Ozkaya and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 258
•2 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 258
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/1712
GENERAL ADMINISTRATIVE DIVISION ) Re ARZU OZKAYA Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms Robin Hunt, Senior Member Date 2 April 2008
Place Sydney
Decision The decision under review is affirmed. ................[sgd]..............................
Ms Robin Hunt
Senior Member
CATCHWORDS
SOCIAL SECURITY – assurance of support – assurer and assuree - Centrelink payments to assuree of special benefit and newstart allowance – resulting debt to assurer - debt did not result from assurer making false statement – debt did not arise from another person making false statement - Centrelink failed to contact assurer contrary to guidelines – finding that special circumstances justify partial waiver of debt – decision affirmed
Social Security Act 1991 ss 596A, 729, 1061ZZGG, 1227(2), 1236, 1237, 1237A(1), 1237AA, 1237AAA, 1237AAB, 1237AAC, 1237AAD, 1237AAE
Guide to Social Security Law part 9.4.7
Secretary, Department of Employment and Workplace Relations and Phan [2006] AATA 76
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Re Fuller and Secretary, Department of Family and Community Services (2004) 83 ALD 152; [2004] AATA 615
Ryde v Secretary, Department of Family and Community Services[2005] FCA 866
Re Nehma and Secretary, Department of Family and Community Services [1999] AATA 219
Re Ebrahimi and Secretary, Department of Social Security [1998] AATA 324
Re Mandlawi and Secretary, Department of Family and Community Services [2005] AATA 236
REASONS FOR DECISION
2 April 2008 Ms Robin Hunt, Senior Member
INTRODUCTION
1. Mrs Arzu Ozkaya, the applicant, signed an assurance of support form for a person who was entering Australia as the wife of a family friend. The assurance of support concerned Mrs Rukiye Yormaz. The assurance of support was accepted by the Department of Immigration and Multicultural Affairs (DIMA), as it was then known, the agency responsible for organising such assurances in association with other migration requirements.
2. The subsequent administration of the assurance of support was carried out by Centrelink. When Mrs Yormaz separated from her husband, Centrelink provided assistance to her and then called upon the assurance and raised a debt against Mrs Ozkaya. Mrs Ozkaya objected to Centrelink’s demand as she believed Mrs Yormaz did not need assistance from Centrelink and that Centrelink had failed to notify Mrs Ozkaya as required.
ISSUE
3. I must decide whether the applicant has a debt to the Commonwealth arising from the assurance of support and, if so, whether there are grounds not to recover the debt.
DECISION
4. I have decided to affirm the decision of the Social Security Appeals Tribunal (“SSAT”) that:
(a) a portion of Mrs Ozkaya’s debt to the Commonwealth, in the amount of $3,428.27 for the period 9 December 2005 to 6 May 2006, be waived;
(b)the balance of the debt is recoverable by the Commonwealth.
SUMMARY OF EVIDENCE
5. The purpose of an assurance of support is to reimburse Centrelink for social security assistance given to a person migrating to Australia should circumstances arise where it becomes necessary. The person who signs an assurance of support undertakes to provide monetary and other support to the visa holder for their first two years of residence in Australia. An assurance of support having been given, should the visa holder receive social security benefits during the first two years in Australia, Centrelink may seek reimbursement from the assurer of the amount paid to the visa holder. This is the situation that arose in the present case.
6. The applicant agrees that she signed the assurance of support and that it was accepted by DIMA. She also met Mrs Yormaz when she arrived in Australia. However, the applicant argued that Mrs Yormaz did not require assistance and that she offered to provide assistance directly once Centrelink notified her that Mrs Yormaz needed help. Further, Centrelink delayed informing her until it had been assisting Mrs Yormaz for some weeks, thus denying her the opportunity to offer assistance sooner.
7. Mrs Yormaz lived with her husband when she first arrived in Australia. However, problems arose between her and her husband’s relatives, leading to a breakdown of the marriage. When the marriage broke down, Mrs Yormaz left the home in Australia which she and her husband shared with his parents and siblings and she needed help. This event occurred before the end of the period covered by the assurance of support.
8. Mrs Yormaz, on 9 December 2005, lodged separation details at Centrelink. She stated that separation occurred on 18 November 2005 due to domestic violence she suffered at the hands of members of her husband’s family. Details of Mrs Yormaz’s violence claim made to NSW police and a record of a psychologist’s interview report concerning Mrs Yormaz are among the Centrelink records furnished to the tribunal.
