Xiao Wu and Secretary, Department of Social Services

[2015] AATA 204

[2015] AATA 204 

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2014/4000
Re	Xiao Wu
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Egon Fice, Senior Member
Date	1 April 2015
Place	Melbourne

The decision under review is affirmed.

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

Egon Fice, Senior Member

Catchwords

SOCIAL WELFARE - Rules for determining rates and payments – Income test – Newstart allowance – Widow allowance – Ordinary income – Undisclosed employment, gambling and rental income – Income exceeded limit – Assets test – Value of personal assets – Investment property exceeded asset limit – Decision under review affirmed

SOCIAL WELFARE – Overpayments and debt recovery – Waiver of debt – No administrative error or special circumstances – No waiver applied

Legislation

Social Security Act 1991 (Cth) ss 8, 11, 23, 408BA, 408CA, 408CE, 408FA, 611, 1068, 1118, 1121, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) s 68

Cases

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Secondary Materials

Department of Social Services, Guides to Social Policy Law <

REASONS FOR DECISION

Egon Fice, Senior Member

1 April 2015

1. Ms Xiao Wu applied for and was granted newstart allowance on 14 April 2003.  She advised Centrelink that she separated from her partner on 16 May 2003.  On                    7 November 2003 Ms Wu was granted a widow allowance.

2. Following extensive enquiries regarding Ms Wu’s financial and asset position, on           7 May 2013 Centrelink decided that she had been overpaid widow allowance between   25 February 2005 and 4 August 2011 resulting in a debt to the Commonwealth in the amount of $89,817.63.

3. On 29 May 2013 Centrelink made a further decision that Ms Wu had been overpaid newstart allowance between 14 April 2003 and 6 November 2003 resulting in a debt owed to the Commonwealth of $5,609.88.  Centrelink also made a decision that Ms Wu had been overpaid widow allowance between 7 November 2003 and 27 January 2005 resulting in a debt to the Commonwealth of $16,002.07.

4. On 27 September 2013 an Authorised Review Officer (ARO) with Centrelink affirmed the decisions regarding the above-mentioned debts.

5. On 4 February 2014 Ms Wu was granted the age pension.

6. On 22 April 2014 Ms Wu applied to the Social Security Appeals Tribunal (SSAT) for a review of the ARO decision.  On 18 July 2014 the SSAT decided to affirm the decisions of the ARO.  Following that decision, Ms Wu commenced repaying her debt to the Commonwealth by deductions of $134.20 per fortnight made to her age pension.  She was in receipt of the age pension at the rate of $854.30 per fortnight.

7. Ms Wu lodged an application seeking a review of the SSAT decision by this Tribunal on 31 July 2014.

8. The issues I am required to determine are:

   (a)whether Ms Wu was entitled to receive newstart allowance between                    14 April 2003 and 6 November 2003;

   (b)whether Ms Wu was entitled to receive widow allowance between   7 November 2003 and 27 January 2005;

   (c)whether Ms Wu was entitled to receive widow allowance between   25 February 2005 and 4 August 2011;

   (d)if the answers to (a) – (c) are in the negative, whether the monies she received in the periods stated are recoverable as debts due to the Commonwealth; and

   (e)if Ms Wu owes debts due to the Commonwealth, whether those debts or any part of those debts should be waived or written off.

   NEWSTART ALLOWANCE

9. There appears to be no issue regarding whether Ms Wu was qualified to receive newstart allowance between 14 April 2003 and 6 November 2003. The issue is whether the newstart allowance was payable during that period taking into account Ms Wu’s assets. Section 611 of the Social Security Act 1991 (the Social Security Act) relevantly provides:

   (1)   A newstart allowance is not payable to a person if the value of the person’s assets is more than the person’s assets value limit.

10. The expression asset is defined in s. 11 of the Social Security Act as follows:

    “asset” means property or money (including property or money outside Australia).

11. Section 611 (2) of the Social Security Act provides that a person’s assets value limit is worked out using the table which follows. The asset value limit varies depending upon whether the person is single or a member of a couple and whether the person is or is not a homeowner. Provision is also made for a couple separated due to illness. In that case, the person is entitled to the asset limit set out for a couple. I have set out below the relevant asset limits applying to Ms Wu throughout the relevant period.

