Street and Secretary, Department of Family and Community Services

[2000] AATA 205

DECISION AND REASONS FOR DECISION [2000] AATA 205

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No    A1999/78

GENERAL ADMINISTRATIVE DIVISION          )          

Re      BERYL AGNES STREET 

Applicant

And    THE SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal       Pamela Burton, Senior Member   

Date17 March 2000

PlaceCanberra

Decision      The tribunal affirms the decision under review. 

...................(Sgd.).......................
  Pamela Burton    Senior Member
CATCHWORDS
SOCIAL SECURITY – age pension – paid married rate - overpayment raised by reason of applicant's husband's income – change in household income not declared by applicant – whether the applicant and her husband are living other than as a couple – whether couple lived separately under the same roof for past 17 years – convenience of living together – significance of joint assets – no claim made for pension at single rate - whether appropriate to waive right to recover all or part of debt by reason of administrative error or special circumstances.
Legislation
Social Security Act 1991, s4(3) s4(3A), s68, s69, s1224, s1237AAD.

REASONS FOR DECISION

17 March 2000        Pamela Burton, Senior Member               

1. This is an application for review of a decision dated 27 April 1998 of the Social Security Appeals Tribunal ("SSAT").  The SSAT affirmed the decision of a delegate of the respondent that an overpayment of age pension of $32,595.40 for the period 26 March 1992 to 20 March 1997 be raised and recovered.

2. Mr Jack Daniels, of Welfare Rights & Legal Centre, represented the applicant and Mr John Kenny, of Centrelink, represented the respondent in the proceedings. The tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the "T documents"), and copies of five property transfers (Exhibit 1).  The applicant gave evidence at the hearing.  Mr Street, her husband, and Ms Heanes, her daughter, gave oral evidence on the applicant's behalf.
   Background

3. The applicant received Age Pension at the married rate from 1 August 1991. Under sections 68 and 69 of the Social Security Act 1991 ("the Act"), the applicant had an obligation to inform the Department of Family and Community Services ("the Department") in writing of a change in circumstances, and to provide any information requested by the Department which might affect payment of the pension.  The applicant seems not to have been notified of the grant of Age Pension and her obligation to provide information that might affect her pension entitlement until 16 March 1992 (T41).  The applicant's husband commenced working in January 1992.  The Department was not informed that Mr Street was working, nor of changes in his income after 16 March 1992.  The overpayment was raised when it was discovered that Mr Street had earned a salary in the relevant period, which affected Mrs Street's pension entitlement. 
   Contentions

4. The applicant contends that her marriage to her husband irretrievably broke down some 17 years ago, and that since that time, they have lived separately, though under the same roof. The respondent contends that Mr and Mrs Street's living and financial arrangements make it evident that Mrs Street has continued to be a member of a couple as defined in subsection 4(2)(a) of the Act, the criteria set out in subsection 4(3) having been met.
   Issues

5. The central issue is whether or not Mrs Street and Mr Street lived together other than in a marriage like relationship during the period 26 March 1992 to 20 March 1997.  This necessitates an inquiry into whether Mr and Mrs Street ceased living in a marriage like relationship some 17 years ago.  If the tribunal finds that Mrs Street has incurred a debt to the Commonwealth resulting from overpayment to her of her pension because of her husband's income, the tribunal is required to consider whether there is any basis for waiver of any part of that debt.
   Agreed facts

6. The facts found by the SSAT are agreed facts for the purpose of this review.  The SSAT found that:

   (a)Mrs Street, now 68 years old, has been receiving age pension since 1 August 1991.

   (b)Mrs Street was issued with an age pension notice on 16 March 1992 which required, among other things, that she advise Centrelink if her and her husband's income exceeded $74 a week.

   (c)Mr Street commenced work as a plant operator with Guideline Pty Ltd on 16 January 1991 (sic).

   (d)Mr and Mrs Street operate a joint bank account, are tenants in common with their daughter in respect of the home in which they live.  The three divide the payment of bills between them equally, irrespective of how the actual expenditure occurs.

