Casa and Secretary, Department of Family and Community Services

[2005] AATA 322

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 322

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   V2004/343

GENERAL ADMINISTRATIVE   DIVISION		)                   V2004/344
Re		GIOVANNI and NELLA CASA

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date11 April 2005

PlaceMelbourne

Decision

In each of the applications under review:

(i)        the decision of the SSAT in so far as it found that there was an overpayment of benefits should be affirmed; and

(ii)       the remaining part as to quantum of the overpayment is remitted to the respondent with the direction that such sum be calculated by regard to these reasons.

(Sgd)  John Handley

Senior Member

SOCIAL SECURITY – applicant and his partner (spouse) received invalid pension/disability support pension from December 1986 – weekly compensation paid from March 1988 – applicants did not respond to recipient notices or disclose weekly receipt of workers’ compensation – findings that applicants had been overpaid, that the overpayment constituted the debt, that the debt not be waived because there had not been sole error on the part of the Commonwealth nor had benefits been received in good faith nor were there special circumstances

Social Security (Administration) Act 1999 (Cth) s180
Social Security Act 1947 (Cth)

Social Security Act 1991 (Cth) s1072 and s1236 and s1237A(1) and s1237AAD

Re Mulheron and Australian Telecom Corporation (1991) 23 ALD 309

Beadle v Director-General of Social Security (1985) 7 ALD 670

Re Gimzewski and Secretary, Department of Social Security (1989) 20 ALD 272

Jazazievska v Department of Family & Community Services [2000] FCA 1484

Pledger v Secretary, Department of Family & Community Services [2002] FCA 1576

Secretary Department of Education, Employment, Training and

Youth Affairs v Prince (1997) 152 ALR 127

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

11 April 2005   Mr. John Handley, Senior Member

1.      The applicants have applied to review a decision made by the Social Security Appeals Tribunal (SSAT) on 15 March 1999.

2.      Both applicants separately applied to that Tribunal.  By reason of their issues being common and the decisions then being reviewed involving the same factual basis, the SSAT decided to deliver a single decision.  I propose to adopt the same course.

3.      In each application Mr and Mrs Casa seek to review decisions made with respect to an overpayment of benefit and the subsequent raising of a debt.  The SSAT varied the decisions previously made by officers of the Department of Social Security however debts of a relatively significant quantum remained.

4.      The background to the proceedings before this Tribunal are unusual to the extent that applications for review were previously lodged by Mr and Mrs Casa by applications V99/424 and V99/421.  During a pre-hearing conference of those applications (convened on 2 June 1999), the applicants decided to withdraw.

5.      The two applications presently under review were lodged with this Tribunal on 11 March 2004.  The applicants sought to review the same decision of the SSAT that was the subject of the review in the proceedings that were previously withdrawn.  There being no impediment to a review of the earlier decision, (by reason of a review of that decision not having been undertaken; refer Re Mulheron and Australian Telecom Corporation (1991) 23 ALD 309) these applications were the subject of an extension of time hearing. That hearing was convened because the respondent took objection to the applications being lodged beyond the statutory time limit. Part of the objection by the respondent was the destruction of its file and its consequent inability to respond to the proceedings. The Tribunal had also destroyed its earlier files as part of its archiving procedures. An extension of time hearing was convened on 21 April 2004 and during the course of that hearing it was learnt that the applicants held the documents lodged by the respondent pursuant to s37 of the Administrative Appeals Tribunal Act 1975 from the previous proceedings.  Having heard the applicant’s case for an extension of time and upon learning that the T-documents from the previous proceedings remained in existence, the respondent ultimately withdrew its objection to an extension of time and a decision was made on 20 May 2004 by Senior Member Dwyer, with the consent of the respondent, to extend the time to lodge these proceedings.

6.      Another unusual feature of this application is the variation in the amounts respectively alleged by the respondent as being overpaid.  The amount of the alleged overpayment has changed on four occasions subsequent to the primary decision which was made on 15 February 1994.  At the date of hearing the amount alleged against Mr Casa as having been overpaid was the sum of $24,061.40 and the amount alleged as overpaid to Mrs Casa was $23,345.50.  Both applicants have at all relevant times received pensions in whole or part and withholdings have been made by the respondent by way of repayment of the alleged overpayment.

