Pavkovic and Secretary, Department of Social Services (Social services second review)
[2019] AATA 3737
•23 September 2019
Pavkovic and Secretary, Department of Social Services (Social services second review) [2019] AATA 3737 (23 September 2019)
Division:GENERAL DIVISION
File Number: 2018/0907
Re:George Pavkovic
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:The Hon. Matthew Groom, Senior Member
Date:23 September 2019
Place:Melbourne
The Tribunal sets aside the ARO decision of 27 July 2017 and remits the matter to Centrelink to:
(a)recalculate the overpayment of DSP to the applicant for the period between 27 August 2013 and 28 December 2015 in accordance with the following directions:
(i)That the first tranche deposits are not income for the purpose of calculating the applicant’s DSP entitlement.
(ii)That the second through to seventh tranche deposits are income for the purpose of calculating the applicant’s DSP entitlement.
(iii)That the overpayment of DSP to the applicant constitutes a debt to the Commonwealth; and
(b)reconsider whether write-off or waiver of the debt arising from such overpayment is appropriate once the precise amount of that debt has been determined.
.......[sgd]...........................................................
The Hon. Matthew Groom, Senior Member
Catchwords
SOCIAL SECURITY – disability support pension – where undisclosed deposits made to applicant – whether deposits constitute income – whether overpayment of disability support pension made and debt to Commonwealth arises – whether any or all of debt can be waived or written-off – decision under review remitted
Legislation
Social Security Act 1991 (Cth)
Cases
Read v Commonwealth [1988] HCA 26
Secretary, Department of Social Security and Jensen, Re [1992] AATA 352
Secretary, Department of Employment and Workplace Relations v Richards, Re (2007) 98 ALD 310Secretary, Department of Employment and Workplace Relations v Richards (2008) 168 FCR 438
REASONS FOR DECISION
The Hon. Matthew Groom, Senior Member
23 September 2019
INTRODUCTION
This is a review of a decision of the Administrative Appeals Tribunal Social Services and Child Support Division dated 12 January 2018 (“AAT1 decision”), which in turn affirmed a decision of an Authorised Review Officer (“ARO”) dated 27 July 2017 that the applicant owed a debt of $38,170.74 to the Commonwealth as a consequence of an overpayment of his Disability Support Pension (“DSP”).
BACKGROUND
On 28 April 2017 Centrelink determined that the applicant owed a debt in the amount of $44,333.35. Centrelink raised the debt on the basis of what it concluded was an overpayment of the applicant’s DSP resulting from undisclosed income that Centrelink found the applicant had received between 5 September 2012 and 20 March 2017 (the “original decision”).
Following Centrelink’s decision the applicant provided Centrelink with further information, in writing and by telephone, in an attempt to explain the undisclosed deposits. Centrelink subsequently reduced the debt amount to $42,557.89 and a process for recovery of the amount was commenced.
On 27 July 2017 an ARO varied the original decision by further reducing the debt to $38,170.74. The ARO assessed a series of undisclosed deposits that had been made into accounts controlled by the applicant between 5 September 2012 and 23 December 2015 to determine whether they should be treated as income for the purpose of calculating the applicant’s DSP. The ARO excluded deposits that had either been satisfactorily explained or were amounts of less than $100. Based on the 27 deposits that had not been excluded (the “relevant deposits”), the ARO re‑calculated the applicant’s entitlement to DSP for the period between 27 August 2013 and 28 December 2015 and determined that the applicant had been overpaid DSP for that period by $38,170.74. The ARO also determined that the amount constituted a debt due to the Commonwealth and that there was no proper basis for the debt to be either waived or written off (the “ARO decision”).
The applicant subsequently applied for a review of the ARO decision by the AAT1; and on 12 January 2018 the AAT1 affirmed the ARO decision. The applicant then applied for a review of the AAT1 decision which is now the matter before this Tribunal.
ISSUES
The issues to be determined by the Tribunal are:
(a)Whether any or all of the relevant deposits are income for the purpose of the income test, when calculating the applicant’s DSP in accordance with the Social Security Act1991 (the “Act”).
