Watts and Secretary, Department of Family and Community Services
[2004] AATA 1398
•24 December 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1398
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/413
GENERAL ADMINISTRATIVE DIVISION )
Re BRETT WATTS Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr KS Levy, Member Date24 December 2004
PlaceBrisbane
Decision The decision under review is set aside and it is determined that:
(1) The applicant was not eligible for the age pension for the whole of the relevant period, 1 January 2002 to 30 June 2003;
(2) As a result of the decision in (1), there was an overpayment;
(3) The overpayment is a debt due to the Commonwealth, and relates to the period 1 July 2002 to 30 June 2003;
(4) The debt is recoverable at law;
(5) The debt should not be written off;
(6) The debt should not be waived in the present circumstances;
(7) The matter is remitted to the Secretary for recalculation of the debt for the period 1 January 2002 to 30 June 2003;
(8) The Secretary should take action as to recovery which is appropriate in the circumstances from time to time, and in accordance with the Act.
..................[Sgd]......................
K S Levy
Member
CATCHWORDS
SOCIAL SECURITY – Pensions, Benefits and Allowances, Application for review of cancellation of age pension – Whether applicant entitled to pension at time of cancellation – Overpayment made – Debt due to Commonwealth – No justification to write off or waive debt – Decision under review set aside to the extent of recalculating the debt – Decision under review otherwise affirmed.
Social Security Act 1991 (Cth) ss 4, 24, 1064, 1064-A2, 1073, 1207V, 1207X, 1207Y, 1208C, 1223, 1236, 1237A, 1237AAD
Bankruptcy Act 1996 (Cth) ss 82, 149, 153Staunton- Smith v Secretary, Department of Family and Community Services (1991) 32 FCR 164; (1991) 25 ALD 27
Kajzer v Secretary, Department of Family and Community Services [1999] AATA 362; (2000) 4(2) SSR 24
Re Secretary, Department of Family and Community Services v WAP [2000] AATA 7
Re Secretary, Department of Social Security and Le-Huray (1995) 36 ALD 682
Re Croy and Secretary, Department of Family and Community Services (1996) 42 ALD 782
Beadle v Director-General of Social Security (1985) 7 ALD 670; (1985) 60 ALR 255
Re Department of Social Security and Regan (1992) AAT 8377
Secretary, Department of Social Security v Danielson (1996) 44 ALD 19
Re Hales and Secretary, Department of Social Security (AAT 12159, 27 August 1997)
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 26 AAR 385; (1997) 50 ALD 186
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2000) 65 ALD 424
Hooi v Brophy (1984) 52 ALR 710
Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383
Re Secretary, Department of Social Security and McAvoy (1996) 44 ALD 721REASONS FOR DECISION
24 December 2004 Dr KS Levy, Member 1. This is an application under section 29(1) of the Administrative Appeals Tribunal Act 1975 by Mr Brett Watts, for a review of the decision of the Social Security Appeals Tribunal (the “SSAT”), made on 31 March 2004. That decision affirmed the original decision that Mr Watts’ age pension be cancelled, but set aside the decision with respect to the debt owing to the Commonwealth under the Social Security Act 1991 (“the Act”) and referred the matter back to Centrelink with the following instructions:
(a)“that a age pension debt exists for the period 1 January 2002 to 30 June 2002;
(b)that the amount of the debt is to be recalculated on the basis that the 2001/02 income for Mrs Lesley Watts is $58,452.92; and
(c)that the debt, as recalculated, is to be recovered.“
2. At the hearing, before the Administrative Appeals Tribunal (the “Tribunal”) on 18 November 2004, Mr Watts represented himself. The Secretary, Department of Family and Community Services (the “Department”) is the respondent in this matter, and was represented by Mr James Howard, Departmental Advocate. No witnesses were called.
3. At the hearing the Tribunal took the following documents into evidence as exhibits:
§Exhibit 1 Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
§ Exhibit 2 Financial position of Mr Watts
Issues
4.The issues for determination by the Tribunal are:
(a)whether Mr Watts was qualified for the aged pension at the time of its cancellation;
(b)whether Mr Watts has been overpaid age pension and the extent of any overpayment;
(c)if there is an overpayment, is it a debt due to the Commonwealth; and
(d)if there is a debt, should it be waived, written off or recovered?
Legislation
5. The legislative provisions which are relevant to the determination of this matter are as follows:
§ Social Security Act 1991
“Section 4
Member of a couple—general
4.(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a)the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or
(b) all of the following conditions are met:
(i)the person has a relationship with a person of the opposite sex (in this paragraph called the "partner");
(ii) the person is not legally married to the partner;
(iii)the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;
(iv)both the person and the partner are over the age of consent applicable in the State or Territory in which they live;
(v)the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.
Member of a couple—criteria for forming opinion about relationship
4.(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to each other; and
(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i) the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage-like relationship.
4.(3A) The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage-like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.
.....
