Bullivant and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 674
•1 August 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 674
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 200600255-256
GENERAL ADMINISTRATIVE DIVISION ) Re MICHAEL BULLIVANT and
MARGARET BULLIVANTApplicants
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Deputy President S D Hotop Date1 August 2008
PlacePerth
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal, dated 26 July 2006, and, in substitution therefor, decides that:
· Mr Bullivant received overpayments of disability support pension and age pension, and Mrs Bullivant received overpayments of wife pension and age pension, in the period from 24 July 1998 to 1 November 2005;
· the amounts of those overpayments constitute debts owed to the Commonwealth by Mr Bullivant and Mrs Bullivant;
· the Commonwealth’s right to recover that part of the debts owed to it by Mr Bullivant and Mrs Bullivant, which arose by reason of overpayments of age pension in the period from 23 August 2005 to 21 September 2005, is waived under s 1237A(1) of the Social Security Act 1991 (Cth) (“the Act);
· the debt owed to the Commonwealth by Mr Bullivant (by reason of overpayments of disability support pension and age pension in the period from 24 July 1998 to 22 August 2005) and the debt owed to the Commonwealth by Mrs Bullivant (by reason of overpayments of wife pension and age pension in the period from 24 July 1998 to 22 August 2005) are recoverable in full from each of them by the Commonwealth in accordance with Part 5.3 of the Act.
..........[sgd S D Hotop]......
Deputy President
CATCHWORDS
SOCIAL SECURITY – overpayment of social security pensions – debts due to Commonwealth – waiver or write off of debts – applicants married to each other – applicants received disability support pension, wife pension and age pension from 1991 – male applicant received retirement pension from United Kingdom local government pension fund from 1998 – both applicants subsequently received United Kingdom old age pension – amounts of retirement pension payments not notified to Centrelink until August 2005 – applicants received overpayments of pension entitlements from 1998 to September 2005 – debts owed by applicants to Commonwealth – recovery of debts – debts incurred in period August-September 2005 attributable solely to administrative error by Centrelink – debts incurred in period August-September 2005 waived – no grounds for waiver of remainder of debts – remainder of debts not attributable solely to administrative error by Centrelink – no special circumstances making it appropriate to waive remainder of debts – no ground to write off remainder of debts – remainder of debts recoverable in full from applicants
Social Security Act 1991 (Cth), s 1236, s 1237A(1) and s 1237AAD
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
REASONS FOR DECISION
1 August 2008 Deputy President S D Hotop Introduction
1. Michael Bullivant (“Mr Bullivant”) received disability support pension from August 1991 to 7 June 2003 and since 8 June 2003 he has received age pension. His wife, Margaret Bullivant (“Mrs Bullivant”), received wife pension from August 1991 to 28 March 2004 and since 29 March 2004 she has received age pension.
2. In June 1998 Mr Bullivant was notified by the Pensions Administration Division of the West Midlands Pension Fund in Wolverhampton, United Kingdom, that his “preserved retirement benefits”, comprising a lump sum retirement benefit and a pension, were payable with effect from 8 June 1998, and those benefits were thereafter paid to Mr Bullivant.
3. Mr Bullivant’s West Midlands pension income was not taken into account by Centrelink in calculating the amounts of disability support pension, wife pension and age pension paid to Mr Bullivant and Mrs Bullivant in the period from 24 July 1998 to 21 September 2005, and, as a result, Mr Bullivant and Mrs Bullivant each received an overpayment of approximately $13,000 in their social security pension entitlements in that period.
4. The amount of the overpayment of social security pensions paid to Mr Bullivant and to Mrs Bullivant in the abovementioned period constitutes a debt owed by each of them to the Commonwealth under s 1223 (as in force at all material times) of the Social Security Act 1991 (Cth) (“the Act”).
5. The matter for the Tribunal’s determination is whether or not:
· the Commonwealth’s right to recover the whole or part of those debts must, or should, be waived under, respectively, s 1237A(1), or s 1237AAD, of the Act; or
· those debts should be written off under s 1236(1) of the Act.
6. For the reasons which follow, the Tribunal has determined that that part of each of the debts which arose in the period from 23 August 2005 to 21 September 2005 must be waived, but that the remainder of each of those debts should not be waived or written off and is recoverable in full from each of Mr Bullivant and Mrs Bullivant.
