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

[2011] AATA 842

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 842

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No V200200804

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS & SECRETARY, DEPARTMENT OF EDUCATION EMPLOYMENT AND WORKPLACE RELATIONS

Applicants

And DUKA COPIC

Respondent

DECISION

Tribunal Mr John Handley, Senior Member  

Date25 November 2011

PlaceMelbourne

Decision

The decision of the Social Security Appeals Tribunal made on 8 July 2002 is set aside and in substitution it is decided that the respondent was overpaid benefits to which she was not entitled and has incurred a debt in the sum of $17,173.30.  

The application is remitted to Centrelink for consideration in accordance with these reasons.

(sgd) John Handley

Senior Member

SOCIAL SECURITY ‑ Respondent paid Job Search Allowance and Newstart Allowance between 1992 and 1999 ‑ admission of employment for limited periods ‑ records of employer seized by warrants ‑ employer subsequently prosecuted and convicted of offences under Taxation legislation ‑ employer imprisoned ‑ seizure recovered two sets of records ‑ interpretation and analysis required ‑ whether respondent employed throughout 1992 to 1999 ‑ income was earned and not declared ‑ false statements made to Centrelink ‑ decision of SSAT set aside.

Crimes Act 1914 (Cth)
Proceeds of Crimes Act 2002 (Cth)

Social Security Act 1991 (Cth)

REASONS FOR DECISION

25 November 2011 Mr John Handley, Senior Member

1.The Secretary to the Department of Families, Housing, Community Services and Indigenous Affairs and the Secretary to the Department of Education, Employment and Workplace Relations (the applicants) sought review of a decision made by the Social Security Appeals Tribunal (SSAT) on 8 July 2002. 

2.The application that was before the SSAT was made by Mrs Copic, the respondent in these proceedings.  She then sought to challenge a decision made by an authorised review officer (ARO) on 21 February 2002 to raise a debt of $17,173.30 being overpayments of job search allowance and newstart allowance in the periods:

·16 October 1992 – 10 December 1992;

·4 February 1993 – 31 March 1994;

·7 August 1997 – 25 June 1998; and

·9 July 1998 – 28 October 1999.

3.On 8 July 2002, the SSAT set aside the ARO’s decision and remitted the application to Centrelink for reconsideration in accordance with its reasons.  The SSAT found there was an overpayment for a limited period by reason of a failure to declare income.  However, it was not satisfied on the material before it that the wage and employment records pointed to the respondent having earned income for all the periods alleged. 

4.This is a hearing de novo.  The review involved – and these reasons will reflect – an analysis of the material that was before me and the evidence heard.

5.This application has a very long history which may be summarised as follows.

6.The applicants alleged that during the periods specified in paragraph 2, the respondent was paid benefits from Centrelink.  It was also alleged that while receiving those benefits, she worked and earned income that she did not declare.  Consequently, it was alleged that she had been paid benefits to which she was not entitled.

7.For reasons which are not apparent, the applicants and/or the Australian Taxation Office (ATO) received information that two persons, Nenad and Tania Dragojlovic and/or a corporation of which they were the Directors, Jontaz Pty Limited (Jontaz), were engaged in an employment hire business.  A number of vegetable market growers in the Werribee district sought persons from Jontaz to pick and pack their produce.  Mr Dragojlovic engaged a number of persons – one of whom was the respondent – and supplied them to his client growers. 

8.The Australian Federal Police (AFP), acting on information from the ATO and from Centrelink executed warrants on residential premises occupied by Mr and Mrs Dragojlovic on 17 May 2001. 

9.Mark Walker, an AFP agent was the case officer for Operation Gravitas which investigated and processed information received that Mr and Mrs Dragojlovic and/or Jontaz had defrauded the Commonwealth by failing to pay group tax and income tax to the ATO. 

10.Centrelink investigated persons who were engaged either by Mr and Mrs Dragojlovic and/or Jontaz and who had been paid income by them. 

11.The respondent was identified from the seized records as being a person who had been engaged by Mr and Mrs Dragojlovic and/or Jontaz.

12.Mr and Mrs Dragojlovic were charged with offences under the Crimes Act 1914 (Cth) which were heard by the County Court in Victoria in 2009-2010. A jury found that Mr and Mrs Dragojlovic were guilty of multiple counts of tax fraud by:

... dishonestly concealing and failing to disclose the full amount of wages paid by Jontaz Pty Ltd to the employees of the company in respect of each of the four quarterly remittance periods for each of the four financial years, namely 1997, 1998, 1999 and 2000 (Sentencing remarks of Judge Nicholson in R v Dragojlovic at [99]).

13.Judge Nicholson imposed lengthy periods of imprisonment.  She also imposed a pecuniary penalty under the Proceeds of Crimes Act 2002 (Cth) in the sum of $633,941 against each of Mr and Mrs Dragojlovic, totalling $1,267,882.78.  In her reasons for sentence, Her Honour stated that Mr and Mrs Dragojlovic had been found guilty on all counts of tax fraud and failed to pay group tax and income tax in an amount exceeding $900,000. 

14.Her Honour decided that Mr Dragojlovic was the person principally engaged in the labour hire business but knowledge of it and the concealing of group and income tax were within the knowledge of Mrs Dragojlovic.  During the period of the offending, Mrs Dragojlovic was also employed by Centrelink at its office in Corio.  In addition to defrauding the Commonwealth, she was also charged with offences of illegal access to a Commonwealth computer.

15.Although Jontaz was incorporated in 1996 and Mr and Mrs Dragojlovic previously conducted their labour hire business as a partnership, (Transcript, p 70-71), for the remainder these reasons, I will refer to Jontaz as the employer.  Nothing material would turn on that nomenclature.  This review is not concerned with an employee/employer relationship.  It is concerned with whether there was a failure to declare earnings to Centrelink and as a consequence, whether the respondent was paid a benefit to which she was not entitled.

