BARRY COOPER MARIE COOPER and SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

[2003] AATA 551

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] 551

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/880

GENERAL ADMINISTRATIVE DIVISION		)
Re		BARRY COOPER MARIE COOPER

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date13 June 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review. 

(Sgd) Ms J Cowdroy
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – overpayment – whether applicants failed to notify Centrelink of changes in their income – whether the debt was properly raised – whether the debt should be recovered – administrative error – special circumstances

Social Security Act 1991

Director-General of Social Services v Hangan (1982) 45 ALR 23 
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

13 June 2003 Ms J Cowdroy, Member    

1.      This decision relates to a review of a decision of the Social Security Appeals Tribunal dated 23 September 2002 which affirmed a decision of Centrelink to:

i) raise and recover an amount of $4811.30 from the applicant Barry Cooper in respect of an overpayment of disability support pension for the period 3 September 1998 to 17 July 2001;

ii) raise and recover an amount of $7766.66 from the applicant Marie Cooper in respect of an overpayment of partner allowance for the period 4 September 1998 to 19 July 2001

Hearing

2. The matter was heard on 25 March 2003. The applicants appeared and gave evidence. The respondent was represented by Ms T Shea. The T-documents, lodged with the Tribunal pursuant to section 37 of the AdministrativeAppeals Tribunal Act 1975, were admitted into evidence as Exhibit E1. The Tribunal indicated, with the consent of the respondent, that it would enter into evidence a  medical report received subsequent to the hearing.  This was received in the form of a letter from Dr N Laherty dated 26 Mach 2003 and it was marked E2.

3.      The matter was decided on the basis of the oral evidence of the applicants, the written material and the oral submissions of the parties.

Background

4.      The following matters are not in dispute. 

5.      Mr Barry Cooper (“the first applicant”) was in receipt of disability support pension during the period 3 September 1998 to 17 July 2001.  His wife, Mrs Marie Cooper (the second applicant"), was in receipt of Partner Allowance for the period 4 September 1998 to 19 July 2001.

6.      Various letters were sent to both applicants informing them of their obligations to notify Centrelink of their income and changes to that income.

7.      During the period 3 September 1998 to 19 July 2001, Mr and Mrs Cooper declared income of $9,631 but received income of $35,855.

Evidence

8.      Mr Cooper commenced to suffer from renal problems in about 1990.  Prior to that time, he was engaged in a large-scale commercial enterprise, employing in excess of 400 people. From about 1990, his state of health progressively deteriorated.  In 1997 he was diagnosed with renal failure and required peritoneal dialysis treatment five times daily.  The treatment greatly reduced his energy levels, he put on weight, his sleep was disturbed, his eyesight was affected and he suffered from restless legs.

9.      In 1999 he was placed on a different form of dialysis, requiring treatment three times weekly.  During that treatment he had bladder problems.  On 5 July 2000, he received a renal transplant, which improved his health dramatically.    

10.     During the time he was unwell, it was “almost impossible” to write letters.  After he was placed on disability support pension, he received some letters from Centrelink and he responded by contacting Centrelink by phone. On several occasions he had asked Centrelink how he should declare his income and that of his wife, and he was told that it would be taken into account at the end of the year, when their taxation returns were filed.  He had been advised that income disclosed in the returns would be noted and payments of social security benefits would be adjusted if need be.  Over the years, their pension payments did fluctuate.

11.     Three years later, he had been advised that what he had been told earlier was an incorrect method of declaring income.  He felt a strong sense of grievance that Centrelink had misled him.  He had made 32 phone calls to Centrelink.  Whilst he was informed that Centrelink does not automatically access Australian Taxation Office (ATO) information for the purposes of calculating benefits, the letter at T10-70 refers to a data matching program and accessing records from the ATO.  

12.     Under cross-examination, the applicant agreed he had lodged some forms with Centrelink and that on those forms he declared some income.  He said it was difficult to give an estimate of his income as he received payment in lump sums, rather than small regular amounts. 

13.     He was confused by the letters from Centrelink and that on receipt of every letter, he would phone Centrelink for clarification. He stated “whatever they wanted, I would give”.  For example, at one point Centrelink wanted a profit and loss statement; this was provided and two weeks later, another one was requested.  He had also provided information about the sale of his house.   At one stage, his disability support pension was cancelled on the grounds that he had not responded to a letter from Centrelink, which was subsequently found to be incorrect.  He said that whenever he rang Centrelink about the amounts of income referred to in its letters, he was told to disregard them.

14.     He referred to 12 days without sleep and that he advised Centrelink he was unable to write.  

15.     At T8-66, the letter from Centrelink dated 16 March 2000 assessed combined annual income at $171.50, which he thought was probably correct at that time. It was not until April of that year that he received earnings from work. In fact, from March 2000 to the end of the financial year, he earned $7,800. He was successful in securing a contract involving a home unit development job at New Farm, which earned him commission of $13,000.  The amount of $7,800 received in April and May represented part payment of that commission. He did not think to notify Centrelink when his income tax return was completed, as he assumed Centrelink would access it.

16.     He is currently self-employed, working about 30 hours per week and earning about $600 net per fortnight.  There are credit card debts of $20,000 and he and his wife sold their house and brought a less expensive home. Currently the debts are being repaid at the rate of $50 and $40 fortnightly respectively.. He has a $10,000 debt to the ATO, which relates to provisional tax incurred over the past three or four years. He was particularly concerned at the fact that part of the debt related to benefit received over three years ago, which he considered was unfair.     

