Cymerman and Secretary, Department of Family and Community Services

[2003] AATA 1354

CATCHWORDS – SOCIAL SECURITY

– Aged Pension – Overpayment – recipient of a Dutch Pension – Dutch Pension indexed and adjusted biannually – failure to inform of increases in Dutch Pension – whether failed or omitted to comply with a provision of the Act - whether debt owed to the Commonwealth - decision varied

Administrative Appeals Tribunal Act 1975 ss. 37 and 43

Social Security Act 1991 ss. 8, 23, 43, 68, 69, 1062, 1064, 1072, 1222, 1222A, 1223, 1224, 1237, 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC and 1237AAD

Family and Community Services andVeterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001 s. 3
Social Security (Administration) Act 1999 s. 68
A New Tax System (Family Assistance)(Consequential and Related Measures) Act (No. 2) 1999 s. 3
Youth Allowance Consolidation Act 2000 s. 3
Student and Youth Assistance Act 1973 s. 289

Gerhardt and Department Employment, Education and Training (AAT 10941, 17 May 1996)
Sekhon v Secretary, Department of Family and Community Services (2003) 37 AAR 468

Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435

Re Jonauskas and Secretary, Department of Family and Community Services (2001) 65 ALD 553

Beadle v Director-General of Social Security (1985) 60 ALR 225
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67, (2002) 68 ALD 357

DECISION AND REASONS FOR DECISION [2003] AATA 1354

ADMINISTRATIVE APPEALS TRIBUNAL     )          
  )          S2003/204
GENERAL ADMINISTRATIVE DIVISION     )          

Re                ADRIANA CYMERMAN

Applicant

AndSECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:                   Deputy President S A Forgie
Date:  20 November, 2003
Place:  Adelaide

Decision:The Tribunal decides that:

1.the decision of the  Social Security Appeals Tribunal dated 28 April, 2003 to raise and recover an age pension debt of $2,108.71 from the period 11 January, 1996 to 5 November, 2002 be varied in so far as:

a.       the sum of $800.00 of the debt is waived; and

2.the decision is otherwise affirmed.

S A FORGIE
  Deputy President

REASONS FOR DECISION

On 20 November, 2003, I varied a decision of the Social Security Appeals Tribunal (“SSAT”) dated 28 April, 2003. That decision had been to affirm a decision made by a delegate of the respondent, the Secretary of the Department of Family and Community Services (“Secretary”) and varied by an Authorised Review Officer (“ARO”) to raise and recover from the applicant, Mrs Cymerman, a debt in the sum of $2,108.71. That sum represented age pension that had been overpaid to her in the period from 1 October, 1997 until 5 November, 2002. In place of the SSAT’s decision, I substituted a decision that the amount of $800.00 be waived but that the Secretary was entitled to raise and recover a debt for the remaining sum of $1,308.71. As he had already recovered more than this amount from Mrs Cymerman, the practical effect of my decision was that the Secretary would refund the difference to her. I gave oral reasons for my decision. In a letter dated 19 December, 2003, Mrs Cymerman has now requested written reasons under s. 43(2A) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”).

1. At the hearing, Mrs Cymerman represented herself and the Secretary was represented by Ms Pugsley, an Advocate with Centrelink.  Regard was had to a bundle of thirteen documents submitted by Mrs Cymerman.  They comprised:

a document issued by the Department of Social Security, by which name the Department of Family and Community Services (“Department”) was formerly known, and entitled “Guide to claiming a Netherlands Pension”;

a letter from the Department to Mrs Cymerman dated 16 January, 1995 advising that her claim for a Netherlands pension had been received by the International Operations Branch in Hobart and that it had been sent to the Netherlands for processing on 16 January, 1995;

a letter written in the Dutch language to Mrs Cymerman from Sociale Verzekeringsbank dated 20 Maart 1995;

a letter written in the Dutch language to Mrs Cymerman from Sociale Verzekeringsbank in Kantoor Buitenland dated 10 Juli 1995;

a letter written in the Dutch language to Mrs Cymerman from Sociale Verzekeringsbank in Kantoor Buitenland dated 26 Sep. 1995;