16.Evidence during the County Court trial about the Jontaz labour hire operations and the maintenance of its records is summarised from the sentencing remarks of Judge Nicholson as follows:

·Jontaz was incorporated on 26 June 1996 and its principal business was employment hire.  It employed persons that it hired to market gardeners in Werribee and surrounding districts (at [103] and [122]);

·Jontaz charged each farmer a fee greater than the amount paid to employees and retained the balance as its income.  Employees were paid in cash (at [104-105]);

·Group Certificates were issued to some employees in an amount less than the amount actually paid.  Some employees were not issued with group certificates at all (at [111]);

·two sets of records were located when the warrant was executed.  One was a true set of the transactions between Jontaz and the farmers and between Jontaz and its employees (the Red Book (Exhibit A6, Volume 2, Tab 10)).  The second was a false set of records which understated both the amount of income received from farmers and the amount paid to employees as wages (at [112]);

·the contents of the Red Book were accepted by the jury as the true record of the transactions;

·the Red Book contained the names of persons who were employees of Jontaz and it also recorded the amounts paid to those persons as income by Jontaz (at [321]); and

·on the basis of the evidence of Mr Walker, a connection was found between approximately 50 persons recorded as employees in the Red Book with group certificates, employment declaration forms and payroll summary records (at [276]).

MARK WALKER

17.In his evidence before the County Court, Mr Walker said in August 2001 he was given the materials seized at the premises of Mr and Mrs Dragojlovic which comprised eight large removalist-type boxes of documentation, plus a home computer and a computer disc (County Court transcript, p 503 and 505).  Warrants were subsequently served on a number of banks in Geelong where records of both farmers and of Jontaz were obtained.  Enquiries were made of individual farmers and records were taken from them.  Documents were also located by search warrants from vehicles found at the home of the parents’ of Mr Dragojlovic. 

18.Mr Walker analysed all of the materials that were provided to him.  He collated the data and prepared a number of spreadsheets which were presented during the County Court trial and which he then interpreted in evidence.  One of those spreadsheets was significant and was received as Exhibit A3 in this review.  It is known as the Gravitas spreadsheet.

19.For the purposes of this review, he also prepared a spreadsheet compiling information of 251 persons who were identified from the Red Book (Exhibit A2).  The information recorded against those persons is based on the entries in the Red Book and to other documentation which was obtained.  The Red Book covered the period April 1996 until October 2000.  However, the entries in the spreadsheet were confined to four financial years between 1 July 1996 and 30 June 2000 (Exhibit A2).  Mr Walker said that there were other records obtained concerning employment of persons by Jontaz between 1992 and 30 June 1996 which were not analysed because other corroborative or supporting documentation was not able to be obtained from banks or farmers because records, if ever held in that period, had been destroyed (Transcript, p 9-10).

20.The spreadsheets contain data obtained from a number of sources corroborating the identities of the named persons.  Those sources were the Red Book, the electoral roll, group certificates, the White Pages telephone directory and Centrelink records.  The sources are consistent in relation to the the respondent’s address at different times, her gender, her age (although the numeral representing the day and the month is reversed on some occasions) and her telephone number (Exhibit A2, line number 68).  The address found by the electoral roll search differs from the only other two addresses throughout this and other records.  I do not know when the roll was compiled. 

21.An issue emerged in examination-in-chief concerning the identity of the respondent having regard to the spelling of her first name  

22.The telephone directories held by Jontaz record a person who has the first name Duka and another entry of a person with a first name Djuka.  The same telephone number is recorded against both names. 

23.Mr Walker said in evidence that he was satisfied that the person identified at column 68 of the Exhibit A2 spreadsheet recorded as Duka is the person also recorded in the employer’s records as Djuka.  He was reassured in that belief by the same telephone number appearing against each name in the employer’s records.  Additionally, his analysis of the employer’s records during the four financial years indicated that the person Duka and the person Djuka never worked on the same day or in the same week. 

24.Mr Walker was examined about the relationship between the Red Book, the diaries kept by Jontaz and the other bundle of Gravitas spreadsheets (Exhibit A3).

25.Diaries maintained by Mr and Mrs Dragojlovic and/or Jontaz are found at Exhibit A6, Volume 3 behind Tabs 11 and 12 for the 1999 and 2000 calendar years.  The 1998 diary is found at Exhibit A6, Volume 1, Tab 4.  The diaries are each day to a page.  On each page the name of the farmer to whom Jontaz workers were hired is recorded and underlined.  Below that name is the first name of the Jontaz employee who worked for that farmer on that day.  The diary entries are handwritten. 

26.The Red Book is a loose-leaf bundle of A4 pages, comprising a number of columns.  Each page bears a week ending date.  In each column are numerals, typically 50 being the amount paid to the named worker on that day by Jontaz.  One column records the first name of Jontaz employees and beside it are seven columns, each representing a day of the week, the first being a Friday and the seventh column being a Thursday.  Another column records the total amount paid to each named worker for the week covered by that page, being the aggregate of the amounts recorded in each of the seven columns for each of the days comprising that week.  For example, if a worker is recorded as having been paid 50 as recorded in four of the seven columns, the column entitled Total records the sum of 200.  The days worked by the employees correspond with the entries in the daily diaries.

27.The Gravitas spreadsheets (Exhibit A3) record the name of every Jontaz employee for every week ending between 5 July 1996 and 30 June 2000. 

28.The spreadsheet contains a number of columns recording the week ending date, the first name of the worker, the number of days worked, the amount of wages for that week and three other columns identifying the source material (by County Court exhibit numbers) and being the AFP records, the Red Book and the diaries. 

29.The diaries and the pages from the Red Book also record the names of farmers to whom Jontaz employees were assigned.  There is consistency between the aggregate number of Jontaz employees assigned to each recorded grower in the Red Book and the entries recorded in the diaries.  Mr Walker said that he also made enquiries from the growers and was satisfied that records held by them confirmed that the Jontaz employees engaged was consistent with both the diaries and the Red Book.

