Carbonell; Secretary, Department of Employment and Workplace Relations and

[2007] AATA 2043

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2043

ADMINISTRATIVE APPEALS TRIBUNAL      )

)No    2007/1735 and

GENERAL ADMINISTRATIVE DIVISION		)                  2007/1737
Re		SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And

ERIC CARBONELL

KELLI CARBONELL

Respondents

DECISION

Tribunal Dr J D Campbell, Member

Date7 December 2007

PlacePerth

Decision

The Tribunal sets aside the decision under review and in substitution finds that:

(a)       Mr Carbonell has a debt owing to the Commonwealth of $2,940.72 arising from the overpayment of Newstart Allowance during the period 20 January 2005 and 13 May 2005; and

(b)       Mrs Carbonell has a debt owing to the Commonwealth of $2,915.83 arising from the overpayment of Parenting Payment during the period 20 January 2005 and 13 May 2005.

.........[Sgd Dr J D Campbell]..........

Member

CATCHWORDS

SOCIAL SECURITY - overpayment of Newstart Allowance and Parenting Payment arising from periodic compensation payments - payment of a lump sum compensation payment - failure to assess quantum of overpayment and raise a debt until 16 months after knowledge of overpayment - issue of sole administrative error - issue of special circumstances.

LEGISLATION

Social Security Act 1991, Sections 17, 1161, 1173, 1180, 1184, 1237A, 1237AAD

REASONS FOR DECISION

7 December 2007 Dr J D Campbell, Member

1.      Mr and Mrs Carbonell were married with four young children as at 1 January 2005.  Mr Carbonell was employed as an executive chef at that time.  On 19 January 2005 Mr Carbonell suffered a soft tissue injury to his right hip and lumbar area.  Mr Carbonell was unable to work.  Mr Carbonell sought compensation from his employer.  This was contested but on 15 February 2005 the insurer (QBE) accepted the claim with weekly periodic compensation payments to be paid with effect from 19 January 2005.  Such payments were paid by the employer.  Such weekly periodic compensation payments were paid until final settlement of the claim on 26 August 20 05 at which time Mr Carbonell received a lump sum payment of $16,000.

2.      On 31 January 2005 Mr Carbonell made initial enquiries to Centrelink concerning income support.  Following further interaction with Centrelink and claims being lodged on 8 February 2005, Mr Carbonell was granted Newstart Allowance and Mrs Carbonell Parenting Payment with date of effect for both payments being 20 January 2005.  Both, Mr and Mrs Carbonell were provided with multiple notices by Centrelink, including the four weekly application forms for Newstart Allowance payment, which detailed the requirement that Centrelink was to be notified within seven days if either Mr or Mrs Carbonell became aware that either party will receive or had received compensation payments.

3.      On 30 May 2005 Centrelink records note that they were contacted by Mr Carbonell who advised that he was on workers compensation, has a medical certificate and that Centrelink could contact a prospective employer, although he has not worked for them up to that time.  As a consequence of further contact between Centrelink and Mr Carbonell on 1 June 2005, both Newstart Allowance payments and Parenting Payments were ceased as at 1 June 2005.  Further communications between the parties, concluded with Centrelink approving payment of Newstart Allowance to Mr Carbonell for the period 4 May 2005 to 31 May 2005, this being approved by Centrelink on 29 July 2005.

4.      On 15 August 2005 Centrelink, following contact from the insurers (QBE), were advised that Mr Carbonell claim for compensation was about to settle, and whether any recovery claim by Centrelink was to be lodged.  Further Centrelink records note that QBE advised that Mr Carbonell had been paid $850.68 weekly periodic payments for the first 13 weeks (from 19 January 2005) and then ongoing at the weekly rate of $723.08.  Further Centrelink noted that the settlement amount agreed was $16,000, and that there was a probable charge to be raised as Mr Carbonell had been in receipt of Newstart Allowance until May 2005.  

5.      On 15 August 2005 Centrelink wrote to Mr Carbonell indicating that some or all of the Centrelink payments to him and his wife made to them since his injury may have to be paid back to Centrelink, because of compensation paid or as a result of lump sum compensation.  Mr Carbonell was advised to contact Centrelink to see whether any money is required to be paid back.  A further letter to the same effect was forwarded on 30 August 2005.

