1. The applicant told the Tribunal that he was employed by the Pretoria Hotel until about 2 March 2006. The applicant was referred to the SSAT's reasons for decision (T2/3-10). The applicant said that with the exceptions referred to in paragraphs 8 and 9 of these reasons, he agreed with Centrelink's summary of the evidence he provided to that Tribunal, found at paragraph 14 of the SSAT's reasons for decision. The SSAT summarised the applicant's evidence as follows:

• The amount of the alleged debt keeps changing, it was initially only $2100; now Centrelink is saying it's $2500.
• [The applicant] ceased work at the Pretoria Hotel in Mannum in March 2006; he had had an argument with his employer and had been sacked on the spot.
• [The applicant] did not receive the final payment said to have been paid to him by the Pretoria Hotel. He submitted that although the other wage payments are reflected as credits to his bank account, the final payment is not.
• He conceded that he received the other amounts, but not the last one.
• Centrelink had told him to declare 'the amount that you take home'. Asked how he decided what to write on his forms, [the applicant] said that he would write down the take-home pay from the previous week. He was aware that his Centrelink forms sought information about fortnightly periods. He confirmed that he would declare his last week's income. He pointed out that 'I went well beyond my means to go to work, yeah, I'm going to underdeclare'.
• He described financial difficulties over a number of years, with a bankruptcy declared in 2004 and discharged in November 2007. However, he said, when working for the Pretoria Hotel that he decided that as he put it 'I would do the right thing and declare some of it ... but I didn't declare all of it because I couldn't afford to live'.
• [The applicant] said that he was in a different and better job now, and is able to pay his bills.

1. The SSAT recorded the applicant as making the following statement "I went well beyond my means to go to work, yeah, I'm going to under-declare." The applicant initially said that he did not make this statement. He said that he had under-declared his income because at some time around the commencement of his employment with the Pretoria Hotel, he had been told by a Centrelink officer that he should record his net weekly income from the previous week on his application for Newstart Allowance. In his closing address however, the applicant said that he under-declared his income as he was struggling at about that time.
2. The applicant also initially denied telling the SSAT that "I would do the right thing and declare some of it ... but I didn't declare all of it because I couldn't afford to live". The applicant also said that rather than indicating that he was in a different and better job at the hearing before the SSAT and was able to pay his bills, he told the SSAT that he was managing to make some payments on his bills at the time.
3. The applicant said that his main concern was the alleged receipt of a final payment of a gross amount of $1,120 on 7 April 2006. The applicant said that he was on the Yorke Peninsular on this day and consequently the suggestion that he received the cash on that day and signed a discontinuation of an unfair dismissal application, on the same date, was wrong.
4. The applicant explained that he has experienced significant financial difficulty. He said that prior to commencing work at the Pretoria Hotel, he had undertaken a business venture with a partner. He said that his parents guaranteed a loan of $50,000 in relation to this business venture. He said that as a consequence, his parents had to sell their home and that he is now estranged from his family.
5. He said that in about August 2007 he commenced employment with Job Network receiving approximately $1,400 per fortnight as a gross payment and that he still holds this position. The applicant said that he has purchased a property with another person and that his share of the mortgage repayments approximates $450 a fortnight. He said he has no other major debts, save of course, for the debt which he owes his parents and which he says now stands at about $45,000. He said that the equity in his current home approximates $165,000 and that his share is approximately 50 percent of this sum. The applicant said that he is currently falling about $50 short each fortnight and that he has a drinking problem, although he has not yet been diagnosed with alcohol dependence, and that he spends over $100 a week on alcohol.
6. The applicant told the Tribunal that he had lodged a stay application earlier in 2009. He said that he had heard nothing more about the application and had not contacted the Tribunal in relation to that application.
7. He also told the Tribunal that he had lodged a claim for unfair dismissal from his employment at the Pretoria Hotel, but again said that he had simply not heard any more about that application. He specifically denied that the alleged $1,120 payment suggested to have been made on 7 April 2006, was in settlement of that unfair dismissal application.
8. The applicant was referred to a document headed "Notice of Discontinuance" comprising the penultimate annexure to Exhibit R2. The applicant agreed that the signature on the document was his and that the document was dated 7 April 2006. He said that he had forgotten about this. He also said that the document must have been posted to him while he was on Yorke Peninsular. He was also referred to an Employment Separation Certificate (final annexure to Exhibit R2) which refers to a net termination payment of $924 and also referred to "two weeks' pay in lieu of notice". The applicant said that he had received this document by post and had, within approximately two weeks, lodged the document with Centrelink. He said that he did not notice that the separation certificate referred to a payment of $924 made in lieu of two weeks' notice.

1. Mr Edwards said that he is a friend of the applicant. He said that on 7 April 2006 he and the applicant were on the Yorke Peninsular. When asked how he could remember the specific date, Mr Edwards said that he and the applicant had gone over the material on a number of occasions. I do not consider that Mr Edwards had a personal recollection of his whereabouts on 7 April 2006.

