Zaki and Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs
[2010] AATA 226
•30 March 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 226
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/1991
GENERAL ADMINISTRATIVE DIVISION ) Re Ashraf Zaki Applicant
And
Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Senior Member Jill Toohey Date30 March 2010
PlaceSydney
Decision The decision under review is set aside and in its place is substituted the decision that 50 per cent of the applicant’s debt to Centrelink be waived.
...............[sgd]...............................
Senior Member
CATCHWORDS
SOCIAL SECURITY – assurance of support – whether assurance of support debt should be written off or waived – whether special circumstances – applicant gave assurance of support for parents-in-law – special benefit paid to parents-in-law – applicant and parents-in-law relied on Centrelink’s advice – Centrelink correspondence confusing – Centrelink mistakenly returned part bond to applicant – Tribunal satisfied that special circumstances existed – not satisfied debt should be waived in full – decision under review set aside and decision substituted that 50 per cent of debt waived.
Social Security Act 1991
Social Security (Administration) Act 1991
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle v Director-General of Social Security (1985) 7 ALD 670
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
REASONS FOR DECISION
30 March 2010 Senior Member Jill Toohey Background
1. Safwat Nassif Aneese and his wife, Faiza Wahib Indrawes, came to Australia from Egypt in March 2004. It was a condition of their permanent residence visas that their son-in-law, Ashraf Zaki, sign an assurance of support by which he agreed:
i)to provide sufficient direct or indirect financial assistance to ensure they would not rely on any form of social security benefit in Australia;
ii)to repay any special benefit paid to them in the first two years after they arrived in Australia;
iii)that Centrelink could use its debt recovery powers to recover any debt that arose on account of payments to them; and
iv)that he understood that he could not withdraw his undertaking once they were granted visas.
2. Mr Zaki signed an assurance of support on 6 October 2003. It was a further condition of his parents-in-law’s visas that he lodge assurance of support bonds with the Commonwealth Bank. On 21 November 2003, Mr Zaki lodged bonds of $3500 and $1500 for Mr Aneese and Ms Indrawes respectively.
3. Mr Aneese and Ms Indrawes were granted visas on 28 November 2003. They arrived in Australia on 13 March 2004. The two-year period covered by the assurance of support therefore ran to 12 March 2006. Within that time, Mr Aneese and Ms Indrawes applied for, and were granted, special benefit.
4. Centrelink decided, and the Social Security Appeals Tribunal has affirmed, that Mr Zaki must repay $15,571.15 (less the amount of the bonds) being the special benefit paid to Mr Aneese and Ms Indrawes during the assurance of support period. Mr Zaki seeks review of that decision.
5. Mr Zaki does not dispute that he signed an assurance of support, that he understood its terms, that it is a binding agreement, or that it could not be withdrawn once his parents-in-law were granted visas. He does not dispute that his parents-in-law received special benefit payments within the assurance of support period. However, he says he should not be required to repay the amount claimed by Centrelink because of special circumstances.
The issue
6. I have to decide:
(i) does Mr Zaki have an assurance of support debt;
(ii) if so, should any or all of the debt be written off or waived.
Does Mr Zaki have an assurance of support debt
7. The relevant legislation is in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1991 (the Administration Act).
8. Where an assurance of support for a person has been given and accepted, and that person receives a social security payment during the assurance of support period, and there is a relevant determination in effect, the assurer is liable to pay the Commonwealth the amount of the social security payment: ss 1061ZZGG, 1061ZZGH of the Act.
9. A person who is liable to pay an assurance of support debt has a debt due to the Commonwealth: s 1227(1) of the Act.
10. There is no dispute, and I am satisfied, that Mr Zaki has a debt to the Commonwealth on account of his assurance of support debt.
11. It has proven difficult to determine the precise amount of the debt. Centrelink calculate it to be $15,571.14 (less the amount of the bonds). Mr Zaki maintains that the correct amount is actually more: $15673.14. I am satisfied that the Centrelink figure is correct.
