Ayoub and Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2001] AATA 381

ADMINISTRATIVE APPEALS TRIBUNAL )

)No N2000/467 and N2000/469

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

DECISION

Tribunal DR J D CAMPBELL, Member

Date9 May 2001
PlaceSydney

Decision The Tribunal determines that the decision under review be affirmed.

[sgd] Dr J D Campbell
Member
CATCHWORDS
Social Security - disability support pension - pensioner education supplement - failure to notify - disputes notification - over payment - debt - administrative error - good faith - special circumstances - waiver

Social Security Act 1991, sections 23, 132, 133, 1158, 1162, 1223, 1224, 1237A, 1237AAD

Re Van Brummelen & Department of Social Security (1995) 37 ALD 729
Re Beadle and Department of Social Security (1984) 6 ALD 1
Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127
Hales v Secretary, Department of Social Security (1998) 92 FCR 254

REASONS FOR DECISION

DR J D CAMPBELL, MEMBER

In this Application, Mr Joseph Ayoub ("the Applicant") seeks a review of the decision of the Social Security Appeals Tribunal ("SSAT") dated 8 March 2000, which affirmed the decision of a delegate of the Secretary, Department of Family and Community Services ("the Respondent") dated 2 November 1998 to raise and recover a debt of $1080 for an overpayment of disability support pension ("DSP"). While affirming the decision of a delegate of the Secretary, Department of Family and Community Services dated 11 November 1998 to raise and recover a debt for overpayment of the pensioner education supplement, the amount of debt owing was varied to $600. The latter two decisions were subject to review by an authorised review officer and in a decision dated 26 February 1999 the debt arising from overpayment of disability support pension was affirmed. In a decision dated 19 November 1999, the debt arising from overpayment of pensioner education supplement ("PES") was also affirmed.
A hearing was held before the Tribunal on 12 January 2001 at which the self represented Applicant presented oral evidence. The Respondent was represented by Mr Kenny, an advocate for the advocacy and administrative law team at Centrelink. Further material was provided to the Tribunal after the close of the hearing in relation to the Applicant's particular medical circumstances. A list of the Applicant's custody dates was received from the Department of Corrective Services on 5 February 2001.
The following written material was placed into evidence before the Tribunal:
Exhibit no                   Description      Date
T1-T47 pp1-123 Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
A1      Bundle of documents from the Applicant including a letter from the Applicant to Centrelink and letter from the Applicant to Austudy Wollongong together with fax verification documents   18 July 1998 and    18 July 1998
A2      Medical report Dr Roberts 21 August 2000
R1      Respondent's Statement of Facts and Contentions     8 December 2000
R2      Payment history of DSP to Applicant
R3      Recovery history for overpayment of DSP to Applicant
R4      Recovery history for overpayment PES to Applicant
R5      Payment details of DSP to Applicant      9 January 2001

isssues

The relevant issues in this matter are whether:

(a) the decision to raise and recover a debt arising for overpayment of DSP was correct; and

(b) whether the decision to raise and recover a debt arising from overpayment of PES was correct.

