Clark and Bambrick (Party Joined); Secretary, Department of Employment and Workplace Relations and
[2007] AATA 1750
•11 September 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1750
ADMINISTRATIVE APPEALS TRIBUNAL )
) No T2006/36
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS Applicant
And
SANDRA CLARK
Respondent
PARTY JOINED: JOHN BAMBRICK
DECISION
Tribunal Ms A F Cunningham (Senior Member) Date11 September 2007
PlaceHobart
Decision The Tribunal sets aside the decision of the SSAT made on 24 January 2006 and reinstates the original decision to raise and recover the overpayment of widow allowance over the period 7 October 2000 to 13 May 2005. ..............................................
Senior Member
CATCHWORDS
Social Security entitlements - widow allowance - earlier finding that applicant member of a couple - debt raised - waiver of debt - issue of "knowingly" - special circumstances not found - decision under review set aside - reinstatement of original decision
Social Security Act 1991, s41(2), s1237AAD
Sutherlands Text Social Security & Family Assistance Law
Re Callaghan and SDSS (1996) 45 ALD 435
Secretary, Department of Family and Community Services v Lyster (2000) 59 ALD 587
Re Schulze and SDF&CS (2004) AATA 705
Secretary, Department of Employment and Workplace Relations v Kelly (2006) FCA 659
Varhegyi: Secretary, Department of Family and Community Services (2005) AATA 868
Field and Secretary, Department of Families, Community Services and Indigenous Affairs (2006) AATA 471
SDEWR and Prahara (2006) AATA 719
Re Beadle v DGSS (1984) 6 ALD 1
Dranichnikov v Centrelink [2003] FCAFC 133
Angelakos and Department of Employment and Workplace Relations (2007) FCA 25
Riddell v Secretary, Department of Social Security (1993) 30 ALD 31
Wood v Secretary, Department of Social Security (1998) AATA 826
Davey and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114
REASONS FOR DECISION
11 September 2007 Ms A F Cunningham (Senior Member) 1. The applicant has sought the review of a decision of the Social Security Appeals Tribunal (the SSAT) made on 24 January 2006 which varied the recoverable amount of a debt by waiver of the portion that occurred between 1 January 2001 to 13 May 2005.
2. The debt raised in the sum of $24,229.95 was with respect to the payment of widow allowance to Mrs Clark for the period 7 October 2000 to 13 May 2005. On 1 July 2005 the decision to assess Mrs Clark as a member of a couple was affirmed by an Authorised Review Officer (ARO).
3. On 28 November 2005 the SSAT decided that:
1. Mrs Clark had been living as a member of a couple with John Bambrick since 16/9/00 (rather than since 7/10/00)
2. The debt should be recalculated to cover the period 16/9/00 to 13/5/05
3. Mrs Clark had a notional entitlement to Newstart Allowance from 1/1/00 to 13/5/05.
4. On 20 December 2005 the decision to raise and recover a debt was affirmed by an ARO.
5. In a separate decision dated 24 January 2006, the SSAT decided that: "recovery of the portion of the debt that is equivalent to a notional entitlement to NSA be waived from the period 1/1/00 to 13/5/05 pursuant to Section 1237AAD of the Social Security Act 1991 (the Act").
It is this decision that is the subject of review to the Tribunal.
6. Mrs Clark and Mr Bambrick have maintained throughout that they are not living in a marriage-like relationship and this issue is the subject of Mrs Clark's most recent application to this Tribunal. In a decision handed down on 2 August 2007 the Tribunal granted Mrs Clark leave to file a late application for the review of a decision by the SSAT which affirmed an earlier finding that Mrs Clark was a member of a couple.
7. Mr Sparkes, on behalf of the Secretary, submitted that if the Secretary's appeal is successful and the Tribunal sets aside the SSAT's decision to waive a portion of the debt, it is not open to the Tribunal to grant a stay of its own decision. The stay of the Tribunal's decision could only be granted by the Federal Court in the event that an appeal is made to that Court.
8. The Tribunal's power to grant a stay is pursuant to Section 41(2) of the Administrative Appeals Tribunal Act which reads:
"The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review".
9. The Tribunal accordingly accepts Mr Sparkes' submission that it has no power to grant a stay of its own decision.
Issues
10. The issue to be determined by the Tribunal is whether all or any part of the debt should be waived due to special circumstances.
