Cohen and Secretary, Department of Family and Community Services
[2005] AATA 488
•30 May 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 488
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/982
GENERAL ADMINISTRATIVE DIVISION )
Re STEPHEN COHEN Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr EK Christie, Member Date30 May 2005
PlaceBrisbane
Decision
The Tribunal sets aside the decision under review and in substitution for it decides to write-off the overpayments of $6,743.72 of disability support pension received by Mr Cohen over the period 24 May 2002 to 26 November 2004 for a period of twelve months from the date of this decision. At this time, the matter is to be remitted to the respondent with a Direction that Mr Cohen submit an updated Statement of Financial Circumstances and an assessment be made whether it remains appropriate to write-off the debt due to the Commonwealth.
..............[Sgd].......................
EK Christie
Member
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension – overpayment – administrative error – special circumstances – waiver – whole or part of the debt – write-off
Social Security Act 1991 ss 1236, 1237, 1237A, 1237AAD
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316; (2002) 70 ALD 1
Prince v Secretary, Department of Education, Employment and Youth Affairs (1997) 50 ALD 186Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576
Central Estates (Belgravia) Ltd v Woolgar [1972] 1 QB 48Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re L and Secretary, Department of Social Security (1995) 21 AAR 412; (1995) 39 ALD 172
Director-General of Social Services v Hales (1983) 47 ALR 281
Re Waller and Secretary, Department of Social Security (1985) 8 ALD 26REASONS FOR DECISION
30 May 2005 Dr EK Christie, Member 1. This is an application by Stephen Cohen for a review of the decision made by the Social Security Appeals Tribunal (the “SSAT”) on 26 November 2004 to recover a debt of disability support pension overpayments in the sum of $6,743.72 for the period 24 May 2002 to 26 November 2004.
2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents) [Exhibit 1] and the various exhibits lodged by the parties.
3. The applicant was represented by Mr P Cranitch, Welfare Rights Centre Inc. The respondent was represented by Mr R McQuinlan, a Departmental Advocate.
4. In its review of the delegate’s decision, the SSAT considered that the only issue for the SSAT to decide was whether the debt due to the Commonwealth could be waived, in part or in full, for either “administrative error” or “special circumstances”. There was no dispute that there was a debt due to the Commonwealth because of disability support pension overpayments.
Inquisitorial Powers of the Tribunal: Issues Before the Tribunal
5. At the completion of the hearing, and following the oral evidence given by Mr Cohen during cross-examination in relation to his current financial circumstances, the Tribunal issued a Direction that Mr Cohen complete a Centrelink “Statement of Circumstances” form. Following its completion, the parties were to review this document and to submit supplementary submissions in relation to the question of “write-off” of the debt due to the Commonwealth.
6. Accordingly, the issues for the Tribunal were waiver of the debt due to the Commonwealth under the “administrative error” or “special circumstances” provisions of the Social Security Act 1991 – or whether the debt could be “written-off”.
Factual Evidence
7. Mr McQuinlan informed the Tribunal that the debt due to the Commonwealth was being currently recovered by instalments of $100 per fortnight.
8. On the basis of the evidence before it, the SSAT made the following findings of fact:
“(i)On 23 May 2002 Mr Cohen’s disability support pension was restored with effect from 1 May 2002;
(ii)On 23 May 2002 he was sent two contradictory letters. One letter advised of cancellation and the other advised of his rate of payment and the annual income used to calculate that rate;
(iii) Mr Cohen’s wife had variable earnings in the period under review which exceeded the annual income referred to in one [of the] 23 May 2002 letter[s];
(iv)By 30 May 2002 Mr Cohen knew that the annual income referred to in the 23 May 2002 letter was incorrect.” (T2, Folio 10).
Evidence of Stephen Cohen
9. Mr Cohen has been a disability support pension recipient for about 12 years. On commencing employment in June 2001, his disability support pension was suspended. However, because of medical reasons (a broken coccyx from falls, a mild stroke, and medical advice to decrease his workload) Mr Cohen resigned from this employment on 22 February 2002. Mr Cohen then telephoned Centrelink a few days later and was informed that his disability payments would be restored forthwith.
