Abrahamse and Department of Family and Community Services

[2000] AATA 422

DECISION AND REASONS FOR DECISION [2000] AATA 422

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q1999/1167

GENERAL ADMINISTRATIVE  DIVISION       )       
           Re      PATRICIA ABRAHAMSE
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Dr EK Christie, Member    

Date22 May 2000

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.           

(Sgd)    EK CHRISTIE
  MEMBER
CATCHWORDS
SOCIAL SECURITY - Family Allowance - overpayment - whether overpayment received in good faith - whether appropriate to waive debt because of "special circumstances"

Social Security Act 1991 ss 1237A, 1237AAD
Re Beadle v Director-General of Social Security (1984) 6 ALD 1
Re Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Prince (1998) 152 ALR 127

ORAL REASONS FOR DECISION

22 May 2000           Dr EK Christie, Member                

1. This is an application for review of the decision of the Social Security Appeals Tribunal (the "SSAT") made on 7 October 1999 to raise and recover an overpayment of Family Allowance ("FA") made to Mrs Abrahamse over the period 14 January 1999 to 1 July 1999.  The SSAT affirmed a decision made by an Authorised Review Officer on 8 September 1999.

2. In its reasons for decision, the SSAT concluded that the debt due to the Commonwealth could not be waived because of "administrative error" as the overpayment had not been received in good faith, nor were there any "special circumstances" which would allow the debt to be waived.

3. The applicant represented herself at the hearing.  The respondent was represented by Mr N Foster, a Departmental Advocate.

4. At the hearing, the Tribunal had in evidence before it documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 – the "T" Documents (Exhibit 1).
   Issues before the Tribunal

5. The only issue for the Tribunal to decide was whether the debt could be waived under the "administrative error" and "special circumstances" provisions of the Social Security Act 1991.  The respondent conceded that the administrative error had solely been caused by the Commonwealth.  However, the issue in dispute, following this mistake, was whether the FA overpayments had been received in "good faith".
   Facts

6. Mrs Abrahamse acknowledged the following findings of fact made by the SSAT (Document T2 Folio 7):-

   "19.Mrs Abrahamse was in receipt of family allowance for one child in the period 14 January 1999 to 1 July 1999.

   20.On 7 December 1998, Centrelink sent Mrs Abrahamse a letter advising her that the income limit for one child was $66,403.00 and that she must advise within 14 days if her combined taxable income exceeded this limit.

   21.On 21 December 1998, Mrs Abrahamse telephoned Centrelink and advised that her combined taxable income for 1997/98 was more than the income limit, and requested that the allowance be cancelled.

   22.Centrelink failed to action her advice and continued payment at the former rate for the relevant period.

   23.Mrs Abrahamse was aware she was not entitled to any payment."

1. Mr Foster stated at the hearing that the correct adjusted amount for overpayment was $414.75.  Recovery of the debt had commenced.  The residual balance at the date of the hearing was $136.99.
   Contentions and Submissions of the Parties

2. Mrs Abrahamse said that she had always acted in "good faith" by advising Centrelink that her combined taxable income for the 1997/98 year exceeded the income limit for FA payment.  In addition, she had advised Centrelink in December 1998 to cancel further payments.  As a result, Mrs Abrahamse had no reason to believe that she would continue to receive FA over the period 14 January 1999 to 1 July 1999.  Furthermore, Mrs Abrahamse said that she had never received any written notification from Centrelink to confirm that she was still receiving FA payments of $11.85 per fortnight.

3. Mrs Abrahamse said that she was unaware that FA payments were paid into her bank account.  Income was deposited into this account from three sources – apart from FA – at irregular intervals, involving variable amounts of money.

4. Finally, Mrs Abrahamse contended that Centrelink could not prove she had known, or was reasonably expected to know, that she was being paid FA after she had notified them to cancel FA.

5. Mr Foster, for the respondent, stated that Mrs Abrahamse knew, or had reason to know, that she was not entitled to receive FA payments.  Centrelink had advised Mrs Abrahamse in December 1998 of the income limit for FA.  In addition, oral advice had been given to her.  Mrs Abrahamse was aware that she exceeded this limit.  The issue was not whether Mrs Abrahamse was unaware that the FA payments were being paid into her bank account – but the state of mind of Mrs Abrahamse in having reason, or reason to know, she was not entitled to receive FA.  Because of the written and oral advice given by Centrelink to Mrs Abrahamse, Mr Foster submitted that she had reason to know she was not entitled to FA and so the payments could not be said to have been received in "good faith".

6. Mr Foster contended that the overpayment could not be waived for "special circumstances" because Mrs Abrahamse did not meet the common law test for the circumstances in which the overpayment being made as being either "unusual", "uncommon" or "exceptional" and so producing a result unintended by the legislation.
   Consideration of Issues

7. The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times.  The relevant legislation is the Social Security Act 1991 ("the Act").

8. The first questions to be considered relates to the credibility of Mrs Abrahamse and the veracity of her account as to her dealings with Centrelink.  I accept Mrs Abrahamse acted honestly in all her dealings with Centrelink and her account to be consistent over time.

9. Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth may be waived:

   "SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
   1237A(1)        Administrative error.  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 one or more other factors (such as error by the debtor).

   SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES

   1237AAD       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 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. The first question to decide is whether the debt can be waived under the "administrative error" provisions (Section 1237A) of the Act. The Explanatory Memorandum to the 1996 Amendments to the Social Security Act best explain what this provision involves:

   "Under the existing subsection 1237A, debts that arise because of administrative error and which were received in good faith, must be waived.  This applies regardless of the financial circumstances of the debtor.  It is not considered appropriate to waive debts merely because the debt was caused by administrative error.  The amendment recognises that it is not appropriate that social security recipients should receive and retain more than they are legally entitled to, merely because the Department has made a mistake." (at page 136)

1. Justice Finn in Secretary, Department of Social Security v Prince (1998) 152 ALR 127 provided the following meaning of the term "good faith":-

   "…if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith.  Absent such knowledge or reason to know, the receipt would be in good faith."

1. The Tribunal concludes that whilst Mrs Abrahamse may have been unaware that FA payments were being paid into her bank account, nevertheless she would have had some knowledge that she was not entitled to the FA payment (see paragraphs 6, 11).  As a result, the Tribunal concludes that the FA payments were not received in "good faith" which means the debt cannot be waived under the "administrative error" provisions of the Act.

2. The next question for the Tribunal to decide is whether the debt can be waived under the "special circumstances" provisions (Section 1237AAD) of the Act.

3. The Tribunal has had to consider the meaning and application of the expression "special circumstances" on many occasions.  The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of "special circumstances".  In that case the Tribunal said (at 3):

   "An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

4. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on special circumstances and Section 1184 of the 1991 Act) at 545, Keifel J, after referring to the Federal Court's decision in Beadle, observed that special circumstances:

   "…would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case….It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary."

1. In Mrs Abrahamse's case, the Tribunal concludes that there are no facts which can be described as "special circumstances" because they are "unusual", "uncommon" or "exceptional" and have led to the unintended result of an overpayment of FA being paid to her.  This means the debt cannot be waived under the "special circumstances" provisions of the Act.

2. For all of the above reasons the Tribunal has no other discretion other than to affirm the decision under review.  This means the application by Mrs Abrahamse is unsuccessful.  The FA overpayment of $414.75 remains as a debt due to the Commonwealth which is to be recovered.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Emma Oettinger
  Associate

Date/s of Hearing  22.5.00
Date of Decision  22.5.00
Rep. for the Applicant              Applicant appeared in Person
Solicitor for the Respondent    Mr N Foster, Departmental Advocate