Taleb and Secretary, Department of Social Services (Social services second review) [2020] AATA 3451 (9 September 2020)

Social Security (Administration) Act 1999 (Cth)

1. These applications are about debts raised by the Commonwealth against the Applicants arising from overpayments of social security entitlements to them over a period spanning approximately nine years. Overpayments were made to Mr and Mrs Taleb because they failed to disclose to Centrelink, in a timely manner, the full extent of their income from their respective employment. Over this period numerous cash deposits were made into their bank accounts, many of which remain unexplained. These applications are linked to be heard and determined together because they involve consideration of the same facts and issues.
2. On 4 and 5 July 2018, Centrelink made the original decisions to raise debts against the Applicants to recover overpayments made to them of certain social security entitlements.[1]
3. On 30 November 2018, an authorised review officer (ARO) of Centrelink reviewed the original decisions and decided to vary them, which had the effect of adjusting (mostly reducing), the overall amounts of the respective debts against Mr and Mrs Taleb.
4. In respect of Mr Ahmed Taleb, the ARO adjusted his debt to the following amounts:[2]

(a) $62,887.68 being overpayments of carer payment (CP) to him during the period 2 April 2009 to 4 October 2017; and

(b) $2,124.33 being overpayments of Newstart allowance (NSA) to him during the period 28 November 2017 to 16 May 2018.

1. In respect of Mrs Gazwa Taleb, the ARO reduced her debts to the following amounts:[3]

(a) $18,839.94 being overpayments of disability support pension (DSP) for the period 22 July 2010 to 19 January 2014; and

(b) $44,288.51 being overpayments of DSP for the period 20 January 2014 to 27 June 2018.

1. Mr and Mrs Taleb are partnered. They have been a married since 1979 and have raised eight (now adult) children. They sought review of the decisions made by the ARO, referred to in the above two paragraphs, by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1).
2. On 13 March 2019, the AAT1 decided to affirm the ARO decisions to raise debts against Mr and Mrs Taleb (Decision Under Review). Mr and Mrs Taleb now seek review of the Decision Under Review by the General Division of the Administrative Appeals Tribunal (this Tribunal).
3. The parties to these applications have lodged written submissions and documentary evidence with the Tribunal, which included the T-Documents comprising over 1,600 pages. A hearing took place before the Tribunal, at which time oral submissions were made by the parties and Ms Hanaa Taleb, Mr and Mrs Taleb's adult daughter, who assisted them with their applications. Ms Hanaa Taleb is fluent in English having been born and raised in Australia. The Tribunal also made an interpreter available to Mr and Mrs Taleb to assist them during the hearing as required. Mr and Mrs Taleb lodged some further documents after the hearing. The Secretary was provided with a copy of these documents and given an opportunity to make further submissions about them.
4. For the reasons set out below, the Tribunal considers that the debts as calculated by the ARO were correctly raised and no portion of those debts should be written off or waived. Accordingly, the Tribunal affirms the Decision Under Review.

1. The issues for determination by this Tribunal are whether the debts referred to above were correctly raised against Mr and Mrs Taleb; and if so, whether all or any portion of those debts should be written off or waived.

1. The Social Security Act 1991 (Cth) (Act) establishes a scheme for the provision of social security entitlements, such as CP, NSA (and presently, job seeker payments) and DSP to eligible persons. As the name suggests, the Social Security (Administration) Act 1999 (Cth) (Administration Act) provides for the administration of those entitlements.
2. CP, job seeker payments and DSP fall within the definition of "social security entitlement" as defined by s 23 of the Act. The rates of these entitlements are calculated using rate calculators as set out in the Act. Specifically, as relevant in this case, s 117(1) of the Act provides that the rate of DSP is to be worked out using the Pension Rate Calculator A at the end of s 1064 of the Act. Section 210 of the Act provides that this same rate calculator is used to calculate the rate of CP. Section 643 of the Act provides that Rate Calculator B at the end of s 1068 of the Act is used to calculate the rate of job seeker payments and previously, NSA. Both of those rate calculators encompass what is known as an "income test" and an "assets test". Whichever test results in the lowest rate will prevail.
3. Under the income test, in effect, the combined "ordinary income" of the members of a couple earned, derived or received each fortnight will be factored into the calculation of the social security entitlements to be paid to each member of the couple.
4. Section 8 of the Act provides several definitions for the purpose of applying the income test. The term "ordinary income" is defined in subsection (1) as follows:

"ordinary income" means income that is not maintenance income or an exempt lump sum.

... Note 3: For provisions affecting the amount of a person's ordinary income see sections 1072 and 1073 (ordinary income concept), sections 1074 and 1075 (business income) ...

1. The term "income" is defined in subsection (1) as follows:

"income", in relation to a person, means:

(a) an income amount earned, derived or received by the person for the person's own use or benefit; or

(b) a periodical payment by way of gift or allowance; or

(c) a periodical benefit by way of gift or allowance;

but does not include an amount that is excluded under subsection (4), (5) or (8).

...

1. The term "income amount" is defined in subsection (1) as follows:

"income amount" means:

(a) valuable consideration; or

(b) personal earnings; or

(c) moneys; or

(d) profits;

(whether of a capital nature or not).

