Buckley; Secretary, Department of Social Security and [1991] AATA 791 (20 November 1991)

Last Updated: 9 July 2008

DECISION AND REASONS FOR DECISION

SOCIAL SECURITY - unemployment and sickness benefits - overpayment.

Administrative Appeals Tribunal Act 1975 s37
Social Security Act 1947 ss106, 114

ADMINISTRATIVE APPEALS TRIBUNAL )
GENERAL ADMINISTRATIVE DIVISION ) W91/78

SECRETARY, DEPARTMENT OF
SOCIAL SECURITY
Applicant

and

GRAHAM DAVID BUCKLEY
Respondent

DECISION

AAT Decision No 7725

Tribunal : Mr T E Barnett, Senior Member
Dr J G Billings, Member
Mr R D Fayle, Member

Date : 20 November 1991

Place : Perth

1. The decision of the Social Security Appeals Tribunal for periods 18 June 1984 to 22 July 1984 and 14 February 1985 to 28 June 1985 is affirmed.

2. The decision of the Social Security Appeals Tribunal with respect to the period 3 October 1985 to 3 April 1986 is set aside and the following paragraph is substituted:

The question of a possible overpayment for the period 3 October 1985 to 3 April 1986 is remitted to the applicant department for reconsideration on the basis that the tax returns of Mr & Mrs Graham David Buckley for the 1985/1986 years of income provide an acceptable statement of their confirmed incomes.

.....................
Senior Member

ADMINISTRATIVE APPEALS TRIBUNAL )
GENERAL ADMINISTRATIVE DIVISION ) W91/78

SECRETARY, DEPARTMENT OF
SOCIAL SECURITY
- Applicant

and

GRAHAM DAVID BUCKLEY

- Respondent

REASONS FOR DECISION

20 November 1991 Mr T E Barnett, Senior Member
Dr J G Billings, Member
Mr R D Fayle, Member

This is an application for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 10 September 1990.

The SSAT was dealing with an application by the respondent to set aside a delegate's decision to raise an overpayment in respect of payments totalling $10,372.72 for invalid and unemployment benefits to the applicant during three separate periods as follows:

18 June 1984 - 22 July 1984 (unemployment benefit)
14 February 1985 - 28 June 1985 (sickness benefit)
20 September 1985 - 3 April 1986 (sickness benefit)

That decision was confirmed by an independent departmental review on 19 May 1989 and the respondent appealed to the SSAT. On the 10 September 1990 the SSAT affirmed the delegate's decision to recover an overpayment regarding all amounts of benefit paid prior to 1 July 1985. The SSAT set aside the delegate's decision regarding benefits paid from "1 July 1985". The effect of the SSAT decision was that the delegate's decision to raise an overpayment for the periods 18 June 1984 to 22 July 1984 and from 14 February to 28 June 1985 was confirmed but the decision regarding the period 20 September 1985 to 3 April 1986 was set aside as it was not satisfied that the combined incomes of the respondent and his wife exceeded the allowable maximum and remitted the matter to the applicant (the Secretary) to recalculate the amount of the overpayment. The applicant applied for a review by the Administrative Appeals Tribunal and the respondent subsequently lodged an application by way of cross-appeal.

The date of 20 September 1985 referred to by the SSAT and by counsel at the hearing varied from that appearing in the departmental record of payments at T33 which specifies 3 October 1985 as the first payment date in the last period. There is no variation in the amounts referred to and the Tribunal has adopted the latter date for the purposes of this decision.

The Tribunal heard oral evidence from the respondent, George Anthony Herring an accountant and Peter Poleschtschuk an officer of the Department. The Tribunal also received into evidence the documents filed under s37 of the Administrative Appeals Tribunal Act 1975, the taxation returns for the year 1985-86 of Graham David Buckley, Lynda Dulcie Buckley and Sigma Plains Pty Ltd and an affidavit of Elizabeth Anne Harrison Detective Sergeant, Australian Federal Police dated 14 November 1991.

