Brookes; Secretary, Department of Education, Employment and Workplace Relations and
[2008] AATA 501
•17 June 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 501
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V2006/1060
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY,
DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONSApplicant
And
TANIA BROOKES
Respondent
DECISION
Tribunal Regina Perton Date17 June 2008
PlaceMelbourne
Decision The Tribunal sets aside the decision under review and substitutes a decision that that Ms Brookes owes a debt to the Commonwealth of $13,325.27
...................[Sgd]......................
Regina Perton
Member
SOCIAL SECURITY – parenting payment (partnered) ‑ overpayment ‑ debt to Commonwealth ‑ waiver – whether sole administrative error - whether special circumstances exist – decision set aside
Social Security Act 1991 ss 8(1), 1075(1), 1223, 1237A, 1237AAD
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
17 June 2008 Regina Perton 1. Tania Brookes is a mother of four children. She first received parenting payment (partnered) (PPP) in late July 2000. Centrelink delivers services for the Department of Employment Education and Workplace Relations (the Department). Centrelink determined that Ms Brookes was overpaid PPP between 7 October 2002 and 30 June 2005 and that, as a result, she owes a debt to the Commonwealth totalling $13,325.27.
2. Ms Brookes’ income, and that of her partner, who runs a small business, is taken into account in determining her rate of payment. Once earnings exceed a specified amount, the rate of PPP is reduced. Centrelink generally informs recipients that they are required to advise the agency within 14 days when there are specified changes of circumstances. These changes include increases or decreases in income.
3. Ms Brookes was also receiving Family Tax Benefit (FTB). She provided Centrelink with estimates of her taxable income and that of her partner in relation to FTB. Ms Brookes believed that the income information she provided to Centrelink concerning FTB was also being applied to her PPP. However, it was not. Ms Brookes is of the view that she informed Centrelink of all relevant changes in income. Centrelink disagrees.
4. There were a number of calculations of the amount of the debt due to overpayment. In December 2005, Ms Brookes was advised that she had a debt of $19,492.60. In June 2006, an authorised review officer (ARO) of Centrelink informed Ms Brookes that the debt owed was $13,325.27.
5. On 27 September 2006, the Social Security Appeals Tribunal (SSAT) decided that the amount of the overpayment was correctly calculated by the ARO. The SSAT also decided that the debt should be waived on the basis that it had arisen as a result of sole administrative error on the part of Centrelink. The Secretary to the Department now seeks a review of the decision of the SSAT.
6. The issues before the Tribunal are whether Ms Brookes owes a debt to the Commonwealth because of the overpayments; and, if so, whether the debt should be waived because of sole administrative error on the part of Centrelink or due to special circumstances.
Is there a Debt to the Commonwealth?
7. The overpayments arose because the amount of ordinary income received by Ms Brookes was higher than that noted by Centrelink in its records. Ordinary income is defined in s 8(1) of the Social Security Act 1991 (the Act) to include income received by both the recipient and his/her partner. The Tribunal is satisfied that the under-reporting of her income for PPP purposes was not a deliberate action by Ms Brookes. The Tribunal also accepts that she assumed the information she was giving to Centrelink about FTB was also being used for her PPP payments. However, regardless of the circumstances that led to the overpayments, the amount overpaid is a debt owed to the Commonwealth pursuant to s 1223(1) of the Act. The calculations of the amount of the debt by Centrelink are complex. The formula used takes account of allowable tax deductions of the business in which Ms Brookes is a partner (s 1075(1) of the Act). Ms Brookes did not dispute the latest calculations, pointing out that she is not in a position to do so.
8. Centrelink’s calculations show that Ms Brookes was overpaid PPP of $13,325.27 between 7 October 2002 and 30 June 2005. The Tribunal has no reason to doubt that the calculations are correct. The Tribunal finds that Ms Brookes owes a debt to the Commonwealth of $13,325.27.
Should the Debt be Waived due to Administrative Error?
9. Section 1237A(1) of the Act provides for waiver of a debt arising solely from administrative error:
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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
10. Ms Brookes has submitted that the income estimates she provided for FTB should have been used by Centrelink for her PPP as well. She pointed out that Centrelink’s computer information screen indicated that she received PPP as well as FTB. Furthermore, she stated that some of her attendances at Centrelink to provide information about her finances do not appear to have been recorded, as she could not see any reference to them in the documents provided to her and to the Tribunal by Centrelink under s 37 of the Administrative Appeals Tribunal Act 1975.
