Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2013] AATA 473
[2013] AATA 473
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/5353; 2012/5354; 2012/5357; 2013/1449; 2013/1453; 2013/1455
Re
Andy Soames
APPLICANT
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT
Decision
Tribunal Senior Member A K Britton
Date 8 July 2013 Place Sydney Decision Summary
The decision made by the Social Security Appeals Tribunal on 7 November 2012 to reject Mr Soames’ claim for disability support pension is affirmed (2012/5353).
The decision made by the Social Security Appeals Tribunal on 7 November 2012 to reject Mr Soames’ claim for a low income health care card is affirmed (2012/5354).
The application for review in relation to the decision made by the Social Security Appeals Tribunal on 7 November 2012 to raise and recover a debt will be determined following receipt of submissions (see para 81 of the Reasons for Decision) (2012/5357).
The decision made by the Social Security Appeals Tribunal on 1 February 2013 to reject Mr Soames’ claim for disability support pension is affirmed (2013/1449).
The decision made by the Social Security Appeals Tribunal on 1 February 2013 to reject Mr Soames’ claim for special benefit is affirmed (2013/1455).
The decision made by the Social Security Appeals Tribunal on 1 February 2013 to refuse to refund withholdings made from Mr Soames’ carer allowance is affirmed (2013/1453).
............................[SGD]............................................
Senior Member A K Britton
Catchwords
SOCIAL SECURITY—Disability support pension—Assets test—Disposal of assets—Whether the Applicant received no or inadequate consideration—Financial hardship—Unrealisable asset—Decision affirmed
SOCIAL SECURITY—Debt recovery—Whether the debt can be waived on account of sole administrative error—Whether the debt can be written off—Special circumstances—Decision affirmed
SOCIAL SECURITY—Debt—re-crediting of moneys already recovered for a debt—no power—decision affirmed
SOCIAL SECURITY—Low income health care card—Assets test—Decision affirmed
SOCIAL SECURITY—Special benefit—Assets test—Decision affirmed
Legislation
Social Security Act 1991 (Cth) – ss 11; 98; 729(1); 1061ZO; 1064; 1064-A1; 1064-G; 1071A-4; 1123; 1124; 1126AA; 1126AB; 1229; 1130; 1236(1); 1236(1A); 1236(1C); 1237A;1237AAD;
Cases
Re Georgina Frendo v Secretary to the Department of Social Security [1987] FCA 438
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 107
Soames and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 699
Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 260
REASONS FOR DECISION
Senior Member A K Britton
8 July 2013
These reasons largely concern the value of the assets held by Andy Soames. The Secretary asserts that Mr Soames “disposed of” close to $1 million during a four month trip to Syria in 2010 and by doing so, offended those provisions of the Social Security Act 1991 (Cth) (the Act) aimed at preventing a person from disposing of assets in order to meet the assets test, and, as a result, become eligible for social security payments.
Mr Soames has applied to the Administrative Appeals Tribunal for review of the six decisions outlined below. Central to each decision is the total value of Mr Soames’ assets at the relevant time. The answer to that question turns primarily on whether, in disposing of assets of around $1 million in 2010, Mr Soames received no or inadequate consideration. If the answer to that question is yes, it will be necessary to decide whether the hardship rules apply. A pre-condition for the application of the hardship rules is that Mr Soames must have an “unrealisable asset” and must suffer “severe financial hardship” if that rule was not applied (ss 1123 and 1229 of the Act).
Before examining each decision it is useful to outline the procedural history to the current applications for review.
Procedural history
In March 2011 the respondent Secretary decided to cancel Mr Soames’ disability support pension (with effect from 29 July 2010) on the grounds that his assets exceeded the “asset cut-off limit”, that is, the amount of assets a person may hold up to the point that disability support pension becomes not payable. That decision was made after the discovery that Mr Soames had withdrawn over $1 million from an Australian savings account before leaving Australia for Syria in August 2010. The Secretary decided that Mr Soames had “disposed of” all but a small proportion of the money withdrawn from his account, for no, or inadequate, consideration (ss 1123 and 1126AA of the Act). On that basis the Secretary found that the value of Mr Soames’ assets exceeded the “asset cut–off limit” and, as a consequence, the disability support pension was not payable to him.