Legislation
11. The relevant legislative provision is Section 1237AAD of the Social Security Act 1991 (the Act) which states:
"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 or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable o waive; and
c) it is more appropriate to waive than to write off the debt or part of the debt.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt".
The Issue of "Knowingly"
12. The first component of Section 1237AAD is that the debt not result from the person knowingly making either a false statement or false representation or failing or omitting to comply with a provision of the Act.
13. It is contended by the Secretary that the debt resulted from Mrs Clark knowingly failing to advise that she was living with Mr Bambrick. Mrs Clark would have been aware that entitlement to a widow allowance is on the basis that she is a single female. It was contended that Mrs Clark knew that she was in a marriage-like relationship with Mr Bambrick and failed to provide that information to Centrelink to allow her eligibility to be assessed correctly.
14. It was not disputed that Mrs Clark received correspondence from Centrelink requiring her to advise Centrelink if she started living with someone as their partner and did not so advise Centrelink. Mrs Clark has consistently maintained that she has not been living with Mr Bambrick as his partner.
15. The word "knowingly" is defined in the Oxford English Dictionary 2nd Edition (1989) as:
knowingly, adv. In a knowing manner, with knowledge, intelligently, consciously, intentionally, etc: see [knowing].
The Macquarie Dictionary defines knowingly as:
conscious; intentional; deliberate.
16. The Secretary relies on the finding which has been affirmed by the SSAT that Mrs Clark and Mr Bambrick were in a marriage-like relationship. In the Tribunal's view the term "knowingly failing" to comply imports an element of intent. There are several criteria listed in Section 4(3) to which regard is to be had in determining whether a relationship is marriage-like. Only one of the criteria is the presence of a sexual relationship which in itself is not determinative of the issue. It is possible that Mrs Clark did not regard her relationship with Mr Bambrick as "marriage-like" as she understood the term and nor did she consider Mr Bambrick as her partner but that her circumstances may nevertheless justify a finding of a marriage-like relationship within the statutory meaning of the term. This finding is presently the subject of another application for review to this Tribunal.
17. In Re Callaghan and SDSS (1996) 45 ALD 435, Deputy President Forgie commented at paragraph 48;
"There is nothing in Section 1237AAD that suggests that the word "knowingly" should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with the provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission".
18. It was Mrs Clark's evidence that she did inform Centrelink of her circumstances and attended at the Murray Bridge Centrelink offices on a number of occasions to advise of her plans to move to Tasmania and reside in a house which she intended to purchase with Mr Bambrick.
19. Mr Bambrick in his evidence to the Tribunal confirmed that he attended the Murray Bridge Centrelink offices on three occasions with Mrs Clark prior to their departure for Tasmania. Despite the lack of confirmatory documentary evidence in the possession of Centrelink as to these visits, the Tribunal accepts Mrs Clarke's evidence in this regard.
20. The Tribunal accepts Mrs Clarke's evidence that she did not regard herself as living in a marriage-like relationship with Mr Bambrick and accordingly any representations made by her to Centrelink regarding the status of her relationship were made on the basis of this understanding. There is no evidence that the debt wholly or partly arose from her "knowingly" making a false statement or false representation to Centrelink or failing or omitting to comply with a provision of the Act. Accordingly the provisions of sub-paragraph 1237AAD(a) are satisfied.
Special Circumstances
21. In order for consideration to be given to waiving the debt, the Tribunal must be satisfied that there are "special circumstances" which are not solely constituted by financial hardship making it desirable to waive the debt.
22. On behalf of Mrs Clark it was contended that there are a number of circumstances in her case that could be classified as special and which could justify waiving the debt. They relate to her health and several deaths of family members that have occurred in past years. Another matter raised on behalf of the applicant was a notional entitlement to a Newstart pension being a factor that should be included in the matrix of circumstances giving rise to "special circumstances" within the meaning of the legislation.
Tragic Deaths
23. Mrs Clark gave evidence regarding the tragic death of her husband in a tractor accident which occurred some sixteen years ago. Mrs Clark said that she was very close to her husband and still misses him. Mr Bambrick confirmed that Mrs Clark still suffers from his loss.
24. In 1978 the father of Mrs Clark's daughter was killed as a result of a gunshot wound. Mrs Clark's daughter was aged four years at the time and it is Mrs Clark's regret that she has been denied the opportunity to know her father. Mrs Clark was not living with her daughter's father at the time of his death. He was in a de facto relationship with another woman. Mrs Clark said in her oral evidence to the Tribunal in that one way his death was "a blessing" but that she regretted the loss of such a young life.
