Cheney and Secretary, Department of Family and Community Services

[2004] AATA 190

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 190

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/808

GENERAL ADMINISTRATIVE DIVISION		)
Re		VINCENT CHENEY

Applicant

And

SECRETARY, DEPARTMENT

OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date27 February 2004 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

….(Sgd) RG Kenny ….

Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – overpayment of newstart allowance – applicant in prison – debts due to Commonwealth - waiver of debt – administrative error – special circumstances

Social Security Act 1991 ss 23(5), 1160, 1223, 1237A, 1237AAD

Director‑General of Social Services v Hangan (1982) 70 FLR 212
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

27 February 2004  Mr RG Kenny, Member      

Application

1.      Vincent Cheney (the applicant) received income support payments under the Social Security Act 1991 (the Act) in the form of newstart allowance prior to his being taken into custody on 13 January 1999.  These payments continued to be made by Centrelink until 17 February 1999.  On 1 March 1999, a Centrelink officer, on behalf of the Secretary, Department of Family and Community Services (the respondent), determined that the applicant had been overpaid in relation to the payments made while he was in prison and that the overpayment was a debt due to the Commonwealth.  The debt was determined to be $971.36 in respect of the period from 13 January 1999 until 17 February 1999.  That decision was affirmed by an authorised review officer on 20 May 2002 and, in turn, by the Social Security Appeals Tribunal on 12 August 2003.  On 17 September 2003, the applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal).

2.      At the hearing, the applicant was not represented.  Ms J Dwyer, Advocate from the Advocacy and Administrative Law Team, appeared for the respondent.

3. In evidence were the T Documents (T1 – T36), lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (Exhibit 1) as well as the following:

§Exhibit 2            Records relating to the applicant’s Commonwealth Bank account.

Applicant’s case

4.      The applicant conceded that he had not notified Centrelink when he was taken into custody and that this was because he was more concerned about his own situation at that time.  Also, he had been in custody previously without notifying Centrelink of this and no overpayments had occurred.  He said that the difference this time was that someone had continued to lodge fortnightly claim forms in his name and with a false signature which meant that the payments continued.  He believed this had been done by his former partner with whom he had resided and who had access to his “pin” number which would have enabled her to withdraw money from his account.  He said that, when he was arrested, there had been no time to secure any of his personal things including his banking card.  He said that he had seen copies of the signed claim forms and that the signature thereon was not his.

5.      The applicant submitted that, because he did not claim the money or get the payments, he should not have to repay it.  He also submitted that the debt was now less than it was initially because some repayments had been made by him.

Respondent’s submission

6.      Ms Dwyer submitted that the debt arose under section 1223 of the Act and that the applicant was not able to receive the newstart allowance payments while he was in prison because of section 1160 of the Act.  She accepted that the signature on each of the relevant claim forms was not that of the applicant but submitted that it was not usual practice for signatures to be verifed by Centrelink staff when processing such forms.  She also submitted that the payments were made to the applicant’s bank account and, therefore, were paid to him and he was the recipient, even though he may not have actually obtained the benefit of the payments.

7.      In relation to waiving the debt, Ms Dwyer submitted that sole administrative error was not the cause of the debt and, therefore, it could not be waived pursuant to sub-section 1237A(1) of the Act.  She submitted that the waiver provision would not apply if there was a failure or omission by the applicant which was a contributing cause of the debt and that, here, the applicant had failed to notify Centrelink that he was in custody.  Ms Dwyer also submitted that waiver under section 1237AAD of the Act was not appropriate because there needed to be special circumstances for this to be done, and that this was not so in the applicant’s case.

Consideration

8.      It is not disputed by the applicant and I am satisfied that Centrelink made payments of newstart allowance into his account with the Commonwealth Bank for the period from 13 January 1999 until 17 February 1999, that the amount so paid was $971.36 and that he was in gaol, as is defined in sub-section 23(5) of the Act, during that period. I am also satisfied that newstart allowance was not payable to him while he was in prison because of the terms of section 1160 of the Act. Those provisions read:

“23 General definitions
…

(5) For the purposes of this Act, a person is in gaol if the person:

(a) is imprisoned in connection with the person's conviction for an offence; or
(b) is being lawfully detained in a place other than a prison, in connection with the person's conviction for an offence; or
(c) is undergoing a period of custody pending trial or sentencing for an offence.