1. The term "earned, derived or received" has the meaning given by subsection (2), which provides as follows:

(2) A reference in this Act to an income amount earned, derived or received is a reference to:

(a) an income amount earned, derived or received by any means; and

(b) an income amount earned, derived or received from any source (whether within or outside Australia).

(underlining emphasis added)

A reference in this Act to a person's ordinary income for a period is a reference to the person's gross ordinary income from all sources for the period calculated without any reduction...

1. Section 1073B of the Act provides for the daily attribution of employment income in accordance with the following methodology:

(a) a person is receiving a ... social security benefit; and

(b) the person's rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and

(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;

the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.

(2) If a person has reached pension age and is receiving a social security benefit, subsection (1) does not apply to the person, to the extent that it relates to that benefit.

1. Section 1075 of the Act provides for permissible reductions in gross income for business expenses.
2. Section 123(3)(b) of the Administration Act provides that a determination of a person's rate of social security payment will continue to have effect until the payment becomes payable at a lower rate under s 100 of the Administration Act_._ Section 100(1) of the Administration Act provides as follows:

100 Automatic rate reduction - recipient not complying with subsection 68(2) notice

(1) Subject to subsection (2), if:

(a) a person who is receiving a social security payment is given a notice under subsection 68(2); and

(b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and

(c) the event or change of circumstances occurs; and

(d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

(e) because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.

...

1. Section 118 of the Administration Act provides that rates can be retrospectively reduced if a person fails to correctly advise Centrelink of their income.
2. Subsection 1223(1) of the Act provides that if a person receives a social security payment to which they are not entitled, the amount of this payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment_._
3. Section 1236(1), read in conjunction with subsection (1A), of the Act provides that a debt may be written off for a stated period or otherwise if, and only if, the debt is irrecoverable at law or the debtor has no capacity to repay the debt. Subsection (1B) provides that:

...a debt is taken to be irrecoverable at law if, and only if:

(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231_,_ 1232 or 1233 has elapsed; or

(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1. Further, s 1236(1C) contains a deeming provision in respect of whether the debt is irrecoverable, as follows:

...if a debt is recoverable by means of:

(a) deductions from the debtor's social security payment; or

...

the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

1. Section 1237A of the Act provides for the waiver of debts in certain circumstances:

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...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.

...

Proportion of a debt

(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.

1. Section 1237AAD of the Act confers a discretion to waive debts in special circumstances:

1237AAD Waiver in special circumstances

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

(a) 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

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.

1. Mr Taleb, aged 63, has been in receipt of the NSA intermittently since June 1995 and CP since August 2006. Mr Taleb was self-employed as a taxi driver during this time. Mr Taleb accepts that he did not advise Centrelink each fortnight of the amount of income he earned from his taxi business. He told the Tribunal that he submitted his annual tax return to Centrelink each year and he thought this was all he was required to do. He said he did not know that he was required to advise Centrelink of any changes to his income for the previous fortnightly period.
2. Mrs Taleb, aged 62, has been in receipt of the DSP since April 2007. Mrs Taleb commenced employment as a family day care educator during the 2014/2015 financial year. Mrs Taleb did not declare her income to Centrelink. Mrs Taleb and her daughter did not deny this at the hearing. Mrs Taleb did not lodge tax returns for the financial years referred to in the last sentence of this paragraph. Ms Hanaa Taleb explained that Mrs Taleb had not earned over the threshold that would require Mrs Taleb to lodge a tax return. Centrelink became aware of this income based on "data-matching" information it had received from the Department of Education and Training (DET) disclosing Mrs Taleb's earnings as an educator for the 2014/2015, 2015/2016, 2016/2017 and 2017/2018 financial years.
3. When the ARO recalculated Mr and Mrs Taleb's overpayments, it was based on:

(a) income as recorded in Mr Taleb's annual tax returns in relation to his taxi business, minus business-related deductions shown in those tax returns;

(b) undisclosed income earned by Mrs Taleb as an educator as advised by DET to Centrelink; and

(c) income received in the form of additional bank deposits made into Mr and Mrs Taleb's bank accounts, which had not been disclosed to Centrelink and were unable to be satisfactorily explained by Mr and Mrs Taleb.

1. At the hearing, Mr Taleb asked the Tribunal why the ARO had significantly reduced the amount of his debts. The Secretary advised that the original decision-maker did not accept Mr Taleb's contention that he worked less than 25 hours per week in the taxi business. On that basis, the original decision-maker undertook the calculation of overpayments on the basis that CP should not have been paid to Mr Taleb from 2 April 2009 to 4 October 2017. However, the ARO, upon review, decided differently about this issue. The ARO was satisfied that Mr Taleb worked less than 25 hours per week in the taxi business and therefore, he was entitled to receive CP. Accordingly, the ARO undertook the recalculation (factoring in the unreported income) on the basis that he was entitled to receive CP from 2 April 2009 to 4 October 2017.
2. On 28 November 2017, Mr Taleb submitted a new claim for NSA. On this form, Mr Taleb declared that:[4]

(a) he and Mrs Taleb were not receiving any income from work; and

(b) he and Mrs Taleb were involved in one business, being the taxi business, as indicated elsewhere on this form.

