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Bousdoukas and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 85 (11 February 2011)

Last Updated: 14 February 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 85

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/1679

GENERAL ADMINISTRATIVE DIVISION
)

Re
MARIA BOUSDOUKAS

Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal
Mr Egon Fice, Senior Member

Date 11 February 2011

Place Melbourne

Decision
The Tribunal sets aside the reviewable decision of the Social Security Appeals Tribunal dated 19 March 2010 and in substitution decides that the applicant owes a debt due to the Commonwealth in the amount of $148,552.29.

...........[sgd] Egon Fice.............
Senior Member

SOCIAL SECURITY – carer allowance – age pension – single rate age pension – value of assets – overpayment of age pension – debt due to the Commonwealth– limited education – living arrangements – valuations – cancellation of age pension payments – pension rate calculator – obligation to notify Centrelink – attributable solely to administrative error – notices – received payments in good faith – knowingly making a false statement - waiver – write off - special circumstances – financial hardship


Acts Interpretation Act 1901 ss 28A, 29

Social Security Act 1991 ss 44(1), 1064-A1, 1064-G1, 1223(1), 1231, 1231(2A), 1232, 1233, 1236(1A), 1237A, 1237(1A), 1237(AAD)

Social Security (Administration) Act 1999 ss 5, 67, 80, 81(1)


Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; (2008) 100 ALD 9

Hooi v Brophy (1984) 52 ALR 710

Re Callaghan and Secretary, Department of Social Security [1996] AATA 413; (1996) 45 ALD 435

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 76 ALD 105

Taylor's Central Garages (Extra) Ltd v Roper [1951] WN (Exeter) 383


REASONS FOR DECISION


11 February 2011
Mr Egon Fice, Senior Member

  1. Mrs Maria Bousdoukas lodged a claim for the age pension on 13 March 1992, having reached the age of 60 years. At that time, she was receiving a carer’s pension for the care of her severely disabled son. Because Mrs Bousdoukas has limited English, her claim was completed with the aid of a Greek interpreter employed by what was then the Department of Social Security (DSS). At the time of applying for the age pension, Mrs Bousdoukas claimed she was separated from her husband although they were living on the same property in Prahran. Mr and Mrs Bousdoukas also jointly owned two blocks of land on the Nepean Highway at Aspendale (the Nepean Highway property).
  2. Following an investigation by DSS regarding her relationship with her husband and their living arrangements, Mrs Bousdoukas was granted the age pension at the single rate. She continued to receive the pension at this rate until 28 February 2008, when a Centrelink officer advised Mrs Bousdoukas that her age pension had been cancelled because the value of her assets was above the allowable limit. In addition, the Centrelink officer advised Mrs Bousdoukas on 29 February 2008 that because she was not entitled to the age pension from 26 March 1992 she had been overpaid that pension in the amount of $153,177. The Secretary, Department of Families, Housing, Community Service and Indigenous Affairs (the Secretary) proceeded to raise and recover a debt due to the Commonwealth in respect of the overpayment of her age pension.
  3. After a review by an authorised review officer (ARO), the Secretary decided that Mrs Bousdoukas was not entitled to receive the age pension between 1 July 1997 and 21 February 2008 and, accordingly, she had been overpaid in the amount of $151,839.02. The ARO found that Mrs Bousdoukas had substantially underestimated the value of the Nepean Highway property and she failed to advise DSS, and subsequently Centrelink, of the change in value of that property over the years. Mrs Bousdoukas sought review of that decision by the Social Security Appeals Tribunal (SSAT). On 19 March 2010 the SSAT affirmed the ARO’s decision. This was despite the fact that it disagreed with the amount of the debt as recalculated by the ARO. The SSAT concluded that the amount of the debt should be $153,177 for the period 26 March 1992 to 19 February 2008. On 28 April 2010 Mrs Bousdoukas lodged an application for review of the SSAT decision with this Tribunal.
  4. The issues which arise for my determination are:

