Risto Mladenov and Secretary, Department of Social Services (formerly Secretary, Department of Families, Housing, Community Services and Indigenous Affairs)
[2015] AATA 99
•24 February 2015
[2015] AATA 99
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/4286
Re
Risto Mladenov
APPLICANT
And
Secretary, Department of Social Services (formerly Secretary, Department of Families, Housing, Community Services and Indigenous Affairs)
RESPONDENT
DECISION
Tribunal Senior Member Egon Fice
Date 24 February 2015 Place Melbourne The decision under review is affirmed.
......................[sgd]..................................................
Senior Member Egon Fice
Catchwords
SOCIAL WELFARE – Pensions, payments and allowances – Disability support pension – suspension and cancellation – suspension due to employment
SOCIAL WELFARE – Pensions, payments and allowances – unemployment allowances – qualification – disqualification due to employment
SOCIAL WELFARE – Overpayments and debt recovery – amounts recoverable – notification of change in circumstances – no notification by applicant of employment
SOCIAL WELFARE – Overpayments and debt recovery – Waiver of debt - generally
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 42A
Social Security Act 1991 (Cth) ss 1223, 1224, 1231, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 68, 69, 74
Cases
Mladenov v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 1129 (31 October 2013)
Mladenov v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2014] FCA 12 (28 January 2014)
REASONS FOR DECISION
Senior Member Egon Fice
24 February 2015
According to the Secretary, Department of Social Services (formerly known as Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and prior to that, Secretary, Department of Education, Employment and Workplace Relations) (the Secretary), between 13 March 1995 and 21 March 1995 Mr Risto Mladenov was receiving a Sickness Allowance. Between 21 March 1995 and 1 April 1996 Mr Mladenov received what was then called a Job Search Allowance. On 2 April 1996 he was transferred to the Newstart Allowance.
Mr Mladenov received Newstart Allowance between 2 April 1996 and 12 September 1996; 15 November 1996 and 1 September 2000; and 26 February 2001 and 5 March 2001. He then applied for and was granted the Disability Support Pension (DSP) which he received between 5 March 2001 and 9 January 2004; and again from 6 May 2005 until and, probably beyond, 20 March 2013.
Following the conduct of a data-match on 2 May 2003 between the records of Centrelink and the Australian Taxation Office (ATO), Centrelink noted significant discrepancies between the two sets of data. Centrelink wrote to Mr Mladenov on 4 June 2003 requesting a response by 9 July 2003. When no response was received, Centrelink suspended Mr Mladenov’s DSP payments on the ground that he was working in excess of 30 hours per week.
On 25 August 2003 Mr Mladenov contacted Centrelink inquiring why his DSP payments had been suspended. He was advised that an employer known as KNM Transport confirmed to Centrelink that he was employed on a full-time basis of at least 40 hours per week and therefore not qualified for the DSP. KNM Transport apparently knew Mr Mladenov by the name Chris Kostov, a name which he had previously used. Mr Mladenov told the customer service officer at Centrelink that he had never heard of KNM Transport and that he had not worked since 1994. Mr Mladenov’s DSP payments were restored while Centrelink undertook further investigations.
Following investigations, Centrelink determined that Mr Mladenov was not entitled to receive DSP payments between 17 November 2001 and 9 January 2004 thereby resulting in a debt owed to the Commonwealth in the amount of $23,529.50. Furthermore, Centrelink determined that Mr Mladenov was not entitled to receive the Newstart Allowance between 27 June 1995 and 25 June 1996 thereby resulting in an additional debt owed to the Commonwealth in the amount of $8,009.30.
Mr Mladenov sought a review of Centrelink decisions regarding DSP and Newstart Allowance payments by an Authorised Review Officer (ARO). The ARO noted that the original debt calculation by Centrelink did not take into account an arrears payment which, when recalculated, added $33.27 to the original debt calculation bringing the DSP debt up to $23,562.77. The ARO notified Mr Mladenov of his decision on 8 February 2008. The ARO also examined Mr Mladenov’s Newstart Allowance debt and confirmed the amount of the debt was $8,009.30. Mr Mladenov was informed of this decision by letter dated 11 February 2008.
