Turcomanovic and Department of Family and Community Services

[2000] AATA 454

DECISION AND REASONS FOR DECISION [2000] AATA 454

ADMINISTRATIVE APPEALS TRIBUNAL)
  Nº V99/1068
GENERAL  ADMINISTRATIVE  DIVISION)                 
           Re:     LYNETTE TURCOMANOVIC       

Applicant

And:    SECRETARY TO THE DEPARTMENT OF FAMILY AND COMMUNITY SERVICES           

Respondent

DECISION

Tribunal:       Mrs H.E. Hallowes, Senior Member         
Date:             9 June 2000
Place             Melbourne
Decision:      The decision of the Social Security Appeals Tribunal dated 26 July 1999 is set aside, and the matter is remitted to the Secretary with directions that Mrs Turcomanovic's debt, being overpaid rent assistance, be recalculated for the period from 1 October 1997 until rent assistance was no longer paid to her and recovered in accordance with these reasons for decision.

(sgd) H.E. Hallowes
  Senior Member
SOCIAL SECURITY — family allowance — rent assistance — whether an ineligible home owner — overpayment — debt to the Commonwealth — whether solely due to administrative error

Social Security Act 1991 ss.13, 23, 872, 1069E, 1069F, 1223, 1224, 1237A, 1237AAD, 1302A

Social Security (Administrative) Act 1999
Social Security (Administration and International Agreements) (Consequential Amendments)
  Act 1999

REASONS FOR DECISION

9 June 2000            Mrs H.E. Hallowes, Senior Member         

1. The Tribunal notes that relevant provisions with respect to its jurisdiction have changed under the Social Security (Administrative) Act 1999 and the Social Security (Administration and International Agreements) (Consequential Amendments) Act 1999.

2. Mrs Turcomanovic seeks review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 26 July 1999. The SSAT decided that a recoverable debt exists for the period 7 September 1994 to 9 April 1998. The SSAT in its reasons for decision advised that it was reviewing a decision made by Centrelink on 30 November 1998 with respect to rent assistance paid to Mrs Turcomanovic for the period 4 January 1996 to 30 April 1998. A copy of the decision of the SSAT and its reasons for decision were included amongst the documents lodged with the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the documents"). The SSAT said in its reasons for decision that it "had doubts about the veracity of much of the evidence given by Mrs Turcomanovic". There was no record on her file that she had notified Centrelink of a change of her address in March 1993. Nor was there any record in Mr Turcomanovic's Centrelink records with respect to payment of newstart allowance paid to him in 1993. The SSAT found that Mrs Turcomanovic's statements were inconsistent in that she had contended on one occasion that she had notified the then Department of Social Security ("the department") by letter that she and her husband had purchased a home, whereas on another occasion, she had stated that she had telephoned Centrelink. The SSAT expressed the opinion that, if Mrs Turcomanovic had advised Centrelink that they had purchased a home, there would have been no reason for her to contact Centrelink in September 1994 with respect to rent assistance, there being a record of a contact in the departmental computer, dated 7 September 1994 which was reproduced in the documents as follows:

   . . . clt pho re ra [rent assistance] rate, client is paying rent of $113 per week, ac is showing $90 per week.   Advised clt to atend foo ro [footscray road] with rent receipt so ac can be updated . . . therefore pa acc details deleted at this stage, . . .   .

3. The documents include a computer-generated copy of a letter sent to Mrs Turcomanovic at 10 Dicken Street, Yarraville on 2 January 1993 with respect to her family payment, now called family allowance.   The letter advised that on the back of the letter was a list of notifiable events.   The back of the letter was not included amongst the documents.   Payments were being made to a State Bank of Victoria ("the Bank") account.  On 1 January 1994 correspondence was sent to Mrs Turcomanovic at 110 Bayview Road, Yarraville, advising her, amongst other things, that she was being paid rent assistance.   Payments were made into a Commonwealth Bank account.   Mrs Turcomanovic was advised that she must tell the department if she moved to a new address.   A further letter dated 15 September 1996 advises Mrs Turcomanovic that her family payment included rent assistance. 

4. The index to the documents refers to the documents indexed at T9 as being a "debt determination and submission" dated 30 November 1999.   This is the heading on one of the folios marked T9.   The folios state that a debt of $3378 for the period 4 January 1996 to 9 April 1998 was raised as Mrs Turcomanovic had owned her home since February 1993.   The copy of the folios before the Tribunal are unsigned and no details are recorded under Part D – Determination.   The rest of the folios indexed as T9 are with respect to Mr Turcomanovic.   The letter indexed at T10 is incomplete.   The authorised review officer ("ARO") affirmed the decision, that is, if a decision had been made on 15 May 1999.  

