Cann and Secretary, Department of Family and Community Services
[2003] AATA 751
•5 August 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 751
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/230
GENERAL ADMINISTRATIVE DIVISION ) Re DOROTHY CANN Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr E K Christie, Member Date5 August 2003
PlaceBrisbane
Decision The decision under review is affirmed. This means Ms Cann’s application for review is unsuccessful.
(Sgd) EK Christie
Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – overpayment – whether debt could be waived for administrative error – whether debt could be waived for special circumstances
Social Security Act 1991 ss 1237A, 1237 AAD
Secretary, Department of Education, Employment & Youth Affairs v Prince (1997) 50 ALD 186
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435REASONS FOR DECISION
5 August 2003 Dr E K Christie, Member 1. This is an application by Dorothy Cann for a review of a decision of the Social Security Appeals Tribunal (“the SSAT”) made on 13 February 2002 that an overpayment of disability support pension of $6,970.18 had been paid to Ms Cann over the period 15 March 2000 to 19 June 2001 and this overpayment was a debt due to the Commonwealth and so could be recovered by Centrelink.
2. In reaching its decision, the SSAT concluded:
“16. Because Mrs Cann did not notify Centrelink of her income from employment, her disability support pension was calculated on an incorrect annual income figure for the period 15 March 2000 to 19 June 2001. As a consequence, under sub-section 1224(1) and sub-section 1223(5) the excess payments she received during that period, in the amount of $6,970.18, are a debt due to the Commonwealth.
…
18. The Tribunal finds that there was no administrative error on the part of Centrelink and therefore the debt cannot be waived under section 1237(1).
…
20. Because the Tribunal finds that the debt arose as a result of Mrs Cann failing to notify her income from employment, as required by the Social Security Act, under section 1237AAD(a)(ii) it is not possible to consider waiver of the debt under this [the special circumstances] provision.” [T2 Folio 10-11]
3. At the hearing, the applicant Dorothy Cann represented herself. The respondent was represented by Ms Julie Dwyer, a Departmental Advocate.
4. The Tribunal had in evidence before it, documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents). Ms Cann gave oral evidence at the hearing.
Issues to be Decided
5. At the outset of the hearing it was agreed to by Ms Cann that an overpayment of $6,970.18 in disability support pension (“DSP”) had been paid to her. It was further agreed by Ms Cann and Ms Dwyer that the only issues for the Tribunal to decide were:
(a)whether the overpayments could be waived in part or in full under the “administrative error” provisions of the Social Security Act 1991; or
(b)whether the overpayments could be waived in part or in full under the “special circumstances” provisions of the Social Security Act 1991.
6. At the end of the hearing Ms Cann advised the Tribunal that Centrelink had been recovering the overpayment at the rate of $150 per fortnight (whilst undertaking paid employment) or $50 per fortnight (whilst receiving DSP only). The residual balance of the overpayment, at the day of the Tribunal hearing, was $1,209.
7. The Tribunal adjourned the hearing to enable Ms Cann to prepare a Statement of Financial Circumstances (by 18 July 2003) and for submissions in response to be received from the respondent (by 25 July 2003).
Facts
8. The SSAT made the following findings of fact at its hearing:
“(i)Ms Dorothy Cann was in receipt of disability support pension at all material times.
(ii)Ms Cann was sent letters from Centrelink, dated 30 March 2000, 13 October 2000 and 1 January 2001, which stated that the annual income used to calculate her payments was $0.14.
(iii)Ms Cann has been employed by RD and IB Inwood from 13 March 2000 to the present.
(iv)In the period 15 March 2000 to 19 June 2001 her earnings were as documented in the employer report provided to Centrelink by RD and IB Inwood in June 2001 [see T8, T9, Folios 39-41].
(v)Ms Cann did not notify Centrelink of these earnings.
(vi)Ms Cann was aware that her rating of disability support pension should have been reduced had her earnings been taken into account (T2, Folios7,8).”
9. Ms Cann conceded the above findings of facts made by the SSAT: (i), (iii), (iv), (vi) were correct.
10. However, with respect to fact (ii), Ms Cann stated that she could not remember receiving the Centrelink letters dated 30 March 2000, 13 October 2000 and 1 January 2001.
11. Ms Cann disagreed with the SSAT’s finding of fact (v) that she did not notify Centrelink of her earnings whilst employed by RD and IB Inwood.
Oral Evidence of Dorothy Cann
12. Ms Cann stated that, when she returned to work in March 2000 with RD and IB Inwood, she had rung Centrelink to advise that she would be returning to work. She was then asked by the Centrelink operator how much she would earn. As she was uncertain at this stage, she having not been paid, she could not answer this question.
13. Consequently, she said that when she received her first pay a fortnight later, she rang again to notify Centrelink of this amount of pay. She said that she was advised that this information would be put on her file. Ms Cann said that she sought further verification on this point by asking “is that all I need to do” and was given the answer “yes”.
