Perry and Secretary, Department of Family and Community Services - [2002] AATA 913

DECISION AND REASONS FOR DECISION [2002] AATA 913

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/313

GENERAL ADMINISTRATIVE DIVISION       )
           Re      ERROL PERRY
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date11 October 2002
PlaceBrisbane

Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 25 March 2002 and substitutes its decision that a debt of $24,835.75 for the period from 8 May 1997 to 27 April 2000 be raised and recovered from the applicant.

................…(Sgd)....................
RG Kenny
Member
CATCHWORDS
SOCIAL SECURITY – newstart allowance – overpayment - recovery of overpayment – assets test – waiver of debt - whether sole Commonwealth error – whether special circumstances

Commonwealth Services Delivery Agency Act 1997
Social Security Act 1991 ss 611(2), 1223(1),1236, 1237A, 1237AAD

Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212

REASONS FOR DECISION

11 October 2002 Mr RG Kenny, Member

Application

On 3 April 1997, Errol Perry (the applicant) lodged a claim with the Department of Social Security for payment of newstart allowance, which he received in the period from 8 May 1997 until 27 April 2000.
On 28 July 2000, a Centrelink officer, on behalf of the Secretary, Department of Family and Community Services (the respondent), advised the applicant that he had been overpaid the amount of $24,835.79 because the total value of his assets had exceeded the allowable limit which enabled newstart allowance to be paid to him.
The applicant was advised that the overpayment was a debt due by him to the Commonwealth. That decision was affirmed by an authorised review officer on 22 August 2001. On 25 March 2002, the Social Security Appeals Tribunal decided to set aside the decision under review and substituted its decision that there was no debt arising in relation to newstart allowance paid to the applicant prior to 5 October 1998.
At the hearing, the applicant was not represented and the respondent was represented by Mr T Ffrench.
In evidence were the T Documents (T1 – T96) (exhibit 1) as well as the following:

Exhibit A1: a bundle of documents assembled by the applicant comprising a list of asset details; a handwritten copy of an extract from taxation returns in relation to a motel unit; a statement dated 16 June 1997 from the National Australia Bank; and a letter dated 29 October 1992 from the National Australia Bank;
Exhibit R1: a letter dated 17 July 2002 from MLC Limited;
Exhibit R2: a statement dated 28 August 2002 from Q Super;
Exhibit R3: a table of asset valuations;
Exhibit R4: the respondent's statement of facts and contentions; and
Exhibit R5: documents from the applicant's Centrelink file.

