Marinellis and Secretary, Department of Social Services (Social services second review)

[2016] AATA 843

Marinellis and Secretary, Department of Social Services (Social services second review) [2016] AATA 843 (26 October 2016) 

Division	GENERAL DIVISION
File Number(s)	2016/1028
Re	Nick Marinellis
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Dr L Bygrave, Member
Date	26 October 2016
Place	Sydney

The decision under review is affirmed. 

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Dr L Bygrave, Member

CATCHWORDS

DISABILITY SUPPORT PENSION – overpayment – whether any grounds for waiving all or part of debt – where write off not applicable – where waiver in relation to an offence not applicable – where no special circumstances – decision under review affirmed.

LEGISLATION

Social Security Act 1991 (Cth) ss 8, 9, 72, 1064, 1073, 1223, 1236, 1237AA, 1237AAD.

Social Security (Administration) Act 1999 (Cth) s 68.

CASES

Groth v Secretary, Department of Social Security (1995) 40 ALD 541.

REASONS FOR DECISION

Dr L Bygrave, Member

26 October 2016

INTRODUCTION

1. On 21 November 2001, Mr Marinellis was granted the disability support pension in accordance with the Social Security Act 1991 (Cth) (the Act).

2. Mr Marinellis was imprisoned from 29 October 2003 to 7 October 2007 after he was convicted of conspiracy to defraud. Consequently, his disability support pension was cancelled on 30 October 2003.[1]

   [1] Exhibit T28, p 364.

3. On 16 August 2004, Centrelink advised Mr Marinellis that he had been overpaid the disability support pension in the amount of $8,307.24. This was because he had failed to disclose bank accounts and joint bank accounts with Westpac Bank, which had a series of amounts totalling $929,576.71 deposited in the period 20 December 2002 to 6 November 2003. This decision was affirmed by Centrelink, both initially and on review.

4. Mr Marinellis appealed to the Social Services Appeals Tribunal (SSAT). On 12 May 2014, the SSAT set aside the decision under review and instead decided that Mr Marinellis’ disability support pension debt be recalculated with the deposits into Westpac accounts 193799 and 2396385 in the period 20 December 2002 to 6 November 2003 to be treated as income under s 1073 of the Act, and the recalculated debt to be recovered in full.

5. Centrelink implemented the SSAT decision on 2 June 2014. The deposits into the Westpac accounts were treated as income under s 1073 of the Act and Mr Marinellis’ debt was reduced from $8,307.24 to $6,357.18. The period for calculating the debt also changed to 31 January 2003 to 29 October 2003.

6. On 25 February 2016, Mr Marinellis applied to the General Division of the Administrative Appeals Tribunal for a review of the SSAT decision.

7. The matter was heard in Sydney on 5 October 2016. Mr Marinellis attended the hearing in person and was self-represented.

   ISSUES

8. The determinative issues for the Tribunal are whether:

   (a)Mr Marinellis was overpaid the disability support pension in the amount of $6,357.18 for the period 31 January 2003 to 29 October 2003; and

   (b)if so, there are any grounds for waiving all or part of the debt.

   RELEVANT LEGISLATION AND CONSIDERATION

9. Pursuant to s 1064 of the Act, the rate of a person’s disability support pension is calculated according to the process set out in s 1064-A1. This requires applying both the income test and the assets test to determine a person’s rate of payment.

10. ‘Income’ is defined in s 8(1) of the Act as an amount ‘earned, derived or received’ by a person for ‘their own use or benefit’. ‘Financial assets’ is defined in s 9 of the Act as including available money or money that is deposited in a financial institution account.

11. Mr Marinellis’ receipt of the disability support pension was subject to him correctly declaring his income and assets to Centrelink, and complying with Centrelink notices.

12. Pursuant to s 72 of the Social Security (Administration) Act 1999 (Cth) (Administration Act), Mr Marinellis received notices from Centrelink that set out his requirement to advise Centrelink of any changes to his circumstances within 14 days of the change occurring. For example, on 23 November 2001 and 10 March 2003, Mr Marinellis received notices requiring him to advise Centrelink if his income increases or he/his partner receives ‘a lump sum or money or one-off payment from any source’.

13. At the Tribunal hearing, the Respondent’s legal representative asked Mr Marinellis about his income and assets during the period from 31 January 2003 to 29 October 2003. Mr Marinellis accepted that he and his (then) spouse opened, held and were signatories to the following two Westpac bank accounts:

    ·Account 032206/19-3799: opened on 3 September 2002 in the name of Lifeforce Enterprises. Statement accounts were addressed to Mr Marinellis at his then address; and

    ·Account 032464/23-6385: opened on 13 January 2003 in the name of NM Finance Network. Statement accounts were addressed to Mr Marinellis at his then address.     

14. Mr Marinellis also accepted that he had purchased properties in Australia and England, and had received rental income from the properties in England during this period.

