Chris Paterson and Secretary, Department of Social Services

[2014] AATA 651

[2014] AATA 651 

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/5793
Re	Chris Paterson
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Mr P Wulf, Member
Date	8 September 2014
Place	Brisbane

The Tribunal affirms the decision under review.

..................................[Sgd]......................................

Mr P Wulf, Member

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Disability support pension – Payment of Income Protection Insurance not declared – Overpayment – Confusion related to advice to different Government Departments – Recovery of overpayments – Whether overpayments recoverable – No special circumstances – Decision under review affirmed.

LEGISLATION

Social Security Act 1991 (Cth) ss 117, 1064, 1223, 1236, 1237A, 1237AAD

Social Security Administration Act 1999 (Cth) ss 63, 68

CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1

Dranichnikov v Centrelink [2003] FCAFC 133; (2003) 75 ALD 134

REASONS FOR DECISION

Mr P Wulf, Member

8 September 2014

INTRODUCTION

1. Mr Chris Paterson[1] (“the applicant”) seeks review of decisions made by Centrelink

   
   

   (“the respondent”) on 6 December 2012[2] to raise a debt for the amount of $9,046.24 for overpayment of his disability support pension (“DSP”) between 29 May 2012 and

   
   

   30 November 2012. The debt was raised due to his receipt of income protection insurance that the respondent says was not declared.

   [1] Exhibit 1, pp 1-6.

   [2] Exhibit 1, pp 73.

2. An authorised review officer (“ARO”) affirmed the decision on 11 March 2013.[3]  The ARO’s decisions were affirmed by the Social Security Appeals Tribunal (“SSAT”) on

   
   

   20 May 2013.[4]  On 8 November 2013, the applicant applied to this Tribunal for review of the SSAT’s decision. An extension of time was granted to Mr Paterson on

   
   

   12 December 2013 for his late filing of his appeal.

   [3] Exhibit 1, pp 74-77.

   [4] Exhibit 1, pp 7-13.

3. For the reasons that follow, this Tribunal finds that Mr Paterson did not properly disclose his financial situation to Centrelink and therefore was overpaid on his DSP. Further, there are no special circumstances to warrant writing off or waiving the debt. Accordingly the decision is affirmed.

   ISSUES FOR THE TRIBUNAL

4. The issues for the Tribunal to determine are:

   (a)Whether Mr Paterson properly advised Centrelink about his receipt of all income protection payments; and if not

   (b)Does Mr Paterson have a debt owing to the respondent; and if so

   (c)Are there any special circumstances as to why the debt should be written off and/or waived in the case where the debt is irrecoverable; and if not

   (d)If Mr Paterson should be availed of additional time to pay the debt.

   LEGISLATION

5. The relevant law is contained in the Social Security Act 1991 (Cth) (“the Act”) and the Social Security (Administration) Act 1999 (Cth) (“Administration Act”).

6. Section 117 provides that a person’s rate of pension is calculated under s 1064 of the Act. Sections 63 and 68 of the Administration Act provide power to the Secretary to require a person to notify matters that might affect their social security payment.

7. Section 1223(1) of the Act provides that an amount of payment to which a person was not entitled for any reason is a debt owed to the Commonwealth. Section 1223(1AB) sets out the circumstances under which a person is taken not to have been entitled to obtain the benefit of a payment.

8. Section 1236(1A) provides for the write-off of a debt where:

   (a)the debt is either irrecoverable at law; or

   (b)the debtor has no capacity to repay the debt; or

   (c)the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

   (d)it is not cost-effective for the Commonwealth to take action to recover the debt.

   Section 1237A provides for a waiver of debts which is attributable solely to an administrative error if the debtor received the payments in good faith.

9. Section 1237AAD provides for the waiver of debts in special circumstances and provides as follows:

   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 a false representation; or

   (ii)failing or omitting to comply with a provision of this Act, the Administration 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.

   ANALYSIS AND FINDINGS

   Background

10. Mr Paterson is currently receiving DSP following the granting of a pension on

    
    

    20 July 2011.[5]  It is not necessary to discuss the aspects of the disability.

    [5] Exhibit 1, pp 99 and 119.