1160 Social security benefit not payable while person in gaol or in psychiatric confinement following criminal charge

A social security benefit (other than parenting payment) is not payable to a person in respect of a period during which the person is:

(a) in gaol; or

(b) …”

9.      In evidence were copies of claim forms lodged with Centrelink on 20 January 1999, 3 February 1999 and 17 February 1999. They are completed in the applicant’s name and bear a signature similar to, but not the same as his signature which appears on his Commonwealth Bank documentation (Exhibit 2). I accept his evidence that he did not complete and sign those claim forms which provided the basis for the making of the newstart allowance payments, while he was in prison. The issue taken by the applicant is that the money should not have to be repaid by him because he was not responsible for the payments being made and did not receive the money, because another person withdrew it from his account without his knowledge. However, I am unable to accept that contention. The payments were made into the account nominated by him and I am satisfied, by that means, they were paid to him. In that regard, section 1223(1) of the Act, at the time when the payments were made, read:

“1223 Debts arising under this Act and the 1947 Act

Recipient not qualified for payment or amount not payable

(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after I October 1997 and:

(a) the recipient was not qualified for the social security payment when it was granted; or
(b) the amount was not payable to the recipient

the amount so paid is a debt due by the recipient to the Commonwealth”.

10.     I am satisfied that newstart allowance was not payable to the applicant whilst he was in prison and the amount that was paid into his account in the sum of $971.36 constitutes a debt due by him to the Commonwealth in accordance with sub-section 1223(1) of the Act.

11.     Provision for waiving a debt which arose solely through administrative error by the Commonwealth or where special circumstances exist is made in sub-section 1237A(1) and section 1237AAD of the Act, respectively, which read:

“1237A Waiver from debt arising from error

Administrative 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.

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).

(1A) Subsection (1) only applies if:

(a) the 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.

1237AAD Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the  Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i)   making a false statement or false representation; or
(ii)  failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.”

12.     As sub-section 1237A(1) of the Act makes clear, a debt must be waived if it is attributable solely to an administrative error made by the Commonwealth and if the debtor received in good faith the payment or payments that gave rise to the debt.  This will not be met if there has been some contribution to the causing of the debt by the applicant: see Director‑General of Social Services v Hangan (1982) 70 FLR 212 at 215, 225 and 235. On each of the fortnightly claim forms which the applicant had lodged before going to prison was a list of matters about which he was obliged to inform Centrelink. This included a reference to being in prison. The applicant conceded that he did not notify Centrelink of his imprisonment and I am satisfied that this contributed to the overpayments being made. In any event, I am also satisfied that there was no administrative error by the Commonwealth in making those payments. That being so, the debt cannot be waived under section 1237A of the Act.

13.     For a debt to be waived under section 1237AAD of the Act, it must be the case, amongst the other requirements of the provision, that there are special circumstances other than financial hardship alone that make it desirable to waive.

14.     The Act provides no guidance as to the meaning of the term special circumstances in section 1237AAD of the Act.  In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674).  There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security(1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special".

15.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Keifel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“would require something to distinguish... [the].. case from others, to take it out of the usual or ordinary case. …….. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

16.     While I accept that being in prison is not a usual state of affairs for a person, this is the very reason that newstart allowance was not payable to the applicant. He has been able to repay some of the debt and I am satisfied that there is nothing in this case that gives it the character of being unusual or unfair and I am satisfied that there are no special circumstances in the applicant’s case that would justify waiver of the debt under section 1237AAD of the Act.

17.     The decision under review is affirmed

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         K Donnelly

Associate

Date/s of Hearing  18 February 2004 (Hervey Bay)
Date of Decision  27 February 2004 (Brisbane)

The Applicant appeared in person            
For the Respondent                  Ms J Dwyer, Departmental Advocate