1. The Tribunal notes that this information provided by Mr Taleb to Centrelink, as set out in the above paragraph, was false. On 29 November 2017, Adventurous Family Day Care (AFDC), a family day care organisation to which Mrs Taleb provided services as an educator, operating as a sole proprietor, provided the following information to Centrelink pursuant to a request for information made under s 196 of the Administration Act:

(a) Mrs Taleb was engaged by AFDC as a "self-employed" person and is likely to continue to be engaged on that basis;

(b) Mrs Taleb commenced working for AFDC on 12 June 2017 and was/is working 24 hours per week;

(c) as from 1 September 2014 "until current", AFCD has deposited salary into Ms Taleb's bank account of $200 per week as per the payment advice forms and payment history report attached the completed form provided by AFCD.

1. On 28 November 2017, Mr Taleb signed a Centrelink Mod F form entitled "Business details" (Mod F form). On the Mod F form, Mr Taleb declared as follows:[5]

(a) he was a sole trader as a "taxi driver" under his own name "on & off for the last 30 years";

(b) his current income was not different to that shown on the tax return, and loss and profit statement, for this business;

(c) the business was still operating, Mr Taleb was still working in the business and the business was still generating income;

(d) the duties performed by Mr Taleb were described as "taxi driver" and that 15 hours of duties were being performed each week; and

(e) nobody else was helping Mr Taleb with the running of the business.

1. In the Mod F form, when Mr Taleb was asked whether he was looking for work full-time he inserted the following in the "No" text box: "Working 30 hrs per fortnight per Mature Age Customer meeting Requirements".
2. The ARO found that Mrs Taleb also received overpayments of DSP because Mr and Mrs Taleb's respective income had not been fully disclosed, including Mrs Taleb's income derived from working as a family day care educator.
3. On 19 March 2018 Mr Taleb signed another Mod F form declaring as follows:

(b) he commenced operating the business in "2000" and the business was still operating;[6]

(c) he was working in the business and performing duties as a "taxi driver" for "10-15 hours" per week;

(d) nobody else was helping him with running the business; and

(e) he was not looking for full-time work because he was "working on his taxi".

1. Mr Taleb also completed a Centrelink Mod iA form entitled "Income and Assets" (Mod iA form) declaring as follows:

(a) he owned a 2009 Holden "Berlina" with an estimated value of $2,000;

(b) Mrs Taleb owned a 2009 Toyota Corolla with an estimated value of $4,000.

1. At question 27 of the Mod iA form, Mr Taleb was asked whether he had any other assets such as "taxi plates". Mr Taleb left this question unanswered. The Tribunal notes that Mr Taleb should have, but did not, disclose his ownership of the taxi plates for his taxi business. The Tribunal notes this as a matter which impacts negatively on Mr Taleb's credibility, which the Tribunal will address in further detail below.
2. Mr Taleb also left unanswered question 29 which asked whether he or Mrs Taleb currently had any income from work other than self-employment. At question 38, Mr Taleb answered "No" to the following question: "Do you (and/or your partner) receive any payments from other sources that you have not already advised us about on this form?". Mr Taleb's answer to this question was incorrect.

Alleged "group saving" system with family and friends

1. In relation to some of the bank account deposits, Mr Taleb sought to explain that he had a system in place involving a group of about ten of his family and friends where he would receive from them regular cash payments of about $200 to $400, which would be accrued and then repaid to those persons at a later point in time. When asked what the purpose of this system was, the Tribunal was informed by Ms Hanaa Taleb that this was done for the purpose of assisting the person contributing those cash payments to help them to save up for an item which might cost a lot of money. Ms Hanaa Taleb says she does the same thing with a group of her family and friends.
2. Mr Taleb said he would deposit into the bank the cash that was given to him by the people in this group of family and friends. When Mr Sparkes on behalf of the Secretary pointed out that this explanation did not match up with the quantum of the bank deposits shown in the bank statements. In some of the statements Mr Sparkes took the Tribunal to there were no individual bank deposits made in the sum of $200 to $400. In response, Ms Hanaa Taleb sought to explain to the Tribunal that those cash contributions were combined before they were deposited into the bank so that if there were ten people in the group and they contributed between $200 and $400 each to Mr Taleb, an aggregate amount of about $2,000 to $4,000 would be deposited into the bank account.
3. Mr Taleb told the Tribunal at the hearing that after those funds were deposited, he would then move that cash around between the various bank accounts, and ultimately pay a lump sum amount back to the person in the group who had made those payments.
4. When asked at the hearing to provide the names of the family and friends in this group, Mr and Mrs Taleb and Ms Hanaa Taleb, did not do so. Ms Hanaa Taleb said she had made an approach to these people to ask if they would make a statement, but she said they had declined to do so.
5. Mr Sparkes urged the Tribunal not to accept this explanation on the basis that it "lacks all credibility". The Tribunal is not satisfied that this "group saving" system was in fact operating as Mr Taleb and Ms Hanaa Taleb had described at the hearing or at all. If it was, and there was nothing unlawful about the handling of cash in this way, there is no reason why one or more of those family and friends said to be involved in the system, would not have made a statement to confirm the arrangement that was said to be in place between Mr Taleb and those persons. The Tribunal regards this explanation by Mr Taleb for some of the bank deposits as implausible and considers that it was fabricated by the Mr Taleb and Ms Hanaa Taleb in order to serve their interests in respect of the present application before the Tribunal.
6. When one considers the numerous bank deposits frequently made in large sums as recorded in the bank statements, it appears that Mr Taleb was running his taxi business at a scale that has not been accurately reflected in this tax returns to the ATO, noting that in some years, Mr Taleb has claimed that he only received a net income of less than $10,000 per annum from this business after expenses, upon which he was raising a very large family and paying off a mortgage on his home. The Tribunal also notes the significant number of hours during which Mr Taleb was "logged" as having worked a shift in his taxi as indicated in the taxi shift reports provided by the Taxi Services Commission.[7] The Tribunal is satisfied, on the balance of probabilities, that those monies (comprising the unexplained bank deposits) were derived as cash payments made to Mr Taleb through his taxi business or by some other means which he has not disclosed to the Centrelink, the Secretary or the Tribunal.
7. The Tribunal finds that those bank deposits remain unexplained and as such, they are to be counted as "income" and therefore factored into the calculation of Mr and Mrs Taleb's social security entitlements.