9. Centrelink decided Mrs Yormaz was eligible for a social security special benefit after the separation and made payment to her. Centrelink did not immediately inform Mrs Ozkaya of this but, some time after Mrs Yormaz had been receiving assistance, sent a series of letters to Mrs Ozkaya demanding reimbursement of ever increasing amounts. Centrelink had decided that Mrs Ozkaya, as the assurer, should reimburse Centrelink for the benefits it paid to Mrs Yormaz during her first two years in Australia.
10. According to Centrelink records, Mrs Yormaz received special benefit, from 9 December 2005 to 30 March 2006, totalling $2,256.45. Centrelink did not write and inform Mrs Ozkaya of this until 6 April 2006. In the same letter, Centrelink told her that she would have to repay this amount under her assurance of support.
11. On 6 July 2006, Centrelink sent Mrs Ozkaya a similar letter informing her that her debt was now $4,916.82. On 10 October 2006, Centrelink wrote again saying the debt was now $7,968.81. On 12 January 2007 another letter from Centrelink informed Mrs Ozkaya her debt was $11,067.16. On 18 April 2007, Centrelink advised by letter that the debt had increased to $13,556.43.
12. Mrs Ozkaya sought reconsideration of the decision to raise the debt and enforce the assurance of support. An authorised review officer of Centrelink affirmed the delegate’s decision that she was required to repay the amount of benefits received by Mrs Yormaz. Mrs Ozkaya sought review of the decision by the SSAT and, on 19 February 2007, the SSAT set aside the decision and substituted a decision that part of the debt raised against Mrs Ozkaya should be waived. The SSAT waived a portion of the debt in the amount of $3,428.27 for the period 9 December 2005 to 6 May 2006. The remaining debt Mrs Ozkaya owes is $11,817.33 according to the SSAT decision. This is the decision I am required to review.
13. Both Mrs Ozkaya and Mrs Yormaz, who is now known by another name, appeared before the tribunal and gave oral evidence. Mrs Ozkaya gave oral evidence that she understood her position when she gave the assurance and was willing to meet her responsibilities in proper circumstances. But she believed Centrelink was wrong in paying benefits to Mrs Yormaz as she did not require support.
14. Mrs Ozkaya and the estranged husband of Mrs Yormaz both made allegations of improper conduct by Mrs Yormaz claiming that she had taken jewellery from the family home and that she was working for cash in hand and not declaring this income to Centrelink. Mrs Ozkaya contends that Mrs Yormaz needed no support and was not entitled to the payments Centrelink made because she had income. Mrs Ozkaya was so convinced of her contentions that she arranged for a private enquiry agent to make a video tape showing Mrs Yormaz working at several locations. Mrs Ozkaya claimed the debt arose as a result of a false statement or a false representation made by Mrs Yormaz that she needed assistance.
15. Mrs Ozkaya also contends that she is not liable to pay the debt because Centrelink failed to notify her that payments were being made to Mrs Yormaz. Mrs Ozkaya also gave evidence that, if Mrs Yormaz had really needed help, Mrs Ozkaya would have provided assistance in person and could have found her a job. She would have been happy to do this but was not given the opportunity initially because Centrelink failed to notify her of the situation. In addition, once Centrelink had informed her, Mrs Ozkaya had written many times to Mrs Yormaz offering her assistance but Mrs Yormaz had not replied to any of her letters.
16. Centrelink called Mrs Yormaz as a witness and Mrs Yormaz gave evidence that she did work part time as was observed by the private detective but had properly declared her income to Centrelink. She detailed for the tribunal the hours she had worked, 10 hours during the week and 4 hours on Sundays, and the amounts she had earned. She gave further evidence that she had been attending school to learn English during the same period. As well, she had been seeing a psychologist and a psychiatrist for the last two years and was taking medication. Mrs Yormaz denied she had taken any jewellery or anything which did not belong to her when she left her husband. She gave evidence she had no opportunity to take anything that did not belong to her because she was escorted by police. She said she left with one dress, her underwear and her passport. She subsequently obtained an apprehended violence order against some members of her husband’s family but not against her husband.
17. Mrs Ozkaya produced a number of letters addressed to Mrs Yormaz which had been retuned to her unopened. When asked about the letters, Mrs Yormaz said she had not contacted anyone other than her own family and Centrelink after she left her husband. Mrs Yormaz did not deny receiving the letters. She gave further evidence that she had lived with her sister and a brother for a time after she left her husband. When asked if she had worked in her family’s manchester business, Mrs Yormaz denied she had ever done this.
