Connolly and Secretary, Department of Family and Community Services

[2000] AATA 307

DECISION AND REASONS FOR DECISION [2000] AATA 307

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q1999/1252

GENERAL ADMINISTRATIVE DIVISION          )          
           Re      ANNETTE CONNOLLY    
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       K L Beddoe (Senior Member)      

Date20 April 2000

PlaceBrisbane

Decision      The Tribunal decides as follows: (a) the decision under review as to the finding of the overpayment and the debt due to the Commonwealth is affirmed; and (b) the decision under review to impose an activity breach period is set aside and the matter is remitted to the respondent with a direction that an administrative breach rate reduction period is to commence upon notice given by the respondent in accordance with section 644C of the Social Security Act 1991.

Decision No. 307/2000  (Sgd) K L Beddoe
  Senior Member
CATCHWORDS
SOCIAL SECURITY:  Newstart Allowance – Disclosure of income – Reasonable excuse – Recovery of debt – Whether activity breach period or administrative breach period applicable

Social Security Act 1991 – s630AA, s631, s644AA, s644B, s644C, s644H, s658, s1224

REASONS FOR DECISION

20 April 2000 K L Beddoe (Senior Member)                  

1. The applicant seeks review of two decisions of the respondent, subsequently affirmed by a decision of the Social Security Appeals Tribunal, to:

   (a)raise and recover an overpayment of Newstart Allowance in an amount of $969.92 paid for the period 24 June 1998 to 15 September 1998; and

   (b)      apply a rate reduction of 18% for a period of 26 weeks.

Document T11 satisfies me that the claimed overpayments occurred on pay days 18 August, 1 September and 15 September 1998, and not from 24 June 1998, i.e. for a period of three fortnights only.

1. At the hearing the applicant conducted her own case and Mrs Guthrie appeared for the respondent. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were before the Tribunal as the T documents. Oral evidence was given by the applicant.

2. I make the following findings of fact.  Document T4 is a copy of a claim for Newstart Allowance lodged at a Department of Social Security office on 24 April 1996.  The claim disclosed that the applicant was married and disclosed details of her husband's income as $303 for the next fortnight.

3. Document T5 includes a copy continuation claim for Newstart Allowance dated 7 July 1998 where the applicant failed to disclose whether her husband worked in the relevant period (24 June 1998 to 7 July 1998) and whether he derived any income in that period.

4. Document T5 also includes a copy continuation claim for the period 8 July 1998 to 21 July 1998 which gives a negative response to the question "did your partner do any work in this period?"  The same response was given for continuation claims for the following periods:  22 July 1998 to 4 August 1998, 5 August 1998 to 18 August 1998, 19 August 1998 to 1 September 1998.  The claim for 2 September 1998 to 15 September failed to give a response.

5. In reply to a requisition for information issued by Centrelink, a company trading as a newsagent advised that the applicant's husband had been employed for 22.5 hours per week and was paid $225.00 per week from 28 June 1998 to 2 October 1998 (T7).  The employment commenced on 15 September 1997.

6. Another company also advised Centrelink of details of the husband's employment, on a casual basis, from 11 August 1998 and continuing after the end of the relevant period.  Details of the income, which fluctuated during the relevant period are included in document T6.

7. The applicant lived with her husband during the relevant period and was aware of his employment with the two companies.  She was not however aware of the actual amounts of wages derived by him.  In response to a question from Mrs Guthrie the applicant said she could not recollect asking her husband about his income.

8. In explanation the applicant said that she had been going through a difficult time in the marriage and she had not thought about what she was doing in relation to the claim for Newstart Allowance.  She does not dispute that the claim forms were incorrectly filled out and she does not dispute the details of her husband's income.  She and her husband separated in mid-September 1998 and had not resumed co-habitation to the time of hearing.

9. The applicant's financial situation at the time of hearing was desperate mainly because she was being evicted from her unit due to redevelopment of the site.  Finding alternative accommodation was proving difficult because the applicant owns two cats.
   Consideration

10. I am satisfied that the applicant only disclosed her husband's employment on the claim for Newstart Allowance made on 24 April 1998 and thereafter failed to notify details of his employment and income.  There was however no overpayment of benefits until the payment made on 18 August 1998 and the following payments on 1 September 1998 and 15 September 1998.

11. Section 658(1) of the Social Security Act 1991 ("the Act") provides that the respondent may give notice to a person to whom a Newstart Allowance is being paid requiring the person to make a statement about a matter that might affect payment of the allowance. There is no issue in this case that the formalities of the notice were not complied with (section 658(2)).

12. I am satisfied and find that the applicant failed to provide information in relation to her husband's remunerative work.  I am further satisfied that the failure to provide information was either as the result of an intention not to provide information or negligent attention to the requirements of the respondent.  I am unable to say which.  I am satisfied however that the applicant made false statements in relation to the income derived by her husband and thereby failed to comply with the requirements of the respondent's notice.