(b)Whether, taking account of any relevant deposits that are income, the applicant was overpaid DSP for the period between 27 August 2013 and 28 December 2015 and, if so, what the amount of the overpayment was;
(c)Whether any such overpayment gives rise to a debt owed to Commonwealth; and
(d)Whether there is any basis under the Act for any or all of such a debt to be waived or written-off.
EVIDENCE
In considering this matter the Tribunal has had regard to the oral evidence of the applicant, the applicant’s son, Mr Kirt Romeo, and The Good Guys sale representative, Mr Renato Azirovic, together with:
·documents lodged by the respondent (T-Documents and Supplementary T‑Documents;
·screenshots of eBay store for “AzcoolAz” (accessed 07/09/2018);
·bundle of various documents handed up by the applicant at the hearing; and
·further expenditure reconciliation evidence provided by the applicant under cover letter dated 27 September 2018 and received by the Tribunal on 17 October 2018.
LAW
Under the Act the calculation of a person’s DSP is subject to an income test. Relevantly, subsection 8(1) of the Act defines “income” to include:
(a)an income amount earned, derived or received by the person for the person's own use or benefit…
Further, subsection 8(1) of the Act defines “income amount” as including:
(a) valuable consideration; or
(b) personal earnings; or
(c) moneys; or
(d) profits;
(whether of a capital nature or not).
Further, subsection 8(2) of the Act defines “earned, derived or received” as follows:
A reference in this Act to 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).
Subsections 8(4), (5) and (8) also include a number of exclusions from the definition of income as described above. However, having considered each of those exemptions the Tribunal is satisfied that they are not relevant to the circumstances of this case.
There is significant case law that deals with the concept of income for the purpose of the Act.
The courts have recognised that income, as it applies in the Act, has a particular meaning and is not to be confused with the concept of income as it may apply in other contexts, such as for income tax purposes. The High Court considered the meaning of income in the Act in Read v Commonwealth [1988] HCA 26 where Brennan J (albeit in dissent) made the following frequently cited observation about the concept of income under the Act:
…the term "income" means what it is defined to mean; it does not mean what "income" would be understood to mean if the definition were not in the Act. The definition is couched in the widest terms, presumably to ensure that public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide. The definition is wide enough to embrace receipts of a capital nature as well as receipts of income, for "income" is defined to mean, inter alia, any moneys, valuable consideration or profits irrespective of the means by which or the source from which those moneys, etc. are received.
Of particular note in Brennan J’s observations is his recognition that income for the purpose of the Act can extend to capital receipts. This would extend to receipts from the realisation of a capital asset.
The courts have recognised that in applying the concept of income under the Act, careful regard should be had to the overarching purpose of the Act. The Full Federal Court in Secretary, Department of Employment and Workplace Relations v Richards (2008) 168 FCR 438 noted at [39] that:
The purpose of the benefits provided under the 1991 Act, like those provided under the 1947 Act, is to “maintain a basic level of income for those who [are] unable to receive sufficient income to provide for themselves”: Garvey at FCR 136; ALR 249; ALD 352.
This overarching purpose is reinforced by the qualification in subsection 8(1)(a) that to constitute income an amount must be “earned, derived or received by the person for the person's own use or benefit” (emphasis added).
Consistent with this, the courts have recognised that where an amount has been paid to a social security recipient but is held on trust or otherwise subject to rights of a third party, then that amount is not income in the hands of the recipient for the purpose of the Act.[1]
[1] See for example Re Secretary, Department of Employment and Workplace Relations v Richards (2007) 98 ALD 310 and Re Secretary, Department of Social Security and Jensen [1992] AATA 352.
Having regard to the provisions of the Act and the relevant case law, in seeking to determine what is income in the present case, where it can be shown that an amount of money has been earned, derived or received by the applicant, a critical question will be whether that amount was earned, derived or received for the applicant’s own use and benefit.
CONSIDERATION
The applicant maintains that none of the relevant deposits should be considered income for the purpose of calculating his DSP. He maintains this position for a variety of reasons.
In considering whether the relevant deposits constitute income it will be convenient to divide them into a series of tranches.
The first tranche comprises a series of 15 deposits made between 28 August 2013 and 27 December 2013, which together totalled $66,150 (the “first tranche deposits”).