18. Mrs Ozkaya asked for additional time at the end of the tribunal hearing to furnish evidence of the alleged theft. She later wrote to the tribunal confirming that she had made enquiries and that the police had a record of the report made by Mr Yormaz complaining about Mrs Yormaz’s conduct. However, she produced no further records and explained that the police regarded the matter as a civil dispute. She further referred to undertakings given by the parties and to court proceedings but not to any criminal prosecution or finding of theft by Mrs Yormaz.
ANALYSIS AND FINDINGS
19. Under section 1061ZZGG of the Social Security Act 1991 (“the Act”), if a person has given an assurance of support that has been accepted and the person identified in the assurance receives a social security payment, the assurer is liable to pay the amount of the social security payment. Mrs Yormaz did receive social security payments, including a special benefit payment before being placed on newstart allowance.
20. Under subsection 729(1) of the Act, a person is qualified for a special benefit for a period if the Secretary determines, in accordance with subsection (2), that a special benefit should be granted to the person for the period. A special benefit is a discretionary benefit and is available only to a person who is not able to get any other income support payment as is provided in paragraphs (2)(a) and (b) of section 729. Mrs Ozkaya has argued, in effect, that Mrs Yormaz should not have received this payment as she was concealing her income, had gold jewellery that did not belong to her, had ignored offers of help and may have been receiving some forms of assistance from her own family. On balance, I am not satisfied that any of these allegations are substantiated. In addition, I am simply reviewing the decision to recover a debt arising from the assurance of support.
IS THERE A DEBT?
21. I am satisfied that a debt arose in accordance with section 1061ZZGG of the Act. Mrs Ozkaya gave a valid assurance of support and Centrelink paid Mrs Yormaz social security allowances that were recoverable from Mrs Ozkaya under the assurance.
Are there are any grounds upon which the Secretary cannot recover the amount?
22. A debt arising in this manner may be waived or written off in some circumstances. Where special circumstances exist, the debt may be waived pursuant to section 1237AAD. As well, if the debt arose from error, it may be waived pursuant to section 1237A. I have also briefly discussed other provisions below that may apply. Extra rules apply for waiver of assurance of support debts pursuant to section 1237AAE. Writing off may occur under section 1236 of the Act.
Writing off
23. Section 1236 of the Act provides:
(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:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
24. None of paragraphs (a), (b), (c) and (d) are satisfied in this case. In particular, Mrs Ozkaya made no argument that she was unable to repay the debt, which would trigger consideration under paragraph (b), notwithstanding her expenses. I find that she has the capacity to repay the debt and hence the debt cannot be written off.
25. I further note that policy guidelines state towards the end of paragraph 9.4.7 of the Guide to Social Security Law that an assurer may still owe an assurance debt even where the assuree obtained payment improperly. An adjustment may be made if the assurer repays some of the money. As I found above, Mrs Ozkaya’s claims about Mrs Yormaz have not been substantiated in my view. That is, the assurer has not convinced me that the assuree obtained money improperly for the purposes of the guidelines.
Waiver of the debt
26. On behalf of the Commonwealth, the Secretary or the Tribunal may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor in the circumstances described in sections 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD and, if the debt is an assurance of support debt, subject to section 1237AAE. See section 1237 of the Act.
27. Subsection 1237A(1) of the Act, which deals with the waiver of debts due to payment to the debtor through administrative error, is not applicable to this case because Mrs Ozkaya was not the person who received the payments. In Secretary, Department of Employment and Workplace Relations and Phan [2006] AATA 76, the Tribunal considered it was arguable Centrelink’s failure to undertake the checks prescribed in s 596A, before paying Ms Phan, was due solely to administrative error. If so, this would have meant any debt that arose in Ms Phan would have arisen solely due to administrative error with the result that the debt must be waived under section 1237A of the Act. However, the assurer cannot benefit from a waiver due to error on Centrelink’s part pursuant to subsection 1237A(1). Mrs Yormaz received the payments, not Mrs Ozkaya. Therefore in the present case, the section does not assist Mrs Ozkaya.
