Coggins and Anor; Secretary, Department of Family and Community Services

[2007] AATA 1353

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1353

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/497

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And ROY COGGINS and AGNES CAMPBELL

Respondent

DECISION

Tribunal Mr M A Griffin, Member

Date23 May 2005

PlaceSydney

Decision The decision under review is set aside and in substitution therefor the Tribunal decides that the decision to raise and recover debts of age pension and wife pension for the period 1 July 1993 to 20 June 2000 is the correct and preferable decision. The Tribunal directs that the matter be remitted to the Department for recalculation of debt correctly.

................[sgd].....................

Mr M A Griffin
  Member

CATCHWORDS

SOCIAL SECURITY - age pension and wife pension - overpayment – finding of not guilty in criminal prosecution – no special circumstances for waiver of debt - SSAT decision set aside

LEGISLATION

Administrative Appeals Tribunal Act 1975, s 37

Social Security Act 1991, ss 1223, 1236, 1236(1C), 1237A, 1237AAD

CASE LAW

Dranichnikov v Centrelink [2003] FCAFC 133

Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64

Director-General of Social Services v Hales (1983) 47 ALR 281

REASONS FOR DECISION

23 May 2005 Mr M A Griffin, Member     

1.      This is an application by the Secretary, Department of Family, Community Services and Indigenous Affairs (“the Department”) for review of a decision of the Social Security Appeals Tribunal (“SSAT”) which set aside a decision of an authorised review officer (“ARO”) to raise and recover debts of age pension and wife pension from Mrs Campbell and Mr Coggins.

2. At the hearing of this matter on 13 and 14 March 2007, the Department was represented by Mr Dube, solicitor. Mrs Campbell and Mr Coggins were represented by Mr Godwin of counsel. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, as well as a number of documentary exhibits.  Mr Coggins did not attend the hearing.  Mrs Campbell gave oral evidence.  There were no other witnesses.

BACKGROUND

3.        This case is about overpayment of pensions. Mrs Campbell and Mr Coggins are married to each other. They married on 25 April 1999. They had been in a de facto relationship prior to that date. Mr Coggins is 81 years of age. He began to receive the age pension at age 65. Mrs Campbell is 73 years of age. She applied for and began to receive the wife’s pension in 1990, the year that Mr Coggins qualified for the age pension. Mrs Campbell returned to paid employment as a health worker in 1992.  She did not inform Centrelink of this employment income. Following a data match with the Australian Taxation Office in September 2002, Centrelink decided on 30 April 2003 that Mrs Campbell and Mr Coggins had been overpaid pension for the period 1 July 1993 to 20 June 2000, in the amount of $23,752.69 each. A criminal prosecution on 4 charges of unlawfully obtaining a payment relating to their pensions was brought against Mr Coggins and Mrs Campbell. The learned magistrate, having heard the evidence, dismissed the charges on 14 April 2004.

4.        Centrelink decided to recover the overpayments administratively. The SSAT in reviewing that decision found that there had been overpayments, that the overpayments were debts owing to the Commonwealth that could not be written off, that they had not arisen solely due to administrative error on the part of the Commonwealth but there were special circumstances that allowed the debts to be waived.

ISSUES

5.        It was not in dispute between the parties that there had been overpayments of pension to both Mrs Campbell and Mr Coggins. The 2 issues in contention were:

a.        the amount of overpayment giving rise to the debts; and

b.whether there are special circumstances that allow waiver of the debts pursuant to section 1237AAD of the Social Security Act1991 (“the Act”).

EVIDENCE

6.        Mrs Campbell was born and grew up in Scotland. She worked there as a nurse. She came to Australia in 1972 and she continued to work as a nurse. In 1987 Mrs Campbell incurred a debt for not disclosing employment income to the Department when she was receiving a pension and living with her then de facto husband Mr Coggins, while he was receiving unemployment benefit (T10 p.24).

7.        In her application for the wife’s pension in December 1990, Mrs Campbell disclosed that she was working at a Nursing Home (T26 p.76). It appears she stopped work after receiving the wife’s pension but returned to work in November 1992 and worked on a casual basis until June 2000.

