DENTON and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2011] AATA 351

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 351

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   2010/2862

GENERAL ADMINISTRATIVE DIVISION		)
Re		COURTNEY DENTON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS 

Respondent

DECISION

Tribunal M J Carstairs, Senior Member

Date25 May 2011

PlaceBundaberg

Decision The Tribunal sets aside the decision under review as it relates to the applicant’s debt of disability support pension for the period 4 August 2007 to 22 December 2009 (the period), and remits the matter to the respondent for recalculation of the amount of the debt, with the following directions, that in the period:

·Mr Denton was in a marriage-like relationship;

·Mr Denton was ineligible for rent assistance; and

·the part of the debt that was a payment of arrears of $2,470.53 made to Mr Denton on 3 March 2008 is waived on grounds of administrative error.

..............................................

Senior Member

SOCIAL SECURITY – disability support pension debt – rent assistance – applicant not paying “rent” as defined – debt must be recalculated

Disability support pension debt – whether marriage-like relationship – assessment of factors mandated in the legislation – whether period should be extended – decision affirmed

Disability support pension – income from employment – arrears payment made on basis of Centrelink error – payment received in good faith – waiver of part of the debt – recalculation of total debt required 

Social Security Act 1991 (Cth) s 4, 13, 1223, 1237A

Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287

Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484

Marei v Department of Employment and Workplace Relations [2007] FMCA 458

Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546

Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576

Secretary Department of Education, Employment, Training and Youth Affairs v Prince 152 ALR 127

Staunton-Smith v Secretary Department of Social Security (1991) 32 FCR 164

REASONS FOR DECISION

25 May 2011   M J Carstairs, Senior Member    

1.      Mr Courtney Denton has applied for review of a Centrelink decision that he has incurred a debt, the amount of which has varied from time to time.   The debt is said to result from Mr Denton receiving disability support pension at a higher rate than that to which he was entitled during the period 4 August 2007 to 22 December 2009 (the period).  

2.      Two reasons underpinned Centrelink’s decision that Mr Denton incurred this debt.  The first concerned an assessment of the effects of Mr Denton’s intermittent earnings on his rate of pension and the second related to whether Mr Denton was in a marriage-like relationship with Ms Melissa Sankey, the mother of his four children.  The answer to each inquiry affects the rate of pension payable to Mr Denton.  

ISSUES

3.        In the reasons which follow I will address the three issues that unfolded during the course of the hearing:

·whether Mr Denton was entitled to receive rent assistance;

·whether that part of the overall debt which was an arrears payment Centrelink made to Mr Denton on 3 March 2008, ($2,470.53[1]) should be waived on grounds of administrative error; and

·whether or not Mr Denton was in a marriage-like relationship with Ms Sankey.

[1]        According to the Respondent’s Statement of Facts and Contentions at paragraph 24. (Exhibit R3)

4.      The issue with rent assistance was new.  It had not been addressed in the Respondent’s Statement of Facts and Contentions as it had not formed part of decision-making to-date.  It only came into issue when Mr Denton gave oral evidence that he was moving his rented caravan during the period, taking it from one location to another around central Queensland to avoid paying site fees.  A further complication was Mr Denton’s early departure from the hearing; he had had enough and was refusing to answer further questions under cross-examination.  My concern was that it was only after Mr Denton left the hearing that Ms Karen Hamilton, who appeared for the respondent, articulated the question of his qualification for rent assistance.  The Tribunal was unsuccessful in its later efforts to resume the hearing by telephone.  Despite this, I must now bring the matter to finality, on all issues raised by the evidence.

5.      With reference to the three issues before me I have reached the following conclusions:

i.Mr Denton was not entitled to rent assistance at any time from August 2007 to December 2009;

ii.Mr Denton was in a marriage-like relationship with Ms Sankey during the period under review; and

iii.Mr Denton’s income from wages must be taken into account (Mr Denton has never contested that point).  However, in that assessment process Centrelink made an error and paid Mr Denton an arrears payment.  That part of the debt, identifiably attributable to that error, ought to be waived.

