Corbet and Secretary, Department of Family and Community Services - [2000] AATA 312

DECISION AND REASONS FOR DECISION [2000] AATA 312

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q99/1149

GENERAL ADMINISTRATIVE DIVISION       )
           Re      DAPHNE CORBET
  Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION

Tribunal Dr EK Christie, Member

Date20 April 2000
PlaceBrisbane

Decision The Tribunal sets aside the decision under review and in substitution therefor decides: to waive the debt accrued over the period 15 July 1993 to 19 April 1994; and that the debt accrued over the period 20 April 1994 to 24 December 1998 is a debt due to the Commonwealth which must be recovered.

(Sgd) EK CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY – age pension – overpayment – whether objective facts for Tribunal to infer Centrelink practices and procedures had been applied – whether appropriate to waive right to recover debt by reason of administrative error or special circumstances.
Social Security Act 1991 ss 1237A(1), 1237AAD
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Caswell v Powell Duffryn Associated Collieries 3 (1939) All ER 722
Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543

REASONS FOR DECISION

20 April 2000 Dr EK Christie, Member

This is an application by Daphne Corbet to review a decision of the Social Security Appeals Tribunal ("the SSAT") dated 22 September 1999 to raise and recover an overpayment of age pension of $23,974.90 for the period 15 July 1993 to 24 December 1998. The SSAT affirmed the decision made by an Authorised Review Officer of Centrelink made on 22 March 1999.
At the hearing, the applicant, Mrs Corbet, represented herself. The respondent was represented by Ms T Guthrie, a Departmental Advocate. The respondent called three witnesses from the Centrelink office. All three witnesses gave their evidence by telephone.
At the hearing, the Tribunal had in evidence before it documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (the "T" Documents) (Exhibit 1) and the following exhibits:

Exhibit 2 Bundle of Social Security documents sent to Mrs Corbet over time
Exhibit 3 Financial Information form completed by Mrs Corbet – 23.11.99
Exhibit 4 Statement of Emanuel Mapula – 25.2.00
Exhibit 5 Statement of Kay Rommy – 29.2.00
Exhibit 6 Statement of Keith Scherer – 25.2.00

Issues before the Tribunal

The only issue for the Tribunal to decide was whether the overpayment of age pension of $23,974.80 could be waived in part, or in full, under the "administrative error" or "special circumstances" provisions of the Social Security Act 1991.
Facts
The general facts were not in dispute and may be stated briefly:

Mrs Corbet was in receipt of age pension from 20 May 1993;
during the period 15 July 1993 to 24 December 1998, Mrs Corbet lived in a defacto relationship with Mr Neil Griffis who was employed on a regular basis with Finemores Transport; and
throughout the period, Mrs Corbet received notices from Centrelink that required her to advise Centrelink if, among other things, her combined income became more than $84.01 or $85.84 per week and if her partner started or recommenced work; and
Mrs Corbet's partner was employed as a truck driver on a seasonal basis, during the sugar cane crushing season.

At the date of the hearing, $1,752.95 of the overpayment had been recovered by Centrelink.
Evidence of Daphne Corbet
Mrs Corbet is aged 66. She had left school at Grade 7, aged 13. She had worked for almost 35 years, ceasing work in 1981. Her work included waitressing, cooking and factory processing of seafoods in locations throughout Queensland and overseas. For many years she had cared for foster children. She had no specialised work skills.
Mrs Corbet said that she was bewildered by the whole episode as the first time she had become aware that there was an overpayment problem was when she went to the Centrelink office in February 1999 and was advised by Mr Neil Edwards that there was no record of her [defacto] partner on the Centrelink computer. Mrs Corbet said that as a result of all of the stress which followed this statement by Centrelink, her health had deteriorated. In addition, she had a number of falls leading to injuries to her arm and back.
Mrs Corbet said that she was perplexed by this statement of Centrelink because her partner's name appeared on her Pensioner Concession/Health Care cards issued to her over the period 1993-1998 (Exhibit 2).
Mrs Corbet queried why Centrelink never advised her to bring in her partner's wage sheets over the period 17 September 1993 to 15 September 1997. She said that, as a result, Centrelink could have made an error as she had not been provided with an opportunity to disclose her partner's earnings.
Mrs Corbet referred to two situations where Centrelink could have advised her of her situation in relation to age pension and her partner's employment, including:

April 1994 – where she advised of a planned trip to the USA and where she spoke of her partner working; and
June/July 1997 – in relation to a request for a summary of age pension payments for tax records. Whilst there was some discussions of her partner's earnings, there was no indication given to her that her partner did not appear on the computer.