The Relevant Legislation
7. Part 5.4 of the Act, which deals with non-recovery of debts under the Act, contains the following relevant provisions:
“1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
…
1246(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
…
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
…
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.
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).
…
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, 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.”
The Evidence
8. The evidence before the Tribunal comprised:
· the documents (T1 – T29, pp 1 -297) lodged by the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (“the respondent”) in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth);
· Exhibits A1 – A6 tendered by Mr Bullivant and Mrs Bullivant;
· Exhibits R1 – R6 tendered by the respondent;
· the oral evidence of Mr Bullivant, Samantha Jeffs, Helen Lundy and Lyneve Atkinson.
The evidence of Mr Bullivant
9. Mr Bullivant gave the following oral evidence-in-chief:
· he was born in June 1938 in Coventry in England;
· he arrived in Australia in 1982;
· in 1992 he stopped working following a heart attack and he claimed, and was granted, disability support pension;
· his local Centrelink office was then located in Gosnells, Western Australia;
· when he was working in England he made contributions to the West Midlands Pension Fund, and he regularly received newsletters from the Fund;
· in 1997 he became aware that he could make a claim on the Fund, and he went to the Gosnells Centrelink office and made enquiries about it;
· Gosnells Centrelink office staff did not inform him what effect his claiming and receiving a pension from the West Midlands Pension Fund would have on his disability support pension;
· he thought that the West Midlands pension would be a “supplement” to his disability support pension;
· in June 1998, when he turned 60 years of age and thereby became eligible to claim a pension from the West Midlands Pension Fund, he visited the Gosnells Centrelink office and gave them documents containing information about the West Midlands Pension Fund;
· he wrote a letter, dated 22 May 1998, to the West Midlands Pension Fund in order to obtain information required by Centrelink and also for tax purposes;
· his letter of 22 May 1998 (Exhibit A1) stated as follows:
“Further to your letter of 3-10-96 I have written to and received from the Inland Revenue exemption from UK income tax on my forthcoming superannuation pension. As you are aware I will be 60 years of age on ... June 1998 and thought that I should keep in touch with you, in anticipation of receiving a lump sum cheque soon after the above date.
Could I also ask that you send me a complete history of contributions for my use here.
…”;
· he received a letter, dated 2 June 1998, from the West Midlands Pension Fund advising him that his preserved retirement benefits were payable and requesting him to complete and return an enclosed form so that his benefits might be paid, and he replied, enclosing the completed form, on 10 June 1998 (T17, p81);
· he subsequently received a letter, dated 17 June 1998, from the West Midlands Pension Fund listing his contributions (as requested in his letter of 22 May 1998) T17, p78);
· he visited the Gosnells Centrelink office in June 1998 and gave them this information;
· he received a letter, dated 16 July 1998, from the West Midlands Pension Fund advising him of the amount of his lump sum retirement grant and his annual pension (T17, p79), and he also took that letter into Centrelink;
· he subsequently received quarterly pension advice statements from the West Midlands Pension Fund in the period from September 1998 to September 2005 (T19, pp89-147), but he did not give that information to Centrelink “because they already had the information”;
· as regards letters to him from Centrelink, dated 10 May 1999 and 9 August 1999, requiring him to advise Centrelink of, inter alia, his income details, he was in the United Kingdom in the period May – August 1999 (and he had advised Centrelink of this), and he has never seen those letters before;
· even if he had seen those letters, there would still not have been any reason for him to contact Centrelink “because they had all the information”;
· he transferred from disability support pension to age pension in June 2003 when he turned 65 years of age;
· at that time he was required by Centrelink to complete an income and assets form, and he included details of his West Midlands pension income and his United Kingdom old age pension income in that form;
· he posted that form to Centrelink in early June 2003, and he assumed that Centrelink would calculate his age pension entitlements on the basis of that information;
· a letter to him from Centrelink, dated 19 August 2003, stated that his age pension payments were calculated on the basis of a specified combined annual income amount (T26, p259), but the components of that amount were not particularised and he assumed that it included his West Midlands pension and his United Kingdom old age pension;
· likewise a letter to Mrs Bullivant from Centrelink, dated 15 March 2004, and a letter to him from Centrelink, dated 19 March 2004, specified a combined annual income amount (T15, p71; T26, p265), but did not particularise the components of that amount;
· in August 2005 he visited the Armadale Centrelink office (which was then his local office) with all his documents and he spoke with an officer named Helen and he was “horrified” to learn that Centrelink’s computer records did not contain any reference to his West Midlands pension payments and that he and Mrs Bullivant had received an overpayment of approximately $26,000 in their Centrelink pensions;
· this was the first occasion on which he had been informed by Centrelink that his West Midlands pension payments would affect the amount of his Centrelink pension payments.