Person may be treated as not being a member of a couple (subsection 4(2))
24(1) Where:
(a) a person is legally married to another person; and
(b)the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
24.(2) Where:
(a)a person has a relationship with a person of the opposite sex (the "partner"); and
(b) the person is not legally married to the partner; and
(c)the relationship between the person and the partner is a marriage-like relationship; and
(d)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.”
…..
Rate of age, disability support, wife pensions and carer payments (people who are not blind)
1064.(1) The rate of:
(a) age pension; and
(b)disability support pension or disability wage supplement of a person who has turned 21; and
(c) wife pension; and
(d) carer payment; and
(f) mature age allowance under Part 2.12A; and
(g) mature age partner allowance;
is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.
Note: a rate calculator relevant for the above section is contained in section 1065-A(i)”
….
Certain amounts taken to be received over 12 months
1073.(1) Subject to points 1067G-H5 to 1067G-H20 (inclusive), 1067L-D4 to 1067L-D16 (inclusive), 1068-G7AA to 1068-G7AR (inclusive), 1068A-E2 to 1068A-E12 (inclusive) and 1068B-D7 to 1068B-D18 (inclusive), if a person receives, whether before or after the commencement of this section, an amount that:
(a) is not income within the meaning of Division 1B or 1C of this Part; and
(b) is not:
(i) income in the form of periodic payments; or
(ii) ordinary income from remunerative work undertaken by the person; or
(iii) an exempt lump sum.
the person is, for the purposes of this Act, taken to receive one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
….
Ordinary income from a business—treatment of trading stock
Control test
1207V.(2) For the purposes of this section, the individual passes the control test in relation to a trust if:
(a)the individual, or an associate of the individual (other than an associate covered by paragraph 1207C(1)(j)), is the trustee, or any of the trustees, of the trust; or
….
(d) the aggregate of:
(i)the beneficial interests in the corpus or income of the trust held by the individual (whether directly or indirectly); and
(ii)the beneficial interests in the corpus or income of the trust held by associates of the individual (whether directly or indirectly);
is 50% or more;
….
Trust
1207X.(2) For the purposes of this Part, if:
(a) a trust is a controlled private trust in relation to an individual; and
(b)the trust is not a concessional primary production trust in relation to the individual (see section 1208U);
then:
(c)the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and
(d)if the individual is an attributable stakeholder of the trust—the individual’s asset attribution percentage in relation to the trust is:
(i) 100%; or
(ii)if the Secretary determines a lower percentage in relation to the individual and the trust—that lower percentage; and
(e)if the individual is an attributable stakeholder of the trust—the individual’s income attribution percentage in relation to the trust is:
(i) 100%; or
(ii)if the Secretary determines a lower percentage in relation to the individual and the trust—that lower percentage.
Attribution of income
1207Y.(1) For the purposes of this Act, if:
(a)during a particular derivation period of a company or trust, the company or trust derives an amount that is ordinary income; and
(b)an individual is an attributable stakeholder of the company or a trust throughout the attribution period that relates to the derivation period of the company or trust; and
(c) the attribution period begins on or after 1 January 2002; and
(d) if that amount:
(i)had been derived by the individual instead of by the company or trust; and
(ii)in the case of income accounted for on an accrual basis as mentioned in subsection (5)—had been so derived by the individual on a cash basis;
that amount would have been ordinary income of the individual; and
(e) that amount is not excluded income (see subsection (2));
then, in addition to any other ordinary income of the individual, the individual is taken to receive, during that attribution period, ordinary income at an annual rate equal to the individual’s income attribution percentage of the amount worked out using the formula:
Amount referred to in paragraph (a)
x
365
Number of days in the derivation period
….
Derivation periods
1208C.(1) For the purposes of this Part:
(a)if a company or trust was in existence throughout a tax year of the company or trust—the tax year is a derivation period of the company or trust; and
(b)if a company or trust was in existence during a part of a tax year of the company or trust—that part of the tax year is a derivation period of the company or trust.
….
1208C.(3) The Secretary may, by writing, determine that, for the purposes of the application of this Division to a specified individual and a specified company or trust, a specified period is a derivation period of the company or trust.
….
Debts arising from lack of qualification, overpayment etc.
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.
….
1223(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a) the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b) the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c) the payment was not payable;
(d) the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e) the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f) the payment was intended to be made for the benefit of someone else who died before the payment was made.
…..
Secretary may write off debt
1236.(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
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.
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.
1236.(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
….
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.
....
Waiver in special circumstances
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 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.”
§ The Bankruptcy Act1966
“82 Debts provable in bankruptcy
(1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.
(1A) Without limiting subsection (1), debts referred to in that subsection include a debt consisting of all or part of a sum that became payable by the bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy.
….
149 Automatic discharge
(1) Subject to section 149A, a bankrupt is, by force of this subsection, discharged from bankruptcy in accordance with this section.
….
(4) If the bankrupt becomes a bankrupt after the commencement of section 27 of the Bankruptcy Amendment Act 1991, the bankrupt is discharged at the end of the period of 3 years from the date on which the bankrupt filed his or her statement of affairs.