10. On 1 May 2002, Mr Cohen first became aware that he had not received any disability support pension entitlements. He telephoned Centrelink to query this issue and, at the same time, provided Centrelink with details of his wife’s income for the two preceding fortnights. Mr Cohen was advised that there were no records of the information he had earlier provided during his telephone call on 22 February 2002.
11. On 8 May 2002, Mr Cohen attended an interview at a Centrelink office; the interview had been arranged during his telephone query on 1 May 2002. At the interview, Mr Cohen provided further income details for his wife for the two preceding fortnightly periods, as well as his wife’s ATO assessment notices for the 2000 and 2001 financial years. Mr Cohen stated that he observed information being “typed in” during the interview but could not see the “actual details” on the computer.
12. Mr Cohen then received two notices from Centrelink – both dated 23 May 2002. One of these notices, advice for cancellation of his disability support pension, was subsequently conceded by Centrelink (following a telephone query made by Mr Cohen on 28 May 2002) to be erroneous, and to be disregarded. The second notice was a notification notice of his obligations, as a disability support pension recipient, informing him that his disability support pension for the period 1 May – 20 May 2002 was based on a combined annual income of $27,076.24.
13. Further to the telephone query made by Mr Cohen on 28 May 2002, Mr Cohen informed the Centrelink staffer that the combined annual income figure of $27,076.24 on the notification notice of 23 May 2002 was incorrect. He provided further information on his wife’s income details for the two preceding fortnightly periods as well as providing the Centrelink staffer with an “amended” gross annual income figure of $36,000 - $38,000. The Centrelink advice he was given was that these figures would need to be checked and he would be telephoned back that day.
14. As no return telephone call was made, Mr Cohen telephoned Centrelink on 30 May 2002 to clarify his income situation as no one had rung him back to verify that the problem “had been fixed”. He informed the Centrelink staffer that his wife’s income details were incorrect and provided the same information he had given during his telephone query on 28 May 2002. Once again, the Centrelink staffer informed Mr Cohen that he would be telephoned back after the income figures that he had provided had been checked by a supervisor.
15. Mr Cohen said that the Centrelink staffer he had spoken to on 30 May 2002 did ring him back to inform him that his file had now been updated and that nothing further was required until his wife’s gross income reached an amount of $48,000 p.a. Mr Cohen stated that he took this threshold of $48,000 as the “the holy grail” to which he should adhere.
16. Mr Cohen acknowledged that his wife’s fortnightly income varied widely.
17. Mr Cohen said that he audited his wife’s income after his query in May and had acted on the belief that in order to reach the threshold of $48,000 p.a., her weekly income would have to exceed $900. At no stage did his wife’s income approach the threshold of $48,000 (> $900/week) until late in 2002.
18. Mr Cohen said that he received no further Centrelink notification notices, other than the one he received dated 23 May 2002, and continued to receive his payments of disability support pension without any knowledge that he was being paid at the incorrect rate. He said that he believed that he had no obligation to inform Centrelink of change in financial circumstances until such time as their combined income totalled the $48,000 threshold. This threshold was not reached during the overpayment period.
19. Mr Cohen acknowledged the following payment summaries for his wife:
(a)2001/02: $37,254
(b)2002/03: $45,550
20. Mr Cohen advised that because of ongoing health problems (his disability support pension arose from a past injury where he broke his back in an accident, together with more recent problems [a broken coccyx from two falls, a mild stroke and a Class III Renal Carcinoma]) he has had to cease employment. His marriage has also ended as a result of the stress associated with the circumstances of his debt and his ongoing medical problems.
Contentions and Submissions of the Parties
21. Mr Cranitch submitted that the debt due to the Commonwealth had arisen solely because of administrative error(s) caused by the Commonwealth. There had been a succession of errors, over the period 8 May 2002 to 30 May 2002 affecting the correct entitlement payments for disability support pension being made to Mr Cohen.
22. Mr Cranitch said that Mr Cohen had received his disability support pension overpayment in “good faith” as he had no reason to know that he was not entitled to the payments received. Furthermore, it could not be said of Mr Cohen that he had turned a “blind eye” to the circumstances which raised doubt as to receiving the correct entitlements, or that he refused to make reasonable inquiries in such circumstances. It was Mr Cranitch’s submission that Mr Cohen received the disability support pension overpayments in good faith as he had no knowledge, or have any reason to know that he was not entitled to the amounts received during the period of the debt; in addition, there were no circumstances which could give rise to a doubt as to his entitlement to the payments received.