the front page of a letter written to Mrs Cymerman from the Department dated 11 January, 1996 regarding the amount of pension that she would be paid from 25 January, 1996.  It stated that the back page of the letter told Mrs Cymerman about her social security rights and what she had to tell the Department;

a document written in the Dutch language entitled “Specificatie Verschuldigd;

a letter dated 26 February, 2003 to the ARO by Mrs Cymerman regarding her wish that another ARO review her case;

the front page of a letter written to Mrs Cymerman from the Department dated 1 February, 2002 and regarding the way her overseas assets and income affected her social security payment.  It stated that the rates that the Department had used to work out the Australian dollar values of her overseas income and assets over the previous three months were set out on the back page of the letter;

a letter dated 11 February, 2003 to Ms Reid by Mrs Cymerman regarding the assessment of the pension that she, Mrs Cymerman, received from the Netherlands;

a letter dated 18 July, 2001 from Sociale Verzekeringsbank to Mrs Cymerman advising her that it had sent a payment to the credit of her account in an Australian bank; and

an eighteen page statement of facts, issues and contentions prepared by Mrs Cymerman.

Regard was also had to the documents lodged under s. 37 of the AAT Act (“T documents”), the Agreement between Australia and the Kingdom of the Netherlands on Social Security dated 4 January, 1991 (“the Bilateral Agreement”) and a computer generated copy of a letter written to her on 29 October, 1996 by the Department submitted on behalf of the Secretary. Ms Pugsley prepared a statement of facts, issues and contentions on behalf of the Secretary. It had been filed and sent to Mrs Cymerman in September, 2003.

1. The commencement of the hearing was delayed to enable Ms Pugsley to read the Secretary’s submission with Mrs Cymerman and to answer questions as Mrs Cymerman’s first language is not English.  I had read all of the documents prior to the commencement of the hearing.

THE ISSUE

1. There was no disagreement between the parties that Mrs Cymerman had been overpaid Age Pension during the period from 1 October, 1997 to 5 November, 2002.  The only issue in dispute was whether the resulting debt of $2,108.71 owed by Mrs Cymerman as a consequence should be waived in whole or in part.

BACKGROUND

The payment of Age Pension to Mrs Cymerman

1. Mrs Cymerman was born in the Netherlands on 2 January, 1930 and has lived in Australia for many years. Since 10 July, 1986, she has been in receipt of an Age Pension. Since its introduction on 1 July, 1991, s. 43 of the Social Security Act 1991 (“Act”) has set out the criteria that a person must meet in order to be qualified to receive an Age Pension.  Throughout the period in issue in this case from 11 January, 1996 to 5 November, 2002 there is no question that Mrs Cymerman has met those criteria.

1. The Bilateral Agreement signed on 4 January, 1991 enabled periods of residence in Australia to be counted as contributions to the pension scheme in the Netherlands.  The Department prepared a package to assist Australian residents to claim a Dutch pension.  It stated that it would assist them by helping them to provide the necessary evidence and sending the applications to the Sociale Verzekeringsbank in the Netherlands.  Whether or not they were entitled to a Dutch pension, the Department stated, was a matter for the authorities in the Netherlands.

1. Mrs Cymerman made a claim for a pension from the Netherlands and submitted it through the Department.  The Department acknowledged its receipt in a letter dated 16 January, 1995 and said that it had sent it to the Netherlands on the same day.  This was included in the documents submitted by Mrs Cymerman.  Although not written in English, it appears from the three letters written to Mrs Cymerman from the Sociale Verzekeringsbank that there was an exchange between them regarding her application.  Her application was successful and, from August, 1995, Mrs Cymerman began to receive a pension from the Netherlands.  Her Age Pension was reduced to take account of her income from the Netherlands.  At that time, it was 475.38 guilders per month.

1. In a letter written to her by the Department on 1 November, 1995 (T documents, pages 19-21), it advised her that her pension would be $288.10 per fortnight starting from 16 November, 1995 with arrears of $6.00.  She was advised that her pension had been increased because of a change in her circumstances and also asked to:

“Please read the back of this letter.  It tells you about your Social Security rights and what you have to tell us.” (T documents, page 19)

1. Set out on the back of the letter was a summary of her Combined Yearly Income comprising her overseas income of $4,735.00 and bank interest of $466.00.  The letter went on to say, in part, that:

“Under sections 68 and 69 of the Social Security Act 1991 you must tell us within 14 days … if any of these things happen, or may happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices.