10. In cross-examination Mr Bullivant said, in relation to his visit to the Gosnells Centrelink office in June 1988, that he had to make an appointment beforehand by telephone. He said that he made a subsequent visit to that office in July 1998 when he brought with him the West Midlands Pension Fund letter of 17 June 1998.
11. Mr Bullivant said that he did not think his West Midlands pension would have any effect on Mrs Bullivant’s Centrelink pension.
12. Mr Bullivant was referred to Centrelink’s records of his, and Mrs Bullivant’s, contacts with Centrelink which indicate that he and Mrs Bullivant had attended for a pre-departure interview regarding the overseas portability of their pensions on 21 April 1999 and that he had provided documentary information to Centrelink in the period April – June 2003, but that no such contacts had occurred in 1998. Mr Bullivant responded that Centrelink’s records are incomplete.
13. In re-examination Mr Bullivant said that the first occasion on which he attended Gosnells Centrelink office in relation to his West Midlands pension was in May 1998. He said that he “definitely” also attended that office in June 1998 but that he was not sure of the date.
The evidence of Samantha Jeffs
14. Mrs Jeffs is the daughter of Mr Bullivant and Mrs Bullivant. She said that she accompanied Mr Bullivant on one of his visits to Gosnells Centrelink office in 1998 when he provided documentation to them in relation to his West Midlands pension. She said that Mr Bullivant and Mrs Bullivant went to the United Kingdom for a few months in May 1999, and that she did not recall receiving any Centrelink mail for them at that time.
The evidence of Lyneve Atkinson
15. Ms Atkinson said that she has been employed at the Armadale Centrelink office for 8 years. She confirmed that she had created a Centrelink document which recorded that Mr Bullivant attended the Armadale Centrelink office on 23 August 2005 in relation to his age pension and that he “need(ed) clarification regarding the UK pension” (T16).
The evidence of Helen Lundy
16. Ms Lundy said that she was employed in the Family and Pensions Section of the Armadale Centrelink office on 1 September 2005 when Mr Bullivant and Mrs Jeffs attended that office. She confirmed that she had created a Centrelink document which recorded that Mr Bullivant attended the office on 1 September 2005 in relation to his age pension and provided “private UK pension details dating back to 1997”. The document also recorded that Mr Bullivant stated that he had provided those details when he was receiving disability support pension, but that no such details appeared on the relevant “foreign income pension summary”. Ms Lundy said that, when she informed Mr Bullivant and Mrs Jeffs that Centrelink records did not contain any information regarding Mr Bullivant’s West Midlands pension, they appeared “shocked”.
Analysis
Must the Commonwealth’s right to recover the whole or part of the debts owed to it by Mr Bullivant and Mrs Bullivant be waived under s 1237A(1) of the Act?
Administrative error
17. The fundamental precondition of waiver under s 1237A(1) of the Act is that the debt, or a proportion thereof, be “attributable solely to an administrative error made by the Commonwealth”.
18. Mr Bullivant and Mrs Bullivant contend that the whole of the abovementioned debt owed by each of them to the Commonwealth is attributable solely to administrative error on the part of Centrelink in failing to act upon the information which Mr Bullivant claimed that he provided to the Gosnells Centrelink office in relation to his West Midlands pension in June/July 1998. In order to determine the validity of that contention it is convenient to break up the total overpayment period into certain discrete periods and consider the circumstances of each period.
The period up until 4 June 2003
19. The critical finding of fact which the Tribunal is required to make in relation to this period is whether or not Mr Bullivant provided to Centrelink within that period the information regarding the amounts of his West Midlands pension payments which Centrelink required in order to calculate his, and Mrs Bullivant’s, pension entitlements, and which he was obliged by the social security law to provide.