6.      In the result, the overall debt will need to be recalculated, a task remitted to Centrelink.

ENTITLEMENT TO RENT ASSISTANCE

7. Rent assistance is an add-on to a person’s social security payment, not a separate payment in its own right. A person has to be qualified for a social security pension or allowance and be paying “rent” as defined in s 13 of the Social Security Act 1991 (Cth) (“the Act”):

8. Section 13(2) of the Act provides:

Amounts are rent in relation to the person if

(a) the amounts are payable by the person…

(v) for the use of a site for:

(A) a caravan or other vehicle; or

(B) a structure;

occupied by the person as the person’s principal home.

9. The period where it now appears Mr Denton’s arrangements did not satisfy this requirement in the Act is some two and a half years during which Mr Denton says he rented a caravan from a person who Centrelink has been unable to identify. That is, Centrelink cannot confirm what Mr Denton has said about the arrangement. At the time, Mr Denton did not advise Centrelink that he was moving the van from place to place around central Queensland.

10.     As best can be identified from the documents, this phase of caravan living came immediately after Mr Denton ceased renting a house at Clairview, some distance north of Rockhampton, owned by Mrs Giose Zuglian.[2]  From the records of Mr Denton’s withdrawals attributable to rental payments, as well as Mrs Zuglian’s recollections (set out in her written statement), Mr Denton had paid rent to Mrs Zuglian from about February 2007 until early May 2007.  Mr Denton said that he then commenced renting a caravan having advertised for one in the “Handy Trader” magazine. His advertisement was answered by a person who gave what has turned out to be a false name, and a false residential address, there being no such address in the local Council records.  But Mr Denton maintains that he regularly paid the owner of the van, a truck driver, on a 4 or 6 weekly basis, meeting up with him at a service station when the driver was passing through Rockhampton.  Mr Denton did not keep any receipts and he said he had deleted the van owner’s phone number by the time Centrelink asked for some proof.

[2]        Exhibit R12

11. The problem here is not just the inherent unlikelihood of this account. The problem is that the Act makes plain that rent allowance is payable for the use of a site, not for the hire of a van moved about from place to place. Mr Denton acknowledged in his evidence that he ought to have told Centrelink that he was moving the van around, but did not.

12. As I see it, Centrelink would not have paid Mr Denton the rent allowance that he was paid in the period from mid-May 2007 to the end of December 2009, had all the details, as we know them to be, been provided to Centrelink. Mr Denton was not entitled to the payment of rent allowance. It means there is a debt under s 1223 of the Act which should be recovered from him. The debt amount must be re-calculated.

WAS MR DENTON A MEMBER OF A COUPLE?

13.     Centrelink has accepted that Ms Sankey and Mr Denton have had an on- again off-again relationship in the past and paid them accordingly.  (Ms Sankey met Mr Denton when she was twenty and she is now in her mid-thirties).  They appear to have let Centrelink know when they have been together and when not.[3]   Ms Sankey said in oral evidence that they get on for a while and then, due to Mr Denton’s ill temper, they simply do not.  It is clearly a volatile relationship; Mr Denton says he has “anger management” issues.  There was, indeed, enough evidence of such behaviour during the course of the hearing.  But Ms Sankey says he is a wonderful, very loving, attentive father.

[3]        Document ST33, p 267

14.     One prominent feature of the relationship between Mr Denton and Ms Sankey is that there are a large number of children of it.  Ms Sankey’s eldest, the child of an earlier relationship, is now eighteen.  He still lives at home and would have been part of the household during the relevant period.  The other children were born in January 1997; April 2002; August 2007; and July 2008.  The longevity of the relationship is immediately apparent from the span of birth dates of the offspring, as is the fact that two of these children were born during the period under review.

