Mussini and Secretary, Department of Family and Community Services

[2005] AATA 87

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 87

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2004/92

GENERAL ADMINISTRATIVE  DIVISION		)
Re		MARIO MUSSINI

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Associate Professor B W Davis AM (Part-time Member)

Date18 January 2005

PlaceHobart

Decision The decision under review is affirmed

Assoc Prof B W Davis AM

Part-Time Member

CATCHWORDS

Social Security - age pension - overseas residency - Italy - Australia - Centrelink - employment income - total earnings - overpayment - debt - international agreement - whether administrative error - INPS (Italian Welfare Authority)

LEGISLATION:

Social Security Act 1991 (pre October 1997 and after 1 October 1977)

Social Security (Administration) Act 1999

Social Security (International Agreements) Act 1999

Guide to Social Security Law

AUTHORITIES:

Re : Beadle & Director-General of Social Security (1985) 7 ALD 760

Zanon & Secretary DFCS (1989) 18 ALD 82

Sallan & Secretary DFCS (1999) AATA 539

Cremer & Secretary DFCS (2001) AATA 509

REASONS FOR DECISION

18 January 2005     Associate Professor B W Davis AM (Part-time Member)   

1.        The decision under review is a decision made by a delegate of Centrelink to cancel Mr Mario Mussini’s Age pension from 28 May 2003, on grounds Mr Mussini had been overpaid age pension of $19,479.24 in the period 20 March 1997 until 28 May 2003;  and a decision by Centrelink that this overpayment should be recovered from Mr Mussini.

ISSUES:

2.(a) whether Mr Mussini’s income precluded him receiving age pension from 28 May 2003;  and

(b) whether Mr Mussini was overpaid pension of $19,479.74 in the period 20 March 1977 until 28 May 2003, because of his level of income;  and

(c) whether recovery of all or part of this overpayment should be waived

STANDARD OF PROOF:

3.        The standard of proof is on the balance of probabilities and to the reasonable satisfaction of the Tribunal.

LEGISLATION:

4.        The relevant legislation is the Social Security Act 1991 (the Act), Sections 8, 44, 1064, 1223, 1237A and 1237AAD and the Social Security (Administration) Act 1999, Section 58.

Note also the Social Security (International Agreements) Act 1999, Section 13(1).

DECISION ON THE PAPERS:

5.        The applicant, Mario Mussini resides in Italy and is unable to attend hearings in Australia.  He agreed in September 2004 to a decision on the papers.

BACKGROUND:

6.        Mr Mussini sought and was granted age pension from 20 March 1997, but on 22 April 2003 a decision  was made by Centrelink to raise and recover a debt of age pension in the sum of $954.64 in respect of the period 8 January 1998 to 2 March 2003.   The overpayment of Australian age pension had occurred because Centrelink was not aware Mr Mussini’s Italian INPS pension had been increased.

7.        On 18 June 2003 decisions were made to cancel the applicant’s age pension and to raise and recover a debt in the sum of $19,162.22 being the full amount of pension paid to Mr Mussini between 20 March 1997 and 28 May 2003.   The total of the two debts was $20,114.86.

8.        Mr Mussini sought review of the decision on 4 July 2003 and the original decision-maker affirmed the decision.  Mr Mussini sought further review on 6 October 2003 and the decision was varied to the extent that the amount of the debt was recalculated to a total of $19,479.74.

9.        Mr Mussini then sought review by an Authorised Review Officer (ARO) who affirmed the decisions on grounds that the combined earnings of Mr Mussini and his wife had been too high for him to be paid age pension and therefore the pension should be cancelled.  The combined income of the applicant and his wife, at the current exchange rate, was approximately A$59,819 i.e. too high for him to qualify for Australian pension.

10.      The ARO then considered whether some or all of the debt should be reduced or cancelled.  The central issue was that Mr Mussini had failed to inform Centrelink he was working and not declared any of his earnings to Centrelink.  Relevant sections of the Social Security Act 1991 provide that if a person has not correctly informed Centrelink and there has been an overpayment, this is a debt which must be repaid.

11.      Given that overpayment had not arisen because of a major administrative error by Centrelink, but because Mr Mussini had not provided Centrelink with correct information about his employment income, the ARO affirmed the initial decisions made by Centrelink.