legislation

The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 23, 132, 133, 1061, 1158, 1162, 1223, 1224, 1237.
background
The Applicant was born on 11 May 1977, lodged an application for DSP on 13 July 1993 and was granted DSP from that day. The Applicant also lodged an application for continuing Austudy on 11 November 1997 (T4). On 28 April 1998 the Applicant was advised of his DSP payment and pursuant to sections 132 and 133 of the Act was notified that he must inform the Respondent within 14 days if he was charged with an offence and in custody or remand, or in goal after being convicted of an offence, or in a psychiatric institution (T7). Similar letters were sent to the Applicant by the Respondent on 1 May 1998 and 10 June 1998 and similar notification requirements were nominated (T8, T9).
In 1 July 1998 PES became payable to the Applicant under the Social Security Act 1991. On 16 July 1998 the Applicant was admitted to prison (T29, p70), with a data matching exercise by Centrelink Services Records suggesting the same on 3 September 1998 (T10, p47-8). On 17 September 1998 the Applicant phoned Centrelink stating that he had been released from prison on 15 July 1998. Centrelink staff confirmed with Corrective Services Authorities that the Applicant was still in prison (T12, p51). On 19 September 1998 the Applicant was remanded on bail (T37, p98) and readmitted to custody on 20 September 1998 (T37, p98). On 25 September 1998 bank records indicate a withdrawal of $1000 from the Applicant's pension account, with a further $540 being withdrawn on 28 September 1998 (T22, p68).
On 2 November Centrelink notified the Applicant of a DSP overpayment and resulting debt of $1080 for paydays 6, 20 August and 3 September 1998. In a letter to Centrelink dated 16 November 1998 the Applicant disputed the issue of the debt, indicating that the letter of 2 November 1998 had required redirection as he was not in prison at that time (T11, p49). The Respondent noted that Correctional Service Authorities had confirmed the Applicant was being held on remand at the Medical Transit Centre Long Bay on 10 November 1998 (T14, p53).
On 12 November 1998 a Centrelink Student Assessment Centre raised a debt of $552.86 due and owing by the Applicant, with the debt arising from overpayment of PES for the period 1 July 1998 to 6 November 1998 (T90, p109).
On 16 December 1998 the Applicant is recorded as having phoned Centrelink stating that he had been released from remand and that he wished to apply for DSP (T17, p57-8). An application form was forwarded on 6 January 1999 (T18, p59-60).
On 12 January 1999 a Centrelink delegate confirmed the DSP debt (T20, p63-4). On 17 January 1999 the Applicant wrote to Centrelink disputing the debt (T21, p65) and enclosed a Corrective Services discharge certificate, which indicated that the Applicant had been admitted on 16 July 1998 and released on bail on 5 August 1998 (T37, p93). The Department of Corrective Services confirmed on 9 February 1999 that the Applicant was still in prison and that the discharge certificate was not authentic (T24, p71). The authorised review officer confirmed the DSP debt of $1080 on 26 February 1999 (T27, p74) and the SSAT in a decision dated 8 March 2000 (T3).
On 13 October 1999 the Applicant requested a review on the PES debt on the grounds of financial hardship. A Centrelink delegate declined to waive the debt on 27 October 1999. On further review this decision was affirmed by the authorised review officer on 19 November 1999 (T43, p115). The SSAT on 8 March 2000 affirmed the decision in relation to the issue of the debt owed by the Applicant for overpayment of PES but increased the quantum of the debt to $600 because of incorrect calculation in the earlier decisions.
applicant's evidence
The Applicant informed the Tribunal of particulars relating to his psychiatric history and the requirement of his current psychiatrist Dr Roberts that he see him on a weekly basis and continue with his medication. The Applicant also stated that while he was in prison he spent a lot of time in the Long Bay Hospital, where he was seen by the psychiatrist twice a week.