23. Mr Cranitch contended that the succession of errors caused by Centrelink had led to the disability support pension overpayments. These errors related to Centrelink’s failure to record Mr Cohen’s correct gross annual income and, in turn, their combined annual income – notwithstanding the queries raised by Mr Cohen. Moreover, this problem had been compounded by the fact that no notification notices had been sent to Mr Cohen over the entire overpayment period – apart from the first one sent on 23 May 2002. In addition, a review of Mr Cohen’s financial affairs had never been undertaken by Centrelink during the overpayment period.
24. It was Mr Cranitch’s submission that these circumstances were “special circumstances” and justified waiver of the debt.
25. Mr McQuinlan submitted that the debt did not arise solely due to an administrative error by the Commonwealth, as Mr Cohen had also contributed to the error by failing to notify Centrelink of changes in his financial circumstances over time. Specifically, that he failed in his obligation to notify Centrelink within 14 days of changes in his circumstances, specifically increases in his wife’s income/combined income.
26. It was Mr McQuinlan’s contention that such an obligation, as stated on the notification notice dated 23 May 2002, to inform Centrelink of any changes in his combined annual income whilst he received disability support pension payments, was ongoing in nature.
27. Mr McQuinlan submitted that Mr Cohen did not receive the disability support pension overpayments in “good faith”. However, Mr McQuinlan stated that there was no imputation being made by the respondent that Mr Cohen had tried to deceive Centrelink. He said that the evidence before the Tribunal was that Mr Cohen tried to give Centrelink a true picture of the situation as he saw it. Accordingly, it was his contention, that in this factual situation it was not an issue of Mr Cohen’s credibility – but a “question of probability”. That is, it was his submission that there had been a “misunderstanding of information” or a “miscommunication in the information exchanged” with Centrelink, on Mr Cohen’s part.
28. Notwithstanding the above qualification, Mr McQuinlan submitted that as a past recipient of disability support pension at the maximum rate (i.e. prior to his marriage), Mr Cohen would have been aware of the link between total combined annual income, in particular his wife’s earnings, and changes in the amount of his disability support pension entitlements. Consequently, it was his submission that, during the overpayment period, when his wife’s fortnightly income constantly varied, he would have had reason to know that he might not have been receiving the correct rate of disability support pension. It was his contention that Mr Cohen had turned a “blind eye” to the circumstances which raised a doubt as to his continued entitlement to receive the correct disability support pension payments made to him.
29. Mr McQuinlan concluded with the submission that there was nothing “unusual, uncommon or exceptional” in Mr Cohen’s circumstances which would warrant the exercise of the discretion to waive the Commonwealth’s right to recover the overpayment.
Supplementary Submissions
30. Supplementary submissions on the question of write-off were filed by the respondent on 10 May 2005 and by the applicant on 13 May 2005.
31. The applicant’s submissions can be summarised as follows:
(a)that the Statement of Financial Circumstances provided by Mr Cohen did not represent an accurate estimate of his usual living expenses; only some expenses totalling around $99 per fortnight could be listed at that stage. Following his recent separation from his spouse, Mr Cohen had not yet established permanent, independent accommodation for himself and was currently living with relatives. As a consequence, no actual estimate could be provided for rental accommodation and living expenses as incurred by Mr Cohen living in his own accommodation, at that stage; the expenses cited in the statement of $99/fn were a significant under-estimate;
(b)Mr Cohen’s current savings of $1,300 would be absorbed in expenses setting up his own accommodation in June 2005 e.g. rental bond, security deposits for utilities and outlays for essential household items. As a result, Mr Cohen would have no financial reserves in the event of any emergency;
(c)because of his various medical conditions, Mr Cohen had limited opportunity for returning to the workforce in the foreseeable future; and
(d)given the transitory state of Mr Cohen’s present existence, the debt should be written-off until such time as the extent of his future financial commitments could be established and, in turn, the degree of financial hardship caused by the recovery of the debt could be assessed.