30.As an example, for the week ending 15 January 1999, the Red Book at page 2336 records Duka having been paid 50 on each of Monday, Tuesday, Wednesday and Thursday of that week.  The amount recorded in the column headed Total is 200.  The diaries for the days Monday, Tuesday, Wednesday and Thursday of that week being 11, 12, 13 and 14 January 1999, record the name Duka on each of those days under the name of the grower Velisha who was identified by Mr Walker in his evidence as Fred Velisha.  

31.Accordingly, there is a relationship between the diary and the Red Book namely, the diary records the person Duka having worked on four days in the week ending 15 January 1999 which is consistent with the data on the relevant page in the Red Book.  The diary also records the person Duka working for Velisha on each of those days.

32.The Gravitas spreadsheet at page 34 against the week ending date 15 January 1999 records the person Duka worked on four days and was paid wages of $200. 

33.Diaries were not kept by Jontaz in 1996 and 1997.  The employer kept some handwritten sheets, photocopies of which appear at Tabs 2 and 3, Exhibit A6, Volume 1.  I assume the data on those pages was entered into the Red Book. 

34.The pages at Tabs 2 and 3 are not dated and are incomplete (I assume by the photocopying process).  I asked Centrelink for the original pages but they were not provided.  Reconciliation is therefore permitted only between the Red Book and the Gravitas spreadsheets. 

35.In his evidence, Mr Walker said that he was satisfied, having analysed the records seized from Jontaz and Mr and Mrs Dragojlovic, that there was evidence of:

... very accurate and reliable systems used by Mr Dragojlovic over the period that he operated Jontaz to keep track of what workers he supplied to what farmers and how many hours those workers worked each day and therefore how much he was liable to receive from the farmers and how much he then had to pay his workers.  I found that, given that the Red Book and the diary are all recorded on the first-name-only basis they’re extremely precise records to enable him to be able to identify how much money he was owed and how much he had to pay, because there are no surnames recorded.  He had to have very precise records to be able to show, in this case Duka, amongst the 40 or 50 people working or 30-odd people working that week at various days – he had to know that he owed Duka $200, so he had to keep very precise records, and the diaries – my understanding is the diary reflects the daily operations of Jontaz in terms of on the Saturday he’s written down which farmers had which workers by name and then that information is then put on to the worksheets for his weekly reconciliation purposes (Transcript, p 19).

36.Mr Walker also said that his investigation caused him to be satisfied that Jontaz workers were paid in cash by Mr Dragojlovic on Fridays.  His enquiries of the farmers and analysis of Jontaz’s income satisfied him that they were paying Mr Dragojlovic either in cash or cash cheques or company cheques payable to Jontaz (Transcript, p 19).

37.He was also able to match the amounts sought by Jontaz from farmers with the amounts paid to workers and ... in practically every instance over the four‑year period, he found that the farmer records and the worker records were 98, 99 per cent accurate (Transcript, p 20).

38.Mr Walker was taken to another document that he prepared which he said provided information taken from the documents seized and which, when explained, demonstrates employment and the issue by Jontaz to the respondent of group certificates (Exhibit A4).  The document is entitled Workers in Red Book cross referenced to Group Certificates/EDFs/Payroll Activity Summary.  The document is of four pages and records the names of persons employed by Jontaz.

39.Against the name Duka Copic on that document, it is recorded that the respondent signed an employment declaration form on 18 September 1998.  Additionally, the document records that group certificates were issued in the income years ending 1998 and 1999.  The last column of the document records that the person Duka Copic first appeared in the Red Book as earning income in December 1996 and last appeared in the Red Book under that name in October 1999 being a total of 94 weeks of employment. 

40.Mr Walker said later in his evidence that separate entries in the wages book for the person Djuka Copic also record employment for 25 weeks in the period August 1997 to October 1998. 

41.The group certificate for the 1999 year issued to Duka Copic is found at Exhibit A6, Volume 1 behind Tab 5 at page 332.  It records gross salary of $1,519 for the 1999 income year.  It also records that taxation was not deducted.  The 1998 group certificate which Exhibit A4 records as having been issued was not within the documents lodged by the applicants.  Mr Walker said that I will have it somewhere within our vast collection of records (Transcript, p 23).

42.When giving this evidence, Mr Walker said he did not have with him the documents which recorded the true amount of income paid in each income year.  That is to say, an examination of all the other records analysed by him indicated that in the 1999 year a sum considerably greater than $1,519 was paid to Duka Copic and the amount declared in the group certificate was an indication of the false declaration by Jontaz to the ATO.  The sum of $1,519 is the sum of 25 daily payments of $49 and three payments of $98 for three weeks when she worked for two days in each of those weeks at $49 per day (Exhibit A6, Volume 1, Tab 8, p 396 – 397).

43.Behind Tab 6 in the same exhibit at page 359 is a copy of an Employment Declaration form completed by the respondent and Mr Dragojlovic on 18 September 1998.  It records the name of the employee as Duka Copic and gives the same date of birth and residential address that appears elsewhere. 

44.Whilst it would appear that the person Duka Copic is not recorded in any of the seized documents as having worked after October 1999, in order to demonstrate the understatement of income paid to workers and the falsity of the wages records, the attention Mr Walker was drawn to other documents behind Tab 5 and Tab 7 (Exhibit A6). 

45.At Tab 5, page 293 is a copy of the group certificate for the 2000 income year for a person where the sum of $2,040 is recorded as the gross salary paid.  That same amount is recorded against that person in a document entitled Payroll Activity (Summary) for the income year ending 2000 (Tab 7, p 366).  That figure is again recorded in a document entitled Payroll Journal for the year ending 30 June 2000 (Tab 7, p 367).  In handwritten records of what purports to be payments made to workers weekly in the 2000 year, that person is recorded as having earned the sum of $2,040. 