Mr Soames challenged that decision without success in the Social Security Appeals Tribunal and later, the Administrative Appeals Tribunal (Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 107). In addition he lodged an appeal against the decision made by the Administrative Appeals Tribunal (“the first AAT decision”). The Federal Court refused Mr Soames’ application for an extension of time to lodge the appeal (Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 260).
In February 2012 Mr Soames made a claim for disability support pension. That claim was rejected on the same grounds as the decision to cancel his pension, namely, the value of his assets exceeded the “asset cut–off limit”. Mr Soames unsuccessfully challenged that decision in the Social Security Appeals Tribunal and the Administrative Appeals Tribunal (Soames and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 699 (“the second AAT decision”)).
In July 2012 and again in September 2012, Mr Soames lodged further claims for disability support pension. The stated reason for rejecting each claim was the same as that given for the earlier decisions. Mr Soames unsuccessfully challenged each decision in the Social Security Appeals Tribunal and now applies to the Administrative Appeals Tribunal for review.
In June 2012 Mr Soames applied to Centrelink for a low income health care card. That claim was rejected by the Secretary and, on review, by the Social Security Appeals Tribunal, on the grounds that Mr Soames’ “deemed income” exceeded the prescribed amount. Mr Soames now applies to the Administrative Appeals Tribunal for review of that decision.
In July 2012 the Secretary decided to raise and recover from Mr Soames a debt in the sum of $5,520 on account of being paid disability support pension, throughout a period, 29 July 2010 to 15 March 2011, when he was ineligible to receive that pension. The Social Security Appeals Tribunal affirmed that decision. Mr Soames now seeks review by the Administrative Appeals Tribunal.
In January 2013 the Secretary decided not to refund to Mr Soames money deducted from his carer allowance to meet the debt referred to above. The Social Security Appeals Tribunal affirmed the Secretary’s decision not to refund that amount. Mr Soames now seeks review by the Administrative Appeals Tribunal.
In December 2012 Mr Soames made a claim for special benefits. The Social Security Appeals Tribunal affirmed the decision made by the Secretary on the same grounds as the earlier decisions concerning disability support pension. Mr Soames also seeks review of that decision by that Administrative Appeals Tribunal.
Statutory framework
The rate of disability support pension payable to a person is determined in accordance with the rate calculator in section 1064 of the Act. Calculations are made of a person’s income and assets, and whichever results in the lower rate of reduced pension must be applied (s 1064-A1). In Mr Soames’ case, the assets test applies as it gives the lower rate of reduced pension.
The Act defines “asset” to mean property or money (including property or money outside Australia) (s 11). Where a person holds assets whose total value exceeds the person’s “assets value limit” the rate of disability support pension payable to them is progressively reduced until the rate of pension is nil (s 98 and Module G of s 1064 of the Act). Where the total value of a person’s assets exceeds the “asset cut-off limit”, disability support pension is not payable. Apparently Mr Soames is neither a member of a couple nor a homeowner, and therefore at the date of the July 2012 and September 2012 disability support pension claims his asset value limit and asset cut-off limit was $332,000 and $835.750, respectively.
Where a person “disposes of” assets for no or inadequate consideration, or for the dominant purpose of obtaining a social security advantage, the person is taken to have disposed of the asset (s 1123). Section 1124 of the Act provides that if a person disposes of assets, the amount of the disposition is:
(a)if the person receives no consideration for the … disposal …— an amount equal to:
…
(ii) the value of the assets that are disposed of; or
…
(b)if the person receives consideration for the … disposal …— an amount equal to:
…
(ii) the value of the assets that are disposed of; or
…
less the amount of the consideration received by the person in respect of the …disposal …
…
Where a person has disposed of assets, the amount of the disposition less the “disposal limit” is included in the calculation of the value of the person’s assets for a period of five years starting on the day on which the relevant disposal took place (s 1126AA). Where a person who is not a member of a couple makes a disposition, or dispositions, of less than $10,000 in a single year, then the provisions concerning disposal of assets do not apply (s 1126AA). Section 1126AB operates to qualify this concession by providing, in effect, that the total amount disposed of cannot be more than $30,000 over a five year period.
Where a social security pension is not payable because of the value of the person’s assets, and the person holds one or more unrealisable assets, in certain circumstances the value of that asset is to be disregarded in working out the value of the person’s assets (ss 1129 and 1130). These provisions are considered in more detail below.
