Conroy and Secretary, Department of Education, Employment and Workplace Relations

[2007] AATA 2081

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2081

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/1980

GENERAL ADMINISTRATIVE DIVISION			)
Re	ROBERT CONROY

Applicant

and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT and WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date21 December 2007 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

………[Sgd]……………………  

RG Kenny

Member

CATCHWORDS

SOCIAL SECURITY – age pension – residential requirements not met - failure to advise Centrelink of relevant income information – overpayment – debt due to the Commonwealth – debt not due solely to Commonwealth error – no special circumstances – no grounds to waive debt – decision affirmed

Social Security Act 1991 (Cth) ss 7, 48, 51, 1223, 1237A, 1237AAD

Director‑General of Social Services v Hangan (1982)70 FLR 212

Beadle v Director-General of Social Security (1985) 7 ALD 670

Groth v Secretary, Department of Social Security (1995)40 ALD 541

REASONS FOR DECISION

21 December 2007     Mr RG Kenny, Member

Application

1.      Robert Conroy received the age pension from 29 October 1998 until 21 February 2006.  On 17 March 2006, a Centrelink delegate determined that Mr Conroy had been overpaid in the amount of $68,161.63.  On 18 July 2006, an authorized review officer with Centrelink confirmed the overpayment but varied the amount to $68,462.43.  That decision was affirmed by the Social Security Appeals Tribunal on 9 February 2007.  Mr Conroy now seeks further review by the Administrative Appeals Tribunal.

Debt due to the Commonwealth

2.      The qualifying criteria for age pension are set out in Social Security Act 1991 (the Act).  As the Act read at the time that age pension was granted to Mr Conroy,    s 48 thereof requires that a proper claim be made.  Section 51 of the Act provided that it had to be made by an Australian resident, a term defined in s 7 of the Act.  The residential requirement must also be met for continued payment of the age pension. The decision in this matter was based on Mr Conroy not meeting that requirement.  I am satisfied that Mr Conroy was not an Australian resident at the time of his claim or at any time he received the age pension.  This was conceded by Mr Conroy.  He also conceded that he had received overpayment of his age pension in the amount alleged by Centrelink.  Having considered the calculations in the relevant Centrelink documentation, I am satisfied that the overpayment of $68,462.43 was correctly calculated.  In accordance with s 1223(1) of the Act, this is a debt due by him to the Commonwealth. 

Waiver of Debt

Contentions

3.      Mr Conroy’s concern with the Centrelink decision was that the debt had not been waived.  He submitted that it arose solely because of error by Centrelink and that there was no fault on his part which contributed to the overpayment because he was not told that he would be unable to receive the age pension if he was not in Australia.  He submitted that he should not have to repay the debt.  He referred to his financial situation and submitted that he had no means of repaying the debt, in any event.  

4.      For the respondent, Mr Hamilton submitted that Centrelink was entitled to grant age pension to Mr Conroy on the basis of information available at the time even though it turned out that he was not qualified to claim or receive it.  He submitted that, though there was some error by the Commonwealth, Mr Conroy had contributed to the overpayment by failing to provide correct information to Centrelink at the time of his claim and subsequent to it.  He also submitted that there were no special circumstances which would enable the debt to be waived.

Legislation

5.      The matters relating to waiver of a debt due to administrative error by the Commonwealth and to special circumstances arise under s 1237A(1) and                  s 1237AAD, respectively, of the Act.  In so far as relevant in this matter, they read:

1237A(1)       Administrative error

1237A(1)  … 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.

1237AAD      Waiver in special circumstances

1237AAD  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.

Background

6.      Mr Conroy was born in Australia in 1932 and is an Australian citizen.  He lived in Australia until 1959 and then moved to Costa Rica.  Apart from visits to Australia in 1966, from 1968 to 1970, in 1975 and from October to November 1998, he has resided in Costa Rica.  He has Costa Rican citizenship and is married to a woman from that country.  One of the reasons for his coming to Australia, with his wife, in October 1998 was to inquire about his eligibility for the Australian age pension.  He completed and lodged a pension claim form on 19 October 1998.  In that form, he wrote that he was residing with a friend and that he was "undecided" about whether he intended to stay in Australia permanently. He also advised that he and his wife owned their own home and a car in Costa Rica and that he received a pension from the Costa Rican government.

