SD and Secretary, Department of Social Services
[2014] AATA 764
•23 October 2014
[2014] AATA 764
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/6334 & 2013/6335
Re
SD
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Ms J L Redfern, Senior Member Date 23 October 2014 Place Sydney The decisions under review are affirmed.
..................[sgd]...............................................
Ms J L Redfern, Senior Member
CATCHWORDS
SOCIAL SECURITY – debt – whether applicant was a member of a couple – whether there is any special reason to not treat applicant as a member of a couple – whether debt should be written off or waived – debts incurred over period of 10 years – question whether debts “irrecoverable in law” – whether officer became aware or could reasonably be expected to have become aware of circumstances giving rise to the debt – capacity to repay – decisions affirmed
LEGISLATION
A New Tax System (Family Assistance) Act 1999 s 21, Sch 1
A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 86, 88, 90, 95, 101
Social Security Act 1991 ss 4, 24, 1223, 1231, 1232, 1233, 1236, 1237, 1237A, 1237AADSocial Security (Administration Act) 1999 s 66A
CASES
Boscolo v Secretary, Department of Social Security [1999] FCA 106; (1999) 90 FCR 531
Cocks v Centrelink [2000] FCA 1248
Lynam v Director-General of Social Security (1983) 52 ALR 128
Pelk v Secretary, Department of Family and Community Services (2006) 151 FCR 546
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Martyniak and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 5; (2011) 54 AAR 188Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164
REASONS FOR DECISION
Ms J L Redfern, Senior Member
23 October 2014
INTRODUCTION
The applicant, Mrs SD, and Mr AD have been married since 1999. The marriage was arranged and it is common ground their marriage has been turbulent for many years. They have four children.
On 1 May 2002 Mrs SD applied for the parenting payment at the single rate on the basis she and Mr AD were separated. Her application was granted effective from 23 April 2002. Mrs SD also claimed the family tax benefit and from 1 May 2003 the benefits were claimed on the basis that she and Mr AD were separated. Mrs SD received the parenting payment (single) from 23 April 2002 until Centrelink cancelled her entitlements and raised a debt of over $49,000 on the grounds that Mrs SD had been overpaid. On 23 May 2013, Centrelink raised three debts totalling $3,032.77 in respect of family tax benefits that were said to have been overpaid for the 2009 to 2012 financial years.
The decisions followed an investigation by Centrelink that commenced in April 2012. The basis for the decisions was that from 23 April 2002 Mrs SD was partnered and was not entitled to receive benefits at the single rate and without having regard to Mr AD’s income.
Mrs SD applied for internal review of these decisions. An authorised review officer accepted that Mr and Mrs D were separated from 23 April 2002 until 15 April 2003, thereby reducing the debt claimed, but otherwise rejected Mrs SD’s claim. She applied for a review of the decisions to cancel the parenting payment (single) and raising of the debts arising from the overpayment of parenting payment and family tax benefit to the Social Security Appeals Tribunal (SSAT), which affirmed the decisions.
Mrs SD has now applied for review of the decisions of the SSAT to this tribunal. She contended that even though Mr AD returned to live in the matrimonial home from April 2003, nothing had changed and they were separated while living together under the one roof.
Given the debt was based on the assessment that Mrs SD was wrongly paid benefits at the single rather than the partnered rate for the period 15 April 2003 to 22 May 2013, the critical issue for determination was whether Mrs SD was partnered, namely a member of a couple, during the relevant period.
If I find Mrs SD was a member of a couple, further issues arise as to whether there is special reason Mrs SD should not be treated as a member of a couple or whether the debt, or any part of the debt, should be written off or waived in the circumstances of the case.
STATUTORY FRAMEWORK AND ISSUES IN DISPUTE
The relevant legislation is the Social Security Act 1991 (the SS Act), the Social Security (Administration) Act 1999 (the SS Administration Act), A New Tax System (Family Assistance) Act 1999 (the FA Act) and A New Tax System (Family Assistance) (Administration) Act 1999 (the FA Administration Act).
Generally, a person is eligible to receive a family tax benefit if they have at least one “FTB child” and are an Australian resident (FA Act, s 21). The family tax benefit is calculated using the rate calculators in Schedule 1 of the FA Act. If the person who claims the family tax benefit is a “member of a couple”, their partner’s income is taken into account when calculating the rate of the family tax benefit payable. For the purposes of the FA Act, the definition of when a person is a member of a couple has the same meaning as that contained in s 4(2) of the SS Act.
There is no contest that at the relevant time Mrs SD had three children that met the definition of a “FTB child” for the purposes of the FA Act. There is also no contest that Mrs SD received three payments of the family tax benefit between 2009 and 2012 and that these payments did not take into account Mr AD’s income for the purposes of calculating the rate of the family tax benefit to which she was entitled.
The parenting payment is an entitlement paid to parents or guardians to assist with the costs of raising children. The rate of the benefit paid is worked out differently depending on whether or not the person is partnered. When a person is partnered the rate of pension is less than the single rate of pension. The partner’s income is also taken into account when the rate payable is calculated.
