Beattie and Secretary, Department of Social Services (Social services second review)

[2016] AATA 363

Beattie and Secretary, Department of Social Services (Social services second review) [2016] AATA 363 (1 June 2016)

Division	GENERAL DIVISION
File Number(s)	2016/0706
Re	Warrick Beattie
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member A C Cotter
Date	1 June 2016
Place	Brisbane

The decision under review is affirmed.

.........................[sgd]...............................

Senior Member A C Cotter

CATCHWORDS

DEBT RECOVERY – carer payment – overpayment – where applicant did not disclose earnings – where no administrative error – where no special circumstances – decision under review affirmed. 

LEGISLATION

Acts Interpretation Act 1901 (Cth) ss 28A, 29

Social Security Act 1991 (Cth) ss 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) s 237

CASES

Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1

Director-General of Social Services v Hales (1998) 82 FCR 154
Dranichnikov v Centrelink (2003) 75 ALD 134
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Haggerty v The Department of Education, Training & Youth Affairs (2000) 31 AAR 529
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553
Secretary, Department of Family and Community Services v Sekhon (2003) 73 ALD 41

Ward and Secretary, Department of Family and Community Services [2000] AATA 212

REASONS FOR DECISION

Senior Member A C Cotter

1 June 2016

BACKGROUND

1. In June 2011, Mr Warrick Beattie was granted a Carer Payment, caring for his great- grandmother, Ms Gwenneth Slater.[1]

   [1] Exhibit 1, T Documents, T 13, page 72, debt details.

2. Ms Slater passed away on 12 February 2012.

3. The following day, Mr Beattie rang Centrelink and spoke with a staff member whom he told that Ms Slater had died.  He says that during that conversation, the staff member told him that he would receive a bereavement payment, plus ongoing fortnightly payments for three months. Mr Beattie says he told the staff member that he would be commencing work for Pristine Cleaning Services on 23 February 2012 and that he asked the staff member if he would have to phone again when he started work. The staff member told him that would not be necessary. As Mr Beattie was unaware of his anticipated income, there was no discussion of how much he would be earning. He thought it was strange that he would not have to disclose his earnings, but relied on what he was told.

4. On 22 February 2012, Centrelink wrote to Mr Beattie, providing his Centrelink statement. The letter contained the following relevant passages:

   This (statement) gives you information about your payments, income and other details. You need to le (sic.) us know if any of these details change to ensure you are receiving your correct entitlement…

   RATE OF PAYMENT – Your future rate of payment may change depending on the amount of your earnings, other income or assets…Note that all the information in this statement is from records we hold as at the issue date of the statement. Regular rate of payment from 09 March 2012 Carer Payment $689.00 Plus Pension Supplement $59.80 Less Court Fines - $25.00 Total $723.80… Note: Your Carer Payment is currently paid under the income test.

   …EARNINGS INFORMATION – You need to tell us your earnings before tax and other deductions such as salary sacrifice…

   …You must tell Centrelink within 14 days…if any of the things listed below happen or are likely to happen to you. If any of these changes happen, the amount of payment you get may change. If you are paid too much because you don’t tell Centrelink about any of these changes when you have to, Centrelink may make you pay it back…You must tell us if you: Employment start, stop, go back to or change work in any form of profession, trade, business or self-employment have any change to your income from employment (the amount you earn goes up or down).[2]

   Mr Beattie denied having received that letter.

   [2] Exhibit 1, T Documents, T 5, pages 26, 27, 28 and 29, Centrelink letter to Mr Beattie dated 22 February 2012.

5. Mr Beattie started work at Pristine Cleaning Services on or about 23 February 2012.[3]

   [3] Exhibit 1, T Documents, T 2, page 6, Social Services & Child Support Division’s (“SSCSD”) decision and reasons for decision dated 11 January 2016, [7].

6. On 24 February 2012, a data match with the Registrar of Births, Deaths and Marriages advised Centrelink of Ms Slater’s passing.[4]

   [4] Exhibit 1, T Documents, T 10, page 46, Authorised Review Officer’s (“ARO”) letter and notes dated 23 September 2015.

7. On 29 February 2012, Centrelink wrote to Mr Beattie, advising that he would be paid a Bereavement Lump Sum Payment of $3,757.60 and would continue to be paid $748.80 Carer Payment until 19 May 2012.[5] Mr Beattie denies having received that letter. The Bereavement Lump Sum Payment was paid to him on 1 March 2012 and his Carer Payment continued to be paid for a further 14 weeks.[6]

   [5] Exhibit 2, Supplementary T Documents, ST 1, Centrelink letter to Mr Beattie dated 29 February 2012.

