Cole and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1223

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1223

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1644

GENERAL ADMINISTRATIVE  DIVISION		)
Re		KYLIE COLE

Applicant

And SECRETARY DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms G Ettinger, Senior Member

Date13 April 2007

PlaceSydney

Decision The decision under review is affirmed.

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

Ms G Ettinger     
  Senior Member

CATCHWORDS

abusive partner – Applicant profoundly deaf – single mother of two children – knowingly Debt of DSP – overpayment due to understatement of partner’s income – difficulties with making a false statement regarding the income -  no special circumstances.

Social Security Act 1991, ss 1223, 1237AAD

Re Beadleand Director General of Social Security (1984) 6 ALD 1,
Ellis v Department of Family and Community Services [2000] AATA 350

REASONS FOR DECISION

13 April 2007 Ms G Ettinger, Senior Member     

1.               Ms Kylie Cole who is profoundly deaf, has incurred a debt to Centrelink for overpayment of Disability Support Pension (DSP), in the sum of $4,107.69, for the period 10 July 2003 to 27 September 2005.  The debt was incurred because Ms Cole did not correctly report, but rather, generally understated, her partner’s income in that period. Ms Cole was in a de facto relationship with Mr G Logue from 2001 to October 2005 during time which they had two children. During that time he worked in paid employment for two periods.

2.               Ms Cole has applied to this Tribunal for review after the Departmental officers and the Social Security Appeals Tribunal (the SSAT), found that she owed the debt as raised (and revised), and that there were no “special circumstances” which could be found to either waive the debt in whole or in part.

3.               Ms Cole was represented by Mr J Rushton, a solicitor, and the Secretary, by his advocate, Mr K Bullock. The Tribunal was assisted by a very capable Auslan interpreter, Mr D Beswick.

4. I am sympathetic to Ms Cole’s situation as she is a single mother bringing up two children, has financial difficulties, and has been in an abusive relationship. However when I considered the discretion to waive her debt pursuant to section 1237AAD of the Social Security Act 1991, I found I was unable to, because I was satisfied from the evidence that Ms Cole made false statements or false representations with regard to her then partner’s income. Accordingly the discretion to find special circumstances cannot be exercised. My reasons follow.

ISSUE BEFORE THE TRIBUNAL

5.               The issue I have to decide is whether the $4,107.69 debt of DSP for the period 10 July 2003 to 27 September 2005 which has been raised against Ms Cole can be waived in whole or in part.

THE LEGISLATIVE CONTEXT

6.               The relevant legislation in this matter is the Social Security Act 1991, (the Act), in particular sections 1223(1) and 1237AAD.

CONSIDERATION OF THE EVIDENCE AND FINDINGS

7.               I accepted the submissions of the parties that the debt had been correctly raised (section 1223 of the Act), and that there was no dispute regarding the amount, which I noted had previously been adjusted, and reduced by a certain amount, due to an internal error of calculation by Centrelink. As the parties are satisfied the debt did not arise because of sole administrative error, there can be no waiver of the debt pursuant to section 1237A of the Act.

8.               I heard evidence from Ms Cole and Ms L Davis, her maternal aunt.  Ms Davis has been assisting Ms Cole and has known her since childhood. During the relevant period 2001 to 2005 when Ms Cole was in a de facto relationship with Mr G Logue, and had two children with him, Ms Davis lived a couple of suburbs from them. She has recently moved to be a near neighbour.

9.               Ms Davis told me that Ms Cole had learning difficulties in primary school as deaf children were not taught well, emphasising in particular that Ms Cole was not competent in mathematics. She said she knew, because for some years when Ms Cole was in primary school, and her mother was in paid employment, Ms Davis used to pick her up from school and do homework with her. Ms Davis told me that Ms Cole completed year 10 at school, but that her mathematics are not strong. Ms Cole can read and write. 