8.        Mrs Campbell said in evidence that she did not know she was required to tell Centrelink about her employment income.  She said she had seen television advertisements about the shortage of nurses and thought it would be a good thing to return to work as she was quite fit at the time. She said she discussed it with Mr Coggins and they both thought it would be a good thing to do. She said “I was so naïve, I believed I was doing the right thing”.  She said “it never occurred to me that pensioners could not work a little job without means testing”.

9.        Mrs Campbell was shown the numerous letters sent to her and Mr Coggins regularly by Centrelink and which included the statement of a requirement to inform the Department if their combined income exceeded a specified limit. She said “I didn’t think the Centrelink letters affected us in any way, I can’t remember even reading them. I thought they were just letting us know what the pension was at that stage. I did not believe I had to tell Centrelink I was doing some work”.

10.      In cross examination, Mrs Campbell was questioned further about the regular letters from Centrelink advising her of her obligations to disclose relevant information such as increase in income.  Mrs Campbell said “I was under the impression age pensioners could go out and work. I probably got all these letters and didn’t pay much attention to them”.

11.      In 1994 Mrs Campbell received advice that she was eligible for a Scottish age pension and that there were no income limits for this pension. She applied for and received the pension. She disclosed this pension to the Department and mentioned her concerns as to how this might affect her Australian pension (T57 p.147). Mrs Campbell said she thought the rules were the same concerning additional income for both the Scottish and Australian pensions.

12.      It was common ground that due to his vision impairment, Mr Coggins relied on Mrs Campbell to deal with all written correspondence and accepted what she told him about their income position for the purposes of the pension payments.

13.      Mrs Campbell suffers ischaemic heart disease, hypertension, paroxysmal atrial fibrillation, osteo-arthritis, osteoporosis, hiatus hernia, depression and has had a mastectomy. She is likely to undergo arthroscopic surgery to her left knee in time. She had a pacemaker inserted last year but continues to suffer angina pain.  She has experienced a family tragedy with the accidental electrocution of her grandson in her home not many years ago.  She has also recently experienced emotional distress from the breakdown of her previously very close relationship with her teenage granddaughter.

14.      Mr Coggins suffers chronic obstructive airways disease, asthma, non insulin dependent diabetes, osteoarthritis and pancreatitis.  He has difficulty walking and uses a motorised scooter.  He experiences significant joint pain.

15.      Mrs Campbell said that both she and Mr Coggins had experienced considerable distress and upset from the prolonged actions taken by the authorities in initially prosecuting criminal charges over these overpayments and in the subsequent debt recovery actions despite the finding of not guilty by the court.

16.      Mrs Campbell and Mr Coggins live together in public housing. They have little by way of savings or assets, other than household furniture and a motor vehicle. The motor vehicle was purchased some weeks ago. Mr Coggins drives Mrs Campbell to the shops in it. They have apparently repaid some of the pension overpayments (T192 p.602) by way of deductions from their pensions. It was argued by Mr Godwin and conceded, in part, by Mr Dube (transcript p.8) that the outstanding overpayment amounts are not certain. Mrs Campbell and Mr Coggins are able to live on their current pension payments but have little left over after normal household expenditure and medical/pharmacy costs.

CONSIDERATION OF THE ISSUES

17. Section 1223 of the Act provides that if a social security payment is made and the person who obtains the benefit was not entitled, for any reason, to that benefit then the amount of the overpayment is a debt owed to the Commonwealth. The parties accept that there were overpayments but the quantum is disputed. The issue to be determined is whether or not the debts can be written off or waived.

18. Section 1236 of the Act provides for write off if, among other things, the debtor has no capacity to repay the debt. Mrs Campbell and Mr Coggins have limited financial means, however, section 1236(1C) deems capacity to repay where deductions could be made from social security payments unless this would cause severe financial hardship. Mr Dube indicated that an appropriate amount of deduction could be agreed between the parties for such a repayment and the evidence shows capacity to repay a modest amount and in fact, this has been done for some time in the past. I find that such a deduction would not give rise to “severe financial hardship” and therefore write off of the debt is not available.