   [6] Exhibit 1, T Documents, T 10, page 46, ARO’s letter and notes dated 23 September 2015.

8. Mr Beattie’s Carer Payment was cancelled on 20 May 2012.[7]

   [7] Ibid.

9. After a data match with the Australian Taxation Office, Centrelink raised a debt for the period 23 February 2012 to 19 May 2012 in the amount of $3,136.10.[8] That was on the basis that Mr Beattie was overpaid Carer Payment during that period.

   [8] Ibid.

10. Reviews of the decision to raise the debt, first by an Authorised Review Officer (“ARO”),[9] and later by the Social Services & Child Support Division (“SSCSD”) of the Tribunal,[10] were both unsuccessful.

    [9] See Exhibit 1, T Documents, T 10, pages 45-50, ARO’s letter and notes dated 23 September 2015.

    [10] Exhibit 1, T Documents, T 2, pages 4-9, SSCSD’s decision and reasons for decision dated 11 January 2016.

11. Dissatisfied with the outcome, Mr Beattie applied to the General Division of this Tribunal for a review of the SSCSD’s decision.

    ISSUES FOR THE TRIBUNAL

12. It is not disputed by Mr Beattie that he was overpaid Carer Payment during the period in question. Nor is the amount of the overpayment contested. As Mr Beattie received a benefit to which he was not entitled, that overpayment is a debt due to the Commonwealth.[11] I therefore find that Mr Beattie is indebted to the Commonwealth for the amount of $3,136.10.

    [11] See Social Security Act 1991 (Cth) s 1223(1).

13. The issue which therefore remains for my consideration is whether that debt should be recovered.

14. Mr Beattie contended that, having regard to the circumstances of this matter, the Commonwealth’s right to recover the debt should be waived, either because of administrative error solely on the Commonwealth’s part, or because of his special circumstances. I deal with those matters below.

    CONSIDERATION

    Administrative error waiver

    The legislative provision

15. Section 1237A (1) of the Social Security Act 1991 (Cth) (“Act”) provides that, subject to subsection (1A) (which is not presently relevant), 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. The note to the section states that subs (1) does not allow waiver of a part of a debt that was caused partly by an administrative error and partly by one or more other factors (such as error by the debtor).

16. In Ward and Secretary, Department of Family and Community Services, Deputy President Forgie held that  the word “solely” meant “exclusively”, “only”, or “to the exclusion of all else”, adding:

    This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor.[12]

    [12] [2000] AATA 212, [46]; see also Secretary, Department of Family and Community Services v Sekhon (2003) 73 ALD 41, 47 [41] (Wilcox J).

17. While it is trite to say that want of good faith arises where there is a positive belief by the recipient that a payment has been made by mistake, it has been held that it also arises “where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt”.[13]

    [13] Haggerty v The Department of Education, Training & Youth Affairs (2000) 31 AAR 529, 534, [16] (French J).

    The parties’ contentions

18. Mr Beattie contended that he was given incorrect advice in his telephone call with the Centrelink staff member on 13 February 2012 and, based on that advice, he did not contact Centrelink again after he commenced work, and disclose his earnings. He said that he did not receive Centrelink’s letters of 22 and 29 February 2012. Had he received them, he would have contacted Centrelink to clarify his position.

19. The Secretary accepted that Mr Beattie’s Centrelink record was accessed on the morning of 13 February 2012,[14] but acknowledged that there is no record of what was discussed at that time.[15] In the absence of clear corroborating evidence, it was submitted that I should not accept the evidence that the Centrelink officer would have advised Mr Beattie that he had no obligation to report an unknown amount of income.[16] 

    [14] Exhibit 1, T Documents, T 9, page 42, Customer Record Access Monitor Report.

    [15] Exhibit 3, Secretary’s Statement of Facts and Contentions dated 3 May 2016, [25].

    [16] Ibid [25]-[26].

20. In any event, the Secretary said that the overpayment was not attributable solely to an administrative error by the Commonwealth; if there had been an error, it could have been overcome had Mr Beattie read and responded to the 22 February letter. As such, it was said that he had to bear at least part responsibility.[17]

    [17] Ibid [27]-[32].

21. Finally, the Secretary submitted that even if the overpayments could be attributed to an administrative error, it was not clear that the payments were received in good faith, since Mr Beattie harboured some suspicion that he may not have been entitled to some of the ongoing Carer Payment.[18]

    [18] Ibid [33]-[38].

