Smyth and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 842
•22 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 842
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4918
GENERAL ADMINISTRATIVE DIVISION ) Re PHILIP SMYTH Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Dr J D Campbell, Member Date22 September 2008
PlaceNewcastle
Decision The decision under review is affirmed. ..................[Sgd]....................
Dr J D Campbell Member
CATCHWORDS
SOCIAL SECURITY - Disability Support Pension - Member of a Couple - Special Reason - Overpayment - Special Circumstances
Social Security Act 1991 – sections 4, 24, 1064, 1223, 1236, 1237A, 1237AAD
Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531
Pelka 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 Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
REASONS FOR DECISION
22 September 2008 Dr J D Campbell, Member background
1. Mr Smyth was born in 1949. Mr Smyth had been self-employed as a ladies hairdresser until forced to cease such activity due to hip and hand arthropathy. Mr Smyth was granted disability support pension (“DSP”) on 1 November 2003.
2. Mr Smyth married his wife, Jennifer Smyth-Davey on 26 November 2006. Mr Smyth had known his wife for 18 years and had been engaged for some eight years prior to their wedding.
3. Some three to four years prior to their wedding, Mr Smyth sold the premises from which he was operating his hairdressing business and he with his future wife agreed to buy the premises in which he now resides at Hannell Street. As part of that agreement, Mr Smyth contributed a capital sum of $50,000 approximately, with the property registered in his future wife’s name, with Mrs Smyth-Davey securing the remainder of the purchase funds by way of mortgage over the property and accepting responsibility for the repayment of such.
4. Prior to the marriage on 26 November 2006, Mr Smyth was receiving a DSP payment in excess of $500 per fortnight with his future wife receiving income from her employment as a teacher in the order of $2,200 per fortnight.
5. Mr Smyth had been advised by way of notice when addressing him of his rate of DSP payment on 27 July 2005 of his notification obligations including the requirement to notify Centrelink within 14 days if he was to marry (T7). Mr Smyth notified Centrelink of his marriage on 17 January 2007, and was issued with a number of forms to complete. (T9 – T12, T14). The completed forms were received by Centrelink on 1 March 2007.
6. On 1 March 2007, Centrelink determined that Mr Smyth should be considered as a member of a couple from the date he married, namely 26 November 2006, and be paid DSP at the married rate. As a consequence, Centrelink determined that Mr Smyth had been overpaid DSP payments in the amount of $2,826.78 for the period 26 November 2006 to 26 February 2007. A debt for this amount was raised on 26 April 2006.
7. On 5 March 2007, Mr Smyth requested a review of the decision to treat him as a member of a couple (T19). On 8 March 2007, Mr Smyth lodged a Module S (Separation Details – T23). On 12 March 2007, Mr Smyth advised Centrelink that he will not be proceeding with the appeal (T19). On 19 March 2007, Mr Smyth requested that the original decision be reviewed (T19). The decision was reviewed by the original decision maker and affirmed on 18 April 2007. On further appeal and review by an authorised review officer, the decision was further affirmed on 30 April 2007 (T34 – T37) that Mr Smyth was a member of a couple, with the decision to raise and recover a debt affirmed on 21 June 2007 (T44 – T47). On further review by the Social Security Appeals Tribunal on (“SSAT”), both decisions were affirmed on 22 August 2007 (T2).
issues
8. The relevant issues in this matter are:
(a) Whether Mr Smyth is a “member of a couple” with Mrs Jennifer Smyth- Davey for the purposes of social security law; and
(b) Whether Mr Smyth has a debt of DSP in the amount of $2,826.78 for the period 26 November 2006 to 26 February 2007.
evidence
9. Mr Smyth described in detail the difficulties experienced by him and his wife after their marriage in November 2006. In particular, while noting that his wife’s mother, being aged, partially blind and disabled prior to their marriage, stated that his wife’s mother had a stroke some few days after their marriage. As a consequence of her mother’s increased invalidity, coupled with her mother’s desire to remain within her own home, care arrangements for the mother involved Mrs Smyth-Davey spending Sunday to Thursday nights at her mother’s residence to assist in her night care, while Friday night to Sunday evening care duties were undertaken by his wife’s sister – a nurse from Sydney, and Monday to Friday daytime care was provided by visiting community nurse on a part time basis.