The applicant contends that the first tranche deposits should not be treated as income as they were deposits to which he had no entitlement. The applicant explained to the Tribunal that the first tranche deposits were amounts of money deposited into his account by his son, Mr Romeo, and then expended by Mr Romeo in the course of Mr Romeo’s business. The applicant told the Tribunal that some years ago he had established an air‑conditioning installation business under the trading names “AzcoolAz” and “Warm or AzcoolAz” but that he had ceased operating the business due to his poor health and was not currently operating the business, nor did he have a financial interest in the business, at the time the first tranche deposits were made. He told the Tribunal that when he could no longer operate the business he assisted Mr Romeo in taking it over and subsequently sold his van and tools to him.
The applicant told the Tribunal that Mr Romeo had independently owned and operated an electrician business under the trading name “In and Out Electrical”; and that after taking over the air-conditioning installation business from him, Mr Romeo had merged the two businesses. The applicant told the Tribunal that in assisting Mr Romeo in taking over his air-conditioning installation business he had allowed Mr Romeo to use his Westpac MasterCard and The Good Guys trading account to purchase business stock including air-conditioners, tools and spare parts. Mr Romeo also met other associated business expenses (including credit card interest charges) and made deposits from time to time into the applicant’s account for the purpose of such transactions.
The applicant’s explanation in this regard was largely consistent with the explanation he had previously provided to the AAT1 and also to Centrelink in various telephone conversations and correspondence. The explanation was also largely consistent with the evidence provided by Mr Romeo, both at the hearing and in a statutory declaration provided on 7 December 2017. In his statutory declaration Mr Romeo declared:
George Pavkovic (my Dad), allowed me to utilise his credit cards to help me start my business. I would periodically deposit amounts to cover the expenses incurred plus any interest charged against the card. Dad also helped me out by allowing me to use his tools and work van.
In the course of his correspondence with Centrelink in relation to the relevant deposits, the applicant had provided a reconciliation of how he claimed the relevant deposits (including the first tranche deposits) had been expended together with various invoices, receipts and bank account statements, as well as a copy of Mr Romeo’s draft tax return for the 2013/2014 financial year. This material is included in the T Documents. After the conclusion of the hearing the applicant provided the Tribunal with a further bundle of evidence which again included a reconciliation of the expenditure together with supporting invoices, receipts, bank statements and various spreadsheets that were apparently used in the preparation of Mr Romeo’s tax return (the “expenditure reconciliation evidence”). The applicant contended that the expenditure reconciliation evidence supports his claim that the first tranche deposits were expended by Mr Romeo in the course of Mr Romeo’s air‑conditioning installation business.
Contrary to the evidence of the applicant and Mr Romeo, the respondent contends that the applicant was the owner and operator of the air-conditioning installation business at all relevant times or, alternatively, was operating the business in partnership with Mr Romeo. Consequently, the amounts deposited were either payments in return for services or income of the business and should be treated as amounts earned, derived or received by the applicant for the applicant's own use or benefit and are therefore income in the hands of the applicant for the purpose of the Act. In presenting its contentions the respondent relies on documentary evidence which it claims is suggestive of the applicant having continued to own and operate the air-conditioning installation business during the relevant period. The respondent maintained that much of the documentary evidence was not consistent with the business having been owned and operated by Mr Romeo during that period as he was not appropriately licensed and did not have experience in operating an air-conditioning installation business as advertised by the business. The respondent drew the Tribunal’s attention to a number of references in the evidence which it claims supports its contentions. These include:
(a)In the “About Us” section of the business website, it noted that “Warm or AzcoolAz” offered “38 years of knowledge on air-conditioning systems”. It also advertised the business as being fully licenced.
(b)The Guestbook section of the business website showed feedback recorded by a customer on 2 September 2013 which stated “many thanks to George and Kirt…”
(c)The Tribunal documents included a business name search which evidenced a business name “AzcoolAz” and “Warm or AzcoolAz” having previously been registered under the applicant’s name.
(d)The Tribunal documents included copies of other documents relating to the eBay store for the business which referred to a “George” and a number of eBay advertisements named “George” as the contact person and included a telephone number that was the same number noted in the Departmental records as being the applicant’s number.