Date	Homeowners		Non-homeowners
	Single	Couple	Single	Couple
01/07/2002	$145,250	$206,500	$249,750	$311,000
01/07/2003	$149,500	$212,500	$257,500	$320,500
01/07/2004	$153,000	$217,500	$263,500	$328,000
01/07/2005	$157,000	$223,000	$270,500	$336,500
01/07/2006	$161,500	$229,000	$278,500	$346,000
01/07/2007	$166,750	$236,500	$287,750	$357,500
01/07/2008	$171,750	$243,500	$296,250	$368,000
01/07/2009	$178,000	$252,500	$307,000	$381,500
01/07/2010	$181,750	$258,000	$313,250	$389,500
01/07/2011	$186,750	$265,000	$321,750	$400,000
01/07/2012	$192,500	$273,000	$332,000	$412,500
01/07/2013	$196,750	$279,000	$339,250	$421,500

1. Chapter 3 Part 3.12 contains general provisions relating to the assets test. Of particular concern in this case is s. 1118(1) which relevantly provides:

   In calculating the value of a person’s assets for the purposes of this Act… disregard the following:

   (a)if the person is not a member of a couple – the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;…

2. There is also a deeming provision dealing with personal effects used primarily within the principal home.  It provides:

   1118(3)  For the purposes of this section, if:

   (b)the value of any assets of a person or, if the person is a member of a couple, of the person and the person’s partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and

   (c)the assets are used primarily for private or domestic purposes;

   the value of the assets is to be taken to be $10,000 unless the person satisfies the Secretary that the value of the assets is less than $10,000.

3. Where an asset belonging to a person is encumbered, for example by a charge or mortgage, when calculating the value of a person’s assets for the purposes of the Social Security Act, the value must be reduced by the value of the encumbrance (s. 1121(1)).

4. Section 11(4) of the Social Security Act sets out the following definition of a homeowner (emphasis in original):

   Homeowner.  For the purposes of this Act:

   (a)a person who is not a member of a couple is a homeowner if:

   (i)      the person has a right or interest in the person’s principal home; and

   (ii)     the person’s right or interest in the home gives the person reasonable security of tenure in the home; and

   (b)a person who is a member of a couple is a homeowner if:

   (i)      the person, or the person’s partner, has a right or interest in one residence that is:

   (A)the person’s principal home; or

   (B)the partner’s principal home; or

   (C)the principal home of both of them; and

   (ii)     the person’s right or interest, or the partner’s right or interest, in the home gives the person, or the person’s partner, reasonable security of tenure in the home; and

   (c)a person (whether a member of a couple or not) is a homeowner while:

   (i)      the whole or a part of the proceeds of the sale of the person’s principal home are disregarded under subsection 1118(2); or

   (ii)     the value of a residence, land or structure is disregarded under subsection 1118(2).

5. While s. 11(4) sets out the circumstances in which a person can be held to be a homeowner, the expression principal home is not defined in the Social Security Act. One has to look elsewhere in order to determine how that expression is understood.

6. The Department of Social Security (of the Department) has established a Guide to Social Policy Law.  While the guides set out in that document are not the law, it seems reasonable to regard that document as an expression of departmental policy.  Although dealing with ministerial policy, Brennan J, the then President of the Tribunal, in  Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634 said, at 640:

   There are powerful considerations in favour of a Minister adopting a guiding policy.  It can serve to focus attention on the purpose which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another.  Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy.

7. The above principle dealing with ministerial policy has been adopted with approval in cases dealing with departmental guidelines and policy.

8. The Guides to Social Policy Law state their purpose as follows:

   Each Guide aims to assist in understanding the associated law and its application.  The Guides are intended to be used to assist with decision-making.  They are not intended to be used as sole decision making tools.  Decision makers should base their decisions on the relevant law, with regard to the Australian Government’s policy contained in the Guides.

9. Clause 4.6.3.30 of the Guide to Social Security Law defines the expression principal home.  It provides:

   The principal home is generally the home in which the single income support recipient or couple (1.1.M.120) lives for the greatest amount of time each year.