28. Section 1237AA deals with waiver of a debt where the debtor has been convicted of an offence that gave rise to a proportion of a debt. There is nothing to suggest Mrs Ozkaya has been convicted of any offence. Section 1237AAA deals with cases where the debt is, or is likely to be, less than $200 and it is not cost effective for the Commonwealth to take action to recover the debt. These circumstances do not apply in the present case. Section 1237AAB deals with cases where the Commonwealth has agreed to settle a civil action against a debtor for recovery of a debt for less than the full amount of the debt. No settlement has occurred in the present case. Section 1237AAC deals with cases where the debtor or debtor's partner would have been entitled to an allowance and also is not applicable to Mrs Ozkaya or her husband according to any material put to me.
29. None of the above provisions apply. I have therefore considered possible waiver under section 1237AAD and the special rules for assurances of support under section 1237AAE. Section 1237AAD deals with special circumstances. I note, as well, that Mrs Ozkaya has not claimed she was unaware of her obligations and does not therefore offend subsection 1237AAE(2) for assurances of support. This section broadly expresses the need for grounds other than lack of awareness of the obligations under the assurance in order for waiver to be possible. Mrs Ozkaya has not claimed she was unaware of her obligations and the section does not prevent waiver in her case.
Waiver of the debt in special circumstances
30. Under section 1237AAD, I may waive the right to recover a debt if it did not result from the making of a false statement or representation and there are special circumstances that make it desirable to waive all or part of the debt. There is no suggestion that Mrs Ozkaya made any false statements or representations. She has behaved faultlessly at all times although she suspects the assuree of fraudulent conduct which has not been established. On balance, I find that the assuree has not made any false statements or representations. Mrs Yormaz may have been at fault in not responding to Mrs Ozkaya’s letters offering assistance but this is not a false statement or representation. She explained her position at the hearing that she was fearful of making contact with anyone because of the violence she had experienced.
31. Mrs Ozkaya has in essence asked for consideration of her own circumstances as well as her contentions that Mrs Yormaz did not need any support. In this connection, I particularly note that Mrs Ozkaya was not notified until 6 April 2006 of the possible call on her for assistance although Mrs Yormaz had been receiving assistance since 9 December 2005. I also note Mrs Ozkaya’s efforts to contact Mrs Yormaz to offer her assistance, which Mrs Yormaz ignored. In addition, Mrs Ozkaya gave evidence she was expecting a baby at the time and was going through a very stressful period because of the debt. This was particularly unfortunate timing for her. She told the tribunal she has since had the baby. Lastly, Mrs Ozkaya did not claim that repaying the debt would cause her financial hardship.
32. There are several instances where the tribunal has waived an assurance of support debt in special circumstances. The phrase ”special circumstances” is not defined in the Act. The Macquarie dictionary gives several meanings of “special”, beginning with “of a distinct or particular character” and a range of other meanings including “different from what is usual or ordinary”. It also gives as meanings, “extraordinary” and ”exceptional”. All of these meanings suggest some unusual situation is required in order to dispense with the debt involved.
33. As explained in the case Re Beadle and Director General of Social Security (1984) 6 ALD 1, Mrs Ozkaya’s circumstances must be "unusual, uncommon or exceptional" in order to qualify as "special". Unfairness as well as hardship may be special circumstances. See, for example, Re Fuller and Secretary, Department of Family and Community Services (2004) 83 ALD 152; [2004] AATA 615 at [27] where Downes J expressed the view that both hardship and unfairness can form the basis of exercising discretion under a similar legislative provision. In Ryde v Secretary, Department of Family and Community Services[2005] FCA 866, Branson J held that the description “special circumstances” in section 1237AAD meant that the “hardship or unfairness” should be “sufficient to justify departure from the general rule in the particular case” (at para 26).
34. As the SSAT noted, Centrelink’s records in the present case contained an entry on 12 December 2005 saying that the assurer must be contacted and given the opportunity to support the assuree. Centrelink admits this was not done in the present case. This means that policy set out in paragraph 9.4.7 of the Guide to Social Security Law about assurance of support debts was not followed. The entry made on 12 December 2005 also states that the debt consequences must be explained to the applicant, which, I take it, means Mrs Yormaz. The entry says this must be done before the grant. It is not clear from the record whether this was done.
35. A later Centrelink record shows Mrs Ozkaya was informed of the payments to the assuree and her resultant debt on 6 April 2006, several months after payments to the assuree commenced. Another entry, dated 7 April 2006, states that the debt advice was sent on that day, a day after the first entry. An entry on 20 April 2006 shows that Mrs Ozkaya contacted Centrelink. On this occasion, she asked that Mr Yormaz be her correspondence nominee.