During cross-examination by Ms Guthrie, Mrs Corbet agreed that Centrelink would not have had her partner's Employment Separation Certificate. Mrs Corbet said that her partner had not claimed social security during the periods of the year he was not employed and she received age pension entitlements.
Mrs Corbet acknowledged that she would have received the Centrelink notification notice (Document T10, 10 May 1993) which required her to advise Centrelink if her combined income exceeded $84.01 per week (at Folio 55). Mrs Corbet said that she would have read the whole of this notice. Mrs Corbet said that her usual practice was to respond to Centrelink notices by phoning Centrelink to advise when her partner commenced work.
In response to the Centrelink notice (Document T11, 18 September 1993), Mrs Corbet said that the notation on this notice indicated that she had phoned Centrelink on 24 September 1993. The purpose of the phone call was to advise that her partner was working and the effects on her age pension entitlements.
Mrs Corbet acknowledged that she had not made this telephone response within 14 days or indicated to Centrelink the amount of income her partner had earned. However, Mrs Corbet stated that Centrelink did not ask her a question about the amount of her partner's earnings.
Mrs Corbet said that she rang Centrelink in response to their notice and noted the call (see Document T12 Folio 90, 28 March 1994). She said that the purpose was to check whether her entitlements would be "all right" if her partner worked. However, she could not recall whether she had told Centrelink of the amount of her partner's earnings.
Mrs Corbet acknowledged that she would have read the Centrelink notification notice (Document T10 Folio 59, 19 March 1994) in its entirety. In relation to the $84.01 limit for combined weekly income, Mrs Corbet stated that she thought that Centrelink had taken her partner into account as she had advised he was working. Mrs Corbet said that she believed she was entitled to part-pension, irrespective of her partner's earning because of the answers provided by Centrelink to questions she had raised. However, she said that she now recognised that Centrelink answers were inconsistent.
Mrs Corbet was taken to an extract from the SSAT decision (Document T2 Folio 5). She clarified the SSAT statement in that she had told Centrelink her partner was working but there was no discussion of his earnings (see paragraph 4, last bullet-point statement).
Evidence of Witnesses for the Respondent
The three witnesses called were Centrelink officers who described the practices and procedures used by Centrelink to ensure the correct information was recorded, coded and entered into the computer to avoid errors in payment of entitlements.

Ms Kay Rommy, of the Centrelink Call Centre, outlined the procedures for obtaining the relevant details on a partner's earnings and work dates. From June 1998, it was compulsory to issue a customer with a receipt number for any contact with the "Call Centre". Ms Rommy stated that it would be "extremely unlikely" that a customer who advised that her partner was working would not be asked what the partner was earning;
Mr Keith Scherer, Customer Service Centre, Centrelink Bundaberg, considered that it would be "extremely unlikely" that a Centrelink officer advised by a customer that their partner was working would fail to ask the customer the amount of their partner's earnings – and that this would be "even more unlikely to occur on repeated occasions". Also, from "at least 1994 it was also common practice to request that payslips be provided by the customer"; and
Mr Emmanuel Mapula, Customer Service Centre, Centrelink Bundaberg, stated "that if a customer in receipt of a pension informs me that his/her partner is working, it is my practice to ask the customer the amount his/her partner earns".

In response to Tribunal questions:

Ms Rommy said that, in relation to Centrelink practices and procedures, she could "only answer how I do my specified job; other persons may vary"; and
Mr Mapula said that he could not remember Mrs Corbet coming in to Centrelink on 28 July 1997 to get records of her entitlement for taxation purposes (Document T14 Folio 94) and could not really remember very much of the discussions they had at that time.