5. The ARO recorded on 14 May 1999 that he had had a discussion with Mrs Turcomanovic on 12 May 1999. Mrs Turcomanovic is recorded as saying that she had not realised she was getting paid rent assistance and she had not provided any rent receipts during the relevant period to the department. She had telephoned the department and notified her change of address, and that she was ceasing paying private rent. She did not recall receiving letters advising her that she was being paid rent assistance. Mrs Turcomanovic had told the ARO that the reference in the documents to $113 a week was the amount of her mortgage repayments and this was what she had telephoned the department about on that date, not her rent. The ARO considered whether the debt should be waived under section 1237A(1) and subsection 1237AAD of the Act, which provide:

   1237A(1)     Subject 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).  

   1237AAD     The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

   (a)the debt did not result wholly or partly from the debtor or another person knowingly:

   (i)making a false statement or a false representation; or

   (ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

   (b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

   (c)it is more appropriate to waive than to write off the debt or part of the debt.

   Note:Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

In a very detailed letter dated 14 May 1999 the ARO advised Mrs Turcomanovic of his decision, drawing attention to the relevant legislation. 

1. Copies of two further letters from Centrelink to Mrs Turcomanovic, dated 25 December 1996 and 22 March 1997, were also amongst the documents.  

2. Following the decision of the SSAT, the rent assistance debt was recalculated as amounting to $5641.50 for the period 15 September 1994 to 9 April 1998.   Mr D. Perdon of Centrelink, who appeared for the Secretary at the hearing, referred to that calculation in the statement of case he provided to Mrs Turcomanovic and the Tribunal.   A copy of the calculation was indexed at T23 of the documents.

3. Computer records with respect to Mrs Turcomanovic record that her "start date" at 110 Bayview Road, Yarraville, was 20 April 1993.   A similar record is displayed giving the date of the event as 20 March 1993.   An earlier entry dated 29 January 1992 records a weekly rent of $90, the rent having been verified.   Mr Perdon lodged information provided to the Secretary by the Commonwealth Bank, including a preliminary application for an advance from the Bank to Mr and Mrs Turcomanovic for a term housing loan to assist with the purchase of a residential home at 110 Bayview Road, dated 16 February 1993.  Mr Turcomanovic's occupation is recorded as self-employed and Mrs Turcomanovic as child care worker, Footscray Council.   At that date their address is recorded as 10 Dicken Street.  

4. Mr Perdon also provided the Tribunal and Mr and Mrs Turcomanovic with the relevant legislation, including section 1069—F1, which provided, between 1993 and March 1996, qualification for an additional amount for those people in receipt of additional family payment. Rent assistance was payable to a person who was "not an ineligible home owner". An ineligible home owner throughout the relevant period is defined in the Act under subsection 13(1). In March 1996 the Act was amended and the relevant provision with respect to qualification for rent assistance became section 1069-E2. As Mrs Turcomanovic said that she did not receive a number of relevant letters from the Secretary, Mr Perdon also drew attention to subsection 23(12) of the Act and section 1302A which, in effect, deem a person to have received a pre-paid letter posted to their last known address. He also noted section 872 of the Act which provides that the Secretary may require notice of a change of circumstances and sections 1223 and 1224, including subsection 1223(5), which came into effect on 1 October 1997, which provides that incorrectly paid amounts under the Act are debts due to the Commonwealth. Section 1224 provides that amounts paid as a result of false statements or failure to comply with the provisions of the Act are also debts due to the Commonwealth.

5. Although, when the matter was originally considered, it was recorded that Mrs Turcomanovic became an ineligible home owner in February 1993, it was decided that her debt did not commence until 4 January 1996, under section 1224 of the Act, as the delegate did not have evidence that Mrs Turcomanovic fell within paragraph 1224(1)(b) until January 1996. Section 1224 provides:

   1224(1)        If:

   (a)an amount has been paid to a recipient by way of social security payment; and

   (b)the amount was paid because the recipient or another person:

   (i)made a false statement or a false representation; or

   (ii)failed or omitted to comply with a provision of this Act or the 1947 Act;

   the amount so paid is a debt due by the recipient to the Commonwealth.

   Note:If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).

The ARO found that, although no rent allowance should have been payable to Mrs Turcomanovic from February 1993, there was only a recoverable debt under subsection 1223(6) of the Act (now repealed) from 4 January 1996 and that from 9 October 1997 a recoverable debt arose under subsection 1223(5).   The original decision-maker and the ARO decided that it was only when Mrs Turcomanovic was sent a letter specifically requiring her to notify Centrelink about changes to the amount of rent she was paying, that she could be found not to have complied with the Act.   The SSAT did not agree with that approach and was satisfied that Mrs Turcomanovic had made a false statement on 7 September 1994, when it is recorded that she had advised she was paying rent of $113 per week.