    The 13 February telephone conversation

22. There is no doubt that a telephone conversation did take place on the morning of 13 February. However, inexplicably, there is no note by the Centrelink staff member on Mr Beattie’s record as to what was specifically discussed and what was said, and by whom. That is itself surprising, given what I understand to be Centrelink’s policy of recording details of dealings with customers. The only evidence is that of Mr Beattie. Understandably, he did not make a contemporaneous note of the conversation, and therefore was relying on memory. The Centrelink staff member was not called to give evidence. I do not draw any adverse inference from that. It is most unlikely that, in the absence of written notes, he or she would have any independent recollection of the conversation some four years earlier. It was clear that even Mr Beattie’s recollections were fading.  For example, at the hearing he could not recall whether he spoke to a male or female staff member, whereas his evidence to the SSCSD was that he spoke with a male officer. However, Mr Beattie was adamant that he did not misunderstand what was said to him; in particular, he maintained that the advice he was given in relation to reporting his earnings related to both the Bereavement Lump Sum Payment and the ongoing Carer Payments.

23. Without further corroborating evidence, I am unable to be satisfied that the conversation took place as recounted by Mr Beattie.

24. Nevertheless, for the present purpose of considering Mr Beattie’s contention as to the application of s 1237A(1), I am prepared to give him the benefit of the doubt, and proceed on the assumption that the conversation occurred as he contended.

    Solely the Commonwealth’s administrative error?

25. As mentioned earlier, the Secretary contended that even if the conversation had taken place as asserted by Mr Beattie and he had been incorrectly advised that there was no need to inform Centrelink of his earnings, the debt was not solely attributable to that error. The Secretary relied in particular on the fact that the 22 February letter clearly spelt out Mr Beattie’s disclosure obligations. His failure to comply with those requirements contributed to the overpayment and the resulting debt.

26. Mr Beattie denied having received either the 22 February letter, or Centrelink’s further letter of a week later. In support of his contention, he told me that, in the course of the present proceedings, he had been told twice that relevant documents had been sent to him by the Litigation Team of the Department of Human Services, but they were never received by him. He had also checked with the manager of his apartment complex, who likewise confirmed that nothing had been received. He referred me to a Postpak bag which he did receive from the Department, which was incorrectly addressed to “Warren” rather than “Warrick” Beattie.[19]

    [19] Exhibit 4, Photograph of Postpak bag addressed to “Warren Beattie”.

27. In response, the Secretary relied on the statutory deeming provisions for the giving of notices by post, contained in s 237 of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”) and ss 28A and 29 of the Acts Interpretation Act 1901 (Cth) (“AIA”).

28. Section 237 of the Administration Act provides that if notice of a decision under the social security law is sent by prepaid post to the postal address of the person last known to the Secretary, notice of the decision is taken to have been given to that person for the purposes of the social security law. Subsection (2) goes on to state that notice of a decision may be given by properly addressing, prepaying and posting the document as a letter. If notice is given in that way, the notice of decision is taken to have been given to the person at the time at which the notice would be delivered in the ordinary course of post “unless the contrary is proved”.[20] Subsection (4) states that the section only applies to notices of decisions and that nothing in it affects the operation of ss 28A and 29 of the AIA in relation to other notices under the social security law (such as a notice that requires a person to inform the Department about some matter).

    [20] Social Security (Administration) Act 1999 (Cth) s 237(3).

29. Section 28A of the AIA provides that, for the purposes of any Act that requires or permits a document to be served on a person (whether the expression “serve”, “give” or “send” or any other expression is used), then the document may be served by, amongst other things, sending it by pre-paid post to the address of the place of residence of the person last known to the person serving the document. Section 29 of the AIA goes on to state that where an Act authorises or requires a document to be served (or “given” or “sent”) by post, the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter. Unless the contrary is proved, service is deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post.

30. During cross-examination, Mr Beattie acknowledged that the printed copy of the letter of 22 February which appears in the T Documents was correctly addressed to him at his then address.[21] Given that, and the fact that the letter would have been posted in the ordinary course of business, the Secretary submitted that the letter would be deemed to have been received by Mr Beattie in the ordinary course of post.

    [21] Exhibit 1, T Documents, T 5, pages 26-30, Centrelink letter to Mr Beattie dated 22 February 2012.