Issues and Legislation

Newstart allowance is payable in accordance with the terms of the Social Security Act 1991 (the Act) and, in accordance with sub-section 611(1) of the Act, newstart allowance is not payable to a person if the value of the person's assets is more than the asset value limit which is prescribed in subsection 611(2) of the Act. In the original decision, and that of the authorised review officer, the respondent has determined that the relevant asset level was exceeded by the applicant at all material times when he was in receipt of the newstart allowance payments and, in the decision of the Social Security Appeals Tribunal, the asset value limit was found to have been exceeded from 5 October 1998.
At this hearing, the applicant conceded that, at all material times, the level of his assets exceeded the asset value limit and also that there was a debt in the amount raised by the respondent of $24,835.79. The only issue for the Tribunal to determine is whether or not that debt should be waived in accordance with either section 1237A of the Act, in relation to administrative error by the Commonwealth, or under section 1237AAD of the Act, in relation to the existence of special circumstances.
Applicant's Case
The applicant was shown exhibit R3 which sets out the asset valuations as calculated by the respondent for the various assets which the respondent maintains are relevant in determining the applicant's asset value limit. He adopted each of these valuations as being correct and, as noted above, conceded that, throughout the period when he was in receipt of newstart allowance, the value of his assets exceeded the relevant asset limit as it varied throughout those periods.
One of the assets that the applicant has is a motel unit at 158 Green Camp Road, Wakerley. It has been valued at $60,000. The applicant said he provided information about his ownership of this asset at the time when he first lodged his claim for newstart allowance. That was in April 1997 when he had an interview with an officer from the Department of Social Security. He had approached that office because, after he had been retrenched from his position with the Golden Casket Lottery Corporation, he was advised, along with other retrenched personnel, that he may qualify for newstart allowance. He asked the officer if, indeed, he was qualified to receive the allowance and was provided with various forms and told to read them, to complete them and, in the event that he felt that he was qualified after having done so, to submit those forms to the Department.
The applicant said that he took the forms to his home where he read them with the "utmost due care and attention" and, in part, completed them. He said that he had worked in responsible positions with government agencies for many years and that he well knew the importance of being "100% accurate" in the completion of documentation. He returned to the office of the Department of Social Security on 6 April 1997 where, again, he spoke with an officer with whose assistance he completed the remainder of the forms. He said that he told the officer that he owned the motel unit but that, although it had been purchased as an investment, it had turned into a liability and was not able to be realised for anything like its purchase price. He said that he also told the officer that he had financed it by borrowing against his principal place of residence, a 3.87 hectare hobby farm at Boundary Road, Thornlands.
The applicant said that, because it was a liability, the officer had told him he need not specifically mention the motel unit in the documentation. Nevertheless, the applicant said that, in completing the forms, he had included a reference to an interest in real estate other than the home he lived in, had advised of the mortgage that was in place in relation to his property and had described the structure of the motel unit. He also said that he lodged with his original claim for newstart allowance, all of the documents that were contained in exhibit A1. This comprised a written statement setting out the details of his assets, all relevant information in respect of the motel unit as at 30 June 1996, a statement from the National Australia Bank and a letter in relation to the mortgage over the motel unit from the National Australia Bank.
The applicant also said he advised the officer of his superannuation interests and also his shareholding and directorship interest in the company EP Enterprises Pty Ltd. He said he told the officer he had a $2 share in the company.
In cross-examination, the applicant conceded that the hand-written document which he had tendered as part of exhibit A1 in relation to the motel unit was not a photocopy of the original which he said that he had lodged with his initial claim for newstart allowance. When asked why he had not tendered his copy or a photocopy of that document, he said that it was on a Centrelink file at his home but that the file was large and that it would be difficult to remove a particular document from it. Therefore, rather than photocopy that document to provide an exhibit to the Tribunal, he transcribed it and did so without amendment. Mr Ffrench noted that the applicant had used the term "Centrelink" in the document and put to the applicant the proposition that the agency, Centrelink, was not in existence at the time of the initial claim. The applicant was unable to explain his use of that term.
In relation to the bank statement included in exhibit A1, the applicant was unable to provide any explanation for the fact that it was dated 16 June 1997, some months after the lodgement of his initial claim in April 1997.