20. Mr Bullivant claims that he visited the Gosnells Centrelink office and provided all the necessary information regarding his West Midlands pension in June/July 1998. Having regard to the whole of the evidence before it, however, the Tribunal notes that the accounts of this matter given, or recorded as having been given, by Mr Bullivant to Centrelink, to the Social Security Appeals Tribunal (“SSAT”), and to this Tribunal, in the period from January 2006 (when the relevant debts were first raised by Centrelink), have not been consistent. Those accounts were (relevantly) as follows:
· in a letter dated 20 January 2006 to Centrelink Mr Bullivant stated:
“ …
In 1997 I was advised that I could apply to obtain my UK local government pension scheme on the grounds of ill health, but would receive a reduced amount as a disability support pension. Before receiving the first payment in 1998 I went into the Gosnells (WA) office of DSS with all information (copies attached) including bank account details for quarterly payment, along with fund policy details and amounts, National Insurance information and relevant tax documents. Since then I have received updates of exchange rates changes, and understood that your department had already made any necessary adjustments to my Australian pension entitlements (make up), if there had been any request for further information, surely I would have been requested to furnish this at that time. Given no such request was made I trusted your calculations were correct as I have no reason to question otherwise.
…” (T22, pp191-192);
· an Authorised Review Officer within Centrelink made the following record of a telephone conversation with Mr Bullivant:
“In our telephone conversation of 2 March 2006 you also said that:
· Shortly after 17 June 1998 you visited the Gosnells Centrelink Office and saw an elderly staff member. You left the information regarding the West Midlands Superannuation with this staff member. You can remember the day as there was a ruckus.
· As you were under the age pension age to receive the West Midlands Superannuation the payment that you were granted was a disability supplement. You therefore believed that it was a supplement to your Australian Disability Support Payment.
· You were told that the West Midlands Superannuation would be taken into account automatically. When you received the subsequent rate notices from Centrelink you assumed that as it had already been taken into account then there was no need for you to advise Centrelink. Also you were never asked for details of any increases to the West Midlands Superannuation.
· You did not make any other attempts to advise Centrelink of the West Midlands Superannuation as you was (sic) never asked and Centrelink had previously assured you that there was no need.
· You had assumed that as Centrelink was a Government agency then it would be aware of any changes to your overseas pensions.
· You were sure that the contact with Centrelink in 1998 was not the contact in 2001 when you advised of the grant of United Kingdom Retirement Pension to your wife.
· Prior to June 2003 you visited the Armadale office to discuss the taxation status of your Centrelink payments. While there you completed an income & assets form & declared the West Midlands Superannuation on this form.” (T23, p203);
· the SSAT relevantly recorded information provided by Mr Bullivant at the hearing on 26 July 2006 as follows:
“Mr Bullivant can clearly recall taking his West Midlands documentation into Centrelink at the Gosnells office in 1998 and that there was a fight in the foyer whilst he was in the office. He went to the counter officer and was told that they would get someone to talk to him. He then saw an elderly gentleman at the back of the office and gave him all the forms and told him what bank account his West Midlands pension was to be paid into. West Midlands needed the bank account details prior to the pension being transferred. Mr Bullivant thinks it was more than nine days from the date of the letter of advice from West Midlands that they would pay him the pension before he received the letter. He thinks it would have been around his birthday on 8 June 1998 when he went to Gosnells Centrelink with this information. Mr Bullivant also got extra information from West Midlands as to the amounts of contributions paid each year because Centrelink asked for this information. Mr Bullivant thinks he went in and saw the same man at Centrelink at least twice.” (T2, p7);
· in his evidence to this Tribunal (set out in paragraphs 9-13 above) Mr Bullivant initially said that he visited the Gosnells Centrelink office in June 1998 and July 1998 and produced each of the letters he had recently received from the West Midlands Pension Fund, although he later said that he first attended that office in relation to his West Midlands pension in May 1998 and that he “definitely” also attended that office in June 1998 but that he was not sure of the date.
21. Mrs Jeffs’ evidence, unfortunately, does not greatly help to clarify this matter. Her evidence does, however, corroborate Mr Bullivant’s evidence that he visited the Gosnells Centrelink office in June 1998 and provided information regarding his West Midlands pension.
