Re Anderson and Secretary, Department of Families and Community Services

Bozdag and Secretary, Department of Social Services (Social services second review) [2016] AATA 765 (30 September 2016)

Division

GENERAL DIVISION

File Number(s)

2014/5076

Re

Mihriban Bozdag

APPLICANT

And

Secretary, Department of Social Services

RESPONDENT

DECISION

Tribunal
Senior Member A Poljak

Date 30 September 2016

Place Sydney
The Tribunal affirms the decision under review.

..............................[sgd]..........................................
Senior Member A Poljak
CATCHWORDS
SOCIAL SECURITY – carer payment – rate of payment – whether overpayment of social security benefit – whether member of a couple – married during relevant period – debt – whether debt can be waived or written off – whether special circumstances – decision affirmed
LEGISLATION
Social Security Act 1991, ss 4, 23, 1064, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999, s 68
CASES
Re Anderson and Secretary, Department of Families and Communities Services [2002] AATA 495

Re Beadle and the Director-General of Social Security (1984) 6 ALD 1
Boskoski v Secretary, Department of Social Services [2014] AATA 915
Cullinane & Secretary, Department of Family and Community Services [2004] AATA 789

Pelka v Secretary, Department Family Community Services (2006) 151 FCR 546
REASONS FOR DECISION
Senior Member A Poljak
30 September 2016
INTRODUCTION