   (e)Mr and Mrs Street have separate bedrooms but both use other parts of the house.  Mrs Street cleans the house and Mr Street does the maintenance work on the home.  They buy food, cook and eat separately.

   (f)Mr and Mrs Street do not socialise together outside the home.

   (g)Mr and Mrs Street have not had a sexual relationship for about 17 years.

   (h)Neither Mr nor Mrs Street is willing to leave the relationship and both state that the current living arrangements are convenient for them.

As to (c) above, it seems that Mr Street commenced working for Guideline Pty Limited on 16 January 1992, which is acknowledged by the SSAT in the first paragraph of its Reasons for Decision.  The error in the agreed facts does not affect the outcome of this review.
The evidence
The marriage relationship

1. Mr and Mrs Street were married in 1977.  They had the care of their grandchildren and raised them together.  In July 1983 the nature of their relationship changed.  Mrs Street believed that Mr Street had been unfaithful to her.  Mrs Street's daughter, Julie Heanes, gave some evidence of the source of conflict between Mr and Mrs Street.  She stated in evidence that when she and her mother were away in Queensland in 1983, Mrs Street's sister visited Mr Street at the matrimonial home.  Ms Heanes said that whatever happened caused a lot of heartache.  It clearly distressed Mrs Street and still does.  Mr Street left the family home to take the grandchildren on holidays.  He said that on his return family life did not resume as normal.  Ms Heanes gave evidence that from this time and "before their separation in 1984" they were constantly at each other's throats.  They have continued to reside together, being civil to each other, but according to Ms Heanes, they lead completely separate lives.

2. It is relevant to note that on 22 May 1985, Mrs Street claimed in a pension entitlement review form that she was married but living apart from her husband (T3).  At that time Mr Street was working and Mrs Street was caring for the grandchildren.  Mrs Street was in receipt of a Widow's Pension.  In August 1987 the Department made inquiries as to her living arrangements (T10, 11).  In October 1987 the Department accepted Mrs Street's claim that she had been living separately from her husband, though under the same roof, since July 1983 (T13, T16).  However, her pension was cancelled as of 10 December 1987 (T18) because of the time limits imposed by subsection 3(8) of the Social Services Act, 1947 up to which a woman may be paid Widows Pension whilst residing with her husband. 

3. Mr and Mrs Street discussed the matter, and decided that they would continue to reside in the same house, despite the effect that would have on Mrs Street's pension entitlement and notwithstanding that there was no prospect of a reconciliation.  Mr Street agreed that Mrs Street could continue to live in the house without her paying any contribution to the mortgage by way of "rent", and that he would buy the groceries.  Influencing their decision was the fact that Mr Street had been recently diagnosed with cancer (T13).  Mrs Street was concerned enough about Mr Street's well being that she accompanied Mr Street to his doctor when he was first diagnosed with the illness.
   Sharing of assets

4. The property in which Mr and Mrs Street resided in 1983 was in Tharwa Road, Queanbeyan, and was registered in Mr Street's name alone.  However, notwithstanding Mrs Street's evidence that the marriage relationship broke down in July 1983, that home was sold in December 1983, and the couple purchased a new property in joint names in Thornton Road, Queanbeyan into which they both moved.  On 23 September 1988 Mr and Mrs Street, as joint tenants as to one half share, purchased with Ms Heanes and her husband, Stephen Heanes, as joint tenants as to one half share, the property in which Mr and Mrs Street now live at Wickerslack Lane, Queanbeyan.  For the purpose of that purchase Mr and Mrs Street jointly borrowed funds from a Building Society (T21).  On 13 July 1990 Mr and Mrs Street sold the Thornton Road property to Mrs Street's son.  On 15 February 1995 changes in the ownership of the Wickerslack Lane property occurred as a consequence of the marital break-up of Julie and Steve Heanes.  Ms Heanes bought out her husband's share of the property and she then became the registered owner of a half share of the property as a tenant in common with Mr and Mrs Street.  At the same time Mr and Mrs Street's respective interest in the property was converted to an interest as to a quarter share each as tenants in common.  These transfers are evidenced by Exhibit 1, which consists of copies of five transfers under the Real Property Act, NSW 1900.
   Living arrangements