10. Mr Smyth noted that such arrangements in part had commenced after the death of Mrs Smyth-Davey’s father, but had progressed following her mother’s stroke. Mr Smyth noted that such arrangements involved his wife having an evening meal with him, after which she would take a taxi to her mother’s place. The weekends, he noted, were spent together until Sunday evening, unless the sister was unable to come to care for her mother. Mr Smyth considered that such arrangements were both disruptive to their existence at the Hannell Street residence and costly in terms of keeping and maintaining two life activities as well as the cost of taxi transport (approx $15 a trip).
11. Mr Smyth stated that each had managed their own financial activities prior to marriage with agreements made as to financial contributions, to major asset purchases and household purchases. Under such arrangements, Mr Smyth felt he managed with some difficulty when receiving the single rate of DSP ($500 approximately per fortnight), but with the reduction to a married rate and repayment of his DSP overpayment, his personal financial circumstances were virtually non existent, when receiving $45 a fortnight. In such circumstances, Mr Smyth stated that he was essentially dependent on Mrs Smyth-Davey for financial assistance to meet his day to day financial needs, as well as payment of such long standing club interests, e.g. Yacht Club Membership.
12. Two submissions were received in relation to the financial affairs of Mr Smyth and Mrs Smyth-Davey. They were dated 23 April 2008 and 7 July 2008. Both were prepared by Mrs Smyth-Davey and were in response to a request made by the Tribunal to Mr Smyth to provide details concerning the current financial circumstances for both himself and his wife. Mr Smyth responded by stating that his wife was both the financial organiser and current financial provider and that she would provide such details on their behalf.
13. An analysis of these two submissions would indicate that the current family income on a fortnight / annual basis consists of:
·Mrs Smyth-Davey:
-Salary Dept. of Education $2,025 nett per fortnight ($52,650 nett per annum)
-Centrelink payments (carers) $98.50 per fortnight ($2,561 per annum)
-Board of Studies (HSC Marking) $3,554 per annum.
·Mr Smyth:
-Centrelink payments approximately $45 per fortnight ($1,170 per annum)
·Joint Income per annum $56,381 nett plus $3,554.
14. An analysis of expenditure reveals the following:
· Mortgage payments $1,670 per month ($20,040 per annum)
· House insurance $59.25 per month ($711 per annum)
· Health insurance $132.79 per month ($1,593 per annum)
· Council & water rates - insufficient information provided
· Gas, electricity, telephone – insufficient information provided
· Taxi costs $300 per month ($3,900 per annum)
· Various debt repayments $1,770 per month ($21,240 per annum)
· Nominated lump sum expenditure is $47,484 per annum, plus costs associated with council and water rates, telephone, electricity, gas and general living expenses.
15. I note the following debts with amounts outstanding at the nominated date (if provided).
Mrs Smyth-Davey:
Citibank $9,661.53 April 2008 paying $245 per month
Westpac $17,610.61 April 2008 paying $720 per month (April)
NAB $11,753.83 Feb 2008 paying $350 per month
Amex $2,941.09 March 2008 paid $90 in March 2008
David Jones $11,286.52 April 2008 account payment two months in arrears
Coles $4,185.81 March 2008 paying $58 per month
Mr Smyth:
Westpac $2,713.38 no payments being made
CitiFinancial $3,322.41 no payments being made
Amex $7,455.66 paying $360 per month (January 08)
16. An examination of capital assets reveals that all significant assets are held in Mrs Smyth-Davey’s name (house, superannuation) with the purchase price of the house being $240,000 and the superannuation account being $77,649. Other assets include artworks ($6,500), jewellery ($2,700) and furniture ($3,500). Debts include mortgage ($190,000 approx), other debts owed by Mrs Smyth-Davey ($57,000 approx) and Mr Smyth’s debts ($13,500 approx).
considerations and findings
17. Having considered all the material in evidence I find the following facts:
·Mr Smyth is aged 59 years, is a retired hairdresser and is in receipt of a DSP, first granted on 1 November 2003, due to a hand and hip arthropathy.