The applicant submitted that he should never have been paid newstart allowance because he was not qualified to receive it due to the level of his assets. However, he submitted that this was due to error on the part of the Commonwealth whose officers should have been aware of the existence of his various assets on the basis of the information he provided in his initial documentation. He said he was given no information concerning the level of the asset limit and was unaware that there was such a limit prior to receiving the letter of demand in relation to the debt that has been raised against him.
He said that he was provided with no separate forms in relation to the motel unit and submitted that, on the reading of his initial claim form, the Department of Social Security should have contacted him and requested further and better particulars in relation to his real estate holdings.
He also said he had advised Centrelink that his asset levels were in the order of $200,000 on his initial claim form and that this should have alerted officers of the Department to the need to make further enquiries.
The applicant submitted that the debt should be waived because it had arisen solely because of error on the part of the Commonwealth.
The applicant also submitted that, in the alternative, the debt should be waived because of his difficult circumstances. In part, these were financial. In addition, he submitted that his hobby farm had been rendered useless because of soil degradation and lack of access because of the activities of government bodies. He said he was in negotiations with them about the plight of his land and that he had spent some $50,000 over the last three years in an attempt to prevent the further degradation of his property. The applicant also said that his independence and his social life were non-existent because of the fact that he was required to provide constant care and attention to his ailing father who lived with him.
Respondent's Case
Mr Ffrench submitted that the applicant had not provided full disclosure of his assets in the forms that he lodged in April 1997. He referred to exhibit R5 which is a copy of the initial claim and also to associated documents as well as other records of dealings between the applicant and the Department. He submitted that these did not include documents of the kind comprising exhibit A1 which the applicant alleged had been lodged. He submitted that the Tribunal might conclude that these documents were not lodged with the initial claim form. Mr Ffrench submitted that the documents which the applicant completed made it clear that he was obliged to furnish a separate document for each of the assets that he owned. This had not been done. He said that the documentation that he completed could be interpreted as applying only to his principal place of residence.
In relation to the applicant's interest in the superannuation fund, Mr Ffrench conceded that this was not a relevant consideration at the time of the initial claim and was only required to be taken into account from 5 October 1998. After that date, the applicant had made withdrawals from his superannuation fund and had re-arranged his superannuation affairs by commencing a separate fund with MLC Pty Ltd in 1999. He referred to exhibit R2, a statement from Q Super, as indicating periodic withdrawals in the period from 16 October 1997 until 25 July 2000. He submitted that the applicant was under an obligation to advise Centrelink of these withdrawals and that these obligations were pointed out to him in notices that were sent to him periodically. The applicant's failure to provide that information meant that he had deprived the respondent of the opportunity of being alerted to the existence of the funds such that it would have made further enquiry and realised the level of the applicant's assets.
Mr Ffrench submitted that it was not appropriate for the applicant's debt to be written off in accordance with section 1236 of the Act because he had assets which were available for him to be able to discharge the debt.
In relation to section 1237A of the Act, he submitted that it was not solely through error of the Commonwealth that newstart allowance had been paid to the applicant despite the fact that the level of his assets were above the allowable limit.
In relation to section 1237AAD of the Act, he submitted that the applicant and possibly his father were in a position where they might well qualify for some form of social security payments and noted that this would assist them in alleviating any immediate financial concerns that they have.
Consideration
The following table, at exhibit R3, lists the applicant's assets and their respective values during the period that newstart allowance was paid to him. It also indicates a relevant asset limit and the extent to which the applicant's assets were in excess of those amounts. The table reads:
Asset    8/5/1997         1/7/1997         1/7/1998         5/10/1998       1/7/1999         22/5/2000
Wakerley       60,000.00       60,000.00       60,000.00       60,000.00       60,000.00       60,000.00
EP Enterprises 3,510.33         3,510.33         0.00    0.00    0.00    0.00
Loans   3,777.66         3,777.66         10,678.53       10,678.53       15,806.63       15,806.63
Vehicles        2,000.00         2,000.00         2,000.00         2,000.00         2,000.00         2,000.00
Q-super         0.00    0.00    0.00    169,483.64      168,112.49      18,085.20