The applicant in these proceedings, Ms Bozdag, entered into an arranged marriage with Mr Koksal Bozdag (her first cousin) in 1977. They have two children together. Their son has Down's Syndrome and is severely disabled. As a child he required, and continues to require, full time care and attention which Ms Bozdag provides. Ms Bozdag has been in receipt of carer payments since 14 July 1994.
In these proceedings, Ms Bozdag seeks review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 4 September 2014 (“the Decision”). The SSAT affirmed the decision of an Authorised Review Officer (“the ARO”) dated 18 June 2014.
In its decision, the ARO found that Ms Bozdag was a member of a couple with Mr Bozdag from 1 August 2005 to 28 January 2014 (“the Relevant Period”); and accordingly she was overpaid carer payment in the amount of $82,071.46 during the Relevant Period which is a debt due to the Commonwealth and must be repaid.
The issues to be determined in these proceedings are:
(a)Whether Ms Bozdag was a member of a couple during the Relevant Period; and if so, whether there was a special reason that she should not be treated as a member of a couple; and
(b)Whether Ms Bozdag was overpaid carer payment in the amount of $82,071.46 during the Relevant Period; and if so,
(c)Whether all or part of the debt may be waived or written off.
RELEVANT LEGISLATIVE PROVISIONS
Section 23 of the Social Security Act 1991 (Cth) (“the Act”) defines a ‘social security payment’ to include a ‘social security pension’. A carer payment falls within the meaning of a ‘social security pension’.
A carer payment, like most social security payments, is paid at a different rate depending on whether the recipient is partnered (a ‘member of a couple’) or un-partnered (‘single’), and the calculation of such payments is affected by the pooling of income and assets pursuant to section 1064 of the Act.
Subsection 68(2) of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”), provides that the Secretary may give a person who is receiving social security payments notice that requires the person to do any or all of the following:
(a) Inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;
(b) Give the Department one or more statements about a matter that might affect the payment to the person of the social security payment…
In this matter, from 12 June 2005 and during the Relevant Period, Ms Bozdag was issued numerous notices in accordance with ss 68(2) of the Administration Act.
The Secretary contends that Ms Bozdag failed to comply with the notices by not disclosing her relationship status (as a member of a couple) and for failing to disclose her income and assets as a member of a couple with Mr Bozdag.
The Secretary also contents that during the relevant period Ms Bozdag was not entitled to the rate of payment that she received. As Ms Bozdag received more than she was entitled to during the relevant period, the amount she was overpaid results in a debt to the Commonwealth.
Section 1223(1) of the Act provides how a debt of a ‘social security payment’ to the Commonwealth arises:
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
The fundamental question for determination is whether Ms Bozdag was a member of a couple during the Relevant Period for the purposes of the Act.
Section 4 of the Act provides that a person is a member of a couple for the purposes of the Act if the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis. “Partner” is defined to mean in relation to a person who is a member of a couple, and means the other member of the couple. The term “member of a couple” has the meaning given by subsections (2), (3), (3A), (6) and (6A).
Relevantly, in forming an opinion about the relationship between two people, the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters, pursuant to section 4(3) of the Act:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to, or in a de facto relationship with, each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage-like relationship or a de facto relationship.
When deciding whether or not a person is in a relationship, I must have regard to the interpersonal relationship as a whole, not limited by the factors listed in s 4(3). The decision-maker must specifically consider the “total picture of the relationship created by all of those factors”; Pelka v Secretary, Department Family Community Services (2006) 151 FCR 546.
Whilst all aspects of the relationship must be considered, differently structured relationships may satisfy different criteria set out in subsection 4(3). As the Tribunal observed in Re Cullinane and Secretary, Department of Family and Community Services [2004] AATA 789 Senior Member McCabe observed that at [16]:
People must be free to structure their domestic relationships as they please. But it is still necessary to attempt to characterise the relationship where the decision whether or not to take into account the other person’s income depends on whether they are members of a couple, or merely share a common address. The criteria offer common-sense indicators. One need not satisfy them all; indeed, one may satisfy few of them but still be considered to be a member of a couple if the decision-maker forms the view that the applicant is in fact a member of a couple.
Deputy President J Constance said in Boskoski v Secretary, Department of Social Services [2014] AATA 915 at [63] that “In considering the various criteria set out in subsection 4(3) it is necessary to take an objective view of the facts. However the subjective views of the parties may be relevant in considering aspects of the relationship, such as the commitment of each party to the other”.