1. The Applicants lodged with the Tribunal a statutory declaration dated 28 October 2019 by one of their neighbours, Mr Walid Saad, seeking to provide an explanation for some of the bank deposits:

My dad owed Ahmed Taleb of [address omitted] approx. $13,000 about 15-20 years ago which he never paid back.

As I am older and working, I decided to pay off my dads (sic) debt.

I gave the money to Ahmed over a 2 years period approx. in cash.

My dad no longer owes Ahmed Taleb any money.

1. The Tribunal rejects this evidence. The Tribunal considers that it is not credible on the basis that those matters were not previously raised by Mr and Mrs Taleb to explain those deposits. Mr Saad was not called to give evidence at the hearing. The Tribunal also notes that if Mr Taleb was only receiving the small amount of net income from his business each year as claimed in his annual tax returns while raising eight children, he would not have been in a financial position to lend an amount of $13,000 to another person. The Tribunal considers that, like the explanation provided by Mr Taleb and Ms Hanaa Taleb about the "group saving" system, this explanation was fabricated by them to serve Mr and Mrs Taleb's interests in this application.

Suggestion that deposits can be explained by movements between bank accounts

1. Attached to an email sent to the Tribunal by Ms Hanaa Taleb on 12 July 2019, the Tribunal notes a handwritten description seeking to explain further bank deposits:

Deposit made in to NAB account xxx1510[8]

29/03/2016 amount $5,200 deposited.

Withdrawn from CBA account 5069[9] $5,000 on 29/03/2016 pg 521

23/05/201 amount $2,000 deposited

Withdrawn from CBA account 5069 18/4/2016 amount of $2,000 withdrawn pg 521

6/06/2016 amount deposited $2,650

Withdrawn from cba account 5069 on 16/06/2016 amount of $3,500 pg 524

8/11/206 amount deposited $2,000

Withdrawn from CBA account 5069 19/09/16 amount $5,000 pg 527

21/11/2016 amount deposited $1,000

Withdrawn from CBA account 5069 19/09/16 amount $5,000 pg 527

28/03/2017 amount deposited $1,000

Withdrawn from CBA amount 5069 20/03/17 amount $2,8000 pg 531

Cash deposits made into NAB [xxx1510] joint account

23/3/13 $28,000 deposit made on 21/3/13

withdrawn from CBA account [xxx5069] on 21/3/13 $30,000 pg 494

5/9/13 $2,000 deposit made on 5/9/13

Withdrawn from CBA account 5069 on 05/08/13 $1,250 and 2/9/13 $1,000 pg 497-498

7/8/14 $5,000 deposit made on 7/8/13

Withdrawn from CBA account 509 on 30/6/14 $1,200, 01/07/14 $400, 08/07/14 $650, 21/7/14 $1580 and 22/07/14 $1,200 total $5,530 page 504-505

27/10/14 $2,000 deposit made on 27/10/14

Withdrawn from CBA account 5069 on 29/09/14 $1,000 and 06/10/14 $1,000 pg 506

24/12/14 $3,000 deposit made on 24/12/14

Withdrawn from CBA account 5069 on 17/12/14 amount $4,300. pg 508.

28/7/2015 $17,000 deposit made on 28/7/2015

Withdrawn from CBA account 5069 on 13/7/2015 amount $3,200 pg 513

08/02/2016 $2,700 deposit made on 08/02/16

Withdrawn from CBA account 5069 amount $5,000 pg 519

(bold emphasis added)

1. The Tribunal is not satisfied that this provides an explanation for the source of the funds comprising those bank deposits. The Tribunal does not accept that monies were derived from the Commonwealth Bank of Australia (CBA) bank account xxx5069 as asserted by Ms Hanaa Taleb. The amounts do not match up on each occasion. The dates of the withdrawals from the CBA account and dates of the subsequent deposit into the National Australia Bank (NAB) account xxx1510 do not always match up. No explanation was provided as to why they needed to be transferred from one bank account to another. These matters cast doubt over the veracity of this evidence. The Tribunal regards the evidence given by Mr Taleb and Ms Hanaa Taleb to be unreliable and considers that this explanation was fabricated to serve Mr and Mrs Taleb's interests in this case.