1. Mrs Turcomanovic expressed her dissatisfaction that the Act provides that she is deemed to have received the Secretary's letters and that there is no similar provision deeming the Secretary as having received her letters.   Mrs Turcomanovic was also concerned that she was receiving letters of demand with respect to repaying the original amount of the debt and yet she had received Mr Perdon's statement of case suggesting that the debt was now over $2000 more.   Mr Perdon explained that, while the matter was under review before the Tribunal, no action is taken by Centrelink to change the decision until the Tribunal makes its decision, if a new decision has been substituted by the SSAT.   He said that he would raise the issue of the letters of demand received by Mrs Turcomanovic with Centrelink.   After the matter was heard, Mrs Turcomanovic provided the Tribunal with a further letter from Centrelink, dated 19 May 2000, with respect to the debt.   The Tribunal provided a copy of that letter to Mr Perdon.

2. Mrs Turcomanovic told the Tribunal that she and her husband bought their new house in February 1993 and that she had attached an advice to Mr Turcomanovic's continuation form for unemployment benefits, advising the Secretary of the purchase.   She noted the departmental records which record that they had changed their address as at 20 April 1993 and she said that the records at the local Council would have disclosed them as ratepayers.   They had settled the purchase of their house on 9 May 1993, moving in on the following day.   Mrs Turcomanovic gave evidence that, once they moved to Bayview Road, she seldom got letters from the department.   Having been made aware of their change of address, she wondered why the Secretary assumed that they were paying the same amount of rent as they had paid before.   In about September/October 1994 the department began paying their social security payments to them separately.   Mr Turcomanovic's social security payment was paid into their bank account whereas she had arranged for her family payment entitlement to be paid into her daughter's bank account.  

3. Mrs Turcomanovic gave evidence that, when taking out a loan to enable them to purchase their home, she had been required by the bank manager to take a letter from the Bank to the department so that the Secretary could provide details with respect to their income.   She obtained this information from the regional office and she had provided it to the bank manager.   She had been unaware after they moved to their new home that part of the social security payment made to her consisted of rent assistance.   She thought the rent at Dicken Street had increased to approximately $120 per week before they purchased their home.   When apparent inconsistencies in her evidence with respect to whether she had written or telephoned Centrelink to advise of their home purchase were put to Mrs Turcomanovic by Mr Perdon, she said that she was unable to recall every telephone call she made to Centrelink but she could recollect that she had telephoned the department with respect to the bank manager's request for details with respect to their income as the department had taken some time to respond to the bank manager's request.   She explained the details recorded by the bank manager in exhibit 1 to the Tribunal's satisfaction and the Tribunal is satisfied that records with respect to Mr and Mrs Turcomanovic's employment were recorded by the bank manager to assist them in obtaining the loan to buy their new house.   It was Mrs Turcomanovic's recollection following her advice to the department that they now owned their own home and were no longer paying rent; that their combined social security payment had decreased for one or two payments but that it had then increased again which she assumed to be an increase in their entitlement, not appreciating that it must have been the result of the continuation of rent assistance paid to her.

4. The Tribunal invited Mr Perdon to peruse the departmental records with respect to Mrs Turcomanovic to ascertain whether records of what she was paid by way of social security payment existed prior to 6 January 1994 and leave was given to the parties to make written submissions if such records were available.   On the day after the hearing Mr Perdon advised the Tribunal that no records were available.   When asked to explain why there was a record in the department's records as late as 7 September 1994, with respect to the amount of $113 per week, whether it be rent or home repayments, over 12 months after they had purchased their home and which is recorded as rent, Mrs Turcomanovic said that, following a conversation with the Bank, she had contacted the department to ascertain whether there may be financial assistance for low income earners to help them pay off homes as there was rent assistance for other low income earners.  

5. After the hearing, Mrs Turcomanovic provided the Tribunal with an advice from the Secretary to Mr Turcomanovic, but as that document is with respect to December 1990 payments it has not assisted the Tribunal.   Mrs Turcomanovic commented in lodging her additional material that the letter from the Secretary about rent assistance had been addressed to her husband.   Despite what Mrs Turcomanovic contended, the Tribunal is satisfied that the letters, copies of which were amongst the documents, were sent to Mrs Turcomanovic and they shall be deemed to have been received by her.   In a response Mr Perdon noted that rent assistance has been paid to recipients of family payment since 1 July 1991.