How did the debt come about
12. Mr Aneese first approached Centrelink for financial assistance in about November 2004. Centrelink arranged a meeting with Mr Zaki and, on 14 January 2005, he signed a statement saying he would appreciate consideration of the financial hardship the family was experiencing; he had no objection to the $5000 bonds being released to pay his parents-in-law and he was willing to pay back “any extra payment” as well.
13. What happened next is not clear but the matter went no further and no payments were made to Mr Aneese and Ms Indrawes.
14. Mr Aneese again approached Centrelink in about May 2005. In oral evidence he said he asked for a small amount and he and his wife were granted around $100 per fortnight between them. He was happy with this because he calculated that payments over the remainder of the assurance of support period would not exceed the $5000 bonds given by Mr Zaki.
15. Mr Aneese maintains that Centrelink calculated the amount of special benefit on the basis that it would not exceed the bonds. I accept the Secretary’s contention that it was the maximum Mr Aneese and Ms Indrawes could receive while still living with Mr Zaki, and coincidental that it would not exceed the bonds.
16. Mr Aneese went back to Centrelink in early June 2005 to ask for a loan to buy a walking frame for his wife. He says he calculated that the cost of about $200 would still be within the amount of the bonds. He gave evidence, which I accept, that he sent Mr Zaki $5000 from Eqypt to pay the bonds. Nothing in particular turns on this but it explains why Mr Aneese viewed the bonds as, in effect, his own funds against which he could borrow, and that he did not intend that Mr Zaki should incur any greater cost on his, or his wife’s, account.
17. Mr Aneese says that, when he asked for money for a walking frame, the Centrelink officer suggested that, rather than continue to ask for small amounts, he and Ms Indrawes move into their own accommodation where they would be eligible for approximately $400 per fortnight plus rent assistance. Mr Aneese says he asked how this would affect Mr Zaki’s assurance of support and the officer assured him that Mr Zaki would only be liable to the extent of the $5000 bonds.
18. On 9 June 2005, Mr Zaki and Mr Aneese met with a Centrelink officer. Mr Zaki says he made clear he could not pay more then the bonds of $5000 because he was by that time unemployed. He wrote the following statement which the officer placed on the file:
I, Ashraf Zaki, understand that assurance of support will be paid to Mr and Mrs Aneese. It is explained to me that I would be liable for all payment even if it exceeds the bond. However, I totally agree to be liable for the bond amount ($5000) while I don’t agree to be liable for any extra.
19. I have only the evidence of Mr Zaki and Mr Aneese about what was said at this meeting. Mr Zaki says he instructed Centrelink not to pay his parents-in-law beyond the limit of the bonds and he left the meeting believing he would be liable only to that extent; he would not have allowed his parents-in-law to leave his home otherwise.
20. Mr Aneese says had he known that Mr Zaki would be liable for more than the amount of the bonds, he and Ms Indrawes would not have moved from his home when they did but would have stayed another eight months until the assurance of support period expired. As it was, they moved into their own accommodation on about 1 July 2005.
21. On 15 June 2005, Centrelink sent identical letters to Mr Zaki about Mr Aneese and Ms Indrawes advising each had been granted special benefit, “a recoverable payment”, from 23 May 2005. The letters continued:
This means that an account is being kept of the amount which you will be required to repay to the Commonwealth. Centrelink will send you regular statements, approximately every three months, advising you of the updated amount you owe. You can also ask for a statement at any time.
A $3500 bond was deposited for this assurance of support [with the Commonwealth Bank]. … Once the amount you owe on the Assurance of Support account(s) for any people covered by this bond is greater than the bond amount, the bond will be taken from the bank and credited towards your account(s). You will be required to repay any balance owing on our account(s) which is not covered by the bond. We will contact you when it is time to repay the account. If the amount that you owe on your account(s) is less than the bond at the end of the Assurance of Support period, the balance will be refunded.
22. I note that both letters referred to a bond of $3500 whereas in fact the bond for Ms Indrawes was $1500.
23. Centrelink did not write to Mr Zaki again until 20 January 2006 when it sent him a letter about Mr Aneese, stating:
We are writing to you about … Mr Aneese. This letter gives an indication of the amount you will be required to repay.