1. The Applicants relied upon a statutory declaration by Ms Hanaa Taleb dated 28 October 2019 to explain a specific bank deposit made in the sum of $80,881.38 as follows:

On the 10th of March 2016 I borrowed $80,000 from my father Ahmed Taleb. The purpose of the loan was to purchase a taxi licence plate for my husband.

On the 21st of May 2016 I drew a cheque of an amount of $80,881.38 from my Nab account to repay my father, Ahmed Taleb. The amount included any interest liable for the loan. The total amount was $80,881.38.

My father Ahmed Taleb deposited this cheque of $80,881.38 into his Nab account xxxx1510, on 23rd May 2016.

1. On 14 October 2019 Ms Hanaa Taleb lodged with the Tribunal copies of the following bank statements:

(a) statement for the period 1 January 2016 to 30 June 2016 of the joint "NAB Homeplus Package Standard Loan" account numbered xxx1588 held by Mr and Mrs Taleb. This statement shows that on 10 March 2016 there had been a "loan redraw" debit to bank account xxxx1510 of an amount of $80,000, followed by a "cash deposit" credit on 23 May 2016 of $80,800.00; and

(b) statement for the period 24 February 2016 to 23 August 2016 of the joint "NAB Classic Banking" account numbered xxx1510 held by Mr and Mrs Taleb. This statement shows a "redraw proceeds" from account xxx1588 credit on 10 March 2016 and a "withdrawal" debit on the same day; followed by a credit of $80,881.38 with the transaction entered as "Hanaa" on 23 May 2016.

1. At the hearing, Mr Sparkes informed the Tribunal that this deposit does not appear to have been included as income for the purpose of the debt calculation. The Tribunal notes there is no entry for this amount of $80,800 as either "Customer other income (unexplained deposits)" or "Partner other income (unexplained deposits)" for the purpose of the debt calculation in Centrelink's "Summary of Changes" document.[10]
2. The Tribunal accepts the explanation given for this deposit. However, this will not result in any further reduction in the debt amounts calculated by the ARO, because the "Summary of Changes" document indicates that those deposits were not factored into the calculation of the debt.

Three separate motor vehicle insurance payouts

1. On 11 July 2019, Ms Hanaa Taleb sent an email dated 8 July 2019 to the Tribunal from "Sarah" in the Claims Assistance Centre of Motor Claims at Hollard Insurance, with attached correspondence to Mr Taleb, confirming that he was paid the following amounts:

(a) "total loss" payout of $5,952.88 for Mr Taleb's 2006 Ford Falcon claim (incident date 28 May 2015 and payout made on or shortly after 16 July 2015);

(b) $2,426 for "cash settled" repairs undertaken to Mr Taleb's Toyota; and

(c) "total loss" payout of $6,684.09 for Mr Taleb's Toyota (incident date 22 May 2016 and payment made on or shortly after 25 June 2016).

(a) there is no entry for 16 July 2015 of $5,952.88 in Centrelink's "Summary of Changes" document;[11]

(b) there is no entry for 25 January 2016 of $2,426 in Centrelink's "Summary of Changes" document;[12] and

(c) there is no entry for 25 June 2016 for $6,684.09 in Centrelink's "Summary of Changes" document.[13]

1. Further, those deposits are not included in the list of cash deposits set out in T-Documents T10/200 (for 16 July 2015); T10/201 (for 25 January 2016); and T10/201 (for 25 June 2016).
2. The Tribunal accepts the explanations given for these deposits. However, this will not result in any further reduction in the debt amounts calculated by the ARO because the "Summary of Changes" document indicates that those deposits were not factored into the recalculation of the debt by the ARO.

1. The Tribunal finds that Mrs Taleb earned income from providing services as an educator to four different family day care organisations, which as mentioned above, were not disclosed to Centrelink at the time she received her DSP during the relevant debt period.
2. Mrs Taleb commenced providing services as an educator at Precious Gemz on 25 January 2015 and subsequently, to three other family day care organisations. The DET informed Centrelink that Mrs Taleb was paid:

(b) by Sunrise Family Day Care, the following amount:

(c) by Butterfly Family Day Care, the following amount:

(d) by Adventurous Family Day Care (AFDC), the following amounts:

(ii) $9,947 during the 2017/18 financial year (based on information provided by the Educator Payment History Record).

1. The Tribunal notes that Centrelink sent a letter to Mrs Taleb dated 9 July 2013 to advise her that if she was not required to lodge a tax return, she was still required to inform Centrelink of the amount of her actual income for the purpose of calculating the family tax benefits which Mrs Taleb was receiving.[14]

1. The calculations for the debts raised against Mr and Mrs Taleb are complex and span a period of nine years. The calculations are computer generated and a printout of them is set out in T-Documents T11 and T12.
2. Aside from offering explanations for certain deposits as referred to above which were not factored into the debt calculation by the ARO, Mr and Mrs Taleb, or Ms Hanaa Taleb, did not vigorously contest the quantum of the debts determined as part of the ARO decisions, and as affirmed by the AAT1.
3. Based on the findings made above, the Tribunal was unable to identify any error in the way the ARO (using a software program) had recalculated Mr and Mrs Taleb's debts. The Tribunal considers that the outcome of those calculations were likely to have been generous toward Mr and Mrs Taleb because if the issue was pressed at the hearing (and it was not), the Tribunal considers there is a real question as to whether Mr Taleb was entitled to receive CP, on the basis that the Tribunal considers he was not truthful when reporting to Centrelink about how many hours he was working in the taxi business and it was likely that he was working more than 25 hours per week. The Tribunal notes that for some of weekly periods, taken from the Taxi Services Commission's shift report ultimately produced to the Tribunal as part of this application, the aggregate number of hours recorded for Mr Taleb's shifts, in fact, exceeded 25 hours, as shown below:[15]