·Mr Smyth married Mrs Smyth-Davey on 26 November 2006, having been engaged for some eight years prior to their wedding. Mr Smyth and Mrs Smyth-Davey reside at a residence in Hannell Street, Maryville. This residence was purchased prior to their marriage, with Mr Smyth contributing some $50,000 to the purchase amount of $240,000. The title is held in Mrs Smyth-Davey’s name and Mrs Smyth-Davey’s meets the mortgage payment of $1,670 per month with approximately $190,000 owing on the mortgage.
·Mrs Smyth-Davey is employed as a teacher and has a nett income of approximately $59,000 per annum, while Mr Smyth has a nett income of $1,170 per annum.
·Mr Smyth has a separate bank account with a minimal balance and has debts accumulated of $13,500 approx, with repayment of one debt at $360 per fortnight by Mrs Smyth-Davey. Mr Smyth has minimal capital assets.
·Mrs Smyth-Davey maintains a separate bank account with a minimal balance. Mrs Smyth-Davey has accumulated debt since prior to their marriage in the amount of $57,000 approx as well as a mortgage amount of $190,000 approx. Mrs Smyth-Davey has capital assets of the house (value unknown, but in the vicinity of $240,000), a superannuation account of $77,649 and other assets of some $12,000.
·Mrs Smyth-Davey manages the financial affairs of the household. Mrs Smyth-Davey admits that the debts, which existed prior to their marriage, have not been managed well since their marriage and the subsequent reduction in Mr Smyth’s rate of DSP payment.
·Mrs Smyth-Davey cares for an aged and disabled mother in the latter’s residence, together with her sister and assistance from community nurses. This involves Mrs Smyth-Davey being absent from the matrimonial residence each evening after dinner, Sunday through Thursday, taking a taxi to her mother’s residence and staying overnight at that residence to care for her mother, prior to proceeding to work each day. Responsibility for such care is shared with her sister, a registered nurse, who works in Sydney and cares for the mother Friday through to Sunday evening.
·Mr Smyth and Mrs Smyth-Davey consider themselves a married couple in all respects, apart from the ones arising as a consequence of Mrs Smyth-Davey, having to care for her mother, which involves separation for five nights a week.
18. The term “member of a couple” is defined in section 4(2) of the Social Security Act 1991 (“the Act”) which provides:
Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis...
19. Section 4(3) of the Act provides that in forming an opinion about the relationship between two people, the Secretary is to have regard to all the circumstances, including, in particular the following matters:
· The financial aspects of the relationship.
· The nature of the household.
· The social aspects of the relationship.
· Any sexual relationship between two people.
· The nature of the people’s commitment to each other.
20. The financial aspects of the relationship have been clearly detailed earlier in this decision. I note that Mrs Smyth-Davey has assumed responsibility for servicing both her debt and in part the debt of Mr Smyth, as well as providing financial support by paying for all aspects of daily living for both herself and Mr Smyth. There is also evidence to suggest long term planning and pooling of financial resources, as evidenced by the purchase of their current place of residence.
21. In considering the nature of the household, I note the separation on a semipermanent arrangement arising as a consequence of the caring arrangements for Mrs Smyth-Davey’s mother. This, although demanding, does not alter the fundamental nature of the household, with Mr Smyth and Mrs Smyth-Davey sharing the responsibility for the carriage of household activity, including care of the dogs.
22. In addressing the social aspects of the relationships, I observe that while they have had a long relationship, the marriage is relatively recent. Both consider themselves married, attend functions together and clearly hold themselves out as married.
23. I note that there is evidence pointing to a continuing sexual relationship, albeit somewhat impeded by Mr Smyth’s disabilities.
24. I have already referred to the long term nature of their relationship, albeit the marriage being relevantly recent. I observe the financial and domestic relationship which has been entered into prior to the marriage and continuing thereafter. The only anomalies relates to the caring responsibilities Mrs Smyth-Davey has in relationship to her mother, with return of normalcy in their domestic arrangements dependent on caring arrangements for the mother altering.