Decision 1: Refusal to grant Mr Soames claim for a disability support pension (application no 2012/5353)
As noted, in July 2012 Mr Soames made a fresh claim for disability support pension and now applies to the Administrative Appeals Tribunal for review of the decision to refuse that claim. The main issues that fall to be determined are:
·Did Mr Soames “dispose of” assets in the five years prior to making his claim for disability support pension?
·If so, what was the value of Mr Soames’ disposed asset(s)?
·What was the value of Mr Soames’ total assets?
·Was Mr Soames’ property in Syria an unrealisable asset?
·If so, would Mr Soames suffer “severe financial hardship” if the financial hardship rules were not applied?
Each of these issues has been determined by the Administrative Appeals Tribunal in earlier decisions. Apart from the first two, each issue is required to be assessed by reference to the date of claim.
Did Mr Soames “dispose of” assets in the five years prior to making his claim for disability support pension?
By the operation of s 1126AA any asset disposed of by Mr Soames between 4 July 2007 and 4 July 2012 counts towards the value of his total assets.
In the first AAT decision the Tribunal found that between August 2010 and March 2011, Mr Soames disposed of $990,000 (“the disposition finding”). Senior Member Bell, in reviewing the subsequent decision to refuse Mr Soames’ claim for disability support pension, decided not to revisit that finding on the ground that the issue had been determined eight months earlier and Mr Soames had failed to produce any new evidence (Soames and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 699 at [24] to [26]).
Mr Soames contends that the disposition finding was infected by error and fresh evidence makes this clear. Before deciding whether that finding should be revisited it is necessary to set out the background to that finding.
Background to the disposition finding
For close to a decade Mr Soames and his wife ran a small business, SSS Food Company. They sold the business in 2009.
On 3 August 2010 Mr Soames closed a Commonwealth Bank of Australia account in the name of SSS Food Company and withdrew $1,090,040.00. He flew to Syria on the same day. On his account he instructed the bank to issue to him three bank cheques each in the sum of $360,000, which he cashed shortly after arriving in Syria. He claimed that on his return to Australia on 21 December 2012 he had spent all but $160,000 — consisting of $40,000 in cash and $120,000 left with his sister in Syria to pay for stamp duty on a property purchased during the trip and funeral costs for himself (it is his wish to be buried in Syria) and other family members.
While in Syria Mr Soames continued to receive disability support pension until 2 November 2010 when his pension was suspended because of the amount of time spent outside Australia. Two days after he returned to Australia his pension was reinstated.
On 22 March 2011 Mr Soames approached Centrelink seeking an adjustment of his rate of disability support pension on the grounds that he had spent the proceeds from the sale of a business property sold in May 2009. At this point Centrelink discovered the withdrawal of over $1,000,000 made by Mr Soames seven months earlier. On the basis of that information a decision was made to cancel Mr Soames’ disability support pension as his assets, assessed at $997,250, were about $200,000 above the asset cut-off limit.
On review, the Administrative Appeals Tribunal affirmed the decision to cancel Mr Soames’ pension but reached a different finding to the Authorised Review Officer about the value of Mr Soames’ assets. The Tribunal estimated the value of Mr Soames’ assets to be $1,340,000, consisting of current assets of $350,000 (the property in Syria) and disposed assets of $990,000.
In summary the Tribunal found:
·Mr Soames travelled to Syria with $1,080,000 in August 2010 and returned in December 2010 with $40,000
·Mr Soames did not, as claimed, spend over $1,040,000 in less than five months
·Mr Soames’ expenditure for travel in Syria may have been as high as $90,000
·In relation to his claim that some funds were spent on supporting family members, that amounted to a gift and constitutes a disposal within the meaning of s 1123 of the Act
·As at March 2011, the amount of Mr Soames’ disposed assets was $990,000. In addition he had at his disposal $120,000 in cash in Syria and some $64,000 in a superannuation account
·The property held by Mr Soames in Damascus was not, as claimed, purchased in August 2010 but probably some time before that date.
In these proceedings Mr Soames was invited to provide any fresh evidence. In answer to that invitation Mr Soames filed a great amount of material much of it irrelevant to the asset disposition issue. In the main the material consisted of assertions about the alleged “unlawful” conduct of Centrelink officers and members of the Administrative Appeals Tribunal and the Federal Court. (see Exhibit A 1 to Exhibit A 26, inclusive.) However some new material came to light about the date of purchase of Damascus property.