(a) 15 to 21 November 2009 - aggregate number of hours, approximately 32 hours;

(b) 20 to 26 March 2011 - aggregate number of hours, approximately 37 hours;

(c) 23 to 29 July 2013 - aggregate number of hours, approximately 79 hours;

(d) 5 to 11 February 2014 - approximately 71 hours; and

1. For present purposes however, the Tribunal concludes that the debts, as recalculated by the ARO as set out in T-Documents T10 and T11, are correct and that the debts raised by the ARO against Mr and Mrs Taleb were correctly raised in accordance with s 1223(1) of the Act.

Should the all or a portion of the debts be written off or waived?

Were the debts attributable solely due to an administrative error on the part of the Commonwealth?

1. Mr and Mrs Taleb, and Ms Hanaa Taleb on their behalf, contend that they should not be required to repay the debts because it took nine years for Centrelink to raise the debts. At the hearing Mr Taleb and Ms Hanaa Taleb accepted that Mr and Mrs Taleb might be partly at fault but contend that Centrelink was also at fault. Mr Taleb contends that if Centrelink had identified the problem to him at the beginning and told him what he needed to do, he would have done it and the debts would not have accrued to such large amounts. Mr Taleb told the Tribunal at the hearing that no one had told him what he needed to do, that there was "no app" as there is now, and that he "did not know the rules".
2. As mentioned above, Mr Taleb's position was that he had submitted his annual tax returns to Centrelink each year (a fact which was accepted by the Secretary at the hearing), so that should have been enough for him to meet his reporting obligations. Unfortunately for Mr and Mrs Taleb, this is not how the system works. Payment of benefits are not made on an annual basis - they are made on a fortnightly basis. This means they are calculated on a fortnightly basis and that the "inputs" going into the calculation for the rate to be paid to Mr and Mrs Taleb each fortnight, must be continuously updated if they change from one fortnight to another.
3. The Tribunal notes numerous letters sent by Centrelink to Mr and Mrs Taleb over the debt periods requesting that they inform Centrelink of any changes to their income. In the letters relating to the further family tax benefits received for most of this period by Mrs Taleb, she also received letters from Centrelink from time to time stating the estimated figure for Mr and Mrs Taleb's "combined income". The statement of combined income on these letters were usually modest amounts. For instance, the Tribunal notes a letter from Centrelink to Mrs Taleb dated 19 March 2015. On the first page of this letter, the following information is set out:[16]

Information used for calculating your regular payment

Total Combined Assets............................................................... $29,463.00

Combined Annual Income............................................................$4,632.60

