a stated period or otherwise. It may be appropriate for the Secretary to exercise this power if the applicant is unable to afford all of the medication that he requires to relieve pain. This is a matter that should be considered by the Secretary after receiving up to date information from the applicant.

DECISION

21.     The matter is remitted to the Secretary to be considered in accordance with these reasons.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: ...........................[Sgd].......................................
              Kate Slack, Research Associate

Date/s of Hearing  15 March 2010
Date of Decision  9 April 2010
Applicant was self-represented
Solicitor for the Respondent     Mr Robert Hamilton, Departmental Advocate