Rees and Department of Family and Community Services

[2000] AATA 397

DECISION AND REASONS FOR DECISION [2000] AATA 397

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N1999/702

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      GRAHAM REES    
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES  
  Respondent

DECISION

Tribunal       Senior Member Barbour    

Date22 May 2000 

PlaceSydney

Decision       The Tribunal affirms the decision subject to review.  
  ..............................................
  Senior Member
CATCHWORDS
Social Security - Newstart Allowance - Whether member of a couple - Marriage-like relationship 

Social Security Act 1991 - ss 4, 658, 1224, 1237A, 1237AAD

REASONS FOR DECISION

Senior Member Barbour                

1. This is an application by Graham Rees ("the applicant") for review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 9 April 1999. The SSAT decision affirmed a decision of the Secretary of the Department of Family and Community Services ("the respondent"). This decision was that the applicant was a member of a couple and therefore there was a debt of Newstart Allowance due to the applicant's failure to report his partner's earnings. This decision also included a finding that there were no special circumstances to allow for the waiver of the debt.

2. The applicant represented himself at the hearing and the respondent was represented by Mr Lozynsky, an Advocate at the Centrelink Administrative Law Section.

3. The Tribunal had before it the documents provided pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the "T-documents") and the Respondent's Statement of Facts and Contentions dated 26 October 1999. The Tribunal also considered the following documents:

Exhibit 1A completed notice under section 196 of the Social Security (Administration) Act 1999 requesting information from St George Bank;

Exhibit 2A completed notice under section 196 of the Social Security (Administration) Act 1999 requesting information from the Australian Taxation Office (ATO);

Exhibit 3A completed notice under section 196 of the Social Security (Administration) Act 1999 requesting information from Esanda Finance Corporation Ltd (Esanda).

BACKGROUND

1. On 1 December 1997 the applicant claimed Newstart Allowance and at question 33 of the form, stated his partner was Doreen Rees. On 3 December 1997, Doreen Rees lodged a Partner details form (Module P). At question 5 of the form Mrs Rees ticked that she was married to the applicant.

2. A data match from the Australian Taxation Office dated 28 September 1998 confirmed that Doreen Rees was listed as the partner of the applicant. On 8 October 1998 a Notice of the Taxation Assessment for the year ending 30 June 1998 confirmed that Doreen Rees' taxable income was $25,397.

3. On 19 October 1998 Centrelink advised the applicant that the amount of income received by his partner meant that he was not entitled to Newstart Allowance from 19 October.  A copy of the applicant's Payment Summary Screen for the period 18 May 1998 to 20 October 1998 and a copy of the Payment History Screen from 18 July 1997 to 1 May 1998 were also obtained by Centrelink on 19 October 1998. On that same day Mr Rees attended Wallsend Centrelink office to inquire about the verification sought of the amount of income received by Doreen Rees from her employer.

4. On 20 October 1998 Centrelink advised Mr Rees that he had failed to declare his partner's income correctly whilst she was casually employed with Hills Sneddon between 19 July 1997 and 16 October 1998, and consequently he was overpaid an amount of $2,976.91.

5. On 23 October 1998 the applicant and Mrs Rees completed "Review of Separation Under One Roof" forms.

6. The applicant re-claimed Newstart Allowance on 24 October 1998 and failed to answer questions 11 and 14 in relation to his partner's details. Centrelink rejected this new claim for Newstart Allowance some time after 24 October 1998 (T10).

7. The applicant disagreed with the decision to raise an overpayment and requested a reconsideration of the decision. The original decision was affirmed and the applicant was informed in writing on 26 October 1998.

8. On 29 October 1998 an Authorised Review Officer (ARO) affirmed the decision to raise the debt and the applicant was informed in writing.

9. A "Separation Under One Roof" consideration was conducted by a Centrelink assessor. The assessor concluded that Mr Rees should be considered as a member of a couple in a marriage.

10. On 10 December 1998 the ARO affirmed the decision under review concluding that the applicant was a member of a couple.

11. The applicant appealed to the SSAT. On 9 April 1999 the SSAT decided to affirm the decision under review to treat Mr Rees as a member of a couple. The SSAT also affirmed the decision that there was a debt owing to the Commonwealth and that there was no basis for waiving or writing off the debt under sections 1237A, 1237AAD or section 1236 of the Social Security Act 1991.

