COLIN DULEY and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2012] AATA 590
•29 August 2012
[2012] AATA 590
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/0080
Re
COLIN DULEY
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Ms K Hogan, Member
Date 29 August 2012 Place Perth The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his rate of age pension was calculated, and that consequently the applicant received an overpayment of age pension in the period prior to 21 February 2011.
Ms K Hogan, Member
….(sgd)….K Hogan…………
Catchwords
Age Pension – overpayment - debt due to the Commonwealth - sole administrative error - special circumstances - waiver or write-off of debt
Legislation
SocialSecurity Act 1991
Social Security (Administration) Act 1999
Cases
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435.
Ward and SDFaCS [2000] AATA 212.
Beadle and Director General of Social Security (1984) 6 ALD 1.
Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25.
Dranichnikov v Centrelink [2003] FCAFC 133.Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173 .
REASONS FOR DECISION
Ms K Hogan, Member
29 August 2012
HISTORY
The applicant was in receipt of the age pension from 22 April 2010.
On 22 March 2011 Centrelink wrote to the applicant advising him his age pension was cancelled because of his failure to report his income.
On 20 April 2011 Centrelink raised an age pension debt of $2,297.05 against the applicant.
On 25 July 2011 the applicant sought a review of Centrelink’s decision to raise the debt. He did not seek a review of Centrelink’s decision to cancel his age pension.
On 20 September 2011 a Centrelink authorised review officer (ARO) reviewed Centrelink’s decision to raise and recover a debt of $2,297.05 for the period 19 October 2010 to 21 February 2011 and affirmed it.
On 14 December 2011 the Social Security Appeals Tribunal (SSAT) affirmed the decision.
The applicant applied to this Tribunal to review that decision.
SUMMARY OF ISSUES
The issues to be considered by the Tribunal are:
(a)whether the applicant was overpaid age pension;
(b)if so, whether the overpayments are a debt due to the Commonwealth;
(c)if so, whether the debt or any part of it should be written off or waived.
EVIDENCE
The Tribunal was provided with a number of documents including:
(a) the section 37 documents;
(b) written submissions from the respondent;
(c) documents provided by the applicant at the hearing.
The Tribunal heard oral submissions on behalf of the parties.
CONSIDERATION OF ISSUES
The legislation relevant to this decision is contained in the Social Security Act 1991 (“the Act”) and the Social Security (Administration) Act 1999 (“the Administration Act”).
ISSUE 1: WAS THE APPLICANT OVERPAID AGE PENSION?
The method of calculating a person’s rate of age pension is set out in section 1064 of the Act. In general terms, a person's income will reduce the rate of age pension payable to a person.
Evidence, finding of fact and application of the law
The applicant gave evidence that he earned income from employment with various employers between August 2010 and 21 February 2011 which was not taken into account when the applicant’s age pension was calculated.
The Tribunal found that the applicant’s ordinary income was not taken fully into account when his rate of age pension was calculated, and that consequently the applicant received an overpayment of age pension in the period between August 2010 and 21 February 2011.
ISSUE 2: IS THE OVERPAYMENT OF AGE PENSION MADE TO THE APPLICANT A DEBT?
Subsection 1223(1) of the Act states:
(1)Subject to this section, if:
(a)a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
Evidence, finding of fact and application of the law
In this case when the Tribunal applied section 1223(1) of the Act it determined the overpayment of age pension made to the applicant was a debt due the Commonwealth.
ISSUE 3: SHOULD THE DEBT, OR ANY PART OF IT, BE WRITTEN OFF OR WAIVED?
Relevant legislation
Subsection 1236(1A) of the Act provides that Centrelink may decide to write-off recovery of a debt for a stated period or otherwise, 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)it is not cost effective for the Commonwealth to take action to recover the debt.
Section 1237A of the Act deals with waiver of debt arising from an error. Subsection 1237A(1) of the Act provides that subject to subsection 1237A(1A) Centrelink 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.
Section 1237AAD of the Act provides that Centrelink may waive the right to recover all or part of a debt if 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 Administration 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.
Section 66A(1) of the Administration Act prescribes a general obligation on an age pension recipient to report within 14 days changes to their circumstances which might affect their entitlement to age pension.
Write off
Evidence, finding of fact and application of the law
The Tribunal found the debt is recoverable at law, the applicant has the capacity to repay the debt, his whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt. The Tribunal decided therefore the debt could not be written off under section 1236 of the Act.
Waiver further to 'sole' Centrelink administrative error
Evidence, finding of fact and application of the law
The AAT considered the meaning of the word 'solely' in Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173 :
“40.There is nothing in subsection 289(1) which indicates that any meaning should be given to ‘solely’ other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error. The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of a Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error. Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact”.
Section 66A(1) of the Administration Act prescribes a general requirement that a claimant or recipient of a social security payment notify Centrelink within 14 days of any event or change in circumstances that may affect the payment.
Section 68 of the Administration Act provides that a person can be given a notice requiring them to provide information about an event or change in their circumstances that might affect the payment of a social security payment.
The respondent contended that the applicant had a general requirement, and by reason of a notice dated 3 May 2010 [T6: p79] an explicit requirement, to advise Centrelink within 14 days that he had commenced work and that he had failed to so do.
The respondent contended that the debt was not caused by the administrative error of the Commonwealth and recovery could not be waived under the terms of section 1237A of the Act.
The respondent contended that the applicant’s income was not taken into account when assessing his rate of age pension in the period prior to 24 February 2011.
The Tribunal found that Centrelink sent a notice to the applicant on 3 May 2010 [T6:P79] which advised him to notify Centrelink of changes to his circumstances including if he commenced work or if his income changes, within 14 days.
