Vines and Secretary, Department of Employment and Workplace Relations

[2006] AATA 911

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 911

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2006/344

GENERAL ADMINISTRATIVE DIVISION		)
Re		MARK  VINES

Applicant

And

SECRETARY, DEPARTMENT

OF EMPLOYMENT AND

WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date26 October 2006 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

...............[Sgd]...............

RG Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – rent assistance – applicant an ineligible homeowner due to an interest in his principal home – deemed principal home for period after actual residence - overpayment of rent assistance - debt due to Commonwealth – no basis to write off debt – no basis for waiver of debt – no sole administrative error by Commonwealth – absence of special circumstances to justify waiver – decision affirmed

Social Security Act 1991 ss 11(4), 11(7), 13(1), 1070C, 1223, 1236(1A), 1239 (1B), 1237,  1237A, 1237AAD

Social Security (Administration) Act 1991 s 180

Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295; (1988) 9 AAR 355
Secretary, Department of Family and Community Services and Gledich (2005) 87 ALD 503; [2005] AATA 598
McDonald and Secretary, Department of Family and Community Services (2004) 86 ALD 704; [2004] AATA 1354
Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 26 AAR 385

REASONS FOR DECISION

26 October 2006  Mr RG Kenny, Member   

Application

1.      Mark Vines (the applicant) received income support payments under the Social Security Act1991 (the Act) in the form of newstart allowance at various times from 1997 to 2004.  He also received rent assistance under the Act at various times while he was living in a home of which he was a part owner.  On 12 July 2005, a Centrelink officer, on behalf of the Secretary, Department of Employment and Workplace Relations (the respondent), determined that he had been overpaid in relation to those rent assistance payments and that the overpayment, totalling $3333.07, was a debt due to the Commonwealth.  That decision was affirmed by an authorised review officer on 23 September 2005 and, in turn, by the Social Security Appeals Tribunal (SSAT) on 18 April 2006.  On 26 May 2006, Mr Vines sought review of that decision by the Administrative Appeals Tribunal (the Tribunal).  Subsequently, on 13 September 2006, the respondent varied the decision by reducing the amount of the debt to $2211.44.  In accordance with subsection 180(1) of the Social Security (Administration) Act 1991, the decision under review is the decision of the SSAT as varied by the respondent.

Hearing

2. Mr Vines was not represented at the hearing and Mr M Black appeared for the respondent. The material before the Tribunal included documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975.

Issues for Determination

3.      It is not disputed by Mr Vines that he was paid rent assistance for parts of the period noted above or that, at all times, he was a co-owner of a house and land at Thomas Road, Curra, near Gympie.  He disputed the decision that he was overpaid because he was not always living in that house, because he was not aware of the amounts of those payments he received and because he had not made the applications for rent assistance.  He considered that the debts should be waived so as to afford him a fresh start after several years of excessive drug use.  The first issue for the Tribunal’s determination is whether Mr Vines was paid rent assistance to which he was not entitled.  In the event that he was, it must then be determined whether there is a debt owed by him to the Commonwealth and whether any such debt may be written off or waived under the provisions of the Act.

Applicant’s case

4.      Mr Vines purchased the Thomas Road home with his partner as tenants in common.  He did so, in part, to provide some financial security for his two children in the future.  He provided that address to Centrelink as his formal contact address and maintained it for that purpose from 3 February 1997 until 19 April 1999 when he moved to Sydney.  His parents lived nearby and, during the period from 1997 until 1999, he spent some time with them and other times at the Thomas Road home.  He remained in Sydney until July 2000 when he moved back to the Gympie area.  From 23 October 2001 until 8 October 2004, he again provided the Thomas Road home as his formal Centrelink contact address and, during that time, he lived mainly with his parents but would stay from time to time at Thomas Road before returning to live in Sydney.  During the periods when he was living in Sydney, Mr Vines shared premises with a variety of people and became heavily involved in taking various forms of drugs.  In his evidence, he said that he did not have specific recall of what he was doing or where he was living in that period because of the effect of the drugs.