13. I have taken into account the then imminent breakdown of the applicant's marriage but I am not satisfied that constitutes a reasonable excuse for not disclosing details of the husband's employment.  Different considerations apply to the providing of information about the husband's income.  In circumstances where there is a breakdown of the marital relationship it may well be difficult or impossible to be able to report the partner's income details.  In this case the applicant said she did not know these details.  She cannot recollect whether she asked for the information.

14. Section 631 of the Act provides, inter alia, that where there is a failure to comply with section 658 without a reasonable excuse then:

    (a)       a Newstart Allowance is not payable to the person; and

    (b)if at a later time, a Newstart Allowance becomes payable to the person an administrative breach rate reduction period applies to the person.

1. Section 644B of the Act provides for an administrative breach rate reduction period of 13 weeks. By virtue of section 644H(2) the rate reduction amount is .16 of the maximum payment rate.

2. The respondent applied an activity breach rate reduction period under section 630AA of the Act.

3. Document T14 is a copy of a letter dated 12 July 1999 from the respondent notifying the applicant that payment of Newstart Allowance had been stopped and notifying an activity test breach period for 26 weeks from 7 July 1999.  The basis for this decision is set out in the opening paragraphs of the letter as follows:

   "We have recently confirmed that you have been working for Mansfield News/Elite Chemicals from 28 June 1998 to 15 September 1998.
   You are required to let Centrelink know about all earnings from employment.  As you failed to declare or incorrectly declared your earnings from Mansfield News/Elite Chemicals for the period from 28 June 1998 to 15 September 1998, your Newstart Allowance has been stopped, and you will be penalised."

1. Those paragraphs evidence a misunderstanding of the facts and explain why the respondent applied section 644AA on the basis that there was an activity breach within the terms of section 630AA of the Act because of the failure to provide information in relation to a person's income.

2. Section 630AA is a section in Subdivision F of Division 1 of Part 2.12 of the Act dealing with qualifications for and payability of Newstart Allowance. The activity test breaches dealt with in Subdivision F relate to a failure by a claimant to comply with requirements in relation to obtaining and retaining employment by the claimant. Where section 630AA refers to a failure to provide information in relation to "a person's income" it adopts the wording of the previous sections relating to other activity test breaches. Each of those sections refers to "a person" in contexts where that person is intended to be a reference to the claimant for Newstart Allowance and not the partner of the claimant. The second reference in those sections is a reference back to the first person by the use of "the person" so that "the person" must be read as also referring to the claimant for Newstart Allowance. In the context of the subdivision, the person referred to in section 630AA is the applicant on the facts of this case.

3. The applicant did not refuse or fail to provide information or provide false or misleading information in relation to her income from remunerative work. She did not derive such income during the relevant period. The assertion to the contrary in the respondent's letter (T14) has no basis in fact. I am satisfied there is no basis for section 630AA to have any operation.

4. That is not to excuse the applicant's failure to provide required information but does satisfy me that section 658 of the Act is the relevant provision. Given the failure to comply with the requirements of the respondent made in accordance with section 658 resulting in a debt recoverable under section 1224 of the Act I am satisfied that the applicant should be subject to an administrative breach applied by section 631 of the Act.

5. I have concluded that there was a failure to provide information which resulted in overpayment of Newstart Allowance in an amount of $969.92.  That overpayment is to be attributed to the applicant's failure to comply with requirements to notify her husband's employment in particular.  If it was an issue I may have been satisfied that the applicant had reasonable excuse for not reporting the quantum of the income but no reasonable excuse for not reporting the fact of employment and that income was being derived.

6. The decision under review will be affirmed as to the finding of overpayment and that there is a debt due to the Commonwealth of $969.92.

7. The decision under review to impose an activity breach period will be set aside. In substitution therefore there will be a decision that an administrative breach rate reduction period is to apply because of the failure to comply with notification requirements. The matter will be remitted to the respondent with a direction that the administrative breach rate reduction period is to commence upon notice given by the respondent in accordance with section 644C of the Act.

8. While I accept that the circumstances of the applicant's financial position was straitened at the time of the hearing she has had the benefit of an order under section 41 of the Administrative Appeals Tribunal Act 1975 and will now have the benefit of the Tribunal's decision setting aside the imposition of the activity breach reduction period. Taking all the material into account I am satisfied there is no basis for either write off or waiver of the debt due to the Commonwealth. However I recommend recovery of the debt to be at a rate of no more than $25 per fortnight while the applicant is in receipt of Newstart Allowance.

   I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of K L Beddoe (Senior Member)

   Signed:         
     T G Lowther
      Associate

   Date/s of Hearing  22 December 1999
   Date of Decision  20 April 2000
   Representative of the Applicant  In person
   Representative of the Respondent  Mrs Guthrie