….
153 Effect of discharge
(1) Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts (including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally.”
Background
6. The evidence presented by Mr Watts orally at the Tribunal, together with documents put into evidence, was that he and his wife had both operated a business for approximately ten years, after which it was sold. A second business was purchased but it was unsuccessful and ceased trading. Mr Watts was then forced to lodge a statement of affairs and seek to be declared bankrupt.
7. Mr Watts is 69 years of age and had been married for about 12 years to Mrs Watts. The evidence upon which the previous decisions are based is that Mrs Watts’ income is separate and regarded by them jointly. It was apparently viewed by Mrs Watts (and accepted by Mr Watts) that income under the Lesley Hales Family Trust was hers alone and that he had no entitlement to that income.
8. It is noted by the Tribunal that in the course of challenging the previous decisions not to grant the age pension to Mr Watts, Mrs Watts wrote and pointed out that if they were divorced, he would be automatically entitled to the age pension. Curiously, a short time later at the hearing of this matter, Mr Watts informed the Tribunal that he and Mrs Watts were to divorce the week after the Tribunal hearing. No other evidence of the divorce was proffered. However, Mr Watts stated that Mrs Watts would allow him to live in her home after the divorce, without the payment of rent and that she would provide him with a room, bathroom facilities and, it was understood, basic sustenance in the form of meals. In return, he would undertake maintenance of the lawn and garden. He had access to a car to attend the hearing and did not require public transport.
9. The specific facts leading to the issues which arise for decision in this case are that Mr Watts, after applying for age pension in February 2000, was granted that pension on 21 February 2000. It was cancelled on 30 June 2003. The pension, when initially approved, was calculated on a combined annual income of Mr Watts and his wife. He was advised that Centrelink was to be informed of any change in income position of Mr Watts or Mrs Watts. He was advised by letter on 9 April 2002 that his pension was calculated on their combined annual income which was at that time, believed to be $13,155.12 and he was informed in that letter that he was obliged to inform Centrelink within 14 days, if inter alia, the combined income on which his pension was calculated, increased.
10. The Income Tax Return for 2001/02 year for the Lesley Hales Family Trust was prepared for Mrs Watts on 17 February 2003. This was not provided initially to Centrelink and certainly not within 14 days. On 30 April 2003 Mr Watts was advised by Centrelink that his pension had been calculated on the combined annual income of $22,660.12 and again informed him that he must advise Centrelink of any increase in the combined annual income. On the same date, Centrelink requested a copy of the 2001/02 Income Tax Return for the Lesley Hales Family Trust. This was not provided within 14 days, and on 16 May 2003, Mr Watts was informed by letter that his age pension had been suspended because of failure to provide the Income Tax Return requested. He provided this on 25 June 2003. On 30 June 2003, the age pension was cancelled as the combined annual income ($63,452.92) was in excess of that which allowed for payment of the pension.
11. The income from the Family Trust was based on the following income statement:
§ Income from Lesley Hales Family Trust $45,480.00
§ Director’s Fees from Lesley Hales Family Trust $8,300.00
§ Income from rental properties $3,229.00
Sub Total $57,009.00
§ Deemed income to Trust from a loan to Lesley Watts
of $183,303.00
$6, 443.92TOTAL $63,452.92
12. This Income Statement reflected adjustments to the net income shown in the Income Tax Return by the addition of costs disallowed by Centrelink. Subsequently, the SSAT allowed a further $5,000 for legal fees which then reduced this assessable income to $58,452.92.
13. On 3 July 2003, a debt of $2,075.64 was raised for the period 4 March 2003 to 25 June 2003. On appeal by Mr Watts, he was advised on 1 September 2003 by an authorised review officer that the period of the debt should be 17 February 2003 to 25 June 2003 and amended the amount of debt to $2,343.01. This was based on the date the Income Tax Return was signed. On 4 September 2003, the authorised review officer again wrote to Mr Watts and advised the correct amount of the debt was $2,407.53. He appealed to the SSAT. That Tribunal decided that the amount should be recalculated for the period 1 January 2002 to 30 June 2003 and the matter was remitted to Centrelink to recalculate the amount of debt. The Tribunal was advised that this amount has been calculated to be $3,707.95.
Evidence
14. At the commencement of the hearing, it was noted that the application under section 29(2) of the Administrative Appeals Tribunal Act 1975 was dated 31 May 2004, which was approximately 60 days after the date of the decision of the SSAT, and was not within the 28 day period prescribed. Mr Howard, for the respondent, advised that the applicant had informed the respondent that there was a considerable delay in the decision of the SSAT being furnished to him. That had been accepted by the Registry of the AAT and the respondent did not wish to press the point. This Tribunal accepted the application satisfied section 29(2)(a) of the AAT Act 1975.
