Barnes; Secretary, Department of Employment and Workplace Relations and

[2007] AATA 1220

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1220

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2006/534

GENERAL  ADMINISTRATIVE  DIVISION

)

           Re          SECRETARY, DEPARTMENT

  OF EMPLOYMENT and   WORKPLACE RELATIONS    

Applicant

And        MELISSA BARNES

Respondent

DECISION

Tribunal Mr R G Kenny, Member

Date12 April 2007 

PlaceBrisbane

Decision

The Tribunal:

1.    affirms the decision under review in relation to the compensation affected payments in the period from 11 November 2005 until 14 February 2006;

2.    affirms the decision under review to raise a debt of $3,605.67 for the period from 12 June 2002 until 10 November 2005; and

3.    varies the decision under review in relation to waiver of the debt so that the only debt that is waived is that in the amount of $155.56 which relates to the period from 20 February 2003 until 3 July 2003. 

…………[Sgd]…………  
  RG Kenny

Member

CATCHWORDS

SOCIAL SECURITY – parenting payment – failure to notify changes in the level of compensation payments – overpayment of parenting payment – debt due to the Commonwealth – waiver of part of debt attributable solely to Commonwealth error – no special circumstances to enable remainder of debt to be waived – observations on absence of good faith

Social Security Act 1991 (Cth) ss 17, 1068B, 1174, 1223, 1237A, 1237AAD
Administrative Appeals Tribunal Act 1975 (Cth) s 40(1)(b)

Social Security (Administration) Act 1999 (Cth) s 68

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

12 April 2007     Mr RG Kenny, Member

Application

1.      From May 2002 until February 2006, Melissa Barnes (the respondent) received income support payments under the Social Security Act1991 (the Act) in the form of parenting payment.  The rate of that payment was dependent upon the income of her husband.  This comprised compensation payments relating to a workplace injury in 1999 from the Department of Veterans’ Affairs (DVA compensation payments), superannuation payments (Comsuper payments) and income from a period of his employment at the Southbank Hotel and Convention Centre (Southbank income). 

2.      Mr Barnes’ Comsuper payments ceased on 10 November 2005.  He then received an increased DVA compensation payment for the period to 14 February 2006 and this included a lump sum, paid on 26 January 2006, for arrears that were owed to him from 11 November 2005.  On 28 February 2006, a Centrelink officer determined that Mrs Barnes had been overpaid in respect of her parenting payment in the period from 10 November 2005 until 14 February 2006.  That decision was affirmed by an Authorised Review Officer with Centrelink on 4 April 2006 and sent to Mrs Barnes on 18 April 2006.  The Social Security Appeals Tribunal (the SSAT) affirmed the decision on 23 June 2006. 

3.      When reviewing the original decision, the Authorised Review Officer also determined that, in the period from 12 June 2002 until 10 November 2005, Mrs Barnes had been overpaid in respect of her parenting payment because the full amount of DVA compensation payments had not been taken into account in its calculation.  An overpayment of $3,605.67 was raised as a debt due by her to the Commonwealth.  However, an amount of $155.56 was waived in respect of the period from 20 February 2003 until 3 July 2003 because of error by Centrelink in the calculation of the level of parenting payment during that period.  Accordingly, the raised debt was reduced to $3,450.11.

4.      In its review of that decision, the SSAT affirmed the decision to raise the debt of $3,605.67 and to waive the component of it from 20 February 2003 until 3 July 2003.  However, the SSAT also waived the debt for additional periods from 9 July 2002 to 17 September 2002, from 2 October 2002 until 19 February 2003 and from 18 October 2003 until 1 July 2004.  This had the effect of reducing the recoverable debt to $2,586.87. 

5.      On 2 August 2006, the Secretary to the Department of Employment and Workplace Relations (the applicant) sought review of those decisions by the Administrative Appeals Tribunal (the Tribunal). 

Hearing

6. Mrs Barnes did not attend the hearing. She advised that she did not wish to do so. Ms Oliver appeared for the applicant. On the basis of the material before me, I am satisfied that Mrs Barnes has had reasonable notice of the hearing which proceeded in accordance with the terms of paragraph 40(1)(b) of the Administrative Appeals Tribunal Act 1975.

Issues for Determination

7.      Ms Oliver advised that the applicant was not challenging the SSAT decision as it related to the original determination of 28 February 2006 concerning the overpayment in respect of the period relevant to the period from 11 November 2005 to 14 February 2006.  This had been affirmed by the SSAT and, on the material before me, I am reasonably satisfied that this component of the decision is correct and should be affirmed.  Ms Oliver also submitted that the SSAT had correctly affirmed the decision of the Authorized Review Officer in relation to the raising of the debt and the waiver of it for the period from 20 February 2003 until 3 July 2003.  These matters have not been contested by the respondent and, again, I am reasonably satisfied that those components of the decision are correct and should be affirmed.  Ms Oliver contended that the SSAT was in error in waiving the debt in the periods from 9 July 2002 to 17 September 2002, from 2 October 2002 until 19 February 2003 and from 18 October 2003 until 1 July 2004.  That is the issue before me for determination. 