7.      The hearing proceeded on 2 March 2005.  Both applicants were unrepresented.  Mr Casa suffers a significant hearing impairment and was assisted at the Tribunal by note takers from the Vic Deaf Interpreting Service.  Mrs Casa was assisted by an interpreter of the Croatian language.  Both applicants did speak some English and they resorted to the note taker and interpreter respectively when needed.  Both applicants were also assisted by Ms Trentini, a Team Leader from Vic Deaf who was of considerable assistance in these proceedings and did make submissions on behalf of Mr and Mrs Casa.  The respondent in these proceedings was represented by Mr Perdon, an advocate with Centrelink.

8.      The background to the application may be briefly summarised as follows.

9.      Prior to December 1985, Mr Casa was employed by South Pacific Tyres in Campbellfield.  He suffered workplace injury and made a claim for benefits under the Victorian Workcover scheme.  Liability was initially denied and he sought legal assistance.  Pending the hearing of an application he made to contest the denial to pay compensation to him, Mr Casa claimed and qualified for payment of Sickness Benefits.  Those benefits were paid until 25 December 1986 from which date Mr and Mrs Casa qualified for Invalid Pension (IP) following a claim made by Mr Casa on 22 December 1986.

10.     From 25 December 1986, Mr Casa has been in receipt of (initially) IP and more recently Disability Support Pension (DSP).  At all relevant times Mrs Casa has received pension in an equivalent amount to her husband by reason of her status as his partner.

11.     The compensation proceedings initiated by Mr Casa were eventually either heard or conceded by the employer.  On 21 March 1988 the employer forwarded to Mr Casa a cheque in the sum of $18,961.30.  That sum was net of deductions made with respect to income tax and a refund to the Department of Social Security of benefits paid previously.  The letter found at T20 of the T-documents records that the payment then made was the equivalent of weekly compensation for the period 17 March 1986 until 1 January 1988.  The letter also records that compensation for the period 14 December 1985 to 14 March 1986 had previously been paid.  When the respondent determined that there had been an overpayment of IP and or DSP, some reliance was made upon the letter of 21 March 1988.  The primary decision-maker decided that the overpayment commenced from 26 December 1986 when the payment of IP commenced.  The Authorised Review Officer (ARO) later determined that the overpayment commenced from March 1988 when it was understood that compensation payments commenced to be paid on a weekly basis.  Accordingly the first variation in the amounts alleged to have been overpaid to both applicants was reduced.  In the case of Mr Casa the amount initially alleged as overpaid was $29,826.90 which was reduced by the ARO on 23 September 1988 to $25,611.00.  In the case of Mrs Casa the amount initially alleged as overpaid was $30,302.90 reduced also on 23 September 1988 to $25,611.90.

12.     The SSAT varied the amount alleged to have been overpaid as against each applicant and by its recommendations (accepted by the respondent) the amount overpaid to Mr Casa was $25,115.90 and the amount overpaid to Mrs Casa was $24,400.00.

13. Subsequent to the decisions of the SSAT, the respondent again varied the quantum of the recoverable debt pursuant to s180 of the Social Security (Administration) Act 1999 and has decided that the amount overpaid to Mr Casa was $24,061.40 and the amount overpaid to Mrs Casa was $23,345.50 (refer to Appendix A of respondent’s Statement of Facts and Contentions).

14.     Having regard to both applicants being unrepresented I held discussions with them at the commencement of the hearing and indicated that I understood that there were three principle issues for review namely:

(i)Whether there was an overpayment (and if there was);

(ii)What is the amount of the overpayment; and

(iii)Whether there is any basis to permit waiver or write off of the amounts overpaid.

