Samandar and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 723

Administrative Appeals Tribunal

DECISION AND WRITTEN REASONS FOR ORAL DECISION [2008] AATA 723

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0925;

GENERAL ADMINISTRATIVE DIVISION		)               2008/1002
Re		BASIL SAMANDAR and JEHAD SAMANDAR

Applicants

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal   Senior Member, Mrs Josephine Kelly

Date of oral decision        14 July 2008

Date of written reasons    19 August 2008

Place  Sydney

Decision The reviewable decisions are affirmed.  

...................[sgd].........................

Senior Member
  Mrs Josephine Kelly

CATCHWORDS

SOCIAL SECURITY – Disability support pension – Wife pension – Debt raised and recovered – Whether debts correctly calculated – Ordinary income – Maximum Payment Rate - Member of a couple – Held debts correctly calculated – Reviewable decisions affirmed

Administrative Appeals Tribunal Act 1975, s 43

Social Security Act 1991, ss 117, 159, 1064-E1, 1233, 1237A , 1237AAD

WRITTEN REASONS FOR ORAL DECISION

19 August 2008 Senior Member, Mrs Josephine Kelly     

1. At the conclusion of the hearing of this matter, the terms of the decision made and a summary of the reasons for that decision were stated orally. The Applicants requested that the Tribunal furnish a statement in writing of the reasons for its decision pursuant to sub-section 43(2A) of the Administrative Appeals Tribunal Act 1975.

BACKGROUND

2.      The Applicants in these proceedings, Mr Basil and Mrs Jehad Samandar, are husband and wife. Mr Samandar received disability support pension (DSP) between 17 July 2002 and 1 July 2003. Mrs Samandar received a "wife pension" over essentially the same period (until 30 June 2003). Records from the Australian Taxation Office indicate that Mr and Mrs Samandar’s income for the 2002/2003 financial year was $9,600. However Mr and Mrs Samandar only declared $4,800 to Centrelink for that financial year.

3.      Consequently, in April 2007 Centrelink decided to raise and recover debts of $824.64 from each of them for the periods between July 2002 and July 2003. An authorised review officer (ARO) affirmed the decision in August 2007. Mr and Mrs Samandar unsuccessfully sought review of the ARO’s decision in the Social Security Appeals Tribunal (SSAT), which affirmed the decision to raise and recover the debts from each of them on 4 February 2008. They now seek review of the SSAT’s decision in this Tribunal.

ISSUES

4. The issue for decision is whether debts have been correctly calculated under the Pension Rate Calculator A and Module E of s 1064 of the Social Security Act 1991 (the Act).

LEGISLATION

5. Section 117 and 159 of the Act provide that the rate of a person’s DSP and wife pension must be calculated using the Pension Rate Calculator A, which appears in s 1064 of the Act. Module E of s 1064 of the Act sets out the effect of a person’s ordinary income on a person’s maximum payment rate, providing in part:

Effect of income on maximum payment rate

1064-E1 This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

Method statement

Step 1.           Work out the amount of the person’s ordinary income on a yearly basis.           

Note:  for the treatment of the ordinary income of members of a couple see point 1064-E2.

Step 2.           Work out the person’s ordinary income free area (see points1064-E4 to 1064-E9 below).

Note:   a person’s ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person’s maximum payment rate.

Step 3.           Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.

Step 4.           If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 5.           If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 6.           Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 1064-E10 to 1064-E12 below.

6.      Section 1064-E2 of the Act provides:

Ordinary incomes of members of a couple

1064-E2        If a person is a member of a couple, add the couple’s ordinary incomes (on a yearly basis) and divide by 2 to workout the amount of the person’s ordinary income for the purposes of this Module.

7.      Section 1064-E4 states that a person’s ordinary income free area is to be calculated using Table E-1 contained in the section. Note 4 of the Table states “the basic free area limits are indexed annually in line with CPI increases”.

8. Section 1064-E10 of the Act provides:

A person’s reduction for ordinary income is

ordinary income excess x 0.4.

MR AND MRS SAMANDAR’S CONTENTIONS

9. Mr Samandar and Mrs Samandar presented their cases themselves. In his written submissions Mr Samandar said that the dispute he, and I understand Mrs Samandar, had with Centrelink was about the interpretation and application of the provisions in s 1064 of the Act. He contended Centrelink had used the wrong formula:

The dispute between US and Centrelink is the interpretation of the various clauses concerning reductions from pensions when a person or a couple earns more than the allowable free area.

Our contention is that as a couple our ordinary income should be divided by 2, deduct from the result the free area & multiply that by 20% (20 cents in the dollar).

To do this in figures:  our total additional income in 2002/2003 was 9600

So 9600 / 2 = 4800 each

In 02/03 the allowable free area was 204 per fortnight = 5304 pa

So 5304 / 2 is 2652 per person

Therefore our pension should reduce 20 cents in the dollar for each Dollar earned over the free area meaning 4800 – 2652 = 2148 X 20% Equals 429.60 each.