THE APPLICANT’S RELATIONSHIP STATUS
Financial Aspects
Ms Bozdag’s legal representative contends that Mr Bozdag and Ms Bozdag have not taken steps to separate their financial affairs even though they are supposedly separated. Instead they have reached an amicable arrangement in regards to their finances. I am not convinced that this accurately reflects the financial aspects of the relationship between Ms Bozdag and Mr Bozdag for the following reasons.
Having regard to the evidence, in particular that of Ms Bozdag and Mr Bozdag, I am satisfied that Ms Bozdag and Mr Bozdag are joint owners of real estate, have significant pooling of financial resources, especially in relation to major financial commitments, and share day-to-day household expenses. These circumstances are over and above a mere financial arrangement, but are indicative of the pooling of financial resources for a common benefit in providing for each other and their children; Pelka v Secretary, Department Family Community Services (2006) 151 FCR 546 at [52].
Ms Bozdag and Mr Bozdag are joint tenants of a property in Merrylands NSW (“the Merrylands Property”). They have owned the property since 1993. The property is leased to a tenant however both Ms Bozdag and Mr Bozdag gave evidence at hearing that they didn’t know anything about the rental arrangement. The only consistent aspect of their evidence is that all of the rental income from the Merrylands Property goes to their daughter for her education and expenses. I am satisfied that this is a joint pooling of a financial benefit for a common family purpose.
Both Mr Bozdag and Ms Bozdag own property independent of each other. Mr Bozdag owns a property at Breakfast Point (“the Breakfast Point Property”) and commercial offices in both Parramatta and Auburn (“Parramatta Office and Auburn Office”). At hearing, Mr Bozdag told the Tribunal that he also has a 50% share in two commercial properties with his brother and sister in law, purchased over twenty years ago, from which he receives rental income. Ms Bozdag said at hearing that she owns a property in Turkey, which was given to her by her father as a wedding present. Her brother lives in the property rent free.
In May 2007, Mr Bozdag took out an ‘investment’ loan with Ms Bozdag for $224,000, secured by mortgage against both the Breakfast Point Property and the Merrylands Property (“the Westpac Loan’). It is Mr Bozdag’s evidence that the Westpac Loan was obtained to assist with the purchase of the Parramatta Office. Ms Bozdag was a joint applicant for the Westpac loan and was required to provide consent. Although she claims to have no recollection of the Westpac Loan, she conceded at hearing that it was her signature on the application forms. I am satisfied that the Westpac Loan is representative of a joint pooling of assets for a benefit and a major joint liability.
From about 2004, Ms Bozdag and her two children have resided, rent free, at the Breakfast Point Property. Ms Bozdag told the Tribunal that she meets the day-to-day costs of living while Mr Bozdag pays the mortgage repayments, utilities and pays for Ms Bozdag’s telephone. At hearing, Ms Bozdag said that he also pays for groceries, not all the time, but whenever she needs them.
Mr Bozdag claimed at hearing that he only provides financial support for his children and in particular for his son who requires constant care. I do not agree. Although Mr Bozdag claims that his intention is not to financially support Ms Bozdag, her evidence, which I accept, is that “she has always been a house wife and has never worked.” Having regard to the expenses paid by Mr Bozdag, it is plain that he supports Ms Bozdag financially to a significant extent.
The financial aspects favour a finding that Ms Bozdag was a member of a couple with Mr Bozdag during the Relevant Period.
Nature of the household
Mr and Ms Bozdag are legally married. I must therefore determine whether Mr Bozdag was living separately and apart from Ms Bozdag on a permanent or indefinite basis, within the meaning of s 4(3A) of the Act, during the relevant period.
Mr Bozdag contends that he has not resided at the Breakfast Point property since 2004. From which time he alleges that he has resided in both his Parramatta and Auburn Offices for a period of approximately 10 years during the relevant period – with his Auburn Office being his main place of residence.
Mr Sanal, who has known Mr Bozdag for approximately 25-26 years, gave oral evidence that he believed Mr Bozdag and Ms Bozdag were no longer living together.
Mr Bozdag gave evidence at hearing about his alleged living conditions. He said that the Auburn office was commercial premises with a number of rooms (which it appears are sub-leased to other tenants, although the evidence is unclear in this regard) and has kitchen facilities and a bathroom with shower. Mr Bozdag claims to sleep on a pull-out couch in one of the rooms of the Auburn Office and occasionally on the top level of his Parramatta Office. He says he showers at the gym located in the building of his Parramatta Office.
At hearing Ms Bozdag gave evidence that Mr Bozdag visits the Breakfast Point property once a month and stays in the property when she is overseas. She also said that he had stayed overnight at the Breakfast Point property on other occasions, namely, when she had an operation and on New Year’s Eve.
Mr Bozdag said that he sees his son every second day or every day. His daughter brings his son to see him at his Auburn office but he also visits his son at the Breakfast Point Property if his son is sick. The evidence is unclear on how often Mr Bozdag is actually at the Breakfast Point Property but it is clear that he goes there whenever his children need him. Ms Bozdag states that he comes if they call him.