The relevant legislation as in force during the relevant periods was:

Interpretation

"106. (1) In this Part, unless the contrary intention appears -

"beneficiary" means a person in receipt of a benefit;

"benefit" means an unemployment benefit, sickness benefit or special benefit under this Part and includes a supplementary allowance;

"claimant" means a person claiming a benefit;

"de facto spouse" means a person who is living with another person of the opposite sex as the spouse of that other person on a bona fide domestic basis although not legally married to that other person;

"dependant", in relation to a beneficiary, means a person who is taken into account, under sub-section 112(2), (3), (4) or (5) in calculating the rate of benefit payable to the beneficiary;

"friendly society" means a society -

(a) registered or incorporated under a law of a State or of a Territory relating to friendly;

(b) approved by the Director-General for the purposes of this definition,

and includes any other person who, or body that -

(c) in the opinion of the Director-General is similar in character to, and provides benefits similar in nature to the benfits provided by, a friendly society; and

(d) is approved by the Director-General for the purposes of this definition;

"husband" includes a male de facto spouse;

"income", in relation to a person, means any personal earnings, moneys, valuable consideration or profits earned, derived or received by that person for his own use or benefit by any means from any source whatsoever, within or outside Australia, and includes any periodical payment or benefit by way of gift or allowance, but does not include - ..."

This matter was heard on 20 November 1991 and the following oral decision was handed down:

1. The decision of the Social Security Appeals Tribunal for periods 18 June 1984 to 22 July 1984 and 14 February 1985 to 3 July 1985 is affirmed.

2. The decision of the Social Security Appeals Tribunal with respect to the period 3 October 1985 to 3 April 1986 is set aside and the following paragraph is substituted:

The question of a possible overpayment for the period 3 October 1985 to 3 April 1986 is remitted to the applicant department for reconsideration on the basis that the tax returns of Mr & Mrs Graham David Buckley for the 1985/1986 years of income provide an acceptable statement of their confirmed incomes.

On the 29 November 1991 the respondent requested written reasons for decision to which he is entitled under s43(2A) of the Administrative Appeals Tribunal Act 1975.

Having considered all the materials and evidence before it the Tribunal found that:

1. The respondent lived in a de facto relationship with Lynda Dickson in 1981 and married her in 1983. During the relevant periods from the 18 June 1984 to the 3 April 1986 the respondent was living with his wife then known as Lynda Buckley (also known as Sue Devereaux) and they were both married persons under the meaning of that term as defined in s3(1) of Social Security Act 1947 ("the Act").

2. During the relevant periods the wife was running an escort agency under the name Sue Devereaux from the garage of their suburban home and she was earning a substantial income. The respondent was aware that she was earning a substantial income in this manner.

3. The respondent bought a shelf company for $800 in 1982 and traded under the name of Sigma Plains Pty Ltd, Trustee for Graylyn Family Trust. He was a director of the company and the other director was his wife's father Mr Ron Tait. The respondent managed and operated a number of businesses on behalf of Sigma Plains Pty Ltd and these included a furniture sales business, a removal business and two hairdressing salons.

4. During the relevant periods the respondent was having a substantial alcohol problem which required medication and which incapacitated him for work for some periods. During those periods he genuinely felt he was entitled to either unemployment or sickness benefits and the Tribunal accepts, except for the limitations regarding allowable income, he would have been entitled to the benefits he was paid for the relevant periods, namely:

(a) 18 June 1984 to 22 July 1984 paid $865.50 unemployment benefit.

(b) 14 February 1985 to 28 June 1985 paid $3,755.82 sickness benefit.

(c) 3 October 1985 to 3 April 1986 paid $5,753.40 sickness benefit.

It is agreed that all those benefits were received by Mr Buckley. (He was declared bankrupt on the 24 April 1986.)

Section 114 of the Act imposes an income test on persons qualified for sickness and unemployment benefits. At the relevant period the section provided -

Income test
"114 (1) Subject to sub-section (1A), where an unemployment benefit or a sickness benefit is payable to a person whose income exceeds $20 per week, the rate per week of that benefit shall be reduced -

(a) where the income of the person does not exceed $70 per week - by one-half of the amount by which that income exceeds $20 per week; or ...