Consideration

5.      Section 1070C of the Act lists the common requirements for qualification for rent assistance payments.  It reads:

“1070C…
The common requirements are that:

(a) the person is not an aged care resident, and is not taken to be an aged care resident for the purposes of the Rate Calculator concerned; and

(b) the person is not an ineligible homeowner; and

(c) the person pays, or is liable to pay, rent, other than Government rent, in respect of a period in respect of premises in Australia; and

(d) the person's fortnightly rent is more than the rent threshold amount (see section 1070T).”

6.      The respondent contends that Mr Vines is an ineligible homeowner and, therefore, does not meet those requirements.  Pursuant to subsection 11(4) of the Act, Mr Vines is a homeowner if he has a right or interest in his principal home which gives him reasonable security of tenure in the home.  In the periods from 3 February 1997 until 19 April 1999 and from 23 October 2001 until 8 October 2004, Mr Vines declared the Thomas Road address to be his principal home for social security purposes.  In his evidence, he said that he stayed there from time to time and also used it as his residential address for his driver’s licence and for conducting his business as a tow truck operator.  The term principal home is not defined in the Act but some aspects of the term are described in subsections 11(5) to (7) thereof.  The description in the Act of a home as a principal one indicates that a person may have more than one residence which constitutes a home: see Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295 at 296; (1988) 9 AAR 355. Also, a place may continue to have the status of a principal home even though the person is not there from time to time: see Secretary, Department of Family and Community Services and Gledich (2005) 87 ALD 503; [2005] AATA 598. I am satisfied that, during the periods identified above, Mr Vines’ principal home was at the Thomas Road address.

7.      In the period from 19 April 1999 to 22 October 2001 and after 8 October 2004, Mr Vines was not living at Thomas Road and that address was not provided to the respondent as his formal contact address.  However, the circumstances of some of that time fall within the ambit of paragraph 11(7)(a) of the Act which reads:

“11(7)  A residence of a person is to be taken to continue to be the person's principal home during:

(a)any period (not exceeding 12 months) during which the person is temporarily absent from the residence;…”

8.      Mr. Black submitted that this provision was applicable to Mr Vines and that, therefore, Thomas Road continued to be his principal home for 12 months after he moved to Sydney on 19 April 1999 and for 12 months after he moved to Sydney on 18 October 2004.  In those respective 12-month periods, Mr Vines was not living at Thomas Road and there was some uncertainty in his mind as to whether he would return to reside there.  However, a home may still be regarded as a person's principal home under paragraph 11(7)(a) of the Act in that situation: see McDonald and Secretary, Department of Family and Community Services (2004) 86 ALD 704; [2004] AATA 1354. I accept Mr Black’s submission and, therefore, I am satisfied that Mr Vines’ principal home was at the Thomas Road address from 3 February 1997 until 19 April 2000 and from 23 October 2001 until 8 October 2005. I am also satisfied that he was a homeowner during those periods.

9.      The term ineligible homeowner is defined in subsection 13(1) of the Act which reads:

"ineligible homeowner" means a homeowner other than:

(a)a person who is a homeowner by virtue of Error! Hyperlink reference not valid. (proceeds of sale of principal home disregarded for 12 months); or

(b)a person who:

(i)is absent from the person's principal home, in relation to which the person is a homeowner; and

(ii)is personally providing a substantial level of care in another private residence for another person who needs, or in the Secretary's opinion is likely to need, that level of care in a private residence for at least 14 consecutive days; and

(iii)has been absent from the principal home for less than 2 years while providing care as described in subparagraph (ii); or

(c)a person who is in a care situation but is not residing in a retirement village; or

(d)a person who pays amounts for the use of a site for a caravan or other vehicle, or a structure, that is the person's principal home; or

(e)a person who pays amounts for the right to moor a vessel that is the person's principal home;”

.

10.     Mr Vines’ circumstances do not fall within any of the exemptions in that provision and, therefore, I am satisfied that he was an ineligible homeowner in the periods identified above.  It follows that, pursuant to paragraph 1070C(b) of the Act, Mr Vines was not eligible for rent assistance during those periods.