Having regard to the evidence, I find it implausible that a supposedly successful accountant such as Mr Bozdag, who has numerous valuable assets and investments, would reside on a pull out couch in his offices for a period of approximately ten years. Even if I am satisfied that Mr Bozdag resided in his Parramatta Office from time to time during the relevant period, I am not satisfied that it was on a permanent or indefinite basis. His evidence in regards to his living arrangements at the Parramatta and Auburn Offices could be described as nothing more than temporary.
I find the objective evidence compelling. Namely, during the relevant period, Mr Bozdag recorded his residential address as the Breakfast Point Property with the Australian Taxation Office, the Australian Electoral Commission, NSW Roads and Traffic Authority, Medicare, on his passport Application, on the application for the Westpac Loan, and on Incoming Passenger Cards when he travelled to Turkey in 2008 and 2010. Mr Bozdag does not dispute this evidence. He stated at hearing on numerous occasions that the Breakfast Point Property was his home and as far as he was concerned, he resided there. He said “that’s my address. I just can’t live there.” On balance, I am satisfied that Mr Bozdag’s main place of residence is the Breakfast Point property.
The nature of the household favours a finding that Ms Bozdag was a member of a couple with Mr Bozdag during the Relevant Period.
Social aspects of the relationship
Ms Bozdag gave evidence at hearing that Mr Bozdag would attend family functions, Christmas’ and birthdays. She said Mr Bozdag usually took the family out to a restaurant on the children’s birthdays. However this had not occurred over the past four years because Ms Bozdag was in Turkey with her son on his birthday. Mr Bozdag gave evidence that they had family dinners 2 to 3 times a year. He also gave evidence about one specific occasion when he invited a Turkish doctor over to the Breakfast Point property for dinner with the family. Considering this evidence, I am satisfied that the Ms Bozdag and Mr Bozdag engaged in joint social activities during the relevant period.
Ms Bozdag contends that for cultural reasons, her separation from Mr Bozdag was not widely discussed. As first cousins they share the same family. Mr Bozdag said that he did not want to upset their joint relatives overseas by telling them about the separation.
Ms Bozdag told the Tribunal at hearing that prior to 2014; she told no-one, including her family in Turkey, that her marriage had broken down. It was only after the Department questioned her relationship status in 2014 that she told everyone she had separated from Mr Bozdag. I accept Ms Bozdag’s evidence that she told no one about her alleged separation prior to 2014 over the evidence of Mr Akin, Mr Sanal and Mr Karatoka for the following reasons.
Ahmet Akin
Mr Akin, a friend of Mr Bozdag and sub-lessee of a room at the Auburn office, provided evidence by way of letter and orally at hearing. He states in his letter dated 20 April 2015 that Ms Bozdag and Mr Bozdag separated in 2005. However, at hearing, Mr Akin said that Ms Bozdag and Mr Bozdag were husband and wife as far as he was concerned. He said he knew they had separated because he never saw them “close together” for the past 30 years, but knew nothing more than that. He said he never asked about private things. It is unclear how he arrived at 2005 being the year of separation.
Ahmet Sanal
Mr Sanal provided evidence by way of letter and orally at hearing. He states in his letter dated 13 April 2015 that Ms Bozdag and Mr Bozdag separated in 2005. However, at hearing he said that the relationship ended in “2005…2006…2007...don’t know exactly” and “later than 2000…don’t remember.” Given the inconsistency with Mr Sanal’s evidence, I am not satisfied that his account of Ms Bozdag’s relationship status is reliable.
Fatih Fred Karatoka
Mr Karatoka, who lives in the same building as the Breakfast Point Property, provided evidence by way of letter and orally at hearing. He states in his letter dated 22 April 2015 that he has known Ms Bozdag since 2005. Mr Karatoka said at hearing that he didn’t get into Ms Bozdag’s personal affairs however stated that Mr Bozdag “comes and goes” and that he believed Ms Bozdag was living as a single parent.
When pressed in cross examination, Mr Karatoka said that Ms Bozdag had asked him to write a statement and had confirmed “the facts” with him, accordingly I am not satisfied that his account of the relationship status is reliable given that I am not able to separate Mr Karatoka’s personal observations of Ms Bozdag’s relationship status and that from the facts Ms Bozdag has told him for the purposes of his evidence in these proceedings.
As already stated, I am satisfied that Ms Bozdag held herself out as married up until 2014 and that she and Mr Bozdag engaged in joint social activities during the relevant period. This factor weighs in favour of a finding that Ms Bozdag was a member of a couple with Mr Bozdag during the Relevant Period.
Sexual relationship
Ms Bozdag contends and the Secretary accepts, that the sexual relationship between Ms Bozdag and Mr Bozdag ceased many years ago. This is a factor which may weigh against a finding that Ms Bozdag was a member of a couple with Mr Bozdag during the Relevant Period. However it is not the only factor I need to consider.
Nature of commitment