10.              Mr Rushton submitted that Ms Cole had difficulties in communicating, not just due to her deafness, but perhaps as a result of some cognitive deficiency. He said that he had difficulty obtaining instructions, and submitted that Ms Cole had difficulties in communicating with her partner who was abusive and also deaf, and with organisations such as Centrelink. Ms Cole’s evidence was that she found it difficult to understand people with different accents, but that she used the TTY telephone with Centrelink, and that she took her aunt along to discuss the content of letters which Centrelink sent her. She did not complain about any difficulties in communicating with Centrelink, and I did not have any medical evidence to substantiate Mr Rushton’s assertions regarding cognitive deficiency.

11.              However I noted that when Mr Rushton attempted to elicit information from Ms Cole in support of her case regarding financial difficulties, she was unable to calculate the amount she receives weekly or fortnightly in benefits. I noted that Ms Cole was not clear how much she received in Family Assistance or DSP; she emphasised however that $20 was deducted fortnightly for her debt. She was also not clear whether the $12 child support payment she receives is fortnightly or monthly.

12.              Mr Bullock, on the other hand, submitted that Ms Cole has been able to obtain Family Tax Benefit, a process which requires her to estimate family income in advance. He emphasised that Ms Cole had not made errors or incurred overpayments in that area. Ms Cole told me that she estimated the income to be $25,000 per annum. 

13.              I am satisfied that in the relevant period Ms Cole knew of her obligations to inform Centrelink fortnightly of the amounts her partner earned. She did so by ringing on the TTY telephone, or attending at Centrelink (which she did either six times or a dozen times in the relevant period), or by email.

14.              I was particularly concerned when Ms Cole repeated many times how she made herself aware of the actual amount of Mr Logue’s earnings by finding his pay slips. She emphasised that he was abusive, and yelled at her and the children whenever she asked him about the amount of his earnings, which she knew she needed to know to tell Centrelink. She also insisted that because he would not tell her, she knew where to look in a drawer where he kept the pay slips, and would report the amounts to Centrelink by reading them off from his pay slips. Ms Cole also told me that because she had never had pay slips herself (in spite of the fact she had had some jobs such as pet care), and did not know how to interpret them, she took the pay slips into Centrelink to show the staff there.  

15.              Unfortunately, in the documents which Mr Bullock tendered, now Exhibit R2 before the Tribunal, there are 42 pages of Centrelink’s contemporaneous records made at the time of Ms Cole’s calls or emails to report Mr Logue’s earnings or make inquiries, and amongst those, there is only one entry which refers to pay slips. That entry is at page 32 of Exhibit R2, dated 24 October 2003, where the Centrelink officer has recorded that Ms Cole will fax three pay slips. That apparently did not occur, and at T20 of Exhibit R1, there are various records of Ms Cole’s reports of earnings which have been recorded, and are marked “NVE”, which indicates they have not been verified. I noted that Ms Davis told me Ms Cole had taken pay slips in once when she went with her.

16.              I am satisfied that Ms Cole reported some part of Mr Logue’s earnings, and that Ms Davis telephoned his employer, the Bluebird Laundry on one occasion to try and verify his earnings. Not surprisingly, for privacy reasons, she was not given those.

17.              I was not satisfied that Ms Cole was accurately representing the situation about having either transcribed Mr Logue’s earnings from his pay slips, or taken them into Centrelink. I prefer the documentary evidence, that is the contemporaneous file notes made by Centrelink staff (Exhibit R2). Those satisfy me that no pay slips were submitted, and that the earnings reported were not verified. However Ms Cole did regularly supply some information about Mr Logue’s earnings.

18.              I noted that later, Centrelink obtained a print-out which is at T11/50, and where the figures for Mr Logue’s earnings do not match the figures supplied by Ms Cole. I noted that the dates do not correspond exactly, but in many cases, the figures supplied by Ms Cole were lower than the actual earnings which included some overtime, although in some cases the figures Ms Cole reported were higher.

19. Mr Rushton was unable to clarify for me from where Ms Cole had obtained the figures she supplied to Centrelink as Mr Logue’s earnings. Mr Bullock submitted that Ms Cole had simply declared the base rate because she perceived an advantage to her in Mr Logue having a lower income, when her DSP was calculated. I was satisfied that although some of Mr Logue’s earnings were reported to Centrelink, a certain component had often been omitted by Ms Cole in the fortnightly declarations. Accordingly, I find that she knowingly was involved in making a false statement or false representation with regard to the family’s earnings, and I cannot apply the discretion in section 1237AAD.

