Bathory and Secretary, Department of Family and Community Service S

[2004] AATA 212

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 212

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2003/897

GENERAL ADMINISTRATIVE DIVISION

Re:         D’MAGDA ELISABET BATHORY

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             2 March 2004

Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) G.D. Friedman
  Member

SOCIAL SECURITY - newstart allowance ‑ overpayment ‑ debt to Commonwealth - waiver of debt - write-off of debt 

Social Security Act 1991 ss1223(1), 1236, 1237A(1), 1237AAD

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

2 March 2004  G.D. Friedman, Member

1.      This is an application by D’Magda Elisabet Bathory (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 9 July 2003.  The SSAT affirmed a decision of an authorised review officer of Centrelink dated 27 December 2002 to raise and recover a debt of $721.40, arising from an overpayment of newstart allowance between 6 July 2001 and 2 August 2001. 

2.      At the hearing on 24 February 2004 the applicant represented herself, assisted by a friend, Mr R. Hammond.  Ms E. King, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1‑T20), with three exhibits (Exhibits R1-R3) lodged by the respondent.

BACKGROUND

4.      The applicant received newstart allowance in 2001.  On 17 August 2001 she was paid $1040.80. This consisted of her regular fortnightly payment of $363.20, a  "withholding" of $50 and $727.20 in arrears, for the period 6 July 2001 to 2 August 2001.

5.      On 23 August 2001 Centrelink decided that the $727.20 was, in fact, an overpayment, which was recoverable as a debt due to the Commonwealth.  On 27 December 2002 an authorised review officer affirmed the decision that there was a recoverable debt, but varied the amount of the debt to $721.40, the difference being a pharmaceutical allowance of $5.80, that had not previously been paid.

6.      On 21 March 2003 the applicant sought review of the decision by the SSAT.  On 9 July 2003 the SSAT affirmed the decision.  The applicant lodged an application with the Tribunal on 18 August 2003 for review of the SSAT decision.

7.      The issue before the Tribunal is whether the applicant has a debt to the Commonwealth, and if so, whether the debt should be waived or written off. 

EVIDENCE

8.      In oral evidence the applicant said that on 17 August 2001 she had made a telephone enquiry of her credit union and to her surprise there was a credit balance of about $1000.00.  She had been expecting a payment but contacted Centrelink on the same day and was told that the payment was an amount in arrears, to which she was entitled.

9.      The applicant stated that on 20 August 2001 she again contacted Centrelink because she was not satisfied that the arrears payment was correct.  She told the Tribunal that she made a further telephone call on 22 August 2001 and said that, as a result of that conversation, she was in no doubt that the payment was correct.  She did not know why the Centrelink record of the conversation was to the effect that she had inquired about the amount of the arrears paid to her on 17 August 2001 alone.

10.     The applicant referred to a Centrelink file note on 23 August 2001 (T8, p14) which showed that an officer had tried to telephone her to confirm that a debt would be raised for incorrect arrears paid on 17 August 2001, and that there had been no answer but the officer had not left a message.  She explained that, if Centrelink had left a message, she would not have spent the arrears.  She was satisfied, after three telephone calls, that the payment was correct, and that she had acted in good faith.  She stated that she received a letter from Centrelink dated 24 August 2001 advising her of the debt, after she had spent the money. 

11.     The applicant told the Tribunal that she used the money to buy clothes, as she was working at the time and could pay essential household expenses.  She stated that she is unable to work at present for medical reasons, and is in receipt of newstart allowance of nearly $400 per fortnight.  She said that she pays $200 per fortnight in rent, and has enough money for her basic living expenses.  She said that she is paying off a previous debt to Centrelink.

12.     Mr Hammond gave oral evidence that he was present during two telephone conversations in which a Centrelink officer led the applicant to believe that the arrears payment had been made correctly.    

CONSIDERATION OF THE ISSUES

13.     The applicant submitted that, when she first contacted Centrelink, she was encouraged to spend the money, and said that this attitude, together with the failure by Centrelink to detect the overpayment after she had raised concerns, constitutes special circumstances to justify waiving the debt.  She said that organisations such as Centrelink owe a duty of care to clients, and that she had acted in good faith at all times, so she should not be penalised.  She noted in particular the failure by Centrelink to leave a message for her on 23 August 2001, when she was not at home.

14.     Ms King submitted that the overpayment by Centrelink was a mistake but not a systemic error.  She said that the mistake was corrected, and the debt raised, within six days of the applicant’s first query.  She submitted that the applicant is not in financial hardship and has no significant commitments, so there are no special circumstances as defined in the Social Security Act 1991 (the Act).

15.     In reaching its decision the Tribunal takes into account the oral and written evidence and submissions made at the hearing. 

16. The Tribunal finds that the applicant received an amount of $721.40 to which she was not entitled in the relevant period, and that the amount is a debt to the Commonwealth under s 1223(1) of the Act.

17. Section 1236 of the Act provides for a write-off of the debt under certain circumstances. The Tribunal finds that the applicant has the capacity to repay the debt and the debt is not irrecoverable at law. Therefore, there are no grounds to write‑off the debt.

18.     Section 1237A of the Act provides for waiver of a debt arising from 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.

Although Centrelink conceded that the overpayment was a result of administrative error, the Tribunal finds that Centrelink detected the error and raised the debt within six days of the applicant’s query.  Therefore, the debt cannot be waived under s 1237A(1A) of the Act.  

19. Section 1237AAD of the Act provides for waiver of the debt in certain 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 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.

20.     In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held that the special circumstances, referred to in s 1237AAD(b), must be unusual, uncommon or exceptional. The Tribunal accepts that the applicant, supported by Mr Hammond, made several telephone calls to Centrelink; and that she believes that she was told incorrectly by a Centrelink officer on more than one occasion that she was entitled to the arrears. The Tribunal also accepts that in the telephone conversation of 23 August 2001 the applicant held the view that any doubts had been resolved. So that, at the time she spent the money, she believed that she was acting in good faith.

21.     On the other hand, the Tribunal notes that the record of the telephone contact by Centrelink of 23 August 2001 is not conclusive, and there is no indication on the file that the applicant was told that the arrears were paid correctly to her.  The Tribunal agrees that the confusion might have been resolved if Centrelink had left her a message on 23 August 2001.  However, Centrelink corrected the error, raised a debt and notified the applicant within six days, which the Tribunal considers to be reasonable in the circumstances.  Although the applicant believed she had acted in good faith, her actions in spending the money so quickly left open the possibility that the payment was made to her in error and that she would need to repay the debt at a later time.  The Tribunal takes into account that, by her own evidence, the applicant is not suffering financial or other hardship, although her circumstances are difficult.

22.     For these reasons, the Tribunal is satisfied, on balance, that the circumstances in this case are not unusual, uncommon or exceptional, and do not constitute special circumstances (other than financial hardship alone). Therefore, the waiver provisions of s1237AAD cannot apply.

23.     The applicant therefore owes a debt to the respondent of $721.40, which cannot be written off or waived.

DECISION

24.     The Tribunal affirms the decision under review.

I certify that the twenty‑four [24] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  24 February 2004

Date of decision:  2 March 2004
Advocate for applicant:                Self‑represented
Advocate for respondent:            Ms E. King, Centrelink