Van Den Bosch and Secretary, Department of Social Services (Social services second review)

[2019] AATA 2705

Van Den Bosch and Secretary, Department of Social Services (Social services second review) [2019] AATA 2705 (19 August 2019)

Division:GENERAL DIVISION

File Number:           2018/0762

Re:Theodorus Van Den Bosch  

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr I Alexander, Senior Member

Date:19 August 2019

Place:Sydney

The Tribunal is satisfied that that decision by Centrelink to raise a debt of $13,447.08 for the period of 8 May 2012 to 10 August 2015 was correct.

The decision under review is affirmed.

............................[sgd]............................................

Dr I Alexander, Senior Member

CATCHWORDS

SOCIAL SECURITY – debt – whether applicant has a debt to the Commonwealth due to overpayment of age pension – whether a property should have been disclosed to Centrelink to be included in calculations for assets test – whether debt can be waived or written off - decision affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 11, 1064, 1118, 1121, 1236, 1237A, 1237AAD

CASES

Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267

REASONS FOR DECISION

Dr I Alexander, Senior Member

19 August 2019

1. On 14 March 2012, Mr Van Den Bosch made a claim for age pension.

2. On 3 April 2012, Mr Van Den Bosch and his wife exchanged contracts for the purchase of property at Koonawarra, NSW (Koonawarra property).

3. On 9 May 2012, Mr Van Den Bosch lodged a Centrelink- Income and Assets form in support of his age pension claim. In that form he reported the following financial assets:

   ·Colonial First State Rollover & Super (CFSR&S) - $81,399.89

   ·Australian Super – $236,312.62

4. On 15 May 2012 the purchase of the Koonawarra property was settled. Mr Van Den Bosch did not inform Centrelink of the purchase of the property.

5. On 3 July 2012, Centrelink sent a letter to Mr Van Den Bosch confirming the superannuation fund assets. The Koonawarra property was not included in the list of assets.

6. On 28 May 2013, Centrelink sent a letter to Mr Van Den Bosch which stated that his age pension was being paid on the basis that his Total Combined Assets totalled $357,990.08. This letter stated, inter alia, that:

   You must tell us within 14 days …if any of the changes listed below happen or are likely to happen   ……..  Assets: If the value of your and /or your partner’s combined assessable assets change by $1000 or more. Changes include buying, receiving, selling, or giving away assets.  Assets include ……real estate……

7. Between 11 July 2013 and 15 March 2015 Mr Van Den Bosch was sent a further four letters which stated that he must advise Centrelink if there any changes to his assets.

8. On 4 November 2016, following the receipt of data matching information, a letter was sent to Mr Van Den Bosch requesting that he call Centrelink to confirm his details in order to ensure that he is receiving the correct rate of age pension payments.

9. On 26 November 2016, Mr Van Den Bosch’s age pension was suspended because of his failure to contact Centrelink and confirm those details.

10. On 1 March 2017, Mr Van Den Bosch wrote to Centrelink and provided copies of a number of documents with respect to his financial and real estate assets. The documents included a copy a solicitor’s letter confirming the sale of the Koonawarra property on 6 August 2015.

11. On 4 May 2017, Centrelink decided to raise and recover a debt of $13,447.08 in respect of age pension overpaid to Mr Van Den Bosch in the period 8 May 2012 to 10 August 2015 (the debt period).[1]

    [1] The debt period accords with the period of age pension payments between the date of the purchase and date of sale of the Koonawarra property.   

12. The decision was made on the basis that the value of Koonawarra property was to be included as an asset in the calculation of Mr Van Den Bosch’s rate of age pension during the debt period.

13. Centrelink’s decision was affirmed by an Authorised Review Officer (ARO) on 26 May 2017.

14. On 17 January 2018 the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the ARO’s decision.

15. In these proceedings Mr Van Den Bosch, who was self-represented, attended the hearing in person and now seeks review of the AAT1 decision.

    ISSUES

16. A person’s rate of age pension is determined in accordance with the Pension Rate Calculator A in section 1064 Social Security Act 1991 (the Act).

17. Module G of section 1064 provides for the effect of assets on the maximum payment rate of age pension, the Assets test.

18. Section 11 of the Act defines asset as property or money.

19. Section 1118 of the Act relevantly provides that the value of a person’s principal home is to be disregarded in calculation the value of a person’s assets for the purposes of age pension.

20. It is agreed that a property owned by Mr Van Den Bosch in Blacktown (the Blacktown Property) was Mr Van Den Bosch’s principal home throughout the debt period and that he is the sole owner of the property.

21. The Respondent contends that, during the debt period, the Koonawarra property was an asset for the purposes of the Assets test and that the value of that property should have been included in calculating the rate of Mr Van Den Bosch’s age pension payments.

22. Mr Van Den Bosch submits that a mortgage on his Blacktown property should have been disregarded in the calculation of his assets.

23. Therefore, the determinative issue is in this matter is whether, during the debt period, the value of the Koonawarra property should have included as an asset in calculating Mr Van Den Bosch’s age pension payments.

24. As Mr Van Den Bosch does not challenge the accuracy of the calculation of the incurred debt the only other issues to consider are whether there are any reasons to write off,[2] or waive,[3] all or part of the debt.