5. The evidence available to the tribunal confirms that Mr and Mrs Street find it convenient to continue to live under the same roof, and that their living and financial arrangements are mutually satisfactory.  This is distinguishable from the situation whereby one party is dissatisfied with the living arrangements but is unable to alter it because the other party refuses to leave, or because the dissatisfied party is prevented by economic or some other circumstances from making other accommodation arrangements.  Mrs Street told the SSAT that she did once try to "throw him out" and that her husband refused to go.  At the tribunal hearing she denied that she had asked her husband to move out.  She then recalled that in the heat of the moment in the last altercation she had with her husband some 7 or 8 years ago she tried to throw him out.  While Mrs Street believes that she could not afford alternative or separate accommodation, she has not explored the option of moving out, nor inquired as to the rate of pension to which she would be entitled if she lived separately and apart from her husband.  Her evidence is that the current arrangement suits her convenience and she has no need to explore other options.  She said that she is happy with her living arrangements.

6. The Wickerslack Lane home is set on some five acres and is a little way out of Queanbeyan.  Mrs Street does not go out much, and apparently never did.  She is suffering from diabetes and is not in good health.  Concerned that her motor vehicle was not reliable, Mr Street purchased another motor vehicle for Mrs Street.  Mrs Street says she did not ask for this gift, and it is argued on her behalf that her husband's gesture can not be regarded as evidence that she is dependent upon him for support.

7. Nevertheless, having heard the evidence a fairly clear picture emerges about the circumstances in which Mr and Mrs Street have freely chosen to live.  Wickerslack Lane apparently offered an attractive lifestyle to the four family members who purchased it.  The property allows both Mr Street and Ms Heanes to have dogs.  The layout of the home lent itself to being divided into two self-sufficient living areas.  It was modified to allow Mr and Mrs Heanes and their daughter to live independently in one half and Mr and Mrs Street in the other.  Mr and Mrs Street have a bedroom each in their end of the home, and they share the rest of their quarters.  The property has a garage in which Mr Street spends a lot of his time. 

8. Mr and Mrs Street care for chickens and have a vegetable garden.  The evidence is that Mr Street ploughs and prepares the garden and Mrs Street plants the seeds.  Mr Street waters the vegetables.  They both pick the garden produce and Mrs Street collects the hens' eggs.  Mr Street is responsible for the repairs and maintenance to the home, and he mows the lawns.  Mrs Street cleans the common areas of their part of the home.  This is the division of labour the couple has always adopted.  Their life-styles appear to be compatible, in that Mr Street spends a lot of his day pottering in the garage, while Mrs Street occupies herself inside.  She knits, crochets and watches television.  Both spend a great deal of time with Ms Heanes' 8 year old daughter.  At night, Mr Street watches television.  Mrs Street tends to retire early. 

9. Mrs Street says that Mr Street is out a lot during the day, and she does not know where he goes.  She told the SSAT that he had another woman, but that he never stays over at the other woman's house (T2).  She was questioned about this statement at the tribunal hearing.  She displayed some bitterness about her husband's behaviour when she gave evidence about this, and her answers were vague and inconsistent.

10. Mr Street's evidence is that he has no interest in another woman, and no desire to live separately from Mrs Street, or to live with any other person.  I accept his evidence in that respect. 

11. It seems that both Mr and Mrs Street spend a good deal of time at home during the day, and they rarely go out at night.  The marriage relationship is not an outwardly loving one.  There is no sexual relationship and it seems there is no physical affection.  Their communication is minimal, but there is no open hostility between the couple.  They talk when they need to about the bills to be paid.  Sometimes Mr Street gives Mrs Street a lift into Queanbeyan.  They would, of course, call an ambulance if either were seriously ill. 