Mr Mladenov then sought a review of the ARO decision by the Social Security Appeals Tribunal (SSAT). The SSAT handed down its decision on 10 September 2012 affirming Mr Mladenov’s DSP debt between 17 November 2001 and 9 January 2004 in the amount of $23,562.77. However it decided that the Newstart Allowance debt period should be altered to between 7 September 1995 and 25 June 1996. It remitted that decision to Centrelink directing that the debt be recalculated. Mr Mladenov was notified by letter dated 25 February 2013 that Centrelink had recalculated his Newstart Allowance debt for the period 7 September 1995 and 25 June 1996 which resulted in a debt amounting to $6,458.73.
Mr Mladenov lodged an application with the Administrative Appeals Tribunal (AAT) on 25 September 2012 seeking a review of the SSAT decision.
DISMISSAL BY THE AAT AND REVIEW BY THE FEDERAL COURT
Because this matter has come before me on remittal from the Federal Court, I should briefly explain the basis upon which I proceeded to hear this matter. Ordinarily, on remittal I would be aware of an error of law having been made and the Tribunal would be directed to rehear specific matters affected by such an error or, on some occasions, the entire matter, either on the basis of existing evidence or permitting parties to lodge further evidence. I did not have the benefit of any such directions in this case nor was any error of law identified.
The Tribunal dismissed Mr Mladenov’s application on 13 June 2013 for failure to comply with directions. That was consistent with the provisions set out in s. 42A (5) of the Administrative Appeals Tribunal Act 1975 (the AAT Act).
Mr Mladenov lodged an application for reinstatement on 20 June 2013. He claimed that the dismissal was unfair. On the hearing of his application for reinstatement on 8 July 2013, the Tribunal refused Mr Mladenov’s application on the ground set out in s. 42A (10) of the AAT Act. That is, his application had not been dismissed in error.
Mr Mladenov lodged an appeal with the Federal Court of Australia on the ground that the Tribunal had not accorded him procedural fairness when refusing to reinstate his application in the Tribunal. Marshall J, who heard Mr Mladenov’s appeal, determined that he had not demonstrated that the AAT denied him procedural fairness when refusing to reinstate his application for review of the decision made by the SSAT ([2013] FCA 1129 (31 October 2013)). His Honour dismissed the application with costs.
Mr Mladenov then sought to bring an appeal against the decision made by Marshall J to the Full Court of the Federal Court of Australia. Because his application for leave to appeal was brought out of time, Mr Mladenov was required to make an application for an extension of time in which to file an appeal from the orders of Marshall J. The extension of time application was heard by Mortimer J who decided, on 28 January 2014, to grant Mr Mladenov an extension of time in which to file a Notice of Appeal ([2014] FCA 12 (28 January 2014)).
In her reasons for decision, Mortimer J referred to the claim by Mr Mladenov that a number of documents held by the respondent had not been produced and therefore he was unable to proceed with his hearing before the AAT. Her Honour expressed some concern as to why the AAT exercised its dismissal powers as it did, resulting in what was a dramatic outcome for Mr Mladenov by denying him his right of review on the merits of Centrelink’s decision. She explained that none of those issues appeared to have been fully explored before the primary judge. Her Honour said, at [57] – [58]:
57 It may be that the applicant’s prospects of success on his procedural fairness argument are slim, by reason of the absence of material about the reinstatement decision. However some of that material might be obtainable on appeal and more light might be shed on why the Tribunal appears to have dealt so swiftly and summarily with the reinstatement application. Or, the authorities about s. 42A (5), to which no attention has so far been paid, may render the applicant’s argument unsuccessful.
58 None of this can confidently be predicted on the material as it stands.… It is arguable that the manner in which the reinstatement power was exercised either continued the denial of procedural fairness said to have occurred by the AAT’s decision on 13 June 2013, or was legally unreasonable. Further exploration of the legal and factual issues necessary to determine these matters may reveal the applicant’s arguments to be wrong. However, without that further exploration, which in my opinion is required for the applicant’s arguments to be determined, it is not in the interests of the administration of justice for the applicant to be precluded from an appeal.
On 25 March 2014 the parties in the matter before the Federal Court lodged a joint statement in support of consent orders. That document referred to statements made by Mortimer J in the extension of time application, concluding:
7. The Court has not made any finding that the appellant was in fact denied procedural fairness by the AAT.
8. Nevertheless, based on her Honour’s reasons for judgement of 28 January 2014 for granting the appellant an extension of time to appeal, as summarised above, the respondents have agreed to orders which set aside the decision of the AAT refusing to reinstate the AAT application and which reinstate the AAT Application. The appellant has consented to these orders.