25. Mrs Clark also referred to the death of her sister-in-law which occurred more recently in February 2005. Mrs Clark said the murder charge relating to her sister-in-laws death was later reduced to manslaughter. Whilst Mrs Clark contended that she was close to her sister-in-law, she had only known her for three years. She was not sure whether it was her brother's second or third marriage. Mrs Clark had little personal contact with her sister-in-law but spoke to her regularly on the telephone. In response to a question from Mr Sparkes as to whether she had been shocked by the death, Mrs Clark responded that it was another wasted young life which she still can't believe.
Health
26. It was Mrs Clark's evidence that she has recently been diagnosed as suffering from a degenerative lumbar back disease, has cholesterol and joint problems as well as tendon damage to her foot which has taken some time to heal. Mrs Clark said that she suffers from depression but has not received any medical treatment for this condition. No medical evidence was presented in support of Mrs Clark's medical conditions. When asked about the effect of her health on her ability to work as an apple picker which she agreed required her to be "on the go", she said that she sometimes takes medication. She remarked that during the day she felt "pretty good" but there are occasions when her fingers lock but that she tries to "put on a good front".
27. It was not submitted that Mrs Clark's medical conditions of themselves are particularly unusual or uncommon but that they should be considered as part of the matrix of circumstances which when considered as a whole, could constitute "special circumstances" within the meaning of the legislation.
28. Mr Bartl submitted that the types of deaths, their number and the time span over which they occurred places these circumstances in a different light to the cases referred to by the applicant.
Notional Entitlement
29. The SSAT decided that a portion of the debt should be waived that related to the difference in notional entitlement to a partnered rate of Newstart Allowance and Widow Allowance between 1 January 2001 and 13 May 2005. It was conceded by Mr Bartl that the SSAT was in error in concluding that a notional entitlement on its own is capable of constituting a "special circumstance" within the meaning of the legislation. He contended however, that a notional entitlement should be considered as part of a matrix of circumstances giving rise to "special circumstances". In support of his submission, Mr Bartl referred to the Tribunal decision in Secretary, Department of Family and Community Services v Lyster (2000) 59 ALD 587 where "special circumstances" were found to exist under section 1237AAD because the father would have been entitled to a payment of family allowance if the correct circumstances of the child's living situation had been known to Centrelink. In that case family allowance paid to the mother of a child was paid into an account accessed only by the child and used by him for pocket money, educational expenses etc. An overpayment of family allowance had occurred because the son had been living with his father since his parents separated.
30. Mr Bartl referred to Sutherlands Text Social Security & Family Assistance Law and to the cases cited therein in support of his proposition that a notional entitlement can be considered as part of the matrix of circumstances giving rise to "special circumstances".
31. Mr Bartl contended that Mrs Clark was at all times eligible for Newstart Allowance. She had been registered with three job network providers, was regularly looking for work and actively seeking employment.
32. It was Mr Sparke's submission that the decisions in which notional entitlement had been accepted as a relevant factor in a section 1237AAD waiver, had been decided before the 1996 amendment to the Social Security Act 1991 and that later decisions had made it clear that the concept of notional entitlement is no longer a relevant consideration for "special circumstances".
33. The amended section 1237AAC provides for a waiver where the debtor or debtor's partner would have been entitled to an allowance. However the provision only refers to an entitlement to family payment or family allowance and in sub-sections 4, 5 and 6 to parenting allowance.
34. It has since been held that this provision provides for a set off of notional entitlement in limited circumstances and with respect to specific payments. As the Tribunal stated in Re Schulze and SDF&CS (2004) AATA 705 at para 35:
"Notional entitlement has been found to constitute part of the factual matrix of special circumstances in several cases such as Re Secretary, Department of Family and Community Services and Lyster (2000) 59 ALD 587. However, I note that the legislature has seen fit to amend the Act to provide for set-off of notional entitlement in the circumstances provided for in s1237AAC. That provision provides for set-off of notional entitlement in only very limited circumstances and by reference to specific payments. It was the respondent's contention that any attempt to expand notional entitlement by virtue of the special circumstances provision would defeat the intention of Parliament. I think this submission is well founded ..."