6. The Tribunal finds that on 10 May 1993 Mrs Turcomanovic became an ineligible home owner and ceased to be entitled to be paid rent assistance. She has therefore been overpaid a social security payment and an issue arises whether she owes a debt to the Commonwealth under the Act. There is no departmental record as to how the Secretary was advised of Mr and Mrs Turcomanovic's change of address. The change of address was recorded on 20 April 1993. The month before a weekly rent of $90 paid by Mr and Mrs Turcomanovic was apparently verified. The Tribunal is satisfied that the letters, copies of which appear amongst the documents, shall be deemed to have been received by Mrs Turcomanovic. The earliest record of a telephone call to the department by Mrs Turcomanovic during the relevant period is that of 7 September 1994. The officer recorded a rental of $113 per week and verification was asked for. The letter to Mrs Turcomanovic from the department, dated 1 January 1994, satisfies section 872 of the Act as being a recipient notification notice, but it does not ask for rental details. In any event, Mrs Turcomanovic had none to provide at that time. The letter did ask whether Mrs Turcomanovic had moved to a new address but this had already been advised on 20 April 1993. The letter did advise her that she was being paid rent assistance, as did the letter dated 15 September 1996.

7. Turning to section 1223 of the Act, as it provided when the original decision was apparently made and as it now provides, Mrs Turcomanovic was not qualified for rent assistance and since 1 October 1997, the amount paid to Mrs Turcomanovic by way of rent assistance was not payable to her and it is a debt to the Commonwealth. The Tribunal notes that subsection 1223(6) of the Act, relied on by the ARO, was omitted from the Act in 1996.

8. Turning to section 1224 of the Act, has Mrs Turcomanovic failed or omitted to comply with a provision of the Act or has she made a false representation? She has consistently contended that the Secretary should have been aware that she was a home owner. Certainly the Secretary was advised of the change of address and rent was not verified after the telephone conversation on 7 September 1994. The Tribunal notes that the ARO recorded on 14 May 1999, that Mrs Turcomanovic was "lost for words for a bit" when he advised her of the departmental record of 7 September 1994. He recorded that she said that she had telephoned to advise of her mortgage repayments which is not entirely consistent with her evidence before this Tribunal when she said that she had rung up to see whether there was any financial assistance for low income home owners with respect to home repayments.

1. After considerable thought and, bearing in mind that the Act is beneficial legislation, the Tribunal is satisfied that on 7 September 1994 Mrs Turcomanovic did not make a false statement or representation to an officer of the department and, although she has received amounts by way of rent assistance to which she was not entitled, a debt is only recoverable from her under section 1223 of the Act with respect to social security payments made to her on or after 1 October 1997. The difficulty for a decision-maker is whether Mrs Turcomanovic advised the Secretary that she was an ineligible home owner in early 1993 for, after she moved to Bayview Road on 10 May 1993, the notices she is deemed to have received from the Secretary required her to advise any change which had occurred, but that change was no longer relevant to Mrs Turcomanovic as she had moved the year before and there was no longer any change in her circumstances to advise the Secretary of. The Tribunal finds, on the balance of probabilities, that the Secretary was advised that Mr and Mrs Turcomanovic were home owners when their new address was recorded in March or April 1993. As Mrs Turcomanovic pointed out, no rent was verified by them from then on and Council records would have verified their home ownership. The Tribunal accepts her evidence that the department provided advice with respect to Mr and Mrs Turcomanovic's income to enable them to obtain a loan to purchase their home and, although it appears from the documents that suspicions have been raised in the department, the Tribunal accepts Mrs Turcomanovic's evidence, as it would have been difficult for Mr and Mrs Turcomanovic to hide the fact that they were not in employment from the bank manager as their social security payments would have been paid into their bank account.

2. The Tribunal has considered section 1237A of the Act but finds that the debt is not attributable solely to administrative error by the Commonwealth as letters to Mrs Turcomanovic advised her that part of her payment was made up of rent assistance and it is reasonable to expect that Mrs Turcomanovic should have advised the Secretary that she was not paying rent during the relevant period. She did not contend that there are special circumstances in her matter.

3. It is for these reasons that the Tribunal will set aside the decision of the SSAT and remit the matter to the Secretary with directions that Mrs Turcomanovic's debt, being overpaid rent assistance, be recalculated for the period from 1 October 1997 until rent assistance was no longer paid to her and recovered in accordance with these reasons for decision.

   I certify that the twenty-one [21] preceding paragraphs are a true copy of the reasons for the decision herein of
   Mrs H.E. Hallowes, Senior Member

   (sgd)     Catherine Thomas
               Personal Assistant

   Date of Hearing:  01.05.00
   Date of Decision:  09.06.00
   Solicitor for the Applicant:           IN PERSON
   Solicitor for the Respondent:       Mr D. Perdon, Officer of Centrelink