Confidential and Secretary, Department of Social Services

[2015] AATA 454

[2015] AATA 454 

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2014/5109
Re	Confidential
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member Bernard J McCabe
Date	29 June 2015
Place	Brisbane

The decision under review is affirmed.

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Senior Member Bernard J McCabe

CATCHWORDS

FAMILY ASSISTANCE AND SOCIAL SECURITY – overpayments and debt recovery – parenting payment – dispute regarding accuracy of payroll records – no corroborating evidence to suggest employer’s records incorrect – applicant not entitled to payments received – no administrative error made by the Commonwealth – good faith – no special circumstances – no discretion to waive debt – reviewable decision affirmed.

LEGISLATION

Social Security Act 1991 (Cth) ss 1223(1); 1237A; 1237AAD

REASONS FOR DECISION

Senior Member Bernard J McCabe

29 June 2015

1. This appeal arose from a determination by Centrelink on behalf of the Secretary that the applicant in these proceedings was overpaid Parenting Payment of $7,448.88 for the period 9 January 2010 to 9 May 2014. If Centrelink is correct, the applicant will have to repay that money. The applicant disagrees with the determination and has sought review. The Social Security Appeals Tribunal (SSAT) affirmed the decision on

   
   

   9 September 2014, so the applicant has asked this Tribunal to reconsider the matter.

2. The applicant’s entitlement to Parenting Payment was calculated on the basis of her fortnightly earnings from her employer. The Secretary – who is the respondent in these proceedings – says payslips from the employer indicate the applicant was underpaid Parenting Payment on some occasions and overpaid on others. Overall, however,

   
   

   the Secretary says the applicant was overpaid.

3. The applicant submits that, in raising the debt against her, Centrelink has relied upon incorrect information about her pay. She says her employer has not maintained accurate records of her earnings and entitlements, and asserts that copies of her pay advices have been altered on some occasions. She referred in both her oral and written submissions to dealings with the Industrial Relations Commission, WorkCover, the Queensland Ombudsman, the Commonwealth Ombudsman, the Anti Discrimination Commission Queensland and the Australian Taxation Office (ATO) in relation to those disputes.

4. The Tribunal’s task is twofold: I must firstly determine whether the applicant was, in fact, paid Parenting Payment at a higher rate than that to which she was entitled. If I find the applicant was overpaid, I must then determine whether there are any

   
   special circumstances

   that would justify the exercise of the discretion to waive the debt.

   Was the applicant overpaid Parenting Payment?

5. The Secretary submits that the applicant’s debt arose because she did not declare the full amount of her earnings from her employer. A letter from the authorised review officer (ARO) at Centrelink dated 15 July 2014 explained that, from 9 January 2010 to

   
   

   9 May 2014, the rate of the applicant’s Parenting Payment was calculated by reference to her declared income. Investigations later revealed the applicant earned more than she declared during that period. According to the ARO’s calculations, the applicant received a total of $23,600.42 in Parenting Payments, but was only entitled to receive $16,151.54. The ARO acknowledged the applicant had been underpaid on some fortnights, but said those underpayments had been taken into account in calculating the overall debt of $7,448.88.

6. Mr McQuinlan, for the Secretary, pointed to several discrepancies between the applicant’s reported earnings and information later received from her employer’s payroll department. Centrelink revised its calculation of the applicant’s entitlement to

   
   

   Parenting Payment based on the employer’s payroll records. If the applicant were able to produce evidence about her earnings which contradicted the information provided by her employer, there might be an argument that she was not, in fact, paid in excess of her entitlement. However, I am not satisfied there is evidence to support that conclusion.

7. At the hearing, the applicant produced a bundle of documents which included individual tax returns, group certificates from her employer, and fortnightly pay advices spanning from 2010 to 2014. She explained in her Statement of Facts and Contentions (at [21]):

   I have been subject to [the employer’s] Payroll errors and adverse treatment due to my special personal and unforeseen circumstances. This has left my pay entitlements distorted, inaccurate and unresolved from 2010 to 2014.   

   The applicant referred to ongoing industrial disputes between herself and her employer before various agencies. She said the ATO was also reviewing inconsistencies in her reported income. She suggested Group Certificates did not accurately reflect her earnings, which, the applicant said, affected the reliability of Centrelink’s calculations.

   
    

   In her Statement of Facts and Contentions, the applicant claimed her employer distorted “lump sum payments, withholding of promotions, pay, leave, loadings, and back paying figures for pay fortnights” in order to avoid accountability (at [23]).

8. The applicant said many of the legal proceedings outside this Tribunal in which she is involved relate to “work discrimination and victimisation”. It is unlikely the outcome of those matters would have any bearing on the question of what the applicant earned between January 2010 and May 2014 for the purposes of these proceedings.

   
   

   However, the applicant did refer to investigations conducted by the ATO in relation to the accuracy of her employer’s payroll records. Any finding by the ATO in respect of that issue would almost certainly be relevant to these proceedings.

9. The Secretary produced evidence of a chain of correspondence between the Department of Human Services (representing the Secretary) and the ATO from January 2015.

   
   

   The Department sent a letter to the ATO dated 9 January 2015 posing a series of questions about whether the ATO considered the employer’s payroll records in relation to the applicant to be inaccurate. In its response dated 29 January 2015, the ATO confirmed it had not investigated the employer’s payroll records (see exhibit 2 at p 28). The ATO officer said the applicant’s matter had been handled as a complaint review but had been closed as “there was no evidence provided by [the applicant] that indicated the ATO needed to investigate [the employer]”. The ATO officer explained:

   [The applicant’s] records for the 2012 financial year were able to be reconciled with the data the ATO held from her employer. Neither her 2011 nor her 2013 records could be reconciled as [the applicant] was unable to provide all payslips for those periods.