6.      On 18 August 2005 Centrelink records note that Mr Carbonell was advised that because of failure to declare his weekly periodic compensation payments, all payments were overpaid, with the worse case scenario being all payments by Centrelink to both him and his partner being recoverable from January 2005.

7.      On 2 September 2005 Centrelink advised QBE that there was a nil charge, having received advice of settlement details (albeit one page apparently missing) from QBE on 29 August 2005, settlement having occurred on 26 August 2005.  The Centrelink files note that a partial settlement was to be actioned, but for no recorded or explainable reason further action was not initiated until 5 September 2006.  On 19 September 2006 Centrelink records note a decision to recover a debt owed by Mr Carbonell relating to the overpayment of Newstart allowance between 20 January 2005 and 13 May 2005 in the amount of $2,940.72.  A similar notation is documented, stating that Mrs Carbonell had been overpaid $2,915.83 Parenting Payment between 20 January 2005 and 13 May 2005, with this being a debt due and payable.

8.      Centrelink advised Mr and Mrs Carbonell of their decisions on 19 September 2006.  Subsequent internal reviews of the decisions were undertaken and both respondents advised that the initial decision remained unchanged in letters dated 10 November 2006 and 19 December 2006 (Authorised Review Officer).

9. In a decision dated 30 March 2007 the Social Security Appeals Tribunal concluded that both Mr and Mrs Carbonell owed a debt arising from overpayments of Newstart Allowance and Parenting Payment respectively between 20 January 2005 and 13 May 2005. The amounts in question were $2,940.72 for Mr Carbonell with the debt for Mrs Carbonell to be recalculated. Further, the Tribunal decided that both debts should be waived pursuant to s 1237AAD of the Social Security Act (1991) (C’th) (‘the SS Act’).

ISSUES

10.     The relevant issues in this matter are:

(a)Has there been an overpayment of Newstart Allowance to Mr Carbonell for the period 20 January 2005 to 13 May 2005 and as a consequence is there a debt due and payable by Mr Carbonell to the Commonwealth?

(b)Has there been an overpayment of Parenting Payment to Mrs Carbonell for the period 20 January 2005 to 13 May 2005 and as a consequence is there a debt due and payable to the Commonwealth?

(c)If debts are found to exist, what circumstances led to their creation?

(d)Should the debts, if found to exist, be waived?

DECISION

11.     For the reasons stated later in the decision I find that:

(a)Mr Carbonell did receive an overpayment of $2,940.72 of Newstart Allowance during the period 20 January 2005 and 13 May 2005.  Further this is a debt due and owed to the Commonwealth.

(b)Mrs Carbonell did receive an overpayment of $2,915.83 of parenting Payment during the period 20 January 2005 and 13 May 2005.  further this is a debt due and owed to the Commonwealth.

(c)(i)        The primary cause of the overpayments and subsequent debts was a failure by Mr Carbonell and/or Mrs Carbonell to notify Centrelink of Mr Carbonell’s receipt of periodic weekly compensation payments until 30 May 2005.

(ii)A contributing but not exculpatory circumstance was the unexplainable delay by the applicant in calculating the debt owed and notifying both respondents.

(iii)A further contributing circumstance was the failure by Centrelink to deal efficiently and effectively with information provided by the respondent, once given and the insurer, in a timely and consistent manner.

(d)The debts to both respondents should stand, as I was unable to conclude that the debts could be waived as a consequence of sole administrative error by Centrelink, nor could the debts be waived or written off because of special circumstances because of Mr and Mrs Carbonell’s failing or omitting to comply with a provision of the Act.  In addition I was unable to conclude that special circumstances existed in this matter.

(e)With such findings the decision under review is set aside and in substitution thereof I find that :

(i)Mr Carbonell received an overpayment of Newstart Allowance between 20 January 2005 and 13 May 2005 in the amount of $2,940.72, with this amount being a debt due and payable to the Commonwealth; and

(ii)Mrs Carbonell did receive an overpayment of Parenting Payment between 20 January 2005 and 13 May 2005 in the amount of $2,915.83, with this amount being a debt due and payable to the Commonwealth.