The SS Act provides that a person is “partnered” if the person is a “member of a couple” (s 4(11)). Relevantly, a person is a “member of a couple”, if the person is legally married to another person, and is not living separately and apart from the other person on a permanent or indefinite basis (s 4(2)(a)). Section 4(3) of the SS Act provides that when determining whether a person is a “member of a couple” all the circumstances of a relationship must be considered, including the following:
(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 …
Section 24(1) of the SS Act gives the Secretary the discretion to treat a person as not being a member of a couple and allow payment at the single rate even though the person is a member of a couple and provides as follows:
(1) Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
Section 1223 of the SS Act provides that if a social security payment is made and the 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 and is taken to arise when the person obtains the benefit of the payment. Section 71 of the FA Administration Act is in similar terms in respect of the payment of family tax benefit to which the person was not entitled.
Section 1236 of the SS Act provides that a debt may be written off in the following circumstances:
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
Section 1236(1C) provides when a person has “capacity to pay” as follows:
For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor's social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 ; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
Section 1237 of the SS Act provides that the Secretary may waive recovery of a debt in limited circumstances. The Secretary must waive a debt that is attributable solely to an administrative error made by the Commonwealth (s 1237A). Relevantly, a debt may be waived under s 1237AAD, which provides:
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, 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.
Sections 95 and 101 of the FA Administration Act are in similar terms to ss 1236 and 1237AAD of the SS Act respectively.
Given that the debt raised relates to payments made to Mrs SD from April 2003, an issue arises as to whether the debt, or any part thereof, is irrecoverable in law: s 1236(1A)(a).
Part 5.3 of the SS Act deals with the recovery of debts. Section 1232 of the SS Act provides as follows:
Legal proceedings
(1) If a debt is recoverable by the Commonwealth by means of legal proceedings under:
(a) Part 5.2 of this Act; or
(b) the 1947 Act; or
(c) the Social Security (Fares Allowance) Rules 1998;
the debt is recoverable by the Commonwealth in a court of competent jurisdiction.
(2) Subject to subsections (4), (5) and (6), legal proceedings for the recovery of the debt are not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
(4) If:
(a) subsection (2) applies so that legal proceedings for the recovery of a debt must be commenced within a particular period; and
(b) within that period part of the amount owing is paid;
legal proceedings for the recovery of the balance of the debt may be commenced within the period of 6 years starting on the day of payment.
(5) If:
(a) subsection (2) applies so that legal proceedings for the recovery of a debt must be commenced within a particular period; and
(b) within that period, the person who owes the amount acknowledges that he or she owes it;
legal proceedings for the recovery of the debt may be commenced within the period of 6 years starting on the day of acknowledgment.
(6) If:
(a) subsection (2) applies so that action under this section for the recovery of a debt must be commenced within a particular period; and
(b) within that period:
(i) action is taken under this section or section 1231 (deductions) or 1233 (garnishee notice) for the recovery of the debt; or
(ii) a review of a file relating to action for the recovery of the debt occurs; or
(iii) other internal Departmental activity relating to action for the recovery of the debt occurs;
action under this section for the recovery of the debt may be commenced within the period of 6 years after the end of the activity or action referred to in paragraph (b).
Section 1231 of the SS Act provides for debts to be deducted from a person’s pension, benefit or allowance. This includes debts under the social security law and overpayments under the FA Act. Section 1233 provides for debts to be recovered by the issue of a garnishee notice to third parties who hold or owe money to the person who is claimed to be the debtor. Both provisions contain a time limitation on recovery action of six years similar terms to the limitations in s 1232.
Sections 86, 88 and 90 of the FA Administration Act also provides for a limitation on recovery in similar terms to ss 1231, 1232 and 1233 of the SS Act.
Accordingly, given some of the debt claimed from Mrs SD would have been incurred as early as April 2003, an issue arises as to when the limitation period commenced.
On 23 May 2013, Centrelink assessed that Mrs SD was a member of a couple and that this had been the case since 23 April 2002. Centrelink cancelled her parenting payment and determined that she had been overpaid parenting payment (pursuant to s 1223 of the SS Act) and family tax benefit (pursuant to s 71 of the FA Administration Act) raising a combined debt of over $52,000. On 9 September 2013 an authorised review officer found that the original decision should be changed having determined that Mrs SD was a member of couple from 15 April 2003 with the effect that the debt arising from overpayment of parenting payment was reduced to $46,671.23 from $49,554.53. The authorised review officer’s decision had no impact on the debt arising from the overpayment of the family tax benefit which was $3,032.77. The authorised review officer considered there were no grounds for waiver of recovery.
The SSAT affirmed the decision of the authorised review officer on 15 November 2013. The SSAT referred to the write off provisions and noted that there was “no reason to believe that the debts are irrecoverable in law or that [Mrs SD] had no capacity to repay the debt”. It was also noted that Mrs SD’s whereabouts were known and that her debts could be repaid through deductions from her ongoing Centrelink benefits. The SSAT gave consideration to the question about whether the debts could be waived. The SSAT found that the debts were not attributable solely to an administrative error and that they were caused by Mrs SD telling Centrelink she was not a member of a couple. The SSAT was not satisfied that there were special circumstances warranting waiver and it was noted that Mrs SD had been able to save more than $100,000 from Centrelink benefits since her arrival in Australia. Mrs SD’s circumstances were not “unusual, uncommon or exceptional” (Re Beadle and Director-General of Social Security (1984) 6 ALD 1).
