"WBP" and Secretary, Department of Families, Community Services and Indigenous Affairs
[2007] AATA 33
•22 January 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 33
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2005/6
GENERAL ADMINISTRATIVE DIVISION ) Re "WBP" Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date22 January 2007
PlacePerth
Decision The Tribunal affirms the decision under review. .............[Sgd Mr A Sweidan]..................
Senior Member
CATCHWORDS
Social Security – suspension of age pension because of failure to provide information required in a written notice
LEGISLATION
Social Security (Administration) Act 1999 ss 68, 72 and 192
CASES
WBC and WBN and Secretary, Department of Family and Community Services [2005] AATA 749
REASONS FOR DECISION
22 January 2007 Mr A Sweidan, Senior Member BACKGROUND
1. It is convenient to set out by way of background the relevant parts of the respondent’s Statement of Facts and Contentions filed in relation to this application which the Tribunal proceeds to do as follows:
“Decision under review
1.This is an application to the Administrative Appeals Tribunal (AAT) for review of a decision made by the Social Security Appeals Tribunal (SSAT) on 14 December 2004 to affirm the decision to suspend the payment of the applicant’s age pension because of failure to respond to a notice under section 68 and 72 of the Social Security (Administration) Act 1999 (the Administration Act).
Issue
2.Was the SSAT correct in affirming the decision to suspend payment of the applicant’s age pension for failure to respond to the notice?
Facts
3.In 1996 the applicant and his wife applied to Centrelink for Disability Support Pension (DSP), Parenting Allowance (PA) and Parenting Allowance (PGA), which was later renamed Parenting Payment (PP).
4.Centrelink granted these payments.
5.In 2001, Centrelink began reviewing their financial position and made a number of decisions reducing, suspending and cancelling these payments.
6.In 2004, the applicant was receiving an aged pension.
7.On 28 July 2004 the applicant notified Centrelink of a change in the value of his assets, namely the transfer of one of his properties, a mortgage to his son and a gift of $10,000.00 from his company Jean Arthur Pty Ltd (the Company) to himself.
8.On 31 August 2004, the applicant telephoned Centrelink and requested a statement of his assets as assessed by Centrelink.
9.A Centrelink Officer wrote to the applicant on the same day advising him of Centrelink’s valuation of his assets to be $249,794.00
10.On 3 September 2004, the applicant wrote a letter to Centrelink, complaining that the valuation of his assets was the same as previously and had not taken into account his advice of a change in assets dated 28 July 2004.
11.On 7 September 2004, a Centrelink Officer responded to the applicant’s complaint and advised him that the transactions the applicant claimed to have occurred were still being investigated.
12.On 12 September 2004 the applicant sent a letter to Centrelink requesting a review of the “decision” dated 7 September 2004 and stated that the transactions referred to in his letter dated 28 July 2004 meant that the Company’s assets were below the threshold and that payment of age pension should have been reinstated.
13.On 17 September 2004 Centrelink sent the applicant a letter requiring him to provide further information, including evidence of transfers of property, company tax returns and financial statements for 30 June 2004.
14.The letter stated that it was an “information notice” under section 68 and 72 of the Administration Act and that failure to provide the requisite information within 14 days would lead to suspension of the applicant’s age pension.
15.On 21 September 2004, the applicant wrote to Centrelink withdrawing his authority to value and enter the land at Lot 12 and Lot 14 Edwards St, York.
16.On the same day, the applicant wrote to Centrelink asking how to transfer “deemed control” of the Company to a third party.
17.On 22 September 2004, the applicant sent a letter to Centrelink with the subject heading “re: Arrogant and threatening letter dated 17 September 2004”.
18.In this letter, the applicant stated that he was not in a position to provide tax returns or financial statements of the Company. The applicant did not enclose any of the evidence requested in Centrelink’s information notice.
19.On 5 October 2004 a Centrelink officer decided to suspend payment of age pension to the applicant on the basis that he failed to provide the required information.
20.On 9 October 2004, the applicant wrote a letter to Centrelink requesting a review of this decision.
