Magjarraj and Secretary, Department of Social Services (Social services second review)
[2017] AATA 720
•23 May 2017
Magjarraj and Secretary, Department of Social Services (Social services second review) [2017] AATA 720 (23 May 2017)
Division:GENERAL DIVISION
File Number(s): 2016/0408 and 2016/1335
Re:Alija Magjarraj
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member J F Toohey
Date:23 May 2017
Place:Sydney
The decisions under review are affirmed.
.........................[sgd]...............................................
Senior Member J F Toohey
CATCHWORDS
SOCIAL SECURITY – debt – periodic compensation – whether applicant overpaid disability support pension – pension – whether special circumstances – decision under review affirmed
SOCIAL SECURITY – debt – whether applicant failed to declare income – whether applicant overpaid disability support pension – whether gambling receipts income – whether special circumstances – decision under review affirmed
LEGISLATION
Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle and Director-General of Social Security (1985) 60 ALR 225
Bobera and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 922
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov v Centrelink [2003] FCAFC 133
Fanning and Secretary, Department of Social Services [2014] AATA 447
Groth and Secretary, Department of Social Security [1995] FCA 1708
Re Ivovic and Director-General of Social Services [1981] AATA 57
Loizou and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 224
Mostovoy and Secretary, Department of Social Services [2016] AATA 323
Nassimi and Secretary, Department of Social Services [2015] AATA 423
Secretary, Department of Employment and Workplace Relations and Ruan [2007] AATA 1758
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Nguyen [2007] AATA 2075CASES
Administrative Appeals Tribunal Act 1975 s 34J
Social Security Act 1991 ss 8, 17(1), 26, 27, 92, 94, 1064, 1072, 1173, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 s 80(1)SECONDARY MATERIALS
Social Security (Tables for the Assessment of Work-Related Impairment for Disability Support Pension) Determination 2011
Guide to Social Security Law
REASONS FOR DECISION
Senior Member J F Toohey
23 May 2017
INTRODUCTION
Mr Alija Magjarraj suffers from a spinal condition, chronic obstructive pulmonary disorder (COPD), an upper limb condition, major depressive disorder and post-traumatic stress disorder (PTSD), and hypertension. In January 2003, he was granted disability support pension (DSP) at the maximum single rate.
In these proceedings, the Tribunal is reviewing decisions concerning payment of DSP to Mr Magjarraj. He and the Secretary consent to the review being conducted by considering the documents lodged with, or provided to, the Tribunal and without holding a hearing: s 34J of the Administrative Appeals Tribunal Act 1975 (AAT Act). I am satisfied that the issues can be adequately determined in this way.
DOCUMENTS BEFORE THE TRIBUNAL
The documents before the Tribunal comprise documents lodged by the Secretary in accordance with section 37 of the AAT Act and written submissions from Mr Magjarraj and the Secretary.
BACKGROUND
When these proceedings commenced, Mr Magjarraj sought review of a decision that he did not qualify for indefinite portability of his DSP in May 2014, and two decisions concerning overpayment of DSP and resulting debts.
On 9 October 2014, Mr Magjarraj contacted Centrelink to say he was planning to go overseas on 1 May 2015 and he asked for an assessment of his medical conditions to determine whether he qualified for “indefinite portability”. In the course of assessing whether he qualified for indefinite portability, Centrelink determined that Mr Magjarraj did not qualify for DSP at all and cancelled his payment. It followed that he did not qualify for indefinite portability. In accordance with s 80(1) of the Social Security (Administration) Act 1999, Centrelink cancelled Mr Magjarraj’s payment.
On 28 July 2015, Mr Magjarraj applied to the Social Services and Child Support Division (SSCSD) of this Tribunal for review of Centrelink’s decisions. On 14 December 2015, the SSCSD decided that his DSP should not have been cancelled, but that he was not entitled to indefinite portability. As a result, Centrelink restored payment of Mr Magjarraj’s DSP as of 11 June 2015 when it was cancelled.
On 25 January 2016, Mr Magjarraj applied for review of the SSCSD’s decision concerning indefinite portability. Subsequently, he withdrew his application.
The Secretary maintains that, once Mr Magjarraj sought review of the decision concerning indefinite portability, the question of whether he qualified for DSP at all is also before the Tribunal, and the Tribunal should reinstate the decision to cancel his payment. In effect, the Secretary says it is not necessary for the Secretary to lodge an application for review of the SSCSD’s decision setting aside the cancellation decision.
I am not persuaded that approach is correct. The two are separate decisions, made under separate provisions in the legislation. There is some overlap in the provisions but the decisions are distinct. For convenience, however, I set out below my reasons for agreeing with the decision of the SSCSD that Mr Magjarraj’s DSP should not have been cancelled.
