Matejic and Secretary, Department of Family and Community Services - [2002] AATA 654

DECISION AND REASONS FOR DECISION [2002] AATA 654

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/951

GENERAL ADMINISTRATIVE DIVISION       )
           Re      LOU MATEJIC NELIA MATEJIC
  Applicants
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr O Rinaudo, Member

Date2 August 2002
PlaceBrisbane

Decision The Tribunal affirms the decision under review.

..................(Sgd)........................
Mr O Rinaudo
Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – entitlement – whether applicant has a continuing inability to work – whether pension correctly cancelled

SOCIAL SECURITY – disability support pension and wife pension – overpayment – whether debt correctly raised – whether debt can be waived – whether applicants knowingly failed to comply with their obligations under the Act and thereby contributed to the debt arising

Social Security Act 1991

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186

Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287
Jazazievska v Department of Family and Community Services [2000] FCA 1484
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Taylor's Central Garages (Extra) Ltd v Roper [1951] WN 383
RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123

REASONS FOR DECISION

2 August 2002 Mr O Rinaudo, Member

This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 4 October 2001, which affirmed the decisions of a delegate of Centrelink to cancel the applicants' social security benefits and to raise and recover an overpayment of benefits made to the applicants during the period 1 July 1993 to 28 March 2000. Mr Matejic was in receipt of a disability support pension whilst Mrs Matejic was receiving a wife pension. Centrelink calculated that each applicant was overpaid an amount of $50,333.66.
This matter was heard by the Tribunal on 26 February 2002. The applicants appeared at the hearing and represented themselves. The respondent was represented by Mr R McQuinlan, Departmental Advocate. The following exhibits were tendered at the hearing:

Exhibit 1: "T" Documents
Exhibit 2: Decision of the QBSA regarding Lou Matejic
Exhibit 3: Decision of the QBSA regarding David and Amanda Patch
Exhibit 4: Advertisement from the Yellow Pages
Exhibit 5: Report by Handwriting Expert, Gregory K Marheine
Exhibit 6: Two surveillance video tapes

Mr Matejic was granted disability support pension (then known as invalid pension) in July 1987 on the basis of anxiety neurosis brought about by two major marriage breakdowns, and because of chronic spondylosis. Mr Matejic complains of pain in his neck, shoulder and back, and was in receipt of the disability support pension from July 1987 until the decision to cancel his pension was made in July 2001.
The respondent cancelled the applicants' pensions after discovering that Mr Matejic had been undertaking work as a builder and earning income from that work which he had failed to disclose to Centrelink. The respondent also had video surveillance tapes (recorded in March 2000) showing Mr Matejic working. The respondent contends that the applicant did not have a continuing inability to work and therefore was not entitled to the disability support pensions he had received.
The respondent obtained records from the Queensland Building Services Authority which show the building work undertaken under Mr Matejic's building licence as follows:

1993/94: five jobs with the value of $158,900.00
1994/95: four jobs with the value of $226,000.00
1996/97: one job with the value of $3,310.00
1997/98: one job with the value of $9,000.00.

Bank account records for the applicants revealed that the following amounts were banked into accounts in Mr Matejic's name:

1993/94: $8,330.00
1994/95: $146,522.00
1995/96: $24,044.00
1996/97: $26,012.00
1997/98: $20,265.00
1998/99: $16,040.00
1999/00: $66,915.00.