Date of purchase of property in Damascus
Mr Soames claimed that shortly after his arrival in Syria he purchased a residential property in Adra, a suburb of Damascus, for $AUD350,000. The Tribunal did not accept that the property was purchased in August 2010. Central to that finding was the apparent discrepancy between two documents (in Arabic) purporting to be contracts for sale of the Damascus property. The Tribunal reasoned at [29], [30]:
Two sets of documents purporting to be the contract for sale were provided by Mr Soames in Arabic: one apparently faxed to Centrelink in about August 2011 and the other was provided to Centrelink on 18 October 2011. Translations of both sets of documents were obtained by Centrelink. The documents, while very similar, are not identical. At the hearing Mr Soames explained that the first document was a copy of the original contract, whereas the second had been emailed to him by his real estate agents in Damascus following his request in March 2011. The document had been ‘caught in the cross-fire’ while being faxed during the recent civil unrest, and a different member of the agent’s company had attempted to re-construct the document. Mr Soames submitted that the second document should be disregarded. The original contract for sale is locked ‘at home in Syria’ and is unable to be accessed by anyone other than him.
The Respondent submitted that the Tribunal should have some concerns about the authenticity of the documents. At first glance the documents appear to be identical. However, on closer inspection of the last page of the contract for sale there are a number of differences that do not appear to be related to the quality of the reproduction of the documents. For example line four; the name and signatures at the bottom of the page; and the placement of official stamps. It is noted that the date of contract on the first version was translated as “20/08/2004” but was translated in the second version as 20 August 2010. These discrepancies lead me to the view that I cannot be satisfied that Mr Soames in fact purchased a property in August 2010.
The finding that the property was probably purchased prior to Mr Soames’ trip to Syria in August 2010 was relevant to the Tribunal’s ultimate decision that the property was not purchased from the $1 million plus withdrawn from his savings account.
In these proceedings Mr Soames sought leave to request the Registrar to issue a summons to give evidence on the solicitor who represented the Secretary, and the interpreter used, in the first AAT proceedings. I requested Mr Soames to identify the issues he wished to explore with the solicitor and the interpreter and to provide an explanation about how those issues might be relevant to these proceedings. Mr Soames’ submissions contained a great number of unsupported allegations and shed no light on either issue.
I refused Mr Soames’ application. Nonetheless I arranged for a fresh translation of each document. That translation revealed a number of small differences between the two documents, which suggested that the first document was a draft. On each the date of sale was the same: 20 August 2010. The Secretary now accepts that to be the date of sale.
On the available evidence I am satisfied that Mr Soames acquired the Damascus property on the date as claimed.
Balance of findings made by the Tribunal
The following table contains a summary of the claims made by Mr Soames in the first AAT proceedings and these proceedings about how he spent his money while in Syria:
As apparent from the above, apart from that relating to medical expenses there is little material difference between the account Mr Soames gave in these proceedings about how he spent his money while in Syria and that given in the first proceedings. Mr Soames remains unable to account for a shortfall of close to $200,000. Many of the claimed amounts, such as the $500 per day for living expenses, appear excessive. In these proceedings Mr Soames admitted that he was unsure of precisely what he spent his money on while in Syria because at the time he was under a great deal of stress: his mother and sister were extremely ill and, in addition, he was forced to spend a great deal of time and emotional energy mediating a dispute between his two sons back in Australia. He also claims that a large amount was given to members of his family and spent obtaining medical assistance for his mother and sister. He suggested in these proceedings this might account for the shortfall.
Central to many of the findings made by the original Tribunal was the finding that there was no reliable contemporaneous evidence about how Mr Soames spent his money while in Syria and much of his evidence was vague and inconsistent. I agree with that conclusion. I have carefully examined whether the disposition finding should be revisited given the fresh evidence that supports Mr Soames’ claim of having purchased a property while in Syria. While I have reached a different finding about when the property was purchased, for the reason given by Senior Member Bell, I have decided not to revisit the central finding made by the Tribunal, that is, that Mr Soames received adequate consideration for at best $90,000 of the money he spent in Syria.
