Cochrane and Secretary, Department of Employment and Workplace Relations
[2006] AATA 394
•8 May 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 394
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2005/211
GENERAL ADMINISTRATIVE DIVISION ) Re LAUREN COCHRANE Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr S. Webb, Member Date8 May 2006
PlaceWagga Wagga
Decision The decision under review is varied to the extent that the Commonwealth’s right to recover Ms Cochrane’s parenting payment single debt in the period from 23 November to 20 December 2004 is waived.
..............................................
Mr S. Webb, Member
Administrative
Appeals
Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
)A2005/211
GENERAL ADMINISTRATIVE DIVISION ) Re LAUREN COCHRANE Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DIRECTION [2006] AATA 394
Tribunal Mr S Webb, Member Date17 May 2006
PlaceCanberra
Direction The Tribunal directs the Registrar, pursuant to sub-s.43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application:
1. at paragraph 26 of the decision delete the date “20 December 2004” and insert in lieu “21 December 2004”.
...................................................................
MemberCATCHWORDS
Social Security - parenting payment single - overpayment - recipient obligations to notify earnings - failure to provide correct information about earnings - administrative error not solely the cause of the overpayment - decision varied
Social Security Act 1991 ss 503, 1068A, 1223, 1237, 1237A, 1237AAD
Pledger v Sectretary, Department of Family and Community Services (2002) FCA 1576
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127
Haggerty v Secretary, Department of Education, Training and Youth Affairs (2000) 31 AAR 529
Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424
Re Beadle v Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
8 May 2006 Mr S. Webb, Member 1. By this application Lauren Cochrane is seeking review of the decision of the Respondent’s delegate, as affirmed by the Social Security Appeals Tribunal, to raise and recover two parenting payment single overpayment debts.
2. Ms Cochrane disputed the amounts of the debts and contended that, in any event, they were the result of administrative error and should not, therefore, be recovered from her.
3. Ms Cochrane gave oral evidence at the hearing of this matter in Wagga Wagga and presented her case without representation. Mr Alan Duri represented the Respondent. Ms Chantel Saunders and Mr David Clues gave oral evidence. Materials were tendered and labelled during the hearing.
factual context
4. It is not in dispute that from 10 November 2004 to 1 March 2005 Ms Cochrane was the sole parent of her daughter (date of birth: 5 April 1989). Ms Cochrane was in receipt of parenting payment single (“PPS”) during that period and had been in receipt of PPS payments since 8 June 1989.
5. On or about 19 November 2004 Ms Cochrane commenced employment with the Griffith Skills Training Centre Incorporated, trading as the Summit Personnel Employment Agency (“Summit”). She notified Centrelink of her employment on 23 November 2004 (T5). Ms Cochrane’s employment with Summit is ongoing.
6. Whether Ms Cochrane correctly informed Centrelink about her earnings in employment is in dispute.
7. It is not in dispute and I find that Ms Cochrane contacted Centrelink in relation to her PPS and her earnings in employment on 20 December 2004 (T7), 10 January 2005 (T12), 18 January 2005 (T9), 2 February 2005 (T22 and T23), 9 February 2005 (T25), 16 February 2005 (T26) and 17 February 2005 (T28).
8. Ms Cochrane does not dispute that she received letters from Centrelink concerning her PPS dated 30 July 2004 (T4), 23 November 2004 (T6), 20 December 2004 (T8), 22 December 2004 (T11), 10 January 2005 (T13), 12 January 2005 (T15), 18 January 2005 (T18), 2 February 2005 (T24) and 16 February 2005 (T27). Each of those letters set out Ms Cochrane’s notification obligations in relation to her earned income and, with the exception of the letter at T24, specified an “Annual Income amount” and a “Regular Fortnightly Earnings amount” that were used for the purpose of calculating the rate of Ms Cochrane’s PPS. Those amounts were:
DATE ANNUAL INCOME ($) FORTNIGHTLY EARNINGS ($)
30 July 2004 2.70
23 November 2004 2.70 670.12
20 December 2004 2.70 335.06
22 December 2004 2.70 335.06
10 January 2005 2.70 670.12
12 January 2005 2.70 670.12
18 January 2005 2.70 670.12
16 February 2005 0.10 (for fortnight) 670.12
9. Ms Cochrane’s payslips reveal that her earnings in employment were (T34):
PAY DATE HOURS $
25 November 2004 21 375.27
9 December 2004 70 1250.90
24 December 2004 70 1250.90
6 January 2005 24 428.88
20 January 2005 76 1358.12
3 February 2005 68.4 1222.31
17 February 2005 76 1358.12
3 March 2005 82 1465.34
10. As can be seen the amounts of Ms Cochrane’s earned income are greater than the amounts of her earned income recorded by Centrelink. It was on that basis that Centrelink calculated that Ms Cochrane was overpaid PPS and raised debts against her in the amounts of $775.71 for the period from 10 November 2004 to 18 January 2005 and $829.79 for the period from 19 January 2005 to 1 March 2005 (T31 and T41). Those debts were affirmed on review and the review officer determined that no basis existed to waive recovery of the debts (T45). The review officer’s decisions were affirmed by the Social Security Appeals Tribunal (T2).