On 25 March 2014 Murphy J made orders by consent as requested by the parties. The orders were:
1. The appeal be allowed.
2. The orders made on 31 October 2013 in proceeding number VID 780 of 2013 be set aside.
3. In substitution for those orders, it be ordered that:
(1) the appeal be allowed.
(2) the decision of the Administrative Appeals Tribunal made on 8 July 2013 in proceeding number 2012/4286, refusing to reinstate the proceeding, be set aside.
(3) proceeding 2012/4286 be reinstated pursuant to section 42A (10) of the Administrative Appeals Tribunal Act 1975.
4. The respondents pay the appellant’s costs of and incidental to the appeal, to be taxed in default of agreement.
The problem with the orders made by Murphy J is that no error of law was identified. Furthermore, s. 42A (10) provides for reinstatement of the application only where it appears to the Tribunal that an application has been dismissed in error. As should be apparent from the above, no error, either administrative or legal, was identified. While that may give rise to questions regarding the validity of those consent orders, doing the best I can in these circumstances, I have treated the reinstatement to have been made on the ground that Mr Mladenov was not accorded procedural fairness when the Tribunal dismissed his application when he was before it for failure to comply with directions. Furthermore, I proceeded having regard to Mr Mladenov’s claim that further relevant documents should be provided to him. On 25 June 2014 I made Directions to give effect to alleviating Mr Mladenov’s concerns regarding those further documents.
NEWSTART ALLOWANCE DEBT
Chapter 5 of the Social Security Act 1991 (the Social Security Act) deals with overpayments and debt recovery. Between 7 September 1995 and 25 June 1996, s. 1224 dealt with debts arising from a recipient’s contravention of the Social Security Act. Relevantly, it provided:
1224 (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 this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth.
The Secretary contended that Mr Mladenov was employed by an entity called Port Link for all or part of the period between 27 June 1995 and 25 June 1996. During the 1996 income year (1 July 1995 – 30 June 1996), the Secretary contended Mr Mladenov was paid a gross salary of $26,065. This information was obtained after Centrelink carried out a data-match with the ATO.
I had in evidence a copy of a tax return lodged by a Mr Chris Kostov for the 1996 income year. Mr Mladenov agreed that he used the name Chris Kostov and, in the course of cross examination by Mr J Lenczner of counsel, who appeared on behalf of the Secretary, agreed that he formally changed his name from Risto Mladenov to Chris Kostov on 19 November 1996. A Change of Name Registration form issued by the Registry of Births Deaths and Marriages was in evidence and it supports what Mr Mladenov said.
The obvious problem for Mr Mladenov is that the income tax returns lodged by his tax agent for the 1995 and 1996 income years are said to be in the name of Mr Chris Kostov. In the course of both of those income years, his name was Risto Mladenov and not Chris Kostov. In fact there was no evidence before me indicating that Mr Mladenov had notified Centrelink that he had changed his name to Chris Kostov in November 1996.
I had in evidence the income tax return filed on behalf of Mr Mladenov (in the name of Mr Chris Kostov) by his tax agent for the 1996 income year. That return discloses his main salary and wage occupation to be a truck driver and that for that income year, he received income in the amount of $26,065, which included $5,843.87 withheld in tax instalments. This information was taken from his group certificate lodged with the income tax return. His employer at that time was stated as Port Link Pty Ltd. Mr Mladenov also recorded having a further $24,580 total business income and, after deductions, $2,407 net income.
In his evidence in chief, Mr Mladenov claimed that his income tax return for the year 1996 was incorrect. He claimed that he had incorrectly lodged with that return the group certificate for the 1995 income year. He said he did not work in the 1996 income year because he was ill. In cross-examination, Mr Mladenov was asked if he submitted an income tax return for the year ended 30 June 1996. His answer was No. Mr Mladenov then attempted to explain that he lodged his 1995 income tax return in 1996 and was therefore somewhat confused. He agreed that he saw his tax accountant in November 1996 and that he gave him a bundle of documents, including a group certificate. He agreed that his tax accountant called him in to sign the tax return lodged at that time. Mr Mladenov attempted to explain that he had income from two sources over the 1995 and 1996 income years. They were from Port Link and from Beacon Transport. Mr Mladenov maintained that he did not recommence employment, after being off work as result of an injury, before September 1996. Despite claiming that his 1996 income tax return was in error, Mr Mladenov agreed in cross-examination that he had never attempted to have that rectified.