(e)At least one of the eBay advertisements included a licence number that was the same number as that issued to the applicant by the Queensland Building and Construction Commission (QBCC).
(f)The Tribunal documents included a search of the QBCC database which evidenced the applicant’s refrigeration and air-conditioning licence being linked to a business with the trading name “Warm or AzcoolAz”.
(g)A search undertaken by the respondent confirmed that the applicant held a refrigeration and air-conditioning licence with the QBCC between December 2012 and at least November 2017.
(h)The applicant’s son’s name and phone number are not included in any of the eBay advertisements for the business included in the Tribunal documents.
Having considered all of the evidence and having heard directly from the applicant and Mr Romeo, the Tribunal is satisfied that during the period in which the first tranche deposits were received, Mr Romeo was the owner and operator of the air-conditioning installation business. The Tribunal accepts that during that period the applicant was actively assisting Mr Romeo in the conduct of the business. However, it is not satisfied that he was doing so as a person with a direct financial interest in the business or in commercial partnership with Mr Romeo. In reaching this conclusion the Tribunal relies on the evidence presented to the Tribunal by the applicant and Mr Romeo as well as the oral evidence of Mr Renato Azirovic. Mr Azirovic told the Tribunal that he recalls Mr Romeo taking over responsibility for the management of purchase orders with The Good Guys. While he told the Tribunal that he believed this transition had occurred “two to three years ago”, when pressed in cross-examination, he indicated that he believed this was in 2015 or 2016. It was clear to the Tribunal that Mr Azirovic was uncertain about the precise dates. However, notwithstanding this, the Tribunal is satisfied that Mr Azirovic had a very clear recollection that Mr Romeo had taken over management of the purchase orders shortly after the applicant had first opened the account. Mr Azirovic told the Tribunal that the applicant had made only a few orders shortly after having opened the account and that Mr Romeo had then taken over from the applicant and from that point on, his engagement had been with Mr Romeo.
The evidence before the Tribunal was that the account had been opened sometime in 2013 and prior to the period in which the first tranche deposits were made. There had also been a number of transactions through that account prior to the first tranche deposits. Having accepted Mr Azirovic’s evidence, and having had regard to the other oral evidence at the hearing, as well as the documentary evidence relating to the purchase orders, the Tribunal is satisfied that Mr Romeo assumed primary responsibility for the operation of the business in 2013 and prior to the period in which the first tranche deposits were made.
In forming this view, the Tribunal has also relied on other documentary evidence which is strongly suggestive of Mr Romeo being central to the conduct of the business at this time. This includes the expenditure reconciliation evidence which contained receipts bearing Mr Romeo’s name and multiple references to the merged business name “AzcoolAz In & Out Electrical”.
The Tribunal accepts the applicant’s explanation that he was attempting to help Mr Romeo establish himself in the business during the period of the first tranche deposits. Both the applicant and Mr Romeo made clear that the business was originally operated by the applicant, that the business website and eBay account had been set up in the applicant’s name, that the applicant had been relied upon for licencing purposes and that the applicant has assisted Mr Romeo from time to time in collecting some stock items and assisted in the installation of units. The Tribunal is satisfied that the extent of the applicant’s involvement as represented by both the applicant and Mr Romeo is not inconsistent with the evidence the respondent has drawn the Tribunal’s attention to. The respondent made much of the fact that on one occasion in December 2013 two separate transactions occurred in both Queensland and Victoria on the same day. The respondent contends that this is evidence that the applicant was in fact engaging in the business activity occurring in Victoria. Both the applicant and Mr Romeo deny the respondent’s contention. However, even if the Tribunal was to accept that the applicant had been responsible for the business transaction in Victoria cited by the respondent, this is not inconsistent with the broader evidence of the applicant and Mr Romeo, both of whom acknowledge that occasionally the applicant had been involved in the collection of stock items and parts for the business. Furthermore, the fact that the applicant was assisting Mr Romeo in this way does not necessarily mean that he had a financial interest in the business or that he was being paid for such activities.