On admission to prison the Applicant stated that as part of the process each prisoner was asked by the screening officer about issues relating to health, finances and payments being received from Centrelink. As part of this process the Applicant stated that a welfare officer named "Bob" would send the necessary letter to Centrelink regarding his DSP and PES Payments. Further the Applicant said that to be on the safe side he sent both a letter and a fax to Centrelink at Bankstown and Austudy at Wollongong on 18 July 1998, and provided copies of those letters and transmission reports indicating that the reports demonstrated that the faxes were sent from the Silverwater Detention Centre on 18 July 1998. The Applicant stated that he felt it necessary to send such correspondence as he could not necessarily rely upon Corrective Services to have made the necessary notifications. The Applicant also stated that he did ring Centrelink from time to time.
The Applicant stated that he understood the overpayments had been picked up by the data matching exercise on 3 September 1998 and that the DSP payments were cancelled immediately but the PES payments were not ceased until 4 November 1998. The Applicant further stated that his health at this point of time was not good, that he was experiencing psychiatric episodes and that he was transferred for assessment to the Long Bay Hospital. The Applicant recognised that overpayments had occurred.
The Applicant told the Tribunal that he had an account with the National Australia Bank into which the DSP and PES payments were made, and that an analysis of the account reveals withdrawals of significant amounts of money on 25 and 28 September 1998. The Applicant said that at these times he was in prison and did not authorise such withdrawals.
In response to questions asked in cross examination the Applicant stated that he had carried through the notification requirements to both Centrelink and Austudy as evidenced by the letters of 18 July 1998, he being admitted into custody on 16 July 1998. In relation to the conversation that is recorded by way of a file note at T41, p12 and which is recorded as having occurred on 19 November 1999, the Applicant denies any knowledge of the contents of a phone call between himself and Centrelink which is reported at pp57-60 of the T-documents as having taken place on 16 December 1998. Further, the Applicant indicated that he did not wish to make any comment on the discharge certificate which was attached to his letter to Centrelink on 17 January 1999 (T21, p65).
medical evidence
The Applicant indicated to the Tribunal that he had been troubled with episodic psychiatric illness and that he had been subject to assessment and treatment since age 14 or 15. He had attended Glenfield Park Special School for some years and had been granted DSP in 1993. The Applicant brought before the Tribunal a bundle of medical reports which detailed a history of significant psychiatric illness and other sequelae. His treating psychiatrist, Dr Roberts, in his report of 21 August 2000, having reviewed a number of earlier psychiatric and psychological reports detailed the following summary and opinion:
"Mr Joseph Ayoub has been variously labelled as being developmentally delayed and psychotic. In terms of his intellectual capacity I would suspect that while not intellectually bright, his I.Q level may be somewhat higher than assessment to date has indicated.
I believe his dysfunction is primarily the result of psychosis.
I am of the view that Mr Ayoub is suffering from a Paranoid schizophrenic illness in which he has delusions of grandeur and persecution, that he sees himself as the centre of a conspiracy in which police and to a lesser extent the Government are operative; he at one point makes reference to knowing what the police have in mind and what they have in their mind is to "load me up".
I am of the view that Mr Ayoub's actions in his life are determined not by matters relating to reality but are determined by perceptions held by him that arise out of his psychotic autistic fantasy world in which he sees himself in a somewhat grandiose manner as being the victim of a wide-spread conspiracy involving primarily the police. " (Exhibit A2)