Mr and Mrs Bozdag have been legally married since 1977. It is a lengthy marriage of nearly 40 years duration. The evidence is inconsistent as to when the relationship supposedly ceased. However, at hearing they both strongly contended that they separated in 2004, because, although they are very close to each other, they don’t understand each other and argue all the time. Neither party has filed for divorce.
Ms Bozdag told the Tribunal at hearing that she had no intention of filing for divorce in the future due to cultural and family issues. Mr Bozdag on the other hand, said at hearing that he could and would file for divorce in the near future. This however remains to be seen.
At the end of 2007, some 2 years post alleged separation, Ms Bozdag went to Turkey with Mr Bozdag for approximately six weeks, because his mother had passed away. Ms Bozdag claims that she only went because his mother was her family too, however, Mr Bozdag gave evidence that she went to give him emotional support. I am satisfied that this demonstrates the nature of companionship and emotional support that they provide to each other.Ms Bozdag’s legal representative contends that her relationship with Mr Bozdag is not a marriage and should not be regarded as one for the purposes of the Act because of a lack of affection and love in the relationship. I do not agree. It is plain from the evidence before me that Mr Bozdag and Ms Bozdag come together for their children; they support each other emotionally and financially. I am satisfied that their relationship goes beyond mere cooperation.
The marriage, albeit perhaps not a ‘happy’ marriage, is still a marriage, with many of the indicia of a marriage. Ms Bozdag and Mr Bozdag are close to each other, and provide for their children when needed. Even if their staying together is very much because of the needs of their son, that, in itself, is one of the indicia of a marriage.
The nature of commitment favours a finding that Ms Bozdag was a member of a couple with Mr Bozdag during the Relevant Period.
DEBT ARISING
Section 1223 of the Act provides that when a person obtains the benefit of a payment that the person was not entitled to for any reason, the amount of the overpayment is a debt due to the Commonwealth.
Ms Bozdag does not dispute the value of the debt arising or the accuracy in which it was calculated.
Based on the calculations provided by the Department I am satisfied that the amount of the overpayment received by Ms Bozdag in respect of the period 1 August 2005 to 28 January 2014 was $82,071.46. She owes this amount to the Commonwealth.
CAN THE DEBT BE WAIVED OR WRITTEN OFF?
Subsection 1236 of the Act provides, in part:
(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.
There is no evidence before me to suggest that any of the conditions set out in s 1236(1A) are met. It follows, that I am not satisfied that the debt should be written off.
Section 1237A of the Act also provides that the Secretary must waive the right to recover the proportion of the debt that is attributed solely to an administrative error made by the Commonwealth. The Secretary contends that there is no administrative error in this matter as the debts arose because Ms Bozdag failed to comply with her notification obligations. Accordingly there is no basis for the debt to be waived.
Subsection 1237AAD of the Act provides:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) The debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration 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.
In Re Anderson and Secretary, Department of Families and Communities Services [2002] AATA 495, the Tribunal said at [27]:
“…it is open to the Tribunal to infer that the applicant has actual knowledge of his obligations under the Act where there are opportunities for that knowledge to be gained and where there are no obstacles to him acquiring that knowledge. In this case, the applicant has had the opportunity to gain an understanding of his obligations under the Act through the provision of advice letters to him from the respondent. The Tribunal is not aware of any obstacles that would prevent Mr Anderson from understanding those letters and gaining that knowledge.”
Ms Bozdag was sent number of notices during the Relevant Period informing her of the need to tell the Department if her circumstances had changed. There is no evidence before me to suggest that she did not receive these notices or was unable to read them. There is also no evidence before me to show that Ms Bozdag complied with the notices and advised the Department of her relationship status, income and assets. As I have already found, Ms Bozdag was in a relationship with Mr Bozdag during the relevant period. Not disclosing this information to the Department could amount to a false statement or a false representation; or at the very least amounts to a failure to admit or to comply with provisions of the Act.
I am satisfied that there is no administrative error in this matter, as the debts arose because of Ms Bozdag’s failure to comply with the notification obligations. It follows that there is no basis for the debt to be waived.
The Secretary may waive the right to recover all part of the debt if there are special circumstances that make it desirable to waive that debt.
Special circumstances are not defined in the Act however the Tribunal is provided some guidance by the decision of Re Beadle and the Director-General of Social Security (1984) 6 ALD 1 at [3]:
An expression such as “special circumstances” is, by its very nature, incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances of unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special (emphasis added).
Unfortunately for Ms Bozdag there is nothing which takes her situation out of the usual or ordinary case. I am therefore not satisfied that there are special circumstances warranting waiver of all or part of the debt.
CONCLUSION
Having regard to all of the factors provided for in section 4(3) of the Act and the interpersonal relationship between Ms Bozdag and Mr Bozdag as a whole, I am satisfied that Ms Bozdag was a member of a couple during the Relevant Period for the purposes of the Act.
There is no evidence before me to suggest that any of the conditions set out in s 1236(1A) of the Act are met or that there was an administrative error in this matter. The debts arose because Ms Bozdag failed to comply with her notification obligations. There is nothing which takes her situation out of the usual or ordinary case. Accordingly there is no basis for the debt to be written off or waived in whole or in part.
The decision under review is affirmed.

I certify that the preceding 64 (sixty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak
..................................[sgd]......................................
Associate
Dated 30 September 2016

Date(s) of hearing 18-19 July 2016

Solicitors for the Applicant Atila Lawyers

Solicitors for the Respondent Department of Human Services

Division	GENERAL DIVISION
File Number(s)	2014/5076
Re	Mihriban Bozdag
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

Tribunal	Senior Member A Poljak
Date	30 September 2016
Place	Sydney

Date(s) of hearing	18-19 July 2016
Solicitors for the Applicant	Atila Lawyers
Solicitors for the Respondent	Department of Human Services

[2002] AATA 495

21 June 2002