DEBRA GROVE and SECRETARY , DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2009] AATA 502
•3 July 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 502
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/3329
GENERAL ADMINISTRATIVE DIVISION ) Re DEBRA GROVE Applicant
And
SECRETARY , DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date3 July 2009
PlaceSydney
Decision
The decision under review is set aside and instead the Tribunal decides that the debt owed by Mrs Grove to the Commonwealth in respect of the period from 28 March 2006 to 25 April 2007 should be waived.
...................[sgd]...........................
Ms N Isenberg
Senior Member
CATCHWORDS:
SOCIAL SECURITY -– parenting payment single -– debt due to the Commonwealth -– quantum of debt -– whether debt should be waived -– “special circumstances” -– decision under review is set aside.
RELEVANT ACT/S:
Social Security Act 1991 (Cth) – ss 1223(1), 1236(1A), 1237A, 1237A(1), 1237AAD
Social Security (Administration) Act 1999 (Cth) – ss 68
CITATIONS:
Jazazievska v Secretary, Department of Family and Community Services (2000) 64 ALD 42
Saunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693
REASONS FOR DECISION
3 July 2009 Ms N Isenberg, Senior Member DECISION UNDER REVIEW
1. The decision made by the Social Security Appeals Tribunal (SSAT) on 18 June 2008 to set aside the decision made by a Centrelink Authorised Review Officer on 10 October 2007 to recover a parenting payment (single), (PPS) debt from Mrs Grove totalling $15,469.47 for the period 24 February 2006 to 25 April 2007, and to substitute a new decision that there was a PPS debt totalling $15,469.47 for that period, but the debt for the period between 26 April 2006 to 17 October 2006 was to be waived under section 1237A of the Social Security Act 1991 (Cth) (“the Act”). The effect of the decision was to reduce the debt to $9,125.92 for the period 18 October 2006 to 25 April 2007.
ISSUE BEFORE THE TRIBUNAL
2. The issues before the Tribunal in this matter are:
(i) Whether Mrs Grove was overpaid PPS?
(ii) If so, whether this is a debt owed by Mrs Grove to the Commonwealth; and
(iii) If so, whether all or part of the recovery of this debt should be waived because of administrative error or because of special circumstances?
3. Mrs Grove did not dispute the amount of the debt, contending only that there were grounds for it not to be recovered.
4. Centrelink conceded that Mrs Grove’s PPS debt in respect of the period 26 April 2006 to 17 October 2006 was solely attributable to its error, as had been found by the SSAT. It contended though that there is no reason to waive the Commonwealth’s right to recover any part of the debt of $9,125.92 arising from the periods 24 February 2006 to 25 April 2006 and 18 October 2006 to 25 April 2007.
LEGISLATION
5. The relevant legislation in this matter is sections 1237A and 1237AAD of the Act.
THE EVIDENCE
Mrs Grove’s dealings with Centrelink
6. On 24 February 2006 Mrs Grove contacted Centrelink to enquire about claiming PPS. She said she discussed her circumstances with the Centrelink officer, namely that she was on compensation, her income was about $38,000, and that her husband, who had moved interstate and was not working, was no longer paying child support for their son. She said she was told that she would need to come in for an appointment and to bring with her, amongst other things, three payslips. The Centrelink file note records that she had recently stopped working. Centrelink wrote to her noting that she had said she would provide details about her compensation claim, and also that she had no other source of income.
7. Mrs Grove said that her employer’s procedure was that payslips were printed out by individuals at work, and as she was not at work, she did not have any payslips. She therefore arranged for her pay officer to have payslips sent to her at home. She produced an email from the pay clerk requesting future pay slips be sent to Mrs Grove at her home.
8. On 8 March 2006, Mrs Grove attended an appointment at Lake Haven Centrelink office but was unable to produce the payslips at that time because they had not yet been received, although she believed she provided them two days later. Centrelink has no record of receiving the payslips.
9. At the appointment on 8 March 2006, she completed a “Customer Declaration Form Parenting Payment – single” form. She indicated that she was not working, had no other income, that she would provide details and verification of any compensation claim. She also completed a “Compensation and Damages” form, advising that she had received regular compensation payments of $512.00 per week. Although, she did not answer the question “Have these payments stopped?” she did indicate that she was pursuing a claim for regular compensation payments. She said she told the Centrelink officer the details of the insurer at that time. In Centrelink’s records, in respect of Mrs Grove’s claim for Family Tax Benefit, (“FTB”) there was a notation dated 14 March 2006, that she told Centrelink she had a compensation claim, that she was pursuing regular payments and that the insurer was Allianz. On 16 March 2006, again in relation to FTB, it was recorded that Centrelink was ”waiting compo clearance.”
10. On 24 March 2006, a Centrelink computer file note records that a Centrelink officer spoke to a representative of Allianz insurance, who advised that no weekly compensation or lump sum compensation had been paid to Mrs Grove. The only likely explanation, it was agreed, is that Mrs Grove was ‘paid’ by her employer who was in turn ‘reimbursed’ by the insurer.