11. In a letter dated 10 August 2000, Centrelink advised Ms Brookes of the rate of PPP she would receive based on estimates of her income and that of her partner at that time. She was informed that the amount of PPP she would receive was based on her husband’s annual income of $14,219.92 and her income of $1,579.76. She was also advised that she must contact Centrelink within 14 days if her total income exceeded $62.00 per fortnight or her husband’s income went over $546.92 a fortnight. Ms Brookes, who has retained a considerable amount of correspondence in relation to her dealings with Centrelink over the years, did not have a copy of the letter, nor did she recall receiving it. While she was regularly sent correspondence about her FTB and information was recorded by Centrelink in relation to that payment, this did not occur for PPP.
12. The income tests for FTB and PPP are different. FTB requires recipients to estimate a combined taxable income for the next financial year. PPP payments are assessed on a fortnightly income test for the person and her/his partner. What is to be included in the calculation of income also differs. It is also unfortunate that the income figures used in the letter of 10 August 2000, that should trigger notice to Centrelink of income increases in relation to PPP, was expressed in a fortnightly figure, given Ms Brooke’s income does not appear to have been related to regular fortnightly payments. It can be difficult to reconcile the annual and fortnightly figures.
13. Notwithstanding the difficulties for Ms Brookes in conforming to the requirements set out in Centrelink’s letter of 10 August 2000 and her mistaken belief that the figures she gave to Centrelink for FTB were also being applied to PPP, she has clearly been paid more than that to which she was entitled. Even though Centrelink did not regularly update Ms Brookes on the level of income on which it was basing its payments, the agency did send her a letter on 10 August 2000 informing her of the income on which the PPP was based and advising her of her obligation to report any increases in income. There is no legislative obligation on Centrelink to be pro-active in applying data about FTB income to a person’s other benefits. As Centrelink did inform Ms Brookes about her obligation to report income increases on one occasion, the Tribunal is unable to find that Ms Brookes’ overpayment was totally Centrelink’s fault.
14. Notwithstanding a lack of initiative on Centrelink’s part in not sending regular letters to Ms Brookes about her income for PPP purposes and in failing to be pro-active when its computer screen showed that Ms Brookes was receiving payments other than FTB, there was also error on the part of Ms Brookes in not providing updates about income for PPP purposes. Therefore, the Tribunal finds that the debt was not attributable solely to administrative error by the Commonwealth and the debt cannot be waived on this ground.
Should the Debt be Waived due to Special Circumstances?
15. Section 1237AAD of the Act provides for waiver of the debt 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.
16. The term special circumstances is not defined in the legislation. For the Tribunal to exercise its discretion to determine that Ms Brookes’ situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25). In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases. Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case.
17. As stated earlier, the Tribunal accepts that Ms Brookes genuinely believed that she was providing the necessary income information to Centrelink. The Tribunal is satisfied that Ms Brookes did not realise that she was failing to comply with her obligations under the Act. The Tribunal finds that Ms Brookes did not knowingly make false representations or knowingly omit to comply with a provision of the Act. Therefore, she meets s 1237AAD(a) of the Act.
18. The Tribunal accepts that the Ms Brookes and her partner have a number of concurrent loan repayments in relation to their business, cars and home. However, while the business environment is difficult and Ms Brookes and her partner have four dependent children, Centrelink has not required immediate payment of the debt. Repayments for the debt are through a deduction of $40.00 per fortnight from Ms Brookes’ FTB payments, with no interest being charged. Therefore, the Tribunal is not satisfied that the situation that she finds herself is vastly different from the situation of other benefit recipients who have incurred debts due to overpayments. In the Tribunal’s experience, it is, unfortunately, not unusual for debts to arise in circumstances similar to those in this case.
19. The Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone). Hence, the Tribunal finds that the waiver provisions of s 1237AAD of the Act should not be invoked.
20. The Tribunal finds that Ms Brookes owes a debt of $13,325.27 to the Commonwealth because of overpayment of PPP. The Tribunal notes that part of the debt has been repaid.
Decision
21. The Tribunal sets aside the decision under review and substitutes a decision that Ms Brookes owes a debt to the Commonwealth of $13,325.27.
I certify that the twenty-one [21] preceding paragraphs are a true copy of the reasons for the decision of:
Regina Perton, Member
(sgd)
Clerk
Date of hearing: 17 October 2007
Date of final submission: 14 December 2007
Date of decision: 17 June 2008
Advocate for the applicant: Mr T Noonan, Centrelink Legal Services
Advocate for the respondent: Self-represented
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