25. In summary analysis, I am satisfied and do so find that the only indicia of living separately and apart relates to the time spent by Mrs Smyth-Davey in caring for her mother. That this is ongoing is recognised, but does not in itself constitute more than a temporary inconvenience, albeit for a term of a few years, in a constellation of indicia which clearly define Mr Smyth and Mrs Smyth-Davey as being members of a couple.
26. Section 24(1) of the Act provides:
Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart 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;
the Secretary may determine in writing that the person is not to be treated as a member of a couple for the purposes of this Act.
27. I acknowledge that the Act requires the decision maker, in the exercise of the discretion contained within section 24(1) of the Act, to focus on the circumstances of a person, not the couple (French J in Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 considered and followed).
28. In directing my focus on Mr Smyth, the Applicant in this matter, I note that his financial circumstances altered at the time of his marriage, and that such an alteration arose as a consequence that his rate of DSP be calculated in accordance with section 1064 Module B and Module E of the Act. Module B provides that a person who is considered to be a member of a couple is paid at a lower rate of pension that a person who is single. Module F provides that where a person is a member of a couple, the couple’s income is taken into account in assessing the person’s payment rate.
29. Mr Smyth contends that the outcome that has resulted, namely the reduction in his fortnightly rate to $63, further reduced by $15 a fortnight to satisfy a debt arising from overpayment, by implementation of the provisions of the Act, is grossly unfair. In so stating, Mr Smyth submits that he, a person without an ability to work, has been left with a minimal income stream and that such minimal income, superimposed on a situation where he, personally, is without any independent financial resources so much so, that he is unable to either, on a day to day basis, meet his financial debts or live without financial support from his wife.
30. I have some empathy for Mr Smyth’s circumstances; however any empathy I may have does not permit me to exercise the nominated discretion in his favour. In so finding, I have given consideration to the following:
· Mr Smyth has particular disabilities which prevent him from working as a hairdresser. He has been receiving DSP payments since November 2003. He has had a long term relationship with his wife, and prior to their marriage in November 2006, they had jointly planned their long term domicile and domestic arrangements in the knowledge that he was incapacitated for work and the caring requirements for Mrs Smyth-Davey’s aging mother. I note that during the period prior to marriage, ability to accrue debt and failure to manage debt repayment by both members of the present couple was in evidence.
· Mr Smyth had been put on notice that he had to notify Centrelink, if he were to marry. Whether or not Mr Smyth was aware that his amount of DSP payment would be considerably reduced as a consequence of his marriage does not alter the provision of the Act which when implemented resulted in his lower rate of pension payment.
· In such circumstance, Mr Smyth, as does many with DSP payments, has to rely of the circumstances and financial resources of his wife. In this matter I observe that Mr Smyth lives in the matrimonial home with his wife providing the financial resources. The difficulty that has arisen is the failure to manage the debt accrual and debt management processes, leading to a cash availability restriction, which is of much concern to Mr Smyth.
· I would consider that such cash flow situations are neither unusual nor uncommon in situations where adequate financial practices have not been implemented in the face of rising debt levels. While I acknowledge that such financial situations do and can occur, I also understand that with proper financial advice as to debt consolidation and overall expenditures, remedies for such circumstances may well exist.
· In the circumstances I have outlined, I consider Mr Smyth’s financial and domestic concerns are the consequence of situations which are not uncommon in the community. In so stating, I acknowledge that caring arrangements for the elderly and infirm cause for much disruption and rearrangement of domiciliary arrangements, while financial over expenditure and debt accrual are common in a community, and in particular where an individual has a propensity over time to overspend and accrue debt.