15.     At the commencement of the hearing I asked Mr and Mrs Casa whether they agreed or disagreed with the allegation of the respondent that there had been an overpayment of benefit.  They both indicated that they agreed that they had been overpaid.  I asked this question of them because it appeared to me on the interpretation of the decision of the SSAT that the applicants had made that concession but their case was principally directed towards quantum of the debt and waiver because of special circumstances.

16.     I was concerned whether my question had been understood and when I asked it later in the proceedings it became apparent that it was not understood.  Mrs Casa said that an interpreter was not present at the SSAT and the Members of that Tribunal had not understood their evidence.

17.     Accordingly Mr and Mrs Casa were sworn independently of each other to give evidence and were cross-examined by Mr Perdon.

18.     Mr Casa said that in 1988, 1989 and 1990 he attended the Moonee Ponds office of Centrelink and provided a copy of a letter that he had received from the compensation insurer confirming his rate of weekly compensation.  He said that the rate of payment increased every year and he was given written notification of it.  He said he took that letter to Centrelink in those years in the month of June or July.  He said he knew that he was obliged to notify Centrelink of compensation payments being received, but he did not return to Centrelink after 1990 because he was “fed up”.  He said that despite taking in the letters in 1988, 1989 and 1990, pension continued to be paid to him at the full rate.  He said there were other occasions when he attended the Moonee Ponds office of Centrelink he was treated poorly.  When he moved from Keilor to Hoppers Crossing and thereafter attended the Werribee office, he said that he was treated in a similar fashion.

19.     Mr Casa also said that from time to time he received letters from Centrelink notifying him of the rate of pension that would be paid.  He said that the letter appeared to be similar on each occasion but there was a different amount recorded as to the rate of pension.  He said he could not recall whether he read the letters or read the notification on the back of each letter asking him to advise Centrelink of any changes in circumstances.

20.     In cross-examination, Mr Casa reaffirmed that he did attend the Moonee Ponds office in 1988, 1989 and 1990 with letters he received from the Workcover insurer.  He said that officers at Moonee Ponds made copies of the letters and he understood that they were kept on his file.  He confirmed that he knew that he was receiving a benefit to which he was not entitled, as evidenced by notes that he had made on a letter from Centrelink dated 19 December 1989 (T28, page 69) where he recorded in his own handwriting “back to social security after Christmas to show this letter, why pay too much and give copy to [illegible]”. 

21.     Mr Casa was then referred to the Reasons for Decision of the SSAT where, on a number of occasions, the date 17 April 1988 appears.  It would appear from the Reasons of that Tribunal that Mr Casa gave evidence that he notified Centrelink on that date that he had received a “lump sum” of compensation (which was the compensation payment referred to in the letter from the employer of 21 March 1988 found at T20, page 49 – refer earlier).  Mr Casa agreed that he did notify the SSAT that he had advised Centrelink of his receipt of compensation on that date and they continued to pay him pension at the full rate, despite his advice.  Mr Casa was asked to explain why it was that he was then adamant that he could recall that date, more so because 17 April 1988 was a Sunday.  Mr Casa said that he could not now remember why he referred to that date when giving his evidence at the SSAT (which was in November 1998).

22.     In concluding his evidence Mr Casa said that he and his wife had refunded over $30,000.00 to Centrelink.  He said that he and his wife had suffered nervous breakdowns and he was “sick of this”.  He said “I want to stop everything and waive the payments.  They don’t know how to calculate”.

23.     Mrs Casa then gave evidence.  She said that she was aware that her husband had told Centrelink on a few occasions that he was receiving compensation.  She recalled that there was an occasion that she and her daughter attended at the Moonee Ponds office for this purpose.  She said there were also occasions where she had received telephone calls from the “Melbourne office” of Centrelink asking her whether her husband was receiving compensation.

24.     Later, after her husband had been in receipt of weekly compensation for some time, she said that she “didn’t know anything” and “don’t know what he did.  He didn’t go in when I wasn’t with him”.

25.     With respect to letters received from time to time advising of the rate of pension being paid to her, Mrs Casa said that she either did not remember receiving the letters (copies of which were within her T-documents) but said later that there were some letters that had been received but she did not know “what they were all about”.  She said that in the early 1990’s she was able to read some English but not very well.