0.00    0.00    0.00    0.00    0.00    85,176.30
Thornlands    72,312.90       72,312.90       70,482.10       70,992.48       81,730.91       83,500.05
Household Effects     10,000.00       10,000.00       10,000.00       10,000.00       10,000.00       10,000.00
Total    151,600.89      151,600.89      153,160.63      323,154.65      337,608.60      274,568.18
Asset limit     124,000.00      124,000.00      125,750.00      125,750.00      127750.00       127,750.00
Excess 27,600.89       27,600.89       27,410.63       197,404.65      209,858.60      146,818.18

The applicant has conceded that the amounts attributed to his assets as listed in that table correctly reflect the valuations of them and I am satisfied that that concession has been properly made. I am also satisfied that the limits referred to in that table are those provided in the Act for the relevant periods and that, throughout the period when the applicant was in receipt of newstart allowance, the value of his assets exceeded the relevant assets limit.
During the period from 8 May 1997 to 27 April 2000, the applicant was paid $24,835.79 by way of newstart allowance. Sub-section 611(1) of the Act precluded the payment of newstart allowance if the value of his assets was more than the asset value limit. Throughout the period, that limit was exceeded in the applicant's case and, in accordance with sub-section 1223(1) of the Act, the amount that he received constituted a debt due to the Commonwealth.
In evidence before the Tribunal was a copy of the claim form lodged by the applicant on 3 April 1997. There, the applicant described himself as having worked as an internal auditor for the Golden Casket Lottery Corporation for 15½ years until he was retrenched on 2 April 1997. In that document, at question 67, the applicant advised that he had an interest in real estate apart from the home that he lived in (see T4 at 34).
Copies of the documents lodged by the applicant on 6 April 1997 were also in evidence (see T5). In the form headed "Asset Details" the following question appears:
"What is your estimate of the net market value of your (and your partner's) normal household contents and personal effects?"
The applicant's response was: "$200,000". In his evidence, the applicant explained that he had completed that on the advice of the interviewing officer and said that it reflected the value of his Thornlands property, except for the house and curtilage, as well as the remainder of his household contents and personal effects. In the form headed "Income and Investments", the applicant advised that he was a member of a superannuation scheme and that the value of his investment at that time was $127,721.50. He also made reference to the company EP Enterprises Pty Ltd and declared that he had one share with the current value of $2 which had yielded no dividends in the previous twelve months.
In the form headed "Real Estate Details" (see T7) the applicant provided the address of his hobby farm at Boundary Road, Thornlands which is his residence. He described it as being 3.87 hectares in area and noted that the property was mortgaged in the amount of $57,000. At question 13 in that form (see T7 at 52) the applicant was asked to describe any building that he had other than the home he lived in. He indicated that there was such a building with a floor area of 6 squares, that it was 10 years old, that it had a timber exterior and an iron roof and 1 bedroom. In his evidence, the applicant said that the information in question 13 was intended by him to refer to the Wakerley motel rather than to his Thornlands property. However, nowhere in that document is reference made to any address other than Boundary Road, Thornlands. The applicant also said that the reference to the mortgage of $57,000 was also intended to be a reference to his investment property which had been purchased per medium of a mortgage secured over the Thornlands property.
There is nothing in the document at T7 concerning real estate details which would promote enquiry into the presence of another property other than the residential property at Thornlands. The response to question 13 could well relate to a separate building on that property which, as noted above, is of 3.87 hectares. The document at T7 contains instructions for those who complete it and these include the requirement for a separate form to be used in relation to each property that a person has an interest in (see T7 at 51). Clearly, the applicant did not comply with that request.
In the event that the documents contained in exhibit A1 were lodged with the claim forms, an officer of the Department involved in processing them would be put on notice of the existence of the Wakerley unit. However, I do not accept the applicant's evidence that these documents were lodged at that time. He admitted in evidence that the document which purported to set out the financial arrangements for the motel unit as at 30 June 1996 had been produced by him a few days before the hearing although he said that he had transcribed the information directly from a copy of the original which had been lodged. However, the document in exhibit A1 makes reference to "Centrelink" and, as I understand it, Centrelink began to operate under the Commonwealth Services Delivery Agency Act 1997 which formally came into effect on 1 July 1997. That was some months after the lodgement of the claim form in April 1997. Therefore, I do not accept that it was lodged with a Centrelink agency and that is consistent with the stampings on the claim forms. These stampings are from the "Commonwealth Employment Service" and from the "Department of Social Security". More significantly, the applicant claimed to have also lodged the statement from the National Australia Bank. This bears a date stamp some two months after the date of lodgement. Also, the applicant's Centrelink file contains no documents equivalent to those in exhibit A1.

