Costin and Department of Family and Community Services - [2000] AATA 323

DECISION AND REASONS FOR DECISION [2000] AATA 323

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q1999/1384

GENERAL ADMINISTRATIVE DIVISION       )
           Re      ALAN COSTIN
  Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent

DECISION

Tribunal Dr EK Christie, Member

Date18 April 2000
PlaceBrisbane

Decision The Tribunal affirms the decision under review.

(Sgd) EK CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY - parenting allowance - parenting payment - overpayment - whether debt due to the Commonwealth may be waived for administrative error or for special circumstances.
Social Security Act 1991 ss 1237A, 1237AAD
Re Groth v Secretary, Department of Social Security (Unreported No. QG52/95 delivered 1 December 1995)

ORAL REASONS FOR DECISION

18 April 2000 Dr EK Christie, Member

This is an application by Alan Costin for a review of a decision made by the Social Security Appeals Tribunal ("the SSAT") on 13 December 1999 to raise and recover:

(a)an overpayment of parenting payment in the sum of $1009.70 for the period 26 March 1998 to 8 April 1999; and
(b)an overpayment of parenting allowance in the sum of $1376.10 for the period 15 February 1996 to 12 March 1998.

The evidence before the Tribunal comprised documents filed pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (the "T" Documents) (Exhibit 1) and the following exhibits:

Exhibit 2 Claim for Parenting Allowance – 8 December 1995
Exhibit 3 Partner Details – 8 December 1995
Exhibit 4 Partner Details – 2 November 1997

The applicant represented himself. Ms J Dwyer, a Departmental Advocate, represented the Department.
Issues before the Tribunal
The only issue for the Tribunal to decide was whether both overpayments could be waived, in part, or in full, because of the "administrative error" or "special circumstances" provisions of the Act.
SSAT Findings of Fact
The SSAT made the following findings of fact in reaching its decision (Document T2 Folios 7 and 8):-

Mr Costin has been in receipt of Parenting Allowance and then Parenting Payment during the relevant periods.
Mr Costin's wife is employed as a nurse earning variable amounts of money.
Mr Costin received letters from Centrelink notifying him that if his or his wife's income changed he was required to notify Centrelink. These letters were sent on 23 December 1995, 11 March 1996, 26 November 1997 and 6 April 1998.

Contentions and Submissions of the Parties

Mr Costin stated that his wife was a nurse whose fortnightly salary varied, depending on the number of "penalty" hours she worked each roster, e.g. evenings, weekends, public holidays. At the time an application was made for parenting allowance, documentation had been provided to Centrelink, in the form of payslips (Document T14), to illustrate the variation in payment.
Mr Costin contended that Centrelink knew of the variation in his wife's income by forwarding the notification notices to him and by the contents of the notices. However, Centrelink did not consider any variation in her pay, thus leading to the overpayment situation.
Mr Costin said that at no time had he been involved in a "face to face" meeting with Centrelink. Rather, all information he received from Centrelink had been "written correspondence".
Mr Costin stated that he had acted in good faith at all times on information provided to him by Centrelink. Furthermore, there had been no intention on his part to deceive Centrelink.
Mr Costin contended that there was an obligation on Centrelink to ensure that its "reporting requirements" were understood by its clients. Whilst Centrelink staff understood the Social Security legislation, this was not the case for his wife and himself.
Mr Costin concluded with the submission that the focus of Centrelink was legislative compliance rather than the needs of their clients. Moreover, he considered that, in this regard, the behaviour of Centrelink to be "duplicitous".
In response to Tribunal questions:

Mr Costin acknowledged the following notification notices sent to him by Centrelink:

(a)Document T7 (11 March 1996) which specified the amount of his wife's income upon which entitlements were based and which Centrelink needed to be advised if this amount ($2.51) were exceeded (Folio 32); and
(b)Document T9 (30 April 1996) which specified an amount of $440.75 for his wife's income upon which entitlements were based and which Centrelink needed to be advised if this amount were exceeded (Folio 36); and
(c)Document T15 (26 November 1997) which specified an amount of $785.32 for his wife's income upon which entitlements were based and which Centrelink needed to be advised if this amount were exceeded (Folio 56).

Mr Costin said that as he was "bombarded" with Centrelink mail, he could not be sure whether he had read these three notification notices; and that it would not have registered with him what these notices contained.