26.     Mrs Casa said that at the present time her husband continues to receive weekly workers’ compensation but she did not know at what rate.  She receives a pension of $93.00 per fortnight.  She said that she and her husband own their own home and it does not have a mortgage.

27.     Mr Casa agreed at the hearing that the rates found within the schedule commencing at page 192 correctly record the rate of weekly compensation received for each week within the period under review in these proceedings.  As to the period of March 1988 and 1 July 1988 it is noted that the T-documents contain a copy of a Minute recorded by a Social Security officer in January 1994, apparently in response to enquiries then made of the workcover insurer.  In the financial year ending 30 June 1988, the rate paid for each week as workers’ compensation was $359.00.  Mr Casa agreed that that rate was paid to him immediately prior to 1 July 1988.

28.     It would seem therefore that calculation of overpayment should not be a complicated exercise because, on the one hand, regard should be had to the weekly compensation paid during the relevant period and the amounts permitted to be received as income by disability support pensioners from time to time pursuant to limits found within the Social Security Act [1991] (“the Act”).

29.     However it was submitted by Ms Trentini on behalf of Mr and Mrs Casa at the hearing that there were some factors which should be considered in calculation of overpayment (if found).  It was submitted that the amount refunded as “Sickness Benefit” of $7548.00 should not have occurred.  On the one hand it was submitted that the letter from the employer advising of that refund is ambiguous as to whether the refund had been made by the employer or by Mr Casa personally.  In those circumstances it was submitted that the benefit of the doubt should be extended towards the applicants and it should be found that that sum had been paid on two occasions.

30.     Additionally it was submitted that regard was had to Child Allowance paid to the applicants which should not have been brought into account in calculation of overpayment, that adjustments with respect to the original amount assessed as over paid had been improperly made (refer to T57, pages 155 and 156) and allowance should be made for the fact that Mrs Casa was overseas between 3 June 1989 and 28 September 1989 during which time pension was not paid to her at all.

31.     On the issue of calculation of overpayment, Mr Perdon submitted that the refund of Sickness Benefit/Allowance is irrelevant to these proceedings.  It was submitted that Sickness Benefit was paid and refunded prior to the period of overpayment in issue in these proceedings and was not taken into account at all in the departmental calculations.  Additionally it was submitted that Child Allowance was not factored into departmental calculations to date of overpayment of DSP.

32.     With respect to the adjustments made to the debt from its initial calculation, (refer to T57, pages 155 or 156), Mr Perdon acknowledged that the respondent had then been in error because it had been assumed by a departmental officer that weekly compensation was not paid between April 1987 and June 1988.  When it was later learnt that the applicant was in fact paid in that period the debt as initially calculated was restored.

33.     The remaining issue is whether the applicants can demonstrate special circumstances and whether there was any sole administrative error on the part of the Commonwealth.

34.     Ms Trentini on behalf of the applicants submitted that the calculation of the debt and the repayments by the applicants had been a major issue in their lives and have caused a significant disruption to their relationship.  It was submitted that Mr and Mrs Casa are in hardship, that there has been an administrative error on the part of the Commonwealth in the calculation of the overpayment (refer earlier submissions as to “Sickness Benefit”) and the circumstances of the applicants are special and the debt should be waived.

35.     Mr Perdon on behalf of the Commonwealth submitted that the applicants’ circumstances were not special and were not out of the ordinary or unusual in the context of the Federal Court decision of Beadle v Director-General of Social Security (1985) 7 ALD 670.

36.     Mr Perdon submitted that the Centrelink may have made mistakes from time to time and may have misplaced documents but the applicants received notification notices twice yearly for more than seven years and failed to respond to them.  The applicants were under a duty to notify altered circumstances, in this case being the receipt of weekly compensation and the increased rate of compensation per annum.  It was submitted that even if the applicants were found as a fact to have notified Centrelink of their compensation receipts, there was uncontradicted evidence from Mr Casa that from 1990 he no longer advised Centrelink of receipt of weekly compensation payments and beyond that date payment of pension without reference to compensation could not be found to be the sole error of the Commonwealth.

