Cartwright; Secretary, Department of Family and Community Service S
[2003] AATA 1332
•23 December 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1332
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/1146
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF
FAMILY AND COMMUNITY SERVICESApplicant
And
KERRY CARTWRIGHT
Respondent
DECISION
Tribunal Mr R G Kenny, Member Date23 December 2003
PlaceBrisbane
Decision
The Tribunal sets aside the decision of the Social Security Appeals Tribunal and substitutes its decision that an amount of family allowance totalling $2,354.62, paid to the respondent in the period from 4 October 1999 until 30 June 2000, is a debt due by her to the Commonwealth which cannot be waived pursuant to the provisions of the Social Security Act 1991 (Cth).
...................(Sgd)......................
R G Kenny
Member
CATCHWORDS
SOCIAL SECURITY – family allowance - recovery of overpayment of allowance – debt due to the Commonwealth – debt not due solely to Commonwealth administrative error – no basis for waiving the Commonwealth’s right to recover the overpayment - Social Security Appeals Tribunal decision set aside
Social Security Act 1991, s 1237A
Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212
REASONS FOR DECISION
23 December 2003 Mr R G Kenny, Member Background
1. In the period from 4 October 1999 until 30 June 2000, Kerry Cartwright, now known as Kerry Elliot (the respondent), was paid family allowance which is payable in accordance with the terms of the Social Security Act 1991 (the Act). On 6 March 2002, a delegate of Centrelink, on behalf of the Secretary, Department of Family and Community Services (the applicant) determined that the respondent had been overpaid an amount of $2,354.62 in respect of her family allowance during that period. On 17 May 2002, an authorised review officer affirmed that decision. On 10 July 2002, the Social Security Appeals Tribunal (SSAT) set aside that decision and substituted its decision that the debt should be waived on the basis that it arose solely through administrative error on the part of the Commonwealth and because the monies were received by the respondent in good faith. On 14 August 2002, the applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal).
2. At the hearing, the applicant was represented by Mr T Ffrench from the applicant’s Service Recovery Team. The respondent was not represented.
3. In evidence were the following:
§Exhibit 1: the documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents (T1-T14));
§Exhibit 2: a “Review of Your Family Allowance” Answer Sheet and Question Guide; and
§Exhibit 3: a document entitled “Changes to your Income and Assets”.
Issues and Legislation
4. Family allowance is paid in accordance with the terms of the Act. The amount of the payment is dependent on the income level of a recipient and one means of determining the amount payable is on the basis of an estimate of the combined income for a given financial year. It is not disputed in this case that the respondent was paid family allowance during the period from 4 October 1999 until 30 June 2000 (the relevant period) on the basis of an estimate of the combined income of herself and her then partner for the 1999/2000 financial year of $26,000. It is also not disputed that the actual level of that income was $38,480, that the amount of family allowance to which the respondent was entitled in the relevant period was $928.65, that she received $3,283.27 in the relevant period, or that she was overpaid an amount of $2,354.62 in the relevant period. Further, the respondent does not dispute that, subject to its being waived, the overpayment amount of $2,354.62 was a debt which was due to be repaid by her to the Commonwealth.
5. I am satisfied that the concessions by the respondent in relation to the existence of the debt of $2,354.62 have been properly made by her and that the only issue for determination in this matter is whether or not the debt should be waived. I am also satisfied that the only provision relevant to the waiver of the debt is section 1237A of the Act which reads:
“1237A Waiver of debt arising from error
(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.
(1A) Subsection (1) only applies if:
(a) a debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
(2) If:
(a)a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.”
Respondent’s Evidence and Contention
6. The respondent told the Tribunal that she had provided the estimate of the income of herself and her then partner in October 1999 and she agreed that she completed and signed the Answer Sheet (Exhibit 2) in which it was stated that, in the event that the income was more than 110% of the estimate, an overpayment may arise. However, she said that she had not really understood the effects of the information in the form but conceded that the wording of the questions on the form meant that she had requested that her family allowance be paid to her on the basis of the estimate that she gave. She also said that she had now separated form her then partner and that the income level exceeded the estimated level only because of his income in the financial year 1999/2000.