20.              I was mindful of Mr Bullock’s reliance on Ellis v Department of Family and Community Services [2000] AATA 350, a case where an overpayment occurred when the recipient of benefits was in prison, and another person had fraudulently made claims on his behalf, and monies were paid to him which he was not able to access. I am satisfied that that case has no application here, and that it can be distinguished. In this case, I acknowledge it may have been hard for Ms Cole to access the correct figures but I find that it was Ms Cole who reported her partner’s earnings incorrectly, and most often at a level below his actual earnings, and that she benefited from that. That is of course how the debt arose.

21. However if I am wrong about Ms Cole having knowingly made a false statement or representation, I shall consider section 1237AAD of the Act which provides a discretion for the consideration of “special circumstances”, and states that if the debt did not result in whole or in part from Ms Cole making a false statement or false declaration, and there are special circumstances, other than financial hardship alone that make it desirable to do so, then I may exercise the discretion to waive the debt in whole or in part. 

“SECT 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 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.”

22.     There is quite a deal of case law on this area, and the discretion is exercised by taking into account all the circumstances of the case, that is, an aggregate of all the circumstances of the case. In that regard I have noted the statements of the Federal Court in Re Beadleand Director General of Social Security (1984) 6 ALD 1, as follows:

“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 on 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.”

23.              In his submissions urging me to find special circumstances in Ms Cole’s case, Mr Rushton submitted that she is an honest person, but that she is confused and has difficulties communicating, and may have cognitive deficiencies. He indicated that she had genuinely been unable to reply to some questions during the hearing.  He submitted the Applicant had discharged her obligations to Centrelink fully, and any discrepancies in the reporting of her partner’s earnings had not been deliberate. He submitted that her deafness constituted a special circumstance, that her reporting problems had arisen due to the non-cooperation and abusiveness of her partner. He submitted that the family, already in straitened circumstances, would suffer further if the debt were not waived as it would have to be recovered from Ms Cole’s DSP payments. Mr Rushton also submitted that if Ms Cole could afford membership of a private health fund, she could, after a qualifying period, obtain a cochlear implant. There would be a long wait for the public sector to supply her that opportunity he submitted.

24.              Mr Bullock argued against the discretion to find special circumstances for Ms Cole. He submitted that I not accept Ms Cole’s evidence regarding fortnightly arguments with Mr Logue regarding the level of his earnings given she said she had been able to access his pay slips regularly.  He submitted it was not clear what data Ms Cole had used to report Mr Logue’s earnings to Centrelink, and contrary to Ms Cole’s evidence, no pay slips had been submitted. He submitted it appeared Ms Cole had used Mr Logue’s base rate, omitting the overtime, because a lower rate of his earnings affected her DSP less.

25.              In making his submissions and arguing against the discretion to find special circumstances, Mr Bullock acknowledged there had been domestic violence in Ms Cole’s life, and that she suffered a hearing disability, but submitted essentially that she had been supplying information that was inaccurate, and perhaps even false, to Centrelink, and that special circumstances could therefore not be considered.

26. I have noted the submissions regarding special circumstances, and I am mindful that Ms Cole does not have an easy life bringing up two children on her own, particularly given their medical problems, and given her hearing disability, and limited income. On the other hand, most recipients of social security are in straitened circumstances. I am satisfied that even if she could satisfy section 1237AAD(a) of the Act in that the debt did not result wholly or partly from Ms Cole or another person knowingly making a false statement or false representation, her situation, although difficult, does not have that “special” or unusual quality which has over the years been required to constitute “special circumstances”  in the case law.  

27.              Accordingly the application must fail.

DECISION

28.              The decision under review is affirmed.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member

Signed:..............[sgd]...............
  Associate

Date of Hearing  11 April 2007
Date of Decision  13 April 2007      
Solicitor for the Applicant          Mr J Rushton, J M Rushton & Co         
Respondent’s Advocate           Mr K Bullock