issues for determination and legislation
11. The issues for determination are whether Ms Cochrane has a debt to the Commonwealth as a result of overpayment of PPS and, if so, whether there are grounds to waive the Commonwealth’s right to recover the debt. Neither party asserted that there are grounds to write off any such debt.
12. The Social Security Act 1991 (“the Act”) applies. Under the Act the rate of PPS is to be calculated using the relevant rate calculator (ss 503 and 1068A) and is affected by the amount of earned income of the claimant. If a person receives a social security payment to which they were not entitled the amount of the payment is a debt due to the Commonwealth (s1223). The Commonwealth’s right to recover the debt may be waived in certain circumstances (s 1237; see 1237AAD). In the case of a debt that is attributable solely to Commonwealth administrative error the debt must be waived if the debt amount was received in good faith (s 1237A).
consideration
13. Making this decision I have carefully considered all of the evidence, the submissions of the parties, the relevant legislation and caselaw.
debts
14. I am satisfied that Ms Cochrane was paid amounts of PPS to which she was not entitled. The amounts she earned in employment were under-stated when calculating the rate of PPS pursuant to s1068A of the Act. The precise amount of the overpayment of PPS was disputed at the hearing. The Respondent was directed to recalculate the amount of the debts raised. In a letter dated 13 April 2006 Ms Cochrane subsequently confirmed that she accepts as correct the debt amounts as stated. That being so, and without recalculating the debts amounts, I accept that the debts were correctly raised in the amounts of $775.71 and $829.79, and so find.
right to recover debts
15. For reasons that will appear I am reasonably satisfied that there are grounds to waive the Commonwealth’s right to recover part of the debts from Ms Cochrane.
16. In Ms Cochrane’s submission the debts arose solely as a result of Centrelink’s failure to properly record information she provided about her earnings in employment. The Respondent conceded that an error had been made in that regard on 10 January 2005. The documents point to that conclusion as well as to a prior error recording her ‘normal’ earnings on a fortnightly basis (see references to ‘normal’ earnings at T7 and T12).
17. Ms Cochrane was a straightforward witness whose credit was not seriously challenged. I accept her evidence that she did her best to inform Centrelink about her earnings and specified the hourly rate at which she was paid. I also accept her evidence that she was very concerned about being overpaid by Centrelink as this had occurred in the past and for that reason she made efforts to contact Centrelink to ensure that she was not being overpaid and to correct errors in the notices she received.
18. I am satisfied that an administrative error was made in the calculation and recording of Ms Cochrane’s earned income on 23 November 2004. Ms Cochrane’s evidence was that, at that time, she did not know the amount of her weekly or fortnightly earnings (having only commenced employment on a casual basis on 19 November 2004) and relied on information provided to her by her employer setting out her hourly rate and the expected number of hours to be worked per fortnight. On balance, I accept Ms Cochrane’s evidence that she sent a facsimile to Centrelink on 23 November 2004 (T34, folio 92) setting out the amount of her earnings and informed Mr Clues about the hourly rate of her earnings in employment ($17.87 per hour). Her evidence was that she relied on Centrelink to correctly calculate her fortnightly earnings. On the evidence of Mr Clues it was possible, but unlikely, that he erroneously calculated and recorded Ms Cochrane’s weekly income as fortnightly on 23 November 2004, but he could not recall her case. I am reasonably satisfied that it is more likely than not that a weekly amount was calculated and incorrectly entered as a fortnightly amount. The amount recorded in the notice dated 23 November 2004 was $670.12, being 37.5 hours at the rate of $17.87. That amount was used for the purpose of calculating Ms Cochrane’s entitlement to PPS.
19. Nevertheless, Ms Cochrane agreed that she received the aforementioned letters from Centrelink containing information about her earnings that she knew, or had reason to know, was incorrect. Her evidence was that she relied on the information provided to her by Centrelink officers over the telephone and, in effect, disregarded the erroneous information in the letters she received.