36. Previous Centrelink entries show Mrs Ozkaya made enquiries about the assurance on 10 March 2006 and again on 29 March 2006. The later entry states that she was sent an initial statement advising of a possible debt amount. Mrs Ozkaya told the tribunal that she became aware of the separation and was concerned for Mrs Yormaz as well as worried about her own undertakings to provide assistance.
37. There have been tribunal cases where the failure by Centrelink to notify the assurer that social security payments are being made to the assuree have been considered in the context of contested debts. Some of these cases have involved section 596A of the Act and policy guidelines requiring notice to the assurer.
38. Section 596A of the Act requires Centrelink to undertake investigations before granting newstart allowance where there is an assurance of support in place. Centrelink records indicate internal investigations were made in the present case but do not explain the nature of these. I am satisfied however that there was no breach of section 596A of the Act. By contrast, there was a failure to implement policy by not alerting Mrs Ozkaya to the situation and the consequences to her.
39. In the case of Re Nehma and Secretary, Department of Family and Community Services [1999] AATA 219, referred to by the SSAT, an officer interviewed the assurer and assuree together and told them that there would be no problem if the assuree were given social security assistance. A tribunal found special circumstances in this case. No such conversation took place in the present case. In the case of Re Ebrahimi and Secretary, Department of Social Security [1998] AATA 324, a Centrelink letter informing the assurer of the grant of benefits was not received and the Tribunal found he was prejudiced by being unaware and therefore unable to take steps to arrange support. The Tribunal accordingly waived part of the debt. This case bears similarities to the present case.
40. In the case of Re Mandlawi and Secretary, Department of Family and Community Services [2005] AATA 236, an assurer provided an assurance of support for a person who was not a relative or friend, as in the present case. In Mandlawi, the Tribunal found that the assurer’s situation could not be described as “special circumstances”. As well, in Mandlawi, the assuree had not declared that she was subject to an assurance of support when applying for special benefit. No such situation was put to me in this case and Centrelink records do not suggest this occurred. Again, in Mandlawi, the assurer was able to contact the assuree and her husband. In the present case, the assurer gave evidence she only knew the name of the assuree and did not know where she lived. On the other hand, Mrs Ozkaya did write to the assuree several times and she did not reply. This in itself does not amount to special circumstances without further consequences.
41. The main matter that I consider may take this case out of the ordinary is the failure to notify Mrs Ozkaya. As Member Perton found in the Phan case, Centrelink’s failure to follow its own guidelines was a major factor in the assurer’s ending up with a debt. Mrs Ozkaya gave evidence that she was well known in the Turkish community and had lots of contacts through her involvement with a newspaper for people of Turkish origin in Australia.
42. I do not agree with the finding of the SSAT that Mrs Ozkaya took no steps to provide support to Mrs Yormaz. I am satisfied there was a probability that she could have made satisfactory arrangements with Mrs Yormaz to assist her to get a job and to provide her with direct assistance. While she was aware of her obligations, Mrs Ozkaya expected to be notified if it was needed. She tried in vain to privately negotiate with Mrs Yormaz by letter once she was aware of what was happening. The submission made by the Secretary was that they did not contact Mrs Ozkaya because Mrs Yormaz was afraid to contact anyone. While this contention is supported by the evidence from Mrs Yormaz that she needed counselling and is still receiving attention from a psychologist and a psychiatrist, the decision to leave Mrs Ozkaya ignorant of the situation for months while her debt accumulated was a serious failure towards her. As well, it went against policy expressed in the guidelines.
43. I am satisfied that this case is out of the ordinary although to a lesser degree than in Phan which involved fraudulent conduct. Nevertheless, there is unfairness that is sufficient to justify departure from the general rule in this particular case as to that part of the debt generated before Mrs Ozkaya was notified. I therefore find that it is appropriate to waive that part of the debt due to special circumstances. I agree with the finding that so much of the debt raised against Mrs Ozkaya as is attributable to the period up to one month after she was first notified of the grant to the assuree should be waived pursuant to section 1237AAD. I also agree that the remainder of the debt raised is recoverable by the Commonwealth. This means I consider the decision under review should be upheld.
decision
44. The decision under review is affirmed.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Ms R Hunt, Senior Member
Signed: ...............[sgd].................................................................
T Aviram, AssociateDate of Hearing 5 December 2007
Date of Decision 2 April 2008
Appearance for the Applicant Self-Represented
Solicitor for the Respondent Ms S Mantaring, Centrelink Legal Services
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