22. Centrelink, however, has no record of any attendance by, or communication or receipt of information from, Mr Bullivant in 1998.
23. Having considered the whole of the evidence before it, the Tribunal is not satisfied that Mr Bullivant notified Centrelink in 1998 or, indeed, in the period from 1998 to 3 June 2003, regarding the amount of the West Midlands pension which was payable to him with effect from 8 June 1998. The Tribunal notes that that pension was in fact paid to Mr Bullivant on a quarterly basis and that the first payment was made to him on 25 September 1998 (T19, p89). The Tribunal also notes that the amount of that pension was automatically increased in April each year “to offset the effects of inflation” (T17, p79). Mr Bullivant acknowledged in his evidence that he did not keep Centrelink informed of the amounts of his quarterly pension payments (including the annual April increases). Although Mr Bullivant gave evidence that he attended the Gosnells Centrelink office on more than one occasion in the period May – July 1998 and provided information regarding his West Midlands pension, the Tribunal, having regard to the inconsistencies in the various accounts he has given regarding this matter (see paragraph 20 above) and having regard to the absence of any Centrelink record of such visits or of relevant information regarding the West Midlands pension being provided by him, regards his evidence as unreliable and it does not accept that evidence.
24. Accordingly, the Tribunal finds that no part of the debts owed by Mr Bullivant and Mrs Bullivant to the Commonwealth, which arose by reason of overpayments of disability support pension and wife pension in the relevant period up until 4 June 2003, was attributable solely to administrative error on the part of Centrelink. Rather, the Tribunal is satisfied that those debts were attributable to a failure by Mr Bullivant to provide detailed information to Centrelink regarding the amounts of the West Midlands pension payments that were made to him in that period.
25. The Tribunal concludes, therefore, that the Commonwealth’s right to recover the whole of those debts cannot be waived under s 1237A(1) of the Act.
The period 4 – 24 June 2003
26. The respondent does not dispute Mr Bullivant’s evidence that in June 2003 he lodged with Centrelink an income and assets form in which he provided details of his existing West Midlands pension and also of a United Kingdom old age pension which was about to become payable to him when he turned 65 years of age. The respondent accepts that the date on which that form was received by Centrelink is 4 June 2003, and concedes that Centrelink failed to act on the information provided in that form and did not appropriately reduce the amounts of Mr Bullivant’s and Mrs Bullivant’s pension payments, thereby resulting in an overpayment to them. The respondent, furthermore, concedes that that overpayment was attributable solely to administrative error on the part of Centrelink and that the right to recover the resulting debt should be waived under s 1237A(1) of the Act.
27. The Tribunal notes that the abovementioned income and assets form was not in evidence before it and it understands that it cannot be located and may have been destroyed. There are in evidence, however, Centrelink records which indicate that:
· on 26 May 2003 Mr Bullivant telephoned Centrelink and made an appointment to discuss a transfer from disability support pension to age pension, and an income and assets form was to be sent to him for completion;
· an appointment was scheduled for 2.00pm on 3 June 2003 at the Armadale Centrelink office for the purpose of Mr Bullivant’s advising of “future UK pension” and his transfer from disability support pension to age pension;
· that appointment was cancelled, but Mr Bullivant attended the Armadale Centrelink office on 4 June 2003;
· on 4 June 2003 Mr Bullivant provided information to the Armadale Centrelink office regarding the amount of “new foreign income”, namely, 63.15 pounds per week, from 9 June 2003. (T 27, pp 288-289 , 292-293)
28. The Tribunal is satisfied that the references to “future UK pension” and “new foreign income” in the abovementioned Centrelink records relate to the United Kingdom old age pension (for which Mr Bullivant was soon to become eligible), and not to the West Midlands pension (which Mr Bullivant had been receiving since September 1998). In the Tribunal’s opinion it is highly likely that, had Mr Bullivant provided information to Centrelink about both his West Midlands pension and his forthcoming United Kingdom old age pension in early June 2003 (as he claimed), Centrelink would have recorded information about both pensions. The abovementioned Centrelink records cause the Tribunal to infer that, on 4 June 2003, Mr Bullivant provided information to Centrelink regarding his forthcoming United Kingdom old age pension, but did not provide information to Centrelink regarding his existing West Midlands pension.
