Chu and Department of Employment and Workplace Relations

[2006] AATA 729

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 729

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N 2006/59-60

GENERAL ADMINISTRATIVE DIVISION

)

Re

PING KUEN CHU

MRS LAY GUAT CHU

Applicant

And DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal  Ms N Isenberg, Member

Date23 August 2006

PlaceSydney

Decision The decision under review is set aside and the matter is remitted to the Respondent with a direction that the debts of Mr and Mrs Chu should be waived pursuant to section 1237A of the Act.

..............................................

Ms N Isenberg
  Member

CATCHWORDS

SOCIAL SECURITY – Overpayment of Newstart Allowance – Whether debt due to the Commonwealth – Whether debt attributable “solely” to Commonwealth’s error – Whether debtor received monies in good faith - Whether debt should be waived.

LEGISLATION

Social Security Act 1991 ss 1223, 1237A and 1237AAD.

CASE LAW

Secretary, Department of Family and Community Services and Trio [2002] AATA 865,

Secretary, Department of Education, Employment, Training & Youth Affairs v Barry Prince [1997] 1565 FCA,

Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529

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

REASONS FOR DECISION

23 August 2006 Ms N Isenberg, Member

1.      Mr and Mrs Chu were overpaid Newstart Allowance in the amounts of $721.63 and $1,242.33 respectively.  They contend that the debts were caused solely by Centrelink’s administrative error.

BACKGROUND

2.      Mr and Mrs Chu have been paid Newstart Allowance since 2003 and 2004, respectively.  They were provided with a payment form that needed to be returned every 12 weeks.  The form was to be lodged earlier if there was a change in circumstances or if either Mr or Mrs Chu’s income changed during the period stated on the form. 

3.      Although Mrs Chu contacted Centrelink by telephone on 28 October 2004, to advise that she was working ‘at the moment’ and that her husband would be lodging his payment form the next day with an estimate of earnings, Centrelink continued to pay them Newstart Allowance as before.

4.      Centrelink failed to change their reporting frequency from 12 weekly to fortnightly. If this had occurred their earnings would have been advised in the fortnight that they were earned and not when the 12 weekly form became due on 10 December 2004.  As a consequence they were overpaid Newstart Allowance.

ISSUE BEFORE THE TRIBUNAL

5.      As Mr and Mrs Chu had conceded that they had been overpaid newstart allowance in the claimed amounts, and Centrelink had conceded that the debts had been incurred solely due to its administrative error, the remaining issue was whether, the payments had been received by the Chu’s in good faith (section 1237A of the Social Security Act 1991 (“the Act”)), or if there are special circumstances to waive the debts (section 1237AAD of the Act).

CONSIDERATION OF EVIDENCE AND FINDINGS

6. For a debt to be waived under section 1237A of the Act, two conditions must be met. Firstly, that the debt arose solely because of administrative error and secondly that the debtor received the payments in good faith.

Did Mr and Mrs Chu receive newstart allowance payments in good faith?

7.      Mr Chu gave evidence that, several times after 28 October 2004 he went to Centrelink at Strathfield, his usual Centrelink office, to ask about the fortnightly claim forms.  On each occasion he saw a different person.  He was told, variously, ‘don’t worry’, ‘go home and check your letterbox’, ‘we’ll fix it up’, and ‘come back if it doesn’t turn up’. 

8.      On one occasion Mr Chu was given another 12 week form.  He thought that the Centrelink staff looked like they didn’t know what they were doing. 

9.      Mr Chu said that he thought on each occasion the Centrelink officer appeared to turn up his particulars on the computer before giving him the information noted above.

10.     Ms Mantaring, (advocate, Legal Services Branch, Centrelink), conceded that although Centrelink had no record of Mr Chu’s attendances it was possible that he did attend as he had said.

11.     Centrelink contended that Mr and Mrs Chu did not receive their payments in good faith. The reasoning was that the Chu’s were both aware of the incorrect payment rate when their rate of Newstart Allowance failed to change notwithstanding the income that they had earned.  Centrelink’s position that the Chu’s had not received the payments in good faith relied on the following:

·Mr and Mrs Chu signed customer declaration forms (T55/166 and T57/170) acknowledging that they must declare the gross amount of any casual earnings.  Both Mr and Mrs Chu had also signed a Preparing for work - Information seminar checklists declaring that they were provided with information about the income test (T56/167 and T58/172). 

·On 29 October 2004, Centrelink sent a letter to Mr Chu explaining how work affects his payments and how income affects his payments.

·The record of conversation between the authorised review officer and Mr Chu which recorded that “he [Mr Chu] was aware that Centrelink was not assessing his income and that his rate should have been less.”  (T40/97) 

·That in Mr Chu’s letter to the SSAT dated 21 October 2005 (T43/112), he wrote that he was ‘concerned’ about their payments.

12.     As to the customer declaration forms, there was no dispute that Mr and Mrs Chu had informed Centrelink in accordance with their obligations set out in those forms.  This does not support Centrelink’s contention of a lack of good faith.

13.     As to the letter of 29 October 2006, while it sets out in table form how income received causes Newstart Allowance to reduce (‘reduction table’), it also refers to ‘working credits’ without specifying how these are calculated or their impact upon Newstart Allowance payments.  When Mr Chu was asked in cross-examination about his awareness of the reduction table he agreed he knew about it, but was unclear how his working credits would be factored in.  In my view his ongoing attendances at Centrelink demonstrate his concern that they were not being paid correctly and that he was seeking to have that clarified.

14.     In relation to Mr Chu’s conversation with the Authorised Review Officer (“ARO”) to the effect that Mr Chu was aware that Centrelink was not assessing his income and that his rate should have been less, Centrelink now asks me to conclude that this demonstrates a lack of good faith.  I do not accept this to be the case.  The uncontroverted evidence is that Mr Chu attended Centrelink precisely for the reason of having his and wife’s payments regularised, because he was aware of the problem.  This is entirely consistent with the reported conversation. 

15.     Similarly, Mr Chu’s letter to the Social Security Appeals Tribunal of 21 October 2005 expressing his ‘concern’ about the payments, is consistent with the evidence of his attempt to clarify matters by continual attendance at Centrelink.  

16.     I was referred to Secretary, Department of Family and Community Services and Trio [2002] AATA 865, wherein the Tribunal summarised the effect of the Federal Court cases of Secretary, Department of Education, Employment, Training Youth Affairs v Barry Prince [1997] 1565 FCA, Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 and Jazazievska v Secretary Department of Family & Community Services [2000] FCA 1484:

• Good faith must be determined by reference to the state of mind of the recipient of the payment.
• Where the recipient knows that he or she is not entitled to the payment, he or she cannot have received it in good faith.
• Where the recipient suspects that he or she is not entitled to the payment and has an objective basis for that suspicion, he or she cannot have received it in good faith.

17. In each of these respects I have no hesitation in finding that Mr and Mrs Chu acted entirely in good faith in their dealings with Centrelink in relation to their Newstart Allowance for the period 30 October 2004 to 3 December 2004 and 16 October 2004 to 10 December 2004 respectively, thereby satisfying the provisions in section 1237A.

18. Having come to that view, it was not necessary for me to consider whether there were special circumstances to waive the debt under section 1237AAD.

DECISION

The decision under review is set aside and the matter is remitted to the Respondent with a direction that the debts of Mr and Mrs Chu should be waived pursuant to section 1237A of the Act.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed: L. Coady  Associate

Date of hearing:  8 August 2006         
Date of Decision:   23 August 2006
Appearance for the Applicants:     Mr & Mrs Chu
Advocate for the Respondent:       Susan Mantaring, Legal Services Branch