15. The basis of the Centrelink assessment had been objected to by the applicant’s wife at the SSAT. She objected to Centrelink not allowing legal fees of $5,000 of the Trust in assessing Mr Watt’s entitlements for age pension. This was subsequently allowed by the SSAT and the annual net income of the Trust amended to $58,452.92. She also contended that $23,000 in mortgage repayments was omitted from the 2001/02 taxation return and that the tax return was being resubmitted. At the hearing before the AAT, Mr Watts indicated that an appeal was being lodged to the Australian Taxation Office in relation to this matter. When asked about when that matter might be decided, Mr Watts was not certain that it had even been lodged.
16. Mr Watts indicated to the Tribunal in oral evidence that he had worked and paid tax all of his life until he became bankrupt and if required, he was prepared to repay the debt. However, he stated he was now impecunious, that he could not work and was to be divorced the following week. He had applied for a health care card as he needed medical attention for a shoulder injury.
Consideration
17. I have carefully considered all of the evidence presented by Mr Watts and the respondent in relation to the issues to be answered by the Tribunal.
Was Mr Watts qualified for age pension at the time of its cancellation and for the period for which a debt is now claimed i.e. 1 January 2002 to 30 June 2003?
18. It must be said at the outset that there was a paucity of evidence to support Mr Watts’ claims of his proposed divorce, of the circumstances of his stated living arrangements after the proposed divorce and of what support Mrs Watts does or will provide to him.
19. The Tribunal is required in the first instance to determine whether Mr Watts, during the relevant period, was a “member of a couple”. Section 4 of the Social Security Act 1991 outlines the circumstances to be considered in determining this issue. Relevantly, section 4 highlights the circumstances where a person is recognised as being a member of a couple – that is, the person is a member of a couple if the person is legally married to another person or is in a marriage-like relationship (Section 4 (2)). Criteria are provided for forming an opinion about whether a relationship is a marriage-like relationship – the financial aspects of the relationship, the nature of the household, including the living arrangements of the people, the social aspects of the relationship, any sexual relationship and the nature of the people's commitment to each other (Section 4 (3)). A couple would not be determined to be in a marriage-like relationship if they were living separately and apart (Section 4(3A)).
20. It would be seen that if the Tribunal found under section 4(2) or 4(3) that Mr Watts was in fact a member of a couple at the relevant time, then section 24(1) would need to be considered. Section 24(1) of the Act provides:
“24(1) Where:
(a)a person is legally married to another person; and
(b)the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.”
21. The consequence of Mr Watts being a “member of a couple” would be that Mrs Watts’ income would be included in the calculation of their combined income for the purpose of identifying whether he was entitled to the age pension. Absent the recognition that he was a “member of a couple”, he would be likely to be entitled to the age pension.
22. In all proceedings prior to the appeal to the Tribunal, it had been accepted that Mrs Watts’ income from the Lesley Hales Family Trust was relevant and assessable for the purposes of determining eligibility for age pension. Mr Watts at the outset, provided information about the existence of his wife’s trust income but subsequently, there were indications of avoidance or at least of a tardy response to requests from Centrelink for information about the Trust. However, there was no evidence that this was contrived or contributed to by Mr Watts notwithstanding the delay in providing details of the Trust income for 2001/02 year until April 2003.
23. In assessing whether Mr Watts was a “member of a couple” as provided by section 4 (3), it is clear that there is no joint ownership of real estate of other assets or any significant pooling of financial resources particularly with respect to financial commitments. However, it is also clear that Mr Watts and his wife were both business people where the administration of the financial aspects of their affairs were kept separately.
24. Apart from the strict business arrangements, it does not appear that at the time Mr Watts applied for the age pension and until more recent times, that other aspects of their marriage could be seen to be differentiated. There was no evidence about their marital arrangements in terms of their living arrangements or the division of effort within the household. There is nothing to suggest anything other than that they held themselves out to be married to each other. Indeed, even until recent times, Mrs Watts was advocating on behalf of Mr Watts in relation to the decision to cancel his age pension.
25. Even apart from these indicia, there is no evidence of Mr Watts and his wife “living separately and apart” (Staunton-Smith v Secretary Department of Family and Community Services (1991) 32 FCR 164; (1991) 25 ALD 27). There was no evidence of physical separation and there was also no evidence of destruction of “consortium vitae” or any implication that that was relevant until very recent evidence of their proposed divorce. This seems to be a case of a normal and effective relationship with the parties living under the same roof and not living separately and apart at all times prior to and during the relevant period when Mr Watts was in receipt of the age pension. It also appears that it continued to exist following cancellation of the age pension and almost until the hearing date.