15.     Ms Hamilton urged not only that I should affirm the existing period for which Centrelink has decided this was a marriage-like relationship, but that I should backdate the period further.  In her submission, the period should commence from 18 November 2006, not 4 August 2007 which was the preferred start-date settled on by the authorised review officer, Ms Michelle Entong.  I will say that I considered Ms Entong’s written reasons an able and thoughtful exposition of the facts and the law, and I agree with her conclusions for changing the start-date to the later date.   I would not extend the period either for the following reasons.

16. There are a number of factors that the legislation requires be taken into account to assist in determining if two people are in a “marriage-like relationship.” The Act requires, at s 4(3), that decision-makers have regard to all the circumstances of the relationship including the following broad headings:

§  Financial aspects of the relationship;

§  Nature of the household;

§  Social aspects of the relationship;

§  Sexual relationship; and

§  Nature of their commitment to each other.

17.     The operation and interplay of these factors were considered in the Federal Court decision of Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546. French J (as he then was) described the task of assessing any relationship as requiring the decision-maker to have regard to their interpersonal relationship as a whole, not limited by the factors listed in s 4(3) but taking into account each of the matters identified by the statute. Section 4(3) contains several sub-headings, which give further reference points which a decision-maker should consider so that an overall picture of the relationship emerges.

18. His Honour’s observations of the test in the Act as expressed in Pelka were not new.  The Federal Court had earlier observed in Staunton-Smithv Secretary Department of Social Security (1991) 32 FCR 164:

The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators. The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.

It should, of course, be clearly understood that no Tribunal is required, in every case, to compile something in the nature of a checklist and then to proceed slavishly to comment on each item in the list. The personal circumstances of people vary substantially. The responsibility of the Tribunal is to extract from the evidence and other material that is before it those items of information that are properly classified as material to its deliberations. If the Tribunal performs that task it will only address those issues that are personal to the decision that is under review; it will then be able to state its findings on material questions of fact with appropriate references to the evidence or other material on which those findings were based.

19.     Given Ms Hamilton’s submission that a marriage-like relationship had resumed by November 2006 it is helpful to consider the facts at that time.  Partly the facts are as revealed by Mr Denton and Ms Sankey’s answers to forms completed for Centrelink assessments of the relationship.  Ms Sankey had last advised of a separation from Mr Denton in 2003.[4]  Mr Denton moved to Rockhampton in November 2006 and Ms Sankey promptly told Centrelink that “her ex-partner, Courtney Denton has moved from down south to Rockhampton and is currently residing” with her until he could find somewhere else to rent.  This information was repeated, by both of them, in separate “Assessment of Living Arrangements” forms.[5] 

[4]        Document ST1

[5]        Documents ST2 and ST3

20.     I would make the perhaps self-evident observation here, that Ms Sankey volunteering this information to Centrelink is consistent with honesty. 

21.     It seems that, indeed, matters did progress as both Mr Denton and Ms Sankey anticipated in these forms.  Mr Denton obtained separate rental accommodation, renting a house at Clairview in February 2007 (see paragraph 10 above).  I have no reason to doubt that Mr Denton was living there even though I accept that sometimes he would have been staying at Ms Sankey’s house in Rockhampton if it was convenient and better enabled him to see the children.  They acknowledge this themselves.  

22. It is true that Ms Sankey’s fourth child was born in August 2007 and one more child was born the following year – so the parties were engaging in a sexual relationship a fact they had not admitted to when they completed the forms referred to above. I can understand their reticence on such matters. However, in her oral evidence, Ms Sankey simply said that they have sex when they are getting on. Engaging in a sexual relationship is only one of a number of factors to take into account, as s 4(3) of the Act makes plain. I have referred above to the necessity to weigh all factors, for and against. I agree with the authorised review officer that in view of the separate living arrangements once Mr Denton had other accommodation, there was insufficient evidence suggesting a marriage-like relationship during the period which Ms Hamilton submitted should be included. I am satisfied that Ms Entong was correct with respect to that period.

23.     Focussing then on the relevant period, from 4 August 2007 to 22 December 2009, the fourth and fifth children were born, significantly, to my way of thinking, only eleven months apart.  At the end of the period, just before Christmas 2009, the couple advised Centrelink that they had resumed a marriage-like relationship.    