10. I had in evidence a Register Search Statement dealing with land identified as Volume 10243 Folio 561 which was said to be a unit described as unit 86, 88 Wells Street Southbank 3205.  The registered proprietor of that property is Xiao Mei Wu.  Ms Wu became the registered proprietor of that property on 13 March 2001.  In fact Ms Wu did not dispute that the property belonged to her in a written statement provided to the Tribunal which was taken into evidence.  However, she had previously made contradictory statements.

11. In the course of an interview conducted by a department officer from the Organised & Systemic Fraud Risk Team on 15 January 2013, when asked about the property at    86/88 Wells Street, Southbank, Ms Wu said that it was her ex-husband’s property.  She claimed that when her ex-husband left Australia, he put the property into her name and hence her name appeared on title.  As the department officer noted, that statement could not be correct.  The Register Search Statement discloses that Ms Wu became the registered proprietor on 13 March 2001.  She notified Centrelink that she had separated from her husband on 16 May 2003.  She also notified Centrelink that her home address changed to 69 Old Burwood Road, Burwood East from the date of her separation.  Furthermore, the department officer noted that Ms Wu had lodged a widow allowance application on 7 November 2003 and, in answer to a question on that application regarding whether she owned any real estate other than the home that she lived in, she answered: No.

12. According to Ms Wu, her residential address has always been 86/88 Wells Street, Southbank.  Her evidence was that at the time of her application for newstart allowance, Centrelink staff did not ask her if she was the owner of a house and so she wrote down her address as 69 Burwood Road, Burwood East, which was her son’s house.  In fact Centrelink records dealing with the notification of her address for correspondence records her address at 24 May 1999 being 18/41 Chapel Street, St Kilda.  She notified Centrelink of a change of address commencing from 12 November 2002 as 276A Jasper Road, McKinnon.  On 3 June 2003 she informed Centrelink that her address was 69 Old Burwood Road, Burwood East from 16 May 2003.  On 16 January 2005 that was altered to 12/8 Wells Street Southbank and again on 15 September 2005 back to the Old Burwood Road address.  Ms Wu’s address later changed to 86/88 Wells Street, Southbank from 1 July 2013.  I have no reason to doubt the Centrelink records.

13. Despite Ms Wu claiming that her husband purchased the 86/88 Wells Street property, that is not borne out by the documents which were in evidence.  On or about 25 October 2000 Ms Wu applied for a loan facility through a mortgage originator company called Credit Mortgage Pty Ltd.  The credit sought was $180,000 and the security which she proposed for that facility was the 86/88 Wells Street property.  That facility was granted with the loan starting on 10 November 2000.  The credit provider was Perpetual Trustees Victoria Ltd.

14. The documents in evidence also disclose that Ms Wu was granted another loan facility on 12 December 2001, the loan amount being $240,000.  The initial drawdown was for $60,000 although it is not clear which security was provided for this facility.  In any event, this facility was used by Ms Wu to pay out the first loan facility for $180,000 on 5 June 2006.  The balance of the account at that time was $149,194.71.  $149,640.87 was debited to the $240,000 facility on 16 June 2006, allowing an additional sum for interest.  The $240,000 facility was discharged on 26 July 2007.  This appears to have been done by using a loan facility provided by Bank of China (Australia), the loan being settled on 26 July 2007.  That loan was in the sum of $285,000.  Once again, the borrower on that facility is named as Ms Wu and the security given was 86/88 Wells Street, Southbank.

15. I did not have before me any objective evidence of Ms Wu residing at the 86/88 Wells Street property prior to July 2013.  In fact it appears Ms Wu entered into a rental agreement describing herself as the landlord on 10 November 2000.  That rental agreement was said to terminate on 9 January 2002.  I also had in evidence a Residential Tenancy Agreement which described Ms Wu as the landlord and the rented premises as 86/88 Wells Street.  That agreement was said to commence on 12 February 2007 and end on 12 February 2008.

16. I also had in evidence an application for a rent certificate lodged by Ms Wu with Centrelink on 5 July 2010.  In that document Ms Wu described her residential address as 69 Old Burwood Road and stated that she started living at that address on 15 June 2004.  She claimed she was paying $800 per month rent.