CIRCUMSTANCES IN WHICH THE APPLICATION FOR THE AGE PENSION WAS MADE

  1. Mr Richard Knowles of counsel, who appeared on behalf of Mrs Bousdoukas, submitted that Mrs Bousdoukas had very limited education and although she could speak in the Greek language, she could not read or write very well in that language. He also submitted that her ability to converse in the English language was limited and she could not read or write in that language. Other than a written statement made by Mrs Bousdoukas for the purposes of her application before the SSAT, there was no other evidence before me of these facts. Nevertheless, I have no reason to doubt that to be the case. A Greek interpreter was required for the purposes of the hearing of this matter.
  2. In her written statement prepared for her application to the SSAT, Mrs Bousdoukas said she had a limited education, not completing grade three. She said she worked as a farmhand, fruit picker and labourer. She migrated to Australia in 1960 and worked as a process worker in a number of factories. She married Mr Leonidas Bousdoukas in 1962. She has two children. The second child, her son, is severely disabled and he requires full time care. She said her son, who is now some 43 years of age, spends the day at a special centre for the disabled. Mrs Bousdoukas put into evidence a photograph of her son in a wheelchair and I accepted that evidence. She receives a carer allowance for looking after her son who has had severe brain damage since birth. He has the intellectual capacity of a five year old and needs daily supervision. In her written statement dated 28 October 2010 which was admitted into evidence in the course of the hearing of this matter, Mrs Bousdoukas testified that she was 78 years of age. She was concerned about her son’s care after she passes away. He is apparently healthy and she is likely to pre-decease him. Her husband is 72 years of age.
  3. In 1979 Mr and Mrs Bousdoukas purchased the Nepean Highway property as joint tenants. She said the money for the purchase came from her husband. She said that until she separated from her husband in 1991, he took responsibility for making all decisions about financial matters.
  4. In her evidence-in-chief, Mrs Bousdoukas said that she was assisted in completing the pension claim form by two women from DSS. She said one of them spoke Greek but she did not know whether that person was a qualified interpreter. That person completed the form for her and gave it to her to sign. She said the completed form was not read back to her before she signed it.
  5. At question nine of the claim form, which is in a section dealing with income and assets, there is a question which asks whether the claimant owns or has an interest in any real estate in Australia or overseas. The No box has been ticked in answer to that question. The claim form indicated that she owned her own home jointly with her husband and that it was fully owned in the sense that it had been paid off. Question 13 of the claim form requires the details of a friend or relative who helped the claimant complete the claim. Rather than filling out the name of the person who helped, the words Greek interpreter have been entered in the details. The address of that Greek interpreter is stated to be DSS Prahran. Mrs Bousdoukas signed the declaration at the end of that form declaring the information in it to be correct.
  6. In conjunction with her application form, Mrs Bousdoukas completed an Asset Details form. In answer to the question regarding details of any other assets that she or her partner had, the person completing the form has entered the words Block of Land.
  7. Mrs Bousdoukas also completed a Living Arrangements form. On that form, question seven asks whether the applicant and any persons living with the applicant at their current address paid for any of a number of items, including real estate and land. The Yes box has been ticked against land (but there was no entry against real estate). Her husband is listed as having paid for the land and the final column of the question requires the value of the asset to be stated. In fact, as the heading to the column explains, the value of the asset means what you would get if you sold it. In this column, the figure $30,000 has been entered. In cross-examination Mrs Bousdoukas was asked about the statements made on her application form including questions regarding houses or land. She said that she did say she had property other than her home where she lived, stating there was land on the Nepean Highway. However, she denied being asked about the value of that asset, but rather said she was asked how much she paid for it.
  8. It is of some interest to note that on the same date on which Mrs Bousdoukas completed those forms, or more pecisely, had those forms completed on her behalf, she was sent a letter from DSS regarding her claim for the age pension. It was addressed to Mrs Bousdoukas at 3 Mackay Street, Prahran 3181. The letter notified Mrs Bousdoukas that it was necessary for DSS to obtain further information from her to enable the department to decide whether she could be accepted as living separately and apart from her husband. The letter explained that an interview had been arranged for her at 9.30am on Friday 20 March 1992. The letter went on to say that if she did not attend the interview, DSS could not proceed with her claim. DSS also sent Mrs Bousdoukas a second letter on the same day in respect of the interview planned for 20 March 1992. DSS indicated that her partner should attend the interview and that she could have a friend, relative or legal adviser present. The letter stated that a Greek interpreter would be present.
  9. Despite the fact that the letters sent to Mrs Bousdoukas on 13 March 1992 were in English, she appears to have attended DSS on 20 March 1992 and completed an Assessment of Marriage-Like Relationship form in the course of the interview. It is not clear whether her husband attended the interview. On that form, there is a question which asks whether she and her husband paid for, amongst other things, real estate and land. The person who completed the form put a tick in the No box against real estate and in the Yes box against land. No value of the asset was entered on the form.
  10. In her written statement, Mrs Bousdoukas said she did not know what the value of the Nepean Highway property might be. She said she always told DSS and Centrelink that was the case. She said she had never been asked to get a valuation for the property and her husband was responsible for financial matters. She said that her husband did not talk to her about the value of the Nepean Highway property. Mrs Bousdoukas claimed she had little interest in the property because it was not developed. She said that although she was aware that prices of household consumables and other items would go up every now and again, she did not understand the concept of inflation. She repeated that she was illiterate and uneducated and that she had no economic or financial understanding.
  11. On 27 March 1992 DSS wrote to Mrs Bousdoukas informing her that she would receive the age pension from 26 March 1992. The letter also explained that under s 68 and s 69 of the Social Security Act 1991 (the Act), Mrs Bousdoukas was required, within 14 days, to notify the Social Security Office of, amongst other things: if your assets go above $111,000.00.
  12. Section 69 of the Act, as it was at the time of the DSS letter, stated:
    1. (1) The Secretary may give a person to whom an age pension is being paid a notice that requires the person to give the Department a statement about a matter that might affect the payment of the pension to the person.
(2) A notice under subsection (1):
(a) must be in writing; and
(b) may be given personally or by post; and
(c) must specify how the statement is to be given to the Department; ...