On or about 12 September 1996 Mr Mladenov completed a Change of Member’s Particulars Advice in respect of his TWU Superannuation Fund. On that form Mr Mladenov indicated that he commenced employment with Canny Carrying Co Pty Ltd on 12 September 1996. Further, he noted that his previous principal employer was Port Link Transport. When cross-examined about this, Mr Mladenov’s explanation was almost unintelligible. As best I could make out, Mr Mladenov appeared to be maintaining that his previous employer was either Beacon Transport or Linfox. Mr Lenczner then directed Mr Mladenov to a letter from Linfox dated 11 April 1995 addressed to the Department of Social Security. The letter was signed by the Payroll Officer who said that Mr Mladenov was an unincorporated subcontractor who began carting for Linfox from 16 July 1992. He then said:
At the moment Risto is not receiving wages as work cover claims have been rejected. The contractors last physical working day is the 22 of February 1995.
The Authorised Review Officer (ARO), who examined the decision to raise and recover a debt of $8,009.30 for the period 17 November 2001 to 9 January 2004, described in his notes that Mr Mladenov first received the Sickness Allowance from 13 March 1995, transferring to the Job Search Allowance from 21 March 1995. That is in accordance with the Centrelink allowance/benefit history computer printout which I had in evidence. It discloses that Mr Mladenov’s medical certificate expired on 21 March 1995. The ARO said that Centrelink records confirmed that Mr Mladenov received Job Search Allowance between 21 March 1995 and 1 April 1996 when he went on to the Newstart Allowance which he received between 2 April 1996 and 25 June 1996.
The ARO also said that in a conversation with Mr Mladenov about his work in 1995, Mr Mladenov said that Port Link closed down in December 1995 when he stopped working and that he could not possibly have worked for that organisation after December 1995. However, a historical company extract obtained from the Australian Securities and Investments Commission (ASIC) discloses that the company was registered and remained so between 1994 and 1998 when it changed its name to PL Holdings Pty Ltd on 23 February 1998. An application for a winding up order was lodged with ASIC on the 31 March 1998. PL Holdings Pty Ltd went into external administration on or about 29 April 1998. It entered into a Deed of Company Arrangement on or about 20 June 1998. The Deed of Company Arrangement terminated on about 30 June 1999 when the Deed achieved its purpose. Therefore, logically, what Mr Mladenov said about Port Link closing down in December 1995 cannot be correct. That conclusion is further supported by the fact that the ANZ Banking Group Limited lodged a fresh charge over the assets of the company on 27 September 1996. That would not have occurred at that time if the company had not continued trading. In fact, a further charge over the company’s assets was granted to CBFC Ltd on 20 March 1997.
In my opinion, the objective evidence is strongly against Mr Mladenov. The income tax return lodged for the 1996 income year by his tax agent strongly suggests that Mr Mladenov’s income for that financial year was as stated in that return. In particular, it was lodged together with the original of the Group Certificate issued by his then employer which was said to be Port Link Pty Ltd. It is inconceivable that the ATO misconstrued that group certificate as being in respect of the 1996 income year if it stated on its face that it was a Group Certificate for the 1995 income year. Furthermore, it would also mean that Mr Mladenov’s tax agent entered the wrong income figures on the 1996 income tax return. The fact that Mr Mladenov never sought to rectify his 1996 income tax return until such time as the Centrelink issues arose also tells strongly against him.
In addition, the Centrelink records disclose that Mr Mladenov did have a medical certificate in the 1995 income year and that it expired on 21 March 1995. Mr Mladenov then applied for and was granted a Job Search Allowance prior to being transferred to the Newstart Allowance. The fact that he was granted those allowances after 20 March 1995 necessarily indicates he was capable of and looking for employment. It cannot be that he was, at that time, injured to such an extent that he was incapable of working. The form Mr Mladenov submitted to the TWU Superannuation Fund notifying change of employer lists Port Link Transport as his former employer. That was on or about 12 September 1996 when he commenced work with Canny Carrying Co Pty Ltd. Although Mr Mladenov said that could not possibly be so because Port Link Transport ceased its operations in 1995, the historical extract obtained from ASIC indicates otherwise.
