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

[2015] AATA 987

Brackenreg and Secretary, Department of Social Services (Social services second review) [2015] AATA 987 (18 December 2015)

Division	GENERAL DIVISION
File Number(s)	2014/6293
Re	Deborah Brackenreg
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member McCabe
Date	18 December 2015
Place	Brisbane

The decision under review is affirmed.

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Senior Member McCabe

Catchwords

SOCIAL SECURITY – benefits and entitlements – overpayment – applicant not entitled to receive – debt raised by the Commonwealth – whether debt should be waived because of administrative error – whether debt should be waived because of special circumstances – discretion to waive not exercised – decision under review affirmed

Legislation

Social Security Act 1991 (Cth) ss 1223, 1232(2), 1237A, 1237AAD

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

REASONS FOR DECISION

Senior Member McCabe

18 December 2015

1. Deborah Brackenreg was paid $54,092.57 in social security benefits that she was not entitled to receive between 20 June 1994 and 22 August 2005. The overpayment was discovered in 2005 following a data-matching exercise in which payments made by Comsuper to the applicant were brought into consideration. Ms Brackenreg has been making repayments to the Commonwealth without admitting liability. She says there should not be any further recovery. The Secretary disagrees.

2. The decision under review must be affirmed. I explain my reasons below.

   Is there a debt due to the Commonwealth?

3. Section 1223 of the Social Security Act 1991 (Cth) (“the Act”) says an overpayment – being a payment to a person who was not entitled to receive the payment, or who is not entitled to receive a payment in that amount – is a debt due to the Commonwealth. I asked Ms Brackenreg to confirm at the outset of the hearing if she was disputing she was, in fact, overpaid during the period under review. (Her Statement of Facts, Issues and Contentions appeared to leave open that possibility.) She accepted she was not in a position to dispute that she received the payments as alleged by the Secretary, and she did not seriously contend that she was entitled to the payments.

4. I have no reason to doubt the social security payments were made as alleged. I also have no reason to doubt the applicant was not entitled to receive those benefits once the information about payments received by Comsuper were taken into account.  I accept $54,092.57 is a debt due to the Commonwealth. The real issue before the Tribunal is whether that amount should be recovered.

   Has there been an unacceptable delay in commencing recovery?

5. Ms Brackenreg submitted s 1232(2) of the Act prevented the Secretary from recovering the debt because legal proceedings had to be commenced in a court of competent jurisdiction within six years of the Secretary becoming aware of the circumstances which gave rise to the debt. I am satisfied that section is not an obstacle to these proceedings.

6. These proceedings are not legal proceedings in a court of competent jurisdiction, of course. Section 1232 would not limit recovery in any event because the Secretary became aware of the circumstances giving rise to the debt following the data matching process in 2005. The Secretary began to recover monies from the applicant within the six year period that follows. I am satisfied there has not been an unreasonable delay that would somehow prevent the Secretary from recovering the monies.

   Should the debt be waived?

7. The Secretary may decide to waive the debt (or part of it) in a range of defined circumstances. There are two provisions relevant here. I will deal with each in turn.

   Waiver because of administrative error pursuant to s 1237A

8. Section 1237A permits the Secretary to waive a debt that is “attributable solely to an administrative error made by the Commonwealth” provided the payment was “received in good faith”.

9. Ms Brackenreg says she spoke with an officer from the Department of Social Security when she first lodged her claim in 1994. She said she told the officer she was in the midst of a compensation claim against Comcare. She also recalled saying she was in receipt of some other payments, including superannuation and income from a tutoring role. She said the officer told her she did not need to report any of those monies unless and until there was a settlement of her compensation claim. She recalls being told about compensation preclusion periods. She said she relied on that advice in all subsequent correspondence with Centrelink when asked to report any additional income or payments.

10. I note Ms Brackenreg’s claim form records (at p 41 of exhibit one) her as saying “yes” to questions about whether she was able to claim compensation (although she indicated she was not in receipt of compensation at that time) and whether she was in receipt of an annuity or superannuation pension. There is also an entry in Centrelink’s records dated 7 December 2001 (exhibit one at p 728) noting the applicant was receiving “super/compo payments from Comcare…”

11. The applicant agreed she did not mention she was receiving payments from Comsuper at any point although she says she was receiving some sort of superannuation payment from Comcare. Mr Robert Welfare was called as a witness at the hearing. Mr Welfare is a friend who said he accompanied Ms Brackenreg to Centrelink offices on a number of occasions during the period under review. He said he heard the applicant tell Centrelink officers she received payments from Comcare, but insisted Ms Brackenreg never mentioned, at least within his hearing, that she was receiving payment from Comsuper.