The Tribunal found both the applicant and Mr Romeo’s evidence in relation to the conduct of the business and their respective involvement in the business during the period of the first tranche deposits to have been consistent over time and consistent with one another. The Tribunal found Mr Romeo to be very frank and forthright in giving his evidence on this point. While the Tribunal maintains some concern about Mr Romeo’s evidence with respect to some other deposits, it found his evidence as it relates to the conduct of the business during this period and the nature and purpose of the first tranche deposits to be persuasive. While the Tribunal found the applicant’s evidence to be generally less consistent, and again unreliable with respect to some of the other deposits, it accepts the applicant’s evidence with respect to his involvement in the business during the period of the first tranche deposits.
Having carefully reviewed the expenditure reconciliation evidence the Tribunal is satisfied that the first tranche deposits were utilised for the purpose of acquiring stock, spare parts and other operational costs associated with the business (including credit card interest charges) in the course of an air-conditioning installation business operated by Mr Romeo. The Tribunal is satisfied that the first tranche deposits themselves were not received by the applicant as payment for services rendered by him in the air-conditioning installation business nor were they income or a distribution of profits to him derived from such a business. For these reasons, the Tribunal is not satisfied that the first tranche deposits were amounts received by the applicant for his own use and benefit. Rather, they were funds channelled through the applicant’s account for the purpose of Mr Romeo’s business and to which the applicant had no actual entitlement. Accordingly, the Tribunal is not satisfied that the first tranche deposits are income for the purpose of the Act.
The second tranche comprises a series of deposits made on 26 and 27 November 2014 and 23 December 2014, totalling $31,010 (the “second tranche deposits”). The applicant told the Tribunal the second tranche deposits were amounts deposited by Mr Romeo into the applicant’s accounts to be held by the applicant for and on behalf of Mr Romeo to assist him in saving for a home loan. The only evidence to support this assertion was the oral evidence of the applicant and Mr Romeo, as well as Mr Romeo’s statutory declaration. The Tribunal found both the applicant and Mr Romeo’s evidence on this point to be unpersuasive. While the Tribunal found Mr Romeo’s oral evidence to be generally very frank and forthright, on this point in particular the Tribunal was left with the distinct impression that Mr Romeo was more concerned with avoiding difficulty for his father than in ensuring he was providing the Tribunal with a full and accurate account of the transactions.
Further, the documentary evidence before the Tribunal was that these amounts were spent by the applicant shortly after having been received which is inconsistent with them having been received for the purpose of the home deposit. Both the applicant and Mr Romeo told the Tribunal that the amounts had been deposited into the applicant’s accounts and then shortly after withdrawn and held in cash by the applicant and subsequently provided back to Mr Romeo from time to time. The Tribunal finds this explanation inherently inconsistent with the suggestion the funds were being held for safe keeping and also improbable. The explanation provided has also been inconsistent over time. The applicant had previously told Centrelink and the AAT1 that he had ‘gambled the money away’. When pressed on this point at the hearing the applicant told the Tribunal that he ‘probably said it’ but that he was anxious and not thinking straight and that the truth was he had subsequently returned these amounts back to Mr Romeo. There is no documentary evidence to support the assertion that these deposited amounts were repaid back to Mr Romeo as contended by both the applicant and Mr Romeo. This is despite the respondent having provided the applicant with multiple opportunities to provide such evidence.
The Tribunal is satisfied that the second tranche deposits were received into an account controlled by the applicant. Having rejected the applicant’s contention that the amounts were being held for Mr Romeo’s home deposit, there was no other compelling evidence that these amounts were held on trust for any party or were encumbered in any way. Accordingly, the Tribunal is satisfied that the second tranche deposits were received by the applicant for his own use and benefit and are therefore income for the purpose of the income test when calculating the applicant’s DSP.
The applicant contends that a third deposit of $2100 made on 5 September 2012 (the “third tranche deposit”) was from the sale of a motorbike on eBay and also proceeds from the sale of some shares. This was consistent with the oral evidence provided by the applicant at the hearing. Again, the Tribunal found the applicant’s evidence on this point to be unpersuasive. The reliability of the applicant’s explanation for this deposit is undermined by the changing details of the explanation over time. For example, in a statutory declaration dated 7 March 2017 the applicant said in relation to the deposit:
I think I sold something and put the cheque in the bank but I cannot remember.