Income
If your income, not including maintenance, is more than $100.01 per week;

…” (T documents, page 20) 

1. A similar letter was written to Mrs Cymerman on 11 January, 1996.  It advised a small increase in her pension and, although she did not include a copy of the back of the letter, I am satisfied that it would have contained the same sort of information as the earlier letter.  This is based on its front page following the same format as the earlier letter and its referring to the information on its back. 

1. A further letter written by the Department to Mrs Cymerman on 29 October, 1996 was written in similar terms.  It advised her that her Age Pension would be $307.50 per fortnight starting from 14 November, 1996.  She was advised that her pension had changed because of a change in her circumstances.  Again the letter adopted the same format as the earlier letters and directed her attention to its back.  It set out her income including her overseas pension of $4,735.15 and told her that:

“Under sections 68 and 69 of the Social Security Act you must tell us within 14 days … if any of these things happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices.

Income
if your income, not including from financial investments or maintenance increases,
if your income as shown above is incorrect;

…”

1. Over the years following 1995, Mrs Cymerman’s pension from the Netherlands was indexed and adjusted each six months.  Although aware of the increase, she did not advise the Department of it as she assumed that the Netherlands would advise the Department of it.  The Department did not check whether persons were advising any changes in the rate of their Netherlands pensions until July, 2002.  Acting under authority given by the Department, Centrelink carried out a data matching exercise for all recipients of Dutch pensions.  As part of that exercise, it noted that Mrs Cymerman had not advised of the increases in the pension she had received from the Netherlands.  Her rate of Age Pension was recalculated and a debt raised.

The calculation of the rate of the Age Pension payable

1. The rate at which Age Pension is payable to a person who is not permanently blind is worked out using Pension Rate Calculator A (“the Rate Calculator”) at the end of s. 1064 (s. 55(a)).  The Rate Calculator sets out eight steps that must be followed.  The eight steps follow the path summarised in s. 1062(1) as the usual path in calculating the rate of a pension:

“(a)   start with a maximum basic rate;

(b)add any additional amounts that are subject to income or assets testing;

(c)apply the income and assets tests;

(d)add any additional amounts that are not subject to income or assets testing.”

1. Under the Rate Calculator, the income test is known as “the ordinary income test” and is set out in Module E at the end of s. 1064.  The assets test is set out in Module G, which is also at the end of s. 1064.  In the case of the ordinary income test, the first step is to work out the person’s ordinary income.  A person’s ordinary income:

“… for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 2 or 3.” (s. 1072)

Division 2 and Division 3 are references to those Divisions in Part 3.10.  Division 2 is concerned with the conversion of foreign currency amounts and Division 3 with the disposal of ordinary income.  In the case of Division 2, there is no suggestion that calculations have not been made in accordance with its provisions.  There is no suggestion that Division 3 is relevant.

1. The word “income” is defined in s. 8 of the Act in relation to a person to mean:

“(a)   an income amount earned, derived or received by the person for the person’s own use or benefit; or

(b)a periodical payment by way of gift or allowance; or

(c)a periodical benefit by way of gift or allowance;

but does not include an amount that is excluded under subsection (4), (5) or (8);”

Sections 8(4) and (5) are concerned with home equity conversion and they are not relevant.  Section 8(8) is concerned with a person’s payments under the Act and his or her return under a superannuation fund, an approved deposit fund, a deferred annuity or an Australian Taxation Office small superannuation account as well as certain other payments. None of those other payments includes a reference to a pension received from the Netherlands. Consequently, for the purpose of calculating Mrs Cymerman’s income, her pension from the Netherlands had to be taken into account.

1. There was no dispute between the parties at the hearing in the Tribunal that the overpayment of Age Pension to Mrs Cymerman during the period in question has been correctly calculated.