  1. Sections 68 and 69 of the Act, as that Act stood in 1993 have now been subsumed by s 67 of the Social Security (Administration) Act 1999 (the Administration Act). The requirement is essentially the same, although s 5 of that Act now deals with the manner of giving notice. Reference is made to s 28A of the Acts Interpretation Act 1901 which of course provides for service by post.
  2. When asked in cross-examination whether she had seen this letter before, Mrs Bousdoukas said not in the format which was shown to her. When asked if she recalled receiving the letter, she responded she didn’t remember.
  3. Although Mr Knowles submitted that Mrs Bousdoukas was not asked to provide a valuation of the Nepean Highway property, and that this fact was borne out by the subsequent documents prepared by DSS, I cannot accept that submission.
  4. The forms which Mrs Bousdoukas was required to complete at the time of, and shortly after, making an application for the age pension clearly required her to state the value of assets which were described as either real estate or land. The fact that she claimed she provided the purchase price rather than the value at the time of making the application does not necessarily support Mr Knowles’ submission. Furthermore, the DSS letter of 27 March 1992 makes it very clear that DSS required information regarding the value of Mrs Bousdoukas’ assets. In fact, although there was no evidence of this before me, as a matter of logic, it would be extraordinary if this had not been explained to Mrs Bousdoukas in the course of her interviews. That is because the rate of pension payable is calculated by reference to the value of assets held by the claimant.
  5. In the current Act, the effect of a person’s assets on their maximum payment rate is established by the application of Module G which is set out at s 1064-G1 of the Act. It would, as a matter of logic, be most unusual if Mrs Bousdoukas were not concerned with the rate of payment of the pension, having just applied for it. In my opinion, this is so despite the fact that she had minimal formal education. In any event, for the reasons I explain below, I need not make any specific findings about that.
  6. Although the materials in evidence before me make reference to a failed attempt to sell the Nepean Highway property in 1993 and the fact that there were possibly some dummy bidders at the auction where the property was passed in at $110,000, Mrs Bousdoukas denied knowledge of that auction. For the purposes of deciding this matter, that would not be appear to be significant because if one were to accept her half share in that property at the time was approximately $55,500, she was nevertheless below the assets limit.
  7. The problem for Mrs Bousdoukas is that under s 69 of the then current Act, she was required by law to notify DSS about any matter which might affect the payment of her age pension. An increase in asset value above $111,000 was clearly a matter falling within that requirement. The notice which was given to her was required to be in writing and could be given by post. The fact that the letter is addressed to the address at which she has received prior letters from DSS indicates that it was posted to the correct address. In fact, Mrs Bousdoukas continues to reside at that address. Therefore, whether she recalls receiving the letter or whether she in fact read it, matters not. It is an offence under the Act to fail to comply with the notice without reasonable excuse. There is no apparent reason why Mrs Bousdoukas could not have asked any of her Greek friends, even her husband, to explain to her what was contained in that letter. That certainly seemed to have happened when she received letters notifying her that she needed to attend the DSS office for an interview, failing which her claim for the age pension would not proceed.
  8. In fact, DSS sent Mrs Bousdoukas a further letter dated 1 April 1992 stating that her pension could not continue to be paid unless she provided DSS with her Tax File Number. DSS pointed out that the number she had provided was incorrect. Given that her pension continued to be paid, the inference I must draw from that is that Mrs Bousdoukas, on receipt of that letter, asked somebody to translate it for her. When told of its contents, she provided the requested information to DSS.
  9. Mrs Bousdoukas was also asked about a letter from DSS dated 16 January 1993. While Mrs Bousdoukas did not recall receiving that letter, she did say that she received notification once per year from DSS questioning whether anything had changed. By that evidence, I understood she received letters from DSS requesting notification of changes to her income or assets position. In fact, the letter of 16 January 1993 asked her to notify DSS if the total net market value of her assets exceeded $112,750.
  10. Mrs Bousdoukas recalled that she planned to go overseas in 2001. However she could not recall receiving a letter from Centrelink, as DSS was then called, dated 17 July 2001 telling her what would happen to her Centrelink payments while she was overseas. A record of her payments indicates that from June 2001 when she planned to go overseas until December 2001, which was the limiting period for her to remain overseas and yet receive carer allowance, she continued to receive regular payments. From that I infer that the contents of the letter were explained to Mrs Bousdoukas prior to her departure for overseas. It also indicates, in my opinion, that whenever Mrs Bousdoukas received a letter from Centrelink, she sought to have it translated so that she could understand what was being said.
  11. The Australian Valuation Office (AVO) provided historical values for both blocks which comprise the Nepean Highway property as at 28 February 2008. In addition, the valuations were confirmed and updated on 3 September 2008. The historic valuations are those set out below.
Date Valued
Lot No 14
Lot No 15
26 March 1992
$150,000
$150,000
1 July 1993
$170,000
$170,000
1 July 1995
$200,000
$200,000
1 July 1997
$300,000
$300,000
1 July 1999
$350,000
$350,000
1 July 2001
$410,000
$410,000
1 July 2003
$420,000
$420,000
1 July 2005
$455,000
$455,000
3 September 2008
$550,000
$580,000
  1. The valuations were not in dispute. Furthermore, Mr David Brown, who appeared on behalf of the Secretary, asked Mrs Bousdoukas whether she was aware that the two blocks of land had sold in the week prior to the hearing. Mrs Bousdoukas said papers were being prepared for her to sign, although she understood that the land had not yet sold and the sale was still in the air. Mr Brown asked whether the price had been agreed and Mrs Bousdoukas said she did not catch the figures because she was hard of hearing. She said she had signed the papers. Mr Brown submitted that the sale price was $1.475 million. While there was no evidence before me of a sale having been completed at the stated price, Mr Knowles did not take objection to that evidence being put by Mr Brown. Given that Mrs Bousdoukas agreed she had signed documents in relation to the sale of the property, for the purposes of this hearing, I accept that a contract was signed for the sale of the Nepean Highway property.
  2. Mr Knowles submitted that the focus of Mrs Bousdoukas’ submissions in respect of this hearing was on waiver of the debt claimed to be owed by her.