other evidence

In a letter from the Department of Correctional Services to the Applicant dated 30 January 2001, the Applicant is detailed as being in custody on four separate occasions in 1988 and 1999. These are detailed as:

Admitted Released on bail
4 June 1998 3 June 1998
1 July 1998    10 July 1998
16 July 1998 19 September 1998
20 September 1998 6 October 1999

Documents provided by the Department of Corrective Services indicate that the Applicant was admitted from Court to Metropolitan Remand Centre A on 16 July 1998. On the same day, 16 July 1998, he was transferred from Metropolitan Remand Centre A and admitted to Long Bay Hospital, where he remained until 24 July 1998 at which time he was transferred and admitted to the Remand Centre

submissions

The Applicant contended that there were particular issues which should be considered in this matter. In recognising that the overpayment of both DSP and PES had occurred the Applicant admitted that such overpayments had arisen through sole administrative error on the Respondent's part. In this regard the Applicant indicated that the Respondent should have been notified of his admission to prison as part of the prison process – a process in which he detailed his Centrelink payments to a welfare officer who undertook to make such a notification. The Applicant further enforced his argument by stating that he sent letters and a fax to both Centrelink and Austudy on 18 July 1998, evidenced by the letters and faxes being contained within written material before the Tribunal. The Applicant further contends that in relation to PES, the failure to cease such payments by the Respondent was a sole administrative error in that the Respondent had knowledge of his custodial situation on 3 September 1998, as a consequence of a data matching activity with the Department of Corrective Services, and cancelled his DSP as of that day, but for whatever reason did not cancel his PES until 4 November 1998.
The Applicant contended that as regards the receipt of any overpayments recorded in his National Australia Bank Account, he was unaware of both the receipt and expenditures made from that account, until after his release in October 1999.
The Applicant further submitted that if such overpayments are considered debts, such debts should be waived as a consequence of special circumstances. In this regard the Applicant contends that his psychiatric conditions, his financial circumstances and his absence of knowledge as to how the withdrawals of the overpayments from his National Australia Bank account occurred constitute unusual and uncommon circumstances.
respondent
The Respondent contended that the overpayments of DSP and PES resulted from a failure by the Applicant to notify the Respondent within 14 days of imprisonment. In this regard the Respondent did not accept that the letters and fax dated 18 July 1998 written by the Applicant to both Centrelink and Austudy are genuine.
The Respondent further contended that the overpayments are debts due and payable by the Applicant pursuant to ss 1223(1), (5) and 1224(1), as with both amounts the Applicant had failed to comply with a provision of the Act.
The Respondent submitted that any PES payment received after 3 September 1998 could not have been received in good faith by the Applicant, despite any administrative error contributing to the overpayment.
The Respondent further contended that the Applicant's circumstances do not constitute special circumstances and hence the debt cannot be waived pursuant to s1237 AAD of the Act.
considerations and findings
This is an unusual matter, in that there is so much written documentation of the Applicant's purported intellectual impairment and his complex psychiatric condition. In relation to the purported intellectual impairment, the Tribunal can and does comment that the Applicant conducted his own representation in an effective and articulate manner, which was not consistent with an intellectual impairment. More so the Tribunal found the Applicant was able to both follow and rebut points of contention with lucid and informed comment, and where there were apparent difficulties demonstrated sufficient common sense and shrewdness not to venture comment. The Tribunal in noting that the Applicant stated that he was studying law at the Australian National University, considers that the Applicant has a significant psychiatric long term condition as evidenced by the many reports placed before the Tribunal by the Applicant. Further, the Tribunal had to adjourn the hearing for some 50 minutes as a consequence of the Applicant sitting at the table and not responding to stimuli from those around him. The Tribunal also noted that upon wakening from a "fugue like episode", the Applicant after a period of walking outside the Tribunal, returned refreshed and more articulate than ever.
In further considering the matter the Tribunal does find that the Applicant does suffer from a significant psychiatric condition as best described by his treating psychiatrist, Dr Roberts. The Tribunal notes the weekly counselling sessions and medication prescribed for the Applicant. As a further comment, the Tribunal is surprised that neither the purported intellectual impairment or the psychiatric condition figured to any extent in the consideration of this matter by either the early decision makers or the SSAT, despite the fact that the Applicant's medical evidence for which he was granted DSP was a psychiatric condition.
Further, the Tribunal notes the Applicant recognises that overpayments of DSP and PES have occurred, and in this regard does not contest such overpayment issues, arguing however that such overpayments were in the first instant a result of sole administrative error.
In considering all the evidence placed before it, the Tribunal makes the following findings of fact in relation to DSP payment:

(a) the Applicant had been receiving disability support pension since July 1993;

(b) Centrelink wrote to the Applicant on 28 April, 1 May and 10 June 1998 and advised the Applicant of his requirement to notify Centrelink within 14 days if he was "charged with an offence and in custody or remand; or in goal after being convicted of an offence or in a psychiatric institution";

(d) the Applicant was transferred from and admitted to the Long Bay Hospital on 16 July 1998 where he remained until transferred from Long Bay Hospital and admitted to the Remand Centre on 24 July 1998;

(e) the Applicant's letter of 18 July 1998, nominated that he was in Silverwater Correctional Centre and the fax report of the same day is inconsistent with the Correctional Services Records nominating that on 18 July 1998 the Applicant was in Long Bay Hospital;

(f) the Applicant, while alluding to the letter and fax of 18 July 1998 at the SSAT, did not produce the letter or fax report to that Tribunal, with the letter and fax report being placed in evidence for the first time before the Tribunal. The issue of the letter and/or fax report had not been raised by the Applicant in any of the earlier review processes concerned with this matter; and

(g) the Applicant understood that he was not entitled to payment of DSP while in prison.