31. As I mentioned earlier, Mr Beattie commented that in the course of the proceedings, he had not received two letters said to have been posted to him. He also pointed to a Postpak that he did receive from the Department even though his name was incorrect. I do not think that latter example assists Mr Beattie, as while it bore the incorrect name, it nevertheless was received by him at the correct address. In any event, he agreed that the letter of 22 February was correctly addressed to him at the right address. I was told that the letter would have been sent in a “window faced” envelope, rather than having a label placed on it as happened with the Postpak. There was therefore less prospect of intervening human error. For completeness, I should also add that the presumption of service is not displaced by proof of non-receipt;[22] something more is required, such as the return of the item posted.

    [22] See Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 96 (Mason, Murphy, Wilson, Deane, Dawson JJ).

32. In the absence of proof to the contrary, I find that the letter of 22 February 2012 was sent by prepaid post to Mr Beattie’s then current address. It would therefore be deemed, by virtue of the Administration Act or alternatively, the AIA, to have been received by him shortly after that date, in the ordinary course of post.

33. Mr Beattie failed to comply with the notification requirements advised in the letter. That failure in turn caused, or at least contributed to, his being overpaid and the subsequent incurring of the debt.

34. It follows from what I have said that, even if Mr Beattie was incorrectly advised by the Centrelink staff member as contended, that administrative error was not the sole cause of the debt. For that reason, I do not consider that waiver under s 1237A(1) would be open.

    Payments received in good faith?

35. It is a precondition to waiver under s 1237A that the debtor received the payment or payments in question “in good faith”.

36. Mr Beattie first started receiving Carer Payment in June 2011. Prior to that, he was a recipient of Newstart Allowance. He agreed under cross-examination that he was aware of the reporting requirements under both benefits and in particular, that he had to report his income. It is therefore not surprising that both he and his mother thought it curious that he was told that he did not have to contact Centrelink again after he commenced working. He said that his mother also inquired about that when she phoned later to inform Centrelink of Ms Slater’s passing. However, she was not called to give evidence.  Mr Beattie said that he also drew support from the fact that a co-worker had told him that he had been receiving full Carer Payments in caring for his wife, even though he continued to work.

37. It is clear from the above that, from the outset, Mr Beattie entertained a suspicion that he might not be entitled to receive Carer Payments after he commenced work and earning an income. He was already aware, from past experience, of his reporting obligations and in particular, about reporting income. That suspicion is confirmed by the fact that his mother also inquired of Centrelink, and he discussed the topic with a co-worker. He could readily have made further inquiries of Centrelink had he chosen to. He did not; rather, he chose, to use the Secretary’s words, “wilful blindness”.

38. I therefore agree with, and accept, the Secretary’s contention that Mr Beattie, entertaining the suspicions which he did, did not receive the relevant payments in good faith. For that reason also, I do not consider that s 1237A(1) has application.

    Administrative error waiver – conclusion

39. To summarise, I do not consider that waiver under s 1237A(1) is open in this matter. In the absence of corroborating evidence, I am not satisfied that the conversation contended for by Mr Beattie took place as alleged, and in particular, that he was told that he did not have to report to Centrelink when he commenced working and what income he was earning. Even if that conversation took place as alleged, the advice given to him was not the sole cause of the overpayment and subsequent debt. He failed to report his earnings as required by Centrelink and that failure caused, or at least contributed to, the incurring of his debt. From the outset, Mr Beattie harboured suspicions, based on his past experience with Centrelink, that he might not be entitled to Carer Payments following his great-grandmother’s death and his commencement of work. I therefore do not believe that he could be said to have received the payments in good faith.

    Special circumstances waiver

    The legislative provision

1. Section 1237AAD of the Act reads as follows:

   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, the Administration 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.

2. This and similar provisions have been the subject of much consideration by the courts and the Tribunal over the years. It is unnecessary, for present purposes, to discuss those decisions in detail. However, there are a couple of observations which I should make.

3. First, paragraph (a) makes it clear that a prerequisite for the exercise of the waiver is that the debtor did not “knowingly” provide false information or “knowingly” fail to comply with their obligations under the relevant legislation.  The term “knowingly” is not defined. However, the deliberate use of that word requires that there be some element of intent in making the representations or in the failure to comply with the legislation.[23]

   [23] See Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, 445 [48] (Deputy President Forgie); Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693, 714 [74] (Deputy President Forgie) citing Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553.

4. There is no suggestion in the present case that Mr Beattie “knowingly” provided false information or “knowingly” failed in his obligations.

5. The term “special circumstances” is likewise not defined in the Act. It has often been said that the expression looks to circumstances that are unusual, uncommon or exceptional, or which “have a particular quality of unusualness that permits them to be described as special”.[24]

   [24] See, eg, Re Beadle and Director-General of Social Security (1984) 6 ALD 1, 3 (Toohey J, Member Wilkins and Member Billings); Dranichnikov v Centrelink (2003) 75 ALD 134, 148 (Hill J).