17. Ms Wu’s Driver Licence lists her address as 69 Old Burwood Road.  There are also a number of other bank documents which list that address as her postal address.

18. Although Ms Wu said in evidence that one of the reasons why she used other addresses for correspondence was that she did not have a key to the letterbox at 86/88 Wells Street, that evidence given by Ms Wu along with other evidence regarding the acquisition of that property varied considerably depending upon the circumstances and person to whom the information was given.  I find that her evidence given orally and in written statements cannot be relied upon.  Accordingly, I have relied solely on objective evidence.

19. I find that at all relevant times, Ms Wu was the owner of the property situated at 86/88 Wells Street, Southbank. Furthermore, for a substantial time during the period in question, I find that Ms Wu had tenants in that premises and did not reside there herself. There is no objective evidence of her residing there at all. Accordingly, I find that Ms Wu was not a homeowner for the purposes of the Social Security Act. I accept that she should be regarded as being single throughout the period.

20. I had in evidence a property valuation statement prepared by Mr Paul Wearing, a property valuer with the Australian Valuation Office (AVO).  Mr Wearing produced historical valuations for the years 2001 to 2012 inclusive.  On 5 June 2012 he conducted a roadside inspection of the property.  His assessments were as follows:

    2001               $265,000

    2002               $290,000

    2003               $330,000

    2004               $335,000

    2005               $345,000

    2006               $370,000

    2007               $405,000

    2008               $465,000

    2009               $515,000

    2010               $580,000

    2011               $650,000

    2012               $615,000

21. As noted above, the AVO valued the property at 86/88 Wells Street at $330,000 as at March 2003.  There being no other evidence regarding the value of that property, I accept it is appropriate to use that figure when determining whether Ms Wu was entitled to be paid newstart allowance between 14 April 2003 and 6 November 2003.  As at                14 April 2003, the outstanding loan balance in the $180,000 account was $7,459.81 and the $240,000 account $8,656.09, resulting in a total mortgage liability of $16,115.90.  Therefore, as the Department contended, the value of Ms Wu’s real property asset at that date was $330,000 - $16,115.90 + $10,000 (being the notional value of household goods).  In other words, the net value of that asset was $323,884.10.  Her asset value limit on 1 July 2003 was $257,500.

22. It should be immediately apparent that Ms Wu exceeded the maximum asset limit for a newstart payment to be made to her between 14 April 2003 and 6 November 2003. On that basis alone, without taking into consideration any income she may have had, in accordance with s. 611(1) of the Social Security Act, newstart allowance was not payable to Ms Wu between 14 April 2003 and 6 November 2003.

23. I had in evidence before me documents indicating Ms Wu was employed during the relevant period despite her denial.  While that income would also need to be taken into account when determining whether Ms Wu was entitled to be paid newstart allowance, I need not do so because she plainly had assets in excess of the maximum asset limit.

    WIDOW ALLOWANCE

24. Although Ms Wu was regarded as qualified for the widow allowance between 7 November 2003 and 27 January 2005 (the first period); and again between 25 February 2005 and 4 August 2011 (the second period), I have serious doubts whether that was in fact the case. Qualification for that social security payment is set out in s. 408BA of the Social Security Act. Section 408BA(2)(c) provides:

    (2)   Subject to section 408BB, a woman is qualified for widow allowance in respect of a period if:

    (a)…

    (b)…; and

    (c)she satisfies the Secretary that she has no recent workforce experience on the day when she makes her claim for the allowance; and…

25. As I have said above, there is objective evidence that Ms Wu was employed at the time of her application.  A letter from Thai Thana Restaurant dated 2 May 2007 states:

    This is to certify that Ms Xiao Mei Wu has been working in our restaurant as a full time chef for past five years.  Her gross weekly income is $920.

26. I also had in evidence a statement from the restaurant setting out her year to date payments as at 6 May 2007.  Her gross earnings for that income year to 6 May 2007 amounted to $40,480.

27. Furthermore, similar to newstart allowance, a widow allowance is not payable to a person if the person’s widow allowance rate would be nil (s. 408CA (1)). Section 408CE(1) provides:

    Widow allowance is not payable to a woman if the value of her assets exceeds her assets value limit.