In light of the above evidence, I find Mr Mladenov did not declare to Centrelink payments he received between 27 June 1995 and 25 June 1996 from Port Link. Nevertheless, for the reasons given by the SSAT in its decision made on 10 September 2012, it is likely that a compensation charge was recovered which was equivalent to the Sickness Allowance and Job Search Allowance paid to Mr Mladenov up to 6 September 1995. For that reason, I agree with the SSAT decision that the period for the recoverable debt in respect of this aspect of Mr Mladenov’s claim is 7 September 1995 to 25 June 1996.
DISABILITY SUPPORT PENSION DEBT
The Secretary submitted that Mr Mladenov incurred a debt for overpayment of DSP between 17 November 2001 and 9 January 2004. During that period of time, s. 1223 of the Social Security Act dealt with debts due to the Commonwealth in the following way:
1223 (1) Subject to this section, if:
(a)the 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 Secretary contended that Mr Mladenov commenced employment with KNM Transport Pty Ltd (KNM Transport) from 29 November 2001. In a statement recorded by a Centrelink officer on 14 January 2002 (although there was some dispute about this and that it was possibly intended to be 6 January 2004 as is indicated by an entry on a Centrelink computer file note record system), Mr Ken Richards, a director of KNM Transport, who was shown a photograph by Centrelink, identified the employee as Mr Chris Kostov. He explained that Mr Kostov was a casual employee prior to becoming a full-time employee. Mr Richards said Mr Kostov commenced casual employment on 5 December 2001. At the time of making the statement, Mr Richards said Mr Kostov was currently employed on a full-time basis.
Centrelink subsequently obtained weekly salary payment details from KNM Transport in respect of Mr Mladenov’s employment. The first entry, under the heading Week Ending, is dated 5 December 2001 indicating that for that particular week, Mr Mladenov worked 46 ¼ hours resulting in a gross payment to him of $647.50. While the written statement recorded by the Centrelink officer indicates that Mr Mladenov commenced work on 5 December 2001, it is most likely inaccurate. It appears to have been taken from the payroll records without regard to the fact that the first entry recorded a payment for the week ending 5 December 2001. Given 5 December 2001 was a Wednesday, it is reasonable to assume that for pay purposes, his start date must have in fact been on Thursday, 29 November 2001. That appears to be the basis upon which Centrelink calculated Mr Mladenov’s overpayment and it also accords with the decision made by the SSAT. The SSAT explained that his pension period around that time commenced on 17 November 2001 and, being a fortnightly payment, concluded on 29 November 2001 when it was taken Mr Mladenov had commenced part-time employment with KNM Transport.
The recipient of a Social Security payment has a continuous reporting obligation to Centrelink. This usually happens in response to the regular letter sent by Centrelink to the Social Security recipient in accordance with s. 68 of the Social Security (Administration) Act 1999 (the Administration Act). The relevant provisions are:
68 (1) Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or senior supplement) is being paid.
(2) The Secretary may give a person to whom this subsection applies a 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.
(c)give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.
…
(4)An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might:
(a)affect the payment of the social security payment or the person’s qualification for the concession card, as the case requires; or
(b)affect the operation, or prospective operation, of Part 3B in relation to the person.
Section 69 of the Administration Act also deals, in similar terms to those set out in s. 68, with the person who has received the social security payment who is not then receiving that payment but to whom payment has at any time been paid.
Section 74 of the Administration Act deals with the failure to comply with the notice from Centrelink. It provides:
(1) A person must not refuse or fail to comply with a notice under section 67, 68, 69, 70 or 70A.
Penalty: Imprisonment for 6 months.
(2) Subsection (1) applies only to the extent to which the person is capable of complying with the notice.
(3) Subsection (1) does not apply if the person has a reasonable excuse.
The Secretary contended that Mr Mladenov failed to comply with his obligation to notify Centrelink that he had commenced employment with KNM Transport. Mr Mladenov disputed that contention. There was no evidence that Mr Mladenov offered a reasonable excuse for non-compliance.