37.     Additionally it was submitted that little confidence could be had in the findings made by the SSAT and the evidence then given by the applicants to that Tribunal.  On the one hand it was noted that the date “17 April 1988” was a Sunday and in those circumstances it could not be found as a fact, or even assumed, that the applicant on that day, or at all, attended a Centrelink office and notified Centrelink officers of his receipt of weekly compensation.

38.     To the extent that the applicants submitted that errors had been made by having regard to the gross rate of weekly compensation as opposed to the nett rate, Mr Perdon referred to s1072 of the Act and a previous decision of the Tribunal in Re Gimzewski and Secretary, Department of Social Security (1989) 20 ALD 272 as authority for gross rates of payments of compensation only to be considered when assessing the rate of income received by a beneficiary. In those circumstances it was submitted that the gross rates of weekly compensation should be considered in calculating the overpayment.

legislation

39.     In December 1986 when IP was first paid to Mr and Mrs Casa, the legislation then applicable was the Social Security Act 1947 (“the 1947 Act”).  That Act was subsequently repealed and replaced by the Social Security Act 1991 (“the 1991 Act”).

40.     The 1947 Act contained provisions requiring recipients of pensions to notify change of circumstances.  That legislation also contained provisions with respect to recovery of benefits that had been paid as a consequence of the failure or omission to comply with recipient notices (which required notification of changed circumstances).

41.     The 1991 Act has contained provisions with respect to overpayment of benefits and recovery.  The 1991 Act has been amended on a number of occasions with respect to the provisions concerning overpayment, the raising of a debt and the manner and method of recovery.  Essentially the 1991 Act, at all relevant times, had contained provisions that entitle the Commonwealth to recovery moneys that have been paid where either there was no entitlement or where there had been a contravention of the Social Security Act or where there had been a false statement or a misrepresentation.

42.     For the purposes therefore of this application, I am satisfied that the provisions under both the 1947 and the 1991 Acts contain provisions giving the Commonwealth an entitlement to recover moneys that had been paid as pension where there was no entitlement.  Under both Acts, pensions were not payable in whole or part, if recipients were receiving income from other sources.  “Income” under both the 1947 and the 1991 Acts includes weekly payments of compensation.

conclusion and reasons for decision

43.     At the commencement of the hearing I suggested that there were three principle issues for review namely, whether the applicant’s were overpaid, the quantum of overpayment and whether there were any circumstances permitting waiver or write-off.

44.     Mr and Mrs Casa conceded during the hearing that they were overpaid.  As a fact I am satisfied that there was an overpayment of invalid pension and later DSP.  The overpayment occurred because at relevant times Mr Casa was in receipt of weekly Workcare benefits whilst he was receiving pension.  Mrs Casa was entitled to pension as the spouse of her husband who was the disability pensioner.  An unfortunate feature of this review was the variation in quantum of the amounts respectively overpaid as calculated from time to time by the respondent and as determined by the SSAT.  This has apparently caused frustration and unhappiness to the applicants.  It would have been preferable, of course, for the amount to have been fixed and certain.  I hope that by this decision there can be some certainty as to the quantum of the overpayment.

45.     As a fact I am satisfied that prior to the date of claim for invalid pension in December 1986, Mr Casa was totally incapacitated from employment by reason of workplace injury and was then awaiting payment of weekly workers’ compensation.  Immediately prior to qualification of DSP, he was in receipt of sickness allowance from the respondent.

46.     Calculation of the amounts respectively overpaid in these applications has been a complex and uncertain exercise to date but hopefully by these reasons some certainty can prevail.

47.     On 21 March 1988 the employer wrote to Mr Casa (T20, page 49) enclosing a cheque representing weekly compensation payments between 17 March 1986 and 1 January 1988.  The letter records that the sum of $7548.00 was paid to the Department of Social Security.  Whilst the letter also records that compensation had previously been paid for the period 14 December 1985 to 14 March 1986, the analysis which follows assumes that compensation has been paid at all relevant times since December 1985 which was at a point in time when the applicant was in receipt of sickness benefit.  The following analysis also assumes that compensation has been paid at all relevant times since December 1986, when the applicant applied, and qualified, for IP.