Ms Dwyer acknowledged that there was no question of any deceptive behaviour on Mr Costin's part in receiving the overpayments of parenting allowance and parenting payment.
Ms Dwyer submitted that Mr Costin had not complied with an obligation under the Social Security Act. She referred to the first notification notice sent to Mr Costin (Document T7 Folio 31) which stated:
"Your payment is worked out using both your and your partner's incomes. The incomes we have used to work out how much you are paid are shown on the back of this letter. You should tell us within 14 days if either your or your partner's income changes.
Please read the back of this letter carefully. It tells you about your Social Security rights and gives you more details about when you have to contact us."
Ms Dwyer submitted that as Mr Costin had not complied with this "clear obligation", an overpayment had arisen. The overpayment arose because of Mr Costin's failure to inform Centrelink that the combined income of his wife and himself exceeded the amount specified in the Centrelink notices.
Accordingly, the debt could not be waived for administrative error as Mr Costin had contributed to the error.
In terms of waiver under the "special circumstances" provision of the Social Security Act, Ms Dwyer conceded that Mr Costin had not "knowingly" failed to comply with a provision of the Act. However, she contended that there was nothing "unusual", "uncommon" or "exceptional" in the facts of Mr Costin's case which warranted the description of "special circumstances" and so be cause for the debt to be waived.

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").
The first question to be considered relates to the credibility of Mr Costin and the veracity of his account as to his dealings with Centrelink. Based on all the evidence before the Tribunal, I find that Mr Costin had acted honestly in all his dealings with Centrelink.
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."
With respect to waiver on the basis of administrative error, the Tribunal finds that there is no basis to waive the debt. The "administrative error" has not been solely caused by the Commonwealth. Mr Costin, in failing to respond to the notification notices by raising some form of query with Centrelink as to the amount of his wife's income, in relation to the amount specified in each notification notice, has contributed to the error.
Although Mr Costin's evidence was that at the time he had made his application for parenting allowance his wife's fortnightly earnings varied, the Tribunal considers that the variation could be such as to be above, or below, the income threshold specified in each notification notice. The Tribunal makes the further observation that over the period of the overpayments of parenting allowance (15 February 1996 to 12 March 1998), Centrelink used very different income thresholds for Mrs Costin's earnings (see paragraph 12).
Mr Costin's social security entitlement was based on the combined income for Mr and Mrs Costin and was specified in each notification notice. The Centrelink notices stated quite clearly the amount of fortnightly income, for Mr and Mrs Costin, upon which their entitlements were calculated. In the absence of any response to the notification notices from Mr Costin, Centrelink had paid what it believed to be the correct amount of entitlement.
The next question for the Tribunal to decide is whether the debt should be waived because of the "special circumstances" provision of the Act.
In Groth v Secretary, Department of Social Security (Unreported No. QG52/95, 1 December 1995), Kiefel J considered whether "special circumstances" applied in a case involving Section 1184 of the Act. Kiefel J endorsed the approach adopted by the Administrative Appeals Tribunal at first instance, namely, in determining whether a person's circumstances are "special", one should look at the effect upon the claimant if the waiver provision were not applied. If the consequence was unintended by the legislation, or the effect on the person concerned was different from that which would be felt by others, then the circumstances may be "special".
The Tribunal concludes that the consequences for Mr Costin receiving an overpayment of parenting allowance, and then parenting payment, in the context of all the factual circumstances the overpayment arose, is not one unintended by the legislation. In addition, Mr Costin has endured the same consequences as any other social security recipient who fails to comply with an obligation under the Act in circumstances which lead to an overpayment. At the very least, some query could have been raised by Mr Costin to clarify the amount of income specified in each notification notice and his wife's actual earning.
Whilst this conclusion may seem harsh, it would be fairer to say the outcome is unfortunate. The outcome is dependent on the legislation, but the legislation provides the Tribunal no discretion from which to depart. The Tribunal makes the observation that Mr Costin's case, unfortunately, is not the first case before this Tribunal where similar decisions have been made in equivalent fact situations.
The Tribunal makes the observation that it would be prudent for Centrelink to undertake a review of the form and content of their notification notices. Whilst the statutory requirement for notifying a social security recipient of their obligations is discharged by the sending of the notices, there is an issue whether the notification notices are "effective"! That is, whether the notice is understood by a recipient? Mr Costin's experience indicates that this may not necessarily be the case! Whilst the Tribunal recognises this issue to be a complex one, observations by the Tribunal in similar fact cases suggests that some attention should be given by Centrelink to what may be a very real problem for social security recipients.
For all of the above reasons, the decision under review is affirmed. The overpayments of parenting allowance and parenting payment remain as debts which must be recovered by the Commonwealth. In determining a suitable amount for instalments to recover the debts, the Tribunal makes the observation that it be conditional upon Mr Costin completing a Statement of Financial Circumstances.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed:         Denise Burton
  Secretary
Date/s of Hearing  18.4.00
Date of Decision  18.4.00
Rep. for the Applicant              Applicant appeared in person
Solicitor for the Respondent    Ms J Dwyer, Departmental Advocate