A person’s obligation to notify of changes in circumstances

1. Up until its repeal by the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001 (s. 3, Schedule 1, item 17) with effect from 1 July, 2001, s. 68(1) of the Act provided that:

“The Secretary may give a person to whom an age pension is being paid a notice that requires the person to inform the Department if:

(a)a specified event or change of circumstances occurs; or

(b)the person becomes aware that a specified event or change of circumstances is likely to occur.”

1. The notice must be in writing, be given personally or by post, specify how the person is to give the information to DSS and the period within which he or she is required to do so and specify that the notice is a recipient notification notice given under the Act (s. 68(3)). The Secretary may give a similar notice to the recipient of an Age Pension requiring him or her “… to give the Department a statement about a matter that might affect the payment of the pension to the person” (ss. 69(1) and (2)).

1. The notice on the backs of each of the Department’s letters notifying Mrs Cymerman of the rate of payment of her Age Pension complied with each of these requirements other than to state that they were recipient notification notices. Each did, however, state that she was obliged to notify the Department of the matters it specified and that she was obliged to do so under ss. 68 and 69. In view of the provisions of ss. 68(3A) and 69(2A) that a notice is not invalid merely because it fails to state that it is a recipient notification notice, I find that the notices were validly given in each letter. 

1. With its introduction from 20 March, 2000, s. 68(2) of the Social Security (Administration) Act 1999 gave the Secretary the same power to issue a notice to a person in Mrs Cymerman’s circumstances as he had under s. 68(1) of the Act. Although there are no copies of letters sent to her in the period from 20 March, 2000, I am satisfied that any letter sent to her regarding her rate of payment of Age Pension would have contained such a notice. I have reached that view on the basis of the previous letters sent to her and what I know of the Secretary’s usual practice. If there were no letters sent to her in that period, the notice that she was sent under s. 68(1) would continue to have effect.

1. Each of the notices to which I have referred required Mrs Cymerman to tell the Department within 14 days if her combined income shown on each of the letters was not correct. That was an event that might affect the payment of the Age Pension to her as it was a matter taken into account under the Rate Calculator in calculating the amount of Age Pension she was paid. It was, therefore, an event of the sort referred to in s. 68 and a matter of the sort referred to in s. 69. Mrs Cymerman, as I have already found, did not advise the Department that the amount of her pension from the Netherlands had changed. That meant that the amount of her combined income as shown in each of the letters did not accurately reflect her combined income. It follows that Mrs Cymerman was in breach of both ss. 68 and 69 and so failed to comply with the notice.  I am satisfied that she did not ignore the notices deliberately in order to gain a greater amount of pension than that to which she was entitled but whether she failed to comply with their requirements knowingly or unknowingly or innocently or fraudulently is irrelevant.

Does Mrs Cymerman owe a debt?

1. An amount paid to Mrs Cymerman as an Age Pension is a “social security payment” within the meaning of the Act (s. 23).  As a social security payment and in the circumstances of this case, the amount paid only becomes a debt that she owes to the Commonwealth and so must repay to the Commonwealth if:

“(a)   a provision of this Act, the 1947 Act or the Data-matching Program (Assistance and Tax) Act 1990 expressly provided that it was or expressly provides that it is, as the case may be; or;

(b)…

Note 1: for the provisions of this Act that create debts due to the Commonwealth see sections 1135, 1223, 1223AA, 1223AB, 1223A, 1223B, 1224, 1224AA, 1224B, 1224C, 1224D, 1224E, 1225, 1226, 1226A, 1229 and 1229A.

Note 2: paragraph 1222A (b) covers some debts under the 1947 Act which arose from amounts that stopped being paid to a person before 1 January 1991.” (s. 1222A)

1. Two sections of the Act are relevant in this case: ss. 1223 and 1224(1). Taking first s. 1224(1), it provides that:

“If:

(a)an amount has been paid to a recipient by way of social security payment; and

(b)the amount was paid because the recipient or another person:

(i)made a false statement or a false representation; or

(ii)failed or omitted to comply with a provision of this Act or the 1947 Act;

the amount so paid is a debt due by the recipient to the Commonwealth.”