32. The respondent’s submissions on the question of write-off of the debt due to the Commonwealth can be summarised as follows:
(a)that Mr Cohen has received the disability support pension at the maximum rate for a single person ($482.10/fn) since 4 April 2005;
(b)that Centrelink is aware that Mr Cohen does not pay rent or other accommodation charges at his current residential address;
(c)that Mr Cohen has approximately $1100 in bank deposits and has no other source of income;
(d)that Centrelink has not been provided with a list of Mr Cohen’s current expenditure; and
(e)an acknowledgement that the debt is recoverable by way of deductions from Mr Cohen’s disability support pension in the absence of any evidence of severe financial hardship. However, the respondent does concede that if Mr Cohen is able to provide evidence that financial hardship would arise from recovery of the debt, then it was appropriate for the Tribunal to write-off the debt for an appropriate period.
The Tribunal’s Decision-Making Powers
33. The question for the determination of the Tribunal is whether the decision [under review] was the correct one [that is, when there is only one decision] or preferable one [that is, when a range of decisions are available] on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, [per Bowen CJ and Deane J, at 68]. There are a range of decisions possible in this application for review. That is whether the debt due to the Commonwealth may be waived, in part, or in full – or written off.
34. Administrative decision-makers are generally required to address the evidence before them and not confine themselves to evidence before a prior decision-maker whose decision is being reviewed unless the relevant legislation requires a decision to be based upon the circumstances at a particular point of time: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326. In this application for review, the Tribunal has considered all the evidence and information before the Tribunal at the date of the hearing, including the supplementary submissions in relation to the Tribunal Direction and the information provided by Mr Cohen in relation to the “Statement of Financial Circumstances” he filed on 13 May 2005.
Statutory Requirements And Case Law
35. Section 1237 of the Social Security Act 1991 provides for factual situations where a debt due by a recipient of social security to the Commonwealth may be waived, either in part or in full. These factual situations relate to overpayments arising from “administrative error” - or where there were “special circumstances” that led to the overpayment.
36. Section 1237A provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “administrative error”:
“SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
1237A(1) “Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor [Tribunal emphasis].”
37. For this section of the Social Security Act to apply to Mr Cohen’s factual situation, Mr Cohen must not have contributed, in any way, to the administrative error that led to the overpayment. In addition, Mr Cohen must have received his overpayments of social security entitlements in “good faith”. Both these requirements must be satisfied in order for Mr Cohen to succeed under the “administrative error” provisions of the Social Security Act.
38. The legal meaning of “good faith” was considered by the Federal Court in Prince v Secretary, Department of Education, Employment and Youth Affairs (1997) 50 ALD 186. In this case, Finn J stated:
“If that person knows or has reason to know that he or she is not entitled to a payment received - i.e. is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith…the [legislation] does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise”.
39. In Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576, Weinberg FCJ reviewed a number of Federal Court authorities in which the meaning of “good faith” in the administrative error provisions of the Social Security Act were considered and concluded:
“What seems to emerge from these authorities is that whether a payment has been received in good faith can only be determined after a careful consideration of the actual state of mind of the recipient of that payment. In that sense the test is entirely subjective, and not objective. However, plainly idiosyncratic views as to what might be regarded as acceptable behaviour, including the standards of a “Robin Hood”, will not be regarded as amounting to “good faith”. It should be noted, in this regard, that wilful blindness is itself a state of mind: Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220.” [Emphasis added]
40. Weinberg FCJ further concluded that there was:
“…a distinction between a want of good faith, and fraud. It is possible that a person may have acted without good faith, but not dishonestly. The terms fraudulently and dishonestly are sometimes treated as though they were synonymous. Strictly speaking, that is incorrect. Fraud connotes an element of deception. Dishonesty may be established without any element of deception”,
and then referred to the following observations of Lord Denning MR in Central Estates (Belgravia) Ltd v Woolgar [1972] 1 QB 48 (at 55):
“To my mind, under this statute a claim is made ‘in good faith’ when it is made honestly and with no ulterior motive. It must be made by the tenant honestly in the belief that he has a lawful right to acquire the freehold or an extended lease, and it must be made without any ulterior motive, such as to avoid the just consequences of his own misdeeds or failures. If the landlord asserts that the tenant’s claim is not made in good faith, the burden is on the landlord to satisfy the court that the tenant, in making the claim, is acting dishonestly or with an ulterior motive.”