12. Mr and Mrs Street, between them, care for Ms Heanes daughter before and after school, allowing Ms Heanes to meet her work commitments.  At one stage they cared for the child over night as Ms Heanes worked night shift.  Both Mr and Mrs Street expressed their desire not to alter their living arrangements while the child is growing up.  In fact, both indicated they intended to remain in the house in which they are currently residing until their deaths.  Ms Heanes seems satisfied about the atmosphere in which she places her child when the Streets are caring for her.  The child clearly enjoys living in an extended family situation and loves her grandparents very much.
    Financial arrangements

13. The couple gave evidence that they have recently opened separate bank accounts.  However, in the relevant period, their evidence is that they operated their finances separately, but through the same bank account.  Each maintained they drew funds from the account only up to what each put in.  No accounting of the transactions was done by either party, each saying that they trusted the other to draw out only from their own funds.  Mr Street understood that Mrs Street drew out her whole pension after it was deposited, because she needed it to survive.  He, on the other hand, didn't need to draw out the whole of his income, and regarded the balance of the account as his.  A study of the bank statements reveal that the withdrawals by or on behalf of Mrs Street did not equate with the deposits of her age pension as to timing or amounts drawn.  Rather, it indicates that various amounts were drawn out by or on behalf of each of Mr and Mrs Street no doubt when required to cover their share of the household bills and their living expenses (T54).  It seems that there was a greater intermingling of the couple's funds than the mere sharing of the one account facility.  Neither party adverted to the question of from whose funds bank charges and taxes were deducted.  The only check Mrs Street made was to note the amount she withdrew from the account and ensure they did not exceed the amount of her pension deposited in the account. 

14. Ms Heanes gave evidence of her role in the financial arrangements of Mr and Mrs Street.  She accessed the joint bank account at the request of either of them, to take money out of the bank account and give it to the person who requested it.  If a household bill came in, she would collect one third of the money due from her mother and one third from her step father and contribute one third herself and pay the bill (see her statement signed 27 September 1999).  It seems in fact that Ms Heanes pays half the out goings (being a half owner of the property), and that she collects a quarter of the amounts from each of Mr and Mrs Street, drawing out the money required to do so separately from the account at the request of each of them.  She said as much in evidence, often inadvertently referring to "a third" when meaning "a quarter".

15. Taking the whole of the evidence into account in relation to the financial aspects of Mr and Mrs Street's relationship, it is clear that Mrs Street trusts Mr Street in relation to financial matters, and, indeed, in relation to all their property dealings.  Notwithstanding that they both budget within their own incomes, the household funds were in the relevant period intermingled in such a way that either could draw on the account.  On the death of either of Mr or Mrs Street, the whole of the funds in the account would pass to the survivor.
    Discussion

16. The applicant submits (letter lodged with the tribunal dated 11 October 1999), that the Streets shared a joint bank account for convenience alone; and that they purchased the two properties together only to facilitate a convenient sharing of accommodation and to ensure that if Mr Street predeceased Mrs Street she would "have access to a property which Mr Street felt she was entitled to from their previous relationship".  It is submitted that Mrs Street's unwillingness to change her accommodation arrangement is because it is inconvenient for her to do so, and that her unwillingness "to leave the relationship" is only in the sense that she is unwilling to physically leave her current convenient accommodation arrangement.  She further asserts that Mr Street bought a car for her use, only because of his concern for her ability to access required facilities.  On Mrs Street's behalf it is submitted that at all relevant times Mr and Mrs Street separately stored their food; did not socialise exclusively with each other inside their home; did their own laundry and cleaned their own rooms, evidencing the separation of the parties from their previous marriage relationship.