CANCELLATION OF AGE PENSION PAYMENTS

  1. In a letter dated 28 February 2008, Centrelink notified Mrs Bousdoukas that her age pension been cancelled because the value of her assets was above the allowable limit. Section 44(1) of the Act provides that an age pension is not payable to a person if the person’s age pension rate would be nil. The Pension Rate Calculator A, which appears at s 1064-A1 of the Act, sets out the method by which the rate of pension to be paid is calculated. As is evident from the method statement in Pension Rate Calculator A, after calculating the income reduced rate, the assets test using Module G is applied in order to calculate the assets reduced rate. In effect, what happens is that a pensioner’s rate of payment is reduced by applying the formula set out in Table G2. The pensioner’s assets excess is calculated by subtracting from that person’s assets value limit which is set out in Table G-1, the value of the person’s assets. At some point, where the assets excess becomes significantly large due to an increase in the value of a person’s assets, the maximum payment rate will be reduced to nil.
  2. The Act which was current when Mrs Bousdoukas received the first letter from DSS in March 1992 contained a provision regarding automatic cancellation of payment of the pension. That would occur if the person receiving a notice under s 68 of the Act failed to inform DSS of the occurrence of the event or circumstances set out in the notice. This provision in the former s 68 has now been reproduced in the Administration Act at s 67 (regarding the notice) and s 81(1) (cancellation) of that Act.
  3. Section 80(1) of the Administration Act provides that if the Secretary is satisfied that a Social Security payment is being, or has been, paid to a person to whom the payment was not payable, the Secretary must determine that the payment is to be cancelled or suspended. As is indicated in the decision statement made by the ARO, the value of Mrs Bousdoukas’ assets between 1 July 1997 and 21 February 2008 was such that Mrs Bousdoukas was not entitled to any payment whatsoever because her pension rate had fallen to nil. In fact the asset level at which her payment rate reduced to nil in the 1997 year was at $243,500 and, in the 2001 year, $277,000. Throughout that period, Mrs Bousdoukas’ share of the Nepean Highway property asset value substantially exceeded those limits. Therefore, I have no doubt that the Secretary’s decision to cancel Mrs Bousdoukas’ age pension was correct and in accordance with the Administration Act.

IS THERE A DEBT OWED TO THE COMMONWEALTH

  1. Prior to 1 July 2001, s 1224(1) of the Act provided that if an amount had been paid to a recipient by way of a Social Security payment and the recipient failed or omitted to comply with a provision of the Social Security law or the Act as in force immediately before 20 March 2000, the amount so paid was a debt due by the recipient to the Commonwealth. This provision was subsequently repealed and from July 2001, s 1223(1) was substituted. It provided that if a Social Security payment was made and the person who obtained the benefit of the payment was not entitled for any reason to obtain that benefit, then the amount of the payment was a debt due to the Commonwealth by the person and the debt was taken to have arisen when the person obtained the benefit of the payment.
  2. There can be no doubt that prior to 1 July 2001, Mrs Bousdoukas failed or omitted to comply with a provision of the Act in force immediately before 20 March 2000. The Secretary sent a notice to Mrs Bousdoukas on 27 March 1992 which required her to notify DSS if her assets exceeded $111,000. She did not do so. In the period following 1 July 2001, having regard to the AVO valuations of the Nepean Highway property, Mrs Bousdoukas was clearly a person who obtained the benefit of the pension payments to which she was not entitled. Had the AVO valuations or valuations approximating those values been given to DSS by Mrs Bousdoukas prior to her receiving age pension payments, those payments would have been reduced in the early years by her assets excess. In fact the calculations made by an officer of Centrelink indicate those overpayments ranged from $166 per fortnight in 1992 to $276 per fortnight in June 1997. After 1997, Mrs Bousdoukas’ payment rate had dropped to nil and therefore all payments she received subsequent to that must be regarded as overpayments.
  3. Mr Knowles submitted there was some doubt about the amount of the debt calculated by Centrelink. This was because the ARO decided that Mrs Bousdoukas had been overpaid $151,839.02 in the period 1 July 1997 to 21 February 2008. On review of that decision by the SSAT, the SSAT was unable to understand how the ARO arrived at that overpayment figure. In fact, as the calculations in the documents before me show, overpayments occurred from 1992 to 1997 because during that period, no reduction was made for the value of the Nepean Highway property. Accepting the AVO valuation of $150,000 for each of the lots comprising the Nepean Highway property, Mrs Bousdoukas’ share of the value of that asset was $150,000. Given that the asset limit as disclosed by the DSS letter and the extract of Table G-1 for a home owner partnered pensioner was $111,000, there was clearly an assets excess which should have resulted in a reduction of Mrs Bousdoukas’ maximum payment rate. It is not obvious from the ARO’s decision that this reduction was taken into account or, if it was, how it was calculated.
  4. However, as the SSAT pointed out, after having attempted to ascertain how the ARO arrived at the debt figure, and having checked the calculation of the debt, it was satisfied that the correct figure was $153,177. Despite that, the SSAT affirmed the ARO’s decision. That seems to have been an error made by the SSAT. In any event, Mr Brown provided to the Tribunal a statement prepared on 24 January 2011 admitting that an error had been made in calculating Mrs Bousdoukas’ debt. He submitted that the correct amount of the debt was $148,552.29. Mrs Bousdoukas has repaid $7,231.64 leaving a debt of $141,320.65 as at that date. The Tribunal contacted the applicant’s solicitor, Mr Nick Giasoumi of GPZ Legal, on 9 February 2011. Mr Giasoumi confirmed that the applicant had no objection to the amendment of the debt as stated.