11. When making his claim for DSP in July 2011, at Question 136 of the claim form,

    
    

    Mr Paterson advised that he had claimed and/or was able to claim compensation, insurance and/or damages.[6]  At Question 137 of that form, Mr Paterson indicated that he was not currently in receipt and/or had not been paid compensation, insurance and/or damages.[7]

    [6] Exhibit 1, pp 21-42.

    [7] Exhibit 1, pp 21-42.

12. On 14 March 2012, Mr Paterson completed a Compensation Personal Sickness and Accident Claim form.[8] On that form, Mr Paterson advised that he had made a claim with Australian Income Protection Pty Ltd (“Australian Income Protection”) and that the claim was currently being assessed. In March 2012, Australian Income Protection advised Centrelink that it was assessing a claim for Mr Paterson and subsequently commenced paying him weekly payments.[9]  Following this, on 15 May 2012, Centrelink contacted Mr Paterson requesting information in relation to payslips from

    
    

    Underwriting Services Pty Ltd (“Underwriting Services”); however it is unclear whether this information was provided.[10]  The correspondence did not however include a request with respect to Australian Income Protection. As the payments from

    
    

    Underwriting Services are not at issue of this matter, it is presumed that these documents were provided. Importantly, the respondent contends that once payments were received from Australian Income Protection, Mr Paterson did not advise Centrelink of these payments as he is required to under the Act and Administration Act.

    [8] Exhibit 1, pp 63-64

    [9] Exhibit 1, pp 60-64.

    [10] Exhibit 1, pp 68-69.

13. In October 2012, Centrelink received advice from Australian Income Protection that

    
    

    Mr Paterson had been in receipt of payments since 28 February 2011 and those payments were ongoing.[11] On 5 December 2012, Australian Income Protection provided Centrelink with an overview of the payments it had paid Mr Paterson during that time.[12]

    [11] Exhibit 1, pp 70-71.

    [12] Exhibit 1, pp 72.

14. There are a number of matters that are important from these documents. Firstly, it is noted that Australian Income Protection sincerely apologise for the delay in providing this information. Secondly, it is noted that Australian Income Protection had commenced paying Mr Paterson prior to him completing the DSP application form although the actual first payment of DSP was not received until 29 May 2012, well after Mr Paterson had submitted his DSP claim.[13]  However, the current matter relates to payments post

    
    

    29 May 2012, until 30 November 2012.

    [13] Exhibit 1, pp 21-42.

15. Mr Paterson gave evidence that he had on a number of occasions advised Centrelink of his current financial circumstances including the all his payments from Coverforce (now Underwriting Services) and Australian Income Protection. Mr Paterson says that on this basis, he fulfilled his obligations to advise under ss 63 and 68 of the Administration Act and that Centrelink were subsequently responsible for the overpayment. However, there is nothing within the material contained in Exhibit 1, including file notes, which demonstrate Mr Paterson advised Centrelink of the Australian Income Protection payments, prior to Centrelink becoming aware that he had received them.

16. To assist with his evidence, following the hearing as part of the Tribunal’s numerous directions in this matter, Mr Paterson provided the Tribunal with a compact disc (“CD”) that included recorded conversations he had obtained under a Freedom of Information request with Child Support.[14]  Mr Paterson did not and/or was unable to provide copies of telephone conversations with Centrelink, and he was unable to provide any evidence that he had advised Centrelink that he was in receipt of additional payments from Australian Income Protection.

    [14] Exhibit 4.

17. On listening to the CD, it is clear that there is conflicting information and more importantly, the Child Support personnel raise concerns and advise Mr Paterson in numerous conversations to specifically discuss his DSP payment matters (including additional payments) with Centrelink rather than just Child Support. As there is no evidence before this Tribunal that these conversations with Centrelink took place, this Tribunal can only make a finding that Mr Paterson did not properly advise Centrelink of his current status and his receipt of Australian Income Protection payments.