11. Mrs Grove provided to Centrelink a copy of a letter – date stamped as received by Centrelink on 28 March 2006 - from the insurer to Mrs Grove. The letter included her claim number and also the details of her employer’s payroll clerk.
12. At about the same time Mrs Grove was having discussions with the Child Support Agency (CSA). She produced a CSA assessment dated 30 March 2006, wherein she had reported an income of $40,112. She said that she knew the CSA would pass the information onto Centrelink and in fact had chased them to do so.
13. On 27 March 2006, Centrelink sent an information notice under sub-section 68(2) of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”) to Mrs Grove advising her of the grant of PPS backdated to 24 February 2006. The notice advised that the annual income amount used to calculate her rate of payment was $12.00, and that she must tell Centrelink within 14 days if her income (which included compensation) increased. Notices in the same terms were sent to her on 6 April 2006 and 12 April 2006. Mrs Grove said that she may not have received the letters or, if she did, may not have read them fully. In any event, she said, she had already told Centrelink about being on compensation several times and what her earnings were, and there was no “increase.”
14. Mrs Grove said that she had not previously received PPS and she thought she was entitled to the $500 or so that she started receiving. She was encouraged in this view because the Centrelink officer with whom she spoke to was also a single parent undertaking full-time work and had two children and she still had an entitlement to PPS.
15. On 26 April 2006, a Centrelink officer apparently spoke with Mrs Grove about registering as a jobseeker. It was recorded that Mrs Grove was on workers compensation. On 30 September 2006, Centrelink records note “compensation claim pending.”
16. Mrs Grove thought that in about September 2006, she received notification from Centrelink about a debt of about $13,000.00. She contacted Centrelink immediately and was told it was as a result of a breakdown in communication between the insurer and Centrelink and that she was not to worry about it. When she heard nothing further, she assumed the problem had been resolved. The Centrelink file however shows no debt having been raised at that time. The Centrelink representative noted, however, that Mrs Grove had a FTB debt which notionally arose pending reconciliation with Mrs Grove’s tax returns which had not been lodged, and this may be to what Mrs Grove was referring.
17. On 17 October 2006, Centrelink file records noted that Mrs Grove was on workers compensation. Attempts were made to contact her by phone but when she could not be reached, she was sent a letter asking her to contact Centrelink within 14 days. In response, she attended for an interview on 15 November 2006, at which time a “Parenting Payment Service Update” form was completed. On that form there is no entry in response to the question, in Part E regarding Right Rate – Employment, “What amount do you receive per week (before tax and other deductions) and what are the number of hours worked per week?” In response to question 62, “Do you … receive, or have you … ever been paid, compensation or damages?”, “Yes” is ticked, indicating an intention to get compensation. The words “Details on system” were hand-written, presumably by Mrs Grove. Centrelink did not appear to have followed this up.
18. On 27 April 2007, Mrs Grove attended an appointment at Wyong Centrelink, where she again advised that she was in receipt of compensation. When Centrelink updated Mrs Grove’s record to include income from wages and compensation her income was sufficiently high that her PPS payment was cancelled from 26 April 2007; in total she had had an entitlement to about $100 PPS.
19. It was not until June 2007, that Centrelink sought verification from Mrs Grove’s employer about her income.
Mrs Grove‘s circumstances
20. Mrs Grove said that she lives with her son in her own home, which she estimated to be valued at about $350,000. She has a mortgage of $220,000 which she pays at about $400 per week. She said that she got behind last year and had to draw down on her superannuation to meet the payments. Her household expenses are about $400 per week. She has a 10 year old car and no other assets and owes about $7,000 on a credit card.
21. She was given $1,500 fee relief from school fees last year, but is being pressed this year for the full payment of $4,000.
22. Her son suffers severe Attention Deficit Hyperactivity Disorder (ADHD) and “is a handful.” His condition has been recognised by Centrelink and she receives a carer’s allowance for him. His condition requires medication and he receives counselling at school and she has also paid for private counselling.
23. As to her own health, she remains on workers compensation, and is working four hours per week. She will soon commence a gradual return to 8 hours per week. Her back continues to trouble her and she has developed a neck problem for which she has another worker’s compensation claim. She also has a leg problem as a result of a childhood accident and this required hospitalisation again, last year and continues to be susceptible to flare ups. She has poor eyesight, notwithstanding wearing glasses.
CONSIDERATION OF EVIDENCE AND FINDINGS
Is there a recoverable debt?
24. There was no dispute that Mrs Grove had been paid more PPS, than that to which she was entitled.
Should the debt be recovered?
25. The Act makes provision in limited circumstances for debts not to be recovered. Pursuant to s 1236(1A) of the Act a debt may be written-off in very specific circumstances, only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
None of the above apply to Mrs Grove.
26. A debt may be waived under s 1237A(1):
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.
27. For a debt to be waived under section 1237A of the Act, two conditions must be met, namely that the debt arose solely because of “administrative error” and, secondly, payments were received by the debtor in “good faith”. In the Department’s Statement of Facts and Contentions, Centrelink accepted that Mrs Grove had received the payments in good faith, although submitted at the hearing that Mrs Grove had failed to thoroughly read the notices it had provided thereby turning a ‘blind eye’ and that she should have made enquiries: See Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424.