Contentions and Submissions of the Parties

Ms Guthrie, the Departmental Advocate, contended that Mrs Corbet failed to comply with statutory obligations provided by Sections 68 and 69 of the Social Security Act - specifically, the obligations contained in notification notices sent to her requiring Mrs Corbet to inform Centrelink when her total combined income exceeded $84.01 to $85.84 per week (Document T10 Folios 83-85). Ms Guthrie submitted that the basis for the overpayment arose because Mrs Corbet failed to inform Centrelink of the increase in her partner's earnings when he was employed during the sugar cane crushing season. It was very clear that when her partner worked, Mrs Corbet's combined income greatly exceeded the limits imposed for her eligibility for age pension.
Ms Guthrie contended that the debt was not due to an administrative error solely caused by the Commonwealth as Mrs Corbet had not informed Centrelink of the amount of her partner's income. Furthermore, Mrs Corbet had not informed Centrelink when her total combined income exceeded the limit for age pension entitlement. In addition, all queries raised by Mrs Corbet with Centrelink were outside the statutory time limit of 14 days.
Ms Guthrie submitted that the notification notices sent by Centrelink to Mrs Corbet [Document T11, 18.9.93; Document T12, 28.3.94; Document T13, 24.5.94] made it quite clear what amount of income was being used to calculate her age pension entitlement. However, it was Ms Guthrie's contention that the evidence of Mrs Corbet was such that she thought she was entitled to age pension irrespective of her partner's income. Accordingly, Ms Guthrie submitted that Mrs Corbet had made a conscious decision that her partner's earnings were not relevant.
Ms Guthrie said that, over the period 1993-1998, Mrs Corbet's age pension entitlements had remained fairly constant. The Departmental Advocate submitted that if Mrs Corbet had advised Centrelink of the changes in her combined total income, Mrs Corbet's entitlement would have varied over time.
Ms Guthrie summarised the evidence of the three Centrelink officers saying that it would be "extremely rare" if three standard questions:

when did the person start work;
who do they work for; and
what are they earning

were not asked by Centrelink staff in response to queries raised by a social security recipient. Moreover, Ms Guthrie submitted that for such a situation to arise on so many occasions, as Mrs Corbet claimed, it could only be regarded with "disbelief".