7. The respondent said that she was aware that she was required to notify Centrelink of various matters in relation to the income levels of herself and her partner but she also said that she believed she had done this. In particular, she said that she believed that her obligations were complete once she advised Centrelink that she had commenced employment in February 2000. She said that she was not aware of having received forms from Centrelink requiring her to provide information about her income but also said that she was not aware of any problems with the receipt of mail at the time even though she had moved premises a few times between 1999 and 2002.
8. The respondent said that she has also been in receipt of parenting payment as well as family allowance while she had not been working and that, after she advised that she had commenced work, the total of her payments from Centrelink was reduced. She understood that this reduction was in respect of both types of payments because of her advice to Centrelink that she was engaged in employment.
9. The respondent was referred to passages which appear in the decision of the SSAT. There, she is recorded as telling the SSAT that she had been “slightly surprised” that some payments had continued after she commenced work. The respondent accepted that she had said that but she also said that the payments were at a reduced level and that she believed that Centrelink had all relevant information and would have known at what level she was entitled to be paid. However, the respondent agreed that, at that time, she had not provided Centrelink with information concerning the levels of income that she was then receiving from her employment.
10. The respondent said that she was currently living with a partner in a new relationship and was in a reasonably sound financial position. She said that there were no special circumstances in her life which might impact on any obligation to repay the debt to the applicant. She contended that she had done all she believed she was required to do in terms of providing information about financial circumstances and submitted that, as there was clearly error on the part of the Commonwealth in its continuation of her family allowance payments, it was unfair that she would be required to repay them.
Applicant’s Contentions
11. Mr Ffrench conceded that there had been administrative error by the Commonwealth in the manner that it had continued to pay family allowance to the respondent after it was notified that she had commenced work. He submitted that, when the information was received, this had immediate effect on the level of the respondent’s parenting payment in that it was cancelled. However, he conceded that family allowance payments had continued.
12. Mr Ffrench referred to letters that had been sent to the respondent on 5 October 1999 (T4), 29 December 1999 (T5) and 13 March 2000 (T7), each of which advised that the respondent was being paid family allowance on the basis of her estimate of income of $26,000 and which also advised her that she was to contact Centrelink if the combined income of herself and her partner exceeded the amount which was 110% of the estimated income amount ie $28,600. He submitted that the respondent had been advised that she was being paid on the basis of her initial estimate and that this advice was given to her in a notice sent to her after she had started work. He submitted that she had failed to respond to requests for updated information about her income when requested to provide this in February 2000. He submitted that this meant that the debt did not arise solely through administrative on the part of the Commonwealth and that the debt could not be waived.
13. Mr Ffrench also submitted that there was an absence of good faith on the part of the respondent in that she must have had some suspicion or doubt about the correctness of the level of payment that she was receiving. Again, he submitted that this would preclude waiver of the debt.
Consideration
14. In evidence was a file note completed by a Centrelink officer which confirms that the respondent advised on 25 February 2000 that she had commenced employment (T9). That note also records that she was made aware that this would terminate her parenting payment. Also in evidence was a letter written to the respondent on 25 February 2000 (T6) in which it is stated that parenting payment was no longer to be paid to her. In another file note, also dated 25 February 2000 (T9), reference is made to another letter being sent to the respondent on that day with a form requiring her to advise Centrelink of her income levels. Such a form was in evidence (Exhibit 3) but, as noted above, the respondent could not recall receiving this document. The materials before the Tribunal did not include a copy of that letter. However, I am satisfied, on the basis of the file note dated 25 February 2000 (T9), that the letter was sent to and received by the respondent and that it constituted a notice as provided for in section 872 of the Act, which was operative at that time, requiring information to be provided by her about her income. A further file note recorded that the respondent did not reply to the request for information about her income and I am satisfied that the respondent did not provided that requested information. That note then declared that the respondent’s family allowance was to be cancelled from 14 March 2000. Clearly, that termination of payments did not occur and payments continued until the end of the relevant period which was 30 June 2000.
15. I am satisfied that there is a debt owed by the respondent to the Commonwealth in the amount of $2,354.62 for the relevant period. This has been conceded by her. The only issue for determination in this matter is whether or not that debt should be waived in accordance with subsection 1237A(1) of the Act. Debts may be written off under section 1236 of the Act and may also be waived under sections 1237AA, AAA, AAB, AAC, AAD and AB of the Act but I am satisfied that these are not applicable in this matter.