In his evidence-in-chief Mr Mladenov said that immediately after the first week he was employed by KNM Transport, he notified Centrelink of that fact. He suggested that it may have been 6 or 14 January 2004 when he rang Centrelink notifying them that they should stop paying him that the DSP. In fact Mr Mladenov was adamant that he called Centrelink on three occasions but they did nothing about it. He referred to a Centrelink printout of Pensions Status History and in particular an entry dated 10 January 2004 which indicated he had returned to work 30 hours (presumably per week) which was followed by the words NOTIFY < 14 DAYS. The problem with Mr Mladenov’s understanding of that entry is that he has omitted the abbreviation SUS indicating the status of his DSP payments as at that date. Quite plainly, that indicates that his DSP was suspended on 10 January 2004 and that Centrelink was to notify him within 14 days of that suspension. It is not, as he claimed, an entry made as a result of what he said he told Centrelink.
When cross-examined about him notifying Centrelink of his employment with KNM Transport, Mr Mladenov said that if Centrelink sent him the money after being notified, he believed he was entitled to some part of the money and that in any event he didn’t care. He said it was their mistake and they had to fix that.
Mr Mladenov was directed to a note on the Centrelink computer dated 19 August 2003. The text of that file note is as follows:
Cust suspended as working more than 30 HRS/WK (see text)
Cust has been suspended as employer report from KNM transport verified
That A/N has been employed on casual basis from 5/12/01, then F/T from 18/4/02. Spoke to Andrea Richards who confirmed that Cust is still employed working at least 40 HRS/WK, more with O/T. Cust has not advised of employment or declared any earnings. OVP [overpayment] to be investigated.
That entry was followed by an entry dated 25 August 2003 where it appears Mr Mladenov phoned Centrelink and he was transferred to the Compliance Section. The text recorded by Centrelink is as follows:
A/N Rang re susp of DSP-said he hasn’t worked since 1994.
A/n rang re suspension of DSP. I explained to cust that KNM Transport confirmed that he is employed on f/t basis of at least 40 hrs per week, therefore he is not qualified for DSP. He said that he has never heard of this employer and hasn’t worked since 1994. I asked cust if he has any ATO correspondence which can verify his Tax File No. He said he will have a look and advise if he has it. I advised cust that I will restore his DSP for now but that employer will be contacted to verify identity.
In response, Mr Mladenov suggested that the reference to 1994 must have been a reference to his ex-partner. Mr Mladenov then suggested that what the Centrelink officer had referred to was KNM Transport, Tullamarine. That is why he said he had never heard of that employer because he worked for KNM Transport, South Kingsville.
With respect to Mr Mladenov, that is anything but a convincing argument. He had previously indicated he was aware he was receiving payments from Centrelink to which he was not entitled and had told Centrelink officers just that. He was now suggesting that because somebody referred to KNM Transport at Tullamarine, he was not required to explain that he was working for that transport company but at a different location. Following a convoluted response which is almost unintelligible, when it was put to Mr Mladenov that the file note must be correct because it referred to him ringing Centrelink, he said it was probably wrong and that he never rang. Frankly, these statements beggar belief. I cannot accept them as accurate. There are a number of independent recordings on the Centrelink computer indicating that Mr Mladenov phoned Centrelink because it had suspended his DSP payment. Furthermore, not one of those file notes refers to KNM Transport at Tullamarine. They simply referred to KNM Transport. Logically, having been notified of suspension and noting that he was no longer being paid the DSP, he would have called Centrelink to find out why that was the case.
The above state of the evidence causes me to find that Mr Mladenov failed to notify Centrelink that, while receiving DSP payments, he had commenced employment with KNM Transport on about 29 November 2001. Those DSP payments continued until temporarily suspended in 2003 but then resumed. After Centrelink confirmed Mr Mladenov’s employment with KNM Transport, his DSP payments were finally suspended in 2004.
I have no reason to doubt the accuracy of Centrelink’s calculation of the overpayment which occurred as a consequence of Mr Mladenov’s failure to notify his resumption of employment. Accordingly, I find that Mr Mladenov was overpaid in the sum of $23,562.77 for the period between 17 November 2001 and 9 January 2004.