The current balance of your account is $2395.90 [being the amount paid to Mr Aneese from 23 May 2005 to 9 September 2005].
24. The letter then repeated the second paragraph from the first letter (above). There does not appear to be a letter concerning Ms Indrawes. Mr Zaki concedes that he paid little attention to the letter and says the amounts in it no sense to him.
25. Also on 20 January 2006, Centrelink wrote to the Commonwealth Bank asking the bank send a cheque for $2395.90 to Centrelink and a cheque for the balance of $1104.10 to Mr Zaki. The bank issued the cheque to Mr Zaki on 6 February 2006.
26. Centrelink concede it was an administrative error to ask the bank to release the bond at this point, when the assurance of support period had not yet expired (and when special benefit was still being paid to Mr Aneese and Ms Indrawes).
27. Mr Zaki says that, having heard nothing since 15 June 2005 when Centrelink said that any money owing to him from the bonds would be repaid, he took the cheque as confirmation that Centrelink had accepted that he would only be liable to the extent of the bonds.
28. The next correspondence from Centrelink to Mr Zaki was on 20 May 2006, after the assurance of support period had expired. In respect of Mr Aneese, Centrelink wrote that:
… an account of $7785.57 had been calculated… [which] will be partly covered by the $3500.00 bond … therefore the outstanding balance of your account is $5389.67.
29. In respect of Ms Indrawes, Centrelink wrote that:
an account of $5389.67 had been calculated, [which] “will be partly covered by the $3500.00 bond … therefore the outstanding balance of your account is $5389.67.
30. Mr Zaki agrees that he received these letters but says he did not pay them much attention.
31. On 20 September and 30 October 2006 Centrelink wrote to Mr Zaki to say that he was required to pay $13175.24.
32. On 20 November 2006 Centrelink wrote to Mr Zaki to say the debt was $11,675.24. This amount appears to have taken account of the bond of $1500 for Ms Indrawes. Mr Zaki says he contacted the Haymarket office and spoke to “Edmund” who told him not to worry about it. He heard nothing further until 9 May 2008 when Centrelink wrote again to say he was required to pay $11,675.24.
33. Nothing further appears to have happened until 7 August 2008 when Centrelink advised the Australian Taxation Office of the debt and asking for $11,675.24 to be withheld from any money due to Mr Zaki.
34. On 25 September 2008 Centrelink advised Mr Zaki that the amount owing was $10,218.27. At this point Mr Zaki contacted Centrelink and sought review of the decision to recover the debt.
Mr Zaki’s contentions
35. Mr Zaki says he understood that he could not withdraw his assurance of support once his parents-in-law were granted visas, and he refers to his statement on 14 January 2005 as evidence that he was willing to pay any amount paid to them over the bonds.
36. Mr Zaki says his circumstances changed around May 2005 when he became unemployed. He says he made clear to the Centrelink officer on 9 June 2005 that he could not repay more than the bonds and he “instructed” Centrelink to pay his parents-in-law no more than $5000 in benefits. He says he understood this would be considered by Centrelink and nothing in Centrelink’s letter of 15 June 2005 led him to think otherwise.
37. Mr Zaki says that, having heard nothing further, he took the cheque for the balance of the bonds as confirmation that Centrelink had accepted his position. He contends he relied throughout on Centrelink’s advice and conduct, and that he was in effect deprived of the opportunity to rectify his position.
The Secretary’s contentions
38. The Secretary submits that the purpose of the assurance of support scheme is to enable the migration of persons such as family members who are likely to need financial support and who would not otherwise be permitted to come to Australia.
39. The Secretary contends that it would undermine the policy of the scheme to permit a person to withdraw his or her assurance once the assured person has arrived in Australia. Further, that there is nothing special about Mr Zaki’s personal circumstances: he is employed and has a reasonable income, is in good health, has adult children living at home; he has a mortgage and credit card debt but nothing out of the ordinary that would warrant waiving the debt.
Can the debt be written off or waived
40. A debt can be written off only if: it is irrecoverable at law; the debtor has no capacity to repay; the debtor’s whereabouts are unknown; or it is not cost-effective to try to recover the debt: s 1236(1A). None of these applies to Mr Zaki.
