ROLAND WALLANDER and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2009] AATA 516

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 516

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/5273

GENERAL ADMINISTRATIVE DIVISION		)
Re		ROLAND WALLANDER

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe

Date11 March 2009

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

......................[Sgd]........................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Newstart allowance – Overpayment – Debt raised – Whether income earned – Money received – Income earned – Whether the debt should be written off or waived – Debt cannot be written off as no administrative error – Debt should not be waived as no special circumstances – Decision affirmed

Social Security Act 1991 (Cth) s1237AAD

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565

REASONS FOR DECISION

11 March 2009 Senior Member Bernard J McCabe         

1.      Mr Roland Wallander, the applicant, asked the Tribunal to review a decision of Secretary to the Department of Education, Employment and Workplace Relations, the respondent, to raise a debt against him. A hearing was convened in March this year. At the conclusion of that hearing, I gave an oral decision affirming the decision under review. Mr Wallander subsequently requested written reasons. Although the time limit for making a request for reasons has already passed, it would be convenient for Mr Wallander to have those reasons so that he can pursue his appeal before the Federal Court. These reasons have been distilled from the transcript.

2.      The respondent raised a debt against Mr Wallander because of his failure to declare income earned while he received a Newstart allowance. The debt covered a period from 14 July to 19 December 2007. At this time Mr Wallander received payments for distributing pamphlets and other things for PMP Distributions (“PMP”). Until July 2007, the applicant reported these payments to Centrelink, and his income support payments were adjusted accordingly. He subsequently contacted Centrelink staff and asked them to record his income as zero. He then stopped declaring his income. He claimed that he did not have to declare the payments anymore as he had advice it was earned in the course of a hobby. Upon reviewing the applicant’s income support payments, Centrelink decided the payments should have been disclosed as income and raised the debt.

3.      I have taken note of Mr Wallander’s employment history. He has experienced difficulties over a long period of time in obtaining, or at least maintaining, suitable employment. I also appreciate he is keen to get some work, and that he is looking at a range of possibilities which are within his expertise so he hopefully one day might improve his situation. I accept that the applicant’s intention in going into this particular venture with PMP was perhaps twofold. One was to see whether it could turn into something, in due course, that would be a source of profit. But the venture was also intended to satisfy what he (or Centrelink) regarded as his obligations under the mutual obligation social security system. Over the last few years, in particular, social security has proceeded on the basis that people needed to do things in order to remain qualified for the assistance they receive; they could not just sit about. I accept that Mr Wallander tried to meet his obligations in a good faith way.

4.      I have also taken note that Mr Wallander expressed some concern that the decision under review was confined to the period from 14 July to 19 December 2007. He thought I should also examine whether or not he was required to declare his income to Centrelink over a longer period of time. I indicated to Mr Wallander during the course the hearing that my focus is necessarily on the decision that has been made. While I appreciate the applicant has a larger issue, over a longer period of time, with Centrelink and the decision here might be relevant to how that larger issue is resolved, I must focus on the narrower issue, the period of 14 July to 19 December 2007, when the applicant was doing some work with (or for) PMP.

5.      

Ultimately, in determining whether a debt was correctly raised against

Mr Wallander for the 14 July to 19 December 2007 period, I have to consider whether money he was given for distributing pamphlets for PMP should be characterised as income either earned, derived or received or exempted under the Social Security Act1991 (“the Act”). If I characterised that income as earned, derived or received, a debt could properly be raised, and I would then have to decide whether the applicant’s debt should be written off or waived.

6.      The first issue comes down to a question of how I should treat the money that Mr Wallander received. There is no question that the applicant received an amount of money. Initially, he approached the payments he received on the basis that they should be declared. He said he became increasingly uncertain that that was the right thing to do – and I accept his evidence on that point – until he ultimately reached a view, informed as he said by some advice that he received, that in fact he was not really required to declare that money that he was being paid by PMP.

7.      Mr Wallander also had discussions with the Australian Tax Office (“ATO”), which has its own regime for determining when money should be declared for the purposes of his income tax. The applicant reached a view that it was no longer necessary to declare the payments to Centrelink. He announced that view to Centrelink staff, so he would not be seen to be underhanded about it. Because Centrelink staff were aware of that decision, a process was set in train which has led to the decision under review.

8.      This dispute really turns on the definition of income, since the applicant is required to disclose, in the various forms, his income so that Centrelink can make an assessment of his position and work out whether he is entitled to receive income support payments.