48.     The letter from South Pacific Tyres does not identify the benefit that was refunded to the Department of Social Security in the sum of $7548.00.  An officer of the respondent issued a receipt on 24 March 1988 (T22, page 53) for that sum and described it as a refund of sickness benefit.  If in fact the sum of $7548.00 was paid to Mr Casa as sickness benefit prior to December 1986 (when he qualified for IP) it would not appear that there has been any refund to the respondent of benefits overpaid subsequent to December 1986.  In the alternative, if the refund then made to the Department of Social Security, was in respect of benefits being both sickness benefit and IP paid to 1 January 1988 then there has been a partial refund of IP and the receipt issued, describing the refund as sickness benefit only, was an error.

49.     It is difficult to make findings of fact, now, upon events that occurred in 1986 and subsequently.  The documents are either in error or are ambiguous.  The passage of time causes memory to be unreliable.

50.     In my view the solution to this dilemma is to adopt the findings made by the ARO that the overpayment commenced in March 1988.  That person made that decision on the basis that an overpayment did not exist prior to that date because compensation had not been made on a weekly basis.  I think it would be fair to say that as a matter of law that interpretation of the legislation then existing was incorrect.  On the one hand it might be argued that weekly compensation if paid as a lump sum was not “income” within the meaning of the 1947 Act but it ignores that compensation had been paid representative of a period of time when IP had been paid.  The applicants were not entitled in those circumstances to receive compensation and pension and the respondent was entitled to recovery.

51.     To now overturn that finding would add a further complication to this unfortunate relationship between the applicants and the respondent.  The respondent apparently is content to accept that the calculation of overpayment should commence at March 1988.  It has not disputed the calculation of overpayment from that date in either these proceedings or the proceedings before the SSAT.  To adopt that date as the commencement of overpayment would at least provide some certainty in the calculation of the overpayment and would avoid a focus on the refund of $7548.00.  In my view no useful purpose is to be achieved by analysis of that sum or the benefit that was sought to be refunded by that payment because irrespective of whether it was a refund of sickness benefit or IP or both, it was paid prior to March 1988.  Clearly it was therefore not paid as a refund of benefits paid beyond March 1988.  Accordingly the amount overpaid to the applicants can be calculated with some confidence simply by a comparison of the amounts paid from March 1988 in weekly compensation and the amounts which have been paid to the applicants as pension.

52.     Those calculations should take account of the absence of Mrs Casa from Australia between 3 June 1989 and 28 September 1989 when benefit was not paid to her.  The amount of overpayment should also have regard to the gross sum paid as weekly compensation, that is, the amount paid to Mr Casa prior to deduction of income tax.  Calculation should be made on that basis having regard to the decision of the Tribunal in Re Gimzewski, the provisions of s1072 of the 1991 Act and by reference also to the recipient notices compelling declaration of income received as “gross income before tax”.

53.     The amounts paid to date in weekly compensation can be easily identified from the T-documents.  Commencing at page 192 is a schedule of the weekly rate paid to Mr Casa from 1 July 1988.  At page 130 is a schedule of weekly compensation payable before that date.  Mr Casa has agreed with the rates as disclosed in those documents.

54. To assist in this process, Mr Perdon has separately calculated the amounts which should be brought into account and has found further errors made initially by his colleagues in earlier calculations. The effect of his calculations has been to again reduce the amount overpaid to each applicant. His calculations and the basis for his calculations are found at Appendix A, being page 6 of the Statement of Facts and Contentions lodged prior to the commencement of the hearing. Those sums respectively are substituted by the respondent pursuant to s180(1) of the Social Security (Administration) Act 1999.