24. I had the advantage of oral evidence from Mr Denton and Ms Sankey. Despite Mr Denton’s amply demonstrated “short fuse” during the giving of his evidence, I considered that both he and Ms Sankey were attempting to give their honestly held views, at least when speaking of their perceptions of their relationship. Those views, of course, are only part of what must be taken into account when making an assessment under s 4(3). As Ms Sankey described in her evidence, it has been a rocky, non-ongoing relationship, characterised by its quite frequent and lengthy breaks. But at its heart there seems to be a very great commitment to five children, including, Ms Sankey’s eldest son to whom I have referred earlier.

25. Before turning to the analysis of the factors under s 4(3), I would comment that forefront in my mind, when deciding to affirm the decision was that I was not persuaded, after considering the evidence about Mr Denton’s supposed arrangements for renting the caravan, that Mr Denton was telling the truth about where he was living. His story about the van and about why he provided Ms Sankey’s address as his own simply did not gel. Mr Denton could not provide physical evidence about the caravan and his supposed peripatetic existence. On the other hand, the respondent produced copious bank records showing Mr Denton to be making regular withdrawals using auto-tellers located almost invariably in and around Rockhampton.[6]  The opportunity was lost to clarify any of these contentious matters when Mr Denton absented himself from the in-person hearing in Bundaberg and then failed to participate further in the telephone resumption of hearing.

[6]        Exhibit R13

26. Bearing those reservations in mind I now turn to the analysis of the factors set out in the s 4(3).

FINANCIAL RELATIONSHIP

27.     There was little to suggest joint ownership of assets and there was limited pooling of financial resources.  However, there was a Christmas Club bank account opened in joint names on 9 March 2007.  Mr Denton and Ms Sankey each gave evidence that this was intended to benefit the children.  Mr Denton said it would be available to Ms Sankey, but intended to benefit the children “should anything happen” to him.  Ms Sankey gave evidence, which I accept, that she never accessed the account.  In other respects their bank accounts were strictly separate. 

28.     Mr Denton acknowledged that he had spent just under $10,000 purchasing a vehicle for Ms Sankey because he had written off her car when it was uninsured.  This purchase had not been mentioned previously.

29.     As was pointed out in Marei v Department of Employment and Workplace Relations [2007] FMCA 458, where the financial affairs of people are quite simple, as indeed they are here, a pooling of financial resources, perhaps minor for persons with greater financial resources, may take on more prominence in the assessment of their financial matters. Having the joint bank account in this period indicates a step taken to pool a financial resource.

30.     Also, Mr Denton nominated Ms Sankey as his superannuation beneficiary.  Ms Sankey said in her oral evidence that she was unaware of this but that is immaterial.  Nominating a person as the beneficiary in such a significant matter points strongly towards there being a relationship; certainly one that is more than “friends”. 

31.     There was no evidence of sharing of household expenses in the period.  At times when Mr Denton has stayed with Ms Sankey she admitted she has not required him to make a financial contribution to the household.  I do not find that surprising, given their long-term relationship (however described) – one would not expect such payment between friends.  I do not regard that particular point as having much significance, as it is not an indicator of a financial relationship.

32.      The financial aspects such as they were (or known then to be), namely some combining on financial matters seen in the joint bank account, when that had not featured previously, and also in Mr Denton nominating Ms Sankey as beneficiary, tend slightly in favour of the relationship being marriage-like during the period. 

NATURE OF HOUSEHOLD

33.     Ms Sankey’s evidence was that they have been coming and going in each other’s lives since they first met, which was in 1995.  As to the period under review, she said that it was not unusual for Mr Denton to stay in the house if he was in Rockhampton during this time, so he could spend time with the children.  As to any matters of housework and the like, she indicated that even if he was staying at the house she did the household tasks because she has her own way of doing things. 

34.     It was part of Mr Denton’s case that he was not living at the house on any extended basis during this period.  I cannot make a positive finding on that matter.  But, equally, I do not accept his evidence that he was living in a caravan and moving about from place to place.