21.On 14 October 2004, the applicant telephoned Centrelink to state his unwillingness to provide further documentation and requested a review of the decision to suspend his age pension.
22.On the same day, a Centrelink Officer affirmed the decision.
23.On 18 October 2004, the applicant wrote to Centrelink to advise of a change of his relationship status and a change of address.
24.On 25 October 2004, a Centrelink Officer wrote to the applicant requesting documentary evidence of his change of address.
25.On 26 October 2004, the applicant wrote to Centrelink requesting a review of the decision to suspend his age pension. On the same day, he also wrote to a Centrelink Authorised Review Officer (ARO) .
26.The ARO affirmed the decision on 28 October 2004.
27.On 21 December 2004, the SSAT affirmed the decision to suspend the applicant’s age pension.
Related AAT decision
28.In WBC and WBN and Secretary, Department of Family and Community Services [2005] AATA 749 (5 August 2005), the AAT reviewed 8 decisions made by the SSAT in 2002 and 2003 to affirm decisions to reduce, suspend and cancel certain payments to the applicant and his wife.
29.The AAT also determined that the applicant controls the Company by operation of s1207C of the Act (WBC and WBN at [115]).
30.The AAT also held that the applicant’s asset attribution percentage and income attribution percentage in relation to the Company is 100 per cent by operation of s1207X(1) of the Act (WBC and WBN at [99], [101], [106], [107] and [115]).
31.The AAT’s decision about the applicant’s control of the Company is paramount to this application.
Legislation and Policy
32.The legislation regarding information requested by Centrelink is contained in the Administration Act.
33.In summary, the provisions allow for the respondent to give a person a notice requiring them to provide information about a matter which may affect their payment of social security pensions or benefits. If the person does not comply with the requirements of the notice, the respondent may suspend or cancel their payment.
34.The broad power given to the respondent to require a person to give information is found in section 192 of the Administration Act.
35.The relevant sections containing the notice provisions are set out below:
68.(1) Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or seniors concession allowance) is being paid.
68.(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:
(a) inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;
(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment.
68.(5) An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might affect the payment of the social security payment or the person's qualification for the concession card, as the case requires.
Provisions relating to notice
72.(1) A notice under this Subdivision:
(a) must be given in writing; and
(b) may be given personally or by post or in any other manner approved by the Secretary; and
(c) must specify how the person is to give the information or statement to the Department; and
(d) must specify:
(i) in the case of a notice under section 68 that requires the giving of more than one statement, each relating to the payment of the social security payment in respect of a period-the date by which the person is to give each statement to the Department; or
(ii) in any other case-the period within which the person is to give the information or statement to the Department; and
(e) must specify that the notice is an information notice given under the social security law.
72.(2) A notice under this Subdivision is not invalid merely because it fails to comply with paragraph (1)(c) or (e).
72.(2A) A date specified for the purposes of subparagraph (1)(d)(i) must be no earlier than 7 days after:
(i) the day on which the notice under section 68 is given; or
(ii) the day on which the period specified in the notice in relation to that first mentioned date begins;
whichever is the later.
72.(3) Subject to subsections (4), (6) and (7), the period specified for the purpose of subparagraph (1)(d)(ii) must:
(a) in the case of a notice under section 67, 68 or 69 that requires the giving of information about an event or change of circumstances consisting of the receipt by the person of a compensation payment-be the period of 7 days after the day on which the person becomes aware that he or she has received, or is to receive, a compensation payment; or
(b) in the case of a notice under section 67, 68 or 69 that requires the giving of any other information, or a notice under section 70-be the period of 14 days after:
(i) the day on which the event or change of circumstances occurs; or
(ii) the day on which the person becomes aware that the event or change of circumstances is likely to occur;
as the case may be; or
(c) in the case of a notice under section 67 or 68 that requires the giving of a statement that relates to the payment of the social security payment in respect of a period specified in the notice-end not earlier than 7 days after the day on which the notice is given; or
(d) in the case of a notice under section 67, 68 or 69 that requires the giving of a statement, not being a notice to which paragraph (c) applies-end not earlier than 14 days after the day on which the notice is given;
81.(1) If:
(a) a person who is receiving a social security payment (other than a newstart allowance) has been given:
(i) a notice under section 67 or 68 that requires the person to give the Department a statement; or
(ii) a notice embodying a requirement under Division 1 of Part 5; and
(b) the person does not comply with the requirement of the notice;
the Secretary may determine that the payment is to be cancelled or suspended.
contentions
36.The respondent contends that the SSAT was correct in its determination that the applicant did not comply with the section 68 notice.