1. Ms Harding agreed the accuracy of the content of her statement (Exhibit R2). Ms Harding said that she and her husband had, at the relevant time, owned the Pretoria Hotel. She said that on 7 April 2006 the applicant had attended the Pretoria Hotel and signed the notice of discontinuance and at the same time she had drawn and cashed a cheque for him in the net amount referred to in the separation certificate of $924. She referred to a copy cheque stub (Annexure 2 to Exhibit R2) in the sum of $942. The cheque stub is dated 7 April 2006. Ms Harding said that she was the Pretoria Hotel's payroll officer during the relevant period.

1. I found the applicant an unsatisfactory witness. His evidence was internally inconsistent. He had initially said that he had failed to declare income due to the receipt of incorrect advice from a Centrelink officer. In closing, he said that he had under-declared his income because of his financial circumstances at the time. He also initially told me that he had no recollection of what had happened in relation to his unfair dismissal application. It was not until he was confronted with the notice of discontinuance, signed by him, and carrying the date 7 April 2006, that he acknowledged that he had discontinued those proceedings.
2. Ms Harding provided clear and direct answers to questions. Her evidence was consistent with documentary evidence annexed to her statement including a cheque stub dated 7 April 2006 and a notice of discontinuance dated 7 April 2006. It was also consistent with the employment separation certificate. Where Ms Harding's evidence conflicts with that of the applicant, I prefer the evidence of Ms Harding.
3. I find that the applicant deliberately understated his income. He did receive a final net termination payment of $924 on or about 7 April 2006 and Centrelink's calculations in relation to the overpayment are accurate. I consequently find that the applicant was overpaid a figure of $2,291.88 arising out of his employment at the Pretoria Hotel.
4. Under s 1223 of the Social Security Act 1991 (the Act) an overpaid amount is a debt to the Commonwealth regardless of the circumstances in which that overpayment occurred.
5. The applicant was declared bankrupt in 2004 and discharged from bankruptcy in November 2007. In some circumstances debts provable in bankruptcy may be discharged. An exception is found at s 153(2) of the Bankruptcy Act 1966 (Cth) which is to the effect that a discharge does not act to "release the bankrupt from a debt incurred by means of fraud or fraudulent of breach of trust to which he or she was a party or a debt of which he or she has obtained forbearance by fraud". In the light of my finding that the applicant deliberately under-declared his income, I consider that the Bankruptcy Act 1966 does not act to release him from his Centrelink debt.
6. An amount may be added to a debt by way of penalty pursuant to s 1228B of the Act. This subsection reads as follows:

"1228B Additional 10% penalty for understatement etc. of income

(1) An amount by way of penalty is added to a debt due to the Commonwealth under this Chapter by a person in relation to a social security payment if:

(a) at the time the payment was made, the person:

(i) had attained the minimum age for youth allowance as defined by section 543A; and

(ii) had not reached pension age; and

Note: For pension age see subsections 23(5A), (5B), (5C) and (5D).

(b) the payment was:

(i) a social security benefit; or

(ii) a disability support pension; or

(iii) a wife pension; or

(iv) a widow B pension; or

(v) a pension PP (single); and

(c) the debt arose wholly or partly because the person had:

(i) refused or failed to provide information in relation to the person's income from personal exertion; or

(ii) knowingly or recklessly provided false or misleading information in relation to the person's income from personal exertion;

when required, under a provision of the social security law, to provide information in relation to the person's income from personal exertion.

Note: For income from personal exertion see subsection 8(1).

(2) The amount added by way of penalty is an amount equal to 10% of so much of the debt as arose because the person refused or failed to provide the information or provided the false or misleading information.

(3) An amount worked out under subsection (2) must be rounded down to the nearest 5 cents.

(4) This section does not apply if the Secretary is satisfied that the person had a reasonable excuse for refusing or failing to provide the information.

(5) This section does not apply in relation to a debt due to the Commonwealth under section 1229A or 1229AB."

1. Section 1228B(4) of the Act may excuse a person if the Secretary is satisfied that the person had a reasonable excuse for refusing or failing to provide information. The applicant failed to provide information to the Department and this led to the debt. In the circumstances of this case and in reflection of my findings, I am not satisfied that the applicant had a reasonable excuse for failing to declare income and consequently I consider it appropriate that Centrelink add a penalty amount reflective of 10 percent of the overpaid sum.
2. I next considered whether recovery of the debt should be waived under s 1237A of the Act. This sections permits waiver of a debt if the debt is attributable solely to administrative error. I have found that the applicant deliberately under-declared his income and that this caused the debt. In these circumstances s 1237A does not apply.
3. I also considered whether special circumstances might exist in this case under s 1237AAD. This section does not have application. However, where the debt resulted "... wholly or partly from the debt or another person knowingly ... failing or omitting to comply with a provision of this Act ...", the Act requires accurate declaration of income and I am satisfied that the applicant knowingly failed to declare that income. In these circumstances s 1237AAD cannot work to allow waiver of any portion of the debt.
4. I finally considered whether the debt should be written off, that is recovery delayed, under s 1236 of the Act. This section may apply if:

"1236 Secretary may write off debt

...

(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. I note that the applicant is currently employed, and spends over $100 a week on alcohol. In the circumstances I am not satisfied that he does not have a capacity to repay the debt or that any of the other provisions contained in s 1236 of the Act have application.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J G Short (Member)

Signed: ............J Coulthard.........................................