The questions for determination were:
(a)Whether or not Mrs SD was a member of a couple in the period 15 April 2003 to 22 May 2013 and at the time of cancellation of her parenting payment single benefit?
(b)If Mrs SD was a member of a couple in the period 15 April 2003 to 22 May 2013:
(i)is there a special reason for Mrs SD to not be treated as a member of a couple under s 24(1) of the SS Act, or
(ii)if not, should the debt, or any part thereof, be written off or waived?
BACKGROUND FACTS AND EVIDENCE
Mrs SD arrived in Australia in 1998 and was granted permanent residency in 2000. She became an Australian citizen in 2006. Mr and Mrs D married in 1999 and had their first child in 2001. They purchased a home in Auburn in 2000 where Mrs SD has resided continually since this time, save for five months during 2005 and three months in 2009 when she visited her family in Lebanon. According to Mrs SD, Mr AD has been “in and out” of the home over the years. There is no dispute that Mr AD currently lives in their Auburn home. Mr AD’s father helped Mr and Mrs D purchase the house, which was purchased jointly by Mr and Mrs D. The purchase price was $230,000. Mrs SD said that about two years ago the property was valued at $370,000.
Mrs SD’s marriage to Mr AD was arranged by her family. They are cousins. She lived in Australia with Mr AD’s family for a year before they married. Her family lives in Lebanon. Mrs SD said that her relationship with Mr AD was difficult from about 2002 when their first child was one year old. Mr AD developed a gambling problem and drug addictions and this has been an ongoing problem.
Mrs SD applied for the parenting payment at the single rate on 1 May 2002, citing the date of her separation from Mr AD as 1 March 2002. At the time of her application, Mrs SD signed a document headed “Parenting Payment Single (PPS) – Information”. The document contained certain statements adjacent to which there were square boxes with ticks manually applied to each box. The document contained a declaration signed by Mrs SD to the effect, “I agree that I have had all of the above explained to me”.
The document was also signed by a contact officer from Centrelink. Relevantly, the document noted as follows:
I am aware that I must advise Centrelink within 14 days of any changes in my circumstances that may affect my payments. I will not wait until my review form is due to advise of these changes (for example: I reconcile with my partner, I commence a new relationship with someone of the opposite sex, a child leaves my custody, I start working or have ongoing earnings from employment (this includes one off payments).
Centrelink records provided to the tribunal include a report from a Centrelink social worker dated 13 May 2002. The report noted that the social worker had assessed Mrs SD’s claim and recommended she be granted the parenting payment at the single rate. It recorded that “verbal & emotional violence was always a part of her marriage” and Mrs SD “had grown accustomed to the verbal put-downs and derogatory name calling”. The report also noted that the officer had discussed the range of services available to Mrs SD.
Mr and Mrs D had a second child in 2003. On 1 May 2003, Mrs SD made a claim for family tax benefit and recorded that she was separated. She participated in an interview with a Centrelink customer service officer on 27 May 2003 during which a Parenting Payment Service Update questionnaire was filled in, apparently by the officer. The questionnaire recorded the date of birth of Mrs SD’s two children and noted the date of Mrs SD’s separation from her husband as 11 March 2002. There is no record of any discussion with Mrs SD in this interview about the circumstances of her second pregnancy given the separation from her husband.
Mrs SD travelled to Lebanon in July 2005 with her two children. Mr AD travelled to Lebanon in September 2005 and both returned to Australia in December 2005 on the same flight. Mrs SD travelled overseas for about three months in 2009. There is no record of Mr AD travelling overseas since his return to Australia in December 2005.
Mr and Mrs D’s third child was born in 2007. There is a note in the Centrelink files recording that Mrs SD advised Centrelink a few days before the birth that she was due to have a new baby. The note records that Mrs SD was advised to contact Centrelink once the baby was born. She applied for family assistance and Medicare in respect of her third child by application dated 18 May 2007.
The Centrelink file records that there was a “Random Sample Survey” interview conducted with Mrs SD on 2 April 2008. The survey recorded that Mr and Mrs D were separated on 11 March 2002 and noted the details of their three children.
Centrelink provided computer generated extracts from their files for the period May 2001 to September 2013. These extracts record, amongst other things, a summary of contact with Mrs SD. There are numerous references to contact between Centrelink officers and Mrs SD about her parenting payment and/or family assistance from May 2001.
The file notes record conversations with Mrs SD in April 2002 to the effect that she was separated from Mr AD “following several years in an unhappy marriage”. It was noted that Mr AD remained in the home but was “hardly living there at all”. On 1 May 2003, Mrs SD notified Centrelink that her second child had been born. This was recorded in a file note which further noted that there was no change in Mrs SD’s personal circumstances. There is a record of Mrs SD contacting Centrelink in November 2004 to make enquiries about a maternity immunisation allowance for her second child and in July 2005 to enquire about the portability of her benefits because she was proposing to travel to Lebanon with her two children for a period of time. It was originally proposed that Mrs SD would return to Australia within a 13 week period. Given Mrs SD did not return to Australia within that period, her benefits were cancelled but were reinstated upon her return in December 2005.
Relevantly, there is no reference in any of the file notes from May 2003 until mid-2007, when Mrs SD advised about the birth of her third child, to any change in Mrs SD’s personal circumstances.