    The first period: 7 November 2003 – 27 January 2005

28. The maximum allowable asset limits for the relevant years in question are the same as those which I have set out in the table in paragraph [11]. For the reasons I have set out above when dealing with maximum assets in respect of newstart allowance, I find that Ms Wu had assets in excess of the asset value limit for the period 7 November 2003 – 27 January 2005.

1. For the sake of completeness, given the evidence I have about the income Ms Wu earned while in receipt of widow allowance, she also plainly exceeded the applicable income limit during the first period.  The maximum permissible income per annum for that period ranged between $3,120 and $3,172.  Ms Wu was well in excess of that limit.

   The second period: 25 February 2005 – 4 August 2011

   Asset limit

2. The Department contended that Ms Wu exceeded the asset limit throughout the second period, apart from between 18 August 2009 and 12 March 2010.  Her asset limit for the 2009/10 tax year was $307,000.  During that period of time, the 86/88 Wells Street property was valued at $515,000 (as per paragraph [31]).  The documents in evidence indicate Ms Wu had a Bank of China mortgage account which provided a facility in the amount of $285,000.  On 12 August 2009 that account had a debit balance of $153,885.90.  However, on 13 August 2009 there was a $50,000 drawdown followed by a further 20,000 drawdown on 18 August 2009.  There was a further $50,000 drawdown made on 26 August 2009.  At the end of March 2010 the debit balance was $271,133.20.  The debit balance in that account continued to fluctuate with significant withdrawals and significant deposits following that period of time. 

3. Therefore, while it is difficult to calculate accurately whether Ms Wu exceeded the asset limit in the period suggested by the Department, her average debit balance during the period was approximately $212,508.  Therefore, the net value of the 86/88 Wells Street property throughout that period was about $302,492.  However if one were to add $10,000 for household effects, that would bring her net asset value up to $312,492.  Accordingly, while I accept that there may have been short periods of time where Ms Wu’s assets were below the maximum limit, they are not sufficiently significant to alter a finding that she exceeded the maximum asset limit for payment of the widow allowance during the second period. 

   Income limit

4. As for the second period in question, the situation is a little more difficult. The evidence I have referred to above at paragraphs [36] - [37] about Ms Wu’s income indicated that she worked full time from approximately 2002 to 2007. However, I did not have documents in evidence regarding Ms Wu’s employment history from 2007 onwards. Considering the employment evidence alone, Ms Wu exceeded the income limit from the start of the second period (25 February 2005) to around June 2007.

5. Regarding the second period in question, the situation is a little more difficult. As the Department contended, the rate of widow allowance is worked out using the Benefit Rate Calculator B which is found at the end of section 1068 (s. 408FA). The Benefit Rate Calculator provides that the income test set out in Module G must be taken into account (s. 1068-A1). In doing so, one needs to understand the meaning of the word income for the purposes of the Social Security Act. It is defined in s. 8(1) as:

   income, in relation to a person, means:

   (a)an income amount earned, derived or received by the person for the person’s own use or benefit; or

   (b)a periodical payment by way of gift or allowance; or

   (c)a periodical benefit by way of gift or allowance;

   but does not include an amount that is excluded under subsection (4), (5) or (8).

6. Section 8(2) of the Social Security Act provides that the references in the Act to the expressions earned, derived or received is a reference to an amount fitting those descriptions which has been acquired by any means and from any source.

7. The Department contended that Ms Wu received about $462,801.20 in unexplained/unknown deposits in her Hong Kong and Shanghai Banking Corporation (Australia) (HSBC) account between 27 January 2005 and 19 April 2011.  Although I have not tallied those figures, I have no reason to doubt their accuracy.  A casual perusal discloses numerous large deposits, some of which are identifiable and others which simply indicate that they are a cash deposit.  Some of those deposits also seem to be transfers from Ms Wu’s other bank accounts.  For example, her Bank of China account on 18 December 2007 discloses a drawdown of $30,000.  Her HSBC account on that date discloses a deposit of $30,000 simply described as loan redraw.