28. Centrelink conceded that the payments to Mrs Grove during the period 26 April 2006 to 17 October 2006 were solely attributable to its error, as found by the SSAT. However, in coming to its view, the SSAT had proceeded on the basis that after the insurer, on 24 March 2006, had denied that Mrs Grove was receiving workers compensation the first indication that Centrelink had that Mrs Grove was receiving workers compensation, was in the phone conversation of 26 April 2006, and that she next mentioned it on 17 October 2006, in another telephone call. In fact, Mrs Grove provided Centrelink with full details of her workers compensation claim and pay contact on 28 March 2006.
29. On 30 March 2006, she had reported an income of $40,112 to the CSA who would pass the information onto Centrelink. Also, on 30 September 2006 Centrelink records note “compensation claim pending”. Further, when she again referred to receiving workers compensation in November 2006, Centrelink does not appear to have followed that up.
30. I agree with the view of the SSAT that Mrs Grove should have responded to the letters she had been sent which informed her that Centrelink was proceeding on the basis that her annual income (from whatever source) was only $12.00 (That in itself was clearly an error by Centrelink.) Had she specifically questioned that at that stage then the overpayment may not have gone on for so long. However, when Mrs Grove provided the insurer’s details on 28 March 2006, she had, in my view, clearly addressed the obligation to which the letters related. Cross-referenced with her initial advice of receiving $512 per fortnight by way of workers compensation – although this was the net rather than gross amount - Centrelink had available to it sufficient information to be able to enquire so as to satisfy itself of Mrs Grove’s entitlement; but it did not do so. Further, on 30 March 2006, she had provided the CSA with a full estimate of her income, in anticipation that the information would be provided to Centrelink.
31. I find no logic in the SSAT having ceased the waiver period on 17 October 2006. It noted that Centrelink “probably has responsibility for the bulk of the debt after this time”. It came to its view that Centrelink was not solely responsible for the debt on the basis of Mrs Grove’s delay in contacting Centrelink in response to its letter of 17 October 2006 until 15 November 2006 “about care of her son, and not her income” and noting that when she did not respond within the 14 days specified in the letter. It was open to Centrelink to suspend her payments or to chase her further, but it did not do so. In fact, Mrs Grove went into Centrelink for an interview on 15 November 2006 where, once again, she discussed her workers compensation and referred Centrelink to her previous advice about it. Again, no enquiries were made by Centrelink to review Mrs Grove’s entitlements because of the compensation payments.
32. I therefore find, that the debt arising from payments made after 28 March 2006 arose solely from Centrelink’s error, and that the payments were received by Mrs Grove in good faith. Accordingly they also are to be waived.
Are there special circumstances why the remainder of the debt should be waived?
33. Section 1237AAD of the Act is a further provision that allows for waiver of debts in “special circumstances”:
(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, the Administration 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.
34. Centrelink conceded that Mrs Grove did not set out to mislead it. While it may have been helpful if she had responded to the letters, I accept that there was no evidence that Mrs Grove intentionally or deliberately failed to comply with her obligations. She had frequent contact with Centrelink and she consistently reported that she was on workers compensation and provided the insurer’s information and the pay officer’s details. Inadvertent or unintentional failure does not constitute "knowingly", even when an applicant knows he or she needs to notify: Re Saunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495.
35. What circumstances might be ‘special’ would depend upon the circumstances of each particular case: Beadle v Director-General of Social Security.(1994) 6 ALD 1 The term is "incapable of precise or exhaustive definition" (at p3). To be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special" (Beadle at p3): See also Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25.
36. Evidence was given about several aspects of her personal circumstances, which were said to be ‘special’: her consistency in telling Centrelink about her workers compensation and the stress that this matter has caused her; her own and her son’s ill health; and some financial constraints occasioned by receiving only 80% of her usual pay through workers compensation.
37. The fact remains that Mrs Grove received from Centrelink $15,469 more than she was entitled to over a 14 month period. I have already decided that for about 13 months of that time she was erroneously paid because of Centrelink’s sole error. It is inescapable, nonetheless, that she has received a large amount of taxpayers’ money to which she had no right. Taxpayers are entitled to expect that in the ordinary course money paid to Centrelink beneficiaries to which they are not entitled will be recovered: Secretary, Department of Social Security v Hales (1998) 82 FCR 154; Davy v Secretary, Department of Employment & Workplace Relations (2007) 94 ALD 693 at 716.
38. I do not think her circumstances are sufficiently special to attract the waiver provisions of s1223AAD in respect of the period 24 February 2006 to 27 March 2006.
DECISION
39. The decision under review is set aside and instead the Tribunal decides that the debt owed by Mrs Grove to the Commonwealth in respect of the period from 28 March 2006 to 25 April 2007 should be waived.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member.
Signed:..................[sgd]..................................................................
Renee Wallace, Associate
Date of Hearing 17 June 2009
Date of Decision 3 July 2009
Appearance for the Applicant Self-representedAdvocate for the Respondent Jennifer Maclean, Centrelink Legal Services
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