29. Having regard to the abovementioned considerations, the Tribunal does not regard the respondent’s concessions (referred to in paragraph 26 above) as appropriate. The Tribunal notes that, although those concessions were made by the respondent in an amended Statement of Facts and Contentions filed and served prior to the hearing, the subject-matter of those concessions was addressed in the evidence and submissions presented on behalf of Mr Bullivant and Mrs Bullivant at the hearing.
30. Having regard to the whole of the evidence before it, the Tribunal is not satisfied that Mr Bullivant notified Centrelink, on or about 4 June 2003 or at any time in the period 4 – 24 June 2003, regarding the amounts of the West Midlands pension payments which he had been receiving on a quarterly basis from September 1998. Accordingly, the Tribunal finds that no part of the debts owed by Mr Bullivant and Mrs Bullivant to the Commonwealth, which arose by reason of overpayments of disability support pension, age pension and wife pension in the period 4 – 24 June 2003, was attributable solely to administrative error on the part of Centrelink. Rather, the Tribunal is satisfied that those debts were attributable to a failure by Mr Bullivant to notify Centrelink of the West Midlands pension that was payable to him in that period.
31. The Tribunal concludes, therefore, that the Commonwealth’s right to recover the whole of those debts cannot be waived under s 1237A(1) of the Act.
The period from 25 June 2003 to 22 August 2005
32. The Tribunal is likewise not satisfied that Mr Bullivant notified Centrelink, at any time in the period from 25 June 2003 to 22 August 2005, regarding the amounts of the West Midlands pension payments which he received in that period. Accordingly, the Tribunal finds that no part of the debts owed by Mr Bullivant and Mrs Bullivant to the Commonwealth, which arose by reason of overpayments of age pension and wife pension in that period, was attributable solely to administrative error on the part of Centrelink. Rather, the Tribunal is satisfied that those debts were attributable to a failure by Mr Bullivant to notify Centrelink of the West Midlands pension payments which were made to him in that period.
33. The Tribunal concludes, therefore, that the Commonwealth’s right to recover the whole of those debts cannot be waived under s 1237A(1) of the Act.
The period from 23 August 2005 to 1 November 2005
34. It is common ground that, on 23 August 2005, Mr Bullivant attended the Armadale Centrelink office for the purpose of arranging for the amount of $45.00 to be deducted from his fortnightly pension payments for tax purposes, and on that occasion he provided documentation regarding his West Midlands pension. It is also common ground that Centrelink did not reduce the amount of Mr Bullivant’s and Mrs Bullivant’s age pension payments, on the basis of the information provided by Mr Bullivant on 23 August 2005, until 21 September 2005, and accordingly Mr Bullivant and Mrs Bullivant each received an overpayment of age pension in the period from 23 August 2005 to 21 September 2005.
35. The respondent concedes that, having regard to the abovementioned circumstances, it would be appropriate to waive, under s 1237A(1) of the Act, the Commonwealth’s right to recover the abovementioned debts which arose in the period from 23 August 2005 to 21 September 2005. Although there may be an issue regarding whether Mr Bullivant and Mrs Bullivant received the amounts of the relevant overpayments in good faith, for the purposes of s 1237A(1), the Tribunal is, in the circumstances, prepared to accept the respondent’s concession.
36. The Tribunal concludes, therefore, that the Commonwealth’s right to recover the debts owed by Mr Bullivant and Mrs Bullivant by reason of an overpayment of age pension to each of them in the period from 23 August 2005 to 21 September 2005 must be waived under s 1237A(1) of the Act.
37. The Tribunal is not aware of any debts owed by Mr Bullivant and Mrs Bullivant by reason of an overpayment of age pension to each of them in the period from 22 September 2005 to 1 November 2005. The question of waiver of debts does not, therefore, arise in respect of that period.
Should the Commonwealth’s right to recover the whole or part of the debts owed to it by Mr Bullivant and Mrs Bullivant be waived under s 1237AAD of the Act?
38. It is common ground that the debts owed by Mr Bullivant and Mrs Bullivant did not result, wholly or partly, from either of them, or another person, knowingly making a false statement or a false representation, or knowingly failing or omitting to comply with a provision of the Act or the Social Security Administration Act 1999 (Cth). Paragraph (a) of s 1237AAD of the Act is, accordingly, satisfied in this case.