12. On 13 May 2000 Mr Rees lodged an application for review at the Administrative Appeals Tribunal ("the Tribunal").
    LEGISLATION AND ISSUES

13. The first issue to be determined in this matter is whether the applicant and Mrs Doreen Rees were living as a couple in a marriage like relationship between 18 July 1997 and 16 October 1998. Section 4 of the Social Security Act 1991 defines what is meant by a marriage like relationship. It states in part:

    4  Family relationships definitions - couples
    …
    4 (2)     Subject to subsection (3), a person is a  member of a couple for the purposes of this Act if:
    (a)       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; or
    (b)       all of the following conditions are met:

    (i)        the person has a relationship with a person of the opposite sex (in this paragraph called the "partner);

    (ii)       the person is not legally married to the partner;

    (iii)      the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;

    (iv)      both the person and the partner are over the age of consent applicable in the State or Territory in which they live;

    (v) the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.
    Note: a prohibited relationship for the purposes of section 23B of the Marriage Act 1961 is a relationship between a person and:
    •         an ancestor of the person; or
    •         a descendant of the person; or
    •         a brother or sister of the person (whether of the whole blood or the part-blood).
    Member of a couple - criteria for forming opinion about relationship
    4 (3)     In forming an opinion about the relationship between 2 people for the purposes of paragraph (2) (a) or subparagraph (2) (b) (iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
    (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 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…

14. The second issue is whether there is a debt of Newstart Allowance, owed by the applicant due to his failure to report his partner's earnings. At the relevant time, section 658(1) of the Social Security Act allowed the Department to issue a notice to a Newstart Allowance recipient requiring them to give a statement about a matter that may affect the payment of the Newstart Allowance. Subsection 658(5) stated that a person could not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person was capable of complying with the notice. 

15. The respondent submitted that because the applicant failed to notify the Department of the correct amount of his wife's income for the period between 18 July 1997 and 16 October 1998, he had not complied with section 658 of the Social Security Act and therefore a debt had arisen under section 1224. Section 1224 of the Social Security Act states that:

    1224  Debts arising from recipient's contravention of law

    (1)       If:
    (a)       an amount has been paid to a recipient by way of social security payment; and
    (b)       the amount was paid because the recipient or another person:

    (i)        made a false statement or a false representation; or

    (ii)       failed or omitted to comply with a provision of the social security law or this Act as in force immediately before 20 March 2000 or the 1947 Act;
    the amount so paid is a debt due by the recipient to the Commonwealth.
    Note:    If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
    1224 (2)         * * * * *
    1224 (3)         * * * * *

16. The third issue to be determined in this matter is whether there are any special circumstances in this case to allow the debt to be waived under sections 1237A or 1237AAD of the Social Security Act 1991. Section 1237A states in part that:

    1237A  Waiver of debt arising from error

    Administrative error

    (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)…
    Proportion of a debt
    1237A(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.

Section 1237AAD of the Social Security Act states:

1237AAD  Waiver in special circumstances
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 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.

APPLICANT'S EVIDENCE

1. Mr Rees attended the hearing and gave oral evidence. The applicant is 57 years old.

2. Mr Rees was unsure of the exact date of his marriage to Doreen Rees, thinking it was around 1975 or 1976. There are no children to the marriage. Mr and Mrs Rees are not divorced, however, the applicant now lives in Sydney and Mrs Rees lives in Newcastle. The parties have no real contact any more. Mr Rees indicated that he had only spoken to his wife once in a period of approximately twelve months.

3. In 1981 Mr Rees had to return to Newcastle to look after his father who was ill. According to Mr Rees, his wife was not happy about returning to Newcastle. Mr Rees told the Tribunal that things became difficult at this time as he lost his job and had to apply for social security. He also stated that from about this time his marriage started to fall apart. He described this period as being a "cold war" between himself and his wife.

4. Mr Rees told the Tribunal that over time he and his wife started to live their lives separately. By the time relevant to the alleged debt, they had moved into their own rooms of the house and were living a "separate life".  Mr Rees stated that this time was extremely difficult  - he referred to an occasion where Mrs Rees attacked him with a knife.

