Boyd and Secretary, Department of Family and Community Services

[2004] AATA 706

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 706

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/12, Q2004/13

GENERAL ADMINISTRATIVE DIVISION		)
Re		ROBERT and LAONIE BOYD

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date2 July 2004  

PlaceBrisbane

Decision The Tribunal affirms the decisions under review.  

...................[Sgd]......................

RG Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements - payments of disability support pension and wife pension – overpayment – failure to provide correct income details – debts due to the Commonwealth – no grounds for waiver of debts - decisions affirmed

Social Security Act 1991 ss 133, 1223, 1224, 1237A, 1237AAD

Social Security Administration Act 1999 s 68

Beadle v Director-General of Social Security (1985) 60 ALR 225

Re Beadle and Director-General of Social Security (1984) 1 AAR 362

REASONS FOR DECISION

2 July 2004   Mr RG Kenny, Member      

Background

1.      From 27 November 1997 until 30 October 2000 and from 4 September 2001 until 27 January 2003, Robert Boyd and Laonie Boyd received payments of disability support pension and wife pension, respectively.  These were paid in accordance with the terms of the Social Security Act 1991 (the Act).

2.      On 27 May 2003, a delegate of Centrelink, on behalf of the Secretary, Department of Family and Community Services (the respondent) determined that Mr and Mrs Boyd had been overpaid and that there were outstanding debts due by them to the Commonwealth. On 16 June 2003, that decision was affirmed by an authorised review officer and the amounts raised as debts were determined, for each of them, to be $3,136.56 for the first period and $1,531.90 for the second period.  In that decision, a component of each of the debts referrable to the second period was waived leaving the recoverable debts at $1,051.96 each for Mr and Mrs Boyd, respectively, for that period. 

3.      On 17 December 2003, the Social Security Appeals Tribunal (SSAT) published its decision in relation to the review of the respondent’s determinations.  The SSAT affirmed the decision in respect of the debts in the latter period. In respect of the earlier period, it affirmed the debt insofar as it related to the period from 15 February 1999 until 20 October 2000 but remitted the matter to the respondent for re-determination of the amount of the debt in respect of the period from 27 November 1997 to 14 February 1999.  Since then, the respondent has carried out the re-calculations as required by the SSAT and determined that the amount of the debt should not be varied. 

4.      On 7 January 2004, the applicants sought review of the decision by the Administrative Appeals Tribunal (the Tribunal). 

5.      At the hearing, Mr and Mrs Boyd were not represented and the respondent was represented by Ms J Dwyer.  The following material was tendered and taken into evidence:

Exhibit 1 the documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents);

Exhibit 2a statement, dated 4 May 2004, prepared by Mr and Mrs Boyd;

Exhibit 3a series of documents compiled by Mr and Mrs Boyd and relating to their application.

Applicants’ Submission

6.      Mr and Mrs Boyd do not dispute that they have been overpaid disability support pension and wife pension in the amounts referred to above. The basis of their application for review of the decision concerning those overpayments is that, in part, the debts should be waived.  Mr Boyd submitted that he and his wife were not solely responsible for the debts and that there had been contribution to them by administrative error on the part of the respondent. Mr Boyd was critical of procedures taken by the authorised review officer in this case and, in particular, of the lack of opportunity that was extended to him to explain the manner in which the debts arose before the decision was made. 

7.      Mr Boyd was also of the opinion that there had been falsification of Centrelink records with certain documents being removed from his file and other documents being created in order to reinforce the existence of the debts.  He submitted that Centrelink had been provided with correct information about income levels, that errors in calculation had been made by Centrelink officers and that, as a result, the debt should be waived.  He referred to the nature of his wife’s employment as a teacher’s aid at the Camira State School where, until December 1999, she was not employed during school holidays.  He submitted that Centrelink was aware of this and should have been able to factor that into the manner in which it calculated the pension entitlements.