Finally, Weinberg FCJ expressed the view that:
“…although a want of good faith under s 1237A(1) [of the Social Security Act] cannot be equated precisely with the common law concept of bad faith, as that concept has developed in other areas of public law, it is clear that both concepts are closely related. It is a serious matter to say of someone that he has not acted in good faith. An allegation of that type connotes an element of moral turpitude. It should not lightly be made.”
41. Section 1237AAD provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:
“1237AAD – 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 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”
[Tribunal emphasis].
42. For this section of the Social Security Act to apply to Mr Cohen’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mr Cohen must not have “knowingly” made a false statement or false representation or failed to have complied with a provision of the Social Security Act. Both these requirements must be satisfied for Mr Cohen to succeed under the “special circumstances” provisions of the Social Security Act. However, the respondent has conceded that there is no dispute that Mr Cohen did not “knowingly” make a false statement or false representation or failed or omitted to comply with a provision of the Social Security Act.
43. The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”. In that case the Tribunal said (at 3):
“An expression such as ‘special circumstances’ is by its very 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 upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”
44. In Boscolo v Secretary, Department of Social Security(1999) 53 ALD 277, French J, a case that also referred to the Federal Court’s decision in Beadle, held that “special circumstances” is where there is “something unusual or different to take the matter the subject of the discretion out of the ordinary … [But] that does not require the case be extremely unusual, uncommon or exceptional.”
45. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
46. Section 1236(1) of the Social Security Act sets out the requirements for a debt due to the Commonwealth to be written off:
“1236 Secretary may write off debt
1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)the debt is 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)the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.”
47. A former President of the Tribunal, Mathews J, has commented on the write-off provisions of the Social Security Act in Re L and Secretary, Department of Social Security(1995) 21 AAR 412, and observed that the financial circumstances of the debtor and the prospect of the recovery of the debt will necessarily be the primary considerations in deciding whether to write off a debt. Mathews J summarised the position as follows (at 428):
“In summary, I consider that matters relating to the personal financial hardship of the individual are always relevant in any decision as to write off under s 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation? If an affirmative answer is reached to this question, then it would be appropriate to defer recovery in the manner contemplated by s 1236(1).”
48. In considering its discretion for write-off under the Act, the Tribunal has also had regard to a number of factors referred to by the Federal Court in Director-General of Social Services v Hales (1983) 47 ALR 281. These factors were summarised by Senior Member Dwyer in Re Waller and Secretary, Department of Social Security (1985) 8 ALD 26 at 42 as follows:
(a)the fact that the applicant has received public moneys to which he was not entitled;
(b)the way in which the overpayment arose, whether as a result of innocent mistake or fraud;
(c)the financial circumstances of the applicant;
(d)the prospect of recovery;
(e)whether a compromise is offered;
(f)whether recovery should be delayed if there is a prospect that the circumstances of the person who received the overpayment may improve; and
(g)compassionate considerations and the fact that the Act is social welfare legislation and any financial hardship which may result from any action for recovery.
Consideration of the Issues
49. The Tribunal has applied the statutory requirements and legal principles (paragraphs 32 to 45) to all the evidence and information before the Tribunal in deciding this application for review.
50. The following factual issues are relevant in considering the questions to be decided for this application for review:
(a)There were very wide fluctuations in the weekly income of Mr Cohen’s wife over the entire overpayment period (T19):
§ July – September 2002: $548 - $880
§ August – December 2002: $515 - $1,294
§ January – March 2003: $515 - $1,625
§ April – June 2003: $546 - $1,147
(b)Furthermore, over this entire period (2002/2003) Mr Cohen’s wife’s weekly income closely approached, or exceeded, the $900 weekly “threshold” Mr Cohen had relied upon on 26 occasions.
(c)There are no written Centrelink documents or information before the Tribunal to support the existence of the “$48,000 threshold” relied upon by Mr Cohen;
(d)Mr McQuinlan stated there are Centrelink Policy Guidelines in place for dealing with circumstances of fluctuating income and calculation of social security entitlements. However, there is no evidence or information before the Tribunal that Mr Cohen raised such a query with Centrelink given that during the period 1 May 2002 to 28 May 2002 when Mr Cohen made telephone queries with Centrelink, his wife’s income varied from $533 to $1,291. In addition, there is no information or advice that Centrelink gave him any such advice.