WAIVER OF DEBTS
Although Mr Mladenov did not put forward any evidence or make any submissions regarding the possibility of waiver of debt, for the sake of completeness, I should examine such a possibility.
There are circumstances under which the Secretary must waive the right to recover a debt and there are also circumstances where the Secretary may waive all or part of the debt at his or her discretion.
Compulsory waiver
Section 1237A of the Social Security Act deals with waiver of debts on grounds of administrative error. It provides:
(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.
(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.
The significant aspects of this legislation are that the debt must have arisen solely because of an administrative error and the payments which gave rise to the debt were received in good faith.
However, having closely examined the evidence, I am not satisfied that either the Newstart Allowance debt or the DSP debt is attributable solely to administrative error. Both debts arose out of the failure of Mr Mladenov to notify Centrelink of a change in circumstances as required in the regular notices sent to him at the time he was receiving those payments. Those notices required Mr Mladenov to tell Centrelink within 14 days if he started work or recommenced work. Mr Mladenov failed to notify Centrelink of earnings he received from Port Link and from KNM transport. Furthermore, as the Secretary contended, he made false representations to Centrelink in 2003 that he had not worked since 1994 and that he did not work for KNM Transport. It necessarily follows that Mr Mladenov cannot take advantage of the waiver provisions set out in s. 1237A of the Social Security Act.
Discretionary waiver
Section 1237AAD of the Social Security 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.
Once again, the problem for Mr Mladenov is that the evidence discloses that he failed to comply with the notices given to him by Centrelink regarding starting work or recommencing work. It was that failure which caused the debts to arise. Furthermore, his statements given to the Centrelink officer that he had not worked since 1994 and that he had never worked for KNM Transport were plainly false and misleading. Therefore, Mr Mladenov cannot take advantage of s. 1237AAD of the Social Security Act.
Even if I am wrong about that, I did not have any evidence of special circumstances in this case. Therefore, I cannot find that it was desirable to waive either part or all of the debts in question.
There is also provision in the Social Security Act for debts to be written off. Effectively, if that provision were to apply, the recovery of debts could be delayed. It does not mean that the debts are entirely erased. Once again, I did not have any evidence before me which would permit me to assess whether the debts incurred by Mr Mladenov should be written off. I am therefore not in position to make a decision one way or the other regarding the possibility of writing off the debts in question. I did however have evidence that Mr Mladenov continues to be in receipt of DSP payments.
Part 5.3 of the Social Security Act deals with methods of recovery of debts. In particular, s. 1231 (1) provides that the amount of the debt may be recovered by making deductions of amounts from any social security payments. Therefore, on its face, there is no reason why Mr Mladenov could not repay the debts he owes to the Commonwealth by way of deduction from his DSP payments.
CONCLUSION
Relying on the objective evidence before me, I have found that Mr Mladenov did not disclose to Centrelink the fact that he was employed by Port Link between 27 June 1995 and 25 June 1996. During the time when he was receiving social security payments, their descriptions changed, but finally they were referred to as Newstart Allowance. That failure to disclose was contrary to notices he received from Centrelink and contrary to his obligation to comply with the Social Security Act. I agree with the SSAT’s decision that the recoverable debt period is between 7 September 1995 and 25 June 1996. I also agree with the subsequent reassessment of the debt for this period being $6,458.73.
I have also found that Mr Mladenov did not disclose to Centrelink that he was employed by KNM Transport between 17 November 2001 and 9 January 2004. Again, this was contrary to his obligation to notify Centrelink of this fact in accordance with the Social Security Act. Therefore, I have found that the decision made by the SSAT in respect of this debt in the amount of $23,562.77 was correct.
I have found that Mr Mladenov does not satisfy the requirements for waiver of those debts, either on the ground of administrative error or special circumstances. I have also found there are no grounds on which to establish that the debts should be written off.
It necessarily follows that I affirm the decision made by the SSAT on 10 September 2012 regarding the Newstart Allowance debt and the DSP debt save for the amount of the Newstart debt, which should be in the amount of $6,458.73.
I certify that the preceding 58 (fifty eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member Egon Fice. .......................[sgd].................................................
Associate
Dated 24 February 2015
Date(s) of hearing 5 November 2014 Applicant In person Counsel for the Respondent Mr J Lenczner Solicitors for the Respondent Australian Government Solicitor
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