WRITE OFF OR WAIVER

  1. Section 1236(1) of the Act provides that the Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period. Section 1236(1A) of the Act 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; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
  1. A debt is irrecoverable at law if it cannot be recovered by means of deduction, legal proceedings, or garnishee notice, because the relevant six year period mentioned in s 1231, s 1232 or s 1233 has elapsed. As far as recovery by deduction from a debtor's pension, benefit or allowance is concerned, the six year period commences on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt (s 1231(2A)).
  2. Neither party made submissions regarding whether the debt might be irrecoverable given the period of time that has elapsed since it began to accumulate. I have nevertheless examined the evidence in order to determine whether an officer of Centrelink could reasonably be expected to have become aware of the circumstances that gave rise to the debt at an earlier point in time.
  3. The problem for Mrs Bousdoukas is that on her age pension claim form, she indicated she did not have an interest in any real estate. On the Asset Details form completed with her application for the pension, the only detail given of other assets owned by her or her partner was the fact that either she or her partner had an interest in a block of land. No value was placed on the block at that time nor was it clear who owned the land. Furthermore, those forms contemplate an application for the age pension at the partnered rate. In the Living Arrangements form which she also completed and lodged with her application, the value of the land is said to be $30,000. It was after these forms were completed that Mrs Bousdoukas sought payment at the single rate.
  4. There are a number of other DSS documents indicating that the value of her proportion of that asset was $15,000. However, it appears that this asset was not correctly coded and entered on Mrs Bousdoukas' records. However, Mrs Bousdoukas was sent letters by DSS and Centrelink requiring her to notify DSS or Centrelink if her assets exceeded a particular level and, in the case of Centrelink, if there were changes to her assets. While Mr Knowles criticised the Centrelink letter because it did not indicate that Mrs Bousdoukas was required to notify Centrelink of a change in the value of assets, in my opinion, that criticism is not well founded. The previous two letters from DSS refer specifically to the total net market value of assets and the fact that the reason why DSS required that information was because the information may alter how much she was paid.
  5. It should be reasonably clear that the obligation to notify Centrelink or previously, DSS, of any change in income or assets lies squarely with the receiver of the social security payment. It would be completely impractical and unworkable for Centrelink to contact every social security payment recipient on a fortnightly basis in order to determine whether their income or assets situation had changed. In fact, the receiver of a social security payment has a statutory duty to notify Centrelink of any changes. Failure to comply with that statutory duty, without reasonable excuse, is an offence. The level of education of the receiver of the pension or the degree of literacy in the English language cannot play any part in altering the statutory duty to advise Centrelink. Statutory obligations would simply become unenforceable if persons who were required to comply with such obligations could simply be excused because they either did not know the law, did not speak the language or did not understand the requirement. Therefore, I find that the six year statutory period commenced in February 2008 when an officer became aware of the circumstances that gave rise to the debt.
  6. There is a similar provision regarding limitation of recovery in s 1232 of the Act which deals with legal proceedings. It is couched in precisely the same language as s 1231(2A). The six year limitation periods as described in s 1231 and s 1232 in the current Act are precisely the same as they were in the Act as it was in 2000. Therefore, I find that Mrs Bousdoukas's debt is not irrecoverable at law.
  7. Given the sale of the Nepean Highway property for $1.475 million, it cannot be said that Mrs Bousdoukas has no capacity to repay the debt. Her whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt. For these reasons, I find that the Secretary cannot write off Mrs Bousdoukas's debt.
  8. Mr Knowles submitted that Mrs Bousdoukas's debt should be waived as her debt arose solely due to an administrative error made by the Commonwealth. Section 1237A of the Act provides:
1237A Waiver of debt arising from error
Administrative error
(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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
(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.
Underestimating value of property
(2) If:
(a) a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
Proportion of a debt
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.
  1. Section 1237A(1A) of the Act does not apply to Mrs Bousdoukas. That is because the debt was raised long after the period of six weeks from the first payment that caused the debt and also long after six weeks from the end of the notification period set out in the notices.
  2. In order to fall within provisions set out in s 1237A(1) of the Act, the debt must be attributable solely to an administrative error made by the Commonwealth. The words used in that expression should be given their ordinary meaning in the context in which they appear in the Act. The expression attributable solely to administrative error was considered by the Full Court of the Federal Court (Heerey, R D Nicholson and Selway JJ) in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126. Nicholson J said, at 130:
[23] . . . The word “attributable” brings into play the notions of causation “as an effect to a cause”: Macquarie Dictionary, 2nd ed, Macquarie Library, NSW, 1991, p 106. The word “solely” brings notions of exclusivity. Solely means “as the only one or ones” or “exclusively or only”: Macquarie Dictionary, p 1664. It means “one and only, single; only”, also “singular, unique, unrivalled”: The New Shorter Oxford English Dictionary, Clarendon Press, Oxford, 1993, p 2938. It is used elsewhere in the Act but not in conjunction with “attributable” so that other usage does not assist in relation to the subsection in question.
  1. Selway J also said, in relation to that expression, at 135:
[35] The ordinary or usual interpretation of the phrase “attributable solely to” is that it refers to the single or sole cause of the relevant act or event. The word “attributable” means “capable of being attributed”. It involves an objective assessment of causation. The words “a debt attributable solely to an administrative error” can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.
  1. The issue for me to determine is the cause of Mrs Bousdoukas' debt. Mr Knowles submitted that the debt was attributable solely to administrative error made by the Commonwealth because, when she made her claim for the age pension, Mrs Bousdoukas supplied information available to her about the Nepean Highway property. She did not know the value of the property at the time of purchase but she was aware of its purchase price. That is the figure which the Greek interpreter from DSS wrote in her application form. Half of that cost was attributed to her.
  2. Mrs Bousdoukas insisted that she had never told DSS or its officers that $30,000 was the current value of the property. With respect to Mrs Bousdoukas, I cannot accept that she can recollect what she told the DSS officer some 18 years ago when she applied for the age pension. While the figure which is written on the Living Arrangements form apparently corresponds with the purchase price, it does not necessarily follow that Mrs Bousdoukas told DSS that was the purchase price. In fact the column in which the figure is written is headed Value of Asset (ie what you would get if you sold it). Logically, the interpreter would have translated what was stated at the head of the column and then recorded Mrs Bousdoukas' response. There is nothing written on the document to suggest that the $30,000 written in response to that question was qualified by Mrs Bousdoukas in such a way that it reflected the purchase price in 1979. Without further evidence, the only reasonable conclusion to draw from what is written on the document is that the value of the asset was $30,000. I cannot accept that what is written on that form is properly classified as an interpreting or recording error. That would be speculative.