1. At the hearing, Mr and Mrs Taleb acknowledged receiving those letters but said that when they did, they only looked to see the figure showing how much they were going to receive, and then they threw the letters out. Mr Taleb contends that while he can manage to converse in the English language, having arrived in Australia in the 1970's, he struggled to read and write in English. Ms Hanaa Taleb also told the Tribunal that her parents did not go to school. The Tribunal asked Mr and Mrs Taleb why they did not ask any of their eight (now adult) children, schooled in Australia, to read the Centrelink letters to them upon receipt. Mr Taleb intimated that he did not show them to his children and Mrs Taleb responded to this question by saying, "I don't know".
2. Mr Sparkes submitted that Mr and Mrs Taleb were able to read sufficiently to look to see how much money they were going to receive and this should be taken as a concession that they could read and understand the figures in those letters, including the figure provided for their combined income. The Tribunal accepts this contention and on the balance of probabilities, finds that Mr and Mrs Taleb read and understood the amount of combined income that was recorded by Centrelink at the times they received those letters. Mr and Mrs Taleb did not take appropriate steps to correct that information with Centrelink and to disclose the full extent of their individual and combined income earned, received or derived through all sources.
3. Mr Sparkes on behalf of the Secretary highlighted a further example at T-Document T21/1090 where the "combined income" recorded on Centrelink's letter to Mrs Taleb was recorded as $22.86. Mr Sparkes submitted that this "must have rung alarm bells" for them. The Tribunal accepts this submission. The Tribunal considers that on the balance of probabilities Mr and Mrs Taleb knew that the amounts recorded on the letters from Centrelink as their "combined income" were incorrect, considering that Mr and Mrs Taleb (for most of the relevant period) were gainfully employed and that there were large sums of money, still unable to be explained, being deposited into their bank accounts.
4. One such "input" going into the fortnightly calculation of the rate of entitlements is the actual amount of income "earned, derived or received" each fortnight by Mr Taleb as a taxi driver, and by Mrs Taleb as a family day care educator. Another such "input" consisted of numerous cash deposits made into Mr and Mrs Taleb's bank accounts with CBA, ANZ bank and NAB between 20 July 2010 and 16 May 2017, which were not disclosed to Centrelink by Mr and Mrs Taleb. Once Centrelink became aware of those deposits, Mr and Mrs Taleb provided a satisfactory explanation to the ARO for some of the deposits and the ARO excluded them from the recalculation of the debt. However, the vast majority of those deposits were not able to be explained by Mr or Mrs Taleb, or their daughter. Centrelink, and the ARO, on review, appropriately treated them as additional "income" for the purpose of calculating their respective social security entitlements.
5. For these reasons, even if Mr and Mrs Taleb were able to establish that there had been an administrative error on the part of Centrelink in not detecting the overpayments at an earlier point in time and not advising Mr and Mrs Taleb of those errors or what they needed to do, the Tribunal is not satisfied that the debt arose solely on account of an administrative error by the Commonwealth. This is because the Tribunal finds that a significant reason why the debt arose is that Mr and Mrs Taleb failed to fully disclose their respective employment income and other income (in the form of cash deposits into their bank accounts which they are unable to explain), in circumstances where they had been advised in writing by Centrelink to do so on numerous occasions.
6. The Tribunal has found that Mr and Mrs Taleb either knew, or should have known, that the low figures recorded by Centrelink as their combined income in the letters being sent to them were incorrect, and they failed to take appropriate steps to contact Centrelink to correct those figures. The Tribunal does not accept Mr and Mrs Taleb's evidence that they did not read this part of the letter. Further, Mrs Taleb was advised in writing that she was required to declare her income from her work as an educator even if she did not have to lodge any tax returns in relation to that work. The Tribunal finds that despite that written advice, Mrs Taleb failed to make such disclosure to Centrelink.
7. The Tribunal does not accept Mr Taleb's submission that no one told him what he needed to do. Mr Taleb was receiving taxpayer-funded social security entitlements. If language or his level of literacy was a barrier, it was incumbent upon Mr Taleb to draw upon the resources available to him in the community, such as asking his adult children to read Centrelink's correspondence to him, to find out what his legal obligations of disclosure were in relation to receiving such entitlements.
8. The Tribunal concludes there is no basis under s 1237A of the Act to write off any part of the debts raised by the ARO against Mr and Mrs Taleb. The Tribunal has found that those debts are not attributable solely to an administrative error made by the Commonwealth. Further, and for the reasons set out above, the Tribunal is not satisfied that Mr and Mrs Taleb received those payments in good faith. On the balance of probabilities, the Tribunal finds that they knew they were receiving payments over a period of nine years to which they were not entitled.

Is discretion enlivened under s 1237AA of the Act to waive all or a portion of the debts?

1. Discretion will be enlivened under s 1237AA of the Act to waive all or a portion of the debt if each of the following requirements are met:

(a) the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation or failing or omitting to comply with a provision of this Act or the Administration Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.