46.When that person is located within the Red Book, as an example of the understatement of income, the sum of $275 is recorded as having been paid in the week ending 21 April 2000 (Exhibit A6, Volume 2, Tab 10, p 978).  That person is recorded in the handwritten wage summaries behind Tab 7 at page 372 as having earned $50 in the same week.  Enquiries made randomly concerning that person throughout the 2000 year in both the Red Book and the handwritten wages summary show a considerable discrepancy on a weekly basis in the amounts recorded as having been paid.

47.The summary prepared by Mr Walker at Exhibit A4 indicates that a group certificate was not issued to the respondent for the 2000 year.  He said there is no record or entry for the person Duka Copic or Djuka Copic after October 1999.  A person by either name is not recorded at all in the handwritten records for the income year concluding 30 June 2000.  (The last entry I can find in the Red Book for the person Duka is in the wages summary for the week ending 15 October 1999 (Exhibit A6, Volume 2, Tab 10, p 908).  The last day of recorded work by the respondent in the diaries is 14 October 2009.  That date is consistent with the decision under review recording the last overpayment of benefits having occurred in the fortnight ending 28 October 1999.) 

48.As recorded above, summaries of the documents seized have been entered into the Gravitas spreadsheets (Exhibits A3).  Those sheets record the names of all Jontaz employees in the four financial years analysed by Mr Walker.  Some persons are highlighted.  The person Duka is highlighted in pink on each of the exhibits.  The person Djuka is highlighted in orange.  The person Duka worked for 94 weeks in the period December 1996 until October 1999.  The person Djuka worked for 25 weeks in the period August 1997 to October 1998.  That is to say within the period of employment of Duka, the person Djuka was also employed.  As Mr Walker said earlier in his evidence, his analysis of all the records indicated that the person Duka and Djuka never worked on the same day or the same week but each had the same telephone number.

49.Mr Walker had access to documents seized from Mr and Mrs Dragojlovic concerning employment in the period 16 October 1992 to 31 March 1994.  Those records were duplicated and were received as Exhibit A5.  Mr Walker said that he did not analyse those records.  Also produced was a document entitled Work Book which was understood to cover the period of employment between 1995 and 1996.  The content of that document was not analysed.  It formed part of Exhibit A5.

50.Mr Walker said that so far as he could recall, evidence was given in the County Court trial from persons who verified that the documents seized where the true records of Jontaz.  He said those persons were Anthony Davis, auditor with the ATO and Campbell Jackson, a forensic accountant in the employ of Deloittes who was engaged by the Crown.

DUKA COPIC

51.The respondent now aged 69, prepared two witness statements.  The first is undated (Exhibit R1) and the second is dated 21 December 2010 (Exhibit A10).  She gave evidence before the Tribunal with the assistance of a NATI accredited Serbian interpreter.  She adopted her statements and confirmed that they had been translated for her.

52.The respondent was born in Bosnia and came to Australia at the age of 27.  She completed eight years of school and is able to read and write in Serbian.  In cross-examination she said that she speaks and understands some English. 

53.In 1961 she married.  She was divorced in 1990 and remained separated under the same roof until 2002 when her husband returned to Serbia.  She and her husband lived in a house they had built in 1986.  Although her husband was responsible for the home loan repayments, she gave him $500 per month with the assistance of her son who was working as a real estate agent.  The home built in 1986 will be described in these reasons as the former home.  Its location was confirmed by the respondent in evidence (Transcript, p 76) and recorded in the T-documents.  The location of the home where the respondent currently resides – which will be described as the current home – and other personal details are omitted from this decision for privacy reasons.

54.At the time of the divorce proceedings in Melbourne, the respondent worked at Silcraft.  When that business closed down, she commenced working full‑time in a carpet factory until that business also closed in 1992.  She was unable to find work and applied for newstart allowance.  Although her husband was also working in 1992, she stated he never gave her money.  In cross-examination, when referred to her claim for newstart allowance, she said that she applied for government benefits in 1993 because she did not have an income.  Benefits were not paid in 1996 and resumed in 1997 when her son moved to England and he could no longer provide financial assistance to her. 

55.The respondent has known Mr and Mrs Dragojlovic since 1982.  They are members of her local Serbian community and she knows them on a casual basis.  They did not assist with her claim for government benefits and she has not discussed the Jontaz wage records with them.  She stated she would telephone Mr Dragojlovic once or twice a week to find out whether work was available.  She does not consider him or his wife to be friends.  She stated she ceased working for Jontaz because of problems with her arms.

56.The respondent stated that she worked at market gardens in Werribee for Jontaz between 1992 and 1999.  She stated that she worked one or two days per week and occasionally she would not work at all for up to four weeks because of ill health, namely arthritis.  Although she did not have a regular treating doctor who would have a complete history of her medical conditions, she stated that she would not have been able to work at the Werribee market gardens every day or even every second day.  Unlike her work at the carpet factory, the farm work was a lot more physically demanding.

57.The respondent was cross-examined about part of her statement that she has no regular treating doctor (Exhibit R6 at [6]).  She said that at the time she prepared the statement, she intended it to mean she did not have a regular doctor between 1995 and 1997.  She was also challenged about the existence of a complete medical history.  She said Dr Bogacki, her current doctor, now has a record of her various conditions which she said was rheumatism and diabetes.  She said that she has had issues, problems with her legs for a long time.  She denied that her long standing injuries prevented her working between 1992 and 1999.  She said I worked as much as l could and believed I wasn’t allowed to work more than l did and denied she had ever worked six days in a week (Transcript, p 96-97).