9.      Centrelink’s is engaged in a different exercise to the one carried out by the Australian Taxation Office. Centrelink is trying to work out whether the applicant actually needs help from the taxpayer. Taxpayers do not want to be paying over more in social security assistance than they must. They want to make sure that money which is paid out by the government is spent on appropriate things and that it is not wasted or given away to people who do not actually need it. So the tests are reasonably carefully tailored – not perfectly, but reasonably carefully tailored – to make sure that money like this goes to people who need it.

10. Now, as I noted above, the inquiry into whether Mr Wallander ought to have continued to declare his income proceeds on the basis of some definitions in the Act. Relevantly, s 8(1) of the Act says:

income, in relation to a person, means

(a)an income amount earned, derived or received by the person for the person’s own use or benefit; …

…

income amount, means:

(a)valuable consideration; or

(b)personal earnings; or

(c)moneys; or

(d)profits; …

There is also a definition in s 8(2) of the Act which defines income amounts that are “earned, derived or received” as references to “income amount earned, derived or received by any means”.

11.     These definitions are very broad. “Income amount” means “moneys” that the applicant has received. It may be, for example, that winning some money on the horses or a jackpot in the lottery might be income on those tests, whereas they would not necessarily be income in other circumstances.

12. Are the applicant’s payments from PMP captured by the definitions of the Act? Here we have a situation where the applicant entered into an agreement with someone to perform certain work. He undertook that work and he was paid an amount for doing it. The evidence before me at present does not suggest that the payments to Mr Wallander were made merely on a basis on a reimbursing him for his costs. It does not appear there was any differentiation in respect of those moneys. Mr Wallander was just paid an amount for the work that was done. No matter which way I cut it – whether I try and describe it as a hobby, an employment relationship or a small business operation (and I accept the evidence is not entirely clear about where it falls) – the moneys received by the applicant constitutes income for the purpose of the Act. The fact is that definition is income is so broad that I think it probably catches those things.

13.     It may be that the applicant has been working at cross purposes with Centrelink and the ATO. Centrelink and the ATO play different roles in the larger scheme of things. That is why the legislation is different; that is why the rules are different. It follows from my conclusion there is no alternative but for me to accept that Centrelink made the right decision in relation to the debt because Mr Wallander did receive moneys he was not technically entitled to receive. The moneys he received from his work with PMP should have been declared. That should have been clear from reading the forms,

14.     The issue, then, is whether Mr Wallander should be excused from the requirement to pay the money back. There are a couple of bases upon which repayments can be written off or waived. It is not clear to me that a write off is appropriate in this case. This is because the money can be recovered; indeed, the money is being recovered. There is also no suggestion that the payment of benefits was the product of an administrative error on the part of Centrelink. I cannot detect any error, let alone one that is the sole cause of the problem here.

15. It comes down to whether, under s 1237AAD of the Act, there are special circumstances that would suggest that it is not appropriate for the applicant to repay the amount. The Social Security Appeals Tribunal (“SSAT”) noted that Mr Wallander could only use the special circumstances waiver provision if the payment was received in good faith. The SSAT questioned whether the payment was received in good faith, and there is, I accept, a serious question about that, given the way in which the legislation has been interpreted in cases like Secretary, Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565. In any event, there must be special circumstances. Now, special circumstances are things that make Mr Wallander’s situation different to that of other people.

16.     I have listened to the evidence Mr Wallander gave about his living circumstances and trying to find a job, and I accept he is doing it tough. His living circumstances are not entirely satisfactory. His rent is not inexpensive, particularly given the amount of money the applicant is receiving. I accept that the applicant has difficulty meeting his weekly expenses, but that is not so different from almost everyone who is receiving social security. Mr Wallander’s health is good. He is not responsible for anyone else. There was nothing else that was referred to as special circumstances that I could use to justify a decision to waive the obligation.

17.     So, what is the bottom line of all that? The bottom line is that the debt has to be affirmed, and it is going to have to be repaid. That can continue to be recovered, presumably, by way of the periodic payments.

18.     

In conclusion, while the decision under review has to be affirmed, I suggest

Mr Wallander go back to Centrelink and work with them constructively to see if something can be done to improve his situation.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed:..................................[Sgd]............................................
  Michael Buckingham, Associate

Date of Hearing  11 March 2009
Date of Decision  11 March 2009
Date of Written Reasons          7 July 2009
Applicant was self-represented
Advocate for the respondent     Mr P Flintoft, Centrelink