1. I am satisfied that Mrs Cymerman failed or omitted to comply with a provision of the Act when she failed or omitted to advise the Secretary, through Centrelink, of the changes in her pension from the Netherlands. That was an omission to comply with ss. 68 and 69 of the Act leading to her being paid an amount of Age Pension that she would not have otherwise been paid. Consequently, a debt arises under s. 1224 of the Act.

1. Section 1223 is the other relevant section of the Act. It has been amended during the period with which I am concerned. As at 1 October, 1997, s. 1223(1) provided, in so far as it is relevant, that:

“… if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:

(a)…; or

(b)the amount was not payable to the recipient;

the amount so paid is a debt due to the Commonwealth.”

The section was subject to a minor amendment with effect from 8 July, 1999 as a result of the A New Tax System (Family Assistance)(Consequential and Related Measures) Act (No. 2) 1999 (s. 3, Schedule 1, item 142) but the amendment is not relevant in the circumstances of this case.  It was further amended with effect from the same day as a result of the Youth Allowance Consolidation Act 2000 (s. 3, Schedule 1, item 11) but again it is not relevant in this case.  Section 1223(1) was repealed and the following provision substituted with effect from 1 July, 2001:

“… if:

(a)a social security payment is made; and

(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment..” (inserted by Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001, s. 3 and Schedule 1, item 7)

1. At all times, Mrs Cymerman was qualified to receive Age Pension. In view of the amount of pension that she received from the Netherlands, however, it was not always payable at the rate at which it was paid to her. She was not entitled to obtain it at that rate. This has been agreed. In relation to those fortnights occurring after 1 October, 1997 when she was paid too much Age Pension as a result, the amounts over paid to her are a debt under s. 1223(1) of the Act in any of the forms in which it was drafted from 1 October, 1997 until 5 November, 2002.

1. From 1 October, 1997 until its repeal with effect from 1 July, 2001 (Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001, s. 3 and Schedule 1, item 8), s. 1223(5) provided that:

   “If:

   (a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and

   (b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person under this Act;

   the difference between the received amount and the correct amount is a debt due to the Commonwealth.”

Even though I have already found that the amounts overpaid in this period are a debt pursuant to s. 1223(1), they are also a debt under this provision in so far as the period 1 October, 1997 to 30 June, 2001 is concerned.  It follows that I have concluded that the amounts that she received but to which she was not entitled are a debt to the Commonwealth.

Should the debt be waived?

1. The Secretary may waive the Commonwealth’s right to recover the whole or part of a debt from a person only in the circumstances set out in ss. 1237A 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD of the Act (s. 1237(1)). Only two sections are relevant in this case. The first is s. 1237A of the Act and it provides that, subject to a qualification that is not relevant in this case:

“… 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.”

1. In an unreported decision of Gerhardt and Department Employment, Education and Training (AAT 10941, 17 May 1996), I considered the meaning of “solely” as it formerly appeared in s. 289(1) of the Student and Youth Assistance Act 1973. That sub-section was in terms similar to s. 1237A(1) of the Act and a submission had been made that the word “solely” did not mean that the error had been made exclusively by the Commonwealth.  After reviewing the authorities, I concluded that the word “solely” meant “exclusively”, “only” or “to the exclusion of all else”.  There is no substantive difference between s. 289(1) of the Student and Youth Assistance Act 1973 and s. 1237A(1) of the Act. Consequently, I have taken the same view in relation to s. 1237A(1).  This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error.  It makes no difference that those other errors or factors are minor.  If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.

1. The same concepts were more eloquently explained by Selway J in Sekhon v Secretary, Department of Family and Community Services (2003) 37 AAR 468 (Heerey and Selway JJ, RD Nicholson J dissenting):

“       The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event.  The word ‘attributable’ means ‘capable of being attributed’.  It involves an objective assessment of causation.  The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.  An example of this ordinary use of the equivalent phrase ‘solely attributable to’ can be seen, for example, in Jahazi v Minister for Immigration and Ethnic Affairs (1995) 61 FCR 293 at 299-300 where the Court said:

‘...whether a particular causal connection between persecution and membership of a group attracts Convention protection will be resolved not merely by the logic of causality but as a matter of evaluation which has regard to the policy of the Convention.  While it is not necessary that the fear of persecution be solely attributable to membership of a relevant social group, a decision-maker can have regard to the extent to which membership of the relevant group is a factor in the risk of persecution.’ (Emphasis added)

This is the meaning of the phrase which the primary judge purported to adopt and apply. He drew attention to the fact that the decision to issue the notice was a discretionary decision. This necessarily means that there was more involved in that decision than merely identifying that the pre-conditions for making it had been met. Although there was no evidence before either the AAT or the primary judge identifying the reasons for that discretionary decision, nevertheless the primary judge was correct to conclude that ‘the giving of the notice was not itself an administrative error’, or at least there was no evidence that it was. Implicit within this conclusion is an acceptance by the primary judge not only that the legal pre-conditions for the issue of the notice were present, but also that there was no administrative error in respect of the policy considerations involved in that discretionary decision. Plainly enough the respondents have concluded not only that the pre-conditions specified in s 1166 of the Act have been met, but also that as a matter of policy the debt should be recovered from the appellant.

The appellant says that this approach is in error. The appellant says that the approach has the result that s 1237A has no work to do. If the creation of a debt under s 1166 can be viewed as a relevant ‘cause’ for the purposes of s 1237A then s 1237A will never have any operation because the existence of the debt is a pre-condition for the operation of that section. This is obviously correct. It was so held in a similar context in Dranichnikov v Centrelink [2003] 53 ATR 270 at 283 [61]. But the primary judge did not make this error. He did not hold that it was sufficient that the Commonwealth had created a debt and this was its purpose. As already noted the primary judge looked behind the issue of the notice under s 1166. That is the significance of his finding that ‘the giving of the notice...was not an administrative error’. So far as is known there was nothing inadvertent or mistaken about the exercise of the discretion to issue the notice under s 1166 of the Act. There was no obligation under the Act to recover any amount from anyone. A policy decision was made to recover moneys from the appellant. Certainly the background to that decision was that moneys could not be recovered from the insurer because of an administrative error. But that does not mean that the discretionary decision was attributable solely to that error. There was necessarily another consideration. Should the debt be recovered from the appellant? That decision was yes. Given that s 1166 of the Act gives a discretion the considerations in relation to that decision (assuming it to be valid) were necessarily more extensive than the fact that the pre-conditions had been complied with and that the debt could not be recovered from the insurer. It required the consideration of matters of policy. There is no suggestion that those matters of policy involved any administrative error. Indeed the matters of policy would not seem to have been identified before the AAT. But the fact that those matters of policy were necessarily considered means that the resulting debt was not ‘attributed solely’ to administrative error. …” (pages 476-478)

1. Applying these principles, the overpayment of Age Pension cannot objectively be said to have been caused only by an administrative error. Certainly, it might be thought that the Department or Centrelink has not at any stage audited the information upon which it relied. It might be thought that the fact that there was no change in the Dutch pension paid to some recipients but not to others (who did notify of the variations in its rate of payment) should have triggered its making some enquiries. No audit and no enquiries might certainly be regarded as a cause of the Secretary’s relying on the incorrect information. They were not, however, the only cause in this case. The Secretary had asked Mrs Cymerman to advise him of changes in her income. It was clear from the notices that her pension from the Netherlands was regarded as income. Mrs Cymerman did not notify him of the changes in the rate of its payment. Her failure or omission was also a cause of the overpayment. Therefore, the overpayment and so debt cannot be said to be attributable solely to an administrative error by the Secretary or by Centrelink and so by the Commonwealth. In view of that conclusion, there is no need to consider whether or not Mrs Cymerman received the overpayment in good faith, which is the second requirement of s. 1237A(1).  The debt may not be waived pursuant to that section as she does not satisfy the first of its requirements.

1. The second section under which I need to consider whether or not the debt may by waived is s. 1237AAD, which provides:

“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 makes it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.”