39. The question arises, for the purposes of para (b) of s 1237AAD, whether “there are special circumstances (other than financial hardship alone) that make it desirable to waive” the Commonwealth’s right to recover the whole or part of those debts.
40. In Secretary, Department of Social Security v Hales (1998) 82 FCR 154 the Federal Court of Australia (French J), referring to s 1237AAD of the Act, said (at 155, 162):
“From time to time in the administration of social security benefits overpayments occur. Sometimes these are the result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place. The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the person concerned. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth. …
…
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary’s discretion.
…
The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.”
41. Mr and Mrs Bullivant submit that there are “special circumstances” in their case which collectively make it desirable to waive the Commonwealth’s right to recover the relevant debts from them, namely:
· administrative errors by Centrelink;
·the ill health of Mr Bullivant and Mrs Bullivant, and the ill health of Mrs Bullivant’s father, Mr Samuel Smith, for whom they cared until he passed away in February 2008;
·the adverse effect of the overpayments/debts on the extended family of Mr Bullivant and Mrs Bullivant, including Mrs Jeffs and her family;
·the difficult financial circumstances of Mr Bullivant and Mrs Bullivant, and the severe financial stress that would be caused to them by the recovery of the debts.
42. As regards health issues, the Tribunal had before it various medical reports by Dr Ken Paton, the treating general practitioner of Mr Bullivant, Mrs Bullivant and Mr Smith, and by Dr David Playford, Consultant Cardiologist (Exhibit A3). Those reports confirm that:
·Mr Bullivant suffers from various medical conditions, including severe ischaemic heart disease, gastro-oesophageal reflux disease, and hiatus hernia;
·Mrs Bullivant suffers from various medical conditions, including osteoarthritis, and gastro-oesophageal reflux disease;
·Mr Smith (who passed away in February 2008 at the age of 94 years) suffered from various medical conditions, including severe cardiac failure, prostrate cancer, and dementia.
Those reports also refer to the stress and the adverse impact on the health of Mr Bullivant and Mrs Bullivant caused by the recovery of debts from them by Centrelink.
43. The Tribunal also had before it a letter from Mrs Jeffs, filed on 9 October 2006 (Exhibit A6), setting out the health circumstances of her husband (who is disabled and for whom she is a full-time carer) and of herself and her brother (who is also disabled), and describing the adverse effect which the debt recovery process is having on the whole family. A medical report from Dr Alida Lancee, Mr and Mrs Jeffs’ treating general practitioner, dated 18 January 2008, confirming Mr Jeffs’ disabilities and Mrs Jeffs’ role as his carer, was also before the Tribunal (part of Exhibit A3).
44. As regards the financial circumstances of Mr Bullivant and Mrs Bullivant, the Tribunal had before it their Income/Expenditure Statement dated May 2008, according to which their total fortnightly income is $1,436.82 and their total fortnightly expenditure (including debt repayment to Centrelink of $200.00) is $1,480.29 (Exhibit A4).
45. The Tribunal is not satisfied that the abovementioned circumstances are such as to “make it desirable to waive”, under s 1237AAD of the Act, the Commonwealth’s right to recover the debts owed to it by Mr Bullivant and Mrs Bullivant.
46. The Tribunal is not satisfied that any part of those debts was attributable to administrative error on the part of Centrelink, with the exception of that part of the debts which arose in the period from 23 August 2005 to 21 September 2005. The Tribunal has already determined that the Commonwealth’s right to recover that part of the debts must be waived under s 1237A(1) of the Act (see paragraphs 34-36 above). It may be that in 1997 Mr Bullivant made preliminary enquiries at the Gosnells Centrelink office about the effect (if any) of his receiving the West Midlands pension on his existing disability support pension and that he then formed the honest belief that the West Midlands pension would not affect his disability support pension and would be a “supplement” to it. That belief, however, did not absolve him from his obligations under the social security law, as notified to him by letters from Centrelink dated 20 September 1993, 10 May 1999, 9 August 1999, 26 May 2003, 9 June 2003, 19 August 2003 and 19 March 2004, to keep Centrelink informed of, inter alia, changes in the amount of his income – an obligation which, the Tribunal has found, he failed to fulfil prior to 23 August 2005.