26. The financial situation of Mr Watts has clearly changed in the past four years and the effectiveness of their marital relationship seems to have been negatively impacted in recent times. While the provision of financial support is not a decisive factor alone it is one of the essential features to show a “marriage-like relationship”. Even though financial independence is not uncommon in contemporary relationships or marriages, (Re Secretary Department of Family and Community Services v WAP (2000) AATA 7, in this case, Mrs Watts has clearly provided for the applicant since his bankruptcy. Even with a pending divorce, she still has apparently undertaken to continue that support, at least for a fundamental lifestyle for Mr Watts. The “financial aspects” do not reflect any intention to live separately and apart. The “nature of the household” also is informative and does not detract from the impression created by the applicant’s evidence that he and his wife have had a “marriage-like relationship”. It is therefore decided that they were not living separately and apart under the same roof at all relevant times while in receipt of age pension (Kajzer vSecretary Department of Family and Community Services [1999] AATA 362; (2000) 4(2) SSR 24).
27. There was no evidence the applicant was not, at all relevant times, “a member of a couple” as prescribed by section 4. But is there a “special reason” to regard him as not being “a member of a couple” as provided for by Section 24(1)? In Re Secretary Department of Social Security and Le-Huray (1995) 36 ALD 782 the Tribunal determined there was a “special reason” where there was no financial responsibility for the other member of the relationship. This is not the case with Mr Watts. In Re Croy and Secretary Department of Family and Community Services (1996) 42 ALD 782, an aged pensioner was held not to have a “special reason” when his new American wife’s assets precluded his continuing to receive the pension. In all the circumstances, the Tribunal determines that all indicia, including the issue of the potential divorce of Mr and Mrs Watts, is not, on the balance of probabilities sufficient to regard it as being a “special reason” to regard Mr Watts as not being a “member of a couple” at the time he was receiving the age pension. This is supported by the decision in Beadle v Director-General of Social Security (1985) 7 ALD 670; (1985) 60 ALR 255 where “special circumstances” was held to have the quality of being quite unusual. This must be seen in the context of the objectives of the Social Security Act and “special circumstances” might be held to be satisfied if an unjust or unfair outcome would result. In terms of all of the evidence in this case, this discretion is not justifiable in terms of section 24(1).
28. In light of that finding of fact, was he therefore qualified for the age pension? This relates to the income of the Lesley Hales Family Trust. By virtue of section 1207V it is accepted that it was a controlled private Trust. Mrs Watts had sole control over the Trust and passed the control test under section 1207V(2). The SSAT found she was an attributable stakeholder of the Trust with an income attribution percentage of 100% under the Trust (see section 1207X(2)). This Tribunal finds no reason to disturb that finding. The income of the Trust is “ordinary income” within the terms of section 1207Y(1), and the legal expenses of $5,000 were a legitimate business deduction in terms of section 1208B. As a consequence, the Trust income of $63,452.92 determined by Centrelink should be reduced by the legal expenses of $5,000 as determined by the SSAT. Therefore the net income assessable under the Trust was $58,452.92.
29. In terms of the applicant’s eligibility for the age pension, he was qualified at the relevant date, subject to not being disqualified by the income test. It is accepted, based on the evidence that the assets test is not applicable to Mr Watts. However, in assessing his income, section 1064(1) prescribes the rate of age pension. Relevantly, section 1064-A2 provides:
“Members of a couple
1064-A2. Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1064-E2, 1064-F2 and 1064-G2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see points 1064-D7 and 1064-D8 below).”
30. Therefore, the applicant’s income is deemed to be shared equally with his wife for the relevant period. Half of the net Trust income of $58,452.92 (or $29,226.46) is therefore assessable in determining eligibility for the age pension. This equates to $1,124.09 per fortnight.
31. The Respondent advised the Tribunal that this amount of income exceeds the allowable threshold to be entitled to any age pension. It follows, therefore, that he had no eligibility to the age pension for the relevant period.
Was there an overpayment?
32. From the finding that Mr Watts was not legally entitled to the age pension for the relevant period, it follows that he was overpaid for the period 1 January 2002 to 30 June 2003. It is noted that the amount of the overpayment as advised by the respondent is $3707.95 and relates to the period from 1 January 2002 to 30 June 2002. However, given the Tribunal’s decision as to the period to which the overpayment relates, this should be remitted to the Department to be recalculated.
Is the overpayment a debt due to the Commonwealth? To what period does any overpayment relate?
33. Section 1223(1) provides:
“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.”
34. From the determination above, it is apparent that there was a social security payment and that there was not an entitlement to the amount received based on the level of other shared income. There is, therefore, a debt due to the Commonwealth.
35. What effective date is applicable to the assessment of this income? Section 1207Y was enacted by Act No 132 of 2000 [see section 3, Schedule 1 (23)]. The commencement date of this section was 1 January 2002. Therefore, it is applicable only from that date. The period to which the payments relate, is from the evidence, that part of 2001/02 year to which the income relates. Prime facie, the pension was paid with effect from 1 July 2001 for that financial year. However, as section 1207Y, which provides for the assessment of deemed joint income based on Trust income only commenced on 1 January 2002, any debt based on Trust income cannot be retrospective prior to that date.