6. It has also been emphasised that, in exercising the discretion in a particular instance, the decision-maker must have regard to the legislative intent of the Act:

   In the exercise of the discretion…, the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the…Act.[25]

   [25] Re Ivovic and Director-General of Social Services (1981) 3 ALN N95.

7. In that context, French J in Director-General of Social Services v Hales observed that the taxpayer is entitled to expect that, in the ordinary course, money paid to people which they are not entitled to will be recovered.[26] In a similar vein, Deputy President Forgie remarked in  Davy and Secretary, Department of Employment and Workplace Relations:

   The “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances…that make it desirable to waive.” That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it…He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement…[27]

   [26] (1998) 82 FCR 154,155.

   [27] [2007] AATA 1,114, [80].

   Mr Beattie’s contentions

8. Mr Beattie submitted that his medical and financial circumstances were sufficiently special as to justify the waiver of the right to recover the whole debt.

9. He testified that he injured his back in a fall at work in May 2015. He produced a letter from his Spinal Surgeon, Dr John Albietz, dated 11 April 2016, which confirmed that Mr Beattie suffered “a left L5/S1 disc prolapse that has caused left S1 nerve damage”. Despite surgical decompression, Mr Beattie continued to suffer back and radiating leg pain. The doctor concluded that Mr Beattie did not require further surgical intervention, but he was being referred to a pain physician.[28] Mr Beattie told me that, despite two operations, he still suffered severe pain and was being treated by a pain specialist. He has been told that he will never work again, although he does not have any reports supporting that assessment.

   [28] Exhibit 5(b), letter from Dr John Albietz dated 11 April 2016.

10. Mr Beattie told me that he currently receives WorkCover payments of $1,520.55 net per fortnight. He rents an apartment for $510.00 per week ($1,020 per fortnight). His ex-girlfriend moved out, so he is looking for cheaper accommodation when the tenancy expires in 60 days’ time. He said that he pays for his medical expenses and is then reimbursed by WorkCover Queensland, but that can sometimes take up to three weeks. He is currently pursuing a workers’ compensation claim. He told me that liability had been admitted and that the matter is at the pre-action stage where offers are to be exchanged.  Failing resolution, litigation will be necessary.

    Are Mr Beattie’s circumstances “special”?

11. While I am sympathetic to Mr Beattie’s ongoing health issues, his circumstances are, regrettably, not uncommon for many recipients of social security. I do not consider that his medical condition is sufficiently unusual or out of the ordinary to justify the exercise of the discretion in his favour.

12. Although Mr Beattie’s financial circumstances are currently tight, that situation is likely to improve in the relatively near future, with him considering renting cheaper accommodation when his current tenancy expires in 60 days and with the prospect of him receiving a substantial payout from his workers’ compensation claim.  I therefore consider that he has the capacity to repay the debt in full. Further, the financial position in which he finds himself is not significantly different to that experienced by many social security recipients.

13. I am also conscious of the fact that it is not in dispute that Mr Beattie was not entitled to the overpayment he received; there is no injustice in requiring him to repay the money to which he was not entitled, even by way of small instalments.

14. Having regard to those matters, I do not consider that Mr Beattie’s circumstances are sufficiently special as to warrant the waiver of the Commonwealth’s right to recover the entire debt.

    Write off

15. Although Mr Beattie did not seek to rely on it, I note, for completeness, that s 1236 of the Act provides that the Secretary may, in certain circumstances, decide to write off a debt for a stated period or otherwise.

16. The only possible basis that Mr Beattie might have under this section is that he has no capacity to repay the debt. I have already found that is not the case. There is no evidence that recovery of the debt would cause him severe financial hardship.[29]

    [29] See Social Security Act 1991 (Cth) s 1236(1C).

17. I therefore do not consider that write off of the debt is available in this instance.

    CONCLUSION

18. To summarise, I do not consider that the Commonwealth is required to waive its right to recover its debt on the ground of administrative error. Nor do I think that Mr Beattie’s circumstances are so unusual or out of the ordinary as to warrant the exercise of the discretion to waive the recovery of the debt. I therefore consider that the debt is recoverable in full.

19. Accordingly, the decision under review is affirmed.

I certify that the preceding 58 (fifty - eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter

.........................[sgd]..............................

Associate

Dated 1 June 2016

Date(s) of hearing	18 May 2016
Applicant	In person
Solicitors for the Respondent	Department of Human Services