In a file noted dated 12 November 2007 it was recorded that Mrs SD’s parenting payment was suspended. There is a further file note dated 20 November 2007 in the following terms:
Customer contacted AUBURN on 20 NOV 2007 regarding Review of Entitlement for Parenting Payment Single. Information was obtained via Interview using Personal – In Office...
...Cust attended S.P intvw today .......... Cust stated SEP march 02. has had 2 children to the SEP ptr after this date. Ptr continues to reside in family home co-owned by ex ptr. Claims does not know where ex lives & ex does not pay maintenance but does assist with bill payment. Cust stated that the bills continue to be in ex’s name as she cannot afford them & if they are not paid it is the ex’s responsibility. Cust also stated that ex is her 1st cousin so there is social contact as it is part of their culture. Cust was advised that giving false or misleading declarations to CLK may result in penalties being imposed...
There was no reference in the Secretary’s Statement of Facts, Issues and Contentions or submissions about earlier suspensions of Mrs SD’s parenting payments. It is contended, and there is no contest about this, that Mrs SD was paid parenting payments at the single rate from 23 April 2002 until 22 May 2013.
Mr and Mrs D’s fourth child was born in 2010.
According to a Centrelink investigation “Case Summary” report dated 9 July 2012, an investigation was commenced on 4 April 2012. The matter recorded as being investigated was the allegation that Mrs SD had been living as a member of a couple for more than nine years and had failed to disclose this to Centrelink. There are records of searches and requests for information undertaken or made by Centrelink officers from January 2012 to November 2012.
Mrs SD was interviewed on 13 March 2013 and handwritten notes were made of the interview by two officers of Centrelink. One set of interview notes appear to record a verbatim account of the interview. The other notes are not as comprehensive and appear to represent a summary of the author’s interpretation of what he or she was told. In most cases the two sets of notes are consistent. The following is an account of some of the relevant questions and answers as recorded in the interview notes by the officer with the more detailed notes. The question was typed and Mrs SD’s response as recorded by the author is handwritten.
Q:It is alleged you and [Mr AD] have been living as [a] member of [a] couple and this [was] not declared to Department of Human Services since 11 March 2002. Do you understand this allegation?
A:Yes, but sometimes what you see outside is not what is happening.
Q:What can you tell me about this allegation? How do you describe your relationship with [Mr AD]?
A:No, I’ve always told Centrelink my situation. I’ve told you during interviews that I’m trying to reconcile with him.
…
Q:When did you separate from [Mr AD]?
A:8 years ago.
Q:What are the circumstances that [led] to separation?
A:He doesn’t give me money, I had no family, I came from overseas, he doesn’t pay mortgage. He’s always out, doesn’t take responsibility for his family. My family overseas don’t know we’re separated.
Q:Have you reconciled since 2002? Have you reconciled for any short period since 2002?
A:I try to reconcile with him. I have four boys to look after and it’s hard. He has a lot of problems, he doesn’t help me – he wouldn’t help me with my car rego. I’ve been to court twice for not registering my car, I didn’t know. He doesn’t allow me to know his financial affairs. He’d give me $100 sometimes for kids.
Q:Where does [Mr AD] live?
A:He would come and go. When he gets angry he stays away 1 – 2 weeks, other times he stays with me.
…
Q:Do you have separate living areas?
A:Yes, sometimes he sleeps on couch.
Q:Have you reconciled since separation (March 2002)?
A:Yes, I fell pregnant with [youngest child born in 2010].
…
Q:How long is relationship likely to continue?
A:If he looks after my kids I am happy to stay with him.
…
Q:Do you wish to have more kids with [Mr AD]?
A:He told me a month ago he wants to be better and good so maybe he means more kids. He did this when I fell pregnant with [the youngest child]. I don’t want more kids, it means more problems.
Q:According to [the] Department’s records, you have [been] separated since 2002. Can you explain why you didn’t divorce … [Mr AD]?
A:My family and it’s a big problem in our culture when a lady divorces.
Mrs SD’s parenting payment (single) was cancelled on 23 May 2013, although there is no record of the cancellation decision in the documents provided. She was notified by letter dated 5 July 2013 that a debt had been incurred as a result of the investigation and she was asked to repay the sum of $49,554.53. Mrs SD was also provided with a warning, but was advised that after careful consideration it had been decided that the matter would not be referred to the Director of Public Prosecutions. Mrs SD sought a review of this decision with the assistance of the Welfare Rights Centre.
Mrs SD was apparently interviewed by a Centrelink social worker on 4 and 11 June 2013. The social worker prepared an assessment and report dated 14 June 2013, containing the following assessment summary:
Based on the information provided during two interviews on 04/06/2013 and 11/06/2013, Social Worker is unable to make a recommendation for consideration of [Mrs SD’s] special circumstances regarding a recent member of a couple decision. Whilst the overall information provided suggests [Mrs SD] is a victim of domestic violence perpetrated by [Mr AD], such claims remain unsubstantiated by any other third parties. Additionally, [Mrs SD’s] information was inconsistent during both interviews. Social Worker was unable to adequately assess the impact of [Mrs SD’s] circumstances with regards to this creating an inability for her to notify Department of Human Services Centrelink of her change in circumstances – being a member of a couple.
It was further noted as follows:
Social Worker provided [Mrs SD] with community agency information on emergency accommodation, legal aid (with reference to her property rights), welfare rights and emergency relief agencies. Social Worker provided counselling and support and information on Police programs of assistance (such as Apprehended Violence Orders). A referral to sexual assault counselling or support services was offered to [Mrs SD] and was declined...