8.      Both Mr and Mrs Boyd conceded that they received many letters from Centrelink in the period from 1997 until 2003 and that these required notification be given in the event that income amounts actually earned by them exceeded the amount referred to in the respective letters.  They said that they did not understand the full significance of these letters, although they said that they were, generally, aware of the need to keep Centrelink informed of income amounts and variations in income levels. They also said that they did not check their income levels against the amounts declared in the letters or the varying amounts of pension payments that they received.

9.      Mr and Mrs Boyd indicated that they were continuing to pay off the debts and expected to finalise this in early 2005. They said that they had no savings at the moment and have accumulated other debts approximating $4,000 but were managing to make ends meet.  Mr Boyd said that he suffers from sleep apnoea and chronic fatigue syndrome but that his overall health was reasonable and that the health of Mrs Boyd and of their two children, aged 16 and 18 years respectively, was good. 

10.     Mr Boyd also expressed concern at the manner in which Centrelink officers had dealt with this matter and, in particular, the making of the overpayment without providing him with an opportunity to provide relevant information.

Respondent’s Submissions

11.     Ms Dwyer submitted that, despite the fact that Mrs Boyd had been employed from November 1997, no notification of this was given by her to the respondent until 23 November 1998.  Also, she submitted that, on 20 December 1999, Mrs Boyd had advised that she had ceased work and did not inform Centrelink of her re-employment until July 2000.  She submitted that, within those periods, no income had been factored into the calculations and the maximum levels of disability support pension and wife pension had been paid to them. 

12.     Ms Dwyer submitted that, in the period from November 1998 until December 1999, Mrs Boyd kept Centrelink informed of her periods of employment at Camira State School by advising, at the beginning of school holiday periods, that she was not working and, by again advising Centrelink at the end of school holidays, that she had returned to work.  She submitted that, in those holiday periods when she was not working, the maximum rate of disability support pension and wife pension was again paid and that a reduced amount was paid whilst Mrs Boyd was in employment.  However, she submitted that the records from Mrs Boyd’s employer, Education Queensland, reveal that she continued to be paid during school holiday periods and that this was the basis for overpayments being made between November 1998 and December 1999.

13. Ms Dwyer submitted that, throughout the period of the overpayments in 1997 to 2000, Mr and Mrs Boyd were advised by regular notices that they had to keep Centrelink informed of their income levels and she submitted that this had not been done in accordance with the requirements of section 133 of the Act. She submitted that there was no basis for waiving of the debts during those periods.

14. In relation to the debt associated with the period from 4 September 2001 until 27 January 2003, Ms Dwyer submitted that this arose because of a failure by Mr and Mrs Boyd to correctly declare the level of Mrs Boyd’s income during that period. She submitted that Mr Boyd was advised on 12 September 2001 that he was to provide accurate information concerning his wife’s income and also that a notice was sent to them on 19 October 2001 in accordance with the terms of section 68 of the Social Security (Administration) Act 1999 requiring them to advise within fourteen days if their combined incomes exceeded $19,528.30 per annum. She submitted that, in fact, during that period, the income level of Mrs Boyd exceeded $22,000 and that, therefore, this led to the overpayment because pension entitlements had been calculated on the lower income figure.  She submitted that there was no basis for this debt to be waived.

Consideration

15.     Disability support pension and wife pension are paid in accordance with the terms of the Act and the level of the payments varies according to the combined income of partnered recipients.  Mr Boyd was employed for almost twelve months for the period from October 2000 until September 2001. Centrelink was advised, appropriately, of this and no overpayments arose during his period of employment.  From 1997 onwards, Mrs Boyd has been employed as a teacher’s aid at Camira State School.  Her employment status has changed over time.  Initially, she worked on a casual basis.  In 1998 and 1999, she worked on a contractual basis during school terms.  From December 1999 onwards, she has worked on a permanent part-time basis, which means that she now receives payment for certain holiday periods.  In the period from December 1998 until December 1999, Mrs Boyd advised Centrelink on each occasion that she stopped work at the end of a teaching period and she again advised Centrelink that she recommenced work at the end of school holidays.  On the basis of that information, her income was factored in as being zero during those periods and the maximum amounts of disability support pension and wife pension were paid during those periods.  However, Mrs Boyd’s evidence was that she continued to be paid, even though she was not actually working during the school holidays, because of an arrangement she had with Education Queensland whereby she would accumulate additional hours that she worked during school term and these would be attributed to her for payment during the holiday periods.  In that way, it was accepted by Mr and Mrs Boyd that monies continued to be received by Mrs Boyd from Education Queensland during the school holidays. 