DECISIONS CONCERNING OVERPAYMENTS
In addition to the decisions above, Centrelink made the following decisions that Mr Magjarraj had been overpaid a total of $54,116.79 in DSP:
(a)on 1 April 2013, Centrelink decided Mr Magjarraj had been overpaid $21,853.02 from 4 January 2011 to 2 August 2012 when he was receiving periodic compensation payments following a motor vehicle accident on the way to work;
(b)on 29 October 2013, Centrelink decided Magjarraj had been overpaid $32,263.77 from 10 August 2006 to 23 November 2011 because, during that time, he had received income that he had not declared to Centrelink.
Mr Magjarraj sought review of both decisions. On 14 December 2015, the SSCSD affirmed the first decision. On 1 February 2016, the SSCSD set aside the second decision and determined that the debt should be recalculated excluding any periodic compensation payments credited to Mr Magjarraj’s account during the relevant period, and that he should repay the remainder.
Centrelink recalculated the debt in accordance with the SSCSD decision and determined the “new debt figure” was $30,728.52 and the “new debt period” was 10 August 2006 to 25 May 2011.
DID MR MAGJARRAJ QUALIFY FOR DSP ON 11 JUNE 2015?
To qualify for DSP, a person must satisfy the criteria in s 94(1) of the Social Security Act 1991 (SS Act). They are:
(a)an impairment rating of 20 or more points according to the Impairment Tables in the Act; and
(b)a continuing inability to work.
There have been amendments to the SS Act since Mr Magjarraj was granted DSP in 2003. It is not necessary to go into them all in detail. It is sufficient to summarise the relevant changes as follows.
The Impairment Tables in effect at the date of reviewing a person’s qualification for DSP must be applied: ss 26 and 27 of the SS Act. Revised Impairment Tables came into effect on 1 January 2012 and apply to new applicants for DSP and any existing DSP recipients whose qualification is assessed, from that date: Social Security (Tables for the Assessment of Work-Related Impairment for Disability Support Pension) Determination 2011. This means that Mr Magjarraj’s impairments must be rated according to the Tables in force in 2015 rather than those in force in 2003.
In 2003, a person could have a continuing inability to work if not capable, because of his or her impairment(s), of working for 30 hours a week. That was subsequently reduced to 15 hours per week. However, as Mr Magjarraj was granted DSP before 11 May 2005, he retained the benefit of the more generous provision, even when reviewed after the passage of the amending Act.
A further change was made with effect from 3 September 2011 by amendment to s 92(2) of the SS Act so that a person who did not have a severe impairment had to have actively participated in a program of support for 18 months in the three years immediately before applying in order to qualify for DSP. Savings provisions meant that the SS Act as previously in force continued to apply to persons already in receipt of DSP.
In summary, Mr Magjarraj would continue to qualify for DSP on 11 June 2015 if, at that time, he had an impairment rating 20 or more points on the Impairment Tables and if, as a result of those impairments, he remained not capable of working for 30 hours or more each week.
Rules for assigning impairment ratings
The Impairment Tables include instructions and rules for assessing an impairment and assigning it a rating. Depending its effect on a person’s ability to function, an impairment may be rated between nil and 30 points.
An impairment rating can only be assigned when the condition causing it is permanent: paragraph 6(3). Permanent in this context means a condition is fully diagnosed, fully treated and fully stabilised and more likely than not will persist for more than two years: paragraph 6(4).
When deciding whether a condition is fully diagnosed and fully treated, it is necessary to consider: whether it has been fully diagnosed by an appropriately qualified doctor; what treatment or rehabilitation has occurred; whether treatment is still continuing or is planned in the near future; and whether any further reasonable medical treatment is likely to lead to significant functional improvement within the next two years: paragraph 6(5) and (6).
Fully stabilised means that it is unlikely that there will be any significant functional improvement in a condition, with or without reasonable treatment, within the next two years: paragraph 6(6).
In considering whether a condition was fully treated and stabilised during the claim period, the Tribunal must consider the treatment that had taken place, and was intended to take place, and its likely effect, during the claim period. Subsequent treatment, and whether or not it was effective, is not directly relevant: Fanning and Secretary, Department of Social Services [2014] AATA 447; and see Bobera and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 922.
I will consider Mr Magjarraj’s conditions in turn.
Chronic obstructive pulmonary disease (COPD)
There is no dispute that Mr Magjarraj suffers from moderate to severe COPD. Dr David Freiberg, consultant physician in respiratory medicine, reported on 7 November 2014 that he had smoked heavily for 30 years (before giving up 12 years earlier) and his symptoms suggested an allergic predisposition; while in Australia, he developed shortness of breath with minimal effort, and lung function tests showed severe COPD. Dr Freiberg favoured Mr Magjarraj living on the Dalmatian Coast in Croatia for his long-term respiratory health rather than on the eastern coast of Australia.