Consideration and Findings

12.     The factual background outlined earlier in this decision was not cause for disagreement between the parties.  Further oral evidence by Mr Carbonell suggested that he may have made earlier contact with Centrelink to advise of his weekly periodic compensation payments, but as to time and date he was unable to recall.

13.     With the material before me in this matter, I make the following findings in relation to essential facts.

(a)On 19 January 2005 Mr Carbonell was injured at work, and was unable to further attend for work at that place of work.  Compensation was claimed, was disputed and finally liability accepted by the Insurer (QBE) on 15 February 2005.  Weekly compensation payments backdated to 19 January 2005 were paid to Mr Carbonell some weeks later.

(b)Mr Carbonell and Mrs Carbonell applied for and received Newstart Allowance and Parenting Payment, with the date of effect being 20 January 2005.  It is acknowledged that Mr and Mrs Carbonell were during the first several months of 2005, finding it difficult to meet financial requirements.

(c)Mr and Mrs Carbonell did receive a number of notices and forms from Centrelink notifying each of their obligations to notify Centrelink in the event that Mr Carbonell received any compensation payments.  Such notices/forms were issued by Centrelink regularly to Mr Carbonell during the period February- May 2005 with Mrs Carbonell receiving at least one such notice in a Centrelink letter dated 9 February 2005.

(d)The first documented record of Mr Carbonell advising Centrelink of his weekly periodic compensation payments is that of 30 May 2005 in a Centrelink file record.  While Mr Carbonell believed he had made an earlier contact, but as to when he was unsure.

(e)Mr Carbonell’s Newstart Allowance and Mrs Carbonell’s Parenting Payments were suspended on 1 June 2005.  On 29 July 2005 Centrelink approved payment for Mr Carbonell Newstart Allowance for the period 4 – 31 May 2005.

(f)On 15 August 2005 Centrelink were advised of the extent of Mr Carbonell’s weekly periodic payments, namely $850.68 per week commencing 19 January 2005 for 13 weeks, and thereafter $723.08 per week.  Further Centrelink were advised that the compensation claim was to be settled shortly for $16,000, with Centrelink noting that there was a probable charge to be raised against that amount, because Mr Carbonell had been in receipt of Newstart Allowance until May 2005.

(g)Centrelink confirmed their view of such a charge against such a settlement in a letter to Mr Carbonell on 15 and 30 August 2005.  A file note to the same effect dated 18 August 2005 is recorded within the Centrelink file.  Further both Mr and Mrs Carbonell were of the belief if overpayments had occurred they would be quantified and notified to them, with such amounts to be debited from the lump sum settlement payment.

(h)Centrelink despite being served on 29 August 2005 with faxed details of the settlement by the insurer (QBE) and despite one page of the faxed document not being present, advised the insurer that there were no charges by Centrelink against the settlement amount on 2 September 2005.

(i)For whatever reason Centrelink recorded the above transactions as a partial settlement on their file note on 2 September 2005, with the paper work to be stored for 12 weeks and then filed.

(j)On 5 September 2006, one year and three days later the matter was reactivated, as the previous partial fax had not been actioned in September 2005.

14.     In reviewing the facts that I have found, it becomes evident that the overpayments to both Mr and Mrs Carbonell were much contributed to by the failure of both recipients of benefits to notify Centrelink of Mr Carbonell’s weekly periodic compensation payments.  I acknowledge that the Carbonell family were experiencing financial difficulties during this period and that such difficulties were enhanced by the delay in the payment of the weekly periodic compensation payments.  Further, while Mr Carbonell believes he may have notified such payments to Centrelink at a date earlier than 30 May 2005, he remained uncertain as to the time or date.  In such circumstances I do conclude that both overpayments had arisen as a consequence of the Carbonells’ not undertaking the necessary action to notify Centrelink of such payments.  My view is further reinforced by the absence of acknowledgement of any periodic weekly compensation payments by Mr Carbonell in his application for payment form for Newstart Allowance on 3 May 2005 and 24 June 2005 and the tardiness to complete the C Mod compensation forms.