14. Ms Cann said that when she received her next DSP payment she noticed that the amount received was unchanged from the amount she had received before commencing paid employment. She said that she was aware that there may be an error in the payment and so rang Centrelink to advise that she was working and earning a specified amount; that is, to query the rate of payment. She was advised that the amount of DSP she received was correct.
15. Ms Cann said that she had rung Centrelink a few more times beyond these dates to query whether the amount of DSP she received, whilst undertaking paid employment, was correct, as the amount of DSP remained unchanged. Overall, she said she had rung Centrelink at least eight times, or more, and, at each time, had been told that the rate of payment for the DSP she received was correct.
16. Ms Cann said that she had also written three letters to Centrelink querying whether the DSP entitlements she received should remain unchanged at the time she was undertaking paid employment. She said that she had been told later that these letters had never been received by Centrelink.
17. During cross-examination by Ms Dwyer, Ms Cann gave the following answers:
(a)that she was unaware that she could ask for a receipt number when she rang Centrelink. She said that she did ask for a receipt number once but was not given one;
(b)that she had never been asked for a password when she telephoned Centrelink, until after she had written the three letters;
(c)Ms Cann acknowledged that she had been convicted of a criminal offence in the Magistrates Court for overpayment of $13,000 of DSP during a period when she shared a house with a violent partner. She said that she was no longer in a relationship with this person. She stated that she had pleaded guilty to this charge on the advice of her solicitor; and
(d)that she was not expecting to work, at this stage, because of the back problems for which she received the DSP.
Submissions and Contentions of the Parties
18. Ms Dwyer queried Ms Cann’s evidence that she had telephoned Centrelink on eight or more occasions and had written three letters to Centrelink. She stated that Centrelink had no record of receiving any of these phone calls or letters. Ms Dwyer submitted that whilst such a situation “may” have possibly occurred on “two or three occasions” it was highly unlikely that such a situation would have occurred on “eight or more occasions”.
19. Ms Dwyer stated that an “Automatic Receipt” was always generated whenever a Call Centre Operator at Centrelink went into a customer’s record. Furthermore, Ms Cann’s records were password protected. As a result, in Ms Cann’s case, she would have been asked a series of questions (such as her customer reference number, date of birth, address) to verify that it was, in fact, Ms Cann who was making the query.
20. Ms Dwyer contended that the overpayments of DSP could not be waived under the “administrative error” provisions of the Social Security Act 1991 as the error leading to the overpayment had not been solely caused by the Commonwealth. Ms Cann had also contributed to the error. Furthermore, Ms Cann had not received the DSP overpayments in “good faith” as she had stated in her oral evidence that she was aware that the rate of DSP she received would be affected by her earnings with RD and IB Inwood.
21. Ms Dwyer also submitted that the overpayment could not be waived under the “special circumstances” provisions of the Social Security Act 1991 because there were no facts that were either “unusual”, “uncommon” or “exceptional” which led to the overpayment being made.
22. Ms Dwyer further submitted that Ms Cann had “knowingly” contravened a provision of the Social Security Act 1991 as she had not advised Centrelink of the changes in her income when undertaking paid employment.
23. Ms Dwyer concluded that the Tribunal should not accept the evidence of Ms Cann to be that of a credible witness.
24. Ms Cann contended that she could not accept the position of Centrelink that they had no record or means to verify all the telephone queries she had made, or letters that she had sent, with respect to her receiving the correct amount of DSP.
25. Ms Cann said she was aware that her DSP payments were incorrect and this was the reason she had raised her queries with Centrelink.
26. Ms Cann stated that it was not her intent to “defraud the system”.
Legislation and Relevant Legal Principles
27. The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times. The relevant legislation is the Social Security Act 1991 (“the Act”).
28. Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth may be waived, either in part or in full. These circumstances arise if the overpayment arose from “administrative error” or whether there were “special circumstances” that led to the overpayment.
29. Section 1237A provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “administrative error”. That section provides:
“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.”
30. For this section of the Act to apply to Ms Cann’s factual situation, Ms Cann must not have contributed, in any way, to the administrative error that led to the overpayment. In addition, Ms Cann must have received her overpayments of social security entitlements in “good faith”. Both these requirements must be satisfied for Ms Cann to succeed under the “administrative error” provisions of the Act.
31. The legal meaning of “good faith” was considered by the Federal Court in Secretary, Department of Education, Employment and Youth Affairs v Prince (1997) 50 ALD 186. In this case, Finn J stated:
“…if that person knows or has reason to know that he or she is not entitled to a payment received - ie is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith…the [legislation] does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise”.
32. Section 1237AAD provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “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 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 [Tribunal emphasis].”
33. For this section of the Act to apply to Ms Cann’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Ms Cann must not have “knowingly” made a false statement or false representation or failed to have complied with a provision of the Act. Both these requirements must be satisfied for Ms Cann to succeed under the “special circumstances” provisions of the Social Security Act 1991.