12.      A request for independent review was lodged with the Social Security Appeals Tribunal on 18 December 2003.  The SSAT hearing was conducted in Hobart on 16 March 2004.  Mr Mussini was not able to attend, but was invited to make written submissions.

13.      The SSAT examined all relevant documentation including submissions by Mr Mussini and information supplied by the Italian Social Security Institute (INPS).  The evidence indicated that Mr Mussini was receiving an Italian pension, but also receiving earnings from employment at Ceramiche Brennero, sufficient that the combined income of he and his wife exceeded the allowable limit for Australian age pension, thus the Australian pension rate was nil.  The Deparment of Family and Community Services considered there were no special circumstances.  After considering all evidence before it, the SSAT decided to affirm the decision under review.  Mr Mussini then applied for review by the Administrative Appeals Tribunal.

ANALYSIS:

14.      The Tribunal is required to stand in the shoes of the original decision-maker, examining all evidence anew, bearing in mind statutory provisions and any relevant prior case determinations.

15.      There are three principal issues for the Tribunal to address:

(a) whether Mr Mussini’s income, with that of his wife, precluded Australian age pension being paid for the relevant period:

(b) if overpayment did occur, is Centrelink entitled to raise a debt for the amount involved? and

(c) are there any special grounds for cancelling all or part of this debt?

16.      Schedule 2 of the Social Security (International) Agreements Act 1999, sets out provisions of the Agreement on social security between Australia and the Republic of Italy.  Article 4 of the International Agreement provides for equal treatment of the citizens of both countries, in that any claim by an Italian applicant will be dealt with under Australian social security law as if the applicant was an Australian citizen.

17.      Mr Mario Mussini has sought an Australian age pension and the relevant provisions of the Social Security Act 1991 are Sections 8, 1072, 1064(1) and 1064-A1, dealing with the definition and meaning of ‘income’ and the method of calculation of pensions. Section 1072 of the Act provides that a reference to ‘income’ involves gross ordinary income from all sources and Section 4.3.6.10 of the Guide to Social Security Law clearly states that the gross rate of overseas pensions and income is assessed as income for Australian social security purposes. A number of Tribunal decisions have further confirmed that gross income from overseas sources in ‘income’ for the purposes of social security law, unless special provisions apply. See, for example, Sallan and Secretary, Department of Family and Community Services (DFCS) (1999) AATA 539 and Cremer and Secretary DFCS (2001) AATA 509.

18       Evidence from Centrelink indicates that when Mr Mussini applied for Australian age pension on 12 March 1977, he answered ‘no’ to two questions asking whether he had been employed in the last twelve months and questioning whether he had an income from any other source not already reported on the form.  His responses were false, as it was later demonstrated he was working for Ceramiche Brennero at the time;  the total income from his employment and Italian pension ranging from 46533000 lire to 65342000 lire between 1997 and 1991, with 29,786 euros in 2002.

19       The applicant could have corrected his initial claim, as he was sent nine notices between May 1997 and May 2003 by Centrelink, indicating how income reports were being used to calculate age pension and advising him of his obligation to advise Social Security or Centrelink of any changes or increases in income.  During the entire period Centelink was calculating age pension on figures he had supplied, but which were at all times significantly lower than his actual income from his employment, Italian pension and his wife’s Italian pension.  The discrepancy was not noticed by Centrelink until April 2003, when Italian taxation records were examined, thus an administrative error had earlier occurred, by failure to note information supplied under the letterhead of Ceramiche Brennero.

20. In June 2003 Centrelink calculated that based on Mr Mussini’s most recent payslip from Ceremiche Brennero, his annual income from employment was 19,715 euros per annum. He was also receiving an Italian pension of 9,744 euros per annum and his wife was receiving an Italian pension of 4,602 euros per annum, thus the combined income was 34,061 euros per annum. The relevant exchange rate in June 2003 was A$1 = 0.5694 euros, meaning that the combined income of Mr Mussini and his wife in Australian dollars totalled A$59,819 per annum, well in excess of the permitted combined income of A$53,456 per annum. Mr Mussini’s rate of age pension at 1 June 2003 was therefore nil and pursuant to Section 44(1) of the Act, age pension was not payable to him.