15.     I note that Centrelink records detail that Mr Carbonell advised them of his compensation payments on 30 May 2005 and that they forwarded him a C Mod form to complete and following further interaction Newstart payments were made to Mr Carbonell for the period 4 – 31 May 2005 on 29 July 2005.  It would appear from the records that Mr Carbonell pursued his claim for this period, with Centrelink, having been placed on notice re compensation payments, approving payments without a complete assessment of the effect of the compensation payments on the rate at which the two allowances could be paid.

16.     While hindsight does allow for a clearer exposition in some respects in this matter, I am satisfied that the administrative carriage on this matter deteriorated significantly after having been put on notice of the weekly periodic compensation payments by Mr Carbonell.  Thereafter it would appear that –

(a)there was no urgency in Centrelink making enquiry as to the quantum of such payments, before approving further benefit payments;

(b)when provided with quantified amounts of the compensation payments on 15 August 2005 and when notified by the insurer of an intended settlement, there appears to be no attempt by Centrelink to quantify benefit overpayments;

(c)despite no apparent attempt to quantify benefit overpayments, Centrelink were advising the recipients that any overpayments were to be a charge against the settlement lump sum – a situation which the recipients understood and accepted;

(d)the compensation settlement process passed with no attempt by Centrelink to quantify any overpayments, and a nil charge advised to the insurer and recipient, such decision having been made without one page of the insurer’s settlement documentation.

(e)Post settlement for whatever reason any further activity by Centrelink lay dormant for 12 months.

17.     In addressing the issue of quantification of the overpayments I am satisfied that Mr and Mrs Carbonell were in receipt of compensation affected payments and that Mr Carbonell did receive periodic weekly compensation payments for 19 January 2005 to 26 August 2005, and a lump sum compensation payment of $16,000 in settlement of his compensation claim.  I am further satisfied that the quantification of overpayments to Mr Carbonell of Newstart Allowance of $2,940.72 for the period 20 January 2005 to 3 May 2005 and to Mrs Carbonell of parenting Payment of $2,915.83 for the period 30 January 2005 to 13 May 2005 have been calculated in accordance with the required legislation.

18.     Further, I am satisfied and so find that the overpayment amounts nominated in the pervious paragraph are debts due and owed by Mr and Mrs Carbonell pursuant to section 1180 of the Act.

Waiver of Debts

19.     I have been particular earlier in this decision in detailing the circumstances of the matter and in particular how the overpayments and debts occurred and were established.  Section 1237A of the SS Act is concerned with waiver and sole administrative error by the Commonwealth.  Despite the administrative mal-administration, I am satisfied that when the overpayments were eventually quantified and the debts raised, that significant cause for the overpayments eventually quantified in September 2006 remained Mr Carbonell’s delay in notifying Centrelink of his periodic weekly compensation payments.  I would further conclude that until the overpayments were quantified, a debt, though perhaps considered to exist cannot be raised and made due and payable.  I have already listed my concerns in this regard.  In such circumstances I am satisfied that both parties have contributed in their own way to the situation which is before me.  I am mindful however that the debt, no matter how delayed in its creation, relates to the period 20 January 2005 to 13 May 2005.  In final consideration, I conclude that there is no evidence before which would support a finding of sole administrative error by the Commonwealth.  In such circumstances, waiver of the debt pursuant to s 1237 A of the SS Act is not available in this matter.

20.     Waiver of debt pursuant to s 1237 AAD requires consideration of three issues, namely

(a)Did Mr Carbonell knowingly make a false statement or false representation or fail or omit to comply with a provision of the Act.

(b)Whether special circumstances exist (other than financial hardship alone) that makes it desirable to waive the debt.

(c)Whether it is more appropriate to waive rather than write off the debt. 

21.     For waiver to be considered all three requirements must be considered.  In addressing the first issue is whether Mr Carbonell knowingly failed or omitted to comply with a provision of the Act.  Mr Carbonell received many notices and Mrs Carbonell at least one notice from Centrelink to notify Centrelink within seven days if Mr Carbonell was to receive any compensation payments.  From the material before me it is evident that such notification was much delayed.  Mr Carbonell offered a variety of reasons including delayed acceptance of liability, delayed receipt of weekly periodic compensation payments and turmoil arising from the injury, loss of financial income and concerns for family well being.  Nevertheless for whatever reason Mr Carbonell continued to complete his application for Newstart Allowance payment form each month, without noting the receipt of his weekly compensation payments.  I note that this continued to occur in such forms lodged by Mr Carbonell after both liability was accepted and the weekly payments commenced being paid.