Money spent while in Australia
It is necessary to also determine whether Mr Soames made any further disposition of assets while in Australia in the period between the withdrawal of funds from his savings account, and the cancellation of his disability support pension on 22 March 2011. In the first AAT decision the Tribunal accepted that Mr Soames may have had some domestic expenses in Australia but concluded it was “far from clear how much this was” at [51]. It is useful to distinguish between the claimed expenditure made in the period before and after Mr Soames’ return from Syria.
(i) Expenditure after return to Australia
Mr Soames claims that by 22 March 2011 he had fully expended the $40,000 in cash he brought back to Australia from Syria. He claims that while in Australia he spent money on the following items:
It is unclear from Mr Soames’ evidence when this alleged expenditure was made and what proportion, if any was spent after his return from Syria. His bank records shed little light on this issue. They show that on return from Syria he had about $10,000 in his savings account and, in the period to the date of pension cancellation, about $7,000 was deposited — $2,600 in disability support pension payments and a further $4,400 from other sources — and about $15,000 withdrawn.
In support of his claim that he fully expended the $40,000 prior to the cancellation of his disability support pension Mr Soames relies on, among other things, a bundle of receipts provided to the Tribunal in the first proceedings (see Exhibit A 11). None relate to the period after his return from Syria. In these proceedings he stated that about $65,000 was spent on removal and household establishment costs incurred in moving his household and that of his eldest son (they live in separate households). Given that Mr Soames moved his residential address about eight months before returning from Syria, in the absence of any supporting evidence I could not be satisfied that the claimed expenses were incurred after his return. In any event, for the reasons as discussed below any costs incurred in assisting his eldest son, who is not a dependant, as that term is used by the Act, constitutes a disposition of an asset for the purpose of s 1123.
Mr Soames has been unable to account for the claimed expenditure of the remaining $40,000 in the three months after his return from Syria. The critical issue is not whether he spent the money but whether he received adequate consideration. I am not satisfied that he received adequate consideration for the entire amount. He probably received adequate consideration for at best $10,000. I am not satisfied that he received adequate consideration for the balance.
(ii) Expenditure prior to return to Australia
The evidence is equally confusing about what amount, if any, Mr Soames spent in Australia during the period he was in Syria. I accept that he may have spent the difference between the amount he withdrew from his savings account and the amount he took to Syria, that is, $10,040 on bills incurred while he was away. If, as he now apparently claims, his expenditure was in excess of that amount, it must have been funded from other sources given his claim that he took to Syria all but about $10,000 of the $1 million withdrawn from his savings account.
(iii) Expenditure after cancellation of pension
Mr Soames claims that after his pension was cancelled he was forced to call on $40,000 of the $120,000 held by his sister on his behalf in Syria. On his account a friend brought that money back to Australia in cash. He stated that the balance of the money held by his sister (who died a few months ago) was used, with his approval, to support family members caught up in the conflict in Syria. It is unclear when this money was spent but if his account given in the first AAT proceedings is to be accepted it must have occurred sometime after the hearing (6 December 2011) as he told the Tribunal that at that time his sister was holding the money in trust for him.
Mr Soames is insistent that the $80,0000 (held by his sister) should not be treated as a “disposed asset” because his purpose in authorising his sister to use the money to assist other family members had nothing to do with obtaining a social security advantage but everything to do with assisting family members. To be caught by s 1123 of the Act it is not necessary to show that the purpose of the disposition was to obtain a social security advantage. It is enough that the person received no, or inadequate, consideration “in money or money's worth” for the disposition (s 1123(1)(a)(i)&(ii)). A donor receives no consideration “in money or money’s worth” for making a gift to a person (see discussion of the meaning of the term “consideration” in Re Georgina Frendo v Secretary to the Department of Social Security [1987] FCA 438). Mr Soames also contends that the money given to his family should not be counted toward his assets because he was not told by Centrelink that “gifting” would be treated as a disposal of assets. Even if accepted this would not change the character of the disposition for the purpose of s 1123 of the Act.
While Mr Soames’ account of how he spent the $40,000 he called on from Syria after his pension was cancelled, is in many respects unsatisfactory, it was not contended that this amount was a “disposed asset”. For present purposes I will assume that it was used to meet his living expenses and he received adequate consideration for that expenditure.