58.In evidence, the respondent said that she did not know the sort of business Mr Dragojlovic ran.  She agreed that he paid his employees in cash.  When asked whether she advised Centrelink that she was being paid in cash, she said she worked as much as she was allowed to work.  She did not ever make enquiries of Centrelink and her friends had told her that she was not allowed to work too much (Transcript, p 85).

59.There was no agreement between her and Jontaz about the amount of hours she would work.  She said she would contact Mr Dragojlovic to enquire about the availability of work and if there was work for her, a bus would collect her and others workers in the mornings.  She would work from either 6am to 1pm or 7am to 2pm.  She would receive her pay on Friday while on the bus and if she did not work on a Friday, she would either wait until the following Monday, or she would attend Mr Dragojlovic’s home to collect it.

60.The respondent stated that she did not keep a record of her wages because she only worked one or two days per week.  At that time she believed she was entitled to work without it affecting her pension.  She was required to work because she was paying off a mortgage and had bills to pay.  Her son contributed to the mortgage because her government benefits were insufficient.  Ms Bolkas asked the respondent whether she was paying the mortgage in 1992 and 1993.  She said that her husband would ask her for money to pay it.  She would give it to him but is unable to say what he did with it.  Her husband asked her for money even when she was not employed. 

61.In her statement, the respondent recorded that in April 2002 she ‘gifted’ her share of the property to her son in accordance with Serbian tradition on condition that she remain in the house rent-free.  In cross-examination, she explained that after the separation, her husband demanded $5,000 for his contribution to the house which her son, Branko, paid.  She said she does not have any records of her son making the payment.  After receiving that payment, her ex-husband transferred his share of the house to Branko, who later sold it in 2006.  Subsequently she has been living in rented accommodation in the current home. 

62.The respondent was referred to a document which records an enquiry by a Centrelink officer on 19 June 1997 in response to a public denunciation (T9, p 58).  She agreed that she had denied, as evident by that form, that she had been working on farms or anywhere else because she believed she was entitled to work for one or two days per week.  Ms Bolkas referred the respondent to a Centrelink letter which details the information customers must tell Centrelink (T10, p 61).  The respondent agreed that the letter required her to advise Centrelink of certain information, including whether she was receiving income.  She did not believe she was required to advise Centrelink about her work for Jontaz because she only worked one or two days per week.  When pressed, she said maybe I did need to tell them, but I didn’t.  I don’t know why (Transcript, p 95).  (A Centrelink memorandum records that the respondent was booked in for an interview with a Centrelink officer on 26 June 1997 (T9, p 58).  It is not known whether that interview occurred.  If it did, and was recorded, I can find no record of it in the T-documents.)

63.In cross-examination, the respondent was referred to a Centrelink questionnaire dated 31 May 1994 (T5, p 28).  In response to question 15, Have you done any work at all since getting Job Search or Newstart Allowance? She recorded No.  When challenged about her honesty, the respondent said that she is truthful and that she only worked as much as [she] was allowed to work (Transcript, p 106).

64.The respondent was referred to her Group Certificate for the year ending June 1999 which recorded her gross salary as $1519 (T19, p 128).  She said that figure may be correct, she could not remember and she could not recall receiving anything more than … he gave me (Transcript, p 103). 

65.The respondent declared to Centrelink that she had earnings of $60.00 per fortnight on six separate occasions between 2 October 1998 and 9 July 1999 (Exhibit A9 and T14, p 120 ‑ 121).  In her statement she recorded that she did not recall making that declaration.  When cross-examined on this issue she said she must have declared it but could not remember the dates.  She denied that Mr Dragojlovic told her to declare it and when asked why she did, the respondent replied, maybe I learnt that I needed to declare it (Transcript, p 107).  She said the figure of $60 was the amount she was earning at the time.

66.The respondent was referred to the evidence of Mr Walker and the spreadsheets he prepared which showed the person named Duka working for Jontaz six days per week on some occasions.  She said that she does not remember ever working that many days or earning $11,000 in 1999 from Jontaz.  She received $30 or $40 per day which increased to $50.  The respondent said her knee problems prevented her from working more than one or two days per fortnight and she denied asking Mr Dragojlovic for as much work as possible.

67.The respondent stated that she could not explain why the Jontaz records for 1993 refer to Duka or Djuka working five days per week.  She stated that Mr Dragojlovic is a dishonest person who put down whatever he liked in his wage records.  She could not comment on whether he used the names of legitimate workers to hide the employment of illegal workers.  She is not aware of other workers with the name of Duka or Djuka and could not explain the frequency in which her name appears in the Jontaz wage records (Exhibit R1 at [15]).  

68.In her statement the respondent recorded that she always writes her first name with a line through the letter D to denote a little g sound ... I never write my name with the spelling Djuka (Exhibit R1 at [20]).  In cross-examination she said she wrote her name with a line through the letter D in Serbia and when sending cards to members of the Serbian community in Australia but otherwise I don’t do it here (Transcript, 103 ‑104).

REASONS FOR DECISION

69.Applications for a review of decisions made by Centrelink alleging an entitlement to recover monies overpaid, rarely involve the volume or quality of documented evidence (and analysis of it) as occurred in this review.  Most of the documents were obtained and analysed for the purposes of the prosecution of the Directors of Jontaz.  Nonetheless they have been valuable in permitting me to determine whether the respondent was employed by Jontaz during the four periods in which an overpayment was alleged and whether, as a consequence of that employment, income was earned and not declared. 

70.The applicants alleged that the respondent earned income which she failed to declare.  Consequently there was an overpayment of benefits which is a recoverable debt.

71.For reasons which follow, I am satisfied that the decision under review should be set aside and substituted with the decision made by the ARO on 21 January 2002.

72.I am satisfied that the respondent was employed by Jontaz and did earn income that she did not declare.  I acknowledge that employment commenced 19 years ago and concluded 12 years ago.  Therefore, some allowance should be made for the passage of time and the imperfections of memory.  I also acknowledge that the respondent did admit that she occasionally worked for Jontaz one or two days per fortnight.  She denied that she was the person identified in some of the records as Djuka and any income recorded against that person should not be visited against her.  However, the documents retained by Centrelink – some of which have been destroyed, I assume by its archive process – indicate that during the period of employment, she made false declarations to Centrelink about her earnings.