On 21 June 2017 the applicant stated that the deposited amount was:
Deposited by me for the sale of my motorbike on eBay which was paid by cheque also money from sale of shares. Not income.
On 6 December 2017, the applicant explained that the deposit related to share trading and provided a CommSec statement evidencing a series of transactions. While the statement provided evidences some share sales those sales do not appear to correlate either in the amount or the timing of the deposit made. There was no compelling evidence of the sale of a motorbike on eBay or of the proceeds from such a sale, and certainly no evidence that would appear to correlate with the deposit made on 5 September 2012. Even if such a sale did occur there is no basis for concluding that such proceeds should not be treated as income for the purpose of the income test when calculating the applicant’s DSP. As acknowledged by Brennan J in Read v Commonwealth referred to above, proceeds from the sale of capital items can still constitute income within the meaning given to the term in s 8 of the Act. The Tribunal is satisfied that the third tranche deposit was money received into an account controlled by the applicant. There was no compelling evidence of the amount having been held on trust for any other party or being encumbered in any way. Accordingly, the Tribunal is satisfied that the third tranche deposit was received for the applicant’s own use and benefit; and is therefore income for the purpose of the income test when calculating the applicant’s DSP.
There was a further series of deposits made on 4 December 2013, 27 December 2013 and 24 June 2014 which totalled $850 (the “fourth tranche deposits”). The applicant contends these were internal transfers between accounts controlled by the applicant and that the source of the funds was his pension payments. Again, the Tribunal found the applicant’s evidence unpersuasive on the point. Despite having been given multiple opportunities to provide documentary evidence to support his assertion, the applicant has failed to do so. The Tribunal is satisfied that the fourth tranche deposits were received into an account controlled by the applicant. There was no compelling evidence of the amount having been held on trust for any other party or being encumbered in any way. Accordingly, the Tribunal is satisfied that the fourth tranche deposits were received for the applicant’s own use and benefit and are therefore income for the purpose of the income test when calculating the applicant’s DSP.
The applicant contends that a deposit for $1000 made on 24 June 2014 was reimbursement for payment of his son’s rent. Both the ARO and AAT1 decisions accepted the applicant’s explanation in relation to $900 of the deposited amount on the basis that $900 was withdrawn from the account shortly after the deposit was made. However, both the ARO and the AAT1 treated the balance of the deposit, namely $100 (the “fifth tranche deposit”), as income on the basis of the discrepancy between the deposit and the withdrawn amount and the absence of any satisfactory explanation for the discrepancy. Despite having been given multiple opportunities to provide documentary evidence to explain the discrepancy the applicant has failed to do so. In addition, the reliability of the applicant’s explanation for this deposit is further undermined by the changing nature of that explanation over time. For example, in his statutory declaration dated 7 March 2017, the applicant stated in respect of the deposit:
I cannot remember but was not income. I would have borrowed to pay visa.
On 21 June 2017 the applicant stated:
Kirt deposited this into account so he could use my card to pay his rent.
The Tribunal is satisfied that the fifth tranche deposit is an amount that was received into an account controlled by the applicant. There was no compelling evidence of the amount having been held on trust for any other party or being encumbered in any way. Accordingly, the Tribunal is satisfied that the fifth tranche deposit was received for the applicant’s own use and benefit and therefore is income for the purpose of the income test when calculating the applicant’s DSP.
In respect of deposits totalling $1700 made on 14 and 29 May 2015 (the “sixth tranche deposits”), both the applicant and Mr Romeo told the Tribunal that the amounts were payment for a hire car charge for the purpose of Mr Romeo’s business. Again, the Tribunal found the applicant’s evidence to be unpersuasive on this point. The reliability of the applicant’s evidence is undermined by the changing explanation he has provided. In his statutory declaration dated 7 March 2017 the applicant explained the deposit as being:
Borrowed money for my visa card and Westpac card.
On 21 June 2017 the applicant explained the deposit as:
Deposited money into this account to pay for hire car for my son. Not income.
And:
Deposited money by my son into this account to pay for hire car and parts for his business purposes. Not my income.