15. During the Tribunal hearing, Mr Marinellis did not dispute that the amounts deposited into Westpac Accounts 032206/19-3799 and 464/23-6385 between 30 December 2002 and 13 January 2004 totalled $929,476.71.[2] This included deposits from unknown sources and rental payments from the properties in England.

    [2] Exhibit T16, pp 271-273.

16. Mr Marinellis told the Tribunal that he did not declare these deposits and payments as income to Centrelink because the money did not belong to him. Rather, he said the money belonged to people who threatened to kill his family and children if he did not comply with what they told him to do. He said that the money was sent to Western Union bank accounts in Nigeria.

17. Mr Marinellis said that in return for holding the money, he received a 3% commission. While he said that his commission payments were only $14 per fortnight, I find this sum implausible. A 3% commission for deposits in the amount of $929,476.71 paid from 30 December 2002 to 13 January 2004 would total approximately $27,884 (3% X 929,476.71) or $1,032 per fortnight (3% X 929,476.71 / 27 fortnights).

18. Mr Marinellis was unable to provide the Tribunal with any evidence to support his assertions that he made payments to overseas accounts and/or the money belonged to other people.

    Was Mr Marinellis overpaid the disability support pension in the amount of $6,357.18 for the period 31 January 2003 to 29 October 2003?

19. Section 1223(1) of the Act provides:

    Debts arising from lack of qualification, overpayment etc.

    (1)Subject to this section, if:

    (a)a social security payment is made; and

    (b)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.

20. Based on the evidence before the Tribunal, I am satisfied that Mr Marinellis received lump sum payments into Westpac Accounts 032206/19-3799 and 464/23-6385 in amounts that totalled $929,476.71 between 30 December 2002 and 13 January 2004. I am also satisfied that Mr Marinellis failed to disclose these deposits to Centrelink in accordance with s 68(1) of the Administration Act.

21. I find that Mr Marinellis was overpaid the disability support pension in the amount of $6,357.18 for the period 31 January 2003 to 29 October 2003 because he failed to disclose that he received amounts totalling $929,576.61 paid into his Westpac accounts during this period.

    Are there any grounds for waiving all or part of the debt?

22. Subsection 1236 of the Act provides, in part:

    Secretary 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:

    (c)the debt is irrecoverable at law; or

    (d)the debtor has no capacity to repay the debt; or

    (e)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

    (f)it is not cost effective for the Commonwealth to take action to recover the debt.

23. There is no evidence to suggest that any of the conditions set out in s 1236(1A) of the Act are met. I am not satisfied that the debt should be written off.

    Should the debt be waived because it relates to an offence?

24. Pursuant to s 1237AA of the Act, a debt relating to an offence may be waived:

    (1)  If:

    (a)a debtor has been convicted of an offence that gave rise to a proportion of a debt; and

    (b)the court indicated in sentencing the debtor that it imposed a longer custodial sentence on the debtor because he or she was unable or unwilling to pay the debt;

    the Secretary must waive the right to recover the proportion of the debt that arose in connection with the offence.

    (2)  For the purposes of this section, a proportion of a debt may be 100% of the debt.

25. Mr Marinellis submitted to the Tribunal that his debt should be waived because he has been imprisoned for the offence of fraud and his assets and bank accounts have been confiscated by the NSW Police. He further submitted that he cannot be punished twice for the same offence.

26. Mr Marinellis’ conviction which resulted in his imprisonment between 29 October 2003 and 7 October 2007 was for conspiracy to defraud. There is no evidence before the Tribunal that Mr Marinellis’ conviction related to his receipt of any proportion of the amount of disability support pension debt. I am satisfied that s 1237AA of the Act does not apply.

    Should the debt be waived by reason of ‘special circumstances’?

27. Subsection 1237AAD of the Act provides:

    Waiver 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, 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.

28. In Groth v Secretary Department of Social Security, 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... [emphasis added].[3]

    [3] (1995) 40 ALD 541, 545 (per Kiefel J).

29. In his written submission dated 30 September 2016 and at the Tribunal hearing, Mr Marinellis stated that his special circumstances included duress, victimisation and discrimination.[4] Mr Marinellis also told the Tribunal that he is in severe financial hardship because all his assets and bank accounts were confiscated by the NSW Police as proceeds of crime.

    [4] Applicant’s Statement dated 30 September 2016, paras 64-65.

30. Mr Marinellis acknowledged that he currently receives the disability support pension, which pays him $1,007.70 per fortnight. He receives $382.70 per fortnight after paying board etc and Centrelink debits $15 per fortnight as repayment of his debt.

31. Unfortunately for Mr Marinellis, there is nothing which takes his situation out of the ‘usual or ordinary case’ and no occurrence that is ‘unfair, unintended or unjust’ that would support him experiencing ‘special circumstances’. I am not satisfied that any or all of Mr Marinellis’ debt should be waived.

    DECISION

32. The decision under review is affirmed.

I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the reasons for the decision herein of Member Bygrave.

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Associate

Dated 26 October 2016

Date(s) of hearing	4 October 2016
Applicant	In person
Solicitors for the Respondent	Department of Human Services