35. The Tribunal adopts the reasoning of the Tribunal in Re Schulze. In any event there is no conclusive evidence to persuade the Tribunal that Mrs Clark would have been entitled to Newstart Allowance. Pursuant to the provisions of section 593 of the Act Mrs Clark would be required to satisfy an activity test. Mrs Clark would also have been required to enter into a Newstart activity agreement which is reviewed from time to time. As well, a pension recipient is obliged to maintain a job seeker diary, report job seeking activities on a fortnightly basis, attend job search training and so on.
36. The Tribunal accepts Mr Sparke's submission that it is not possible for a Newstart activity agreement to be made retrospectively. As stated by Justice Weinberg in Secretary, Department of Employment and Workplace Relations v Kelly (2006) FCA 659:
"I would add that it is also difficult to see how something that manifestly did not occur can be deemed by a Tribunal, with retrospective effect, to have occurred, at least in the context of statutory criteria that are strict, and clearly stated. The fact that there were several options available to the Secretary when dealing with the respondent's continuing right to claim a newstart allowance, does not mean that either the SSAT, or the AAT, was itself entitled to choose one or more of those options, and proceed upon the basis that it had been exercised. A statute that sets out strict conditions for eligibility for a particular benefit is not amenable to a construction that treats that which ought to have been done as though it had been done".
37. There was no evidence that Mrs Clark was a party to an activity agreement at any time during the relevant period ie 1/1/01 to 13/5/05, nor can she be deemed to be a party to and have complied with an agreement that did not exist.
38. In light of the requirements and preconditions to satisfy eligibility and on-going entitlement to Newstart Allowance, the Tribunal cannot be satisfied on the evidence presented that Mrs Clark had an entitlement to Newstart Allowance. As DP Forgie noted in Varhegyi: Secretary, Department of Family and Community Services (2005) AATA 868 at para 36:
"After these decisions were made, the waiver provisions of the Act were amended with effect from 1 January 1996, introducing specific waiver provisions where there is a notional entitlement to parenting allowance or family allowance. Eligibility for these allowances is not dependent on a person's satisfying an activity test in order to be eligible for the payment as is the case for Austudy or Newstart Allowance".
39. DP Forgie went on to state at para 37:
"I agree with Deputy President Jarvis. There is no room to introduce a concept of notional entitlement in that of special circumstances in s1237AAD(1) of the Act".
40. This approach was recently followed in Field and Secretary, Department of Families, Community Services and Indigenous Affairs (2006) AATA 471 and SDEWR and Prahara (2006) AATA 719 where the Tribunal said, inter alia, at para 12:
"The SSAT found the applicant had a notional entitlement to Newstart and took into account that entitlement when discussing special circumstances. The SSAT said that the applicant would probably have received Newstart in any event, even though he was not entitled to parenting payment so there has been no net loss to the Commonwealth. That conclusion is at odds with other decisions of this Tribunal, most obviously Schulze and SDFaCS (2004) and Varhegyi (2005). Those decisions make it clear "there is no room to introduce a concept of notional entitlement" into the expression special circumstances: Varhegyi at paragraph 37 per DP Forgie"
Findings
41. The Tribunal determines that it is not appropriate to consider notional entitlement to Newstart Allowance as part of the matrix of special circumstances. The question remains as to whether the other issues raised by Mrs Clark regarding her health and the three tragic deaths could be considered as "special circumstances" sufficient to justify a waiver of part of all of the debt.
42. The Tribunal must be satisfied that there are "special circumstances" before it considers whether to exercise its discretion to waive part or all of the debt. The decision of the Tribunal of Re Beadle v DGSS (1984) 6 ALD 1 is commonly referred to as to the meaning of the expression "special circumstances". The Tribunal said in that decision:
"An expression such as 'special circumstances' is by its nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual. uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is context which allows one to say that the circumstances of one case are markedly different from the usual run of cases. That is not to say that the circumstances must be unique but they must have a particular qualityof unusualness that permits them to be regarded as special".
43. The Full Federal Court in Dranichnikov v Centrelink [2003] FCAFC 133 held that for a finding of "special circumstances" to be made out:
"... what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary".
44. A recent decision of the Federal Court of Australia in Angelakos and Department of Employment and Workplace Relations (2007) FCA 25 dated 29 January 2007 considered a number of previous decisions which have discussed the term "special circumstances". A degree of flexibility is required because of the wide range of circumstances that can arise. As Besanko J said at para 33:
"I note her Honour’s reference to the Tribunal in the case before her probably overstating the test. I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context".