36. In the case of the applicant, it follows that a debt is due to the Commonwealth from 1 January 2002 to 30 June 2002 in respect of the 2001/02 year. In respect of the 2002/03 year, payments of age pension were also made to the applicant. While the financial return for the Trust had not been filed at the date of the hearing for that financial year, the question arises whether those payments are to be regarded as current debts. This is answered by section 1223 (1AB) which relevantly provides:
“1223(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a) the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b) the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c) the payment was not payable;
(d) the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e) the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f) the payment was intended to be made for the benefit of someone else who died before the payment was made.”
37. Part of this section replaces the former section 1224(1). In introducing the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Bill, (which included the present section 1223(1AB)), the responsible Minister told the Commonwealth Parliament that “[T]he changes introduced by this bill, will ensure that when a person receives a social security payment …… that exceeds the amount that should have been paid, the excess amount is a debt and is recoverable.” The explanatory Memorandum which amplifies the amendments in this Bill includes “examples” which mirror the provisions of section 1223 (1AB). This qualifies the explanation of subsection 1223(1) which applies where a person had “…obtained the benefit of a payment and the person was not entitled to obtain that benefit for any reason.”
38. Section 1223(1AB) is invoked if payment of a pension amount was paid because of “…. a false statement or misrepresentation” by any person [1223(1AB)(d)]. Apart from a person breaching the elements of this section simpliciter, there must be seen to be a causal relationship between the false representation and payment of the pension amount. (Re Department of Social Security and Regan (1992) AAT 8377).
39. In considering the bona fides of the applicant in making a representation as to income, the Tribunal is satisfied that there was an intentional or negligent misrepresentation knowing that it was, in all probability, false. The reasons for this conclusion are consistent with the reasoning in relation to section 1237AAD later in this decision. The reasoning is also consistent with Secretary, Department of Social Security v Danielson (1996) 44 ALD 19 at 23-24 where the Federal Court held that if the Tribunal determines that an inference is drawn adversely for the applicant under (the then applicable) section 1224(1), the applicant is required to ”….prove on credible evidence to the satisfaction of the AAT,” that the statements made by him were not false. Failure to comply with an obligation on the taxpayer (implied or express) or a failure to comply with the section was discussed in Re Hales and Secretary, Department of Social Security (AAT 12159, 27 August 1997). In that case there was a failure to comply with the section, notwithstanding advice on more than one occasion of the obligation to inform the Department of any change in the income advised and upon which the income was calculated. Similar circumstances apply in the instant case.
40. Consequently, there is a causal connection between the false representation or omission of the applicant and the payment of age pension made. As a result, there is prima facie, a debt due to the Commonwealth under section 1223(1AB) and the adverse inference drawn by the Tribunal has not been displaced by the applicant. Therefore, there is a debt due also for the period 1 July 2002 to 30 June 2003 (insofar as payments were made in respect of the 2002/03 year).
41. In light of the above, the Tribunal has decided to vary this aspect of the decision by determining that a debt is due for the relevant period of overpayment, i.e. 1 January 2002 to 30 June 2003. As a consequence, the amount of the overpayment should be remitted to the Secretary to be recalculated.
Is the debt recoverable? Should it be waived or written off?
42. Before the SSAT, it was argued that the amount was affected by the provisions of the Bankruptcy Act 1966. This amount is not within the category of debts which is provable in bankruptcy (section 82). Notwithstanding that, it is clear this debt arose after he became bankrupt and is therefore not protected by section 82. As he became bankrupt on 14 February 2000, he was released from bankruptcy on 13 February 2003 (see section 149). This had the effect of releasing him only from debts provable in bankruptcy (section 153). Therefore these provisions do not offer any protection to the applicant. The debt is therefore recoverable unless it is written off or waived.
Can the debt be written off?
43. A debt can be written off under section 1236 only if it is irrecoverable. The relevant provisions are:
“Secretary may write off debt
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.
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.”
44. These provisions do not reveal any condition which is applicable to the applicant. The applicant’s circumstances are not such that now or in the future, the debt might not be recoverable at law. Therefore write off is not appropriate. This is not to preclude the Secretary from exercising his discretion under this section at a future time, if that seemed appropriate.
Can the debt be waived?
45. A debt can be waived under section 1237 of the Act. However, the Secretary may only waive a debt in circumstances set out in the provisions specified in section 1237(1). In this case, there appears to be two other provisions which may be relevant. These are sections 1237A and 1237AAD:
“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.
1237A.(1A) Subsection (1) only applies if:
(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
Waiver in special circumstances
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 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.”
46. In applying these provisions to the present case, section 1237A(1) is only relevant where there is an administrative error. Section 1237A(1A) makes section 1237A(1) applicable only where the debt is not raised within a period of 6 weeks from the first payment that caused the debt.
47. I am not satisfied that circumstances which gave rise to the debt in respect of Mr Watts’ age pension was attributable solely to administrative error of Centrelink. Indeed, it is difficult to regard this as an administrative error at all. The Department assessed the entitlement based on the stated income. While Mr Watts did not at any time conceal the fact that his wife’s Trust and its income, the provision of the relevant information did not occur until 25 June 2003. It is difficult to accept that neither Mr Watts nor his wife, being experienced business owners, could not foresee the likely magnitude of the income before the end of a three year period after the commencement of payment of age pension. On the balance of probabilities, it should have been foreseen by Mr Watts and/or his wife.