1. Based on the findings of the Tribunal as set out in these Reasons for Decision, there is a real question about whether the Tribunal could be satisfied that the first of these requirements is met in the circumstances of this case. Irrespective of whether the Tribunal is so satisfied, the Tribunal has considered the submissions made by Mr and Mrs Taleb and Ms Hanaa Taleb, and the evidence, and does not consider that "special circumstances" existed in Mr and Mrs Taleb's case which warrant waiver of the debts or a portion of them.
2. Mr and Mrs Taleb consider that it is unfair to have to repay the debts and that this situation had caused them great distress. The Tribunal acknowledges that Mrs Taleb receives the DSP because she suffers from high blood pressure, heart and kidney problems, stress, a left leg condition and diabetes and that Mr Taleb has his own health conditions.
3. Ms Hanaa Taleb contends that the quantum of the debts is not reasonable, and her parents do not have any chance of being able to repay them in their entirety. Ms Hanaa Taleb told the Tribunal that in her religion, it was important for her parents not to owe any money when they die and suggested that Mr and Mrs Taleb would need to borrow money from others to repay the Centrelink debts before they die. Ms Hanaa Taleb also told the Tribunal that Centrelink had advised them that when her parents died, the remaining balance of these debts would be reduced to $0 and others would not need to repay them on her parents' behalf.
4. Mr and Mrs Taleb claim that they will be unable to repay the debt due to their living costs including food, bills, electricity, gas, water, the cost of medicine for Mrs Taleb and cigarettes (initially reportedly as $165 per fortnight for the cigarettes, but at the hearing Mr Taleb said that the cost of the cigarettes was about $100 to $120 presently).
5. The Tribunal notes that Mr and Mrs Taleb applied for and entered into an arrangement with Centrelink to pay off the debts by instalments at the rate of $50 per fortnight and subsequently, renegotiated to reduce those repayment instalments to $15 each per fortnight. The $15 per fortnight instalments are deducted from Mr and Mrs Taleb's social security entitlements, which they receive each fortnight. Mr Sparkes pointed out to the Tribunal that if Mr and Mrs Taleb continue to repay the debts based on $15 instalments per fortnight, that it will take them 166 years to repay the debts in full.
6. At the hearing, Mr Sparkes highlighted that Mr Taleb was presently receiving $1,000 per fortnight with the new job seeker payments and Mrs Taleb was receiving DSP (less Centrepay deductions made to pay for certain utility bills), being an amount of $780.11 per fortnight. When the Tribunal asked Mr Taleb at the hearing how much he was receiving from Centrelink, he said he was receiving $520 per fortnight. He had omitted to disclose the full amount of job seeker payments being made to him during the pandemic. The Tribunal asked if they were receiving any other entitlements to which he answered "No". This is incorrect. He was receiving $1,000 per fortnight in entitlements as indicated by Mr Sparkes. This was a further instance of Mr Taleb providing incorrect information to the Tribunal and in general, the Tribunal found Mr Taleb's evidence to be unreliable.
7. Mr and Mrs Taleb contend that financially they were "struggling" and that their adult children helped them financially, "a little bit". Mr and Mrs Taleb confirmed that they did not pay rent, as they owned their family home. On 26 May 2020 (after the hearing and at the request of the Tribunal), Ms Hanaa Taleb lodged with the Tribunal a bank statement for Mr and Mrs Taleb's "NAB 100% Offset Loan" account numbered xxx1588 for the period 7 January 2020 to 7 May 2020 showing monthly repayments made by Mr and Mrs Taleb of $300, and a closing (loan) balance as at 7 May 2020 of $11,811.56. There was no evidence before the Tribunal of any other mortgages over Mr and Mrs Taleb's home. They also own two motor vehicles. The first is a 2009 Holden Barina they estimate to be worth $3,500 and the second is a 2011 Ford FG Falcon they estimate to be worth $4,500.[17] There are no longer any dependant minors living under the care of Mr and Mrs Taleb.
8. The Tribunal does not accept that Mr and Mrs Taleb are experiencing financial hardship. They are close to owning their own home outright. Their eight children are now adults. Mr and Mrs Taleb are both in receipt of social security entitlements. They can still afford to pay $100 or slightly more each fortnight to pay for cigarettes. Importantly, though they are currently repaying the debt at a very modest amount of $15 each per fortnight. Even if that amount were to be increased by Centrelink to $50 each per fortnight, as they were paying before the Covid-19 pandemic, this is unlikely to shift them into a position of being in financial hardship.
9. The Tribunal acknowledges that the existence of these debts has caused and continues to cause distress to both Mr and Mrs Taleb. It is unfortunate that the overpayments were not detected much earlier. The Tribunal accepts that Mrs Taleb suffers from high blood pressure. However, the Tribunal must be satisfied that Mr and Mrs Taleb's circumstances are special, being unusual or out of the ordinary. The Tribunal considers that Mr and Mrs Taleb's situation is not special, out of the ordinary or unusual. For one, it is not uncommon for recipients of the DSP to have conditions that may heighten the distress experienced by having a large debt raised in their name if overpayments are made. However, Mr and Mrs Taleb have had the benefit of using the funds arising from these overpayments over the years and they have also been given permission presently to repay that debt by way of instalments which they can afford. The debts comprise payments to which they were not entitled to receive under the Act. Those payments would not have been made if appropriate disclosures had been made by Mr and Mrs Taleb over the years and they should repay those amounts to which they are not entitled.
10. For the above reasons, the Tribunal finds that "special circumstances" did not exist in Mr and Mrs Taleb's case that make it desirable to waive all or a portion of the debts and concludes that discretion to waive all or a portion of the debts does not arise under s 1237AA of the Act.

Is discretion enlivened to write off all or a portion of the debts under s 1236 of the Act?

1. The relevant provisions in s 1236 of the Act are set out above. In Mr and Mrs Taleb's case the debt is deemed to be recoverable because it is recoverable by means of deductions from both of their respective social security entitlements. There is no evidence before the Tribunal to suggest that those social security entitlements are not expected to continue. Accordingly, by application of the deeming provision in s 1236(1C) of the Act, Mr and Mrs Taleb's debts cannot be found to be "irrecoverable at law" and the Tribunal concludes that discretion under s 1236 of the Act is not enlivened in this case.

1. The Tribunal concludes that the debts as recalculated by the ARO have been correctly raised against Mr and Mrs Taleb and that the quantum of those debts are in the correct amounts. The Tribunal concludes that the debt should not be written off and that no discretion has been enlivened for the Tribunal to waive all or a portion of the debts.
2. Accordingly, the Tribunal affirms the Decision Under Review.

I certify that the preceding 91 (ninety-one) paragraphs are a true copy of the reasons for the decision herein of Member K. Parker

....................[sgd]..............................

[1] Refer T-Documents T20/896 & 900; T21/1282 & 1284. The original decision for Mr Taleb's CP was made on 3 July 2020 (refer T20/869), however, it was subsequently stated to be made on 4 July 2020. Nothing turns on this discrepancy. The T-Documents are a set of documents produced by the Secretary under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth).

[6] The Tribunal notes this statement by Mr Taleb is inconsistent with his representation made to Centrelink approximately six months earlier to the effect that he had been operating as a sole trader as a taxi driver on and off for the last 30 years - see paragraph [34(a)] in these Reasons for Decision.

[7] Refer paragraph [65] of these Reasons for Decision.

[8] This bank account is held jointly by Mr and Mrs Taleb.

[9] This bank account is held by Mr Taleb only.

[10] Refer T-Documents T11/324 & T10/201.