1064-E2 is very clear about dividing a couple’s income quote “if a person is a member of a couple, add the couple’s ordinary income (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income for the purpose of this module”.

By the way the underlining emphasis was done by Centrelink in the letter they sent me and not by me.

I think Centrelink bases their calculations mainly on 1064-E10 which states that ordinary income excess x 0.4 but conveniently forgetting that this was repealed and substituted by Act No 57, 1996 & Act. No. 68, 1999.

That clearly states:

“1064-E10 A person’s reduction for ordinary income is worked out by dividing the person’s ordinary income excess by 2”

I believe this alone should clinch my case.

Also in the News for Seniors Autumn 2008 Issue 73, it is clearly enunciated in paragraph 5 page 23 that “income over these amounts reduces the rate of pension payable by 40 cents in the dollar for single pensioners and 20 cents in the dollar each for couples”

If the framers of all those clauses dealing with pension reduction intended that a couple or single person pays the same amount, then we don’t need all those clauses, they are superfluous.

This is exactly what happened with us.  If I was single I would have paid the 1650 alone.  So why do we need all these articles differentiating between singles and couples. It would have been enough to say that it would reduce by 40 cents in the dollar and in case of a couple they pay 50% each.

Even if you still think that all those clauses are open for different interpretation then we (Pensioner Earners) should be given the benefit of the doubt.

…

10.     In support of their case at the hearing, Mr Samandar tendered two copies of a  document entitled A Guide to Commonwealth Government payments. The first copy had the following handwritten annotation on it:  “downloaded from the internet in 2003”.  Under the heading Chart C – Income Test for Pensions the document stated the income test for pensions for a couple (combined) was up to $212 per fortnight and less than $2064 for a part pension. The second copy, which I understood had been downloaded from the internet in 2008, put the same figures at $232 and $2530.50, respectively.

CONSIDERATION

11.     I accept the contentions made on behalf of the Secretary.  Mr and Mrs Samandar’s debts were calculated in accordance with the Steps set out in Module E, as reproduced in the table below contained in the Secretary’s Statement of Facts and Contentions:

Step 1	Work out the amount of the person’s ordinary income on a yearly basis. s.1064-E2: For couples, add income for both then divide by 2:	$9,600 + $4.52 p.a. (deemed income from financial investment) = $9,604.52  ¸ 2 = $4,802.26
Step 2	Work out the person’s ordinary income free area limit (Limits are legislated, limit in 2002/2003 were [sic])	$2,652.00
Step 3	Work out whether the person’s ordinary income exceeds the person’s ordinary income free area. This is the ordinary income excess.	$4,802.26 - $2,652.00 = $2,150.26
Step 4	If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.	[this step doesn’t apply in this case.]
Step 5	If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area. s.1064-E11: A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.	Ordinary income excess = $2,150.26
Step 6	Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points s.1064-E10 to s.1064-E12 below. s.1064-E10. A person’s reduction for ordinary income is:   Ordinary income excess x 0.4	Reduction for income = ordinary income excess x 0.4 = $2,150.26 x 0.4 = $860.104 This is the amount by which your pension is reduced.

12.     I accept that the above table correctly represents how Module E of s 1046 of the Act is applied to Mr and Mr Samandar’s circumstances, and that the figures in the right hand column are correct. At the hearing, each of the steps outlined in Module E was carefully considered and applied. 

13.     Both Mr and Mrs Samandar received $10,194.26 each by way of pension, but each was entitled to $9,334.16.  The sum of $860.10 was an overpayment in each case.  Those sums are debts due to the Commonwealth (s 1223(1) of the Act).   These amounts are higher than the debts actually raised, of $824.64. However, no argument was put to me by the Secretary that I should increase the debt amount.

14. Although not relied upon by Mr and Mrs Samandar in these proceedings, it is appropriate to state that, on the material before me, there were no special circumstances upon which the debt could be waived (s 1237AAD of the Act), or that demonstrated any administrative error by Centrelink which would justify waiver, pursuant to s 1237A of the Act.

15.     The material Mr Samandar relied upon in support of his case was dated 2003 and 2008. There was no evidence that he and Mrs Samandar relied on any publications issued by Centrelink to explain their failure to disclose the correct amount of their income for the 2002/2003 financial year when they declared their earnings.   There was no explanation for that failure.  Rather, their case was an "after the event" attempt to have their debts set aside or reduced.  

16.     I note that Mr and Mrs Samandar have repaid the debts and are currently in receipt of DSP and wife pension.

DECISION

17.     In my opinion the correct or preferable decision is to affirm the decisions under review.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member,
Mrs Josephine Kelly.

Signed: ………[sgd]….…..

Steven Mulipola, Associate

Date of hearing:  14 July 2008

Date of oral decision:  14 July 2008

Date of written reasons:  19 August 2008

Representative for the Applicants:           Self-represented

Solicitors for the Respondent:                  Centrelink Legal Services