35.     Ms Sankey emphasised that she wants Mr Denton in her children’s lives, because he is kind and caring, and she said not ever moody and argumentative, as he is with her and with others.  So he was a welcome part of the household engaging in care of the children, whatever else can be said.

36.     On balance, I cannot make a positive finding that Mr Denton was part of the household (in the sense of living in it with the other members) in the period under review.  When he was present, the focus of his interest and engagement seems to have been with the children and not with Ms Sankey.  This focus on the children rather than the partner tends to point away from the relationship being marriage-like.  However, I am not at all confident about the amount of time that Mr Denton was present at Ms Sankey’s house because I do not accept that I was told the full extent of his involvement there.

SOCIAL ASPECTS OF RELATIONSHIP

37. The Act in this regard makes mention of whether the people hold themselves out as married. There were numerous instances of Mr Denton doing so for the purpose of completing forms related to his employment. He also nominated Ms Sankey as his next of kin, and gave her address as his own. Ms Sankey expressed surprise at his nominating her as his next of kin, although she was aware that he used her address for the same reasons as he advanced to me. Mr Denton said he had given her address because it looked better to the employer to be a local man. Also he said that he used Ms Sankey’s address as it saved him inconvenience if he moved; he could rely on her to keep anything that came.

38.     There were a few written statements from friends and neighbours that tended to support what Mr Denton and Ms Sankey said, that is, that people knew that Mr Denton was the father of the children, but that he came and went, and was not in a permanent, committed relationship with Ms Sankey.  Neither Mr Denton nor Ms Sankey spoke of particular other relationships within their families or with friends outside the family.  Ms Sankey said that she keeps to herself. 

39.     There was evidence that the social relationships are very much about the children.  This, it seems to me, is quite understandable given the commitment of time involved with caring for five children, especially two young babies in the period, and also the evident, admitted concern that each parent showed with respect to those children.  I did not get the impression that there was much of an “outside” or social face to the relationship.  What was engaged in was all to do with the children.  That said, Mr Denton and Ms Sankey acknowledged that birthdays and Christmas, as well as day trips to the beach were done together, as a family.   

SEXUAL RELATIONSHIP

40.     As already mentioned, there are four children of their relationship.  Ms Sankey said that she and Mr Denton are just friends who have sexual relations from time to time but only when they are getting on.  Two children were born in the period under review; the second child having been born quite some time prior, in April 2002.  Meantime, Mr Denton and Ms Sankey had broken up.  Ms Sankey had told Centrelink that she wanted another child and wanted the child to have the same father as the others.  

41.     This aspect of the relationship points to the relationship being marriage-like for the period.  It does so more particularly when Mr Denton and Ms Sankey acknowledged to Centrelink that they were partnered at the end of 2009. 

NATURE OF COMMITMENT TO EACH OTHER

42.     Ms Sankey said that Mr Denton is an excellent father who takes time with his children.  There is evidently much that brings them together and, equally, much that forces them apart again, seemingly because of Mr Denton’s volatile personality.  I note that they are not considered by Centrelink to be in a relationship at present suggesting that the pattern continues.

43.     It seems to me that in this relationship between Mr Denton and Ms Sankey, what stands out in the period is the birth of two children.  This was a conscious decision on Ms Sankey’s part, choosing Mr Denton again as the father.  It is only at this time that we see Mr Denton nominating Ms Sankey to employers as his next-of-kin and partner, and refer to her as his de-facto.  It is not unreasonable to take from this, as least on his part, that there was more to the relationship than simply friendship.  The parenting of children, especially when consciously thought out and planned, suggests a commitment to the future.  It binds people’s lives in shared responsibilities.  It seems to me that at least with reference to this period, these two people were hopefully taking on that shared responsibility and commitment to each other.  The element of emotional support is indicated by Mr Denton’s presence at the birth of the children in 2007 and 2008 respectively.  