34. The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”. In that case the Tribunal said (at 3):
“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”
35. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
36. The meaning of the term “knowingly” has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 where Deputy President Forgie stated (at 445):
“There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act of or omission.”
Consideration of the Issues
37. The first issue for the Tribunal to decide is whether all, or part, of the debt can be waived under the “administrative error” provisions of the Act.
38. The Tribunal has considered all of the evidence and information before it including Ms Cann’s oral evidence at the hearing. The Tribunal considers the following findings on the factual evidence made by the SSAT to be particularly significant:
“9. The Tribunal considered her evidence, given at the hearing, in relation to numerous attempts made by her to inform Centrelink of her earnings from employment, and found this to be lacking in credibility. The Tribunal was unable to believe that Mrs Cann made 10 phone calls and wrote three letters to Centrelink between 10 March 2000 and the end of March 2001, of which Centrelink have no record whatever. The Tribunal confirmed from the Centrelink computer system that Mrs Cann’s records are password protected, and therefore concluded that, had she contacted Centrelink by phone on one or ten occasions, she would have had to provide this before her file could be accessed.
10. The Tribunal also notes that Mrs Cann acknowledges receipt of Centrelink notices in relation to the income on which her payments were calculated, and her obligation to inform Centrelink of any change to this. She did not respond to these notices within 14 days, and the Tribunal does not accept that she had already provided Centrelink with the information requested.” (T2, Folio 8)
39. The Tribunal makes the observation that Ms Cann’s appearance in the Toowoomba Magistrates Court, for the social security offence for which she was convicted, was 12 June 2001 (T20, Folio 80) - a date close to the end of the overpayment period which is the subject of this application (15 March 2000 to 19 June 2001).
40. The Tribunal in its analysis of the factual evidence agrees with the above findings of the SSAT. The Tribunal cannot accept on the civil standard of proof, the balance of probabilities, that on the very frequent occasions that Ms Cann claims she either telephoned (eight or more times) or wrote (three times) to Centrelink that there was not at least one record to verify, or to confirm, that Ms Cann had contacted Centrelink to query her DSP payments. Such a finding is made even clearer when the operation of a password protected system for Ms Cann’s records is understood. That is, had Ms Cann contacted Centrelink by telephone on one or eight occasions she would have had to provide password details to the call centre operator for the operator to go into her records.
41. Given these facts, the Tribunal can make no other conclusion than to find that Ms Cann did not notify Centrelink of changes in her financial circumstances. As a consequence, overpayments of DSP arose. Consequently Ms Cann contributed to the administrative error that led to the overpayments of DSP that she received. As a result, the overpayments of DSP cannot be waived under the “administrative error” provisions of the Act. Given this finding the Tribunal does not have to consider whether the overpayments were received in “good faith”..
42. The next issue for the Tribunal to consider is whether paragraph (b) of section 1237AAD of the Act is satisfied – that is, whether there are “special circumstances (other than financial hardship alone) that makes it desirable to waive” the right to recover all or part of the debt. In addition the Tribunal must also consider paragraph (a) of section 1237AAD. That is, whether Ms Cann has “knowingly” made a false statement or “knowingly” failed or omitted to comply with a provision of the Social Security Act 1991.
43. The Tribunal has carefully considered the facts in this case and, given the Tribunal’s conclusions can find no facts in this case which could be described as “unusual”, “uncommon” or "exceptional” (Beadle’s case) that led to overpayments of DSP. In addition, there are no facts in Ms Cann’s case which have led to an outcome that would take it out of the usual or ordinary case or unintended and so result in an unjust outcome (Groth’s case).
44. The Tribunal cannot find any fact or feature in Ms Cann’s case which would “take it out of the ordinary” to warrant the description of “special circumstances”.
45. The Tribunal concludes that there are no “special circumstances” in Ms Cann’s case. Given this finding there is no reason for the Tribunal to consider whether Ms Cann “knowingly” made a false statement.
46. For all of the above reasons, the Tribunal finds that the DSP overpayments of $6,970.18 received over the period 15 March 2000 to 19 June 2001 is a debt due to the Commonwealth that can be recovered. The overpayments of DSP cannot be waived in part or in full under the “administrative error” or “special circumstances” provisions of the Social Security Act 1991.
47. The Tribunal has carefully considered the Statement of Financial Circumstances prepared by Ms Cann and the supplementary submissions made by Ms Dwyer and supports the proposition that the recovery of Ms Cann’s overpayment be suspended for a period of three months from the date of this decision after which time Ms Cann’s position be reviewed through the preparation of a new Statement of Financial Circumstances.
48. For all of the above reasons, the Tribunal decides to affirm the decision under review.
I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Sarah Oliver
AssociateDate of Hearing 7 July 2003 (at Toowoomba)
Date of Decision 5 August 2003The Applicant appeared in person
For the Respondent Ms Dwyer, Departmental Advocate
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