ROSA MARUCA and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2012] AATA 182
•28 March 2012
[2012] AATA 182
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/3556
Re
ROSA MARUCA
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Ms A F Cunningham (Senior Member)
Date 28 March 2012 Place Hobart The decision under review is affirmed.
[Sgd Ms A F Cunningham]
Ms A F Cunningham (Senior Member)
CATCHWORDS
SOCIAL SECURITY - overseas age pension - applicant failed to advise of increase in income received from Italian pension payments - decision under review to raise and recover overpayments affirmed
LEGISLATION
Social Security Act 1991, ss 8(1), (2), 55, 1064-E1, 1064- E10 to E12, 1223, 1236, 1237A, 1237AAD
Social Security (International Agreements) Act 1999
Schedule 2 - the Agreement on Social Security between Australia and the Republic of ItalyREASONS FOR DECISION
Ms A F Cunningham (Senior Member)
The applicant, Rosa Maruca, seeks the review of a decision of the Social Security Appeals Tribunal (SSAT) made on 23 June 2011, which affirmed a Centrelink decision to raise and recover a debt of age pension in the sum of $7,419.62, for the period 26 December 2002 to 30 December 2009 (the relevant period).
As Mrs Maruca resides in Italy, the parties agreed that the Tribunal would determine the application for review on the basis of the material before it.
In Mrs Maruca’s application for review she asks that her grounds be taken into consideration but provided no further evidence in support of her objection of the SSAT’s decision. The respondent submitted a Statement of Facts and Contentions and documents tendered pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.
ISSUES
The issue for the Tribunal to determine is whether Mrs Maruca was paid $7,419.62 more than her entitlement to age pension, and if so, whether she should repay the amount.
BACKGROUND FACTS
Mrs Maruca has been in receipt of Australian age pension from 7 October 2002 and has lived in Italy throughout the relevant period. Her pension has been paid pursuant to the provisions of the International Social Security Agreement between Australia and Italy.
Mrs Maruca received Australian wife pension until she reached age pension age on 7 October 2002, at which time she was transferred to Australian age pension (age pension).
Throughout the relevant period Mrs Maruca has been in receipt of various pension payments from Italy, the details of which are contained in the Section 37 documents at ST1, pages 94 to 115.
Throughout the relevant period each payment was assessed as income and affected the rate of Mrs Maruca’s age pension.
The amounts assessed remained unchanged throughout the relevant period until a review of Mrs Maruca’s circumstances in early 2010 revealed that the pension amounts had increased each year. (ST1).
Centrelink accordingly recalculated Mrs Maruca’s entitlement taking into account the revised income amounts of Italian pension. On 17 June 2010 Centrelink determined that in the relevant period, Mrs Maruca had been overpaid $7,419.62 and that the amount was a debt which must be repaid. Mrs Maruca has been repaying the amount by regular withholdings from her age pension.
THE LEGISLATION
The relevant law is contained in the Social Security Act 1991 (the Act), the Social Security (International Agreements) Act 1999 (the International Act) and Schedule 2 – the Agreement on Social Security between Australian and the Republic of Italy (the Agreement).
Payment of an age pension is subject to an income test. Section 55 of the Act provides that a person’s rate of age pension is calculated using the Pension Rate Calculator A at the end of section 1064 of the Act.
The Pension Rate Calculator A includes modules for assessing ordinary income and assets. Section 1064-E1 provides the module for calculating the effect of a person’s ordinary income on the maximum rate of payment.
Ordinary income is defined in section 8(1) of the Act. Sub-section 8(2) provides that income earned, derived or received by any means and from any source within or outside Australia is included within the definition. The Tribunal accepts that the Italian pension payments received by Mrs Maruca constitute ordinary income for the purposes of Module E. There is nothing in the Agreement or the Act that excludes or modifies the assessment of these payments.
Under the Method Statement contained in section 1064-E1 where a person’s income exceeds the income free area, step 6 directs that the rate reduction be determined pursuant to sub-sections 1064-E10 to 1064-E12.
The Secretary calculated that during the relevant period Mrs Maruca’s income exceeded the income free area and thus affected her rate of age pension. However as Mrs Maruca’s age pension had been calculated on the previously advised fixed rate of income, the Secretary determined that Mrs Maruca had been paid more age pension than her correct entitlement.
Section 1223 of the Act provides that where a person receives more than their correct entitlement, the amount is a debt owing to the Commonwealth.
Section 1236 of the Act provides for the write-off of debts in certain circumstances. The Tribunal accepts that this section has no application to the present circumstances.
Under section 1237A of the Act recovery of a debt shall be waived where it arose solely from administrative error and the payments were received in good faith. As there is no evidence that the debt was the sole consequence of an administrative error, the provision has no application.
DISCUSSION
It is the Secretary’s evidence that on 27 September 2002, Mrs Maruca was sent a letter that included a paragraph advising her of her obligation to inform the Secretary of increases in her income. A copy of the letter is contained at T11 page 56. Copies of further similar letters are contained in the T Documents at T11 pages 56 to 87.
It is contended by the Secretary that although Mrs Maruca’s income increased, she failed to advise of those increases despite her knowledge that her rate of age pension was income tested and would be affected by the increased of her Italian pension payments.
This evidence is not contested by Mrs Maruca. The Tribunal accepts the Secretary’s contention that the debt did not arise solely from administrative error and that Mrs Maruca did not receive her Australian age pension payments in good faith.
Section 1237AAD of the Act allows for waiver of recovery of debt in special circumstances if the recipient did not knowingly contravene a provision of the Act.
It is contended by the Secretary that as Mrs Maruca was aware that her income affected her rate of Australian age pension and that that income had increased and yet she failed to fulfil her obligation to advise of that increase. For this reason Mrs Maruca must fail to satisfy the threshold test regarding a knowing contravention.
Mrs Maruca has provided no evidence in response to the Secretary’s contention. The Tribunal accepts that she would have been aware of the increased rate of her Italian pension payments and through the advice contained in the letters forwarded to her on a regular basis by Centrelink, would also have been aware of her obligation to advise of her increased income and failed to do so. There is no evidence that Mrs Maruca did not receive the correspondence from Centrelink or that any of the letters were returned. The Tribunal is accordingly satisfied that the threshold provision contained in section 1237AAD being a failure to comply with a provision of the Act as to notification of increased income is not satisfied. For this reason the Tribunal finds that it is not appropriate to waive the right to recover all or any part of the debt.
The Tribunal is satisfied that the debt raised in the sum of $7,419.62 has been correctly calculated in accordance with the provisions of the Act and is recoverable.
For these reasons the decision under review is affirmed.
I certify that the preceding 27 (twenty seven) paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Senior Member).
[Sgd R Hunt]
Administrative Assistant
Dated 28 March 2012
Date(s) of hearing Hearing on the papers
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