12. Ms Brackenreg was required to report her income on a regular basis while dealing with Centrelink. She filed a series of fortnightly forms between July 1994 and March 1995, and regular reports in the years that followed. She expressly denied earning income or receiving any money during the periods covered by the forms. On 23 March 1995, she participated in a review and confirmed she was not receiving any monies from superannuation or insurance policies: exhibit one at p 109. She repeated that advice on a series of Centrelink forms lodged up until 2005. The questions in those forms were clear enough – indeed, they could not be clearer. Ms Brackenreg said she interpreted the forms in light of the advice she said she received from the officer in 1994. She added she experienced difficulty in filling out forms and responding to requests for information because of her diagnosed ADHD condition.

13. Even if I accept the officer gave the applicant erroneous advice about her reporting responsibilities in 1994, I am not satisfied the overpayments which followed over the next 11 years were solely attributable to that error. To begin with, on the applicant’s own evidence – which is consistent with the evidence provided by Mr Welfare – she only mentioned she was receiving money from Comcare, not Comsuper. (She says she did tell Centrelink she was receiving some sort of superannuation payment, but did not specify it came from Comsuper.) It is easy enough to see how that failure to distinguish between the agencies might have led the departmental officers to conclude the applicant was only receiving compensation payments, and they advised her on that basis. They should not have fallen into that error, of course, and I accept the applicant must have mentioned the fact she was receiving superannuation payments on at least one occasion which is referred to in the Secretary’s records (exhibit one at p 728). But it seems likely the information provided by the applicant was at least partly responsible for the error.

14. The applicant did raise a question over whether Comcare and Comsuper did make separate payments. She said she had a vague recollection that Comsuper payments may have been administered by Comcare. The Secretary did not provide any material which enabled me to confirm that proposition. I considered adjourning the hearing so the question could be investigated, but – even if the applicant were right – there is a further reason for finding the error was not solely attributable to the Secretary.

15. The applicant says she consistently interpreted the questions in the various forms which asked her to disclose other sources of income in light of the advice she received from the officer in 1994. But those questions were in the plainest terms and referred to payments under superannuation policies. She was also closely questioned about her circumstances in regular interviews. The applicant is an intelligent woman, albeit one who had a range of mental health challenges at the time. Even with those conditions, it is hard to believe she did not question the advice she says she received. I do not accept a succession of departmental and Centrelink officers would have persisted with the same obviously incorrect advice she was supposedly given in 1994. At a minimum, I am satisfied the applicant failed to properly engage with her responsibility to report all the sources of her income. She contributed to whatever error led to the overpayment. It follows waiver under s 1237A is not available.

    Waiver because of special circumstances pursuant to s 1237AAD

16. The Secretary (or the Tribunal on review) also has the discretion to waive the debt in special circumstances provided the debt did not arise as a consequence of the applicant knowingly making a false statement or knowingly failing to comply with a requirement of the legislation. The Secretary says there is doubt about the applicant’s state of knowledge but I do not need to reach a view on that question because I am not satisfied it would be appropriate to exercise the discretion in any event.

17. I accept the applicant has identified a number of matters that might, either separately or together, constitute special circumstances. (Special circumstances are particular features of the applicant’s case that suggest the applicant should be treated differently than other cases  that are subject to the general rule: see, for example, Re Beadle and Director-General of Social Security (1984) 6 ALD 1.)

18. I will accept for the purposes of the exercise that the applicant was given bad advice by departmental officers. I also accept she had a number of serious health conditions at the time she was receiving payments, including ADHD which compromised her ability to deal with Centrelink, major depression and cancer. At a minimum, those conditions would have distracted the applicant from her dealings with Centrelink at various times. I also accept she experienced ongoing distraction and stress while she was involved with litigation against Comcare, and criminal proceedings launched by the Commissioner of Taxation that she successfully defended on the grounds that she was not competent to file tax returns. I also accept she was not financially experienced and was a poor custodian of her own affairs, most obviously because of the ADHD. I also note she experienced a marriage breakdown during the period under review – although that is hardly an unusual circumstance.

19. I also note the applicant has since left most of these problems behind. While she still experiences some ill-health, she is functioning effectively. She is able to hold down an important full-time job as a lawyer after completing her legal studies. She is paid a healthy wage and she has few financial commitments (albeit I accept her evidence that she remains a poor financial manager). She is active in the community and plays a prominent role in an animal welfare organisation.

20. Where a person receives benefits she was not entitled to receive, she should expect the monies will have to be repaid at some point. The Act recognises exceptions to that general rule, but the power to waive is a discretionary one. The power to waive in s 1237AAD is enlivened when special circumstances exist (provided there was no knowing failure on the part of the applicant). While I am satisfied there are matters in this case which might qualify as special circumstances, I must still be satisfied it is desirable to exercise the discretion – and I am not satisfied. The applicant has had the benefit of a significant overpayment. It was undoubtedly of assistance to her at the time. There is no good reason now why she should not be expected to repay the full amount over a suitable period of time.

    Conclusion

21. The decision under review is affirmed.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

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Associate

Dated 18 December 2015

Date of hearing	9 December 2015
Applicant	Ms D Brackenreg (appeared via video link)
Advocate for the Respondent	Mr R McQuinlan