48. The meaning of the expression “good faith” as shown in section 1237A(1) was considered by the Federal Court in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 26 AAR 385; (1997) 50 ALD 186. While that case involved the consideration of that term in connection with another statutory provision there seems to be no difference of legislative intent where those provisions and section 1237A(1) of the Act are concerned. In that case, Finn J said:
“The significance of the statutory context in which the formula is used is in the illumination it gives as to what is that required state of affairs. It has correctly been observed that the term ‘good faith’ (or its now less fashionable Latin equivalent ‘bona fide’) is a protean one having longstanding usage in a variety of statutory and, for that matter, common law contexts. I merely instance provisions protective of public officials in respect of illegal acts done in good faith in the purported execution of a statute; for a discussion of which see, for example, Little v Commonwealth (1947) 75 CLR 94 at 108-110; the duty of good faith of a mortgagee exercising a power of sale (for example, Downsview Nominees Ltd v First City Corp Ltd [1993] 1 NZL 513); and ‘good faith’ as an essentially knowledge or notice idea in both statutory and common law contexts involving property dealings; see, for example Bankruptcy Act 1966 (Cth), s 120(6); Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266.
The burden of the formula can very significantly given the purpose it is intended to serve in a given setting. In one context it can focus inquiry upon a person’s reason for action (eg as with the good faith duty of company directors); in another, to a person’s state of knowledge when a particular event occurs.
For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. 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 the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.” (Pages 387-388).
49. The term “good faith” has also been considered more recently by Cooper J in the case of Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2000) 65 ALD 424. There, His Honour amplified circumstances relevant to “good faith”:
“Prima facie, s 1237A(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.
A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists. Although said in a different context, the observations of Lord Blackburn in Jones v Gordon (1877) 2 App Cas 616 at 629 are apposite. His Lordship said :
‘... If he was (if I may use the phrase) honestly blundering and careless, and so took a bill of exchange or a bank-note when he ought not to have taken it, still he would be entitled to recover. But if the facts and circumstances are such that the jury, or whoever has to try the question, came to the conclusion that he was not honestly blundering and careless, but that he must have had a suspicion that there was something wrong, and that he refrained from asking questions, not because he was an honest blunderer or a stupid man, but because he thought in his own secret mind - I suspect there is something wrong, and if I ask questions and make farther inquiry, it will no longer be my suspecting it, but my knowing it, and then I shall not be able to recover - I think that is dishonesty. I think, my Lords, that that is established, not only by good sense and reason, but by the authority of the cases themselves.’”
50. In this case, whether or not Mr Watts knew of the exact income of the family trust, he was informed of his obligation to advise of any change in the income level already provided to Centrelink and on which his entitlement was based. His not knowing the income from the Lesley Hales Family Trust (or the ability to find out the amount of income), or at least the likelihood that the income was significantly different to that which he had informed Centrelink, is not a reasonable conclusion over a period of approximately three years between the time of being granted the aged pension and the time when the financial statements were ultimately provided to Centrelink. He had reason to know that there could have been a significant change in the level of income to the Trust and therefore failing to take action to ascertain the likely quantum of income from the Trust at any time over that three year period does not seem consistent with a finding that he received payment in “good faith”. He knew that he was required to provide any changes in details of income for either he or his wife and it was reasonable to expect that the amount of income had changed significantly. Therefore, it was reasonable for him to expect that entitlement to age pension could be affected. He was careless as to whether the information that was initially provided needed to be corrected to Centrelink in a timely way. As his obligations had been bought to his attention on more than one occasion and as he did not attempt to ascertain any relevant detail, I cannot find that he received the payments of age pension in good faith. As a result, no part of the debt can be waived under section 1237A(1).
51. The second waiver provision in this case is section 1237AAD. That section provides:
“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 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.”
52. All three of the limbs of section 1237AAD must be satisfied before the debt may be waived. In relation to the first limb, the question is whether the false information provided or the continuation of inaccurate information upon which the age pension was calculated, was done so “knowingly”. This condition is not the same as the concept of mens rea which in the criminal jurisdiction, requires the mental element of intention to be satisfied. However, in considering the degree of knowledge or intention or recklessness that might be relevant to section 1237AAD, it is useful to consider concept of “knowledge” as discussed in case of Hooi v Brophy (1984) 52 ALR 710 at 712-713. There, the term “knowledge” was cross-referenced to the judgment of Devlin J (as he then was) in Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383 at 385.