41. A debt must be waived if it is attributed solely to administrative error by Centrelink and the payment was received in good faith: s 1237A(1). I do not think that Centrelink’s error in asking the Commonwealth Bank to repay the balance of the bond before the assurance of support period had expired was an administrative error of the kind contemplated by s 1237A(1) but, in any event, the debt cannot be attributed solely to that error.
42. A debt may be waived if it did not result wholly or partly from the debtor knowingly making a false statement or a false representation, or failing or omitting to comply with the relevant legislation; and there are special circumstances, other than financial hardship alone, that make it desirable to waive; and it is more appropriate to waive than to write off the debt or part of the debt: s 1237AAD
Are the special circumstances which make it desirable to waive some or all of the debt
43. The Act gives no guidance as to what might constitute special circumstances but the expression has been considered on many occasions by the courts and by this tribunal.
44. A precise rule is not possible; it will depend on the circumstances of the particular case whether they are special: Beadle v Director-General of Social Security (1985) 7 ALD 670. Circumstances need not be unique but they must have “a particular quality of unusualness” in order to be special: Re Beadle and Director-General of Social Security(1984) 6 ALD 1, at 3. If something “unfair, unintended or unjust” had occurred it would follow that there must be some feature out of the ordinary: Groth v Secretary, Department of Social Security (1995) 40 ALD 541 per Kiefel J at 545. See also Angelakos v Secretary, Department of Employment and Workplace Relations[2007] FCA 25.
45. I accept the evidence of Mr Zaki and Mr Aneese that Mr Aneese and Ms Indrawes acted on the advice of a Centrelink officer that they would be better off financially if they moved out. I accept they would not have moved from Mr Zaki’s home when they did but for this advice. I accept that Mr Aneese asked how this would affect Mr Zaki. I find it unlikely that an officer positively told them that Mr Zaki would not be liable beyond the extent of his bond but I accept that they were given confusing, and possibly misleading, information that did nothing to alert them to the true situation.
46. The situation was not helped by Centrelink’s letter of 15 June 2005. It did not specify any amounts; it indicated that regular statements would be sent but they were not; and it indicated that Centrelink would contact Mr Zaki when it was time to repay the account, which did not happen. Nor was it helped by some other letters, some of which are frankly difficult to follow.
47. I accept that Mr Zaki believed his “instruction” would be carried out even though it ran counter to the undertaking he originally gave. I accept that he regarded the bond in much the same way as Mr Aneese, in effect as a fund they could borrow against.
48. Centrelink did not notify Mr Zaki approximately every three months as it had said it would, and later returned part of the bond. Nothing in Centrelink’s conduct before 20 January 2006 gave Mr Zaki reason to clarify his liability. It was reasonable for him to rely on Centrelink’s conduct and, in doing so, his liability grew.
49. There are strong policy reasons for not waiving assurance of support debts lightly. However, I am satisfied that special circumstances exist in this case which make it desirable to waive some, though not all, of the debt.
50. Mr Zaki should not have ignored Centrelink’s letter of 20 January 2006. He should at least have contacted Centrelink about it. Had he done so, he should have discovered his continuing liability. He should not have simply assumed that Centrelink had accepted his “instruction”. He could have calculated his parents-in-law’s special benefit, determined when it would equate to the bonds, and gone back to Centrelink to clarify his position at that point. He might also have contacted Centrelink in September 2005 when he again became employed to see if that changed his position at all. By not doing any of these things, he was equally responsible for the debt he incurred.
51. I am satisfied that special circumstances exist that make it desirable that 50 per cent of Mr Zaki’s debt of $15,571.14 be waived.
I certify that the 51 preceding paragraphs are a
true copy of the reasons for the decision
herein of Senior Member Jill TooheySigned: .....[sgd]...........................................................................
Diana Weston AssociateDate of Hearing 3 February 2010
Date of Decision 30 March 2010
ApplicantSelf-represented
Representative for the Respondent: Ms Pankaj Sharma, Centrelink Advocacy Branch
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