18. On this basis, the Tribunal finds that Mr Paterson has a debt to the Commonwealth of $9046.42.

    Should the Debt be written off and/or waived

19. The Tribunal is required to consider whether the debt should be written off and/or waived pursuant to s 1237AAD of the Act. The provisions in this section are conjunctive in that the Tribunal must be satisfied that the debt did not arise wholly or partly from the person making a false statement, or failing or omitting to comply with a provision of the Act or the Administration Act, and there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt. It is noted that it is more appropriate to waive the debt than to write it off. The Tribunal also needs to assess whether there might have been an administrative error that could give rise to the waiving of the debt.

20. On an assessment of the evidence, and given that Mr Paterson has not been able to provide information as to his alleged conversations with Centrelink, this Tribunal does not find there was an administrative error. It is clear that the Child Support staff have advised him to contact Centrelink in relation to the implications of his additional payments on his DSP. As highlighted above, there is no evidence that he has done this.

21. The term "special circumstances" has been considered on numerous occasions by both this Tribunal and the Federal Court (in its original and appellant jurisdiction).

    
    

    The generally accepted requirement for “special circumstances” is that Mr Paterson’s circumstances must be different from the usual cases such that they are out of the ordinary (see for example, Beadle and Director-General of Social Security[15] and Dranichnikov v Centrelink[16]).  These circumstances should not be just financial in nature.

    [15] (1984) 6 ALD 1.

    [16] [2003] FCAFC 133; (2003) 75 ALD 134.

22. The Tribunal acknowledges that Mr Paterson has a number of matters that impact upon him. These include his inability to work, his separation from his partner and children, and his financial circumstances.

23. During the hearing, there was significant discussion as to Mr Paterson’s current financial status and his inability to repay any debt. Mr Paterson advised that he was currently trying to sell his house and has been for some time. The Australia and New Zealand Banking Group Limited (“ANZ”) were granted default judgment by the District Court in February 2013.[17]  The default required Mr Paterson to pay $421,126.22 with the ANZ taking possession of Mr Paterson’s real property at Toorbul. At the time of the hearing, the ANZ had not taken possession and the property was on the market. At the time of writing this decision, the property remains on the market.[18]

    [17] Exhibit 3.

    [18] As per accessed 4 September 2014.

24. Mr Paterson advised that besides the judgment owed to the ANZ, he also owed monies to his father for a loan. Except for oral evidence, no other evidence of this loan was provided despite there being discussion as to how to demonstrate this loan during the hearing.

25. During the hearing, the respondent raised the issue as to whether the debt may be irrecoverable due to Mr Paterson’s financial circumstances and/or, if Mr Paterson be given additional time to pay the debt given his current financial circumstances.

    
    

    Section 1073 of the Act allows for a debt to be written off where it is irrecoverable. At the end of the hearing, this Tribunal directed Mr Paterson to provide this Tribunal and respondent with up to date evidence on his current financial status. This information was to include any income he may be receiving apart from his DSP, copies of bank statements, information on his parenting payments, documents related to the loan that

    
    

    Mr Paterson indicated he owed his father, and any other factors Mr Paterson might believe would assist his case. Regrettably, Mr Paterson did not provide this information except for again providing a copy of the District Court judgment which had previously been before the Tribunal.

26. Based on the failure of Mr Paterson to provide this information, this Tribunal can only consider the evidence before it. As there is no documentary evidence to support

    
    

    Mr Paterson’s currently financial situation, the Tribunal can only infer that he has the capacity to repay the debt and on this basis, Mr Paterson is required to immediately commence repaying the debt.

    DECISION

27. For the reasons set out above, the Tribunal affirms the decision under review.

I certify that the preceding 27 (twenty -seven) paragraphs are a true copy of the reasons for the decision herein of Mr P Wulf, Member

..........................[Sgd]..............................................

Associate

Dated 8 September 2014

Date of hearing	28 April 2014
Date final submissions received	8 September 2014
Applicant	In person
Solicitors for the Respondent	Joe Guthrie, Department of Social Services