114 (3) For the purposes of the application of sub-section (1) in relation to a married person, the income of a person shall include the income of that person's spouse, unless that person and his spouse are living apart - ..."

The applicant submits that throughout the relevant periods the respondent's wife was receiving a very substantial income which brought their combined incomes way above the cut off level provided in s114. It also submits that the respondent himself was making free use of large amounts of money drawn in cash or by cheque from the various businesses at various times and that neither these amounts or the details (or even notification) of his wife's income were notified to the applicant in the various returns submitted by the respondent. Mr Buckley denied making any false statement in claim forms as he claims he was unaware of his wife's earnings. He states that he relied on the accountant's information and recalled that when Mr Herring prepared the 1984-85 tax return (tendered in evidence), for himself, Sigma Plains Pty Ltd and Graylyn Family Trust, he was told by Mr Herring that Sigma Plains Pty Ltd on behalf of the Graylyn Family Trust had made a substantial amount of money that year and rather than pay company tax of 46 cents in the dollar on such an amount it would be advisable if the business were to pay $32,000 in salary and personal taxes thereon. The respondent stated that in reality the trust never paid him that money. According to the accountant, however, that amount was credited to the Buckleys' loan account as he was under Part X of the Bankruptcy Act.

In support of it's case the applicant called Mr Herring, the accountant who acted for the respondent, his wife, Sigma Plains Pty Ltd and the Graylyn Family Trust and tendered all the income tax returns as evidence that the combined income exceeded the point at which benefits cut out as specified in s114.

Mr Herring's evidence indicated to the Tribunal that the income tax returns for Mrs Buckley relevant to the first two periods were a sham and the Tribunal places no reliance on them. It did place reliance upon the actual list of expenses given by Mrs Buckley to the accountant and on his evidence that Mrs Buckley was making regular remissions of over $6,000 per month totalling $70,000 from surplus money from the escort agency.

From these facts and from the respondent's evidence of the type of cash drawings he took from the various businesses the Tribunal had no difficulty in being reasonably satisfied that during the first two relevant periods between 18 June 1984 and 3 July 1985 the combined income of the respondent was far above the cut off level provided in s114 and that consequently no sickness or unemployment benefits were payable in that period.

Consequently there has been an overpayment during those periods of $4,621.32. These overpayments occurred as a consequence of the respondent omitting to notify the applicant of the income and the overpayments would not have occurred except for that omission.

Even if it is true, as the respondent claims, that he was unaware of the details of his wife's income, that fact is irrelevant to this decision. The legislation refers merely to the fact of a false statement having been made; it does not matter whether it was made deliberately or innocently. In any event the Tribunal has no doubt that the respondent was fully aware that his wife's escort agency was earning a very substantial income.

With regard to the benefits totalling $5,753.40 paid for the period 3 October 1985 to 3 April 1986, the only evidence of the combined income of Mr and Mrs Buckley comes from their income tax returns for the year ending 1986. Mrs Buckley's return was prepared on instructions from the Trustee in Bankruptcy and the Tribunal accepts it as evidence that her income for that year was $3,490.

The respondent's return was prepared by himself and the Tribunal accepts it as evidence that his income was $4,320 from the Graylyn Family Trust.

In the absence of any contrary evidence therefore the Tribunal is reasonably satisfied on the evidence before it that the combined income of the respondent and his wife Linda Buckley for the year ending 30 June 1986 was $8,710. This should be averaged out as a weekly income over a 52 week period and applied to the period 3 October 1985 to 3 April 1986.

Decision

1. The decision of the Social Security Appeals Tribunal for periods 18 June 1984 to 22 July 1984 and 14 February 1985 to 28 June 1985 is affirmed.

2. The decision of the Social Security Appeals Tribunal with respect to the period 3 October 1985 to 3 April 1986 is set aside and the following paragraph is substituted:

The question of a possible overpayment for the period 3 October 1985 to 3 April 1986 is remitted to the applicant department for reconsideration on the basis that the tax returns of Mr & Mrs Graham David Buckley for the 1985/1986 years of income provide an acceptable statement of their confirmed incomes.