  3. In addition to the above, her age pension claim form indicates that she did not own or have an interest in any real estate in Australia or overseas. Although she noted in the Assets Details form that there was a block of land, that question relates to the assets of her or her partner. It is not clear from that statement who the owner is. To compound matters, at the same time Mrs Bousdoukas sought an assessment of her living arrangements with her estranged husband for the purpose of receiving the age pension at the single rate. It is reasonable to conclude that the principal reason why no account was taken of the value of the Nepean Highway property was because Mrs Bousdoukas instructed the interpreter to tick the No box when responding to the question regarding the ownership of real estate by her. The fact that she noted that she, together with her husband, paid for the real estate does not necessarily indicate ownership. Quite plainly, relying on Mrs Bousdoukas's statutory duty to notify DSS of the value of the asset, DSS officers accepted that she did not have ownership of the Nepean Highway property. This is borne out by the supplementary record printout from DSS dated 27 March 1992 where no value is attributed to an asset described as real estate total. There is a figure of $15,000 listed at other assets but that provides no indication at all that Mrs Bousdoukas was a part owner in real estate. In fact, it suggests the opposite.
  4. There is another problem with Mr Knowles’ submission regarding administrative error. He submitted that the information supplied by Mrs Bousdoukas should have prompted DSS and its officers to make enquiries about the Nepean Highway property. With respect, I disagree. Her age pension claim form plainly informs DSS that she does not own real estate. The fact that her husband or she and her husband paid for some real estate which was valued at $30,000 says nothing about Mrs Bousdoukas's entitlement to receive a social security payment. In my opinion, the most logical explanation for DSS not making any further enquiries about the Nepean Highway property was that there was nothing to alert DSS officers that Mrs Bousdoukas was a part owner of that property. Given the information provided by Mrs Bousdoukas, the most likely explanation is that DSS did not code her as holding a real estate asset.
  5. There is also the matter of the letter sent by DSS and Centrelink requiring Mrs Bousdoukas to provide certain information to the Secretary. The first letter dated 27 March 1992 refers to s 68 and 69 of the Social Security Act 1991 (as it then was). Section 68 permitted the Secretary to issue a notice requiring a person to inform the Department if a specified event or change of circumstances occurred which might affect the payment of the pension. Section 69 provided that the Secretary may give a person to whom the age pension is being paid a notice requiring that person to give the Department a statement about a matter that might affect the payment of the pension to the person. Further, the letter sent to Mrs Bousdoukas indicated that a response must be provided within 14 days. Mrs Bousdoukas failed to respond to that letter within 14 days. Although Mr Knowles submitted that Mrs Bousdoukas did not accept that she received the letters, s 68 and s 69 permit notice to be given by post. The letter was correctly addressed to Mrs Bousdoukas. At that time, the Acts Interpretation Act 1901, which was then in effect, dealt with the meaning of service by post in s 29. It provided:
29 Meaning of service by post
(1) Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
  1. While there was no evidence before me that the letter was prepaid and posted, there was no evidence before me to suggest that Mrs Bousdoukas did not receive the letter. In fact, Mrs Bousdoukas' evidence under cross-examination appeared to be that once every year she received from DSS or Centrelink a letter requiring her to inform the Agency if anything had changed. On that basis, the reasonable inference is that she received the letter despite the fact she does not recall receiving it. That of course is understandable given the passage of time. Accordingly I find, on the balance of probability, that Mrs Bousdoukas did receive the letter of 27 March 1992. Likewise, I find that she received the letter dated 16 January 1993 from DSS and also the letter of 17 July 2001 sent by Centrelink. Mrs Bousdoukas did not respond to any of those letters within 14 days and therefore that is also a reason why the debt arose. Accordingly, I find that the debt owed by Mrs Bousdoukas was not solely attributable to errors made by the Commonwealth. There is therefore no reason for me to examine whether or not Mrs Bousdoukas received the payments in good faith. Mrs Bousdoukas' debt cannot be waived under s 1237A of the Act.
  2. In the alternative, Mr Knowles submitted the Tribunal should exercise its discretionary power under s 1237AAD of the Act and waive the debt because:
  3. Mr Knowles submitted that the following matters established the existence of special circumstances in Mrs Bousdoukas's case:
  4. Mr Brown submitted Mrs Bousdoukas was advised by a letter dated 27 March 1992 that she needed to inform DSS should her assets exceed $111,000. Mrs Bousdoukas would have been aware of the value of the property at that time given that it was placed on the market in 1993 with a reserve of $110,000. He submitted that Mrs Bousdoukas would have been aware that the value of the property was appreciating and that she failed to establish the value of the property. She knowingly omitted to inform DSS when the value of her share of the property exceeded the asset value limit. For that reason alone, s 1237AAD of the Act could not be applied to Mrs Bousdoukas's circumstances.
  5. On the other hand, Mr Knowles submitted that Mrs Bousdoukas did not knowingly fail or omit to comply with the provision of the Act, nor did she knowingly make a false statement or a false representation which gave rise to the debt. He submitted that the word knowingly involves consideration of her actual state of mind. He submitted that Mrs Bousdoukas did not knowingly make any false or misleading statement or knowingly omit to comply with the Act because, given her educational, cultural and vocational background, she would not have been in a position to do so.
  6. Mr Knowles referred to the decision of Deputy President Forgie in Re Callaghan and Secretary, Department of Social Security [1996] AATA 413; (1996) 45 ALD 435 at 445. There, Deputy President Forgie said at [48]:
There is nothing in s 1237AAD which suggests that the word “knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.
  1. Deputy President Forgie's statement above was made following an analysis of a number of cases including the decision of Matheson J in Hooi v Brophy (1984) 52 ALR 710. Matheson J referred to the decision of Devlin J in Taylor's Central Garages (Extra) Ltd v Roper [1951] WN (Exeter) 383. In that case, Devlin J referred to three degrees of knowledge. Although not necessary for the decision, because Counsel for the Prosecutor argued where a statute did not use the word knowingly, the result of omitting that word was to shift the burden of proof from the prosecution to the defence, he explained the different forms of knowledge recognised by the law. He said, at 385:
The first is actual knowledge, and, of course, the justices may find it because they infer it from 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, as it has been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. . . . There is a vast distinction between a state of mind which consists of deliberately refraining from making enquiries, the result of which the person does not care to have, and a state of mind which is merely neglecting to make such enquiries as a reasonable and prudent person would make. . . . The case of shutting the eyes is actual knowledge in the eyes of the law; the case of merely neglecting to make enquiries is not knowledge at all - . . .
  1. Although Mr Knowles submitted that Mrs Bousdoukas did not recall and did not believe that she ever received the three letters from DSS and Centrelink respectively, in her oral evidence, she referred only to not recalling having received those letters. In cross-examination, Mrs Bousdoukas was asked if, after her interview with officers of DSS she received a letter, she said she did and that it informed her that her pension would be paid. She did not recall anything else being in that letter. The letter in which she was advised that her age pension would be paid from 26 March 1992 was the letter dated 27 March 1992. When asked if she recalled anything else in that letter, she answered no. Mr Brown also asked if she had somebody read it to her, and she responded yes, she took it to Centrelink and that is what she always did with letters. As for the other letters, she did not recall receiving them. However, the fact that she did not recall those letters or recall receiving them does not mean she did not receive them. In fact, as I have already found, in my opinion, Mrs Bousdoukas did receive the letters.