In considering further the issue of whether the Applicant notified the Respondent of his imprisonment within 14 days, the Tribunal, as a consequence of the earlier finding of fact, finds that the Applicant did not do so, as the date and place of the letter and fax report of 18 July 1998 are inconsistent with his then place of imprisonment. Further the Tribunal, while noting that the Applicant stated that the welfare officer was going to notify Centrelink on 16 July 1998 of the Applicant's imprisonment, is unable to rely on the validity of such evidence, in the light of the Applicant's conduct and circumstances at that time. In this regard the Tribunal notes that the Applicant was experiencing a psychiatric episode which required his admission to Long Bay Hospital and that actions thereafter by the Applicant for the next few months seemed to be contrary to the Applicant's actual situation as exampled by the telephone calls and the discharge certificate.

In relation to the issue of PES payments, the Tribunal makes the following findings of fact:

(a) the Applicant was receiving PES payments when admitted in remand on 1 July 1998;

(b) the Applicant received $60 a fortnight PES payments up to 4 November 1998;

(c) a data matching scheme activity with the Department of Corrective Services revealed that the Applicant was in prison on 3 September 1998;

(d) that the Applicant was notified in letters as nominated in paragraph 31 of this decision of his requirement to notify Centrelink within 14 days of particular circumstances occurring;

(e) the Applicant's letter and fax report of 18 July 1998 is inconsistent with his then place of lodgement for the reasons stated in paragraph 31 of this decision; and

(f) the Applicant failed to undertake the notification requirements within 14 days for the reasons nominated in paragraph 32 of this decision.