Evidence

8.      As part of a review of her parenting payment in April 2002, Mrs Barnes completed a review form in which she advised that her husband was in receipt of the DVA compensation payment.  She nominated the amount of this as $483.84 per week.  Compensation payments are treated as ordinary income when calculating the level of a parenting payment: see sections 17 and 1174 of the Act.  Mrs Barnes’ parenting payment was cancelled because the combined income of herself and her husband precluded payment.  On 3 May 2002, Mrs Barnes made a further claim for parenting payment to which she attached a letter, dated 29 April 2002, from the DVA which described the DVA compensation payment to Mr Barnes as comprising a gross weekly amount of $309.02 to be paid from 18 April 2002 until “a date to be determined”.  Mrs Barnes referred to that letter in her claim and that amount of DVA compensation payment was relied upon in a recalculation of parenting payment to Mrs Barnes.  Parenting payments were resumed and Centrelink sent Mrs Barnes a letter, dated 8 May 2002, which informed her of the resumption of payments and advised that the payment was based upon her husband’s income of $25,393.42 or $976.67 per fortnight. 

9.      The letter of 8 May 2002 also included a requirement that Mrs Barnes was to advise Centrelink of any event or change in circumstances which would affect her payment including matters relating to income.  Except for one such occasion, there is no Centrelink record which indicates receipt of this information.  The exception was on 20 February 2003 when Mrs Barnes advised that the new rate of DVA compensation payment was $645.42 per fortnight.  Centrelink failed to utilize this information.  The applicant has conceded that this was due to the fault of Centrelink and this was the basis of the waiver of the debt in the period from 20 February 2003 until 3 July 2003.

10.     In evidence were Centrelink payment records and advices from the DVA concerning the compensation payments made to Mr Barnes from 2002 until 2006. Throughout the period, Centrelink based its calculations on the amount notified by Mrs Barnes in May 2002.  This was $618.04 per fortnight.  DVA records show that compensation payments did not remain at that level.  The DVA compensation payments and total income relied upon by Centrelink are set out in columns 2 and 3, respectively, in the following table.  The DVA compensation payments actually made to Mr Barnes and his actual income are set out in columns 4 and 5, respectively, thereof:

date	DVA payment relied upon	total income relied upon	actual DVA payment	actual income
24/5/02	$618.04	$976.67	$618.04	$976.67
12/7/02	$618.04	$976.66	$645.42	$1,004.04
9/1/03	$618.04	$988.24	$640.30	$998.24
9/7/03	$618.04	$995.64	$667.26	$1,044.86
8/1/04	$618.04	$997.91	$665.00	$1,044.87
8/7/04	$618.04	$1,003.23	$696.21	$1,081.40
6/1/05	$618.04	$1,006.70	$698.34	$1,087.00
7/7/05	$618.04	$1,012.14	$727.36	$1,121.46

11.     Mr Barnes’ Southbank income was received for his short period of employment for a fortnight in October 2002.  For that period, his compensation payments ceased. 

12.     Mrs Barnes’ evidence at the SSAT was that she received letters from time to time from the DVA which advised her of the changing amounts of compensation payments made to her husband.  She said that she advised Centrelink of most of these changes either on review forms which she forwarded to Centrelink or by attending a Centrelink office and advising staff.  One of these review forms was received by Centrelink in July 2002.  It was processed by Robin Fairleigh who is a customer service officer with Centrelink and has worked in that capacity since 1992.  She gave evidence at the Tribunal hearing. 

13.     Ms Fairleigh consulted the computer records and said that they revealed that she received a parenting payment review form from Mrs Barnes on 9 July 2002 and that she wrote to Mrs Barnes on 12 July 2002 requesting letters or paperwork to verify Mr Barnes’ income.  Ms Fairleigh also noted that, on 23 July 2002, a response was received from Mrs Barnes and that she made an entry on Mrs Barnes’ record which showed that she had viewed the relevant income screens and that no change was made to the amount of compensation which had previously been recorded on Mrs Barnes’ record.  Ms Fairleigh said that, if Mrs Barnes had advised her of a change to the level of compensation, the record would have been amended, accordingly.  She said that she believed that the information had not been provided by Mrs Barnes.

14.     Evidence was also given by Melda Jean Wieden.  She is an administration officer with Centrelink.  In October 2003, Ms Wieden was a customer service officer who had worked in that capacity since January 2002.  Ms Wieden consulted Centrelink records which revealed that she conducted an interview with Mrs Barnes in October 2003.  She said that the purpose of the interview was to review Mrs Barnes’ income details.  On 8 October 2003, she completed a file note which recorded that she had not been able to find reference to the DVA compensation payments in Mrs Barnes’ records and had contacted another Centrelink officer to assist her.  She then located the reference which made no change to the amount of DVA compensation payments.  She said that, if Mrs Barnes had advised her that the DVA compensation payment had changed, she would have entered the amendment in her records.  She said that she believed that Mrs Barnes had not provided her with new information.