37.The notice clearly required the applicant to provide information which was necessary for Centrelink to determine the correct amount of pension to be paid.
38.The applicant received the notice and responded to it, but did not provide any of the information requested by Centrelink.
39.The respondent contends that the applicant failed to “comply with the requirements of the notice” under section 81(1) of the Administration Act.
40.The respondent had power to suspend or cancel the payment and chose to suspend it.
41.The respondent refers the AAT to its decision in “WBC and WBN” , which relates to a similar matter.
42.In “WBC and WBN”, the same applicant as in this application received a section 68 notice to produce documents including financial statements and failed to provide them. His benefits were subsequently suspended and ultimately cancelled.
43.The AAT, at [33], stated as follows:
(a) I consider that he made a decision to not provide an important component of the information requested of him. The information was relevant to Centrelink’s assessment of his eligibility to social security payments and the rate of any such payments. .[…] decisions made to suspend and cancel the benefits of the applicant in such circumstances were, in my opinion, entirely justified and I affirm the decisions under review […]
44.The applicant wrote a letter to Centrelink on 12 September 2004 requesting his full pension to be reinstated as a result of a change of assets. To determine the veracity of the letter, Centrelink required evidence of the transactions the applicant claimed to have occurred.
45.The respondent contends that the information requested by Centrelink was reasonably necessary to determine the applicant’s asset pool.
Conclusion
46.The respondent contends that the applicant’s refusal to provide the necessary documents was a clear non-compliance with the notice and that the suspension of payments was justified.
47.The respondent contends that the AAT should affirm the SSAT’s decision of 14 December 2004.”
TRIBUNAL’S DECISION AND REASONS
2. The Tribunal is satisfied on the evidence before it that:
3. The respondent sent a letter to the applicant on 17 September 2004 requiring him to provide the respondent with information including evidence of transfers of property, company tax returns and financial statements as at 30 June 2004. A copy of this letter appears at page 49 at T19 of the “T” Documents filed by the respondent.
4. The Tribunal is satisfied that the applicant failed to provide the respondent with all of the information which was required by the respondent.
5. The Tribunal is accordingly satisfied that the applicant failed to comply with the requirements of the notice and that s81(1) of the Social Security (Administration) Act 1999 accordingly applies.
6. The Tribunal is of the view that the respondent in the circumstances had the power to suspend or cancel the payment of the applicant’s age pension and that the respondent’s decision to suspend the payment was justified in the circumstances.
7. In the circumstances, the Tribunal affirms the decision under review.
8. The Tribunal’s reasons for its findings follow:
9. The letter of 17 September 2004 was sent because on 28 July 2004 the applicant wrote to the Department notifying it of asset changes and advising it of what he called a deed of gift.
10. The applicant’s letter is headed notification of assets change. It says in the first paragraph that the applicant has been gifted the sum of $10,000, the effect of which lowers the deemed asset value of the company by the sum of $10,000.
11. This is followed by the words "please adjust". He then advises the Department in the next paragraph that on 30 June 2004 the company, that is, Jean Arthur Pty Ltd, transferred to him certain land in York. The applicant then goes on to provide a somewhat confusing description of various what appear to be, subdivisions and changes in boundaries of the various lots in the property at York. He goes on to speak about the existence of a transportable building on one of the lots, the significance of which is not particularly clear.
12. Then at page 2 of the letter after speaking about some other matters to do with radioactive waste, the relevance of which is unclear, the applicant then talks about John who is apparently his adult son, having granted him finance and taken out a mortgage over the land. He purports to enclose what he describes as a cancelled certificate of title. He says that he doesn't have a copy of the land transfer or the mortgage.