20. The fact is that Ms Cochrane did not contact Centrelink following receipt of the letter dated 23 November 2004 and only did so in December 2004 to advise of an impending change to her earnings over the Christmas period. In the Respondent’s submission, the fact that Ms Cochrane did not seek to rectify the error in her earnings amount as notified is a factor to which her debt is, in part, attributable. Even though Ms Cochrane believed that she had properly informed Centrelink about her earnings, and was entitled to rely on the information provided to her by Centrelink as correct, it was her responsibility to inform Centrelink if she perceived an error in the earnings amounts recorded in the letters she received. In her submission, which I accept, she was not aware of any error in her recorded earnings until 10 January 2005, whereupon she sought to correct the error. It is conceded that she failed to correct the error as the result of an administrative error by Centrelink at that time. However, Ms Cochrane failed to inform Centrelink, subsequently, of changes in her earned income after receiving the notice dated 18 January 2005. On that basis, I am satisfied that part of Ms Cochrane’s debt, being the amount of PPS that she was overpaid prior to 18 January 2005 ($775.71) is solely attributable to the administrative errors of the Commonwealth. The remaining part of her debt, being the amount of PPS that she was overpaid after 18 January 2005 ($829.79) was not solely attributable to Commonwealth administrative error.
21. Recovery of the part of the debt that is solely attributable to administrative error in Centrelink can only be waived pursuant to s 1237A if Ms Cochrane received those payments in good faith. The term ‘good faith’ has been considered in numerous decisions of the Courts and this Tribunal. What is required is an assessment of the subjective state of mind of the person concerned (see Pledger v Sectretary, Department of Family and Community Services (2002) FCA 1576 at [59]; Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127 at 129-130; Haggerty v Secretary, Department of Education, Training and Youth Affairs (2000) 31 AAR 529 at [16] and [17]). A person who turns a blind eye or who chooses to disregard something that is known to be incorrect wants for good faith (see Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 at [40] - [41]).
22. Ms Cochrane gave evidence that she did not realise the amount of her earnings specified in the letter dated 23 November 2004 was incorrect. Her evidence was that she thought and expected that the letter was correct as she had given her earnings information to Centrelink on that day. She stated that she thought the amount of her earnings notified in the letters dated 20 and 22 December 2004 were correct because she had earned those amounts. Ms Cochrane gave evidence that she knew the amounts in the letters she received from Centrelink in January 2005 incorrectly stated her earnings. She contacted Centrelink on 10 and 18 January 2005 in order to ensure that she was not being over paid PPS and subsequently relied on the verbal information she was given by Centrelink officers over the telephone. I accept that Ms Cochrane was not aware of any error in the amount of her earnings recorded by Centrelink prior to 10 January 2005 and believed that she was being paid the correct amount of PPS.
23. Nevertheless, I am satisfied that Ms Cochrane had good reason to know that the amount of her income recorded in the letters she received from Centrelink on 20 and 22 December 2004 was incorrect. It was her responsibility to read those letters with reasonable attention to the amount of earned income specified. Had she done so, she would in all likelihood have realised that the fortnightly amount recorded was substantially less than the fortnightly amount of her earnings as recorded on her pay slips. She failed to do so and it cannot be said, therefore, that she received the erroneous payments of PPS after 20 December 2004 in good faith.
24. I am satisfied and find that prior to 20 December 2004 Ms Cochrane received the erroneous PPS payments in good faith. It follows, that the Commonwealth’s right to recover the part of her debt arising from payments made prior to 20 December 2004 must be waived pursuant to s 1237A.
25. Are there sufficient grounds to waive recovery of the remaining amount of Ms Cochrane’s debt on the basis of special circumstances pursuant to s 1237AAD? I am satisfied that there are not. Ms Cochrane’s evidence was that she has suffered from depression for many years and effectively manages her depression with prescribed medications. Her daughter is in good health. Ms Cochrane is in full time ongoing employment. She is able to make ends meet and cover all of her household expenses on a weekly basis. Having considered her evidence I am satisfied that there are no circumstances in this case that constitute ‘special circumstances’, that is circumstances that are unusual, uncommon or exceptional (Re Beadle v Director-General of Social Security (1984) 6 ALD 1) or that recovery of the debt would result in anything unfair, unjust or unreasonable (Groth v Secretary Department of Social Security (1995) 40 ALD 541).
26. It follows, therefore, that there is no basis on which to waive the Commonwealth’s right to recover that part of Ms Cochrane’s debt arising from the erroneous PPS payments she received in the period from 20 December 2004 to 3 March 2005.
decision
27. The decision under review is varied to the extent that the Commonwealth’s right to recover Ms Cochrane’s parenting payment single debt in the period from 23 November to 20 December 2004 is waived.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member
Signed: ...............[Peter Strauch].......................................
AssociateDate of Hearing 5 April 2006
Date of Decision 8 May 2006
Applicant Unrepresented
Representative for the Respondent Alan Duri
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