5. Mr Rees told the Tribunal that the only times they went out together were to very occasional family birthdays when both were invited. On one occasion Mr Rees took Mrs Rees to a day surgery. Mr Rees said that being a very private person, he did not let many people know about the circumstances. Mr Rees said that he had tried to reconcile with Doreen over the years but without success. The applicant told the Tribunal that he still considered Mrs Rees his next of kin.

6. On cross-examination, Mr Rees told the tribunal that for the period in question (18 July 1997 through to 16 October 1998), he and Mrs Rees did not have a sexual relationship. During this period they were sharing the utilities of the house and the furniture as well as the housework. The applicant and Doreen Rees kept separate bank accounts before and during the marriage. Mr Rees told the Tribunal that he and Doreen shared responsibilities around the house. Although Mr and Mrs Rees had an informal arrangement to share the cost of the bills and rates equally, Mr Rees stated that his wife paid the majority of the bills and rates and he tried to pay when he could as he was out of work for part of the period in question.

7. Mr Rees stated that, at the time, he would not have described himself as being separated, as he believed that a couple separated when one of the couple "walked out the door". Mr Rees also stated that during the period he thought there would be a chance for reconciliation.

8. The home that Mr Rees shared with his wife during this period is mortgaged in joint names. The St George mortgage documents indicate that the Rees are a married couple.  The applicant told the Tribunal that he and Mrs Rees had represented to the bank that they were married. The applicant stated that he had taken a loan with Esanda in 1999 and had told them that he was technically married, but separated.
   MR BRENNAN'S EVIDENCE

9. Mr Murray Brennan attended the hearing and gave oral evidence to the Tribunal. Mr Brennan has known both the applicant and Mrs Rees for approximately 12 to 14 years. He is still friendly with both of them.

10. Mr Brennan first met Doreen though their involvement in community groups. He later met the applicant. He said that Mr and Mrs Rees appeared to have a good relationship when he first met them. Mr Brennan would often go over to the Rees' house for dinner with his wife and they would visit he and Mrs Brennan. Mr Brennan is now divorced.

11. Mr Brennan told the Tribunal that it became clear that in the early to mid 1990s there were "critical problems" with the Rees' relationship. Around this time Mrs Rees would come over to Mr Brennan's house to work on his computer. She would often denigrate and swear about the applicant. Mr Brennan also stated that Mrs Rees expressed to him that she no longer wanted to go out in public with the applicant and that she wanted nothing to do with him.

12. From the mid 1990s, Mr Brennan told the Tribunal, the applicant and Mrs Rees had separate bedrooms, were never seen out together and the relationship was "very tense". Mr Brennan, on cross-examination, told the Tribunal, that other friends had also observed the deterioration in the Rees marriage. Mr Brennan said that Mr Rees would purposely roster himself to work for the Coastal Patrol to get out of the house.
    RESPONDENT'S SUBMISSIONS

13. Mr Lozynsky submitted to the Tribunal that the decision to raise an overpayment on the basis that the applicant was a member of a couple was correct in relation to a consideration of the factors in section 4 of the Social Security Act 1991. Mr Lozynsky noted that Mr and Mrs Rees own the matrimonial home jointly and that during the period in question, they shared bills equally as well as the costs of housekeeping. Mr Lozynsky stated that the respondent accepted that Mr and Mrs Rees had separate bedrooms, but shared other parts of the house and further noted that Mr Rees had not made any attempts to find any other accommodation.

14. Mr Lozynsky submitted that Mr and Mrs Rees lived separate lives but were close and connected. He noted that the Rees' marriage had been a long marriage and that this should be taken into account. Mr Lozynsky submitted that the applicant and Mrs Rees did attend some social functions together and so had social contact. Mr Lozynsky stated that the respondent accepted that there were no sexual relations between Mr and Mrs Rees, but noted that many married couples make changes to deal with strained relations. Mr Lozynsky submitted that in order to not constitute a marriage like relationship, a relationship must have totally broken down, that is destroyed. Mr Lozynsky stated that this was not so in the case of Mr and Mrs Rees.

15. Mr Lozynsky also noted the loan documents and Australian Taxation Office document. He submitted that these needed to be taken into account when considering whether or not Mr and Mrs Rees were in a marriage like relationship. Mr Lozynsky also stated that the applicant noted on his Newstart application that he had a partner, but not that he was separated. Mr Lozynsky further stated that the two forms completed by Mrs Rees notified the Department of the separation, but only after the debt was incurred.