OVERALL ASSESSMENT OF THE RELATIONSHIP

44.     Taking all matters together, those that point towards a marriage-like relationship and those that point away from it, I am satisfied that the relationship was marriage-like in the period under review.  It is true that on a longer term view, its history shows this to be a far from stable relationship.  But that very history has significance too as this was a relationship that had gone on for more than ten years, even though not continuously.  In that context, when these two people committed to parenting further children together, this seems to me to be a turning point when the relationship took on a different hue.  In other words, while their relationship may be attended by conflict and volatility from time to time, the fact that they have continued to maintain it, and rekindle it, points to commitment to each other.   Further support for this view comes from Mr Denton’s election to describe his relationship as de-facto.

45.     I consider that Centrelink made the right decision about what is admittedly a complex relationship.  Accordingly, I affirm that decision. 

ARREARS PAYMENT – ADMINISTRATIVE ERROR

46.     Part of the overall debt relates to the undercounting of Mr Denton’s earnings from intermittent employment in which he was engaged during the period under review.  Mr Denton did not dispute that he had incurred overpayments that related to his earnings as can easily happen when the person’s earnings are not regular, but variable fortnight to fortnight, and affected also by less predictable payments such as overtime.  That is, Mr Denton’s case does not involve any intentional mis-statement, on his part, concerning his earnings.  I am satisfied that he kept Centrelink advised when he started new employment and exercised his best efforts to estimate what he might earn.  It is in that context that events surrounding Mr Denton’s employment between November 2007 and February 2008, with Greyhound Bus Company, are to be viewed.  But the subject payment – the arrears payment – was paid in March 2008, after that employment came to an end.

47.     By way of general background, Mr Denton said that he went to Centrelink when he got the job as a driver at Greyhound hoping to have his disability support pension cancelled, but it was merely suspended.  There are often good reasons to suspend rather than cancel a pension, so there is no problem with that action in this case.  Indeed, as events transpired, when Mr Denton lost the employment some 3 months later, his pension having only been suspended, not cancelled, made its reinstatement a more straightforward process. 

48.     During his visit to Centrelink, Mr Denton advised that he expected to be paid $750 per week at Greyhound.  His earnings, however proved to be a rather more than that.  Mr Denton does not dispute that he earned some $19,520 while with Greyhound.[7]  In the ordinary course this was likely to lead to him incurring an overpayment.

[7]        Document T11 at p 74.

49.     The redundancy came about when Greyhound lost one of their North Queensland contracts.  It seems this was after cyclones in the area affected trade.  Being a relatively new employee, Mr Denton was amongst the first to lose his job.  Of course he was shocked and worried about how he would live.  Mr Denton said that he was at Centrelink within half an hour of finding out he had been laid off, with his latest payslip, because that showed his year-to-date earnings.  He could recall these events with clarity. 

50.     Mr Denton recalled also that the Centrelink officer told him his pension could be reinstated, but that he needed to provide proof of his wages and a Separation Certificate, (a document prepared and signed by the employer by way of advice to Centrelink about such matters as reasons for termination).  Greyhound provided the Separation Certificate to Centrelink on 3 March 2008.[8]   The document confirmed the period of work as 12 November 2007 to 27 February 2008.  At the same time, according to the Centrelink date stamp, Greyhound provided all the payslips.[9]  

[8]        Document ST5 p 25

[9]        Document ST6 at pp 27-33

51.     Armed with that information what then seems to have happened is that Centrelink then incorrectly treated the figures appearing on these payslips as fortnightly receipts when, as is plainly stated on the payslips, they were weekly receipts.  Centrelink then carried out a recalculation of what Mr Denton had been entitled to in the period 12 November 2007 to 27 February 2008 (during which period he was receiving no pension) and sent him two letters (both dated 3 March 2008[10]).  In one letter he was informed that he would receive a substantial payment of arrears with his newly reinstated disability pension. 