  2. Having formed the view that Mrs Bousdoukas received the letters, the question which arises is whether she deliberately refrained from making enquiries regarding the valuation of the Nepean Highway property or whether she merely neglected to do so. In my opinion, Mrs Bousdoukas deliberately refrained from making enquiries. That is because the evidence indicates she responded to the DSS letter of 13 March 1992 and attended the arranged interview on 20 March 1992 where she completed the Assessment of Marriage-like Relationship form. Furthermore, on 1 April 1992 the evidence indicates she received a letter regarding the provision of an incorrect tax file number. That was clearly corrected because, as the letter stated, failure to contact DSS within 21 days would have resulted in her age pension payments ceasing. There is no evidence of any cessation of payments of the age pension. The reasonable inference is that she had somebody translate the letter for her and responded to it. Those events coupled with the fact that in her evidence she said that she always took letters to Centrelink to have them read to her, leads me to find that she received the three letters referred to by Mr Brown. I have no reason to doubt that she took those letters to Centrelink and asked for somebody to translate those letters for her. Having done that, Mrs Bousdoukas must have been aware that she was required to notify Centrelink of any change in the value of her assets. The fact that she did not do so in those circumstances indicates, in my opinion, she deliberately refrained from making enquiries about the valuation because she did not wish that information to be given to DSS or Centrelink.
  3. My finding regarding Mrs Bousdoukas knowingly failing to comply with provisions of the Act is also supported by other evidence before me. In her pension claim form, the interpreter who completed that form on her behalf ticked the No box in answer to the question whether she owned or had an interest in any real estate in Australia or overseas. The assets form completed along with the pension claim form simply described her or her partner having a block of land. Given that she answered No to the claim form, a reasonable reading of the asset details in conjunction with the claim form is that the land belonged to her partner.
  4. The DSS interpreter also completed the Living Arrangements form on her instructions on the same day. As Mr Knowles submitted, the handwriting on the claim form and the living arrangements form appear, on their face, to be in the same hand. It is reasonable to infer that the same interpreter completed those documents. It is difficult to understand why that interpreter would have ticked the No box on the claim form if Mrs Bousdoukas in fact told the interpreter that she and her husband were the joint proprietors of the Nepean Highway property.
  5. On the Living Arrangements form, while the Yes box is ticked against land, the question asked is whether Mrs Bousdoukas and any of the people listed in the question both paid for the land. She has answered Yes and mentioned her husband as being the person who paid for the land together with herself. In the column which clearly requires the value of the asset to be disclosed, the figure $30,000 has been written without any qualification. If in fact Mrs Bousdoukas had told the interpreter that she and her husband had together purchased the land as joint proprietors for the sum of $30,000 in 1979, I would have expected something to have been stated to that effect where the figure $30,000 has been written on the living arrangements form. The only explanation as to why nothing further is written can be that the interpreter was told that Mrs Bousdoukas did not own any land although she and her husband had paid for the land which was valued at $30,000.
  6. If the interpreter was told by Mrs Bousdoukas that the $30,000 represented the purchase price in 1979, because the interpreter was a DSS officer, logically, that would have elicited some questioning about its value, given that the age pension is means tested. It is, in my opinion, inconceivable that a DSS officer would not have raised a query about the value of the land. Therefore, I must conclude that Mrs Bousdoukas refrained from telling the DSS officer that she was a joint owner of the Nepean Highway property. There was no evidence she was unaware that she was a joint owner at that time. She refrained from making any enquiries about its value despite being aware that she was required to do so. Therefore, I find that s 1237AAD dealing with waiver and special circumstances cannot apply to Mrs Bousdoukas.
  7. If I am wrong about my finding regarding the application of s1237AAD of the Act, I would nevertheless find that Mrs Bousdoukas' circumstances are not special in the context in which that expression is used in s 1237AAD of the Act.
  8. The waiver provisions in s 1237AAD of the Act have been discussed in a number of cases by the Full Court of the Federal Court and other Judges of that Court. Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; (2007) 100 ALD 9 discusses the many decisions of the Federal Court and the Full Court of the Federal Court which have dealt with that expression as it appears in s 1237AAD of the Act. He said, at 17-18:
[33]...I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word “exceptional” is emphasised. It was not the intention of parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.
  1. While I do not for one moment intend to suggest that Mrs Bousdoukas' personal circumstances, particularly regarding her disabled son, have not been extremely difficult, in my opinion, those circumstances do not take this matter out of the usual or common situations in which social security recipients find themselves.
  2. Although Mr Knowles submitted that I should find that DSS did not correctly record information supplied by Mrs Bousdoukas when making an application for the age pension, I cannot accept that submission. The very strong inference to be drawn from all of the documents surrounding her application leads to the finding that the DSS officer simply recorded what Mrs Bousdoukas told her. The contents of her application form are not inconsistent with the other documents which record information given by Mrs Bousdoukas. In fact, they are entirely consistent, particularly having regard to the fact that they appear to have been completed by the same DSS officer.
  3. Mr Knowles also submitted that Mrs Bousdoukas' entitlement to receive the Age pension has never been the subject of review by DSS or Centrelink. This, as I understood Mr Knowles’ submission, and particularly any delay in deciding to investigate her circumstances, is something which falls under the heading special circumstances. With respect to Mr Knowles, I cannot agree. DSS and now Centrelink relies on recipients of social security payments to comply with statutory requirements regarding the giving of information, particularly regarding assets and income, to Centrelink within 14 days of becoming aware that changes have taken place. It is not the responsibility of DSS or Centrelink to take action to review a social security recipient's entitlement to payment of the pension. It is the recipient's duty to provide information to the appropriate department. There is nothing unusual or uncommon about the fact that DSS or Centrelink did not review Mrs Bousdoukas’ entitlement to be paid the pension in these circumstances.
  4. Mr Knowles also referred to the fact Mrs Bousdoukas is now 78 years of age and that she is required to repay a very substantial debt. She has no other source of income other than the age pension. The problem with that submission is that it has now been revealed that Mrs Bousdoukas and her husband have sold the Nepean Highway property for $1.475 million. At least Mrs Bousdoukas has signed a contract to that effect and, without other evidence, I am prepared to accept that her husband also signed the contract. As Mr and Mrs Bousdoukas are now tenants in common of that property, she will be entitled to half those proceeds. She cannot be described as suffering financial hardship. The home in which she and her son reside is not encumbered.
  5. While the long term care which her son will need is of course a concern to Mrs Bousdoukas and to her daughter, who has agreed to take over the care and responsibility for Mrs Bousdoukas's disabled son when she passes on, it seems to me that there will be sufficient funds available to adequately care for him. Accordingly, I cannot find that Mrs Bousdoukas' debt is one which should be waived for the reason that there are special circumstances that make it desirable to waive her debt.