The Secretary acknowledges, and I am satisfied, that this condition was fully diagnosed, treated and stabilised on 11 June 2015. The medical reports indicate that Mr Magjarraj’s night-time symptoms would be relieved with a CPAP machine, but nothing suggests any substantial improvement in functional capacity during the daytime was likely.
The Secretary contends that Mr Magjarraj’s resulting impairment should be rated 10 points under Table 1 (Functions requiring Physical Exertion and Stamina). Table 1 describes a rating of 10 points (“moderate functional impact”) as follows:
The person:
(a)experiences frequent symptoms (e.g. shortness of breath, fatigue, cardiac pain) when performing day-to-day activities around the home and community and, due to these symptoms, the person:
(i) is unable to walk (or mobilise in a wheelchair) far outside the home and needs to try or get other transport to local shops or community facilities; or
(ii) has difficulty performing day-to-day household activities (e.g. changing the sheets on the bed or sweeping paths); and
(b)is able to:
(i) use public transport and walk (or mobilise in a wheelchair) around a shopping centre or supermarket; and
(ii) perform work-related tasks of a clerical, sedentary or stationary nature (that is, tasks not requiring a high level of physical exertion).
On 30 September 2016, Dr Sandra Armstrong completed a review for the Department of Human Services Health Professional Advisory Unit. The report is of particular relevance because of its detailed summary and analysis of the history, medical evidence and decisions made concerning Mr Magjarraj’s qualification for DSP.
Dr Armstrong noticed “some discrepancies” in the evidence about the functional impact of Mr Magjarraj’s COPD, but she agreed, based on the material, that a rating of 10 points on Table 1 was appropriate.
The SSCSD decision records that Mr Magjarraj told that tribunal that his condition had become worse in the last two to three years; he got assistance with household chores and would be capable of folding light washing, but difficulty breathing would prevent him from changing sheets or sweeping paths; he could walk slowly and took a lot of breaks; he was able to walk and move around the house; he spent a lot of time lying in bed or sitting while watching television.
I am satisfied on the information before me that the impairment resulting from Mr Magjarraj’s COPD should be rated 10 points as at the date of cancellation. The information does not support the conclusion that it had severe functional impact that would rate 20 points. Severe for the purposes of Table 1 means a person:
(a)usually experiences symptoms (e.g. shortness of breath, fatigue, cardiac pain) when performing light physical activities and, due to these symptoms, the person is unable to:
(i) walk (or mobilise in a wheelchair) around a shopping centre or supermarket without assistance; or
(ii) walk (or mobilise in a wheelchair) from the car park into a shopping centre or supermarket without assistance; or
(iii) use public transport without assistance; or
(iv) perform like day-to-day household activities (e.g. folding and putting away laundry or light gardening); and
(b)has or is likely to have difficulty sustaining work-related tasks of a clerical, sedentary or stationary nature for a continuous shift of at least 3 hours
Mr Magjarraj has not provided any information in these proceedings that suggests his impairment was more severe than what he described to the SSCSD. I am satisfied that his impairment did not rate 20 points at the date of cancellation.
Spinal condition
The Secretary acknowledges, and I am satisfied, that Mr Magjarraj’s spinal condition was fully diagnosed, treated and stabilised on 11 June 2015. It is clear from the information before the Tribunal that it is long-standing and has deteriorated since 2003, in part as a result of motor vehicle accidents in January 2011 and November 2014. The question is how many points the resulting impairment attracted at the date of cancellation. The relevant table is Table 4 (Spinal Function).
Dr Wilkinson
In a report dated 9 January 2013, Mr Magjarraj’s general practitioner, Dr Wilkinson, reported that the degenerative condition in his lumbar spine, shoulders and neck, “restricts his ability to function”. She described his current symptoms as “chronic back, neck and shoulder pain” and indicated that it affected his “endurance” and “movement / dexterity (e.g. walking, bending, sitting, standing, lifting / carrying / manipulating objects)” but she gave no details.
Dr Protulipac
Dr Zoran Protulipac, a clinical psychologist, reported on 4 May 2015 that he had been treating Mr Magjarraj weekly “for months” for his major depressive disorder and PTSD. He indicated Mr Magjarraj could manage six to 12 steps but, in relation to his restricted mobility, said his general practitioner should be consulted about his physical condition.