“There are I think, 3 degrees of knowledge which it may be relevant to consider in cases of this sort. The first is actual knowledge, and, of course, the justices may find it because they infer from it the nature of the act that was done, for no man can prove the state of another man’s mind, and they may find it, of course, even if the defendant gives evidence to the contrary. They may disbelieve him, and think that that was his state of mind. They may feel that the evidence falls short of that, and, if they do, they have then to consider what might be described as knowledge of the second degree: they have to consider then whether what the defendant was doing was, as it had been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. I do not think it necessary to look further, certainly not in cases of this type, than the expression used by Lord Hewart CJ, in a case under this section, Evans v Dell (1937) 53 TLR 310 at 313 ’… the respondent deliberately refrained “from making inquiries” the results of which he might not “care to have”.’
The third sort of knowledge is what is generally known in the law as constructive knowledge. It is what is encompassed in the words ‘ought to have known’ in the phrase ‘know or ought to have known’. It does not mean actual knowledge at all. It means that the defendant had in effect, the means of knowledge. (my emphasis.)”
53. It seems to me consistent with the finding above of lack of good faith that the applicant’s recklessness (and perhaps that of his wife), results in “constructive knowledge”. I do not believe that section 1237AAD was meant to have a narrow construction as there can be a variety of circumstances to be considered. Therefore, where the applicant had the means to acquire the relevant knowledge from his wife, then omitting to obtain that information must be seen as doing so recklessly and as a consequence, knowingly, for the purposes of section 1237AAD.
54. In relation to the second limb of that section, it must be determined whether there are special circumstances (other than financial hardship alone) which make it desirable to waive the debt. Determining whether the circumstances are “special”, depends on the purpose of the power in that section. (In Beadle v Director-General Social Security (1985) 60 ALR 225 at 228, the Full Court of the Federal Court determined that limits of that term cannot be specified with any real precision.
55. Mr Watts had been a businessman for a considerable period of time and had been married to Mrs Watts for approximately 12 years. She was clearly a person of significant independent means. However, Mr Watts has now had the misfortune of having a failure with his last business which resulted in bankruptcy. He also now has a medical condition pertaining to his right shoulder. He has also informed the Tribunal that he was to be divorced in the following week. However, other relevant circumstances are that he failed or omitted to comply with his obligation to notify the Department about the change in the combined income of himself and Mrs Watts compared to the estimate that was originally provided to Centrelink when he was first granted the age pension. As a witness, I did not discern a deliberate intention of the applicant to be deceitful but nevertheless, I was left with the impression that he was relatively indifferent to the matter as he ‘had paid tax all his life’. He had been informed of his obligation to bring this to the attention of Centrelink at least twice over the previous three years and even when a request was made for the provision of the financial statements in March 2003, he failed to provide those until June 2004. At that stage, this was the first opportunity which Centrelink had to make a factual assessment and ceased the payment of the age pension at that time.
56. In the circumstances, I am not satisfied that Mr Watts’ circumstances are “special”. He has some health problems but he is not physically incapacitated and admitted to doing the gardening for Mrs Watts after their divorce so that he would justify residing in one of Mrs Watts’ properties. He provided no other evidence such as illiteracy or any other significant factor to support failure to abide the requirements which Centrelink had communicated to him. Consequently, I find that there are no “special circumstances” which are sufficient to waive the debt.
57. In relation to whether it is more appropriate to waive than to write off the debt, it is not clear what Mr Watts’ future circumstances will be if he obtains a divorce, although his evidence was that he would still live in one of his wife’s houses and possibly the one that she also occupies. It is not appropriate to write off the debt under section 1236A. On the other hand, the appropriateness of waiver of the debt is not without doubt as to the future circumstances of the applicant. There seems at present however, some difficulty for Mr Watts to repay the debt in full, even though it is not large in quantum.
58. In the circumstances, it does not seem appropriate to waive the debt or to write it off, given the uncertainty of the applicant’s future position, the circumstances surrounding the acquisition and retention of the age pension and the need to acknowledge that the debt involves public monies to which Mr Watts was not legally entitled (Re Secretary, Department of Social Security and McAvoy (1996) 44 ALD 721). This could be reviewed by the Secretary at some future time, if deemed appropriate.
59. For these reasons, the decision under review is set aside and it is determined that:
(1)The applicant was not eligible for the age pension for the whole of the relevant period, 1 January 2002 to 30 June 2003;
(2)As a result of the decision in (1), there was an overpayment;
(3)The overpayment is a debt due to the Commonwealth, and relates to the period 1 July 2002 to 30 June 2003;
(4)The debt is recoverable at law;
(5) The debt should not be written off;
(6) The debt should not be waived in the present circumstances;
(7)The matter is remitted to the Secretary for recalculation of the debt for the period 1 January 2002 to 30 June 2003;
(8)The Secretary should take action as to recovery which is appropriate in the circumstances from time to time, and in accordance with the Act.
I certify that the 59 preceding paragraphs are a true copy of the reasons for the decision herein of Dr K S Levy, Member
Signed: Denise Burton
Administrative AssistantDate/s of Hearing 18 November 2004
Date of Decision 24 December 2004
The Applicant was self-represented
For the Respondent Mr J Howard, Departmental Advocate
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