Administrative Error
51. Firstly, the Tribunal considers the factual evidence relating to whether the debt could be waived under “administrative error” provisions of the Social Security Act.
52. The Tribunal concludes:
(a)that given the situation Mr Cohen’s wife’s weekly income closely approached the $900 figure on 26 occasions in the 2002/03 financial year – including income amounts of $1,294, $1,194, $1,187, $905 and $1,095 for five consecutive weeks in October/November 2002; and
(b)given that Mr Cohen was well aware of the significance of the $900 weekly income figure, to the “$48,000 threshold”, Mr Cohen has contributed to the administrative error that has led to the disability support pension overpayments. That is, given that such high income figures were earned very early in the 2002/03 financial year it would be a reasonable expectation that Mr Cohen would have raised a query with Centrelink as these amounts greatly exceeded the amounts provided by Mr Cohen for combined annual income of $35,000 (or $673 per week) and $38,000 (or $730 per week) – as well as the “$48,000 threshold” ($923 per week). Furthermore, given these very large increases in income amounts that widely fluctuated over time, the failure by Mr Cohen to raise such a query resulted in a situation where Centrelink could not instigate a review on procedures to address a situation of widely fluctuating income and its consequences for a social security recipient.
53. Given this finding that Mr Cohen has contributed to the “administrative error”, there is no need for the Tribunal to consider the issue of “good faith”. The debt cannot be waived under the “administrative error” provisions of the Social Security Act.
Special Circumstances
54. The next issue for the Tribunal to consider is the factual evidence relating to Mr Cohen’s state of knowledge at the time and to events surrounding the false statement or the act or omission.
55. The Tribunal accepts the respondent’s submissions that there has been no deception on Mr Cohen’s part in his dealings with Centrelink. Rather, that there had been a “misunderstanding of information” or a “miscommunication in the information exchanged between Mr Cohen and Centrelink that has led to the overpayment of disability support pension.
56. In addition, the respondent has conceded that Mr Cohen did not “knowingly” make a false statement or false representation or failed or omitted to comply with a provision of the Social Security Act
57. Accordingly, for the above reasons, the Tribunal concludes that Mr Cohen’s state of knowledge as to the events surrounding the statement or the act or omission in failing to comply with a provision of the Social Security Act do not represent a situation whereby he had “knowingly” made a false statement or act and omission.
58. When the legal principles to the meaning of “special circumstances” that have been defined by the Federal Court are applied to the facts of this case and the Tribunal’s earlier findings, the Tribunal concludes that there is nothing “unusual”, “uncommon” or “exceptional” in the circumstances that led to the overpayment – or that there was something unusual or different to take the matter out of the ordinary.
59. Consequently, “special circumstances” do not apply and the debt due to the Commonwealth cannot be waived under the “special circumstances” provision of the Social Security Act.
Write Off
60. Finally, the Tribunal considers the factual evidence relating to whether the debt could be waived under “write off” provisions of the Social Security Act.
61. The Tribunal has considered the factors set out in Director-General of Social Services v Hales (1983) 47 ALR 281 (see paragraph 48) and concludes:
(a) Mr Cohen received public money to which he was not entitled;
(b) the overpayment arose as a result of an “innocent mistake”;
(c)the current expenditure details of Mr Cohen cannot be determined accurately until such time as he establishes his own residence in June 2005 and to become completely independent of his existing arrangements, i.e. as he currently lives with relatives following recent separation from his spouse;
(d)the question of compromise has not been raised; and
(e)that there is little prospect that the employment circumstances of Mr Cohen will improve given the nature of his medical conditions.
62. For all of the above reasons, the Tribunal sets aside the decision under review and in substitution for it decides to write-off the overpayments of $6,743.72 of disability support pension received by Mr Cohen over the period 24 May 2002 to 26 November 2004 for a period of twelve months from the date of this decision. At this time, the matter is to be remitted to the respondent with a Direction that Mr Cohen submit an updated Statement of Financial Circumstances and an assessment be made whether it remains appropriate to write-off the debt due to the Commonwealth.
I certify that the 62 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Denise Burton
Administrative AssistantDate/s of Hearing 12 April 2004
Date of Decision 30 May 2005
For the Applicant Mr P Cranitch, Welfare Rights Centre
For the Respondent Mr R McQuinlan, Departmental Advocate
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