Dr Giblin
In a report dated 14 September 2015, Dr Peter Giblin, orthopaedic surgeon, stated that Mr Magjarraj’s chief complaint was pain in his lower back with burning and pins and needles going down his left leg into his foot; his second complaint was neck pain and stiffness going into his right shoulder and forearm.
Dr Giblin reported that Mr Magjarraj’s symptoms were mechanical in nature and he had “mild limitation in terms of his daily personal and household activities”; he relied on somebody to do the lawns and gardens for him; he could still walk most distances, but there were days when his left leg was going to collapse and he felt he might fall; he was increasingly reliant on support from his 15-year-old daughter with housework and shopping; he could still drive a car, but not long distances, and had difficulties “accessing his blind spot”.
On examination, Dr Giblin found Mr Magjarraj could actively rotate his chin 10° towards the right, 40° towards the left, 10 finger breadths off his chest and extension of his neck was “barely a 10th normal”; when standing with his feet together he could bend over and touch his knees; lateral extension was to the distal third of the thigh on either side, and extension of his lumbar spine was nil; straight leg raising was 70° on the right side but limited to 30° on the left with the complaint of pain mainly in the back area.
Job Capacity Assessments
On 8 December 2014, a Job Capacity Assessor interviewed Mr Magjarraj for the purposes of reviewing his DSP. In a report dated 5 June 2015, she noted that he “reported having no significant difficulties with his back, neck and shoulders when overseas. He is reportedly performing all daily living activities whilst there” but he experienced pain when in Australia. The assessor recorded that the treating doctor noted “it would favour him long term on the Dalmatian coast rather than the eastern coast of Australia.”
The assessor concluded that there was “mild” functional impact on activities involving spinal function because Mr Magjarraj had “some difficulty” with activities overhead, bending to knee level and straightening up again without difficulty, and turning his trunk or moving his head; he had a sitting tolerance of 10 to 30 minutes, inability to bend to knee high, and difficulties in overhead reaching; and he needed assistance in cooking and cleaning. On this basis, the assessor assigned a rating of five points.
SSCSD decision
The decision of the SSCSD shows that Mr Magjarraj reported he had “a lot of pain” in his neck and back, and his legs:
In the morning it takes him at 15 to 30 minutes when he wakes to be able to straighten up. He can walk but not very far. If he has to walk it will only be for a very short time and slowly. He can stand for about 10 to 15 minutes but cannot guarantee that he will not fall. He could bend to pick up a light object from a desk but not from knee level.
He can drive but drives very slowly and carefully and often pulls over to have a rest. He has difficulty moving his head too much and is markedly reliant on his side mirrors when he drives. Usually someone drives him when he has to go somewhere. In terms of sitting, he cannot give a precise time to how long he can sit but he is always changing position, walking or adjusting his posture. When asked about flying to Croatia and managing the pain on the aeroplane, he replied that he always has a stopover the two days, both to and from Croatia. He takes his medication and he is always moving around and walking during the flight.
The SSCSD decided that, on the basis that he could sit in or drive a car for 30 minutes and was unable to bend to pick up a light object to knee height, and he had some difficulty moving his head to look in all directions, Mr Magjarraj’s spinal condition caused moderate functional impact and rated 10 points on Table 4. The Secretary disagrees and says it should rate no more than five points (mild functional impact).
Table 4 provides there is mild functional impact if the person has difficulty in:
(a)activities over head height (e.g. activities requiring the person to look upwards); or
(b)bending to knee level and straightening up again without difficulty; or
(c)turning their trunk or moving their head (e.g. to look to the sides or upwards).
Table 4 provides there is moderate functional impact rating 10 points if the person is able to sit in or drive a car for at least 30 minutes, and at least one of the following applies:
(a)the person is unable to sustain overhead activities (e.g. accessing items overhead height); or
(b)the person has difficulty moving their head to look in all directions (e.g. turning their heads to look over their shoulder); or
(c)the person is unable to bend forward to pick up a light object placed to knee height; or
(d)the person needs assistance to get up out of the chair (if not independently mobile in a wheelchair).
Dr Armstrong’s review shows that, in her view, Mr Magjarraj reported a much greater impairment of his spine at the SSCSD hearing than appeared in the medical reports, and she considered Dr Giblin’s report a more reliable indicator of the spinal functional impact. She concluded that an appropriate rating was somewhere between five and 10 points and, applying the instructions in the Impairment Tables, the lower of the two ratings was to be assigned (see paragraph 11(c) of the Introduction to the Impairment Tables).