17. In relation to the couple not socialising together, Mrs Street stated that she and Mr Street did not go out to dinner or lunch together, but had not done so for a period well before 1983.  I accept that the couple do not socialise together outside the family home, however, Mrs Street's evidence is that she does not socialise outside her home in any event.  According to Ms Heanes, Mrs Street has always been a fairly private person.  In relation to the couple not associating with each other in their home in the presence of visitors, there are occasions when this does occur.  Mr Street has a good relationship, not only with Ms Heanes, but also with Mrs Street's sons.  When they come to visit, they talk with Mr Street.  Mrs Street said in evidence that when this occurs she ignores her husband and leaves the room to make a cup of tea.  She said that he goes to the garage - not to avoid the family, but because he likes to spend time there.  While I accept that Mrs Street might feel a little uncomfortable with Mr Street interacting with her family, I think it is likely that she is overstating the case.  The fact is that Mr Street does interact with her family members and the visits occur in Mr and Mrs Street's part of the house.

18. I accept the evidence that the couple shop, store their goods, and cook separately.  I accept that they both have their own television and watch programs separately.  Ms Heanes gave evidence about this.  She pointed out that Mrs Street has a special diet, (and as she has diabetes I assume she must eat at regular times), and that she cooks for herself.  Ms Heanes said that Mr Street cooks when he comes in.  She said, "Mum goes to bed pretty early.  He comes in and watches TV.  If she is crocheting, he watches TV in the dinette."

1. When Mrs Street applied for the Age Pension in August 1991 she advised the Department that she was married to Mr Street.  Mr Street provided partner details.  Mrs Street was asked at the hearing why did she not apply for Age Pension at the married rate, since she regarded herself as living separately from Mr Street, though under the same roof.  She answered that she didn't notice whether she was receiving married or single rate.  I find this hard to accept.  I think it is more likely that she accepted her situation and her entitlement to the pension at the married rate, until the overpayment was raised.  This is consistent with Mr Street having claimed Mrs Street as a dependent on his 1994 Tax return (T35), and with Mr Street naming Mrs Street's ANZ account as the account into which his wages were to be paid by his employer in 1995 (T36).  In fact, when Mr Street applied for Age Pension in 1997 (T37), he nominated the same account for the deposit of his pension payments, indicating that the account was to be changed into a joint account.  As late as 26 March 1997 (T38) Mr and Mrs Street signed a form on which they indicated that both had a half share in each of their two motor vehicles, irrespective of the fact that one vehicle was registered in Mr Street's name alone.

2. I accept the applicant's submission that she and Mr Street continue to reside together as a matter of "convenience".  That they find their living arrangements convenient is verified by Ms Heanes in her statement dated 27 September 1999, in which she says that Mr and Mrs Street now live "totally separate lives and I would describe our household arrangement more like communal housing than a family".

3. Mr and Mrs Street's relationship is both a convenient and a cooperative one.  It seems that by the time they purchased the property at Thornton Road in December 1983, the relationship had taken on the character of a "marriage of convenience".  Since that time, both Mr and Mrs Street have not only been accepting of that kind of relationship, but happy to remain in the marriage on that basis.  Mrs Street was reluctant to separate from Mr Street in 1987, because of his ill heath, though the Department informed her that if she did so, her entitlement to a Widow's Pension would have continued.  They now form part of an extended family unit from which neither is prepared to withdraw, and neither suggests that the other should live elsewhere.

4. Taking the whole of the evidence into account I conclude that, while the marriage relationship, originally based on love, went through a rocky period, it did not irretrievably break down.  The nature of the relationship changed, but it remained a marriage like relationship.  It continues to provide the couple with most of the benefits and obligations that the concept of a marriage conveys.  An illustration of this is the couple's mutual recognition of their obligation to provide for each other in the event of the death of one of them.  At the hearing it was pointed out to Mr Street that now that their interest in the property at Wickerslack Lane is as tenants in common, on the death of one of them, the interest of that person does not automatically pass to the other.  Mr Street indicated that he intended to make or change his will to ensure that Mrs Street would be the beneficiary of his interest in the property in the event of his demise.