21.      It follows from the above that Centrelink’s decision to cancel the applicant’s age pension from 28 May 2003 was lawfully made.

22.      The next matter to be considered is whether Mr Mussini was overpaid pension in the period 20 March 1997 to 28 May 2003, because of his income level, and whether Centrelink is entitled to raise a debt of $19,479.74 in consequence.

23. The Tribunal notes that Centrelink has tabulated the total income of Mr Mussini from employment and Italian pension in Australian dollars for each year 1997 to 2002 exclusive, allowing for the appropriate exchange rate in each year. The income ranges from A$36,240.65 in 1997 to A$50,060.50 in 2002. Equivalent figures for Mrs Mussini’s Italian pension range from A$6,939.40 in March 1997 to A$7,733.83 at 1 January 2002. The couples combined income therefore ranges from approximately A$53,178 in 1997 to A$57.794 in 2002. In each case the combined income exceeded the cut out point for a couple to receive age pension. As a result, pursuant to Section 1223(1) of the Act, Mr Mussini has been overpaid $19,479.74 in respect of the period 20 March 1997 to 28 May 2003.

24.      Mr Mussini has claimed he would not have applied for an age pension if the documentation had indicated that he could not receive an Australian pension while still working.  Nonetheless he did apply and claimed neither he nor his wife had been employed during the previous 12 months.  This was untrue, although in another part of the documentation he openly stated he had been employed until 1997.  A number of letters subsequently sent to him did state in clear and simple format that his Italian pension was being considered his only income and he should promptly advise Centrelink if information about his total income was wrong.  He did not tell Centrelink their assumption was incorrect, hence overpayment of pension continued.

25. Section 1224 of the Social Security Act 1991 provides that if a person is overpaid pension because they fail to fully inform Centrelink of their circumstances, that overpayment is a debt which has been paid back. In Mr Mussini’s case the debt amounts to $19,479.74 for the period 20 March 1997 to 28 May 2003.

26. Section 1237A of the Act allows recovery of part or all of a debt to be waived where the debt has been solely caused by administrative error and the debtor received the payments that gave rise to the debt, in good faith.

27.      Evidence suggests that Centrelink did commit an administrative error by failing to note Ceramiche Brennero had made contributions to Mr Mussini’s pension fund in 1996, thus his claim in March 1997 that he had not been employed in the past twelve months was incorrect.  Nor did the applicant advise Centrelink of ongoing earnings from Ceramiche Brennero in the period March 1997 until May 2003, although he was required to do so.  There were several opportunities to correct the situation, as he was advised of the basis upon which age pension was being calculated and requested to provide Centrelink with information if this was incorrect.  It is clear that the debts subsequently incurred by Mr Mussini did not arise solely through administrative error and therefore cannot be waived pursuant to Section 1237A(1) of the Act.

28. The Tribunal has examined all evidence in the case to determine whether any special circumstances exist under Section 1237AAD of the Act, within the meaning of Beadle v Director-General of Social Security 1985 7ALD 760, being circumstances that are unusual, uncommon or exceptional, to allow waiver of all or part of any debt. Mr Mussini remained in employment throughout the relevant period and his debt was created by his own failure to declare his income. No special circumstances apply.

29.      Having re-examined all evidence before it, the Tribunal finds on the balance of probabilities:

(a) Centrelink’s decision to cancel Mr Mussini’s age pension from 28 May 2003 was lawfully made, as the combined income of he and his wife exceeded the allowable limit, thus the pension rate was nil.

(b) The applicant was overpaid pension in the period 20 March 1977 to 28 May 2003, since employment income was not reported. A debt of $19,479.24 was incurred and in accordance with Sections 1224 and 1237A(1) of the Social Security Act 1991 Centrelink is entitled to recover that debt.

(c) No special circumstances exist pursuant to Section 1237AAD, to waive part of all of this debt.

DECISION

30.      The decision under review is affirmed.

I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor B W Davis AM (Part-time Member)

Signed:   R Hunt (Administrative Assistant)

Date of Hearing  Decision on papers                   
Date of Decision  18 January 2005