16. Mr Lozynsky submitted that there must be special reasons to not treat a couple as living in a marriage like relationship and that in this case there were no such special reasons.

17. The respondent further submitted that the applicant had not fulfilled the requirement of sections 658 and 1224 as he failed to provide correct information in relation to his partner's earnings on his fortnightly applications for payment of Newstart Allowance.

18. Mr Lozynsky also submitted that there were no special circumstances or sole administrative error on the part of the respondent in this case to allow for waiver of the debt under sections 1237A and 1237AAD of the Social Security Act 1991.
    FINDINGS

19. There are three issues to be determined in this matter. The first issue is whether the applicant and Mrs Doreen Rees were living as a couple in a marriage- like relationship between 18 July 1997 and 16 October 1998. The second issue is whether there is a debt of Newstart Allowance owed by the applicant to the Commonwealth due to his failure to report his partner's correct earnings. The third issue to be determined is whether there are any special circumstances in this case that allow the debt to be waived.
    Issue 1

20. In order to determine whether or not the applicant and Mrs Rees were living in a marriage like relationship between 18 July 1997 and 16 October 1998, the Tribunal must have regard to the various indicia outlined in section 4(3) of the Social Security Act 1991 as outlined above. Having regard to the criteria set out in section 4(3) the Tribunal is able to make the following findings.

    (a) The financial aspects of the relationship

    (i) There is joint ownership of real estate in this case. The home that Mr Rees shared with his wife during this period is mortgaged in joint names. The St George Bank mortgage documents indicate that the Rees are a married couple;
    (ii) Mr Rees indicated in his evidence that he and Mrs Rees always kept separate bank accounts before and during the marriage. However, as indicated above, the applicant and Mrs Rees shared responsibility for the St George Bank mortgage. Therefore, it can be found that they pooled their financial resources;
    (iii) On the evidence provided by the applicant there are no legal obligations owed by the applicant in respect of Mrs Rees;
    (iv) Mr and Mrs Rees had an informal arrangement for sharing household expenses equally. However, Mr Rees told the Tribunal that his wife paid the majority of the bills and rates and he tried to pay when he could. This arrangement demonstrates a continuing relationship of financial support.

    (b) The nature of the household
      (i) There are no children to this marriage;  

    (ii) During the period in question, Mr Rees told the Tribunal that he and his wife had separate bedrooms and shared the living areas. The applicant said that he and Mrs Rees shared the utilities of the house and the furniture;
    (iii) Mr Rees said that the housework was distributed equally.

    (c) The social aspects of the relationship

    (i) Mr and Mrs Rees are still legally married, however, Mr Rees told that Tribunal that he intends applying for divorce in the near future. On the evidence of the applicant, at no point during the period in question did he or Doreen Rees indicate to anyone that they were separated. Mr Rees told the Tribunal that during this time he still considered himself to be married. It was only later when informed by the Department that it was possible to be "separated under the same roof" that he considered that he may have been separated. Mr Rees indicated to the Tribunal that being a very private person, he did not let many people know about the difficulties in his marriage.
    (ii) Mr Brennan's evidence would suggest that while he assessed the Rees' relationship as having "critical problems", "very tense" and deteriorating, at no time did he consider that the Rees were no longer a married couple;
    (iii) The evidence of Mr Rees was that during this period he and Mrs Rees would go out very rarely together. The applicant told the Tribunal that the only times they went out together were to very occasional family birthdays when both of them were invited. The evidence of Mr Brennan supports this evidence;

    (d) There was no evidence that there was any sexual relationship between the applicant and Mrs Rees during the period of 18 July 1997 to 16 October 1998.      
    (e) The nature of the people's commitment to each other