[10]        Document T25 at pp186-188 and 189-194

52.     Mr Denton was surprised by the amount of this payment and again went to Centrelink.  He raised his concerns that some $2,400 in arrears seemed an “awful lot of money”.  The Centrelink officer to whom he spoke then went away to speak to his supervisor, who confirmed that the calculations were correct.  Mr Denton said that he was told the amount was what he was entitled to, and part of it was working credits.

53.       I accept what Mr Denton says took place at the times he went to Centrelink.  Mr Denton struck me as a fundamentally honest person (despite my reservations about his evidence about his life in the caravan, and his failure to disclose detail of his movements to Centrelink).  I discerned in his dealings with Centrelink about employment matters he was quite diligent, quickly advising when and where he was working.  My finding about the trustworthiness of his evidence on these matters takes into account this diligence, but I also note that he volunteered estimates of what he was likely to earn at Greyhound, and it was he who sought to have his pension cancelled when he got the job there.  I also accept that Mr Denton fully advised Centrelink what he had earned at Greyhound by referring them to his year-to-date earnings.  By the time that the arrears payment was made Centrelink had all the information needed to correctly assess his entitlements.

54. So the question which arises is: what is the position where a debt occurs directly as a result of Centrelink error? This is an area of the law in which there is ample Federal Court authority and it is helpful to consider what is said in these cases, taking into account that s 1237A of the Act provides that:

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.

55.     Ms Hamilton submitted that the debt arose as a result of Mr Denton failing to properly declare his income and, secondly, as a result of his failure to declare his relationship with Ms Sankey.  That, to my way of thinking, completely misconstrues the nature of what happened, that led to the arrears payment.  It suggests that the overpayment relates to Mr Denton’s earnings during the period of his employment.  It does not.  This payment of arrears stands as a separate, mistaken calculation on Centrelink’s part, occurring rather later in time.  It is wrong, and in my view of things, not in the spirit of the legislation, to torture the evidence in the way suggested by Ms Hamilton so that the plain fact of the error being solely Centrelink’s is lost.  Once it is understood that this was not a Centrelink payment made to Mr Denton that in any way coincided with Mr Denton’s employment then the real cause is apparent.  I am satisfied that the error was solely an administrative error on Centrelink’s part. 

56. The other part of the test set out in s 1237A requires “good faith” receipt of the impugned payment. The Social Security Appeals Tribunal dealt with this aspect of the matter rather differently, however that Tribunal seems to have laboured under a mistaken impression that this part of Mr Denton’s debt related to his under-declaring earnings at Greyhound. In fact this part of the debt represented only a later-occurring calculation of entitlement to arrears. When Centrelink paid Mr Denton the arrears he was no longer working for Greyhound and his earnings were by then fully declared. It is important to note that the wording of the section contemplates sectioning-off parts of debts to give consideration to the element of identifiable administrative error.

57.     The meaning of “good faith’ receipt has been considered by the Federal Court in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince 152 ALR 127 and Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287. Absence of good faith arises where a person receives a payment where the person knew or had reason to know that he or she was not entitled to receive it.

58.     Mr Denton did indeed suspect that the payment was incorrect and that is why he went to Centrelink to check it. Mr Denton was deeply offended with the SSAT recording of his evidence about these events, where the following was said:[11]

“Mr Denton candidly admitted that he expected his rate of disability support pension to decrease once he commenced employment with Greyhound, and when it had not decreased he was certain he was being paid at the wrong rate.  He questioned the calculation and says he was assured it was correct.  He did not believe this but was happy to accept the payment as he needed the money desperately at the time”.

and (at para 25): 

“Mr Denton was candid in his evidence ... that he expected his rate of disability pension to decrease once he commenced employment and he thought he was being paid at the wrong rate.  There is no evidence that Mr Denton attempted to ensure that his earnings from Grey hound were correctly or completely made available to Centrelink.  He presented some payslips … and was happy with the resulting calculation because he needed the money at the time”.

