Bishop and Secretary, Department of Family and Community Services
[2005] AATA 79
•25 January 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 79
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2004/1018
GENERAL ADMINISTRATIVE DIVISION ) Re LESLEY BISHOP Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Robin Hunt Date25 January 2005
PlaceSydney
Decision The Tribunal finds that the discretion available under section 1237AAD should be exercised and sets aside the decision under review.
[sgd] Ms R Hunt
Senior Member
CATCHWORDS
SOCIAL SECURITY – Parenting payment single – Resumption of work not reported to Centrelink - Resulting overpayment – Debt to the Commonwealth – Explained by depression – Special circumstances other than financial hardship alone.
LEGISLATION
Social Security Act 1991 s 1237AAD
CASE LAW
Nguyen and Secretary, Department of Family and Community Services [2004] AATA 249
Re Bruce and Secretary, Department of Family and Community Services (1995) 39 ALD 473
De Neumann and Secretary, Department of Social Security (AAT 11280, 29 August 1996)
Re Balancio.and Secretary, Department of Family and Community Services (2003) 74 ALD 204
Re Secretary, Department of Family and Community Services and Temesgen(2002) 72 ALD 563
Woodward and Secretary, Department of Family and Community Services [2001] AATA 818
Re Nisha and Secretary, Department of Family and Community Services [2000] AATA 315
Re Ivovic ,and Director-General of Social Security (1981) 3 ALN N95
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670,
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
REASONS FOR DECISION
25 January 2005 Robin Hunt, Senior Member summary
1. Ms Lesley Bishop, the Applicant, received overpayments of the benefit known as parenting payment single (PPS) in the period 25 June 1999 to 13 November 2000. As a result, the Secretary required her to repay $9,834.05. Ms Bishop had advised Centrelink on 13 May 1999 when she ceased casual work for her employer, a bank. However, she neglected to inform Centrelink when she resumed working in July 1999. In the meantime, she continued to receive PPS at the higher rate to which she had been entitled when not employed. It was not until 4 years later, in July 2003, that Centrelink discovered that Ms Bishop had been overpaid and raised a debt for recovery.
2. Ms Bishop argued that she had been suffering from depression when she took sick leave in May 1999 and was still unwell when she returned to work. She said this was the reason why she had failed to report to Centrelink that she had returned to work. She asked that the right to recover the debt be waived in view of her special circumstances.
3. The Social Security Appeals Tribunal (the SSAT) accepted the evidence of Ms Bishop and decided that she had not knowingly failed to meet her obligations to Centrelink. However, the SSAT went on to decide, on 2 August 2004, that the right to recover the debt should not be waived. The SSAT considered there were no special circumstances among other grounds that might have permitted write-off or waiver of the debt. Before the present Tribunal, Ms Bishop claimed that her situation amounted to “special circumstances” sufficient to waive the debt under section 1237AAD of the Social Security Act 1991 (the Act). The Tribunal has decided that, cumulatively, the circumstances surrounding Ms Bishop’s failure to notify Centrelink of her return to work were special circumstances and that Centrelink’s right to recover the debt of $9,834.05 should be waived.
issue
4. The applicant has conceded that she has a debt due to the Commonwealth for the amount claimed. She has also conceded that the debt was not solely the fault of the Commonwealth so as to permit waiver under section 1237A of the Act. The matter for the Tribunal’s decision is whether section 1237AAD should apply so as to waive recovery of all or part of the debt due to her special circumstances.
legislation
Section 1237AAD of the Act reads:
“1237AAD Waiver in special circumstances
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.”
evidence
5. Before the Tribunal, Ms Bishop gave oral evidence that she was not behaving normally when she returned to work in 1999. Ms Bishop said that she went back to work because she ‘had to do so to survive’ but was not coping with anything else. She had never realised, until Centrelink tried to recover the overpayments, that she had not been entitled to the payments she received during 25 June 1999 to 13 November 2000.
6. Ms Bishop told the Tribunal that she was still suffering from depression and continued to take a lot of time off work because of this. Her income varied due to her depressive condition and casual employment status. She earned between $800 and $1,500 per fortnight depending on her shifts. The stress of preparing for the Tribunal proceedings meant she lost $650 gross when she felt incapable of working the weekend shifts prior to the hearing. She had suffered depression for many years despite treatment and medication. Ms Bishop made a detailed written statement about her circumstances over many years and events that may have lead to her mental condition. She verified the statement at the hearing and gave further oral evidence.