16. I am satisfied that there was administrative error by the Commonwealth in its continuation of payments of family allowance to the respondent after it had processed the information that she gave concerning her new employment status in February 2000. The family allowance payment was to have been cancelled because of a lack of response by the respondent to the request for information about her income level; but this was not done by Centrelink.
17. Despite the declaration in the file note that Centrelink intended to cancel the respondent’s family allowance, a notice was sent to her on 13 March 2000 (T7). Clearly, this was a further manifestation of the Commonwealth’s error. At that stage, Centrelink had been made aware that she was in employment and, therefore, the reference to the estimate was incorrect. The information contained in the notice was that she was to be paid $172 by way of family allowance and that the basis of that calculation was the initial estimate of $26,000. Although this notice should not have been sent to the respondent in those terms, the information that it contained about the rate of family allowance payment and the income upon which the calculation was made was the same as in the notices sent to her in October and December 1999 (T4/T5).
18. In one particular, the notice of 13 March 2000 was different from the earlier notices. It made reference to a debt recovery payment which had been implemented in the amount of $42.22 per fortnight and, as I understand it, this related to the recovery of a debt incurred previously by the respondent and unrelated to the matter before the Tribunal. The nett result was that the respondent was notified on 13 March 2000 that she was to continue to receive $120.68 as a reduced family allowance payment. That variation was explained in the notice and I am satisfied that a reading of that notice would indicate that payment of family allowance was being continued at a rate unchanged from late 1999, albeit with a deduction for debt recovery, and on the basis of the income estimate which did not reflect the respondent’s then position of being in employment.
19. I have noted the respondent’s submission that she should not have to repay the debt because it was not only her that was at fault in its creation. However, that is not the effect of section 1237A of the Act. It has application where the sole cause of the debt is administrative error by the Commonwealth. Any contribution by the recipient of a payment will mean that the debt may not be waived. In Re Ward and Secretary, Department of Family and Community Services [2000] AATA 212, the Tribunal determined that the word “solely” as used in the waiver provision in relation to Commonwealth error means “exclusively”, “only” or “to the exclusion of all else”. I adopt that interpretation and am satisfied that, on the facts of this case, although there was a serious error made by Centrelink officers in not cancelling the respondent’s family allowance, there was, nevertheless, contribution by the respondent to the continuation of those payments because of her lack of response to the information contained in the notice of 13 March 2000 and also her failure to provide details of her income after she commenced employment. In that situation, I am satisfied that the administrative error leading to the overpayment was not due exclusively to or only to the actions of officers of the Commonwealth.
20. It should also be noted that the error on the part of the Commonwealth had relevance to the payments that continued to be made to the respondent after Centrelink failed to cancel the family allowance towards the end of the overpayment period. The remainder of the debt, in this case, arose because the actual income of the respondent and her previous partner in the financial year 1999/2000 was more than 110% of the estimate that she gave for the year in October 1999.
21. The finding that the error in this case was not due solely to the Commonwealth is enough to dispose of this matter. The need to consider the issue of good faith will only arise if the debt was attributable solely to Commonwealth administrative error. However, in that regard, I make the following observations. It was the respondent’s evidence that she was surprised to see that her payments of family allowance continued but she indicated that she believed them to be correct because of the reduction that occurred. I am satisfied that such a reaction would have put her on notice of some irregularity in the payment. The respondent was aware that her parenting payment had been terminated but there may have been some confusion generated in her mind because of the commencement of the debt recovery at the same time. However, as noted above, I am satisfied that the debt may not be waived because it was not due solely to administrative error on the part of the Commonwealth.
Decision
22. The Tribunal sets aside the decision under review and substitutes it decision that an amount of family allowance totalling $2,354.62, referable to the period from 4 October 1999 until 30 June 2000, is a debt due to the Commonwealth which is recoverable from the respondent. The Tribunal finds that the right to recover that debt cannot be waived pursuant to the provisions of the Social Security Act 1991.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member
Signed: Sarah Oliver
AssociateDate of Hearing 12 December 2003
Date of Decision 23 December 2003For the Applicant Mr Ffrench, Departmental Advocate
The Respondent appeared in person
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