47. The Tribunal accepts that the health circumstances of Mr Bullivant and Mrs Bullivant are poor. It also accepts that Mr Smith’s health had been very poor for some years prior to his passing away in February 2008 and that responsibility for his care was accepted and discharged conscientiously by Mr Bullivant and Mrs Bullivant. The Tribunal is not satisfied, however, that the nature and degree of those circumstances are such as to make it desirable or appropriate to absolve Mr Bullivant and Mrs Bullivant from their liability to repay their debts to the Commonwealth. Likewise, the Tribunal is not satisfied that the stressful effect which the debt recovery process is having on Mr Bullivant, Mrs Bullivant, Mrs Jeffs and other members of their extended family is a circumstance that makes it desirable or appropriate to absolve them from that liability.
48. Finally, although the Tribunal accepts that Mr Bullivant and Mrs Bullivant are not in a comfortable financial situation, it does not accept that their financial situation is desperate or dire. It appears from the abovementioned Income/Expenditure Statement that they own their own home and have no mortgage repayment expenses. Nor, it seems, do they have any dependants. They are, furthermore, in receipt of their United Kingdom pensions in addition to their Centrelink age pensions. Although the Statement indicates that their fortnightly expenditure exceeds their fortnightly income by $43.47, the Tribunal is of the opinion that there is room to reduce their stated fortnightly expenditure at least to the extent that it does not exceed their fortnightly income. This could be achieved, without affecting their current living expenses, by a reduction in the rate of their Centrelink debt repayments which, according to the Statement, is $200.00 per fortnight. If that rate of repayment is in fact causing financial hardship to Mr Bullivant and Mrs Bullivant, it may be that a lower rate of repayment may be able to be negotiated with Centrelink.
49. Having regard to the totality of the abovementioned circumstances of Mr Bullivant and Mrs Bullivant, the Tribunal is not satisfied that those circumstances are such as to make it desirable or appropriate to waive, under s 1237AAD of the Act, the Commonwealth’s right to recover the debts owed to it by Mr Bullivant and Mrs Bullivant.
Should the debts owed to the Commonwealth by Mr Bullivant and Mrs Bullivant be written off under s 1236(1) of the Act?
50. It is common ground that none of the preconditions of the exercise of the power to write off a debt, specified in paras (a)-(d) of s 1236(1A) of the Act, is satisfied in this case. In particular, the Tribunal is satisfied that Mr Bullivant and Mrs Bullivant have the capacity to repay their debts to the Commonwealth by means of fortnightly deductions from their social security payments without causing them severe financial hardship.
51. Accordingly, the debts owed to the Commonwealth by Mr Bullivant and Mrs Bullivant cannot be written off under s 1236(1) of the Act.
Decision
52. For the above reasons the Tribunal sets aside the decision of the Social Security Appeals Tribunal, dated 26 July 2006, and, in substitution therefor, decides that:
·Mr Bullivant received overpayments of disability support pension and age pension, and Mrs Bullivant received overpayments of wife pension and age pension, in the period from 24 July 1998 to 1 November 2005;
·the amounts of those overpayments constitute debts owed to the Commonwealth by Mr Bullivant and Mrs Bullivant;
·the Commonwealth’s right to recover that part of the debts owed to it by Mr Bullivant and Mrs Bullivant, which arose by reason of overpayments of age pension in the period from 23 August 2005 to 21 September 2005, is waived under s 1237A(1) of the Act;
·the debt owed to the Commonwealth by Mr Bullivant (by reason of overpayments of disability support pension and age pension in the period from 24 July 1998 to 22 August 2005) and the debt owed to the Commonwealth by Mrs Bullivant (by reason of overpayments of wife pension and age pension in the period from 24 July 1998 to 22 August 2005) are recoverable in full from each of them by the Commonwealth in accordance with Part 5.3 of the Act.
I certify that the 52 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President S D Hotop.
Signed: ............[sgd D. Brodie]..........
AssociateDate of Hearing 26 May 2008
Date of Decision 1 August 2008
Representative of the Applicants Ms P Robbins
Sussex Street Community Law Service Inc
Representative of the Respondent Ms M Conlon
Legal Services Branch, Centrelink
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