19. It is clear on the evidence that the debts did not arise solely from administrative error on the part of the Commonwealth and therefore the debts cannot be waived under section 1237A of the Act.

20. The remaining relevant section of the Act, and that upon which the SSAT based its decision, is section 1237AAD which provides:

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 to 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.

21. Mr Dube contends that Mrs Campbell knowingly failed to comply with the Act by not disclosing her paid employment. He points to the numerous letters sent to her by Centrelink and to her prior debt experience in 1987 and argues that her explanation for not disclosing her work is not credible. I had the benefit of observing Mrs Campbell give her evidence under oath and being tested by cross examination. I accept her evidence that she did not pay attention to the content of the letters other than to note the amount of the pension payment. I accept her evidence that she believed she could work and receive the pension. I find that Mrs Campbell and Mr Coggins did not knowingly fail to comply with the Act. However, the section also requires that there be special circumstances (other than financial hardship alone) that make it desirable to waive the debt.

22.      The issue is whether or not there are special circumstances in this case which make it appropriate to waive the debts arising from the overpayments to Mrs Campbell and Mr Coggins. In Dranichnikov v Centrelink [2003] FCAFC 133 (19 June 2003) at paragraph 65, Hill J in considering the term “special circumstances” said:

65. … The origin of the test apparently adopted by the Secretary appears to be the decision of the first instance Judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225.  That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154.  The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth).  Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given.  The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.

66. To some extent the question whether there were special circumstances must depend on how it came about that the error occurred.  Again that is not a matter to which the decision maker apparently averted.  Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that 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: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.

23.      The term “special circumstances” is intended to allow the decision maker the fullest opportunity to consider the particular circumstances of each case (Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64). In this case there are many factors that must be taken into consideration; these include the medical conditions of both Mr Coggins and Mrs Campbell, their financial circumstances, the protracted history of this matter and social and familial issues.

24.      It is evident that both Mr Coggins and Mrs Campbell suffer from a range of physical ailments and that both have experienced emotional upset and distress.  Mr Coggins was said to be unable to attend the Tribunal hearing due to his various conditions. However, the evidence is that he recently purchased a motor vehicle that he requires to drive Mrs Campbell on shopping trips. In all the circumstances these medical matters are not unusual or exceptional. The loss of her grandson was undoubtedly a tragic and distressing experience for Mrs Campbell and the breakdown of her previously close relationship with her granddaughter is also unfortunate. However, these matters whilst very sad are not out of the ordinary.

25.      As to financial circumstances, the Federal Court said in Director-General of Social Services v Hales (1983) 47 ALR 281 at p.321:

The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common; they will be impecunious and in straitened circumstances.

Mrs Campbell and Mr Coggins have limited financial means and virtually no assets. However, they are by no means unusual in this circumstance and they are able to make do with their pensions. 

26. Having regard to all the evidence both written and oral, I find that the medical, emotional, financial, social and domestic factors affecting Mr Coggins and Mrs Campbell do not give rise to special circumstances for the purposes of section 1237AAD of the Act. Having regard to the evidence concerning the uncertainty of the quantum of overpayment, I find that the matter should be remitted to the Department for recalculation of the debt.

DECISION

27.      The decision under review is set aside and in substitution therefor the Tribunal decides that the decision to raise and recover debts of age pension and wife pension for the period 1 July 1993 to 20 June 2000 is the correct and preferable decision. The Tribunal directs that the matter be remitted to the Department for recalculation of the debt correctly.

I certify that the preceding 27 paragraphs are a true copy of the reasons for the decision herein of M.A. Griffin

Signed:         K Portus
  Associate

Date/s of Hearing  13, 14 March 2007
Date of Decision  23 May 2007
Advocate for the Applicant       Mr Dube of Sparke Helmore   

Advocate for the Respondents Mr Godwin of counsel