As I read Dr Armstrong’s report, when she said Mr Magjarraj reported greater impairment of his spine to the SSCSD than was borne out in the medical reports, she was referring mainly to his lumbar spine. She noted that Mr Magjarraj told the SSCSD that he had “difficulty moving his head too much”. This is borne out by Dr Giblin’s finding that Mr Magjarraj could actively rotate his chin on 10° towards the right and 40° towards the left, 10 finger breadths off his chest and extension of his neck is “barely a 10th normal”.
A rating of 10 points on Table 4 requires only that a person be unable to perform one of the listed activities. I am satisfied, on the basis of Dr Giblin’s report and Mr Magjarraj’s statement to the SSCSD, that he has difficulty moving his head to look in all directions. On that basis, I find that his spinal impairment rated 10 points.
Other conditions
Because I am satisfied that Mr Magjarraj’s COPD and spinal condition rated a total of 20 points in June 2015, it is not strictly necessary to consider whether his other conditions attracted any impairment rating. For completeness, I will consider them briefly.
Shoulder condition
I would agree with the findings of the SSCSD and with Dr Armstrong’s report that Mr Magjarraj’s shoulder condition was fully diagnosed. The SSCSD considered it was fully treated and stabilised but that he did not meet the criteria for a five-point rating (mild functional impact) on Table 2 (Upper Limb Function) because he did not have “some difficulty” with most of the activities listed as required for that rating.
Dr Armstrong did not think Mr Magjarraj’s shoulder condition could be considered fully treated because the extent of treatment appeared to be two cortisone injections to his right shoulder some time before 2003. In any event, she considered it was of limited functional impact and no impairment rating would be warranted.
Mr Magjarraj has not provided any information in these proceedings to suggest that the SSCSD did not accurately reflect what he told that tribunal. I find that, even if his shoulder condition was fully treated and stabilised, it rated no points at the date of cancellation.
Major depressive disorder and PTSD
There is limited information before me about Mr Magjarraj’s psychological conditions. According to Dr Protulipac’s report dated 4 May 2015, Mr Magjarraj was suffering major depressive disorder and PTSD and had recurrent traumatic memories followed by severe somatic reactions; he suffered severe fear, hypo alertness, frequent nightmares, poor motivation, lethargy, hopelessness, helplessness, anxiety, insomnia and physical limitations. Dr Protulipac assessed the impact of the conditions on Mr Magjarraj’s well-being to be “severe” and likely to last five or more years. He noted he had been seeing Mr Magjarraj “weekly” for “months” (the form also allowed for “years”).
The SSCSD considered there was insufficient information about Mr Magjarraj’s psychological condition at the date of cancellation for it to be considered. I agree. Given the very limited information about Mr Magjarraj’s psychological condition, I am not satisfied that it could be considered fully treated and stabilised at the date of cancellation. It therefore could not be given an impairment rating.
Hypertension
The only evidence of this condition appears to be a report on 13 November 2014 from Dr Phan, cited by Dr Armstrong, which listed hypertension as a condition that was well managed and of minimal or limited impact. Dr Armstrong noted that she would not usually expect hypertension to have a functional impact. On this basis, I find this condition should be rated nil impairment points.
Lower limb function
In his report dated 14 September 2015, Dr Giblin stated that Mr Magjarraj had lower back pain going down into the left leg. He did not find any significant neurological abnormalities of the lower limbs but he thought Mr Magjarraj was unfit for using his left leg for repetitive stair or ladder climbing. It is not clear from the report whether Dr Giblin thought treatment was warranted or what improvement, if any, might be expected.
Dr Armstrong observed that an impairment rating was not warranted on Table 3 (Lower Limb Function) because the medical evidence did not indicate difficulties with lower limb functioning. In light of Dr Giblin’s comment, it does not appear to be correct to say the medical evidence did not indicate difficulties with lower limb function. However, there is insufficient evidence to say it was fully treated and stabilised during the claim period and, for that reason, I find that it cannot be assigned a rating for that period.
Continuing inability to work
As I understand the Secretary’s written submissions, it is not suggested that Mr Magjarraj did not have a continuing inability to work for the purposes of qualification to DSP (as distinct from the purposes of indefinite portability).
According to the Job Capacity Assessment on 5 June 2015, Mr Magjarraj had a “baseline work capacity” of 8 to 14 hours a week, based on his current level of functioning and related activities, and he had “a reduced work capacity based on his self-reported limitations due to his medical conditions and information provided in the supporting medical report”. On this basis, the assessor considered his capacity for work within two years “with mainstream intervention” was 15 to 22 hours per week. Suitable work was identified as “light less skilled” work, for example, “quality control, light courier work, console operator”.