On 9 September 2013 an authorised review officer determined that Mrs SD was a member of a couple with Mr AD during the period 15 April 2003 to the date of the review. It was determined that Mrs SD was not eligible to receive the single rate of the parenting payment or the family tax benefit during this period and she had therefore incurred debts. The authorised review officer considered the debt waiver provisions but concluded there were no grounds for waiver of recovery of the debt. There is no record that the authorised review officer considered whether the debt should be the written-off.
Mrs SD gave evidence and was cross-examined at length by the lawyer for the Secretary. She tendered a statement from Mr AD and Mr AD gave evidence by telephone. Mrs SD maintained that she and Mr AD were separated, although she agreed they had lived under the same roof for much of the time since marrying. There is little dispute about the facts, which were principally evidenced by documents.
Mr and Mrs D own their home in Auburn as tenants in common. They refinanced the loan in January 2002 for $210,000 and had a home loan mortgage account in their joint names. Regular cash deposits were made to this account from 2002. According to Mrs SD, Mr AD has not contributed towards the mortgage since 30 October 2013 although she agreed that he had made mortgage payments until this date “most of the time”. She said she had been very concerned about this and recently made a payment of $100,000 from her savings towards the mortgage. There is now $69,000 owing on the mortgage. When asked where the funds had come from to make these payments, Mrs SD said she had saved this money from the Centrelink benefits. Mrs SD said that she paid for the shopping and Mr AD paid bills from time to time but was unreliable, particularly after he started his business in 2008. He paid her money for the children from time to time.
Mrs SD agreed that she applied for a David Jones AMEX card in April 2008 and that she relied on Mr AD’s income, nominating him as her partner, to obtain the credit facility. Mr AD nominated Mrs SD as a dependent spouse for the purposes of his income tax returns for 2003/2004 and 2004/2005. He nominated the Auburn address as his residence for Medicare, his driver’s license and car registration. The Auburn address is also nominated as Mr AD’s business address. When Mrs SD was in Auburn Hospital for the birth of her children in 2007 and 2010, she listed Mr AD as her next of kin and emergency contact person and ticked her marital status as “married or de facto”.
According to Mrs SD, Mr AD has lived in the house more often than not over the past 10 years. She also agreed that while there were periods when Mr AD had “gone missing” he came home most nights. Mr AD sleeps on the couch and not in her room.
Mr and Mrs D travelled to Lebanon in 2005. She agreed they holidayed together in Queensland in 2010. They stayed in an apartment together but on Mrs SD’s account, they stayed in different rooms. Mrs SD looks after the children but Mr AD takes them out from time to time and pays money towards their support, albeit intermittently. Mr and Mrs D attend family gatherings and holiday celebrations together and Mrs SD says that friends and family do not realise that they are separated or unhappy. According to Mrs SD, she and Mr AD do not have ongoing sexual relations and the birth of her two youngest children resulted from forced sexual relations with Mr AD. Notwithstanding this, Mrs SD responded to questions asked of her by Centrelink investigators that she hoped to reconcile with Mr AD. When asked about this response, Mrs SD said she had tried to reconcile with Mr AD and if Mr AD “paid more attention to the children and paid more money”, she would be happy to stay with him.
Mrs SD said that she had recently discussed her relationship with her sister but had not contemplated separation or divorce because of the difficulties in taking these steps – her family would not accept it. She had not been to see a lawyer about getting a divorce but may consider this in the future. She had been to see a religious leader about her problems and he had advised her to ignore the difficulties while the children were young.
According to Mr AD’s statement, he had a longstanding drug, gambling and alcohol problem but he had been in control of these addictions over the last 12 months. He provided the letter in support of Mrs SD’s application at the request of one of his children, not Mrs SD. He stated that he had forced her to have sex leading to the birth of their last two children in 2007 and 2010. He stated that had not given Mrs SD money from 2002 until now, he did not bring anything into the house and did not eat at the house. Mr AD said that he stole Mrs SD’s money when she paid money into the housing loan and did not give money to her for the children or groceries. Mr AD said that he and Mrs SD told their family that they were happy for “good faith”. He paid electricity and water bills when he felt like it. When asked whether he had paid gas bills, Mr AD said not really. According to Mr AD, the marriage was a mistake from the beginning and when asked why he remained married, Mr AD said that he did not want to leave the children with Mrs SD. In his letter Mr AD made a statement to the effect that when the children were older, he and Mrs SD would go their separate ways.
WAS MRS SD A MEMBER OF A COUPLE DURING THE RELEVANT PERIOD?
Overview of the relevant law
To make decision about whether Mrs SD was a “member of a couple” in the relevant period, the tribunal must assess the totality of the circumstances surrounding the relationship between Mr AD and Mrs SD (Pelk v Secretary, Department of Family and Community Services (2006) 151 FCR 546). While the indicia in s 4(3) of the SS Act must be addressed, they are not exhaustive nor intended to operate like a mechanical checklist. The indicia provide a benchmark for what was considered by the legislature, no doubt by reference to community standards, to be the essence of a “marriage-like” relationship. These factors are objective indicators but ultimately how they are assessed in their totality will be a matter of impression. As stated by Creyke SM in Re Martyniak and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 5, (2011) 54 AAR 188 at [64], these are matters of fact and degree.
In Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164, O’Loughlin J, when determining whether a husband and wife were “living separately and apart”, referred to a list of factors he considered might be relevant and stated at 170:
It is not suggested that this list is exhaustive nor will each of these subjects fall to be considered in every case. It must also be emphasised that a particular answer to a single subject will rarely, if ever, supply a final solution. The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators. The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.
The factors set out in s 4(3) of the SS Act provide guidance to decision-makers in forming a view about whether a relationship is marriage-like. However, in many cases the analysis will be complex and challenging, as are many relationships, and it is useful to draw on the observations of Fitzgerald J in Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131:
Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
These observations should be taken into account when considering the evidence in the application of s 4(3) of the SS Act.
Consideration and findings
Having regard to all of the evidence, I am of the view that Mrs SD was a member of a couple with Mr AD in the relevant period, namely 15 April 2003 to 22 May 2013.
If Mr and Mrs D are to be believed, they have a very unhappy marriage and this has been the case for many years. Mrs SD has been consistent in her complaints to Centrelink about her marriage since about 2003. Mr AD’s statement and his evidence over the telephone to the tribunal present a similar picture, although there is inconsistency between his evidence and the evidence of Mrs SD about the financial support provided by him. Mr AD gave evidence that he paid nothing to Mrs SD. In contrast, Mrs SD said Mr AD had paid the mortgage and contributed towards household expenses. Indeed, this must have been the case as Mrs SD would have been unable to make such significant savings, supporting herself and four children, without financial contribution from Mr AD. Mrs SD told Centrelink investigators that she wanted to reconcile with Mr AD and she told the tribunal that she would be happy to remain with Mr AD as long as he provided more support to her and the children. Mr AD stated that he did not wish to be in a relationship with Mrs SD and they should never have married. They nonetheless holidayed together in Lebanon in 2005 and in Queensland in 2010.
The Secretary contended that Mr and Mrs D’s uncorroborated evidence about their matrimonial relationship should be treated with caution. They both stand to benefit financially if the decision of the SSAT is set aside; Mrs SD will not need to repay the debt claimed by the Secretary and Mr AD will get the benefit of the reduced mortgage. The Secretary submits that in these circumstances the tribunal should consider and give weight to other objective matters, being those factors set out in s 4(3) of the SS Act, to assess whether Mrs SD was a member of a couple with Mr AD in the relevant period.
I accept this contention but also accept that the marriage between Mr and Mrs D has been turbulent for a number of years. There is evidence in the Centrelink files, copies of which were produced to the tribunal, about Mrs SD’s complaints about Mr AD. Those complaints are consistent with her evidence. Mr AD’s addictions have understandably caused conflict and his attitude, as evidenced by his statement and in his evidence to the tribunal about Mrs SD, was mean-spirited and uncompromising.
However, the fact that Mr and Mrs D’s marriage is unhappy does not, of itself, mean they are not members of a couple for the purposes of the social security and family assistance legislation. The following matters, being the factors enumerated in s 4(3) of the SS Act, are relevant to this consideration.
First, the financial aspects of the relationship between Mr and Mrs D are indicative of a “marriage-like relationship”. Mr and Mrs D jointly owned assets, they are jointly liable for the mortgage, have maintained a number of joint bank accounts for many years and there is evidence they pool their finances. Mr AD paid the mortgage until 30 October 2013 and while Mrs SD paid for groceries, there is evidence from both that Mr AD has paid bills and contributed to expenses for their children from time to time. Mrs SD’s complaint over the years has been that Mr AD does not contribute enough. This may be the case and it is clear this has caused conflict between them. Mrs SD was nonetheless able to save approximately $100,000 over a ten-year period from the benefits she received from Centrelink. She has used this money to pay off the joint debts owed by her and Mr AD. As such, both Mr and Mrs D have gained the benefit of the higher parenting payment and the family tax benefit while having the benefit of pooling their financial resources.
Secondly, while the evidence from Mr and Mrs D is to the effect that Mrs SD takes on the primary responsibility for providing care and support for the children, they both agree Mr AD contributes from time to time and on a regular basis. According to Mr and Mrs D, they do not sleep in the same bedroom but there is no dispute they otherwise share the house and have for many years on a consistent basis. Mr AD contributes to maintenance around the house by paying for the lawns to be mowed. Both Mr and Mrs D gave evidence that Mr AD comes and goes as he pleases and does not consult with Mrs SD about his daily arrangements. There is no independent corroboration of this evidence from third parties. If I nonetheless accept this evidence, this does not of itself establish that Mr and Mrs D are separated while living under one roof. It evidences an unhappy relationship but there is no evidence they have taken steps to separate their resources, possessions or living spaces within the home.
Thirdly, there is evidence that Mr and Mrs D hold themselves out as a married couple and frequently engage in social activities together. Mr and Mrs D have had three children together during the relevant period. Mrs SD’s claim is that her last two pregnancies were the result of non-consensual sexual intercourse. Mrs SD was offered support and counselling by social workers at Centrelink in 2002 and in 2013 and she has refused these offers on each occasion. I accept Mrs SD’s evidence that this may be explained by the stigma of separation and divorce in her culture. I also accept Mrs SD’s evidence that she consulted a religious leader about her marital problems and has recently consulted her sister about this. However, I also note that Mr and Mrs D have holidayed together on at least two occasions since the time Mrs SD alleges they separated. It is conceivable Mrs SD has maintained a commitment to the relationship because of cultural pressure and/or financial difficulties. The nature of Mrs SD’s commitment is evidenced by her answers to the Centrelink officers who interviewed her as part of their investigation in 2012 and her evidence to the tribunal.