8. The problem for Ms Wu is that she also had a share trading account with TD Waterhouse.  It is likely that the proceeds of share sales may also have found their way into her bank accounts.  When asked about the numerous cash deposits into her HSBC account in the course of an interview on 15 January 2013 by an officer with the Organised & Systemic Fraud Risk Team, she attempted to explain that friends of hers owned an investment property which was rented out to students.  She said rent was paid into her account from which expenses were paid and the balance paid back to the owners of the property.  However she did not provide a satisfactory explanation for why the rent was paid into her account.  There were also unexplained deposits from Perpetual Trustees.  Once again, Ms Wu gave unsatisfactory explanations for those deposits.

9. The documentary evidence also disclosed Ms Wu held a deposit account with Crown Ltd, which operates the Crown casinos.  The sums of money which went through that account are properly described as astonishing.  The Department calculated that between  5 October 2006 and 2 August 2011 Ms Wu had spent approximately $1,893,966 in cash buy-ins.  Having examined the transaction history, I have no doubt that is correct.  She also had an account with the Echo Entertainment Group (Jupiter’s Casino) which was opened on 19 August 2008.  The Account Activity statements which were in evidence disclose that Ms Wu turned over $536,056 in December 2010; $70,570 in April 2010 and $143,339 in August 2008.

10. Ms Wu was provided with regular letters from Centrelink issued pursuant to s. 68(2) of the Social Security (Administration) Act 1999.  That section provides:

    (2)   The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all 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.

    (c)give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.

11. The letters sent to Ms Wu made it clear that she was required to report to Centrelink, within 14 days, where events or changes in circumstances may have affected her Social Security payment.  Such changes or events included where her income varied from the rate last notified or shown in the letter.  Ms Wu plainly failed to comply with those requirements.

12. For those reasons, I find that the unexplained monies in Ms Wu’s bank accounts should be regarded as income for the purposes of the Social Security Act. On that basis alone, as the Department contended, the application of Module G of the Benefit Rate Calculator B to the $462,801.20 in the HSBC accounts as income would result in the rate of payment of the widow allowance being reduced to nil between February 2005 and August 2011.

    DEBT DUE TO THE COMMONWEALTH

13. The Department contended that the monies paid to Ms Wu to which she was not entitled amounted to a debt due to the Commonwealth. Section 1223 of the Social Security Act provides:

    (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.

14. The expression social security payment is defined at s. 23 (1) of the Social Security Act to mean, amongst other things, a social security benefit; or an allowance under the Act. Newstart allowance and widow allowance are both social security benefits, and hence they plainly fall within that definition. Accordingly, I find that the newstart allowance in the amount of $5,609.88; the widow allowance in the amount of $16,002.07; and the widow allowance in the amount of $89,817.63 were payments to which Ms Wu was not entitled and they are therefore a debt due to the Commonwealth.

    RECOVERABILITY OF THE DEBTS

15. Although Ms Wu made no submissions regarding the recoverability of debts owed to the Commonwealth in the event that I should find that such debts had arisen, for the sake of completeness, I should examine the statutory provisions dealing with this subject.

16. The Social Security Act contains a number of provisions in Part 5.4 which deal with the non-recovery of debts. These fall under three main categories, namely: write-off, waiver arising from administrative error and waiver in special circumstances.

    Write-off

17. Section 1236(1) provides:

    (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.

18. Section 1236(1A) sets out the circumstances in which the Secretary may write off a debt. It provides:

    (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;

    (d)it is not cost effective for the Commonwealth to take action to recover the debt.

19. There was no evidence before me which would engage any of the provisions set out in s. 1236(1A). As for capacity to repay the debt, s. 1236(1C) provides that if the debt is recoverable by way of deductions from the debtor’s social security payment, 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.

20. The evidence before me was that Ms Wu is currently in receipt of the age pension at the rate of $854.30 per fortnight.  Centrelink is already in the process of recovering her debt by way of deduction in the amount of $134.20 per fortnight from her age pension.  In addition, Ms Wu continues to be the sole registered proprietor of the 86/88 Wells Street property.  That property was valued at $610,000 on 5 June 2012.  She had repaid the $240,000 mortgage with Perpetual Trustees and, save for a balance of $6,861.30 as at     6 September 2013, the $285,000 mortgage with The Bank of China (Australia) has been repaid.