7. One of the events that she found most distressing was the loss of her home in 1998. Ms Bishop told the Tribunal that she had been supporting herself and her three children without any maintenance from her former husbands but managed to save enough to put towards purchase of a house. She said that she borrowed funds under the Homefund scheme, but she could not make the repayments and fell further and further behind. Ms Bishop said that despite her refinancing her mortgage, the bank eventually forced her to sell. She tried resettling at Nambucca but returned to Sydney and these moves caused significant problems for herself and her children in 1998 and 1999. She then took leave from the bank job for health reasons and incurred the present debt when she returned to work.
8. Ms Bishop said her only assets included about $15,000 in superannuation with the bank and a car which was not paid off. She needed the car to get to work. Her 2 sons lived with her and made some contribution to the household from their casual earnings. They were able to do little more than cover their own expenses. She also had a housemate who contributed to household outgoings.
9. Ms Bishop said she had always wanted to be a nurse. Before Centrelink raised the debt, Ms Bishop enrolled at university in nursing studies. She had completed 2 years but when the debt was raised, the stress and anguish caused her to discontinue her studies. She had deferred her final year and had been working as much as she could to repay her debts. Her debts included legal fees incurred in defending herself against prosecution by the DPP for defrauding the Commonwealth in respect to the Centrelink debt. Her solicitor had eventually persuaded the DPP to drop the charges. Until then, she had been afraid that she would not be able to register as a nurse because of the pending charges. These pressures associated with the debt had meant her doctor had to prescribe medication for constant neuralgic pain. She had never been without antidepressants. She referred to letters from her treating doctors, a general practitioner and a psychiatrist, which were before the Tribunal.
10. Further, Ms Bishop had incurred an Austudy debt of $1,677.33 as a result of a misunderstanding about her entitlement to this form of assistance when she commenced studies. She had been making payments to Centrelink of $50 per fortnight. She was unsure to which debt her payments had been directed but believed she had almost repaid the Austudy debt and had met little or none of the PPS debt. She had also incurred a HECS debt which was approximately $3,200 and would increase to about $5,000 when she resumed her studies.
11. Ms Bishop said that although her financial position had improved, she still had various debts apart from the Centrelink debt. Debts included $16,000 for the car with payments of $175 per week. As well, she had 2 credit card debts totalling $5,600, which she had incurred to meet living expenses when Centrelink had garnisheed her wages. Legal costs of defending the criminal charges connected with the Centrelink debt meant she had another debt of $3,000. She had been paying approximately $116 per fortnight over the last 12 months towards legal fees. Ms Bishop detailed her present weekly financial commitments, which included not only household expenses but medications, legal expenses, existing Centrelink repayment, medical insurance and credit card repayments.
analysis
12. The Full Federal Court has given some guidance as to what are special circumstances. In Beadle v Director-General of Social Security (1985) 7 ALD 670, Bowen CJ, Fisher and Lockhart JJ, said of a provision similar to section 1237AAD, that the phrase “special circumstances” was sufficiently understood not to need a judicial gross. There are many examples of cases where the phrase has been considered. In Re Beadle and Director of General-General of Social Security (1984) 6 ALD 1, Toohey J (Presidential Member), I A Wilkins and Dr J Billings (Members) said:
“…it is not helpful to focus too closely on each particular circumstance of the applicant and ask whether it is special. Of itself it is unlikely to be special for there would be many in a similar situation. The question is whether, when the relevant circumstances of the applicant are looked at in their entirety, they may be fairly described as unusual, uncommon or exceptional…” (at 4)
13. Circumstances which may be taken into account in exercising a discretion associated with special circumstances include unusual and exceptional circumstances and unfair and inappropriate application of a rule. In Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, Deputy President Todd suggested that a global assessment of the circumstances was appropriate. I have followed these decisions in turning my mind Ms Bishop’s situation.
14. The SSAT found that Ms Bishop did not knowingly defraud the Commonwealth. Because of her mental state, she was not capable of dealing with her affairs. She told the present Tribunal that she put all her energies into doing her job and cannot now imagine how she coped. The SSAT, however, found that the pending prosecution and Mrs Bishop’s legal bills were not a special circumstance. I agree with these findings to the extent that the prosecution and associated bills were tainted by guilty association. However, since the SSAT handed down its decision, the DPP has decided to drop the charges. While this removes some of the pressure from Ms Bishop, it also puts the debt and related legal expenses in a different light. The dropping of these charges has removed the stigma from Ms Bishop concerning her not reporting the overpayment.