73.In a questionnaire completed on 2 September 1993 (T4, p 19), the respondent recorded that she last worked on 8/92 at Corio Bay Carpet.  The pay records indicate that in the week concluding 28 August 1993, that is the week before that declaration was made, she worked five days and earned $225 (T21, 339).  She also worked in the weeks ending 30 July 1993 and 23 July 1993 and earned income (T21, p 336-337).  After August 1992 when she declared that she last worked for Corio Bay Carpet, the respondent worked for Jontaz in the weeks ending 23 October 1992 until the week ending 4 December 1992 and then from the week ending 5 February 1993 until the week ending 24 June 1993 (T22, p 466-467). 

74.A Centrelink officer made enquiries of the respondent following a review of her newstart allowance on 19 June 1997.  A computer entry of those enquiries records that she denied allegations stating she has never worked on farms or anywhere else (T9, p 58).The documentary evidence before me, including the respondent’s witness statement (Exhibit R1), indicates her answer was false.  Although the pay records do not indicate she was working at 19 June 1997, they do show she worked for Jontaz on farms from December 1996 to January 1997, between October and December 1992 and for a considerable time throughout 1993.

75.Records from Centrelink show that the respondent volunteered earnings of $60 only on six occasions between 2 October 1998 and 9 July 1999 (Exhibit A9).  In evidence the respondent said that she could not recall making those declarations but acknowledged that she may have done so because she learned that [she] needed to declare it (Transcript, p 107).

76.It is unclear to me whether the respondent was then declaring that she earned $60 on the day that she made the declaration or (as the Transcript at p 107 suggests) $60 was the income paid by Jontaz for a week ending at or about those dates.  The dates of declaring the sum of $60 to Centrelink incorporate three dates which were week ending dates for the purposes of the Jontaz records. 

77.On 16 October 1998 when the respondent declared $60, she had worked five days in that week ending and earned $250, being $50 per day.  On 30 October 1998 when she declared $60, it coincided with a week ending of the same date and within that week she earned $315, being six days at $50 per day and an additional $15 recorded in a column with a heading O/T.  On 9 July 1999 when $60 was declared, it coincided with a week ending of the same date where the respondent was paid $150, having worked three days in that week at $50 per day.

78.Accordingly, at or about the occasion of those three declarations to Centrelink, the wage records indicate that the respondent was never paid $60 either as a daily, weekly or fortnightly sum.  She had earned considerably more and her declaration of $60 was false. 

79.Between 20 July 1998 and 16 September 1999, the T-documents record (p 59-114) that a number of recipient notices were forwarded to the respondent at her former address notifying of her obligation to inform Centrelink if one or more specified events occurred.  One such event was whether she started any paid work or started to receive income. 

80.I am unable to find anything in the T-documents to indicate that the respondent ever responded to those notices.  This is not surprising because she admitted in evidence that she did not volunteer employment or the income earned because I didn’t work much, I worked one or two days, and therefore I thought I didn’t need to tell them (Transcript, p 95).When it was suggested in cross‑examination that she did not notify Centrelink of her employment or income being earned, the respondent said I thought that I was allowed to earn some money (Transcript, p 95).A combination of her false declarations of employment and her responses to questions of the reasons for her familiar to declare income satisfy me that the respondent knew she was receiving benefits to which she was not entitled. 

81.I am satisfied that the notices that were forwarded to the respondent between 20 July 1998 and 16 September 1999, were received.  I am satisfied that they were properly addressed, prepaid and there is nothing in the T-documents to indicate that the notices were ever returned.  The address on those notices was the respondent’s former address as consistently recorded throughout the T‑documents between 1993 and 2002 at pages 15, 25, 34, 38, 48, 57, 125, 128, 489, 495, 522, 546 and 550.

82.Another issue that emerged during the hearing was the identity of the respondent.  She said that her first name was Duka.  The employment records frequently refer to a person Djuka also having worked and earned income.  The respondent said that she was not the person Djuka and gave evidence of her practice of spelling her name.  I do not accept her evidence.  On the one hand she said that she always wrote her name with a line through the letter D to denote a method of pronunciation but later said that she only adopted that practice when sending letters or cards to members of the Serbian community.

83.I cannot locate any record within the T-documents in which the respondent has signed her name with a line through the letter D as she asserted.  In her claim forms for newstart allowance, she has signed her name, D. Copic, without a line through the letter D (T6, p 45, T7, 56).  The same signature appears in other documents lodged with Centrelink (T8, p 57, T28, p 495, T45, p 550). 

84.On the evidence before me, I am satisfied that the person Duka and Djuka are the same person.  The telephone books of Jontaz which were seized are compelling because the same telephone number is recorded against both names.  The person Duka is found in the telephone books in Exhibit A6, Volume 2, Tab 9, pages 409 and 434 and the person Djuka is found in the same exhibit at pages 487, 488, 489 and 496.  I am not satisfied that there are two persons, one being known as Duka and the other person being known as Djuka each having the same telephone number. 

85.Additionally, I am satisfied that the person Duka and Djuka are the same person because, consistent with the evidence of Mr Walker, an examination of the employment records indicates that those persons never worked on the same day or in the same week with Jontaz between 1992 and 1999.

86.For all of the above reasons, I am satisfied that the respondent did work during each of the four periods alleged by the applicants as constituting the periods of overpayment of benefits.  I am satisfied that the respondent was overpaid benefits because within those four periods she did work and earn income which she did not declare.  It follows that she received Commonwealth benefits to which she was not entitled.  Therefore, she has incurred a debt which the applicants are entitled to recover.