The applicant also produced various spread sheets and account statements that describe transactions involving car hire companies. However, the amounts and dates of those transactions do not correlate with the deposited amounts.
For these reasons the Tribunal does not accept the applicant’s explanation for the sixth tranche deposits. The Tribunal is satisfied that the sixth tranche deposits were amounts received into an account controlled by the applicant. There is no compelling evidence to establish that the amounts deposited were held on trust for any other party or encumbered in any way. Accordingly, the Tribunal is satisfied that the sixth tranche deposits were received for the applicant’s own use and benefit and therefore are income for the purpose of the income test when calculating the applicant’s DSP.
The final tranche relates to a deposit of $750 into the applicant’s Westpac Bank account on 24 December 2014 (the “seventh tranche deposit”). The applicant has consistently explained the deposit as an amount paid by Mr Romeo to meet the cost of an air-conditioning unit purchased through the applicant’s accounts for the purpose of Mr Romeo’s air-conditioning installation business. However, unlike the first tranche deposits, despite having been given many opportunities to do so, the applicant has not provided either Centrelink or the Tribunal any documentary evidence that the deposit was actually made by Mr Romeo or that the air-conditioning unit was purchased by or on behalf of Mr Romeo at around that time. In the absence of further supporting evidence, the Tribunal cannot be satisfied that the seventh tranche deposit was made as contended by the applicant. The Tribunal is satisfied that the seventh tranche deposit was received into an account controlled by the applicant. There is no other compelling evidence to establish that the amount deposited was held on trust for any other party or encumbered in any way. Accordingly, the Tribunal is satisfied that the seventh tranche deposit was received for the applicant’s own use and benefit and therefore is income for the purpose of the income test when calculating the applicant’s DSP.
For the reasons set out above, the Tribunal is satisfied that the second through to seventh tranche deposits are income for the purpose of calculating the applicant’s DSP. Based on the material before it, the Tribunal is also satisfied that those amounts were not previously disclosed when the original calculation of the applicant’s entitlement to DSP was made. It is clear therefore, that there has been an overpayment of DSP to the applicant; although of a significantly lesser amount than that found in both the ARO decision and the AAT1 decision.
Turning then to the question of whether the overpayment of DSP to the applicant constitutes a debt. Under subsection 1223(1) of the Act, where a person obtains a benefit of a social security payment they were not entitled to for any reason then, the amount of the payment is a debt due to the Commonwealth. In accordance with this subsection, and on the basis of the Tribunal’s finding that the applicant has received an overpayment, the Tribunal is satisfied that the applicant owes a debt to the Commonwealth in the amount of the overpayment.
In the circumstances, the Tribunal considers it appropriate to remit this matter to Centrelink to undertake a recalculation of the extent of the overpayment of DSP to the applicant for the period between 27 August 2013 and 28 December 2015 based on the findings of this Tribunal. Given that the precise amount of the overpayment is still to be recalculated, the Tribunal also considers it appropriate to remit any question regarding write-off or waiver of the debt arising from such overpayment to be considered by Centrelink, once the precise amount of the debt has been determined.
DECISION
The Tribunal sets aside the ARO decision of 27 July 2017 and remits the matter to Centrelink to:
(a)recalculate the overpayment of DSP to the applicant for the period between 27 August 2013 and 28 December 2015 in accordance with the following directions:
(i)That the first tranche deposits are not income for the purpose of calculating the applicant’s DSP entitlement.
(ii)That the second through to seventh tranche deposits are income for the purpose of calculating the applicant’s DSP entitlement.
(iii)That the overpayment of DSP to the applicant constitutes a debt to the Commonwealth; and
(b)reconsider whether write-off or waiver of the debt arising from such overpayment is appropriate once the precise amount of that debt has been determined.
I certify that the preceding fifty one (51) paragraphs are a true copy of the reasons for the decision herein of The Hon. Matthew Groom, Senior Member ....[sgd]...............................................
Associate
Dated: 23 September 2019
Date of hearing: 26 September 2018 Date of final submissions: 9 November 2018 Applicant: Self-Represented Advocate for the Respondent: Mr Pietro Nacion
Mr James BrownSolicitors for the Respondent: Sparke Helmore Lawyers
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