22.     In such circumstances, I do conclude that both Mr and Mrs Carbonell were aware they had to notify Centrelink in the event Mr Carbonell was to receive weekly compensation payments.  I note that when Mr Carbonell applied for his Newstart Allowance that he indicated that he was claiming workers compensation in relation to his injury and was provided with a Mod C – Compensation details form on 8 February 2005.  The issue of whether both Mr and Mrs Carbonell had the capacity to understand and carry through these notification requirements is not in question, with the only apparent obstacles to carrying through their notification requirements in a timely fashion being the difficulties associated in copying with the injury and the difficulties resulting from the loss of an income stream (RCA Corporation v Customer Cleared Sales Pty Ltd (1978) 18 ADR 123 – considered and followed).

23.     As a consequence it is my finding that both Mr and Mrs Carbonell’s debts did arise partly as a consequence of their failing or omitting to comply with their duty of notifications, arising from notices served pursuant to the Act.  In such circumstance both Mr and Mrs Carbonell’s debts cannot be waived pursuant to s 1237 AAD of the SS Act.

24.     While it is not necessary to address the issue of special circumstances, in the light of the finding I have made in the previous paragraph, I will do so.  I have earlier detailed a litany of unsatisfactory administrative actions associated with quantification of the overpayment, and the raising of the debt.  I do conclude that this was unsatisfactory administrative attention, which resulted in the Carbonell’s being misinformed and/or adequately informed as to the quantum of their overpayment in late August/early September 2005.  With such advice that was rendered, it is not surprising that the Carbonell’s had other options upon which the lump sum could be spent, particularly in the circumstances when expecting a charge against the lump sum, none was forthcoming.  I certainly can empathise with the Carbonell’s frustration and irritation when one year after the issue of debts owing were raised.

25.     Nevertheless, despite the shortcomings of the administrative process associated with the debt quantification, the issues which led to the overpayment were in the main a result of a delay in notification of compensation payments.  Centrelink’s administrative errors were centred on the quantification of the overpayment, but while lamentable, I would conclude did not affect the quantum of the overpayment.  While the Carbonells have been misled and inconvenienced in their view, the debts eventually raised were no more and no less than that which should have been raised much earlier.

26.     With such comments, and mindful that other special circumstance matters (health, finance) were not in evidence or pursued by the Carbonells, I would distinguish between matters which would constitute special circumstances and less than appropriate administration, with the former giving rise to waiver, if successfully argued, and the latter a claim for an ex gratia payment resulting for deficient administration.  While undoubtedly the Carbonells may well view the whole process as unfair, such unfairness relates more to the later administrative processes rather than the overpayment creation.  In summary, I would conclude by finding that special circumstances are not found to exist in these matters, for although the Carbonells may consider the whole process unfair as a result of misadvice, tardy advice and anguish arising from such, at the end of the day the debts owed were what they would have been if calculated 15 months earlier.

27.     After consideration of necessary issues, I conclude that the debts cannot be waived, pursuant to s 1237 AAD of the SS Act.

28.     Accordingly I set aside the decision under review and in substitution find that Mr Carbonell has a debt owing to the Commonwealth of $2,940.72 arising from the overpayment of Newstart Allowance during the period 20 January 2005 and 13 May 2005.  Further, Mrs Carbonell has a debt owing to the Commonwealth of $2,915.83 arising from the overpayment of Parenting Payment during the period 20 January 2005 and 13 May 2005. 

I certify that the twenty eight [28] preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member

Signed: ....................[Sgd R Riberi]..............................
   Associate

Date of Hearing  27 November 2007
Date of Decision  7 December 2007
Counsel for the Applicant  Ms M Conlon
Solicitor for the Applicant  Centrelink Legal Services Branch
Representative of the Respondent       Self Represented