87.The applicants have quantified the debt at $17,173.30 on the basis of a) income received by the respondent from Jontaz; b) the benefits which were paid on the occasions that income was not declared and c) allowable limits.  The calculations are contained in 19 pages of documents found at T41.  I have no reason to doubt the accuracy of the calculations.  A contrary submission was not advanced.

88.The respondent’s representatives did not challenge the accuracy of the periods of employment as recorded in the source material and replicated in the Gravitas spreadsheets (Exhibit A3).  Furthermore, the hearing did not involve a comparison between the periods of employment in the source materials and the entries in Gravitas spreadsheet at Exhibit A3.

89.I had no reason to doubt the analysis undertaken by Mr Walker or his review of the materials.  However, the Tribunal does have an inquisitorial responsibility and it would be appropriate to at least randomly select some dates from the source materials and determine whether the amounts earned were accurately recorded in the Gravitas spreadsheet.  I have randomly selected a number of dates from the source material, which, coincidentally also included entries for the person Djuka, to satisfy myself that a finding of fact could be made of the amounts earned as calculated in the Gravitas spreadsheet.

90.My calculations are set out in the tables below.  The tables identify the relevant dates selected and the source materials to which I had regard, namely: 

·The Red Book which contains employment data for the income years 1996 to 2000 only (Exhibit A6, Volume 2,Tab 10);

·Diaries for the 1998 and 1999 calendar years (Exhibit A6, Volume 1, Tab 4);

·Worksheets (Exhibit A5);

·The wages book (Exhibit A6, Volume 1, Tab 8); and

·Centrelink records at T22.

91.I calculated and entered the data against each date independently of the Gravitas spreadsheets.  I then compared my calculations against the entries in the Gravitas spreadsheet and against every entry, I noted whether my calculations were consistent with those in the Gravitas spreadsheet.

92.When interpreting the raw data, the day of the week in each week ending is a Friday.  The actual days comprising the week ending run from the previous Friday until the following Thursday.  For example, 5 June 1998 is a Friday and it is a week ending date.  However, the days worked in that week are indicated by entries in seven columns, each having a day of the week as the heading commencing on a FR (Friday) and concluding on TH (Thursday) (Exhibit A6, Tab10, p 2261).

93.The materials inspected to compile these tables revealed that the respondent’s employment with Jontaz was not confined to the four periods identified by the applicants.  However, it is not known whether the respondent also received social security benefits on those occasions.  In any event, I am only concerned with the four periods in which the applicants alleged an overpayment and the entries in the following tables are confined to those four periods only.  (Note: the week ending dates in the tables fall within fortnight ending dates used by Centrelink as pay periods and for the purposes of this review are periods where an overpayment was calculated).

94.

Table 1: Verification of 1992 Earnings

Centrelink’s Calculations (T22, p 466)			Employer’s Work Sheets (Exhibit A5)
week ending	n° of days worked	amount earned	verification
23/10/1992	4	$160	ü
30/10/1992	4	$160	ü
6/11/1992	3	$120	ü
13/11/1992	Nil	Nil	ü
20/11/1992	7	$290	ü
27/11/1992	5	$215	ü
4/12/1992	3	$120	ü

Table 2: Verification of 1993 Earnings

Centrelink’s Calculations (T22, p 466 ‑ 467)			Employer’s Work Sheets (Exhibit A5)
week ending	n° of days worked	amount earned	verification
5/2/1993	5	$225	ü
12/2/1993	6	$332	ü
19/2/1993	5	$225	ü
26/2/1993	5	$225	ü
5/3/1993	5	$225	ü
12/3/1993	6	$270	ü
19/3/1993	5	$225	ü
25/3/1993	5	$225	ü
3/12/1993	5	$225	ü
10/12/1993	4	$180	ü
17/12/1993	6	$270	ü
24/12/1993	4	$180	ü
31/12/1993	5	$225	ü

1994 Earnings

94The only record of work in 1994 is in the week ending 26 March 1994.  A worksheet within Exhibit A5 records the respondent working 5 days in that week and being paid $225.00 (T22, p 469).

1995-1996

95.There are no records of employment by either Duka or Djuka after the week ending 26 March 1994 until the week ending 20 December 1996.  The Red Book, the Centrelink records (T22, p 470) and Exhibit A4 record the respondent working in each subsequent week ending until 24 January 1997.  An overpayment is not alleged in this period.

Table 3: Verification of 1997 Earnings

Centrelink’s Calculations (T22, p 470 ‑ 471) and Gravitas spreadsheets  (Exhibit A3)			Employer’s Red Book (Exhibit A6, Volume 2, Tab 10)
week ending	n° of days worked	amount earned	verification
1/8/1997	4	$200	ü
*8/8/1997	6	N/K
15/8/1997	2	$100	ü
22/8/1997	5	$250	ü
29/8/1997	2	$100	ü
5/9/1997	5	$245	ü
12/9/1997	5	$250	ü

Notes:

1.The entries above are a comparison of the Centrelink tables at T22, p 472 and the Gravitas spreadsheet (Exhibit A3), verified against the Red Book.

2.The dates recorded in bold record the worker as Djuka.

3.Centrelink records (T22, p 472) have no entry of work in the week ending 8 August 1997.  The Gravitas spreadsheets at Exhibit A3 records work of 6 days in that week ending but there is no entry for the amount earned.  The AFP and Red Book source material is not recorded in Exhibit A3. 

4.Centrelink has not recorded work in the week ending 15 August 1997.  The Red Book and Exhibit A3 records Djuka working 2 days at $50 in that week. 

5.Entries in the Gravitas spreadsheet could only be made against the Red Book work sheets.  Diaries – which provide another source of reconciliation – were not used before 1998.

96.