45. The Full Court stated in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31 at para 38:
"Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other".
46 The waiver provision of section 1237AAD clearly states that financial hardship alone does not constitute "special circumstances". It is open however to consider it as a relevant factor and part of a matrix particularly when considering the overall objective of the legislation being to provide financial assistance to those in need. In considering whether to exercise a discretion to waive the debt, the financial circumstances of the applicant would be a relevant consideration particularly if financial hardship would result if a waiver was not granted.
47. It was not submitted nor was there evidence to suggest that Mrs Clark's financial circumstances are particularly grave. Mrs Clark owns property which has a government valuation of some $230.000.00 and is reducing her debt at the rate of 10% per fortnight. Mrs Clark has casual employment from time to time. She also has an entitlement to $25,000.00 in superannuation benefits at the end of the financial year.
48. The Tribunal does not accept that Mrs Clark's health issues are particularly unusual or uncommon for a woman of her years. They have not prevented her from undertaking casual work as an apple packer and appear to be managed by medication to a large extent. Mrs Clark controls her cholesterol problem with medication and advised that her foot injury has recovered. Mrs Clark has not sought medical treatment for depression.
49. Nor does the Tribunal accept that the three tragic deaths that she has experienced have left her with any lasting deleterious effects. Whilst the Tribunal can accept that the tragic death of her husband may still affect her, this death occurred some sixteen years ago. The death of one's spouse, albeit in tragic circumstances, is not an unusual or uncommon occurrence. There is no evidence that the deaths of the other two persons referred to have had any long lasting impact on Mrs Clark. Mrs Clark described the death of her daughter's father as "a blessing" in the circumstances. She had only known her brother's wife for some three years and although she spoke to her regularly over the telephone, circumstances prevented personal contact.
50. Reference was made to several other Tribunal decisions which whilst not binding on this Tribunal provide examples of what has been considered to be "special circumstances" in individual cases. Deputy President Groom declined to find the tragic and recent deaths of the applicant's two daughters in a car accident as sufficiently special to justify the exercise of a discretion in Gordon v Secretary, Department of Employment and Workplace Relations (2006) AATA 792.
51. In the decision Wood v Secretary, Department of Social Security (1998) AATA 826, Deputy President Forgie declined to find the applicant's personal tragedy of the loss of her daughter and granddaughter, consequential PTSD and depressive/anxiety disorder as sufficiently special to take her outside the general range of circumstances suffered by other members of the community. As she said at paragraph 134:
"They are not circumstances which mean that it is unfair or inappropriate that she should have to repay monies which she should not have been paid and which she would not have been paid had she told the Department of her place of residence and her living arrangements".
52. As Deputy President Forgie reiterated in her decision Davey and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114 at para 80:
"Special circumstances must exist which make it desirable to waive the debt. This requires a consideration of the general administration of the Social Security system and not just a consideration of the persons individual circumstances. The consequence is that the applicant has the benefit of part of a pension entitlement in circumstances in which he/she was not entitled to it".
53. Applying this reasoning to the present case the Tribunal is not satisfied on the evidence presented that the circumstances of the tragic deaths experienced by Mrs Clark considered individually or together constitute "special circumstances" that would justify the waiver of a debt in respect of a pension for which a determination has been made that she was not entitled.
54. It was not submitted and the Tribunal finds that the provisions of section 1237A do not apply because the debt was not the sole consequence of administrative error.
55. Whilst the Tribunal has concluded that the debt did not result from Mrs Clark knowingly making a false statement or representation to Centrelink, the Tribunal is not satisfied that her circumstances are sufficiently special to justify a waiver of the debt pursuant to the provisions of section 1237AAD of the Act.
56. For these reasons the Tribunal sets aside the decision of the SSAT made on 24 January 2006 and reinstates the original decision to raise and recover the overpayment of widow allowance over the period 7 October 2000 to 13 May 2005.
I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Senior Member)
Signed: R Hunt (Administrative Assistant)
Date/s of Hearing 5 July 2007
Date of Decision 11 September 2007
Solicitor for the Applicant Mr Brian Sparkes, Centrelink Legal Services
Solicitor for the Respondent Mr Ben Bartl, Hobart Community Legal Service
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