Dr Armstrong did not consider it necessary to determine whether Mr Magjarraj had a continuing inability to work for the purpose of qualifying for DSP, because she assessed his total impairment rating as 15 points. However, she stated that he “should be able to work 15-22 per week within 2 years in a suitable occupation, with further medical treatment and vocational training”. She noted that Mr Magjarraj last worked as a cleaner in 2010 but said this would no longer be appropriate given his medical conditions. She thought a more suitable occupation could be as a receptionist “which is a sedentary occupation, which can involve frequent changes of posture”. Dr Armstrong did not suggest that Mr Magjarraj could work for 30 hours per week.
Based on this information, I am satisfied that, on 11 June 2015, Mr Magjarraj had a continuing inability to work within the meaning of s 94(1) as it applied to him.
For these reasons, I agree with the SSCSD that Mr Magjarraj qualified for DSP on 11 June 2015.
WAS MR MAGJARRAJ OVERPAID?
As set out above, the Secretary contends that Mr Magjarraj was overpaid a total of $54,116.79, firstly because of payments made when he was subject to a compensation preclusion period and secondly because he failed to declare income from the proceeds of gambling.
The preclusion period debt
If a lump sum or periodic payments are made wholly or partly in respect of lost earnings or earning capacity resulting from personal injury, it is compensation for the purposes of the Act. DSP is a “compensation affected payment”: s 17(1) of the SS Act.
Periodic compensation payments received while a person is receiving a compensation affected payment are treated as ordinary income: s 1173.
The rate at which a person is paid a social security payment is affected by income earned. Section 1173(2) provides that a person’s daily rate of a compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
Information before the Tribunal
Mr Magjarraj was injured in a motor vehicle accident on 4 January 2011. According to information provided to Centrelink by GIO Insurance, workers compensation payments totalling $49,841.66 for the period 4 January 2011 to 2 August 2012 were made to Clean Top Services, of which Mr Magjarraj was director.
A copy of the GIO Insurance schedule of payments provided to Centrelink is before the Tribunal. It comprises 28 pages showing payments for medical and related expenses, and for lost wages due to incapacity.
An Employer Injury Claim Report filed with GIO on 13 January 2011, shows that Mr Magjarraj lodged a claim for injuries sustained in a motor vehicle accident on 4 January 2011 “whilst travelling from one job site to another”. He gave his usual gross weekly earnings as $1500. He signed the form in his capacity as director but there is no doubt the claim was for injuries sustained by him personally. A Workers Injury Claim Form signed by Mr Magjarraj in his capacity as “the worker” was in almost identical terms to the Employer Injury Claim Report.
According to a record made by a Centrelink Authorised Review Officer of his conversation with Mr Magjarraj on 4 September 2015, Mr Magjarraj acknowledged he was the director and owner of Clean Top Services Pty Ltd which no longer existed; he said he never received compensation payments; he was not sure if the company received them; it was difficult for him to remember.
The SSCSD decision shows that Mr Magjarraj told that tribunal that he did not receive the payments made by GIO, and the money went to Clean Top Services to keep the office going. He acknowledged that he was the director of the company. The GIO schedule shows that periodic compensation payments were paid into a Citibank cheque account linked to a savings account, both in Mr Magjarraj’s name.
Consideration
The Secretary submits that, other than disputing receipt of the periodic compensation payments, Mr Magjarraj has not provided any information that would suggest that the schedule of payments provided by GIO insurance was incorrect, or that details of his bank account were incorrect; he has merely asserted that his payment should not be reduced.
I have no reason to doubt the information in the insurance and bank documents. I am satisfied, on the information before me, that Mr Magjarraj received periodic compensation payments during the relevant period. I have no reason to doubt the Secretary’s calculation of the resulting overpayment. Nothing in the documents before the Tribunal gives reason to conclude that Mr Magjarraj’s DSP for the relevant period should not have been reduced in accordance with s 1173, and in accordance with the income test in the rate calculator in s 1064.
A person who obtains the benefit of a payment that he or she was not entitled to obtain has a debt due to the Commonwealth in the amount of that payment that arises when he or she obtains the benefit of the payment: s 1223.
I am satisfied that Mr Magjarraj has a debt to the Commonwealth in the amount of $21,853.02 by reason of the periodic compensation payments received while he was receiving DSP.
Failure to declare income
The Secretary contends that, in the period 10 August 2006 to 23 November 2011 while receiving DSP at the full rate, Mr Magjarraj also received income that he failed to declare and which affected the rate at which he was entitled to be paid DSP.
The Secretary asserts that Mr Magjarraj had “numerous and sizeable unexplained and undisclosed cash deposits” in his bank account and, further, that the transactional history of the account indicated “a regularity of usage and the overall pattern of withdrawals and deposits is suggestive that it is an account used on a daily (or regular) basis for general expenditures and functions”.