In relation to the Wakerley unit, the applicant's claim form lodged on 3 April 1997 made reference to the existence of property other than his residence. However, the documents which were lodged three days after that are capable of bearing an interpretation that they applied only to the Thornlands property. To the extent that the applicant did not provide a separate document in relation to the Wakerley unit and did not clearly indicate distinction between his references to that property and his residential property in the form that he completed, I am satisfied that he contributed to the circumstances which overlooked the existence of the Wakerley motel unit as an asset.
In relation to superannuation, the applicant disclosed the existence of his membership in Q Super in his initial claim form. At that time, superannuation was not taken into account as an asset for social security purposes. That position changed in 1998. Throughout the period when he was in receipt of newstart allowance, the applicant was sent letters from Centrelink requiring him to advise that agency if any of a range of nominated events occurred. On 24 December 1998, one such letter required the applicant to advise if he made a withdrawal from a superannuation fund (see T14 at 68). Letters to that effect were also sent to him on 7 January 1999 (see T15), 3 March 1999 (see T17), 8 March 1999 (see T18), 9 March 1999 (see T19), 20 March 1999 (see T21), 23 March 1999 (see T22), 26 May 1999 (see T23), 18 August 1999 (see T24), 10 November 1999 (see T25), 25 November 1999 (see T26), 6 January 2000 (see T27) and 29 March 2000 (see T29).
In exhibit R2, the Customs Service Officer from Q Super set out the withdrawals that the applicant made in the period from 16 October 1997 until 25 July 2000. There were thirty such withdrawals. One was for $80,000 on 23 September 1999 and another was for $20,000 on 8 December 1999. The others were in varying amounts ranging from $2,000 to $10,510. I am satisfied that the applicant did not advise Centrelink of any of these withdrawals.
Section 1237A of the Act reads:
"Administrative error
1237A.(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later."
In Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212 (18 February 2000), the Tribunal determined that the word "solely" as used in that provision means "exclusively", "only" or "to the exclusion of all else". I adopt that interpretation and am satisfied that, on the facts of this case, there was contribution by the applicant to the overlooking of the Wakerley property. I am also satisfied that the failure of the applicant to advise of his superannuation withdrawals contributed to his superannuation interests not being taken into account as assets.
In the period prior to 5 October 1998 when superannuation was not taken into account as an asset, the applicant's asset limit would have been exceeded if the Wakerley property had been taken into account. That is also the case after 5 October 1998 and, additionally, it would have been the case independently of the Wakerley property if the superannuation interest had been taken into account.
The miscalculation of the value of the applicant's assets was not due solely to error on the part of the Commonwealth. Therefore, the debt is not able to be waived under section 1237A of the Act.
Waiver under special circumstances is provided for in section 1237AAD which reads:
"Waiver in special circumstances
1237AAD. 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 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."

The Act provides no guidance as to the meaning of the term special circumstances. The Full Federal Court in Beadle v Director-General of Social Security (1985) 7 ALD 670 stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood "not to require judicial gloss" (at 674). There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security(1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special".
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle's case, observed (at 545) that special circumstances:
"…would require something to distinguish [the] case from others, to take it out of the usual or ordinary case. … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary."

In this case, reference has been made by the applicant to his financial circumstances, to the responsibility that he has assumed for the care of his father and to the degraded nature of his Thornlands property through the agency of government bodies. While I accept that the applicant faces difficulties in the financial sense, he does have assets, including the Wakerley motel unit, that are realisable and I do not accept that he is in truly straitened circumstances. He encounters restrictions in his life-style because he has accepted responsibility for the care of his father but that can not be described as unusual or out of the ordinary. His hobby farm has experienced a level of degradation but the applicant stated in his evidence that he is involved in negotiations with the relevant instrumentalities in that regard. I am satisfied that none of these matters, considered individually or cumulatively, amount to special circumstances as required by section 1237AAD of the Act and I am satisfied that no other factors have emerged at the hearing or in the documentation before the Tribunal which would justify the waiver of the debt in this case.

Decision

The Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 25 March 2002 and substitutes its decision that a debt of $24,835.75 for the period from 8 May 1997 to 27 April 2000 be raised and recovered from the applicant.

I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member
Signed: Sarah Oliver
Associate

Date of Hearing  19 September 2002
Date of Decision  11 October 2002
The Applicant Appeared in Person
Solicitor for the Respondent    Mr T Ffrench, Departmental Advocate