55.     The remaining issue then is whether the debt should be repaid.

56.     Section 1236 of the Act permits the Secretary to “write-off” the debt but s1236(1A) only permits write-off in limited circumstances being,

(a)The debt is not recoverable; or

(b)The debtor has no capacity to repay; or

(c)The debtor’s whereabouts are unknown; or

(d)That it is not cost effective to recover the debt.

I am not satisfied that any of those circumstances apply and writing off the debt would be impermissible.

57.     Another issue for consideration is whether the debt may be waived.  Section 1237A(1) permits waiver in limited circumstances only.  That section is reproduced as follows:

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.

58.     For the purposes of this analysis the “debt” as referred to in that section will be the amount as calculated having regard to the reasons found earlier.

59.     I am satisfied that the applicants were paid in error but for reasons which follow I cannot be satisfied that the errors were attributable solely to the Commonwealth.  I accept and find as a fact, that in the 1988, 1989 and 1990 years, Mr Casa did, (on one occasion on each of those years) attend the Moonee Ponds office of Centrelink and attempted to notify the change in his weekly compensation rate.  It would appear from the evidence heard that Mr Casa had an unsatisfactory relationship with officers at Centrelink and beyond 1990 he did not return because he was “fed up”.  Thereafter he acknowledged that pension continued to be paid to him as if he was not receiving compensation and he was aware that he was receiving a benefit to which he was not entitled.

60.     Centrelink staff should have acted on the letters that were produced by Mr Casa and if the compensation then being paid had been brought into account, the overpayment beyond 1988 more likely than not would not have occurred.  However prior to June 1990 when Mr Casa would have received a letter advising him of a variation in the workers’ compensation rate for the following financial year, he and his wife would have received ten recipient notices.  For the purposes of this part of the decision I note from the T-documents applicable to Mr Casa that he received notices between 29 July 1987 and 9 April 1990 inclusive found at pages 38, 48, 50, 54, 64, 65, 67, 69, 73 and 75 of the T-documents.  All of the notices asked him to declare income above a specified level.  There was no evidence that the applicant at any time acted on any of those letters.  He attended at the Centrelink offices at Moonee Ponds only when he received the letters from Workcover in June or July of the 1988, 1989 and 1990 years.  I note that the letter at page 65 specifically directs Mr Casa to declare compensation if paid (and then whether paid periodically or by way of lump sum).  I also note that Mr Casa declared in December 1986 (page 20) that “should I receive any money from my workers’ compensation claim or if any of my circumstances change I will need to notify this department within 14 days”.

61.     Because I am satisfied that the error causing overpayment of benefit was not solely caused by the Commonwealth, that is the overpayment can be attributable in part also to the applicants, Mr and Mrs Casa are unable to take advantage of s1237A(1) of the Act.  I note also that even if the error had been attributable solely to the Commonwealth, Mr and Mrs Casa would need to demonstrate receipt of the funds in good faith.  The Federal Court decisions of Pledger v Secretary, Department of Family & Community Services [2002] FCA 1576 and Jazazievska v Department of Family & Community Services [2000] FCA 1484 are applicable to this issue.

62.     In Pledger Weinberg J completed an exhaustive analysis of the legal concept of “good faith” by reference to Australian and English authorities and by reference also to civil and criminal standards.  Ultimately His Honour concluded that there was a difference between receiving a payment in good faith and acting in good faith.  Additionally he found that the AAT should consider an applicant’s state of mind during the period in issue because it may be found as a fact that some payments were received in good faith but other payments were not.  His Honour decided that such findings were required because a finding of whether a debt should be waived could not be made unless there was a finding that payments were not received in good faith.

63.     In Jazazievska, Cooper J decided at paragraph 40:

Prima facie, s 1237A(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.

64.     At paragraph 41, His Honour decided that:

A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists….

65.     In Secretary Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127, Finn J also discussed the concept of “good faith”:  His Honour then decided that the concept of good faith as applying to the Student and Youth Assistance Act 1973 was concerned with the state of mind of a person who received the payment.  His Honour decided that if that person knew, or had reason to know, that they were not entitled to the payment that was received, the person did not receive the payment in good faith.  His Honour expanded the concept of an absence of good faith by the concluding that such a person was not entitled to use the moneys received as his or her own moneys.