Mr Magjarraj maintains that the deposits are the proceeds of gambling by a friend, Soka Cvijanovic. He says Ms Cvijanovic uses his cheque account in order to conceal the proceeds of her gambling from her husband and to capitalise on the high interest rates paid on his account and the high daily withdrawal allowance. Mr Magjarraj submits that gambling receipts are not assessable as income for the purposes of the Act.
According to a statutory declaration sworn on 22 November 2013, Ms Cvijanovic states that she has been using Mr Magjarraj’s accounts since 2005 for her “personal gambling/poker plays” and all of the money that has gone into his account is hers for her personal use. She states that she has used his account because his withdrawal daily limit is high and she does not want other members of her family “to know everything”.
The Secretary refers to Mr Magjarraj’s Player Activity Statement Reports from The Star casino which show monthly turnovers between September 2013 and December 2013 of amounts between $106,024 and $217,222. The Secretary submits that the monthly turnover shows that Mr Magjarraj had considerable resources at his disposal which are not reflected in any declarations he made to Centrelink. The Secretary contends that the records were in Mr Magjarraj’s name, that the turnover was attributed to his “playing time” and that the amounts were deposited into an account in his name.
In a written submission to the Tribunal on behalf of Mr Magjarraj, his representative, Ms Alexandrova, states that he was not aware that gambling winnings are regarded as income for social security purposes. She says most people believe, because the Australian Tax Office does not consider gambling winnings to be taxable income, that the same applies to the Centrelink. She says not enough information is given to people about the rules and regulations in the SS Act.
Ms Alexandrova refers to deposits into Mr Magjarraj’s account at times when he was overseas as evidence in support of his claim that the winnings were not his. Further, she says, information in his Player Activity Statement Report shows that Mr Magjarraj’s membership card was used mostly on a daily basis for periods of less than 30 minutes. She says it would be “very unlikely” that Mr Magjarraj would travel from his home to the casino to play for such short periods, and the Tribunal should accept his claim that the winnings deposited into his account were Ms Cvijanovic’s.
Consideration
Section 8(1) of the SS Act provides that "income", in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person's own use or benefit; or
(b)a periodical payment by way of gift or allowance; or
(c)a periodical benefit by way of gift or allowance;
By subsections (4), (5) and (8), certain amounts are excluded from the meaning of income for the purposes of the Act. None of the exclusions is relevant in this case.
"Income amount" means valuable consideration, or personal earnings, or moneys, or profits, whether of a capital nature or not: s 8(1). By s 8(2), an income amount earned, derived or received is a reference to:
(a)an income amount earned, derived or received by any means; and
(b)an income amount earned, derived or received from any source (whether within or outside Australia).
Section 1072 provides:
A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.
"Ordinary income" means income that is not maintenance income or an exempt lump sum: subsection 8(1).
In Nassimi and Secretary, Department of Social Services [2015] AATA 423 at [9], Deputy President Tamberlin observed:
In Read v Commonwealth [1988] HCA 26 at [3] the High Court noted that the definition of “income” in the Act is in the widest terms to ensure that public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide. The purpose of the definition is to ensure that it brings within its net as wide a range of categories and sources of income as possible: see Frederick George Rose v Secretary, Department of Social Security [1990] FCA 52 at [12].
The Tribunal has found gambling winnings to be income for the purposes of the Act on many occasions; see, for example: Mostovoy and Secretary, Department of Social Services [2016] AATA 323; Loizou and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 224; Secretary, Department of Employment and Workplace Relations and Ruan [2007] AATA 1758; Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Nguyen [2007] AATA 2075.
According to the SSCSD at [27], Mr Magjarraj conceded that he and Ms Cvijanovic “sometimes gambled together and some of the money [in the account] came from his own Lotto winnings”. The SSCSD observed that Mr Magjarraj gave no indication of how much of the money in the account belonged to him and he was not able to demonstrate satisfactorily the source of all the deposits. For reasons which are not explained, Ms Cvijanovic was not available to give evidence.
The SSCSD said at [32] that it did not consider Ms Cvijanovic’s statutory declaration to be reliable and nor did it consider Mr Magjarraj’s evidence to be reliable.
Mr Magjarraj was put on notice by the SSCSD’s decision, and by the Statement of Facts, Issues and Contentions filed by the Secretary in these proceedings, that Ms Cvijanovic’s statutory declaration was considered unreliable. No reason has been advanced as to why she is not available in these proceedings. Mr Magjarraj has elected to have his matter determined on the documents, as is his right. However, the sum total of additional information is the statement by Ms Alexandrova that a number of deposits were made when he was not in the country, and that it would be “very unlikely” for him to travel to the casino to gamble for brief periods most days.