On balance, I conclude that Mrs SD, and possibly also Mr AD, have maintained a commitment to the marriage over the past 10 years. They have continued to live in the same home and have made no attempt to create separate living spaces or to separate their possessions. Until October 2013 they shared expenses and pooled their finances. They jointly own assets and have joint liability for the mortgage. While Mrs SD appears to take on the primary responsibility for the children and the household, Mr AD makes some contribution, albeit inadequate on Mrs SD’s account. They hold themselves out as being members of a couple and Mrs SD has expressed a commitment to the marriage to Centrelink officers and to the tribunal. She has had discussions about separation with her religious adviser and, more recently, her sister but has not taken any steps to seek further advice about this from lawyers or counsellors despite being offered assistance by Centrelink officers.
While Mrs SD may be unhappy in her marriage and believes there are impediments in effecting separation, she was nonetheless gained the financial benefit of living as a member of a couple with Mr AD over the past 10 years. The rationale behind the Commonwealth providing benefits at a higher rate to a parent who is single is to assist the parent in supporting their children when they do not have the benefit of being partnered to an income earner to share expenses. This has not been the case for Mrs SD because, on her own admission, she has had financial contributions and support from Mr AD over the past 10 years. Mrs SD does not believe Mr AD has contributed enough but she has been able to accumulate significant savings, which have been applied to the joint mortgage of Mr and Mrs D.
Having regard to all of the circumstances of the case, I therefore conclude that Mrs SD was a member of a couple during the relevant period.
SHOULD MRS SD NOT BE TREATED AS A MEMBER OF A COUPLE IN THE CIRCUMSTANCES OF THE CASE?
The Secretary, and therefore the tribunal, has discretion to allow payment of a benefit at the single rate even though a person is a member of a couple if satisfied that the person should, for “a special reason in the particular case”, not be treated as a member of a couple. In Boscolo v Secretary, Department of Social Security [1999] FCA 106; (1999) 90 FCR 531, French J considered the general approach to determining whether special reasons exist. He observed, at [18]:
The word “special” conditioning “reasons” or “circumstances” guards the entrance to the exercise of many different statutory discretions. It is generally futile to search for its meaning in terms of other words. It is it is in essence instrumental, a direction to the decision-maker that the discretion it constrains is not lightly to be enlivened... Circumstances or reasons will not necessarily fall outside the designation of “special” because they fall within a class which is widely defined or because they are circumstances or reasons which can be foreseen before they arise. The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course. But that does not require that the case be extremely unusual, uncommon or exceptional. [Citations omitted]
In considering whether it is appropriate to exercise the discretion under s 24(1) of the SS Act it is necessary for the decision-maker to consider the circumstances of the person who is claiming to be paid the benefit of the single rate.
The fact Mrs SD remains in an unhappy marriage for cultural or financial reasons does not raise matters that are unusual or so different as to take Mrs SD’s case out of the ordinary course. Unfortunately, there are likely to be many cases where an unhappy married couple decide to remain together for the sake of the children, financial convenience or cultural reasons. In so doing, they gain the financial benefit of pooling their resources. In this case, Mrs SD has received the benefit of Mr AD’s financial contributions to the household and living expenses of her and the children over the past 10 years. This is not a case where there has been no pooling of resources, which is to be distinguished from the situation considered in Cocks v Centrelink [2000] FCA 1248, where O’Loughlin J discussed and approved the approach to exercise the discretion where there was an inability of a couple to pool resources.
Having regard to these matters, I am not satisfied there is “a special reason” for this discretion to be exercised in Mrs SD’s favour so that Mrs D should be paid her entitlements at the single rate.
SHOULD THE DEBT (OR ANY PART) BE WRITTEN OFF OR WAIVED?
Write off
The Secretary has discretion to write off a debt in certain circumstances (s 1236 of the SS Act). Relevantly, a debt may be written off if the debt is “irrecoverable at law” or if the debtor has “no capacity to repay the debt”.
Mrs SD contended that Centrelink officers knew about her personal circumstances and should have raised concerns earlier. It was not fair to recover the debt after such a long period. In oral submissions and in the submissions filed, the Secretary submitted that the debt was not irrecoverable at law without detailing the basis for this contention. The issue was not identified as a contentious matter in the reasons of the authorised review officer, the SSAT or by the Secretary at the hearing. During the course of considering the material, I identified this as a potential issue and requested that the parties address on the matter at a resumed hearing.
