Editors --- "Disability support pension debt: whether member of a couple; waiver and special circumstances" [2008] SocSecRpr 45; (2008) 10(4) Social Security Reporter, Article 11

• BRKICH and SECRETARY TO THE DFHCSIA
• Background
• The issue
• The law
• Discussion
• Formal decision

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Disability support pension debt: whether member of a couple; waiver and special circumstances

BRKICH and SECRETARY TO THE DFHCSIA

(2008/866)

Decided: 29th September 2008 by G. McDonald

Background

Following a back injury Brkich, a divorcee, was in receipt of disability support pension (DSP) at the single (unmarried) rate from December 1999, and in particular during the period November 2003 to June 2006. In November 2003 Brkich married his second wife, Ms Pimaikang, in Hong Kong. After the wedding Brkich returned to Australia without his wife, although she later visited Australia and lived with him in the periods March to May 2005 and again from August to November 2005. In Hong Kong, Pimaikang maintained a bank account containing only a small balance, and did some low paid work; her husband in Australia did not support her during these periods and was unable to do so, given his financial position. During the period of the alleged overpayment (November 2003 to June 2006) Pimaikang was also supporting her two children and her elderly mother. In July 2006 she again returned to Australia and was granted a permanent spousal visa in July 2006. Brkich and his wife separated in January 2008.

Brkich claimed that he had contacted Centrelink prior to his marriage and was advised that, should he marry, he should bring his wife to a Centrelink office after her arrival in Australia. He took this advice to mean that he did not have to notify Centrelink of his marriage. There is no record at Centrelink of this contact, although Centrelink records did disclose that Brkich had been advised in writing in 2000 of the need to notify should he marry, though his evidence was that he did not read Centrelink correspondence. Brkich maintained that his understanding was that, until granted permanent residency, his wife had no right to claim any social security payments and that, therefore, there was no need to notify Centrelink of his marriage.

It was unclear as to what financial arrangement existed between Brkich and his wife, both whilst she remained in Hong Kong and during the periods she visited Australia, and the details of her working arrangements in Hong Kong were also not clear.

The issue

The Tribunal considered whether, although married, Brkich should be treated for social security purposes as not being a member of a couple and, if he was to be regarded as a member of a couple, whether any or all of the debt should be waived because of special circumstances.

The law

The requirements in relation to a situation in which a married person is to be taken as not being a member of a couple, are contained in s.24of the Social Security Act 1991 (the Act), which provides:

24(1)Where:

a person is legally married to another person; and

the person is not living separately and apart from the other person on a permanent or indefinite basis; and

the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;

the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

(2)Where:

a person has a relationship with a person of the opposite sex (the partner); and

the person is not legally married to the partner; and

the relationship between the person and the partner is a marriagelike relationship; and

the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple; the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.

In addition, S.1237AAD of the Act provides for waiver of recovery of a debt where special circumstances can be said to exist. That section provides -

1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

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

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.

Discussion

The Tribunal noted some difficulty in reconciling the evidence of Brkich and his wife, particularly in relation to the advice Brkich claimed to have received regarding his obligations on marriage (which, even if given to him, he did not follow), his wife’s working arrangements in Hong Kong, and the extent to which their finances were separated or pooled during the period of the alleged overpayment. However, the Tribunal concluded from the available evidence that Brkich did not provide financial support to his wife after their marriage, until her arrival in Australia in March 2005, nor during other times when she was in Hong Kong, but probably did pool their financial resources during the times she visited Australia.

Noting the decisions in Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651 and Cocks v Centrelink[2000] FCA 1248 the Tribunal concluded that all circumstances must be considered in determining whether the discretion contained in s. 24 of the Act should be exercised, and that the mere absence of pooling of financial resources was of itself insufficient to justify the exercise of the discretion. The Tribunal was satisfied that Pimaikang had her own financial resources and was not dependent upon Brkich, and their decision to live apart during the period in question was not of itself a ‘special circumstance’. The Tribunal concluded that there was insufficient compelling evidence to justify treating Brkich, although married, as a single person for any part of the overpayment period. As such, he should have been paid DSP at the married rate, and an overpayment had occurred.

The Tribunal then considered the waiver provisions ofs.1237AAD. The Tribunal accepted that Brkich had made some general enquiry to Centrelink regarding notification requirements upon marriage, and concluded that he in all probability misunderstood the advice given to him at that time. Taking into account his evidence that he did not read Centrelink mail, the Tribunal concluded that he did not knowingly fail or omit to comply with a provision of the Act. Applying the criteria set out in Secretary, Department of Social Security v Hales [1997] FCA 1565; (1998) 82 FCR 154 the Tribunal determined that the combination of Brkich’s various misunderstandings (as to his obligations, and as to his wife’s possible entitlements under the Act) were sufficient to constitute ‘special circumstances’ for the purposes of s.1237AAD of the Act, and that it was more appropriate that the debt be waived rather than written off.

Formal decision

The Tribunal affirmed the decision to not exercise the discretion contained in s.24 of the Act, but set aside the decision in relation to recovery of the debt and in lieu determined that recovery should be waived.

[P.A.S.]