1. I am satisfied that Mrs Cymerman satisfies the requirements of s. 1237AAD in that the debt did not result wholly or partly from Mrs Cymerman’s knowingly (or unknowingly) making a false statement or representation. Furthermore, I am satisfied that she did not knowingly fail or omit to comply with a provision of the Act even though she failed or omitted to do so. In reaching this conclusion, I adopt the view that I took in Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435 when I said:

“(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.” (page 445)

I explained my reasons for that decision further in Re Jonauskas and Secretary, Department of Family and Community Services (2001) 65 ALD 553 at 570-572.

1. The debt may only be waived if the second aspect of s. 1237AAD is also satisfied.  That is that there are special circumstances that make it desirable to waive.  The expression, “special circumstances”, has been considered in the past.  I have had regard first to the words of the Full Court of the Federal Court when it said that it is not “... possible to lay down precise limits or precise rules.” (Beadle v Director-General of Social Security (1985) 60 ALR 225 (Bowen CJ, Fisher and Lockhart JJ)). Of the expression “special circumstances”, it has been said by Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 that:

“… although imprecise [it] is sufficiently understood not to require judicial gloss: Beadle’s case [(1985) 60 ALR 225, 7 ALD 670] (at ALR 229; ALD 674), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s 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.” (page 545)

More recently, the expression was considered again by Kiefel J in a different context in Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67, (2002) 68 ALD 357. Her Honour adopted similar principles and considered their application in the context of determining the length of a preclusion period when a person has received a compensation payment. In doing so, she clearly referred not only to the circumstances of the individual affected by the preclusion provisions of the Act but to the effect that those preclusion provisions were intended to achieve and the consequences for every person who was affected by them. Having regard to all of the circumstances, would the result be one that is unfair, unintended or unjust so that the circumstances may be described as special?

1. In this case, the provisions of the Act are clearly intended to characterise as debts owed to the Commonwealth amounts of Commonwealth money paid to a person who was not entitled to receive them regardless of whether that person received them in good faith or not. The objective is to recover those debts but latitude is allowed if there are special circumstances. In this case, therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s. 1237AAD of the Act.

1. I decided that Mrs Cymerman’s circumstances were special but only to an extent that justified my waiving the sum of $800 of the debt. In reaching that conclusion, I took into account the lengthy period of time that it took the Department or Centrelink to realise that it was not using the correct information in making its payments of Age Pension to some of the recipients of a pension from the Netherlands. In not carrying out any audit or check for almost seven years, it contributed to Mrs Cymerman’s thinking that she was being paid on a proper basis and that she had fulfilled its requirements. On the other side of the coin, though, despite Mrs Cymerman’s views that the Department or Centrelink should have kept abreast of the changes in her Dutch pension, neither was under an obligation to do so. There was no obligation under the Bilateral Agreement and none under the Act. Mrs Cymerman was the person who was under an obligation as a result of the Secretary’s having asked her to advise of changes in her income, including her Dutch pension. Some 17,000 recipients of Dutch pensions had been asked to do the same and, of these, some 15,000 had complied with their obligations. Although only 12% of the recipients did not comply, 2,000 is still a significant number of people. That in itself would not be enough to say that Mrs Cymerman, as one of the 2,000, is in special circumstances. When combined with her age, her history of poor health and the anxiety that she feels she has suffered as a result of the overpayment, though, they may be regarded as special circumstances in so far as a portion of the debt is concerned. Taking into account all of the matters raised at the hearing, I decided that her circumstances were special circumstances to the extent that an amount of $800.00 of the debt should be waived.

1. For the reasons I have given, I decide that:

   1.the decision of the  Social Security Appeals Tribunal dated 28 April, 2003 to raise and recover an age pension debt of $2,108.71 from the period 11 January, 1996 to 5 November, 2002 be varied in so far as:

   a.the sum of $800.00 of the debt is waived; and

   2.the decision is otherwise affirmed.

I certify that the thirty-seven preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie

Signed:           ..(sgd. P. Paczkowski).............................

P. Paczkowski  Associate

Date of Hearing  20 November, 2003
Date of Decision  20 November, 2003
Date of Written Reasons              16 January, 2004
For the Applicant  self

For the Respondent  Ms A. Pugsley, advocate

The Service Recovery Team, Centrelink