statutory framework

In relation to the issue of overpayment of the disability support pension for the pay periods 6 and 20 August and 3 September 1998, the following statutory framework is defined:
(a) section 23(5) of the Act defines when a person is in gaol. There is no argument between the parties that the Applicant was in goal commencing 16 July 1998;
(b) section 1158(1) of the Act states that a social security pension other than a pension PP (single) is not payable to a person on a pension payday if on that payday the person is in goal, provided the payday is not the first or last payday of the period of imprisonment. The Tribunal concludes that the Applicant was entitled to payment on 23 July 1998, but not thereafter, namely 6 and 20 August and 3 September 1998; and
(c) subsections 132(1), 133(1) and 133(2) of the Act define the notification power of the secretary in relation to requiring a DSP recipient to furnish particular nominated information. The Applicant was provided with three such notices, and the Tribunal has concluded earlier in the decision and for the reasons stated that the Applicant did not fulfil these requirements, within the required time.
The Tribunal, having established that an overpayment has occurred relating to the payment of DSP for paydays 6 and 20 August and 3 September 1998 and that this overpayment occurred because the Applicant no longer qualified for payment for the periods and that the overpayment occurred because the Applicant failed to carry out his notification duty, that is failed to comply with a provision of the Act, finds that such overpayment is a debt due and owing by the Applicant, pursuant to subsections 1223(1), 1223(5) and 1224(1) of the Act.
In considering the issue of overpayment of the PES for the period 1 July 1998 to 4 November 1998, the following statutory framework is defined:
(a) subsection1162A of the Act states that PES is not payable while an individual is in goal or receiving psychiatric confinement because the person has been charged with committing and offence. The Tribunal notes that as the Applicant was in goal as from 1 July 1998, the Applicant was not entitled to payment of PES on payday 3 July 1998, the payment on that day being in arrears for the previous fortnight, and there after while still in prison; and
(b) subsection1061PZX of the Act determines that when a PES is not payable, the pension is to be suspended or cancelled;.
(c) subsection132(1) and ss133(1) and (2) of the Act authorise the Secretary to issue notification letters instructing the receiver to respond with particular information upon occurrence of a nominated event within 14 days. The Tribunal has already considered this issue and found that the Applicant failed to respond within the 14 day time frame, notifying that he was in prison; and
(d) subsection1061 PZZC(1) of the Act defines the day on which the adverse determination is to take effect. SS1061 PZZC(4) stipulates that where an individual has contravened a provision of the Act and this has caused a delay in the determination, the determination takes effect on the day nominated in the determination, (such a day may be earlier than the day on which the determination is made).
In considering the earlier finding of facts against the statutory framework, the Tribunal concludes that the Applicant was under a duty to notify of his imprisonment and that he failed to do so; that he was not entitled to payment of PES commencing with the pay day 3 July 1998 and continuing to November 1998: that payments were made and constitute overpayments of benefits from and including the pay day 3 July 1998; that this amount is $600, and that the determination to make effective the date of such a determination is in accord with section 1061 PZZC of the Act.
The Tribunal having found that overpayment of PES has occurred, further finds that such an overpayment constitutes a debt due and payable by the Applicant pursuant to subsection 1223(1) of the Act in that he no longer qualified for the payment, subsection 1223(5) of the Act in that he had received more payment than entitled and subsection 1224(1) in that he had failed to comply with a provision of the Act (failure to notify).
administrative error
Section 1237A(1) of the Act states that a debt must be waived if a debt is attributable solely to administrative error made by the Commonwealth and if the debtor has received in good faith the payments that give rise to the debt.
In considering the DSP debt, within the findings the Tribunal has already made and in particular the findings in relation to the Applicant's failure to notify of his imprisonment within 14 days, the Tribunal finds that there is no evidence of sole administrative error in relation to the issue of the DSP debt.
In relation to the PES debt the Tribunal notes that the Respondent was made aware of the Applicant's imprisonment on 3 September 1998 and that no action was taken to cancel PES payments until 4 November 1998. The Tribunal finds that payments made from 3 September 1998 to 4 November 1998 were payments made in error and responsibility rested solely with the Respondent for the administration error. Nevertheless, although the issue is clouded with the Applicant's difficulties associated with the operation of the account, the Tribunal is satisfied that the Applicant knew he was not entitled to such payments of PES once he was in gaol, and while he may have had some concerns about the withdrawals from his account in late September 1998, these concerns came at the time of his release, when he believed he would have funds in his account to expend. The Tribunal concludes that the Applicant did not receive such payments in good faith as he knew he was not entitled to them (Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127) considered and followed). In conclusion the Tribunal finds that that portion of the PES overpayment arising from sole administrative error cannot be waived because the Applicant did not receive such payments in good faith.
In turning to the issue of special circumstances, the Tribunal notes the essential words of Toohey J in Re Beadle and Department of Social Security (1984) 6 ALD 1, that circumstances must be unusual, uncommon or exceptional for them to be considered "special circumstances". In this matter the Tribunal notes the particulars of the Applicant's circumstances and primarily those of a difficult adolescence, a period of boarding at the Glenfield Park Special School, the untoward episodes that occurred at that school and the continuance of a psychiatric disorder over the ensuing years, for which the Applicant was granted a DSP in July 1993. The Tribunal has already considered the issue of intellectual impairment and found that the Applicant's performance and articulate and at times skilful behaviour at the hearing was more congruent with an individual not suffering intellectual impairment. Nonetheless the Tribunal, in acknowledging the opinions of Dr Roberts and other psychiatrists and psychologists whose opinions were introduced into evidence, does recognise that the Applicant lives often in a world of his own creation and a world that he believes in and one which may be removed from the real world. Despite this recognition the Tribunal finds that as far as the issues in this matter are concerned the Applicant is able to separate the "do's and do nots". In the Tribunal's view the Applicant knew that he was not entitled to social security payments while in prison, as he accepts an overpayment did occur. The Tribunal also notes that the Applicant received psychiatric care soon after his admission to the prison at the Long Bay Hospital and for continuing periods thereafter. The Applicant would appear to have tried to obfuscate circumstances in which he found himself by making unusual if not confusing telephone calls and creating a discharge certificate, all of which could and were clarified by the Respondent by the making of a telephone call to clarify the situation. In this regard, the Tribunal considers that such actions by the Applicant may be part and parcel of his underlying psychiatric condition.
In considering all the evidence relating to his health condition, his financial and domestic circumstances, the Tribunal concludes that they do not constitute "special circumstances" and accordingly neither debt can be waived pursuant to section 1237 of the Act.
determination
The Tribunal determines that the decision under review be affirmed.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of DR J D CAMPBELL, Member
Signed:         .....................................................................................
  Associate
Date/s of Hearing  12 January 2001
Date of Decision  9 May 2001
Counsel for the Applicant        Self-represented
Solicitor for the Respondent    Mr J Kenny

[2001] AATA 381

9 May 2001

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Administrative Error

Judicial Review

Standing

Compensatory Damages