5. In making this finding I have had regard to subsection 4(3) of the Act which sets out the criteria for forming an opinion about a relationship. I refer to some of the evidence under the relevant clauses of the subsection:

   (a)In relation to the financial aspects of the relationship in the relevant period Mr and Mrs Street had joint ownership of real estate (though as tenants in common for part of the time) and joint liabilities in respect of it.  They pooled their financial resources in the sense that their income was deposited into a joint account and their expenditure drawn out from it.

   (b)In relation to the nature of the household, they jointly care for Mrs Street's grand daughter when in their care, and, with the exception of their bedrooms, regard the rest of their home as common area for use.  They co-operatively divide the chores in relation to the housekeeping and general upkeep of the property.

   (c)In relation to the social aspects of the relationship, Mrs Street socialises very little outside her family and her home.  She attends her church, but other than with her priest and her doctor, she has not discussed her marital relationship.  She has taken no steps to dispel any impression that outsiders might reasonably form from the fact that the couple reside together, that they are living as a married couple.

   (d)Mr and Mrs Street have no sexual relationship, and do not share the same bed or bedroom. 

   (e)In relation to the nature of their commitment to each other, Mr and Mrs Street have been married for in excess of 20 years.  They have resided together in that time, and despite the disruption to their loving relationship in 1983, they have continued to live together in the various homes to which they have chosen to move.  They both consider that their living arrangements will continue indefinitely.  I do not accept that they provide no support or companionship to each other.  They provide some measure of emotional and physical security to each other by reason of the fact that they sleep in the same house and both spend a lot of time at their home during the day.  One is available to the other in the event of a medical emergency.  Neither desires nor intends to live with another person.  Their commitment to each other in the long term is reflected by the fact that they both intend their assets to pass to the survivor of the couple on their deaths. 

Findings

1. I find that Mrs Street continued to live as a member of a couple with Mr Street in the relevant period.  Mrs Street incurred a debt to the Commonwealth arising from an overpayment because of Mr Street's income in the period 26 March 1992 to 20 March 1997.  It is not in dispute that in this period Mr Street earned in excess of $74 a week.  The next issue to consider is whether the debt ought to be waived or written off.

2. As to this, Mr Street commenced working at Guideline Pty Ltd on 16 January 1992.  For the 8 weeks prior to Mrs Street receiving the Age Pension Notice on 16 March 1992, Mr Street was receiving wages averaging $597.30 a week (T40).  The Notice gave her 14 days in which to advise of this change in income.  Mrs Street did not comply with the Notice, and as a consequence she received Age Pension in excess of her entitlement.  That is not to say that I conclude that Mrs Street intentionally failed to provide the Department with the information it required relevant to her pension entitlement.  At the time she was advised of her entitlement, her husband was already employed.  I accept that she was unaware of the implication of this at the time.

3. While I accept that Mrs Street was unaware of the details of Mr Street's earnings, she made no effort to find out.  She probably did not put her mind to the increases in salary that her husband might have received, or the consequences of it.  Nevertheless, the overpayment arose from Mrs Street's failure to fulfil her obligations to the Department while she was in receipt of the Age Pension at the married rate, and not from any error on the part of the Department. 

4. The circumstances that gave rise to the overpayment are neither exceptional nor uncommon.  The hardship that the repayment of the debt will cause to Mrs Street does not amount to special circumstances such as to warrant waiver of the debt pursuant to subsection 1237AAD(b).  As to her ability to repay the debt, Mrs Street is not prevented from applying to the Department for a rate of recovery of the overpayment appropriate to her circumstances from time to time.
   Decision

5. The tribunal affirms the decision under review.

   I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Pamela Burton, Senior Member

   Signed:         Eva Dimopoulos           .....................................................................................
     Associate

   Dates of Hearing  18 October 1999; 9 December 1999
   Date of Decision  17 March 2000
   Counsel for the Applicant        Mr Jack Daniels
   Solicitor for Applicant               Welfare Rights & Legal Centre Ltd
   Counsel for the Respondent    Mr John Kenny
   Solicitor for the Respondent    Administrative Law Section, Centrelink