    [2] Section 1236 of the Act

    [3] Section 1237A, s 1237AAD of the Act

    MR VAN DEN BOSCH’S EVIDENCE

25. Mr Van Den Bosch told the Tribunal that in 2012 he had intended to purchase the Koonawarra property in order to build a new house. He tried to arrange a bank loan using the property as security; however, he claims that he was unable to secure a loan because of his age.

26. Mr Van Den Bosch explained that he had an existing ANZ Home Loan Account (ANZ account) with a current minimal balance and was able to increase the loan balance, with his Blacktown property as security, by depositing a sum of money from one of his superannuation accounts.

27. In around March or April 2012 he withdrew a sum of $195,000 from the CFSR&S fund which he deposited in the ANZ account.

28. Mr Van Den Bosch explained that he had tried to have the ANZ account transferred, with the Koonawarra property as security, but was informed that this was not possible because the property had been purchased jointly with his wife.

29. On 15 May 2012, Mr Van Den Bosch and his wife finalised the purchase of the Koonawarra property without any charge or encumbrance.

30. The effect of Mr Van Den Bosch’s financial arrangements was that, during the debt period, the ANZ loan was secured by his Blacktown property.

31. Mr Van Den Bosch told the Tribunal that his intention was to sell his Blacktown property when the new house on the Koonawarra property was completed and then repay the ANZ loan.

32. However, Mr Van Den Bosch stated that his attempts to progress the building of the house were unsuccessful and that his domestic circumstances changed in January 2015 when he and his wife separated.  He explained that the Koonawarra property was subsequently sold on 6 August 2015, for the same price that he had paid when the property was purchased in 2012.

33. When asked why he didn’t notify Centrelink of the purchase of the Koonawarra property, Mr Van Den Bosch stated that he had relied on his experience as an accountant. He said that he had assumed that his mortgage would be deductable from the assessment of any of his assets and, as the value of the Koonawarra property was roughly equivalent to the balance of his mortgage, he also assumed that the net value of his combined assets had not changed and therefore he did not have to notify Centrelink.

34. Mr Van Den Bosch conceded that, at the time of the purchase of the Koonawarra property, he had not been aware of the specific requirements of the Act with regard to assets in the calculation of age pension payments.

35. Mr Van Den Bosch told the Tribunal that he currently lives alone in his Blacktown property and currently continues to receive a part age pension of approximately $640 per fortnight with approximately $240 being withheld from each payment for repayment of the debt.[4] The remaining debt, as at 3 October 2018, was $5,197.98.[5]

    [4] Secretary’s Statement of Facts and Contentions – Annexure D

    [5] Ibid – Annexure A

36. Mr Van Den Bosch indicated that currently he has approximately $200,000 remaining in his superannuation funds.

    CONSIDERATION

37. Section 1121(1) of the of the Act provides that:

    If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person’s assets of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance.

38. However, section 1121(3) provides that:

    Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 1118.

39. On the evidence it is clear that Mr Van Den Bosch’s ANZ loan is a charge or encumbrance on his Blacktown property.

40. As it is his principal place of residence, Mr Van Den Bosch’s Blacktown property is an asset that is to be disregarded under section 1118 of the Act.

41. It follows that the balance of the ANZ loan cannot be deducted from the total value of Mr Van Den Bosch’s assets when calculating his entitlement to age pension payments.  

42. Therefore, I am satisfied that, during the debt period, the value of the Koonawarra property should have been included when calculating Mr Van Den Bosch’s entitlement for age pension payments.

43. Section 1236 of the Act provides, inter alia, that the Secretary may decide to write off a debt if the debtor has no capacity to write off the debt.

44. On the available evidence, it is clear that Mr Van Den Bosch has the capacity to pay the debt and in fact has already repaid most of the debt.

45. Section 1237A provides, inter alia, that the Secretary must waive the right to recover the proportion of the debt that is attributable solely to an administrative error made by the Commonwealth.

46. There is no evidence of an administrative error by Centrelink.

47. Section 1237AAD of the Act provides, inter alia, that Secretary may waive the right to recover all of part of a debt if the Secretary satisfied that there are special circumstances that make it desirable to waive.

48. The Act does not define what constitutes “special circumstances”.

49. However, there has been considerable judicial consideration of the phrase in the context of other social security legislation, for example, in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267, [2012] FCA at 639 Jacobson J stated inter alia as follows:

    …….

    the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary and unfairness or unintended consequences may show that this exists.

50. On consideration of the available evidence I find nothing in Mr Van Den Bosch’s circumstances which takes the case out of the ordinary that would warrant the exercise of the discretion to waive all or part of his debt.

51. Mr Van Den Bosch simply made incorrect assumptions and failed to exercise sufficient caution or make appropriate enquiries before arranging his financial affairs.

52. If follows that I am satisfied that Centrelink’s decision to raise the debt was correct and that the calculation of the debt was also correct.  

    DECISION

53. For the reasons set out above, the Tribunal is satisfied that that decision by Centrelink to raise a debt of $13,447.08 for the period of 8 May 2012 to 10 August 2015 was correct.

54. The decision under review is affirmed.

I certify that the preceding  (fifty - four) paragraphs are a true copy of the reasons for the decision herein of Dr I Alexander, Senior Member

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Associate

Dated: 19 August 2019

Date of hearing:	5 August 2019
Applicant:	In person
Advocate for the Respondent:	Dr S Thompson
Solicitors for the Respondent:	Department of Human Services