31. In summary, I conclude that Mr Smyth’s circumstances are not particularly uncommon or unusual for the reasons outlined above. That Mr Smyth considers his treatment unjust does not in my view, constitute a special reason, which would permit the exercise of discretion in his favour. For Mr Smyth to succeed, he would have to detail circumstances, other than he has outlined, that have arisen as a consequence of implementation of the Act and that when objectively considered, have resulted in an unjust and unfair outcome. In Mr Smyth’s case, the implementation of the Act, when placed under objective consideration, resulted in a focus being placed on an expenditure pattern and debt accrual which was beyond the available financial resources as they were being currently managed.
32. As a consequence of the finding that Mr Smyth was and remains a member of a couple, Mr Smyth was not entitled to be paid DSP at the single rate during the period 26 November 2006 and 26 February 2007. In such circumstances, I find that there has been an overpayment of DSP pension in the amount of $2,826.78. I further find that this is a debt due and owing by Mr Smyth pursuant to section 1223 of the Act.
33. In addressing the issue of whether the debt should be written off pursuant to section 1236 of the Act, I would observe that the debt is not irrecoverable at law; that Mr Smyth has a capacity to repay the debt and that his whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debts. In such circumstances, I conclude that write off of the debt pursuant to section 1236 of the Act is not available to Mr Smyth.
34. In considering whether the debt could be waived pursuant to section 1237A, namely sole administrative error by the Commonwealth, I observe that Mr Smyth was notified of the requirement to notify Centrelink within 14 days of his marriage. Further, I note that Mr Smyth is recorded as requesting Centrelink on 17 January 2007 and 24 January 2007 to provide him particular forms with the necessary forms being completed and returned by Mr Smyth to Centrelink on 1 March 2007. On the material before me, I find that there is no evidence indicative of a sole administrative error by the Commonwealth. In such circumstances I conclude that the waiver provisions pursuant to section 1237A are not available in the circumstances of this matter.
35. I note that section 1237AAD provides for waiver of a debt in whole or in part in circumstances which are considered to be special. Earlier I have dealt at length with the background circumstances of this matter. I note that Mr Smyth considers that the implementation of the Act has resulted in an outcome, which he believes to be unfair and unjust. I also note the statement by French J in Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 in which he observes that social security legislation has long been concerned to differentiate the rates of benefit payable to those who are single and those who enjoy the benefits of marriage or like relationships.
36. In addressing the issue of whether Mr Smyth circumstances should be considered special circumstances, I note a long line of authority commencing with Toohey J in Re Beadle and Director-General of Social Security (1984) 6 ALD 1, in which the qualifying adjective, special, is said to look towards circumstances that are unusual, uncommon or exceptional. Further in relation to financial circumstances, it has been long established that the factor of financial hardship is not sufficient to amount to special circumstances, unless it is “exceptional” and not merely “straightened” (Re Colaiacolo and Secretary Department of Social Security (AAT 2109, 24 April 1985). Similar sentiments were expressed by Mr Mahon, Senior Member in Re Hajar and Secretary, Department of social Security (1988) 16 ALD 716.
37. In addressing the circumstances of this matter, I note that Mr Smyth is receiving a DSP. Such a situation cannot, in itself, be considered to be unusual and/or uncommon. Similarly, I note that Mr Smyth is married and resides with his wife, who is absent caring for her mother on five nights a week. I further recognise that Mr Smyth is financially dependent on his wife, a circumstance which he does not necessarily enjoy, but a circumstance which has arisen because of a decrease in his rate of DSP payment. I have undertaken a careful analysis of the couple’s financial situation earlier in this decision. I consider their financial situation to be difficult, but neither uncommon, unusual nor exceptional. I would observe that their current financial situation requires careful management. Nevertheless in such circumstances, I do not conclude that neither the health and/or financial circumstances existing in this matter constitute special circumstances.
38. In conclusion, I find that the debt cannot be waived pursuant to section 1237AAD of the Act, as special circumstances have not been found to exist.
decision
39. In summary, I determine that the decision under review, involving two issues, be affirmed.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member
Signed: ..............[Sgd].................................
Ms R Prasad, AssociateDate of Hearing 26 March 2008
Date of Decision 22 September 2008
Appearance for the Applicant Mr Smyth, self-represented
Appearance for the Respondent Mr Lozynsky, Centrelink legal services
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