Summary
I am satisfied that in the five years prior to making a claim for disability support pension Mr Soames “disposed of” a total of $670,000:
·$560,000 by 21 December 2010 ($1,080,000 less $520,000 ― purchase of property, money left with sister, cash on return to Australia)
·$30,000 by 22 March 2011
·$80,000 by 1 July 2012 (based on Mr Soames’ claim made at the first hearing (6 December 2011) that the money was then held by his sister in Syria and that made at the second (31 August 2012) that it had been spent).
Section 1126AA requires that $20,000 be deducted from this amount. Accordingly the value of Mr Soames’ disposed assets is $650,000.
Total value of Mr Soames’ assets
In the second AAT decision the Tribunal found that at the date of claim, 9 February 2012, Mr Soames held the following assets: house in Syria ($350,000); shares ($1,241); cars ($9,000); household and personal effects ($2,000) and a small amount in the bank ($1,000). There is no evidence to suggest that those assets either were disposed of, or their value materially changed by the time Mr Soames made his second claim for disability support pension in July 2012.
I am satisfied that the amount Mr Soames held in assets was $1,013,241 consisting of current assets ($363,241) and disposed assets ($650,000). It follows that the total value of Mr Soames’ assets exceeded the relevant asset cut-off limit, and disability support pension was not payable to him.
Should the hardship rules be applied?
The value of any unrealisable asset must be disregarded in working out Mr Soames’ rate of pension if he would otherwise suffer severe financial hardship (ss 1129, 1130).
The application of s 1129 turns on whether:
·The property owned by Mr Soames in Damascus is an unrealisable asset
·Mr Soames would suffer severe financial hardship if s 1129 did not apply to him
Section 11(12) provides an asset of a person is an unrealisable asset if:
(a)the person cannot sell or realise the asset; and
(b)the person cannot use the asset as a security for borrowing.
An unrealisable asset will also be unrealisable for the purpose of the Act if (s 11(13):
(a)the person could not reasonably be expected to sell or realise the asset; and
(b)the person could not reasonably be expected to use the asset as a security for borrowing.
Is the Syrian property an unrealisable asset?
The Secretary contends that the property in Syria is not an unrealisable asset pointing to material obtained from the internet that reveals that the agent through whom Mr Soames purchased the property remains in business and residential real estate in Damascus apparently continues to be sold for good value (see Exhibit R 2). In addition the Secretary relies on recent newspaper reports which claim that the situation in Syria is uneven and parts of Damascus continue to function (see Robert Fisk, ‘The war has reached Damascus, but for now it is not a warzone’ in The Independent (online), 11 April 2013<
Mr Soames contends that it would be impossible to sell or borrow against his property and the Secretary’s contention ignores media reports, confirmed by members of his family, that Syria is a country at war where thousands, if not millions, of people are now refugees.
Mr Soames admits that he has made no efforts to contact the agent from whom he brought the property or anyone else to enquire if the property could be sold. He further admits that apart from a casual conversation with a family member in late 2011, who when he raised the possibility of selling the property, said “you’re mad … the whole country [is] shut”, he has not discussed selling the property with anyone in Syria including family members with whom he is in regular contact. He admits that a member of his family reported three months ago that they had seen the property and it was untouched by the conflict.
While it seems unlikely Mr Soames would be able to realise the property given the situation in Syria, in the light of the material tendered by the Secretary and in the absence of any steps taken by Mr Soames to make some enquiries, in my opinion the question of whether the property is an “unrealisable asset” cannot be confidently determined. Prior to the hearing Mr Soames was on notice that the Secretary disputed that the property was an unrealisable asset (see Secretary’s Statement of Facts and Contention, 27 May 2013 at [29], [30]). However he was not provided with the evidence relied upon by the Secretary to support that contention until the first day of hearing. Given that in previous decisions of the Social Security Appeals Tribunal and in the second Tribunal decision, it was decided that that the Syrian property was an unrealisable asset, it is not surprising that Mr Soames has not turned his mind to whether there is sufficient evidence to support his claim. Were it not for my finding set out below that Mr Soames was not suffering severe financial hardship, in fairness to him the appropriate course in my opinion would be to provide him with the opportunity to provide further evidence. However for the reasons that follow it is not necessary to finally determine this issue.
Would Mr Soames suffer severe financial hardship if s 1129 were not applied?