17.     Mrs Cooper had been in receipt of some form of social security benefit since 1992. She did not remember ever being asked to provide estimates of income.  She acknowledged that the reference at T6-62 of total fortnightly income of $2.54 was not correct, however she could not recall seeing the letter. Her husband assumed responsibility for responding to Centrelink letters. 

Submissions 

18.     In submissions, Ms Shea emphasised that both applicants received notification letters from Centrelink advising them of their obligation to advise if the income stated in those letters was incorrect or if their income changed at any time.  A recipient’s entitlement to benefit is not calculated on the basis of the information provided on their tax returns.  Although Centrelink has authority to conduct random data matching with the ATO, it does not routinely access such information.

19.     The information provided in the letter at T10-70 should have alerted the applicants to the fact that a data matching process occurred, rather than a process whereby Centrelink routinely accessed taxation returns of all social security recipients. 

20.     The applicants cannot bring themselves within the provision relating to sole administrative error, in that the debt was not solely due to error on the part of Centrelink. Relying on the principles enunciated in Director-General of SocialServices v Hangan (1982) 45 ALR 23, notwithstanding the fact that the Tribunal might find that the applicant was wrongly advised about the manner in which Centrelink obtained information, it is clear that he and his wife also contributed to the debt by failing to comply with their notification obligations. Write off of the debt was not appropriate nor was waiver of the debt under section 1237A because the debt is not due solely to an administrative error made by the Commonwealth.

21.     In respect to waiver of the debt due to special circumstances, the respondent acknowledged the ill health of the applicants, but submitted that this is not an unusual or exceptional circumstance for recipients of social security payments.  There is no evidence of financial hardship. Ultimately there are no special circumstances sufficient to justify waiver.

22.     Mr Cooper reiterated his contention that he had relied on Centrelink and had been misinformed.  His wife has cystitis and medical practitioners were trying to cure her condition.  The couple’s income is presently less than $500 per fortnight with a mortgage repayment of $60 per fortnight.  He considered that they were in financial hardship. 

Findings and Legislative Framework

23. It is not disputed that both applicants were paid social security payments for which they are not qualified. Section 1223 of the Social Security Act 1991 (the Act), provides in essence that any amount in excess of the correct amount of entitlement is a debt due to the Commonwealth.

24.     Section 1237A of the Act relates to waiver of debts arising in particular circumstances.  Subsection (1) provides:

“Subject to subsection (1A), the Secretary must waiver 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.”

25.     The applicants point to a letter of 9 October 2000 in support of their contention that they had been advised not to provide income information as Centrelink would access their tax records at the end of the financial year.  However, whilst that letter refers to data matching with the Australian Tax Office, it also refers to the tax returns for 1998/1999, which is a reference to tax returns dating back 15 months.  I consider that that information should have alerted the applicants to the fact that data matching with their tax returns had not been carried out at the end of the financial year.

26.     However, leaving that aside, there were a number of letters sent to the applicants setting out their notification obligations. In particular, a letter dated 31 March 1999 requested the second applicant to provide tax returns for 1996/1997, 1997/1998 and proof of earnings for the period 1 July 1998 to 31 March 1999 for herself and her husband.  If that letter had been read, then clearly it would have put the applicants on notice that tax returns were not automatically accessed by the respondent.  

27.     I note Mr Cooper’s evidence that he was advised to the contrary on a number of occasions.  However, even if administrative error was present, of significance is the fact that when income was declared to Centrelink it was vastly underestimated.  Whilst I accept that he received large sums by way of commission and not a regular income, clearly only a small proportion of total income was declared. The fact that the applicants were asked to provide information about income, again, should have raised doubts in their mind about the veracity of their understanding in relation to Centrelink’s process of obtaining income information.

28.     Ultimately I find that the debts have not arisen solely as a result of administrative error in that the applicants contributed to the debt by (i) not responding to the information provided in the seven notification letters sent to them; and (ii) not providing accurate information regarding their respective incomes, on the occasions when such information was provided. 

29.     This leaves consideration of whether there are special circumstances which may warrant waiver of the whole or part of the debts.  Section 1237AAD of the Act directs that the Secretary may waive recovery if certain criteria are met. It states:

“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.”

30.     On the basis  that the applicants did not knowingly fail to comply with their obligation to notify, I considered whether special circumstances existed that make it desirable to waive the right to recover the debt.

31.     The term “special circumstances” has been considered by the Tribunal and other forums on numerous occasions.  In this context the decision of Re Beadle andDirector-General of Social Security (1984) 6 ALD 1 has been much quoted as the benchmark in respect to the interpretation of those words. In that case the Tribunal said:

“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 qualify of unusualness that permits them to be described as special.”

32.     I have taken into account the evidence in relation to the applicants’ health and in particular, that of Mr Cooper, for the period of the overpayment.  However, in that respect the applicants are no different to many other recipients of disability support benefit who suffer from ill health over a protracted period of time. 

33.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, when discussing Beadle’s case, made the observation 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 quite unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

34.     Whilst the applicants consider that to require repayment of the debts would be unjust, it seems to me that the circumstances fall short of that criteria.  I find that the applicants’ financial situation is precarious. However, neither their personal circumstances, their state of health or their financial situation justify a finding of special circumstances.

35.     In those circumstances, the Tribunal affirms the decision under review.

I certify that the 35 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  25 March 2003
Date of Decision  13 June 2003

The Applicants were unrepresented
For the Respondent                  Ms T Shea, Departmental Advocate