Table 4: Verification of 1998 and 1999 Earnings

week ending	n° of days worked – Per Diaries (Exhibit A6, Tabs 4 & 11)	n° of days worked – Per Red Book (Exhibit A6 Tab 10)	amount earned – per Red Book (Exhibit A6 Tab 10)	n° of days worked – Per Wage Book (Exhibit A6, Tab 8)	amount earned – per payroll journal (Exhibit A6, Tab 8)	n° of days worked – per gravitas spreadsheets (Exhibit A3)
16/10/1998	5	5	$250	1	$49	5
23/10/1998	6	6	$300	Nil	Nil	6
30/10/1998	6	6	$300	1	$49	6
4/12/1998	6	6	$300	1	$49	6
11/12/1998	5	5	$270	Nil	Nil	5
18/12/1998	6	6	$300	Nil	Nil	6
5/2/1999	6	6	$300	1	$49	6
12/2/1999	4	4	$200	Nil	Nil	4
19/2/1999	6	6	$300	1	$49	6
25/6/1999	6	6	$300	Nil	Nil	6
2/7/1999	4	4	$200	Respondent not recorded in wage book after week ending 25/6/1999	4
9/7/1999	3	3	$150		3
1/10/1999	4	4	$200		4
8/10/1999	5	5	$250		5
15/10/1999	6	6	$300		6

Notes:

The 1998 and 1999 diaries are incomplete.  For example, nothing is entered in the 1998 diary before 18 September.  There are entries in the 1999 diary between January and March, a few weeks of April and 18 June to December only.  The dates in Table 4 were chosen to coincide with diary entries.  It was thought that verification against the diaries and the Red Book would provide an added measure of confidence in the Gravitas spreadsheets if identical data was recorded.

The reasons extracted from Exhibit A6 Tab 8, above are within the other set of records maintained by Jontaz.  They are false.  They do not represent the true extent of days worked or income earned by the respondent. 

96.I am satisfied and find as a fact that the amounts alleged to have been paid to the respondent by Jontaz during each of the four periods in issue are consistent with the amounts recorded in the Gravitas spreadsheet (Exhibit A3).  However, for reasons set out in Notes 2 and 3 after Table 3 above, the Gravitas spreadsheets record amounts earned in the weeks ending 8 and 15 August 1997.  At first instance, it appears that Centrelink did not take those earnings into account in its summary of earnings (T22, p 472) but did take those earnings into account in its calculation of the overpayment (T36, p 512 and 513).  An examination of T36, page 513, reveals that Centrelink found that income of $200 was received in the fortnight ending 21 August 1997 (which incorporates the week endings of 8 and 15 August 1997) of $200.  This is less than the sum probably earned having regard to the number of days worked as recorded in the Gravitas spreadsheet and the daily rate of $50.  Despite this evidence, I suggest the amount previously assessed as overpaid, namely, $17,173.30 not be disturbed. 

97.The relevant law is set out in the Social Security Act 1991 (the Act).  The Act was significantly amended between 1992 and 1999.  At the conclusion of the hearing I was not addressed by Counsel who appeared for both parties about the application of the Act during the periods that benefits were overpaid.  No attention was given to whether the law that applied on each and every occasion that an overpayment was alleged was the applicable law, or whether the Act as applying at the date of the primary decision was the applicable law.  Although now repealed, the parties agree that s 1224 applies.  Its operation is saved by the transitional provisions in Act N° 47 of 2001.  However, that section was confined only to whether a beneficiary made a false statement of representation or failed to comply with a provision of the Act.

98.A Statement of Facts and Contentions lodged by the applicant prior to the commencement of the hearing referred to a number of provisions within the Act, some of which were applicable in 1995 and some which were applicable at a later date. 

99.In the absence of submissions by both Counsel, it would be inappropriate for me to decide the law applying in relation to recovery of social security benefits.  I am satisfied and find that during the periods of alleged overpayment as recorded in paragraph 2 above:

a)    the respondent received Centrelink benefits, namely job search allowance and newstart allowance;

b)    the respondent was working and earned income which she did not declare;

c)    the respondent was not entitled to the benefits received and consequently, she was overpaid in the sum of $17,173.30 which was an amount that would not have been paid to her had she declared all her earnings from her employment with Jontaz;

d)    the benefits were not paid to the respondent by sole administrative error on the part of the Commonwealth;

e)    the respondent knew she was not entitled to those benefits and she did not receive them in good faith;

f)     additionally or in the alternative, the debt resulted from the respondent knowingly making a false statement or representation and having failed to comply with a provision of the Act; and  

g)    subject to the legislation applying between 1992 and 1999, or until the date of the making of the primary decision, the respondent has incurred a debt in the sum of $17,173.30 which the Commonwealth has a right to recover.

100.I understand that the respondent presently receives Age Pension.  I do not know whether she has any other assets or income.  Accordingly, I cannot determine whether she has capacity to repay the debt.  I think in the circumstances it would be appropriate that the applicants consider the financial circumstances of the respondent and the respondent volunteer her present financial circumstances, including a declaration of her income and assets.  A decision should then be made whether collection of the debt should be deferred for a period of time, that is to say that it be written off.

DECISION

101.In all of the circumstances and for the above reasons, I am satisfied that the decision of the SSAT made on 8 July 2002 should be set aside and in substitution, it is decided that the respondent was overpaid benefits to which she was not entitled and has incurred a debt in the sum of $17,173.30.  The application is remitted to Centrelink for consideration in accordance with these reasons. 

I certify that the one hundred and one [101] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr John Handley, Senior Member

Signed:          Olympia Sarrinikolaou

Legal Assistant

Dates of Hearing  1 December 2010 and 21-22 March 2011
Date of Decision  25 November 2011
Counsel for the Applicant            Ms L. Bolkas
Solicitor for the Applicant             Ms S. Krauss, Australian Government Solicitor
Counsel for the Respondent        Mr Z. Partos
Solicitor for the Respondent        Mr H. Streager, Victoria Legal Aid