Carstairs and Secretary, Department of Family and Community Services
[2000] AATA 906
•11 October 2000
DECISION AND REASONS FOR DECISION [2000] AATA 906
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2000/3
GENERAL ADMINISTRATIVE DIVISION )
Re ANN CARSTAIRS
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr E K Christie, Member
Date11 October 2000
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and in substitution therefor the Tribunal decides to waive the whole of the debt accrued over the period 8 February to 26 May 1999 under the 'special circumstances' provision of the Social Security Act 1991. This means Ms. Carstair's application is successful.
.............(Signed).........................
DR E K CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY – newstart allowance – overpayment – whether appropriate to waive right to recover debt by reason of administrative error or special circumstances
Social Security Act 1991: ss 586B, 1237A(1), 1237AAD
Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Caswell v Powell Duffryn Associated Collieries (1939) 3 All ER 722 at 733
Re Junor and Secretary, Department of Social Security (1997) 48 ALD 326
ORAL REASONS FOR DECISION
Dr E K Christie, Member
This is an application by Ann Carstairs to review a decision of the Social Security Appeals Tribunal ("the SSAT") made on 16 December 1999. The SSAT decided:
"to affirm the decision that there is a debt in relation to overpayments of Austudy made between 18 March and 26 May 1999 and set aside the decision to waive recovery of debt resulting from overpayments of Austudy made between 8 February 1999 and 17 March 1999. [$2143.84]"
The decision made by an Authorised Review Officer of the Secretary, Department of Family and Community Services ("the Department") on 2 November 1999 was to raise and recover overpayment of Austudy in the sum of $1337.00 paid during the period 18 March 1999 to 26 May 1999.
At the hearing Ms. Carstairs was represented by her partner, Mr. H. Dienemann and the Department was represented by Mr. N. Foster, a Departmental Advocate. Both Ms. Carstairs and Mr. Dienemann gave oral evidence.
At the hearing, the Tribunal had in evidence before it documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents), Exhibit 1 and the following exhibits:
Exhibit 2 - Letters dated March 11 and 17, 1999, from Mr. Dienemann to Centrelink.
Exhibit 3 - Commonwealth Bank Account ("CBA") Statement - Ann Carstairs, 27 November 1998 – 15 April 1999.
Exhibit 4 - Telstra Account, Itemised calls, Ann Carstairs – 11 January to 9 April 1999.
ISSUES BEFORE THE TRIBUNAL
The only issue for the Tribunal to decide was whether the overpayments of Austudy made to Ms. Carstairs could be waived, in part or in full, under the 'administrative error' or 'special circumstances' provisions of the Social Security Act 1991 ("the Act"). Ms. Carstairs agreed with the submission of Mr. Foster that any decision to waive recovery of debt should apply to Austudy overpayments of $2143.84 made between 8 February 1999 and 17 May 1999.
FACTSThe general facts were not in dispute and may be stated briefly. Ms. Carstairs was in receipt of Austudy. On or about 8 February 1999, Ms. Carstair's partner (Mr. H. Dienemann) recommenced work at Yeronga TAFE with earnings of approximately $1064 per fortnight.
EVIDENCE OF ANN CARSTAIRSMs. Carstairs said that she and her partner had been social security recipients over many periods of their six year relationship.
Ms. Carstairs stated that Centrelink was aware that both her, and her partner's social security files were linked i.e. that when her partner advised Centrelink of changes in his employment circumstances, her payments were automatically altered and vice versa. Ms. Carstairs said that she had made many telephone queries (around 20), as well as corresponding frequently, whenever a change in circumstances arose and, in this way, Centrelink was aware of both files being linked.
During cross-examination by Mr. Foster, Ms. Carstairs stated:
That she had never personally advised Centrelink her partner had commenced employment, but had left this task to Mr. Dienemann;
Because her partner had advised Centrelink of changes in his employment circumstances and her benefits were adjusted, she did not believe there was a need for her to personally notify Centrelink;
She was adamant that she had telephoned Centrelink sometime in March 1999 – notwithstanding this call was not registered on the Department's Call Centre Records (T30). In this call she had queried why her benefits had decreased. As well, she had informed the Department that her partner was working and that she and her partner no longer had dependents; and
That she was aware that Austudy payments were calculated on the basis of her partner's income. However, she stated that she was unaware of how the actual rate was calculated.