16.     Mrs Boyd conceded that she had advised Centrelink on 20 December 1999 that she had ceased work but denied that this was a declaration of complete cessation of work and that, rather, it was an indication that the nature of her employment had changed from work on a contractual basis to that of being permanent part-time. It was also conceded that no further advice about her employment was provided to Centrelink until July 2000. 

17.     In evidence before the Tribunal were payment records provided by Education Queensland for Mrs Boyd for the period from 1997 to 2000.  I am satisfied that those income levels have been correctly utilised by Centrelink as the basis for calculation of the entitlements of Mr and Mrs Boyd to disability support pension and wife pension, respectively, during that period and that those calculations correctly result in overpayments of $3,136.56 for each of them during that time.  As noted above, this was not challenged by the applicants in this case.

18.     In relation to the period from September 2001 until January 2003, I am also satisfied that the combined income of Mr and Mrs Boyd exceeded $22,000 and that, at that level, they were each overpaid the amounts of $1,531.90.  I have also noted that, in part, those debts have been waived by the respondent in this matter and that this left a resultant debt for that period is $1,051.96 each for Mr and Mrs Boyd.  Again, the fact of these debts is not challenged by Mr and Mrs Boyd. 

19.     In their submission, Mr and Mrs Boyd have conceded that the debt prior to November 1998 should not be waived and I am satisfied that that concession is properly made.  During that period, Centrelink was not aware that Mrs Boyd was working and the maximum levels of disability support pension and wife pension were incorrectly paid to them.

20.     In the remaining part of the period when the first debt arose, it was submitted by Mr Boyd that there was no fault on the part of himself or his wife which led to the incurring of the debt.  I do not accept the correctness of that submission.  Before the school holiday periods, Mrs Boyd advised that she was not working and, in reliance on that information, Centrelink assumed that she was not earning income. In fact Mrs Boyd continued to receive income through the administrative arrangement with her employer concerning additional hours of work that she performed during school term. This was information of which Mr and Mrs Boyd were aware and which was not revealed to Centrelink. The respondent, unlike the applicants, was not in a position to know that these payments continued during the holiday periods.

21.     Part of the submission made by Mr Boyd was that the calculations of their pension entitlements was based upon income levels of Mrs Boyd calculated on an hourly basis with the number of hours of employment being multiplied by the rate at which Mrs Boyd was paid per hour. He submitted that Mrs Boyd did not receive the full amount of income during the teaching period for the number of hours she worked, because of the administrative arrangement noted above, and that this meant that greater amounts of income were relied upon by Centrelink during teaching periods than were actually earned.  He submitted that this meant that an adjustment should be made to the overpayment to take that into account.  In that regard, Ms Dwyer referred the Tribunal to the manner in which the overall debt was calculated and the amounts of credit being granted in the calculation process to match the periods when underpayment of pension was made.  I am satisfied that these were taken into account in calculating the overpayment and that no further adjustment needs to be made. 

22.     In relation to the debts in the second period, Centrelink records show that, on 4 September 2001, Mr Boyd advised that he had ceased his period of employment.  It was his evidence that he advised Centrelink on that day of Mrs Boyd’s income and that he made no further contact with Centrelink thereafter.  In particular, he denied contacting Centrelink on 12 September 2001.  In his evidence, he said that this was the day following the tragic events in New York which had kept him awake the previous night with the result that he had slept for most of the day on 12 September 2001 and made no telephone calls.  Despite his evidence, there are computer-based Centrelink records which make reference to a telephone conversation between Mr Boyd and a Centrelink officer on 12 September 2001 on three separate documents (T39/98, T40/99 and T66/368).  The file note at T39/98 refers to a telephone call from Mr Boyd and reads:

“Customer advised of income currently affecting DSP.  Customer advised to check partner’s income and if incorrect to advise Centrelink as soon as possible.”

