Jonathon Van Kleef v The Chief Executive of The Ministry of Social Development Hc Wn

• Jurisdiction: New Zealand
• Judge: Williams J
• Judgment Date: 01 March 2013
• Neutral Citation: [2013] NZHC 387
• Docket Number: CIV-2012-485-2135
• Court: High Court
• Date: 01 March 2013

BETWEEN

In the matter of an appeal by way of case stated from the determination of the Social Security Appeal Authority at Wellington under's 12q of the Social Security Act 1964

Jonathon Van Kleef

Appellant

and

The Chief Executive of the Ministry of Social Development

Respondent

[2013] NZHC 387

CIV-2012-485-2135

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Appeal from Social Security Appeal Authority decision in relation to repayment of benefit amounts allegedly overpaid to applicant — ACC advised WINZ that applicant was entitled to backpayment of ACC weekly compensation for the period applicant was in receipt of WINZ benefits — review found that the applicant's combined income from benefits and ACC back-payment exceeded ceiling for entitlement and amount should be repaid — applicant complained of differential treatment of his ACC back payment by IRD and WINZ which increased his tax liability — Authority held applicant's circumstances were no different from every other beneficiary receiving lump sum for backdated payment of weekly earnings related compensation — because it was not a “rare and unusual” situation, Authority declined to direct Chief Executive under s86(1) Social Security Act 1964 (“SSA”) (recovery of payments in excess of authorised rates) to take no steps to recover over payments — whether s81 SSA (review of benefits) allowed for retrospective review — whether the Authority applied correct test when declining to direct Chief Executive not to recover the overpayments.

Counsel:

Mr Van Kleef in person

T I Hallett-Hook for Respondent

JUDGMENT OF Williams J

1 For most of the period from February 2010 to February 2011 Mr Van Kleef received a sickness benefit and an accommodation supplement. He also received temporary GST assistance — special assistance reflecting the then recent increase in GST from 12 ¹/₂ per cent to 15 per cent — from the period October 2010 to February 2011.

2 In February 2011, ACC advised WINZ that Mr Van Kleef was entitled to backdated weekly compensation from ACC covering the period during which Mr Van Kleef was in receipt of his various WINZ benefits. I understand that the backdated ACC payments amounted to $17,501.50. For the same period $8,400.50 was paid to him by way of sickness benefit, $1,954.29 by way of accommodation supplement and $66 in GST assistance.

3 WINZ reviewed Mr Van Kleef's entitlements and found that all overpayments should be recovered. WINZ recovered directly from ACC the amount of the sickness benefit paid but there is no statutory basis upon which it can retrieve directly from ACC the accommodation supplement and GST assistance payments. The accommodation supplement and GST assistance could not be recovered under's 252 because, unlike the sickness benefit, they are not income tested benefits.

4 The Chief Executive then decided to review those two benefits pursuant to the general review power contained in s 81 of the Social Security Act 1964. The review was undertaken and because the Chief Executive took the view that Mr Van Kleef's combined income from benefits and ACC back-payment for the relevant period exceeded the ceiling for entitlement to accommodation supplement and GST assistance, the amounts paid over the relevant period should also be repaid dollar for dollar. Mr Van Kleef was asked to sign a form authorising ACC to repay this remaining money directly to WINZ but he declined to so sign.

5 Instead he took the matter to an internal review where the Chief Executive's decision was upheld, then a formal review before the Benefits Review Committee (BRC) which again upheld the Chief Executive's decision on 12 April 2012. The matter then went to the Social Security Appeal Authority (SSAA). The Authority also upheld the Chief Executive's decision. The Authority concluded that:

• (a) section 81 of the Social Security Act entitled WINZ to review retrospectively the payments to Mr Van Kleef by way of accommodation supplement and GST assistance;

• (b) the ACC payments made were income for the purpose of assessing his entitlements to the accommodation supplement;

• (c) there had been overpayment as a matter of fact; and

• (d) there were no facts upon which the Chief Executive should grant Mr Van Kleef relief from recovery.

6 Mr Van Kleef now appeals pursuant to s 12Q of the Social Security Act. The Authority has posed the following four questions of law:

• (a) Did the Authority err in law in its interpretation of s 81 of the Social Security Act 1964 when it concluded that the Chief Executive was entitled to conduct a hindsight review of the appellant's benefit entitlements?

• (b) Did the Authority err in law when it concluded that the appellant's ACC payments should be treated as income when assessing his entitlement to the Accommodation Supplement?

• (c) Was there any evidence on which the Authority concluded that there had been an overpayment of Accommodation Supplement?

• (d) Did the Authority err in law when it determined that it was inappropriate to direct the Ministry not to take steps to recover overpayments of Accommodation Supplement and Temporary GST Assistance under's 86(1) or s 86A of the Social Security Act 1964?

7 For completeness, I note that Mr Van Kleef resides in Canterbury and could not travel to Wellington for the appeal hearing. He asked that arguments be heard by way of teleconference — he was apparently too unwell even to travel to the nearest District Court for an audiovisual link up — and with the consent of counsel of the Chief Executive, I agreed that we proceed on that basis. I turn now to the questions.

Question 1: Does s 81 allow for retrospective review?

8 Section 81 gives the Chief Executive the power to review any benefit in order to ascertain: 1

• (a) whether the beneficiary remains entitled to receive it; or

• (b) whether the beneficiary may not be, or may not have been, entitled to receive that benefit …

9 Having undertaken the review, if the Chief Executive concludes that the beneficiary “was not entitled to receive the benefit”, he or she may “suspend, terminate, or vary the rate of the benefit from such date as the Chief Executive reasonably determines”. 2

10 The answer to the question has been authoritatively resolved by the Supreme Court in Arbuthnot v Chief Executive of Department of Work and Income 3 in which the court held that the Chief Executive had: 4

… the ability to look backwards and to determine whether an overpayment has been made in the past. The Chief Executive is no longer limited to making adjustments going forward from any change of circumstances, but may “reasonably determine” the date from which any adjustment should take effect. Consistently with the scope of the enlarged review power, an adjustment to a decision taken within the Department may be effected retrospectively where appropriate.

11 See also the earlier decision of this court in M v Chief Executive of Department of Work and Income to the same effect but directly in respect of ACC payments. 5

12 Mr Van Kleef seems also to argue that the ACC backdated payments are not income to which s 64 of the Act should apply. Although not strictly within the terms of Question 1, Mr Hallett-Hook has raised the matter in this context and I simply record that I agree. I rely on the Court of Appeal authority in Goh v Chief Executive of Ministry of Social Development 6 referring to the High Court decision in that appeal to the effect that the date upon which payment is made is not relevant under the section. What is relevant is the date or dates during which the income was earned.

13 The answer to Question 1 is yes.

Question 2: Were the ACC payments income?

14 Income, understandably, is very broadly defined in the Social Security Act. Section 3, the definition section, defines income in these terms:

• (a) means any money received or the value in money's worth of any interest acquired, before income tax, by the person which is not capital (except as hereinafter set out) and;

• (b) includes, whether capital or not and as calculated before the deduction (where applicable) of income tax, any periodical payments made, and the value of any credits or services provided periodically, from any source for income-related purposes and used by the person for income-related purposes.

15 Clearly ACC weekly payments are both money received which is not capital under paragraph (a) and periodical payments for income-related purposes in terms of paragraph (b).

16 The answer to Question 2 is yes.

Question 3: Was there an evidential basis upon which the Appeal Authority could conclude there has been an overpayment of the accommodation supplement?

17 A no answer to this question requires the relevant finding of fact by the...