EVIDENCE OF HELMUT DIENEMANN
Mr. Dienemann challenged the SSAT's discussion of evidence (at T2 Folio 5 para 9) viz. that he had not advised Centrelink he had returned to work after Ms. Carstairs received the 15 March 1999 Notification Notice (T9). He referred to his letter to Centrelink – giving his wage details (Exhibit 2, 11 March 1999), that confirmed that such a notification had occurred. Moreover, Ms. Carstairs' CBA statement (Exhibit 3) indicated that her Austudy payment for 18 March 1999 had decreased. Mr. Dienemann contended that this was an indication of both their files being linked – an increase in his earnings was followed by a fall in Ms. Carstairs' Austudy payments. A similar analysis could be done with other letters he had forwarded to Centrelink (Exhibit 2) and changes to Ms. Carstairs' entitlements (Exhibit 3) in March 1999.
Mr. Dienemann referred to a Review Officer's File Note (T24 Folio 67) where the Departmental Officer, who had spoken to Ms. Carstairs, had recorded:
"She [Ms. Carstairs] said her partner had always advised of income. I obtained her file & there were several letters from him…."
Mr. Dienemann contended that this statement was further evidence of the fact that both their files were linked.
Under cross-examination by Mr. Foster, Mr. Dienemann stated:
That his letter of 11 March 1999 was his first written advice to Centrelink of a change in work circumstances. However, he had given some earlier verbal advice of his pending return to work with some idea of earnings. However, this advice was limited in this regard because of 'administrative fault' with his employer in not being able to provide accurate details;
That he could not give a precise time for his call to the Melbourne office of Centrelink other than it occurred shortly after he started work; and
By reference to Exhibit 4, he acknowledged that the first call he could have made to Centrelink from Ms. Carstairs' telephone was 22 March 1999.
CONTENTIONS AND SUBMISSIONS OF THE PARTIES
Mr. Foster submitted that the date Centrelink was first advised by Mr. Dienemann of his employment/earnings change in circumstances was in his letter dated 11 March 1999 (Exhibit 2). This was received by Centrelink on 16 March 1999. Telephone advice was after this date (viz 22 March 1999). He contended that the evidence was clear that no telephone call had been made before 22 March 1999.
Mr. Foster submitted that Austudy overpayments for the period 8 February to 16 March 1999 could not be waived as Ms. Carstairs had received payments without advising Centrelink of her partner's earnings.
Mr. Foster submitted that s.586B of the Act imposed a statutory obligation on Ms. Carstairs, alone, to notify Centrelink of any changes in circumstances as specified in the notification notices. This she had no done. Accordingly, the overpayment could not be waived as Ms. Carstairs had contributed to the administrative error by failing to fulfil her obligation to personally advise Centrelink of changes in her partner's income so that her Austudy payments could be adjusted. In addition, he contended that a knowledge of records on the computer did not override Ms. Carstairs' obligation to notify Centrelink personally.
Mr. Foster further submitted that Ms. Carstairs' case was not one which warranted waiver under the 'special circumstances' provisions of the Act because the reality of the situation was that she continued to receive Austudy payments when her partner was in full employment. He contended that the only factor which might apply appeared to be the question of administrative error.
Mr. Dienemann submitted that the debt should be waived because:
Their social security files were linked and acted upon by Centrelink to provide the necessary information for Austudy payments to Ms. Carstairs;
Of uncertainty on Ms. Carstair's part on the "statutory processes";
Continued attention over time by Ms. Carstairs and Mr. Dienemann to keep Centrelink fully advised of changes in their circumstances; and
That Mr. Dienemann's letter of 11 March 1999 to Centrelink confirmed that he had contacted Centrelink about his changes in his income and employment details.
CONSIDERATION OF THE ISSUES
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 Act.
The Tribunal has considered the credibility of Ms. Carstairs and Mr. Dienemann and the veracity of their accounts as to their dealings with Centrelink. I accept Ms. Carstairs and Mr. Dienemann to have acted honestly in all their dealings with Centrelink and their account to be consistent over time.
Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived:
"SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
1237A(1) 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).
SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
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 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 first issue for the Tribunal to decide is whether the debt should be waived because of the 'administrative error' provisions of the Act. This application is one with a confusing history of administrative decision-making as contrasting findings were made by the Authorised Review Officer and the SSAT as to whether waiver of the debt should be permitted because of the existence of 'administrative error' or 'good faith'.
The Tribunal finds that Ms. Carstairs has contributed to the administrative error by failing to personally notify Centrelink of the changes in employment circumstances of her partner as provided for in s.586B of the Act. In reaching this conclusion the Tribunal has given weight to the reasoning of Deputy President Burns in Re Junor and Secretary, Department of Social Security (1997) 48 ALD 326:
"The tribunal in Johns, above, concluded at ALD 780-1 that:
'….It is patently clear that the obligation to inform or notify is imposed upon the person who is in receipt of the pension. The language is clear and concise. It places upon the recipient of the service pension the obligation to keep the department appropriately informed. It clearly is directed at the person in receipt of the pension and at no other person….'"
Applying this reasoning in Ms. Carstairs' case, the Tribunal concludes that Ms. Carstairs was personally required to notify the Department of her partner's change in circumstances. Unfortunately, this was not the case (see para 9) and this omission has contributed to the administrative error which led to the overpayment. Accordingly, the debt cannot be waived under the 'administrative error' provisions of the Act.
The next question for the Tribunal to decide is whether the debt should be waived because of the 'special circumstances' provisions of the Act. The leading case is Re Beadle v Director-General of Social Security (1984) 6 ALD 1 where the Tribunal said at page 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."
The Tribunal concludes that the circumstances in which the overpayment of Austudy entitlements were paid to Ms. Carstairs were sufficiently 'unusual' or 'uncommon' to justify the description 'special circumstances':
That Ms. Carstairs had believed Centrelink had acted upon her social security file and her partner's file as being linked; and that adjustments in her Austudy entitlement reflected advice given to Centrelink by her partner of his employment/earnings circumstances;
That she and her partner held this view, as social security recipients for a number of years;
Centrelink was aware of their association over this time;
That their view [of linked files] could be further supported by the frequent queries she made to Centrelink by telephone and by correspondence (see para 8) each time there was a change in circumstances accompanied by a payment variation; and
An inference that their files were linked, and Ms. Carstairs' reliance on this view could be supported by the evidence in:
(a) Exhibits 2 and 3 (see para 10); and
(b) Centrelink Telephone Call File Note (see para 11).
The decision of Wright LJ in Caswell v Powell Duffryn Associated Collieries 3 (1939) All ER 722 at 733 is particularly relevant in relation to the weight to be placed on an inference:
"There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish…..But if there are no positive proved facts, from which any inference can be made, the method of inference fails and what is left is mere speculation or conjecture."
The Tribunal concludes that the above findings are objective facts – not speculation, on which an inference of linked files and implications for Austudy payments could be derived by Ms. Carstairs.
Accordingly, the Tribunal is satisfied, on the balance of probabilities, because of past practices and actions adhered to by Ms. Carstairs and Mr. Dienemann over time, for notifying changes in circumstances, Ms. Carstairs had come to believe that their files were linked. Therefore, Ms. Carstairs believed changes in Mr. Dienemann's employment circumstances and earnings would be reflected in changes to her Austudy entitlement. That is, Centrelink would act on information notified by Mr. Dienemann in calculating her Austudy entitlements.
Applying the principles in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435, the Tribunal finds, on the civil standard of proof, that Ms. Carstairs did not knowingly fail to comply with a provision of the Act. Ms. Carstairs had inferred that because of linked files, the practice of her partner notifying Centrelink of changes in his employment circumstances was also advice acted on by Centrelink to calculate her Austudy entitlement. Accordingly, the Tribunal concludes that paragraph (a) of Section 1237AAD of the Act is satisfied.
For all of the above reasons, the Tribunal concludes that the overpayment accrued over the period 8 February to 26 May 1999 should be waived under the 'special circumstances' provisions of the Act. This means that Ms. Carstairs' application is successful.
I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member.
Signed: .....................................................................................
R. Hayes, AssociateDate/s of Hearing 29 September 2000
Date of Decision 29 September 2000
Date of Written reasons 11 October 2000
Applicant Mr. H. Dienemann
Respondent Mr. N. Foster, Departmental Advocate
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