23.     I am satisfied that there was no falsification of Centrelink records, as was alleged by Mr Boyd, that there was contact between him and the Centrelink officer on that date and that the information referred to in the file note was provided to the Centrelink officer at that time. Also in evidence was a letter, dated 19 October 2001, to Mrs Boyd in which he was advised that pension payments were being made on the basis of the combined annual income of herself and Mr Boyd of $19,528.60.  The letter also required Mrs Boyd to advise within fourteen days if the combined income increased above that level.  It is not disputed that the income level did exceed that amount and that no notification of this was provided by Mr or Mrs Boyd to Centrelink.

24. From 1996 onwards, Mr and Mrs Boyd periodically received notices from the respondent requiring them to provide information about their combined income. In the early period, I am satisfied that these constituted notices in accordance with section 133 of the Social Security Act 1991 and that, in the latter period, the notices complied with the terms of section 68 of the Social Security (Administration) Act 1999. Those notices obliged the applicants to provide that information and I am satisfied that this was not done. This led to the overpayments of disability support pension and wife pension which, in the period prior to 1999, constitute debts due to the Commonwealth under sections 1224 of the Act prior to amendment in 1999 and section 1223 of the Act after that amendment.

25. Relevant to the matter of waiver of the debts, sections 1237A and 1237AAD, in so far as relevant, read:

“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.

…

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.”

26. In relation to waiver under section 1237A, I am satisfied that no component of the debts arose solely through administrative error made by the Commonwealth. In the period prior to 23 November 1998, the debt arose solely because the respondent was not advised that Mrs Boyd was in employment. In the next period, to 20 December 1999, overpayments arose because the respondent was not advised that Mrs Boyd continued to receive income from her employer in periods when she was not actually attending work because of the administrative arrangement that she had concerning accumulated additional hours. Increased levels of pension were received by Mr and Mrs Boyd during those holiday periods because of the failure of Mrs Boyd to indicate that she continued to receive income. In the period after 20 December 2000 until 28 July 2000, the overpayments arose because the respondent had been advised by Mrs Boyd that her employment had ceased. The file note, at T33/87 reads:

“Abovenamed advised that she has ceased employment at Camira State School.  Abovenamed stated that on the 17 December 1999 it was her last day working at the school.  I have zeroed out these earnings.  Abovenamed advised that if she starts work again she will inform us.”

27.     In reliance on that information, pension payments continued at the maximum level despite the fact that Mrs Boyd continued in employment. At that stage, her employment status had changed to permanent part-time which included payment for certain holiday periods. 

28. In the final period, there was no administrative error on the part of the respondent because there was a failure by the applicants to advise that the income level upon which pensions were calculated was less than the amount actually earned by Mrs Boyd. I am satisfied that the debts cannot be waived under section 1237A of the Act.

29. In relation to waiver under section 1237AAD of the Act, one of the requirements is that there be special circumstances, other than financial hardship alone, that make it desirable for the debt to be waived. It must also be the case that it is more appropriate to waive the debt than to write it off. In this case, Mrs Boyd is still in employment and recovery of the debt is being achieved through reduction of disability support pension payments to Mr Boyd. In those circumstances, it is not appropriate to write off the debt.

30.     The Act provides no guidance as to the meaning of the term “special circumstances”. In Beadle v Director-General of Social Security (1985) 60 ALR 225, the 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 228). 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 be “unusual, uncommon or exceptional” and must have a “particular quality of unusualness that permits them to be described as special".

31.     In this case, while I accept that the applicants experience a degree of financial hardship, I am also satisfied that there are no special circumstances other than financial hardship alone which would make it appropriate to waive the debt.

32.     I have noted Mr Boyd’s concern at the manner in which Centrelink officers dealt with this matter. However, I am satisfied that all relevant information has been provided and that any procedural irregularities that may have occurred have had no impact on the correctness of the overpayment decision.

Decision

33.     The decision under review is affirmed.

I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  4 June 2004  
Date of Decision  2 July 2004

The Applicants appeared in person
For the Respondent                  Ms J Dwyer, Departmental Advocate