10. In the course of her oral evidence, the applicant referred to repeated instances of what she considered to be deliberate attempts by her employer to alter the records of her earnings. During cross-examination, Mr McQuinlan asked the applicant to point to specific examples in her original fortnightly pay advices (tendered as exhibit 4) that reflected different earning figures to those that were later provided to Centrelink by her employer. The applicant was unable to point to any specific discrepancies in the pay advices.

11. Queensland Shared Services (QSS) provides finance and human resource management services to various government agencies including the applicant’s employer. A senior officer of QSS, Suzanne Mant, was called by the Secretary to give evidence about the applicant’s entitlements as they appeared in the payroll records. Ms Mant said that QSS officers who review payroll records are required to refer any irregularities to management. Although Ms Mant said she did not audit the applicant’s records herself, she confirmed no irregularities were reported by those who were tasked to review the data.       

12. The method of calculation employed by Centrelink in assessing the applicant’s entitlement was not challenged; only the figures upon which the calculations were based were the subject of criticism. In the absence of any convincing evidence that suggests the payroll records provided by the employer to Centrelink are inaccurate, I am not satisfied that the calculation of the debt is flawed in the way the applicant suggests.

    
    

    In those circumstances, I find that the applicant was overpaid Parenting Payment in the sum of $7,448.88.

    Can the debt be waived?

13. Pursuant to subsection 1223(1) of the Social Security Act 1991 (“the Act”), where a social security payment is made to a person who is not entitled to that payment,

    
    

    the amount of the payment is a debt due to the Commonwealth.  The debt is taken to arise when the person obtains the benefit of the payment. On the basis of the evidence available, I am satisfied the applicant received $7,448.88 to which she was not entitled and that the amount must be repaid to the Commonwealth, subject to any provision which might allow the Secretary to waive the debt. 

14. Mr McQuinlan explained in submissions that the Secretary’s discretion to waive the Commonwealth’s right to recover a debt is narrow. The power to waive the debt is governed by s 1237 of the Act, which refers to a set number of waiver provisions that might be invoked. For the purposes of this case, the only waiver provisions that might apply are those contained in ss 1237A and 1237AAD.

15. Section 1237A of the Act deals with administrative error. The Secretary has the discretion to waive the debt if it is solely the result of a mistake made by Centrelink.

    
    

    But as Mr McQuinlan pointed out, the overpayment was a result of the applicant’s failure to give Centrelink full details of her earnings from her employer. The applicant does not argue that the debt is the result of an error on the part of Centrelink.

    
    

    In those circumstances, it is clear the debt cannot be waived on the basis of s 1237A.

16. Section 1237AAD of the Act deals with special circumstances. That section states:

    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, 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.

17. The applicant submitted that she has always reported her earnings to Centrelink

    
    

    “in good faith”, and that she has “not knowingly made a false statement to Centrelink” (Applicant’s Statement of Facts and Contentions at [3]). But even if I accept the applicant satisfies the first limb of s 1237AAD, she must also demonstrate that

    
    special circumstances

    beyond financial hardship on its own make it desirable to waive the debt, and that it is appropriate that I (exercising the Secretary’s discretion) do so.

    
    

    In order to find there are special circumstances within the meaning of the Act, I must be satisfied there is something different or unusual about the case which suggests it should be treated differently from the usual run of cases. To put it another way, there must be something about the case that suggests an exception ought be made.

18. The applicant referred in both her oral and written evidence to several factors which she said distinguish her case from others involving Centrelink overpayments. In terms of financial hardship, she said she has sustained losses of over $200,000 in remuneration and assets as a consequence of her disputes with her employer. She said she is often forced to rely on charity to meet the basic needs of herself and her child.

    
    

    Beyond financial hardship, the applicant explained that an ankle injury sustained in February 2010 has left her with a physical impairment, creating difficulties for her at work as well as in her life at home as a single parent. She said her experiences of domestic violence, her marital breakdown and ongoing family court proceedings are a source of significant stress, and that she has suffered from an anxiety disorder

    
    

    (as diagnosed by her general practitioner and confirmed by her treating psychiatrist) since 2012.

19. There is nothing different or exceptional about the applicant’s case that suggests she should be treated differently to others in her position. I accept the applicant has limited financial resources available to her – but as a recipient of Parenting Payment, that does not make her circumstances unique. That is what entitles her to Parenting Payment in the first place, and other recipients of Parenting Payment are in the same position.

    
    

    Similarly, many single parents in receipt of Parenting Payment would have experience of the family court process and the stresses that often entails, and so the applicant’s case in that respect is not uncommon or unusual. The applicant did not produce medical evidence as to the severity of her physical and psychiatric impairments, but I am not satisfied on the evidence before me that those conditions make it desirable to exercise the discretion.

20. I am not satisfied that the circumstances described by the applicant, either taken individually or as a whole, satisfy the requirements of s 1237AAD such that the discretion to waive the Commonwealth’s right to recover the debt is available.

    Conclusion

21. I am satisfied the applicant received an overpayment of $7,448.88 to which she was not entitled, resulting in a debt liable to be paid to the Commonwealth. I am not satisfied the circumstances of the applicant’s case enliven the Secretary’s discretion to waive the Commonwealth’s right to recover, or that the discretion should be exercised in her favour if it were enlivened.

22. The decision under review must be affirmed.

I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

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Associate

Dated 29 June 2015

Date of hearing	27 May 2015
Applicant	In person
Advocate for the Respondent	Mr R McQuinlan Department of Human Services