11.     In evidence were the respondent's records of rent assistance payments to Mr Vines.  These reveal that payments were made in the following payment periods: 30 January 1997 to 30 January 1998; 24 December 1998 to 15 March 2000; 22 June 2000 to 7 November 2001; and 9 February 2005 to 10 March 2005.  The total amount of assistance paid during those periods was $3333.07, of which the respondent later determined that the applicant was entitled to only $1121.63 – thereby reducing the alleged debt to $2,221.44.  Where payments are made to a person who was not qualified to receive them, a debt to the Commonwealth arises pursuant to subsection 1223(1) of the Act which reads:

“1223(1)  Subject to this section, if:

(a)a social security payment is made; and

(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

12.     I am satisfied that the payment to Mr Vines totalling $2221.44 is a debt due to the Commonwealth in accordance with that provision.  Subsection 1236(1A) of the Act enables a debt to be written off.  It reads:

“1236(1A)     The Secretary may decide to write off a debt under subsection (1) if, and 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.”

13.     Whether or not a debt is recoverable at law is provided for in subsection 1236(1B) of the Act which reads:

“1236(1B)  For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d)the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.”

14.     I am satisfied that that provision is not applicable to Mr Vines and I am also satisfied that the remaining components of subsection 1236(1A) of the Act do not apply to him.  In particular, I have noted the respondent's records which reveal that he is currently in receipt of social security benefits and that fortnightly deductions are made from these payments in relation to his indebtedness.

15.     A debt may also be waived in accordance with sections 1237, 1237A and 1237AAD of the Act which, insofar as relevant, read:

“1237(1)  On behalf of the Commonwealth, the Secretary may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor only in the circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD and, if the debt is an assurance of support debt, subject to section 1237AAE.

1237A Waiver of debt arising from error

Administrative error

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.

1237AAD Waiver in special circumstances

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 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.”

16.     There is no evidence that the payments were made to Mr Vines because of any administrative error made by the Commonwealth.  In any event, I am satisfied that the payments were not received by him in good faith.  The meaning of the expression good faith was considered by the Federal Court in Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 26 AAR 385 in the context of paragraph 289(2)(b) of the Student and Youth Assistance Act 1973.  There is no material difference between the provisions of that paragraph and those of subsection 1237A(1) of the Act.   Finn J, at 388, said of the provision:

“Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – that is, is not entitled to use the moneys received as his or her own –  that person does not receive payment in good faith.  Absent such knowledge or reason to know, the receipt would be in good faith.”

17.     Mr Vines said in his evidence that he was aware that the payments were made into his account.  Also in evidence were a series of application forms relating to rent assistance.  Whilst they purport to carry the signature of Mr Vines, he said in evidence that he had not completed the documents or signed them and said they were completed by his partner and without his knowledge of the contents.  In the documents, it was falsely stated that Mr Vines did not own a home.  In giving his evidence, Mr Vines was evasive in his responses and appeared generally vague in his recollection of events.  I do not accept his evidence that he was unaware of the content of those application forms.  I am satisfied that, even if he did not complete the documents himself, he was aware of their contents.  In evidence was a “rent receipt” which purported to indicate that Mr Vines was paying rent to someone at the Thomas Road address.  At the hearing, Mr Vines conceded that this was a false document. 

18.     For waiver of a debt in special circumstances, it is a requirement that the debt did not result wholly or partly from a debtor or another person knowingly making a false statement or false representation.  I am satisfied that, at all material times, a person, either Mr Vines or his partner, falsely declared that Mr Vines was not a homeowner and also falsified rent receipts so as to represent that rent was being paid by Mr Vines for accommodation at Thomas Road.  In that situation, the debt is unable to be waived under section 1237AAD of the Act.

Decision

19.      The Tribunal affirms the decision under review.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:             Michelle Brazier
  Legal Research Officer

Date/s of Hearing  19 September 2006
Date of Decision  26 October 2006
The Applicant was self represented         
For the Respondent                  Mr M Black, Departmental Advocate