Apart from carer allowance, Mr Soames has not received any social security payments since his disability support pension was cancelled in March 2011.
When he made a claim for disability support pension in July 2012 Mr Soames was living with his former wife in a Housing Commission property, where he remains to this day. On his account, after paying rent, his former wife receives about $280 per week. In 2012 their youngest son had just completed school, commenced work and was living at home. Mr Soames claims that while he and his former wife are separated they support each other. He claims that from time to time they are forced to rely on assistance from charities. On his account when things become tense at home he stays with close friends. He says while he is reluctant to do so, on occasion he is forced to rely on the generosity of his daughter and friends, in order to survive.
While Mr Soames claims that he has exhausted all sources of funds available to him I am not satisfied that this was the case in mid-2012. In these proceedings he stated that he ran out of money five months ago (January 2013).
While I accept that when he made his claim for disability support pension Mr Soames was suffering financial hardship, in my opinion at the relevant time he could not be said to be suffering severe financial hardship: he had no dependents, was living in stable and comfortable accommodation, was receiving financial support from his wife, was able to turn to friends and other family members for assistance. Even if at the relevant time Mr Soames had exhausted all funds these factors would lead me conclude that any financial hardship suffered by him could not characterised as severe.
Not being satisfied that Mr Soames was suffering severe financial hardship, s 1129 cannot be applied.
Conclusion: When Mr Soames made his claim for disability support pension the total value of his assets exceeded the asset cut-off limit. Accordingly the disability support pension was not payable to him. It follows that the decision to refuse his claim for disability support pension must be affirmed.
Decision 2: Refusal to grant Mr Soames’ claim for disability support pension (application no 2013/1449)
In September 2012 Mr Soames made a further claim for disability support pension. In the absence of any evidence to suggest there was a material change in either the value of his assets or financial circumstances since he made a claim for disability support pension three months earlier, I have decided not to revisit either issue and to adopt the findings set out above.
It follows that the preferable decision is to affirm the decision to refuse to grant Mr Soames’ claim for disability support pension.
Decision 3: Refusal to grant Mr Soames’ claim for a low income health care card (application no 2012/5354)
On 4 May 2012 Mr Soames lodged a claim with Centrelink for a low income health care card. The Social Security Appeals Tribunal affirmed the decision to reject that claim.
To qualify for a health care card, among other things the person must satisfy the health care card income test (s 1061ZO(2)(d)). A person satisfies that test if, in the eight weeks ending on the day they made a claim for the card, their “ascertained income” is less than their “allowable income” as those terms are defined in s 1071A-4 of the Act.
I agree with the finding made by the Social Security Appeals Tribunal that in the relevant period Mr Soames’ ascertained income significantly exceeded his allowable income. It follows that Mr Soames does not satisfy the health care card income test and the decision under review must be affirmed.
Decision 4: To raise and recover a debt from Mr Soames in the sum of $5,520 (application no 2012/5357)
In July 2012 the Secretary notified Mr Soames of the decision to raise and recover a debt in the sum of $5,520.62 being for payment of disability support pension between 29 July 2010 and the date his pension was cancelled, 15 March 2011 (the debt period).
Mr Soames was not entitled to be paid disability support pension throughout the debt period because the value of his assets exceeded the asset cut-off limit. Mr Soames does not challenge the calculation of the debt. Having reviewed the figures I am satisfied that the calculation is correct. The sole issue to be decided is whether the power conferred by the Act to waive or write off all or part of the debt can and/or should be exercised.
Can the debt be waived on account of administrative error?
Section 1237A of the Act provides that the Secretary, or Tribunal acting as substitute decision-maker, must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth:
Waiver of debt arising from error
Administrative error
1Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
Section 1237A poses the question: “is an administrative error made by the Commonwealth the only cause that objectively can be ascribed to some or all of Mr Soames’ debt?” (see Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126, at 135). If the answer to that question is yes, and the overpayment was received in good faith, that part of the debt attributable to that error must be waived.
Mr Soames contends that he was never told by Centrelink that his pension would be affected if his assets exceeded a certain amount or he did not receive adequate consideration for disposing of his assets. He contends that because of a combination of language problems (his first language is Arabic), health problems including depression, and the responsibility of caring for his eldest son who suffers from a combination of physical and psychiatric problems, it is unreasonable to expect him to understand Centrelink’s complex rules.