66.     In the present applications, I am satisfied that at all relevant times when the payments of pension were received, the applicants knew that they were not entitled to receive them.  I am satisfied, having regard to the documents observed in these proceedings, the recipient notices which the applicants largely ignored and the admission by them in these proceedings that they knew they were being overpaid, permits a finding of fact that those payments were not received in good faith.  I do not intend by this finding to imply that the applicants have in any way acted fraudulently but I cannot find that they have on the occasions that pension was received held any honest belief that they were entitled to receive and retain those payments.  In those circumstances the debt as calculated cannot be waived.

67.     I accept that Mr and Mrs Casa from time to time felt a degree of frustration in their dealings with Centrelink officers.  I also accept that up until 1990 Mr Casa did attend the Moonee Ponds Office of Centrelink on one occasion each year to notify of the increased rate of weekly compensation.  However s1237A is concerned with receipt of moneys in good faith, not acting in good faith.  I note from the evidence that Mr Casa said that he was “fed up” with his communications with Centrelink and after 1990 did not communicate with Centrelink officers.  Mrs Casa acknowledged receipt of letters from time to time but either did not read them or did not respond to them.  There was clearly an act of wilful blindness on her part and probably also on the part of her husband who received similar notifices.

68.     Waiver of debt is also permitted in the circumstances described at s1237AAD of the Act.  That section provides that the Secretary may waive the right to recover all or part of the debt if a debtor did not knowingly make a false statement or false representation or failed to comply with a provision of the Act and there are special circumstances other than financial hardship that make it desirable to waive the debt.

69.     The expression “special circumstances” as appearing in this section is not defined by the legislation.  It has been the subject of many decisions of this Tribunal and of the Federal Court.  In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, at 545, Kiefel J decided that “special circumstances” was an imprecise concept but was sufficiently understood “not to require judicial gloss”.  Her Honour decided

For present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others to take it out of the usual or ordinary case.  That was I consider the only enquiry to be undertaken in this 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.

70.     In the circumstances of this application I could not find that there is “something unfair, unintended or unjust” concerning the circumstances of Mr and Mrs Casa that would permit any finding of such circumstances being “special”.

71.     For the reasons given earlier the applicants did fail or omitted to comply with a provision of the Act, namely the declaration from time to time of their changed financial circumstances.

72.     Section 1237AAD is conjunctively constructed.  Special circumstances, if any, would only be relevant if a false statement or representation had not been made.  At this point, for the reasons given earlier, this section requires no further consideration.  Financial hardship, if applicable, is also not a relevant factor.  However, if the section applied, I would have found that the applicants own their own home without mortgage.  Mr Casa continues to receive weekly compensation of $765.00 per week.  Both continue to receive partial pension.  The moneys overpaid to them were from Commonwealth funds and the public purse deserves reimbursement.  Mr and Mrs Casa have been repaying the debts by withholdings from pension.  There is no evidence that they presently have funds to pay the whole of the balance presently outstanding and it would appear appropriate that repayment continue by way of pension withholdings.  The rate of withholdings is dependent upon their capacity to repay based on their present financial circumstances.  There was a statement of financial circumstances lodged but it would appear from the evidence in cross-examination that the amounts disclosed did not accurately or honestly reflect the present financial circumstances of the applicants.  Subject to their financial circumstances having changed from the last review, I would direct that the debts be respectively repaid in the amounts currently being withheld.

73.     In each of the applications under review:

(i)the decision of the SSAT in so far as it found that there was an overpayment of benefits should be affirmed; and

(ii)the remaining part as to quantum of the overpayment is remitted to the respondent with the direction that such sum be calculated by regard to these reasons.

I certify that the 73 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior Member

Signed:         Alice Beattie
  Associate

Date of Hearing  2 March 2005
Date of Decision  11 April 2005
Solicitor for the Applicant          Nil (Self Represented)
Departmental Advocate            Mr D. Perdon