Consideration

15. The letter, dated 8 May 2002, which was sent by Centrelink to Mrs Barnes constitutes a notice as provided for in subsection 68(2) of the Social Security (Administration) Act 1999.  Mrs Barnes was obliged by that notice to advise Centrelink of changes in her circumstances which would affect her parenting payment.  Centrelink records reveal references to the correct amounts of compensation payments in December 2005 and January 2006.  However, these are outside the overpayment periods.  During the overpayment periods, the only record is that dated 20 February 2003.  On the material before me, I am satisfied that, except for that one occasion, Mrs Barnes did not advise Centrelink of the changing levels of her husband’s DVA compensation payments.  I am also satisfied that Mrs Barnes did not advise Centrelink of the Southbank income.  Of particular significance to those findings is the sworn evidence of Ms Fairleigh and Ms Wieden.  Clearly, no evidence was given by Mrs Barnes who advised the Tribunal that she did not wish to attend the hearing. 

16.     The calculation of parenting payment is made in accordance with the rate calculator set out in her section 1068B of the Act.  Compensation payments are treated as ordinary income and directly affect the level of parenting payment.  The parenting payment made to Mrs Barnes was based on the DVA compensation payment amount which she initially reported to Centrelink.  I am satisfied that the actual amounts of compensation payments varied from time to time in the manner reflected in column 4 of the table above (in paragraph 10) and that, as a result, Mrs Barnes was overpaid an amount of parenting payment.  The amount of that overpayment has not been disputed by Mrs Barnes and I am satisfied that this was correctly calculated at $3,605.67.  I am also satisfied that, pursuant to subsection 1223(1) of the Act, this constitutes a debt owed by Mrs Barnes to the Commonwealth.  

17.     I have given consideration to whether the debt should be waived as provided for in subsection 1237A(1) and section 1237AAD of the Act.  

Waiver of Debt

18.     The matters relating to waiver of a debt due to sole administrative error by the Commonwealth and to the applicant’s special circumstances arise under subsection 1237A(1) and section 1237AAD, respectively, of the Act.  In so far as relevant in this matter, they read:

1237A Waiver of debt arising from error

1237A.(1)       Administrative error

1237A.(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.

1237A.(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.

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.

waiver under s 1237A

19.     The first element to be satisfied under sub-section 1237A(1) of the Act is that the debt must be attributable solely to administrative error made by the Commonwealth.  Mrs Barnes’ failure to provide updated information about her husband’s compensation prior to 20 February 2003 contributed to the debt and, accordingly, the overpayment from 12 June 2002 until that date cannot be attributed solely to Commonwealth error.  The applicant has conceded that the overpayments from 20 February 2003 to 3 July 2003 were attributable to the Commonwealth solely because Centrelink failed to take the new information provided into account.  However, there was a further change to the level of compensation payments on 9 July 2003.  Centrelink was not notified of this or any subsequent change to the compensation payments prior to 10 November 2005.  Accordingly, I am satisfied that the overpayments which arose after 3 July 2003 cannot be attributed solely to the Commonwealth.

20.     As noted above, the applicant has waived the debt for the period 20 Feb 2003 until 3 July 2003.  Subsection 1237A(1) of the Act requires more than attribution to  sole Commonwealth error.  The payments must be received in good faith.  Ms Oliver submitted that this requirement was not met.  The Federal Court has held, in the context of provisions similar to subsection 1237A(1) of the Act,  that an absence of good faith arises where a person receives a payment where the person knew or had reason to know that he or she was not entitled to receive it: see Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127. Mrs Barnes’ parenting payment was cancelled in 2002 because of the level of her husband’s compensation payment. She reapplied for the parenting payment shortly thereafter with a reduced level of compensation payment nominated in a DVA letter. This points to her being aware of the significance that the amount of compensation payment had in the calculation of her parenting payment. However, I make no finding in that regard. I accept the concession made by the applicant for the period for which it waived the debt. A finding of an absence of good faith is not required for the remaining periods because I am satisfied that the debt did not arise solely because of Commonwealth error.

waiver under s 1237AAD

21.     For waiver of a debt under section 1237AAD of the Act, it must be the case, amongst the other requirements of the provision, that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.  The Act provides no guidance as to the meaning of the term “special circumstances” in that provision.  In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674). There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security (1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special".

22.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“would require something to distinguish... [the]… 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”.

23.     On the basis of Mrs Barnes’ evidence before it, the SSAT was unable to find special circumstances sufficient to waive the debt on that basis.  On that evidence and the material before me, there are no factors, either individually or taken together, in this case that enable it to be characterised as unusual or unfair and I am satisfied that there are no special circumstances in Mrs Barnes’ case that would justify waiver of the debt under section 1237AAD of the Act.

Decision

24.     The decision in relation to the compensation affected payments in the period from 11 November 2005 until 14 February 2006 and the decision to raise a debt of $3,605.67 for the period from 12 June 2002 until 10 November 2005 are affirmed.  The decision in relation to waiver of the debt is varied so that the only debt that is waived is that which relates to the period from 20 February 2003 until 3 July 2003 in the amount of $155.56. 

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         Fiona Kamst
  Legal Research Officer

Date/s of Hearing  14 March 2007
Date of Decision  12 April 2007
The Applicant  was unrepresented
For the Respondent                  Ms S Oliver, Solicitor, AGS