The applicant gave evidence that he had contacted Centrelink on several occasions in the period between August 2010 and 21 February 2011 asking that his age pension be ‘put on hold’ because he was earning income.
The applicant's evidence was that he was frequently located at places where there was no reception for his mobile phone. In the period under review he said he did not report his changed income regularly or within the fortnight period because of the limitations of the telecommunication system.
Centrelink records provided to the Tribunal documented contact with Centrelink on 18 November 2010 that "he will let us know if the earnings eventuate"[T7:p82] and again on 24 February 2011 that he "had been working since December" and was concerned about being overpaid [T11:p90].
There was no evidence on the Centrelink file of further contact by the applicant in the period between August 2010 and 21 February 2011.
There was no record on the Centrelink file that the applicant had advised Centrelink of his earnings in the period between August 2010 and 21 February 2011.
The Tribunal found the applicant did not notify Centrelink of his changed income or that he had commenced work within 14 days of the event as he was required to do by the notice of 3 May 2010 and by section 66A(1) of the Administration Act.
The Tribunal decided the applicant contributed to the error that led to the debt. The Tribunal found therefore it could not waive the debt pursuant to section 1237A of the Act.
Waiver further to a finding of 'special circumstances'
Evidence, finding of fact and application of the law
The Tribunal first had to conclude whether the applicant knowingly made a false statement or false representation or failed or omitted to comply with the requirements of the Act and the Administration Act. The meaning of the word 'knowingly' has been discussed in a number of decisions made by the Administrative Appeals Tribunal. In Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 Deputy President Forgie commented (at 48) that:
“There is nothing in s 1237AAD which 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 a provision of the Act”.
The applicant's evidence was that he contacted Centrelink on at least two occasions and requested that his age pension be put 'on hold' while he was working. There was, however, no record on the Centrelink file that he had advised Centrelink of his earnings in the period between August 2010 and 21 February 2011and there was no evidence on the Centrelink file that he contacted Centrelink other than on 18 December 2010 and 24 February 2011.
The Tribunal found the applicant did not knowingly omit to comply with a provision of the Act; however it was satisfied he had not notified Centrelink of his income within the required time frame.
The Tribunal considered whether the applicant’s circumstances were ‘special’ within the meaning of the Act. In every case, the individual circumstances of the case were examined to determine whether they were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. In particular, the Full Federal Court in Dranichnikov v Centrelink [2003] FCAFC 133 determined that whether there are special circumstances in a particular case is dependent on whether there are circumstances that would distinguish the case from the usual case.
The respondent submitted that the applicant had actual knowledge of the requirement to notify Centrelink of changes to his circumstances and knowingly failed to do so. The respondent further contended that the applicant had no circumstance that might be considered unusual or uncommon so as to be considered special in the context of other social security recipients.
The term 'special circumstances' is not defined in the Act however, it has been extensively considered in case law:
In Beadle and Director General of Social Security (1984) 6 ALD 1 (at 3) the Administrative Appeals Tribunal stated 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 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.”
...
In Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25 (at 33) the Federal Court stated as follows:
“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”.
The applicant contended that he had repeatedly requested Centrelink to stop paying him and that he did not believe that he 'owed' them money.
It was apparent from the evidence of the applicant that he was exceedingly frustrated as a consequence of his contact with Centrelink.
The applicant gave evidence that when he commenced work for Graham Sexton, in August 2010, he contacted Centrelink and advised them of this. There is no record on the Centrelink file of this.
The applicant did not dispute that he received his pension whilst in receipt of income from employment, but he disputed that he was 'over paid the pension' because he stated that he had made numerous attempts to have the payments stopped.
The applicant argued that the 'special circumstances' in his case were that his mobile phone did not work in regional Western Australia and that because of the hours he worked, he was unable to talk to the relevant Centrelink office.
The Tribunal found that the applicant was aware that he did not have good mobile phone coverage in regional Western Australia and he was also aware that the hours within which he worked as a shearer prevented him from contacting Centrelink during the day.
There was no evidence before the Tribunal that the applicant was unable to use other means of communication at his disposal, for example, to contact Centrelink in writing.
The Tribunal finds that as the applicant was fully aware of the limitations of the mobile phone coverage and the restrictive hours he worked, he should have used other means of communication at his disposal, for example, to contact Centrelink in writing, and therefore, the applicant’s circumstances were not "special circumstances" within the meaning of the Act.
Having decided the applicant’s circumstances were not ‘special circumstances’ within the meaning of the Act the Tribunal was unable to waive the debt under section 1237AAD of the Act.
CONCLUSION
In the course of the hearing the evidence of the applicant was that some of his income in the period prior to 21 February 2011 may not have been taken into account in calculating his pension entitlement.
The Tribunal did not have sufficient information to calculate the applicant's entitlement to the age pension in the period prior to 21 February 2011.
It seems to the Tribunal that the appropriate disposition of this proceeding is that the Tribunal should set aside the decision under review and remit the matter to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his rate of age pension was calculated, and that consequently the applicant received an overpayment of age pension in the period between August 2010 and 21 February 2011.
DECISION
The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his rate of age pension was calculated, and that consequently the applicant received an overpayment of age pension in the period prior to 21 February 2011.
I certify that the preceding 56 (fifty-six) paragraphs are a true copy of the reasons for the decision herein of Ms K Hogan, Member .
...(sgd) T Freeman........
Associate
Dated 29 August 2012
Date of hearing 12 June 2012 Applicant In person Advocate for the Respondent Mr P Maishman
Ms M Conlon
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Debt Due to Commonwealth
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Administrative Error
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Waiver of Debt
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Overpayment of Benefits
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