    (i) Mr and Mrs Rees at the time in question had been married for approximately 21 years;
    (ii) Mr Rees described the relationship he had with Mrs Rees during the period in question, as a "cold war". The applicant told the Tribunal that on one occasion Mrs Rees had attacked him with a knife. However, Mr Rees also described his relationship with Mrs Rees as one where there was some level of companionship and emotional support on his part. Despite living separate lives, Mr Rees did take Mrs Rees to day surgery on one occasion and sought to reconcile with her over a long period of time.
    (iii) From the evidence of Mr Rees and Mr Brennan, it appears that Mr and Mrs Rees had very different ideas about the future of their relationship. Mr Rees told the tribunal that he had attempted reconciliation with Mrs Rees a number of times over a long period of time without success. The applicant also told the Tribunal that he still considers Mrs Rees as his next of kin. Mr Brennan's evidence indicated that Mrs Rees around this time wanted nothing to do with Mr Rees;
    (iv) It became clear during the hearing that Mr Rees considered himself to be in a marriage like relationship with Doreen Rees during the period in question. He told the Tribunal that at the time he would not have described himself as being separated as he believed that a couple separated when one of the couple "walked out the door".

1. Notwithstanding the indicia outlined in section 4(3) the question to be asked is whether in all the circumstances existing, the couple can be said to be in a marriage like relationship. The Tribunal accepted both Mr Rees and Mr Brennan as witnesses of truth and felt that both men gave their evidence to the best of their recollection. Mrs Rees was not called to give evidence at the hearing by either party. At the conclusion of the hearing, the Tribunal was satisfied that her evidence was not required. After considering the evidence of the applicant and Mr Brennan, the Tribunal finds that the applicant and Mrs Rees were living in a marriage like relationship during the period of 18 July 1997 to 16 October 1998.

2. It is clear from all the evidence outlined above in relation to section 4(3), that in all the circumstances Mr and Mrs Rees were still living in a marriage like relationship. Perhaps the most convincing evidence of this was that Mr Rees himself considered that he was living in a marriage like relationship at the time.
   Issue 2

3. Having found that Mr and Mrs Rees were living in a marriage like relationship for the period of 18 July 1997 through to 16 October 1998, the Tribunal must determine whether there is a debt of Newstart Allowance, owed by the applicant due to his failure to report his partner's earnings.

4. Section 1224, outlined above, prescribes that a debt arises when a social security payment recipient failed or omitted to comply with a provision of the social security law or the Social Security Act. Mr Rees does not dispute that he gave incorrect information to the Department in relation to Mrs Rees' income for the period 18 July 1997 through to 16 October 1998, and therefore failed to comply with section 658 of the Social Security Act 1991. Mr Rees' only objection to the debt being raised was that Mrs Rees had given him incorrect information and he believed that he should not be held responsible.

5. The Tribunal finds that the Department has correctly raised a debt in the amount of $2,976.91 in this case. The Tribunal accepts Mr Rees' evidence. It is accepted that Mrs Rees did give incorrect information to Mr Rees. However, it is the responsibility of the recipient to check all information they provide to the Department in relation to their social security payment. If a recipient is unable to verify the information they are providing to the Department, they should alert the Department to this when providing the information. Given the nature of the difficulties Mr Rees has described in his marriage, the Tribunal can not accept Mr Rees' argument that it was reasonable for him to accept the information from his wife without question.
   Issue 3

6. The third issue to be determined in this matter is whether there are any special circumstances in this case to allow for the debt to be waived under section 1237A or 1237AAD of the Social Security Act 1991.

7. The Tribunal asked Mr Rees if there were any special circumstances that the Tribunal could consider in order to waive the debt. Mr Rees said that he believed that the fact that Doreen had given incorrect information to him constituted special circumstances.

8. The fact that Mrs Rees provided incorrect information to the applicant cannot constitute special circumstances within the meaning of sections 1237A and 1237AAD. As outlined above, it is the social security payment recipient's responsibility to verify all information they provide to the Department. If they are unsure of the information, they should notify the Department of this. Mr Rees' failure to do so cannot be categorised as a special circumstance.

9. For these reasons the Tribunal finds that the applicant and Mrs Rees were living in a marriage like relationship during the period of 18 July 1997 through to 16 October 1998, that a debt of $2,976.91 has been correctly raised and that there are no special circumstances to justify waiver of that debt. The Tribunal affirms the decision under review.

   I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Barbour

   Signed:         .....................................................................................
     Associate

   Date/s of Hearing  12 May 2000
   Date of Decision  22 May 2000      
   Solicitor for the Applicant         Self represented             
   Solicitor for the Respondent    Mr George Lozynsky, Centrelink