[11]        Document T2 at para 17

59.     Mr Denton’s main concern was this account suggested he was being no more than glibly opportunistic, in full knowledge that there had been an error.  He wanted it understood that whilst it was true that he was indeed happy to accept the payment in the circumstances, being, as he said, “flat broke” and suddenly without a job, this acceptance was premised upon his having received Centrelink’s assurances that the payment was right. 

60.     It is more than understandable in the circumstances that he was grateful to receive the money.  I find totally believable what he said happened at Centrelink and I accept it as true.  I certainly accept that he only wanted to have a payment that was correct and at no point was he trying to mislead Centrelink.  The respondent did not lead any evidence from its officers to rebut what Mr Denton said.  It should also be noted that the calculation error would not readily reveal itself to enquiry in a busy Centrelink office, when Mr Denton came in to query it.  It is highly likely anyone checking would simply go off the erroneously recorded figures, and then give the assurance. 

61.     In fact, the authorities suggest the reasonableness of the belief is not the true test.  This was considered by French J in Haggerty.  His Honour said :

... want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non-entitlement in the mind of some imaginary recipient. That proposition is quite consistent with the view that the existence of such facts may support an inference that the recipient disbelieved or doubted or was suspicious about his or her entitlement." [bolding added]

62.His Honour went on to say:

Concern, puzzlement, upset and a perception of unusual circumstances, coupled with absence of further inquiry, are not enough themselves to constitute want of good faith.

63.      His Honour's decision suggests the Tribunal must form a view about whether the recipient of benefits should have known or suspected he was not entitled to receive the payments. It is not a strictly objective test in that sense, as was confirmed in Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576. In that case, Weinberg J considered the authorities and said:

"... whether a payment has been received in good faith can only be determined after a careful consideration of the actual state of mind of the recipient of that payment. In that sense the test is entirely subjective, and not objective. However, plainly idiosyncratic views as to what might be regarded as acceptable behaviour, including the standards of a `Robin Hood', will not be regarded as amounting to `good faith'."

64.     It is therefore necessary for me to have regard to Mr Denton’s actual state of mind.  I am satisfied that Mr Denton believed he was receiving what he was entitled to receive.  That belief was not necessarily reasonable given the high earnings he had been getting as a driver, and his experience as a long-term disability pensioner who works from time to time.  He clearly was puzzled about this prospective payment but that is why he spoke with Centrelink officers where he had his concerns allayed.  The responses he received might not have satisfied the "imaginary recipient" referred to by French J in Haggerty, but that is not the test. Once his honesty is accepted, and I do accept his account, he is not prevented from relying on the benefit of the application of s 1237A.

65.     I do not consider that he was turning a ‘blind eye’ to his circumstances: Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484. I am satisfied that this part of the debt ought to be waived on the grounds of administrative error, Mr Denton having received the payment in good faith.

66.     As to other parts of the overpayment that relate to earnings, I did not understand Mr Denton to suggest anything other than that these should be recovered from him, if what he was paid was incorrect.  That is clearly right.  Mr Denton raised a concern that one debt which he had repaid (which related to Mr Denton’s income earned at Lyndee Transport in the period 16 September to 19 October 2009) still appeared on the debt ledger.  Ms Hamilton acknowledged at the resumed hearing that Mr Denton had repaid this debt and that the sum of $213 should be excised from the amount owing.  No argument was presented that there were any “special circumstances” to justify waiving any other part of the debt.

SUMMARY

67.     In the result, the debt amount will need to be re-calculated for the period 4 August 2007 to 22 December 2009 taking into account that:

·I affirm that Mr Denton was in a marriage-like relationship in the period;

·Mr Denton was ineligible for rent assistance in the period; and

·the part of the debt represented by the payment of arrears of to Mr Denton of $2,470.53 on 3 March 2008 is waived on grounds of administrative error.

I certify that the 67 preceding paragraphs are a true copy of the reasons for the decision herein of

Signed:         .....................................................................................
  Dominique Mayo, Associate

Dates of Hearing  22 March; 11 and 18 May 2011
Date of Decision  25 May 2011
Applicant  Self-represented
Respondent  Ms K Hamilton – Centrelink Advocacy Branch