The Secretary submitted that no part of the debt claimed was irrecoverable at law based on the facts of the case and the provisions of ss 1236 and 1231 to 1233. Mrs SD represented to officers of Centrelink at the time she made her application for the parenting payment at the single rate in May 2002 that she was separated from Mr AD. She confirmed this representation when she notified Centrelink of the birth of her second child and then when she made an application to be paid the family tax benefit on or about 1 May 2003. Mrs SD was interviewed on 27 May 2003 and confirmed that the date of separation was 11 March 2002. She maintained this position in her dealings with Centrelink officers and there is no evidence of any communication with Centrelink offices to the contrary. It was submitted by the Secretary that there is no evidence Centrelink officers were aware or could reasonably be expected to have become aware about the change in Mrs SD’s circumstances, given her assertion to the contrary, until the investigations by Centrelink commencing in April 2012. As such, the six year limitation period did not commence until Centrelink officers commenced investigations on April 2012.
I do not accept this submission. When Mrs SD notified Centrelink about her third child and was interviewed in November 2007, Centrelink officers would have been on notice that there was a change in Mrs SD’s personal circumstances and should have made further enquiries to assess whether she continued to be entitled to the family tax benefit and the parenting payment at the single rate. If Centrelink officers had made further enquiries, they would have discovered the matters that were subsequently discovered in 2012. However, the fact Centrelink officers should have made these enquiries in 2007 and did not do so does not impact on the recoverability of the debt in the circumstances of this case.
This is because Centrelink commenced a review of Mrs SD’s file in April 2012. This review action was undertaken within the six year limitation period prescribed in subs (2) of ss 1231 to 1233 and has the effect of extending the recovery period for a further six years.
There is no evidence from the Centrelink files to suggest Centrelink officers were aware or could reasonably be expected to have become aware of these matters prior to November 2007. I therefore find that no part of the debt is irrecoverable at law. Accordingly, the discretion to write off the debt, or any part thereof, cannot be enlivened on this basis.
Mrs SD submitted that the debt should be written off because she had no capacity to repay the debt. She gave evidence of her understanding of the parenting payment and family tax benefit. She said that these monies were her children’s benefits. Mrs SD did not accept or appear to understand these benefits were paid to her to contribute to the cost in caring for her children. She paid the savings accumulated from these benefits towards the mortgage because she was concerned Mr AD had not paid the mortgage for nine months. She however agreed that Mr AD would get the benefit of the reduction in the liability of the mortgage. Mrs SD said that she could not repay the debt by redrawing on the mortgage but could not explain why this was the case, other than to assert that these monies were her children’s funds and she could not and would not use these monies to repay the debt.
While I accept that Mrs SD does not have sufficient income to repay the debt, she has funds available to redraw on the mortgage. There was no evidence to suggest Mrs SD cannot draw down these funds to repay the debt owing or that this would result in severe financial hardship for her. It is difficult to understand why Mrs SD would refuse to make this repayment given the benefit which she concedes has been obtained by Mr AD in her reducing their joint indebtedness. The amount owed under the mortgage is now $69,000. Given the value of the property, there is substantial equity. It would be in Mrs SD’s best interests to repay the debt from the amount recently paid towards the mortgage rather than have deductions made against her benefits. Mrs SD’s refusal to consider such a proposal was inexplicable and unconvincing.
Having regard to the fact that Mrs SD has the means to repay the debt, I am not satisfied it can, or should, be written off on this basis.
Waiver
There is no evidence there was an administrative error giving rise to the overpayment. Accordingly, s 1237A is not applicable and the debt cannot be waived on this basis.
The Secretary, and therefore the tribunal, has discretion to waive the right to recover all or part of the debt if satisfied of the three matters set out in s 1237AAD of the SS Act. First, the tribunal must be satisfied the debt did not result, wholly or in part, from the debtor knowingly making a false statement or representation or failing (or omitting) to comply with the requirements of the SS Act (or its predecessor) or the SS Administration Act. Secondly, there must be special circumstances, other than financial hardship alone, that make it desirable to waive the debt. Thirdly, it must be more appropriate to waive rather than write off the debt.
The Secretary contended that Mrs SD failed to comply with s 66A(2) of the SS Administration Act by failing to advise Centrelink officers of a change in her circumstances after April 2002. Mrs SD says she and Mr AD never reconciled even though they continue to live under the one roof. She therefore had nothing to disclose to Centrelink from 2002. This remains her view.
This is not a case where the Secretary alleges Mrs SD has been deliberately misleading or that she has lied to Centrelink about her circumstances. Nor have I made such a finding. Mrs SD contends that the uncontested facts should establish she is not a member of a couple. For the reasons I have already outlined, I have come to a different conclusion. Accordingly, I cannot be satisfied Mrs SD knowingly made a false statement or representation or knowingly failed or omitted to comply with a provision of the social security legislation. This does not necessarily mean that I am satisfied about the converse proposition, namely that the debt did not arise from a knowing default by Mrs SD. Ultimately, whether I am satisfied about the first criteria in s 1237AAD is not determinative.
Even if I accept Mrs SD did not knowingly mislead Centrelink or fail to disclose a change in circumstances, I am not satisfied there are “special circumstances” to justify the waiver. In this regard, I note that the matters referred to in respect of the exercise of the discretion under s 24(1) of the SS Act are relevant.
CONCLUSION
Accordingly, I affirm the decisions under review.
I certify that the preceding 87 (eighty -seven) paragraphs are a true copy of the reasons for the decision herein of Ms J L Redfern, Senior Member ....................[sgd]............................................
Associate
Dated 23 October 2014
Dates of hearing 2 May, 13 June and 8 October 2014 Applicant In person Solicitor for the Respondent Dr S Thompson, Sparke Helmore
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