15. While it is true that the medical evidence before the Tribunal was not tested at the hearing, as the Respondent’s representative pointed out, the certificates before the Tribunal are clear and similar evidence was sufficient to convince the SSAT that Ms Bishop had not knowingly failed to advise Centrelink that her earnings had resumed. I am also mindful of the cost associated with requesting a medical practitioner to give evidence in legal proceedings. Ms Bishop impressed me as telling the truth and was obviously distressed at times when giving evidence about her history and circumstances. On balance, I therefore, accept her evidence that she was suffering and continues to suffer from depression.
16. As her counsel has argued, there are many examples of cases where the Tribunal has found the circumstances of an applicant warranted exercise of the discretion or a similar discretion to that available under section 1237AAD. In Nguyen and Secretary, Department of Family and Community Services [2004] AATA 249, depression was considered a special circumstance for section 1184K of the Act. In Re Bruce and Secretary, Department of Family and Community Services (1995) 39 ALD 473 the Tribunal took into account the psychological pressure of enduring an unrepayable debt. While the debt in Ms Bishop’s case may not be unrepayable, it would take her many years to repay it as she has a variable and low income. She further told the Tribunal the pressure of the debt had caused her to suspend her nursing studies and affected her prospects of qualifying.
17. Again, in De Neumann and Secretary, Department of Social Security ( AAT 11280, 29 August 1996), past history of suffering, psychological factors and the pressure of debt were taken into account, even where the debt extended over an 11 year period. Depression was a factor where there was a smaller debt in ReBalancio and Secretary, Department of Family and Community Services (2003) 74 ALD 204 The finding that the debt was not knowingly incurred was taken into account in Re Secretary, Department of Family and Community Services and Temesgen (2002) 72 ALD 563 and in Woodward and Secretary, Department of Family and Community Services [2001] AATA 818. I accept that Ms Bishop did not knowingly accrue the debt in the present case due to her depression and confusion and find that this aspect of the decision of the SSAT should not be disturbed. This means that Ms Bishop meets subsection 1237AAD(a).
18. In Re Nisha and Secretary, Department of Family and Community Services [2000] AATA 315, the Tribunal took into account severe distress as a factor warranting the exercise of the discretion even though there was little financial hardship. In Ms Bishop’s case, her distress is exacerbated by financial difficulties. Although section 1237AAD depends in subsection (b) on special circumstances “other than financial hardship alone”, the clause acknowledges by the word “alone” that finances can be part of the special circumstances.
19. In the present case, Ms Bishop has continuing depression, the debt exacerbates her condition according to her general practitioner and her own evidence, the debt is hampering her work and study efforts, she is in a poor financial situation and has to pay rent although she tried to buy her own home in the past, she has debts caused by her dealing with the Centrelink garnishee and the associated criminal charges which have since been dropped, she has virtually no assets and limited working life remaining because of her age. On balance, I find that these circumstances taken together amount to special circumstances for the purposes of subsection 1237AAD(b).
20. I have taken note of the authorities cited by the Respondent about whether it is desirable to waive a debt in accordance with subsection 1237AAD(b). As cited, in Re Ivovic and Director-General of Social Security (1981) 3 ALN N95, strict enforcement should not be dropped unless the case is something out of the ordinary, as the Federal Court suggested in Groth v Secretary, Department of Social Security(1995) 40 ALD 541. In the present case, Ms Bishop is not only suffering depression and in poor financial circumstances but has been making efforts to repay her debts and to improve her employment prospects although hampered by her difficulties. She hopes to be able to resume her studies if she is freed form this debt. I think this is sufficient to say that her case is out of the ordinary and sufficient to make it unjust and inappropriate not to waive the debt.
21. No argument has been put to the Tribunal that it would be appropriate or not to write off the debt as mentioned in subsection 1237AAD(c) and, as there is nothing before me to support this course of action, I find that this would not be more appropriate than waiver. Accordingly, I find that the debt caused by the overpayment should be waived under section 1237AAD as to any outstanding portion of the debt.
decision
22. The Tribunal finds that the discretion available under section 1237AAD should be exercised and sets aside the decision under review.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Robin Hunt, Senior Member.
Signed: .....................................................................................
Associate: Reuben MansourDate of hearing 29 November 2004
Date of decision 25 January 2005Representative for the Applicant Mr S Hodges
Advocate for the Respondent Mr G Richardson
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