I accept that the information before the Tribunal appears to support the claim that a number of deposits were made while Mr Magjarraj was out of the country but I am not persuaded that is sufficient to find that the deposits did not belong to him. Further, it may or may not be “very unlikely” that he would travel some distance for short periods of gambling. There is no way of knowing what his habits were and, by his own evidence to the SSCSD, at least some of the money in the account was his own winnings.
I am satisfied, on the weight of the information before me, that the deposits in question should be treated as income for the purposes of the SS Act. I have no reason to doubt the Secretary’s calculation of the resulting overpayment. I am satisfied that Mr Magjarraj has a debt as calculated by the Secretary.
Should any reason or all of either debt be waived?
A debt may be written off if the debtor has no capacity to repay, if the debt is irrecoverable at law, if the debtor’s whereabouts are unknown or if recovery is not cost‑effective: s 1236 of the Act. As there is no evidence to suggest that any of these applies in this case, there is no ground for writing off the debt, whether temporarily or permanently.
A debt must be waived where it is wholly attributable to administrative error and the debtor received the payment in good faith: s 1237A. There is nothing to suggest that payment to Mr Magjarraj was attributable to administrative error and I am not satisfied, on the information before me, that he received the payment during the relevant period in good faith. There is, therefore, no requirement that the debt be waived.
Section 1237AAD of the Act provides that the Secretary may waive the right to recover all or part of a debt if 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, the Administration 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.
I will assume, for the purposes of this decision, that the overpayment did not result wholly or partly from Mr Magjarraj knowingly making a false statement or a false representation, or failing or omitting to comply with social security legislation. It remains to consider whether there are special circumstances, other than financial hardship alone, that make it desirable to waive any of his debt.
The meaning of the expression “special circumstances” for the purposes of the Act has been considered by the Tribunal and the courts on many occasions. It is “by its very nature incapable of precise or exhaustive definition” and contemplates circumstances that are “unusual, uncommon or exceptional”: Beadle and Director-General of Social Security (1984) 6 ALD 1. In Beadle and Director-General of Social Security (1985) 60 ALR 225, the Full Court said:
[I]t is not possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase “special circumstances”, although lacking precision is sufficiently understood in our view not to require judicial gloss.
In Groth and Secretary, Department of Social Security [1995] FCA 1708, the Court looked for circumstances that distinguish an applicant’s case from others’ and which take it “out of the usual or ordinary case”; see also Dranichnikov v Centrelink [2003] FCAFC 133. In other cases, the Tribunal has looked to whether strict enforcement of liability would be “unjust, unreasonable or otherwise inappropriate”: Re Ivovic and Director-General of Social Services [1981] AATA 57; and whether any injustice or unfairness would be visited upon the applicant that is not visited upon all other recipients of social security payments: Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
In considering whether an applicant’s circumstances are “special”, it is relevant to consider the policy underlying the relevant provisions. The decision-maker must have regard to whether, by exercising the discretion in a particular case, he or she will be “achieving or frustrating ends or objects which are conformable with the scope and purpose of [the Act]”: Re Ivovic (above). It would frustrate the purpose of social security legislation, in particular the provisions by which payment is affected by income and assets, if a person can retain the benefit of the [payment as well as additional payments in anything other than unusual circumstances. In particular, the policy concerning compensation payments is based on the principle that a person who is compensated for loss of income as a result of an injury should use of that money to live on, rather than receive a taxpayer- funded payment: Guide to Social Security Law at 4.13.2.60.
Mr Magjarraj submits that he looks after two school-aged children, has continuing health problems, that he was involved in a further motor vehicle accident in November 2014 and he has limited funds available to him. A statement of financial circumstances on 27 January 2016 showed that his outgoings exceeded his income by approximately $60.00 per week after payment of some fines and his Centrelink debts.
Section 1237AAD(b) expressly excludes financial hardship from the meaning of special circumstances. In any event, the Secretary says, Mr Magjarraj now receives approximately $870 in DSP and family tax payments of approximately $595 per fortnight, and he received lump-sum settlement payments in January 2015 and August 2016 totalling $395,000, and he cannot be said to be in financial hardship.
I agree. I accept that Mr Magjarraj has health problems and the care of his children. However, I am not persuaded that there is anything out of the ordinary about his circumstances that makes it desirable to waive any or all of either of his debts.
CONCLUSION
For these reasons, I affirm the decisions under review.
I certify that the preceding 104 (one hundred and four) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey.
............................[sgd]............................................
Associate
Dated: 23 May 2017
Date of hearing (on the papers): 20 February 2017 Advocate for the Applicant: Radka Alexandrova Solicitors for the Respondent: Department of Human Services
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