The respondent contends that the applicants failed to comply with their notification obligations under the Social Security Act 1991 ("the Act") in that they failed to advise Centrelink of income they had earned from Mr Matejic's building business.
Evidence Before the Tribunal
Mr Matejic gave evidence at the hearing after being warned about his rights.
Mr Matejic told the Tribunal that he had only worked under duress. He said that he had contracts when he became injured and needed to complete this work. He said that he got involved with a Mr Patch who said that he would not have to do anything, simply provide his gold builder's license. He said that it was a case of finishing off these jobs to complete obligations.
He did not deny working, however, he stated that he was under duress and continued to work for as long as he could. He stated that he could not work and finished the jobs without a license. He stated that he worked for nothing and that although he did work and was not paid. Mr Matejic said that he had to complete the work so that he knew that it had been done properly.
Mr Matejic said that he had never cheated anyone in his life. He said that some of the money that Centrelink had taken as earnings were in fact a Gold Lotto win. Mr Matejic said that he had received $42,000 in Gold Lotto prizes from four wins but only showed the Tribunal receipts for $3,000. He said that in 1995/96 he had won $24,642.25.
He stated that he always liked to help young people.
Mr Matejic told the Tribunal that his sex life had gone.
Mr Matejic said that he had not put in any tax returns during the period under review. He said that he believed in God and trusted people.
Mr Matejic said that he was told by Centrelink that if he earned less than $75 per week he did not have to declare his earnings. Mr Matejic said that he had been on site with Mr Patch for four days and that is all. He said that he was paid $1,000 in one go over a six month period. He said that he made no more money than $75 per week.
Mr Matejic said that he had only done two jobs, one raising and one restumping of houses and had only received $400 for this. Mr Matejic said that his English was not good. He said that he was only working for an hour or so for only a couple of days. He stated that he gets up at about four o'clock in the morning.
Mr Matejic said that he purchased thirteen stumps and was never paid for them. Mr Matejic said that this was on behalf of a Mr Bob Wilson. He said that solicitors had drawn up an agreement so that Mr Wilson would do the work and so Mr Matejic would not have to get social security.
Mr Matejic acknowledged the Yellow Pages advertisement under the name of "Dominic and Mick Carbanichi". He acknowledged that the "Lou" in the advertisement was him. Mr Matejic said that he supervised jobs for the Carbanichi Brothers. He said that, basically, what he did was to sit there and tell the others what to do. He said that he was answering the phone for them. He acknowledged that he advertised from time to time in the Yellow Pages. In particular, he said that in 1999 he advertised as a general and house builder. Mr Matejic confirmed that he never made more than $75 per week.
In addition to the evidence of Mr Matejic, the Tribunal was shown a video. This video, which Mr Matejic acknowledged was a video of him at work, showed Mr Matejic undertaking various forms of work over a number of hours on different days. Mr Matejic stated, with respect to the video, that he only worked under duress and that he would take a number of panadol to ease the pain and then would do some work. He said that he considered that he looked in pain in the video and that he was moving very slowly.
It is not necessary to go through the various work being undertaken by Mr Matejic in the video. Suffice to say that it was perfectly clear from the video that Mr Matejic appeared more than capable of carrying on activities which would be usual for a builder such as digging holes, jack-hammering, shovelling, wheeling four wheel barrows, loading and unloading heavy steel frames from vehicles, chiselling brick walls apart and other activities which would include the use of his upper arms, back, hips and legs.
The evidence on the video was, in the Tribunal's view, more than sufficient to establish that Mr Matejic was quite capable of undertaking work of a strenuous and heavy nature over long periods of time. The two videos were tendered as evidence before the Tribunal.
The evidence on the video, which extended over a period of time in 2000, was, in the Tribunal's view, damning of Mr Matejic's evidence that he was incapable of working and that he should remain on a disability support pension.
Legislative Framework
The first issue in this matter is whether Mr Matejic is qualified to receive a disability support pension, which is payable in accordance with the terms of s 94 of the Act. That provision relevantly reads:
"94. Qualification for disability support pension
(1) A person is qualified for disability support pension if:
(a) the person has a physical, intellectual or psychiatric impairment; and
(b) the person's impairment is of 20 points or more under the Impairment Tables; and
(c) one of the following applies:
(i) the person has a continuing inability to work;
…
(2) A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:
(a) the impairment is of itself sufficient to prevent the person from doing any work within the next 2 years; and
(b) either:
(i) the impairment is of itself sufficient to prevent the person form undertaking educational or vocational training or on-the-job training during the next 2 years; or
(ii) if the impairment does not prevent the person from undertaking educational or vocational training or on-the-job training such training is unlikely (because of the impairment) to enable the person to do any work within the next 2 years.
(3) In deciding whether or not a person has a continuing inability to work because of an impairment, the Secretary is not to have regard to:
(a) the availability to the person of educational or vocational training or on-the-job training; or
(b) if subsection (4) does not apply to the person - the availability to the person of work in the person's locally accessible labour market.
(4) For the purposes of subparagraph (2)(b)(ii), if a person has turned 55, the Secretary may, in considering whether educational or vocational training is likely to enable the person to do the work, have regard to the likely availability to the person of work in the person's locally accessible labour market.
(5) In this section:
"educational or vocational training" does not include a program designed specifically for people with physical, intellectual or psychiatric impairments;
"on-the-job training" does not include a program designed specifically for people with physical, intellectual or psychiatric impairments;
"work" means work:
(a) that is for at least 30 hours per week at award wages or above; and
(b) that exists in Australia, even if not within the person's locally accessible labour market."
To qualify for a disability support pension, all three of the requirements in s 94(1) must be met by the applicant. Further, they must have been met at the time of cancellation of disability support pension.
At the time Mr Matejic was granted disability support pension, the Social Security Act 1947 ("the 1947 Act") was in force. Under the 1947 Act, to be qualified for the invalid pension (as it was then known) a person must have been "permanently incapacitated for work" (s 28(a)).
Section 147(b)(i) of the Act provides for the payment of a wife pension to a woman whose husband or partner is receiving disability support pension. Accordingly, Mrs Matejic will not be qualified for the wife pension if her husband does not qualify for his disability support pension.
In this case, the main issue in dispute therefore is whether Mr Matejic has a continuing inability to work. If the Tribunal finds that he did not have a continuing inability to work, and therefore finds that his pension was correctly cancelled, the Tribunal will need to consider whether the debt was properly raised.
Under s 1223 of the Act, where a person has received social security payments where they were not qualified to receive the payments, the amount so paid is a debt due to the Commonwealth. If the Tribunal finds that Mr Matejic was not qualified for the disability support pension at a particular point in time, then monies paid to him and his wife from that point on will be a debt owed to the Commonwealth.
Consideration
In this case there are two decisions which must be made. The first is to determine whether there is an overpayment of disability support pension and wife pension in the sum of $100,667.32 for the period 1 July 1993 to 28 March 2000; and further, whether future payments for disability support pension and wife pension should be ceased on the basis that Mr Matejic is capable of undertaking employment.
The evidence is clear that Mr Matejic has undertaken work and earned income over a long period of time, including the period between July 1993 and March 2000. The evidence would tend to establish that Mr Matejic in fact worked and earned income during the relevant period. It is possible that Centrelink could have raised the debt for prior to July 1993, however, they have refrained from doing so on the basis that there are simply insufficient records to reconstruct from when the debt should be backdated.
The Tribunal is simply unable to be accepted that the substantial sums of money going through Mr Matejic's bank account could possibly be for a supervisory role only and it is not accepted that he only earned $75 per week during the period.
With respect to the cessation of Mr Matejic's disability support pension and Mrs Matejic's wife pension, the medical evidence before the Tribunal is to the effect that Mr Matejic is capable of undertaking some form of remunerative employment. In particular, Dr Yang opined in his report that Mr Matejic's orthopaedic conditions do not restrict Mr Matejic from being able to perform at least light, semi-sedentary work on a full-time basis. The Tribunal agrees with this assessment. In fact, based on the video evidence, it is clear that Mr Matejic could undertake work at a higher level even than this. The Tribunal accepts that, in any event, Mr Matejic is capable of doing work which you would not expect of a man on disability support pension. Accordingly, the Tribunal is satisfied that the decision to cease disability support pension payment to Mr Matejic and wife pension to Mrs Matejic was correctly made.
The Tribunal is satisfied that Mr Matejic was capable of working during the period of the overpayment. As he did not have a continuing inability to work during the period, he was not qualified to receive the disability support pension and therefore he was not entitled to receive the payments made to him. As Mr Matejic was not entitled to receive the disability support pension, his wife was ineligible to receive her wife pension during that period. Accordingly, the Tribunal is satisfied that the debt was correctly raised against the applicants.
Special Circumstances
Given the above findings, the Tribunal must now consider whether there are any special circumstances in this case which would warrant the exercise of the discretion in s 1237AAD to waive all or part of the debt owed by the applicants. Section 1237AAD provides as follows:
"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 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."
Of particular relevance in this case is whether the applicants knowingly failed to comply with their obligations under the Act. The principles in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 are relevant with respect to the meaning of "knowingly" in s 1237AAD:
"There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."