21. Given her current asset position, I can find no basis for writing off Ms Wu’s debt to the Commonwealth.

    Waiver arising from error

22. Section 1237A explains when the Secretary must waive the right to recover a debt. It provides:

    (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.

    (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.

23. There was no evidence of administrative error before me on the hearing of this matter. I had in evidence numerous notices sent to Ms Wu pursuant to s. 68 (2) of the Social Security (Administration) Act 1999. Those notices clearly explained to Ms Wu that she was required to advise Centrelink of changes in her circumstances including the receipt of income and assets. She failed to do so. Accordingly, I find that Ms Wu’s debts are not attributable solely to an administrative error made by the Commonwealth. She is not entitled to waiver of her debt under s. 1237A.

    Waiver in special circumstances

24. Section 1237AAD of the Social Security Act provides:

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

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

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

    (ii)     failing or omitting to comply with a provision of this Act, the Administration 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.

25. It should be apparent from my findings on the evidence before me on the hearing of this matter that Ms Wu made false statements or false representations about her assets and income when applying for social security payments.  I refer particularly to her interest in the 86/88 Wells Street property; the various bank accounts into which large sums of money were deposited from time to time; her employment at Thai Thana Restaurant; the rental monies she received from 86/88 Wells Street; and her gambling receipts.  These were not disclosed to Centrelink either on application or, as required by the notices sent to her, within 14 days of her circumstances changing.  In fact Ms Wu appears to have deliberately avoided recording the property at 86/88 Wells Street as her residential address with any funding provider or the casinos which she frequented during the periods in question.  Therefore, I find that the special circumstances waiver provisions do not apply to her.

    CONCLUSION

26. I have found that Ms Wu was not entitled to receive newstart allowance between           14 April 2003 and 6 November 2003.  That is because, regardless of her eligibility, the value of her assets exceeded the asset limit for payment to be made to her.

27. I have also found that Ms Wu was not entitled to receive widow allowance between        7 November 2003 and 27 January 2005; and from 25 February 2005 to 4 August 2011.  Regarding the first period in question, Ms Wu exceeded both the asset and income limits for payment of that allowance.  As for the second period, although the value of her assets may have dropped momentarily below the maximum for the allowance to be paid, there remained a very large question regarding her actual income.  There are multiple deposits made to her HSBC account during that period, many of which remain unexplained.  She also held a share trading account with TD Waterhouse, the proceeds of which were likely deposited in that account.  She was also in receipt of rental income and had an extensive history of gambling large sums at various casinos.  Although Ms Wu offered the explanation that overseas friends of hers would use her gambling accounts, other than her statement, there was no evidence to support such a finding.  Given Ms Wu’s frequent contradictory explanations for deposits in her accounts, I cannot make a finding that her statements regarding those deposits are accurate.  There was no corroborating evidence.  Accordingly, I have found that Ms Wu was not entitled to payment of the widow allowance during the two periods in question.

28. I have also examined whether the debts in question should be written off or waived. I have found that the debts are recoverable taking into consideration the fact that Ms Wu currently receives the age pension and that she continues to be the registered proprietor of the 86/88 Wells Street property. Furthermore, given her failure to disclose her true asset and income position either on application for the allowance or in accordance with notices sent to her by Centrelink, she cannot take advantage of the discretionary waiver provisions in s. 1237A of the Social Security Act. Given that I have found Ms Wu made false statements and failed to comply with the notices sent by Centrelink, the special circumstances waiver provisions in s. 1237AAD cannot apply to her.

29. I find that the decision made by the SSAT on 18 July 2014 regarding her newstart allowance payments and her widow allowance payments was correct.  I affirm that decision.

I certify that the preceding 68 (sixty-eight) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member

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

Associate

Dated 1 April 2015

Date of hearing	8 December 2014
Date final submissions received	3 February 2015
Applicant	In person
Advocate for the Respondent	Mr J Henderson
Solicitors for the Respondent	Programme Litigation and Review Branch, Department of Human Services