13. Clearly the purpose of this letter from its terms was to attempt to persuade the respondent that the combined assets of the applicant and his wife had fallen below the threshold with the intent that his wife’s parenting payment ought to be reinstated. The result was that on 17 September 2004, the respondent wrote back to the applicant, referring to various letters and documents and requiring the provision of certain information.
14. It appears that the reference in the second line of the respondent’s letter to a fax dated 23 July is erroneous and is meant to be a reference to a letter of 28 July 2004. However nothing turns on this.
15. In the letter of 17 September the respondent asks for certain classes of documents.
16. It is common ground that the applicant has a son of precisely the same name and that this has been the cause of some confusion.
17. In the circumstances it is understandable that the respondent required more information in order to establish who these two individuals are, whether or not they are the same person and why it is that the registered proprietor of the relevant land had a different address to that on the certificate of title.
18. An examination of the ensuing correspondence between the respondent and the applicant, shows that the applicant has written to the respondent on more than one occasion in highly offensive terms and personal terms and on each occasion he has met with a polite, careful, well considered response by officers of the Department who it appears were simply trying to do their job.
19. Ultimately, the applicant did provide some of the information which was being sought. However, the applicant failed to provide two very important classes of documents that were being sought. The first of those classes of documents were those relating to the alleged loan between himself and his son and the mortgage in respect thereof.
20. The next class of information was the request by the respondent for:
“...the 30 June 2004 tax return and financial statements for Jean Arthur Pty Ltd.”
21. The applicant says in respect of the mortgage, relating to the loan arrangement between himself and his son, that all the respondent had to do was to search the mortgage at the Land Titles Office. This is clearly not so. Such a search would simply identify the parties, show the original amount owing, and show the terms and conditions of the mortgage. It does not, for example, tell you whether the loan has been repaid in part or in full and whether there are any other terms and conditions of the loan between the parties.
22. With regard to the 2004 tax returns and financial statements for Jean Arthur Pty Ltd, the applicant says that those documents were not in existence at the time, they had not been prepared and they still have not been prepared because he cannot afford to pay an accountant to do so. Therefore he says he should not be required to provide them.
23. On 29 October 2004, the respondent wrote to the applicant saying:
“If you are unwilling to pay accountants to provide financial statements (balance sheets, profit and loss statements) then there is the option that you can produce these statements yourself. These documents must be accurate and credible and appropriately attested to by the relevant company office holders, directors and secretary. I will then accept these papers as satisfying my need for accurate contemporary information about Jean Arthur Pty Ltd.”
24. This did not result in the provision of any information.
25. The applicant further argues that the material sought was, in his words, “evidence and not information” and therefore he should not have to provide it. He says that because the documents were not in existence, he ought not to be required to bring them into existence in order to provide them to the Department.
26. There are two provisions which empower the Department to request information. One is section 68 of the Social Security Administration Act, and the other is section 192. Section 192 is actually in broader terms in section 68. Section 192 provides:
“The Secretary may require a person to give information or produce a document that is in the person's custody or under the person's control to the Department if the Secretary considers that the information or document may be relevant to one or more of the following –”
27. Section 68(1) sub-paragraph 2 permits the Secretary of the Department to require a person give one or more statements about a matter that might affect the payment to the person of a social security payment. When one combines those two provisions, it can be seen that the Social Security Administration Act provides the Secretary with extremely broad powers to require the provision of information from recipients of social security, i.e. persons who are making a claim in order that the Secretary might satisfy himself that the claim is justified.
28. The notices of 17 September and 29 October 2004 make it abundantly clear to the applicant what the implications are of him failing to provide the information and the applicant could not have been in any doubt whatsoever about the effect of not complying but deliberately chose not to do so.
Decision
29. The Tribunal affirms the decision under review.
I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: ..........[Ms C Skinner]..................................
AssociateDates of Hearing 25, 26 September 2006
Date of Decision 22 January 2007
Representative for the Applicant In personSolicitor for the Respondent Arran Gerrard
Australian Government Solicitor
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