In Taylor's Central Garages (Extra) Ltd v Roper [1951] WN 383 at 385, Devlin J considered the meaning of the word "knowledge" and found that actual knowledge can be inferred from the evidence and the nature of the acts done. Further, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123 at 126, Hope, Reynolds and Hutley JJA, in a joint judgment stated:
"… a court is entitled to infer knowledge on the part of a particular person on the assumption that such a person has the ordinary understanding expected of persons in his line of business, unless by his or other evidence it is convinced otherwise. In other words, the true position is that the court is not concerned with the knowledge of a reasonable man but is concerned with reasonable inferences to be drawn from a concrete situation as disclosed in the evidence as it affects the particular person whose knowledge is in issue. In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge. However, this conclusion may be easily overturned by a denial on his part of the knowledge with the court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge."
Following the RCA Corporation case, it is open to the Tribunal to infer that the applicants had actual knowledge of their obligations under the Act where there were opportunities for them to gain that knowledge and where there were no obstacles to them acquiring the knowledge.
In this case, the respondent has sent letters to the applicants notifying them of their obligations under the Act. The Tribunal is not aware of any obstacles that would prevent Mr or Mrs Matejic from understanding those letters and from gaining an understanding of their obligations under the Act.
In this case the Tribunal finds that the debt arose from the applicants' knowingly failing to comply with their obligations under the Act, namely, their failure to notify Centrelink of Mr Matejic's earnings. Mr Matejic not only had the opportunity to gain an understanding of his obligations to notify Centrelink of any income he earned from their correspondence to him, he had also been advised verbally by a Centrelink officer that he needed to advise them if his income exceeded $75 per week. As indicated previously, the Tribunal did not accept Mr Matejic's evidence that he was earning less than $75 per week from his building activities.
Given this finding, the debt cannot be waived under s 1237AAD and the Tribunal need not consider the question of whether special circumstances exist.
Decision

For the reasons outlined above, the Tribunal affirms the decision under review.
I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed:         Sarah Oliver
  Associate
Date of Hearing  26 February 2002
Date of Decision  2 August 2002
The Applicants Appeared in Person
Solicitor for the Respondent    Mr R McQuinlan, Departmental Advocate