CONCLUSION

  1. Mrs Bousdoukas’ age pension was cancelled on 28 February 2008 when Centrelink discovered that the value of her assets was such that the rate of payment had been reduced to nil. Using AVO provided historical values of the Nepean Highway property, Centrelink determined that Mrs Bousdoukas’ assets exceeded the allowable assets limit since 26 March 1992. This meant that the rate of pension to which she was entitled to be paid should have been progressively reduced and when the rate of payment was reduced to nil, she was not entitled to any age pension payments. Centrelink has recently recalculated the overpayments made to Mrs Bousdoukas and concluded on 24 January 2011 that she owed a debt to the Commonwealth in the amount of $148,552.29. That sum was not in dispute. I have found that the $148,552.29 is a debt due to the Commonwealth.
  2. After examining Mrs Bousdoukas’ current financial circumstances and the recoverability of that debt, I have found that the debt is recoverable at law and the Secretary’s decision not to exercise discretion to write off the debt was correct.
  3. I have also found that that the Secretary’s decision not to waive the debt was correct. That is because the debt cannot be said to be attributable solely to an administrative error made by the Commonwealth. I have found that Mrs Bousdoukas did not disclose to DSS officers that she was a joint proprietor of the Nepean Highway property when she lodged her application for the age pension. It was that failure which caused the overpayments to be made. Furthermore, Mrs Bousdoukas failed to comply with the obligation to notify DSS and then Centrelink of the change in the values of the Nepean Highway property as it appreciated over the years.
  4. I have also found that Mrs Bousdoukas’ debt should not be waived on the ground that there are special circumstances which make it desirable to do so. That is because I have formed the view that Mrs Bousdoukas knowingly made a false statement regarding ownership of the Nepean Highway property and that she omitted to comply with the statutory duty to notify DSS and Centrelink of the progressive changes in the value of that property. I have also determined that the situation in which Mrs Bousdoukas now finds herself, including the ongoing care of her seriously disabled son, will not result in financial hardship and her situation cannot be properly described as unusual or uncommon.
  5. In my opinion, the decision made by the SSAT on 19 March 2010 to affirm the decision under review was incorrect but only to the extent that in purporting to affirm that decision, it in fact altered the ARO's decision regarding the quantum of the debt. It in fact concluded that the debt of $153,177, as originally calculated, was correct. I have found that the quantum of the debt has now been correctly calculated as $148,552.29. Therefore, in my view, the correct and preferable decision is to set aside the decision of the SSAT and in substitution I have decided that Mrs Bousdoukas owes a debt due to the Commonwealth in the amount of $148,552.29.

I certify that the seventy-eight [78] preceding paragraphs are a true copy of the reasons for the decision herein of

Senior Member Egon Fice


Signed: ..........[sgd] Elise Montalto..........................................

Associate


Date of Hearing 8 November 2010

Date of Decision 11 February 2011

Counsel for the Applicant Mr Richard Knowles

Solicitor for the Applicant Mr Nick Giasoumi, GPZ Legal

Solicitor for the Respondent Mr David Brown, Australian Government Solicitor


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