Ms Guthrie contended that Mrs Corbet could not rely on notifying CES as the basis for making Centrelink aware of her partner working, as such notification was not a notification to Centrelink.
Ms Guthrie submitted that the debt could not be waived under the "special circumstances" provision of the Social Security Act, contending that Mrs Corbet's failure to comply with all obligations contained in the notification notices to inform Centrelink of changes in her circumstances amounted to "reckless indifference" or even "wilful blindness". Accordingly, she submitted Mrs Corbet's actions were such that they could be described as a knowingly failure to comply with the notification provisions of the Act.
Ms Guthrie contended that there was nothing in Mrs Corbet's case which justified discretion to be applied for "special circumstances". Mrs Corbet had received a considerable amount of social security moneys for which she was not entitled, at a time when her partner earned considerable amounts of income.
In addition, Ms Guthrie submitted that the decline in health and stress which Mrs Corbet had endured in her life was not in itself a "special circumstance".
Finally, Ms Guthrie contended that any assessment of Mrs Corbet's case, in totality, indicated that financial hardship was not in issue. The completed Financial Information Statement (Exhibit 3) indicated that Mrs Corbet had a capacity to repay the debt.
Mrs Corbet stated that she felt she had been penalised even though she had continued to make Centrelink aware of the times her partner had worked. Notwithstanding that she had given this advice to Centrelink, as well as the further fact that her partner's name appeared on her Health/Pension Card (Exhibit 2), at no stage had she ever been told by Centrelink to bring in her partner's payslips, employment forms or separation certificates.
Mrs Corbet stated that she "did her utmost" to keep Centrelink informed over the period 1993-1997; the exception was 1998 because of illness. However, she did not receive any notification notices in 1998.
It was Mrs Corbet's contention that the overall situation she now found herself in was "bizarre" and arose because Centrelink could not provide her with correct information to her queries. Mrs Corbet emphasised the fact that over a five year period, she had never been asked by Centrelink to bring in her partner's pay envelopes and was unaware of the situation she now found herself after being told in 1999 that she was "in a lot of trouble with overpayments".
Consideration of the Issues
The objective of the Tribunal is to review administrative decisions not only on their merits, but in accordance with the law at all times. The relevant legislation is the Social Security Act 1991 ("the Act").
Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived:
"SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
1237A(1) Administrative error. Subject to subsection (1A), 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.
Note:Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
SECTION 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."
The first question to be decided by the Tribunal relates to the credibility of Mrs Corbet and the veracity of her account as to her dealings with Centrelink. I accept Mrs Corbet to be a witness of truth and that she had acted honestly in her dealings with Centrelink.
In relation to the question of waiver, the Tribunal considers that the issue reflects a situation in which Mrs Corbet made honest attempts to advise Centrelink that her partner was working. Whilst it may be a reasonable expectation on Centrelink's part that Mrs Corbet would have disclosed her partner's earnings at some stage, it could also be said that it would be reasonable for a similar expectation to be present, from Mrs Corbet's perspective, when she made her enquiries. Given the Centrelink officer's much greater command and knowledge of the Social Security Act, in the absence of Mrs Corbet's disclosure of her partner's earning, it would have been reasonable to expect some simple follow-up question on this point. The Tribunal agrees with the observations of Senior Member Handley in Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543:
"Any failure to regard the seriousness of the consequences of the giving of wrong advice as not being a circumstance special to the person or persons who have suffered as a result of that advice would be cruel. Citizens are entitled to act upon the advice given to them by representatives of government through its departments and agencies. Citizens also are entitled to have confidence in the advice that they are given by persons in authority and who represent government departments and agencies. Citizens should be entitled to expect nothing less."
In terms of waiver of the debt because of "administrative error", the Tribunal concludes that both Centrelink and Mrs Corbet have both contributed to the error. Accordingly, the debt cannot be waived for administrative error because it has not been solely caused by Centrelink as Mrs Corbet had not queried Centrelink, at some stage, on her threshold for combined income or the amount of her entitlement.
The next question for the Tribunal to consider is whether the debt can be waived under the Section 1237AAD provisions of the Act.
The meaning of the term "knowingly" has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435 where Deputy President Forgie stated at 445:
"(48) 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. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."
Applying the principles in Re Callaghan and Secretary, Department of Social Security, the Tribunal finds, on the civil standard of proof that Mrs Corbet did not knowingly fail to comply with a provision of the Social Security Act (see paragraphs 10, 11 and 14). Accordingly, the Tribunal concludes that paragraph (a) of Section 1237AAD of the Act is satisfied.
The next issue for the Tribunal to consider is whether paragraph (b) of Section 1237AAD of the Act is satisfied – that is, whether there are "special circumstances (other than financial hardship alone) that makes it desirable to waive" the right to recover all or part of the debt. The Tribunal has had to consider the meaning and application of the expression "special circumstances" on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of "special circumstances". In that case the Tribunal said (at 3):
"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 the 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."

The Tribunal concludes that there are some "unusual" circumstances associated with Mrs Corbet's fact situation which justify the description of special circumstances – but these "unusual" circumstances only apply for part of the period over which the overpayments accrued. The following summary table forms part of the basis for this conclusion:

Table 1

Notification Notice Date "T" Doc/Folio Number Total Entitlement $ Income Threshold $
10 May 1993 20 September 1993 19 March 1994 28 March 1994 19 April 1994 24 May 1994 17 September 1994 11 March 1995 15 September 1995 T10/54 T10/57 T10/65 T10/68 T10/59 T10/71 T10/62 T10/77 T10/83 258.90 262.30 263.90 261.30 263.90 263.90 267.80 271.60 281.90 84.01 84.01 84.01 84.01 84.01 84.01 84.01 84.01 84.01

Over the period 10 May 1993 to 15 September 1995, Mrs Corbet's entitlement, and the threshold upon which her entitlement was calculated, showed little variation; and
Over this period Mrs Corbet's partner:

worked from 15 July 1993 to 26 December 1993;
(ii) did not work from 30 December 1993 to 23 January 1994;
(iii) worked from 28 January 1994 to 10 April 1994; and
(iv) did not work from 14 April 1994 to 19 June 1994 (Document T18).