Mr Soames’ argument that Centrelink failed to advise him of the requirement to report his asset and income is unsustainable. Prior to and throughout the debt period he was notified of these requirements on a regular basis.
Even if accepted that he was ignorant of, or did not understand those requirements the power to waive the debt could not be exercised. The genesis of the overpayment was Mr Soames’ failure to disclose the existence of over $1 million in assets to Centrelink. The debt therefore was not solely attributable to an administrative error made by Centrelink. It follows the power to waive the debt under s 1237A cannot be exercised.
Can the debt be written off?
Section 1236(1A) of the Act provides that the Secretary may write off a debt 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.
A debt is not taken to be irrecoverable for the purposes of paragraph (1A)(b), if it can be recoverable by means of deductions from the debtor's social security payment (s 1236(1C)(a)).
None of the pre-conditions to the exercise of the power conferred by s 1236(1) are satisfied. Accordingly the debt cannot be written off under this provision.
Can the debt be waived because of special circumstances?
Section 1237AAD of the Act gives the decision-maker the power to waive all or part of a debt if satisfied, among other things, that “there are special circumstances (other than financial hardship alone) that make it desirable to waive [the debt]”.
That power can only be exercised if the decision-maker is satisfied that (s 1237AAD):
(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; …
The Secretary did not address whether the debt in part or whole was the result of Mr Soames knowingly making a false statement or a false representation or failing or omitting to comply with a relevant legislative provision. I have decided to defer making a decision about whether the debt can be waived under s 1237AAD until the parties have been given an opportunity to make submissions on this issue. I direct:
(a)Within 14 days of the date of this decision the Secretary must advise the Tribunal and Mr Soames in writing, whether she contends that the debt cannot be waived because of s 1237AAD(a) of the Act. If contended that that s 1237AAD(a) applies, the Secretary must also provide to the Tribunal and Mr Soames brief written submissions in support.
(b)If the Secretary contends that s 1237AAD(a) applies, Mr Soames is invited to provide brief written submissions to the Tribunal and the Secretary on that issue which must be provided within 14 days of receipt of the Secretary’s submissions.
Decision 5: The decision to refuse to refund money deducted from Mr Soames’ carer payment (application no 2013/1453)
In August 2012 Mr Soames was advised of the Secretary’s decision to deduct from his carer allowance an amount of $108.30 per fortnight as repayment for the debt discussed above. In December 2012, an agreement was entered into between Mr Soames and the Secretary under s 1234 of the Act, to reduce the amount deducted from his carer allowance to $15 per fortnight. Two weeks later Mr Soames requested that the money deducted from his pension be refunded. On 14 January 2013 an Authorised Review Officer decided not to grant that request. That decision was affirmed by the Social Security Appeals Tribunal.
The Social Security Appeals Tribunal concluded that there was no legislative basis upon which it could make an order to refund an amount deducted from a person’s social security payment to recover a debt.
This issue was not fully argued before me. Neither party were able to refer me to any legislative provision that expressly conferred a power to refund money withheld from a person’s pension payment. Even if such power were available, in my opinion, in circumstances where a decision had not been made to waive or write off the relevant debt to which the deduction relates, it would be inappropriate to exercise that power. I affirm the decision under review.
Decision 6: To refuse to grant Mr Soames’ claim for special benefit (application 2013/1455)
On 19 December 2012 Mr Soames applied for special benefit. He seeks review of the decision made by the Social Security Appeals Tribunal to affirm the decision to reject that claim.
The Act describes special benefit as “a discretionary benefit … available only to a person who is not able to get any other income support payment” (s 729(1)).
Special benefit is not payable to a person if the value of their assets exceeds their assets value limit (s 733). A person’s assets value limit must be worked out according to the table in s 733(3). At the relevant time the value of Mr Soames’ assets far exceeded the applicable assets value limit, namely $190,250. It follows that special benefit was not payable to Mr Soames and the decision under review must be affirmed.
I certify that the preceding 88 (eighty -eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton ...............[SGD].........................................................
Associate
Dated 8 July 2013
Date(s) of hearing 11 and 12 June 2013 Date final submissions received 19 June 2013 Applicant In person Solicitors for the Respondent Sparke Helmore
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