7.      In processing his claim for age pension, Centrelink requested further information from Mr Conroy.  To that end, he provided a statement on 23 October 1998.  There, he wrote that he and his wife had returned to Australia three weeks earlier with the intention of remaining in Australia permanently.  Mr Conroy's claim was then granted on 29 October 1998.  He and his wife left Australia on 4 November 1998 and returned to Costa Rica.  He did not advise Centrelink that he was leaving Australia and, except for a response that he provided to a Centrelink questionnaire on 13 April 1999, he had no further communication with Centrelink until the debt was raised.  In that response, he indicated that he would be returning to Australia within 12 months.  Mr Conroy has not returned to Australia since November 1998. 

Waiver under s 1237A

8.      Documents in evidence included various file notes which made reference to Mr Conroy's absence from Australia.  Clearly, Centrelink was not unaware of this while it continued to pay the age pension to him.  This was conceded by Mr Hamilton.  Indeed, in the reasons published by the authorised review officer, it was conceded that the decision to grant age pension and to continue its payment to Mr Conroy involved errors of judgment by Centrelink officers.  I agree with that observation.  However, the first element to be satisfied under s 1237A(1) of the Act is that the debt must be attributable solely to administrative error made by the Commonwealth.  A debt will not arise solely through error by the Commonwealth if there has been some contribution to the causing of the debt by the recipient: see Director‑General of Social Services v Hangan (1982) 70 FLR 212 at 215, 225 and 235.

9.      I am satisfied that Mr Conroy contributed to the grant of his age pension claim and continuing payment of that pension to him.  Centrelink, in granting the claim, relied upon the statement made by Mr Conroy on 23 October 1998 that he and his wife intended to remain in Australia permanently.  Within 11 days, they left Australia permanently and I am satisfied that he did not intend to remain in Australia.  Centrelink also relied upon Mr Conroy's further statement on 13 April 1999 that he would be returning to Australia within 12 months.  He did not do so and I am satisfied that he did not intend to return to Australia.  Those were matters which contributed to the granting of his claim and the continuation of his age pension payments.  Because there was contribution on his part, this means that this was not a case of sole Commonwealth error and the debt can not be waived under s 1237A of the Act.

Waiver under s 1237AAD

10.     For waiver of a debt under s 1237AAD of the Act, it must be the case, amongst the other requirements of the provision, that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.  The Act provides no guidance as to the meaning of the term “special circumstances” in that provision.  In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674). In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

would require something to distinguish... [the]… 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.

11.     The only matter raised by Mr Conroy in this context was his financial situation.  He and his wife have their own house which comprises three apartments, one of which they occupy.  The other two apartments are tenanted.  His total monthly income from those rents and a government pension amounts to US $603 which is expended on daily living costs.  Mr Conroy equated that level of income with the wage of an unskilled worker in Costa Rica.  He said that, although he and his wife are the owners of the house, they have completed legal documentation bequeathing it to their children on their death and he claimed that this process was one which would prevent the sale, in their lifetime, of the house unless they obtained the consent of the children.  He said that he was not in a position where he could repay the debt.

12.     I am not satisfied that Mr Conroy is living in financial hardship although I accept that the repayment of the debt would be a slow and difficult process for him.  There is no material before me upon which any findings can be made about the capacity for the selling of his house.  In any event, s 1237AAD requires more than financial hardship and, on the material before me, I am satisfied there are no factors, either individually or taken together, in this case that enable it to be characterised as unusual or unfair and I am satisfied that there are no special circumstances in Mr Conroy’s case that would justify waiver of the debt under that provision.

Decision

13.     The decision under review is affirmed.

I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:…………………………………………………………….
  Associate

Date/s of Hearing: 28 November 2007
Date of Decision: 21 December 2007
The Applicant was unrepresented
For the Respondent: Mr R Hamilton, Departmental Advocate.