The Tribunal concludes that over the period 15 July 1993 to 19 April 1994, the circumstances by which the overpayment arose were "unusual" because:

Mrs Corbet had rung Centrelink on 24 September 1993 to advise that her partner was working following the receipt of the Centrelink notice dated 18 September 1993 (see notation Document T11);
Centrelink had not sought information from Mrs Corbet as to her partner's earnings; and
Notwithstanding Mrs Corbet's query from the commencement of the period of overpayment (15 July 1993) to the time of the notification notice dated 19 March 1994 (Document T10), she continued to receive her entitlement at a fairly uniform rate. During this period, her partner was employed for over 90% of the time.

However, over the period 14 April 1994 to 19 June 1994, when her partner was unemployed, Mrs Corbet continued to receive her entitlements at an unchanged rate. The Tribunal concludes that the notification notice dated 19 April 1994 (Document T10) should have at least acted as a "trigger" for Mrs Corbet to raise a query with Centrelink as to the accuracy of the amount of her entitlement; or to query why an unchanged income threshold was used.
Moreover, the Tribunal has given consideration to the practice and procedures used by Centrelink as stated in the evidence of the three Centrelink officers (paragraphs 19, 20). Undoubtedly, such practices and procedures do exist. However, the question for the Tribunal is to infer that these practices and procedures were applied every time Mrs Corbet raised some form of query with Centrelink. The law of evidence on inferences is quite clear:
"There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish….But if there are no positive proved facts from which any inference can be made, the method of inference fails and what is left is mere speculation or conjecture."
Per LJ Wright in Caswell v Powell Duffryn Associated Collieries 3 (1939) All ER 722 at 733.
The Tribunal concludes that there are no objective facts before the Tribunal in which any inference can be made, at the requisite standard of proof, that Centrelink practices and procedures were applied consistently throughout Mrs Corbet's dealings with Centrelink over time. In particular, there is no real evidence before the Tribunal to make such a conclusion over the period 15 July 1993 to 19 April 1994. The Tribunal considers the Departmental Advocate's submissions on the application of Centrelink practices and procedures to Mrs Corbet's fact situation to be speculative over the period 15 July 1993 to 19 April 1994.
Based on the above findings (paragraphs 43-47), the Tribunal concludes that part of the overpayment can be waived because of the "special circumstances" provisions of the Act - that is, the overpayment accrued over the period 15 July 1993 to 19 April 1994. However, the overpayments accrued over the period 20 April 1994 to 24 December 1998 remain as a debt due to the Commonwealth which is to be recovered because "special circumstances" no longer apply. Because of the number of occasions notification notices were sent to Mrs Corbet after 19 April 1994, together with the discontinuity of her partner's employment, some form of query to clarify the amount of her partner's earnings and her entitlement seems warranted. However, such clarification did not occur.
The Tribunal further finds that there may be some discrepancy or uncertainty as to the accuracy of the amount of overpayment calculated by Centrelink. Specific dates of employment for Mrs Corbet's partner were not provided by his employer, only the dates he was paid. Accordingly, the Tribunal directs that the amount of overpayment be re-calculated by Centrelink and that such re-calculation be done in consultation with Mrs Corbet.
The Tribunal makes the further observation that in any recovery by instalments of the overpayment, in terms of the amount and time period, due regard be given to Mrs Corbet's health. In addition, the amount and time of recovery should consider the need for her, as a 64 year old, to have sufficient financial reserves on hand to address any potential emergency or financial crisis situation which may confront her, over time, with increasing age.
The Tribunal sets aside the decision under review and in substitution therefor decides:
(a) to waive the debt accrued over the period 15 July 1993 to 19 April 1994; and

(b)that the debt accrued over the period 20 April 1994 to 24 December 1998 remains a debt due to the Commonwealth which is to be recovered.
I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed:         Emma Oettinger
  Associate
Date/s of Hearing  1.3.00
Date of Decision  20.4.00
Rep. for the Applicant              Applicant appeared in person
Solicitor for the Respondent    Ms T Guthrie, Departmental Advocate