Di Fiore and Secretary, Department of Employment and Workplace Relations
[2006] AATA 287
•30 March 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 287
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/1284
GENERAL ADMINISTRATIVE DIVISION ) Re MARCUS DI FIORE Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr Ian Way, Member Date30 March 2006
PlaceSydney
Decision The decision under review is affirmed.
[Sgd] Mr Ian Way
Member
CATCHWORDS
SOCIAL SECURITY – disability support pension (DSP) – applicant in gaol – DSP paid to applicant while in gaol – whether applicant failed to notify Centrelink of his imprisonment – whether overpayment a debt due to Commonwealth – whether appropriate to write off or waive debt - decision under review affirmed
Social Security Act 1991- s 23(1); s 132(1); s 1158; s 1224(1); s 1236(1A); s 1237(1); s 1237A and 1237AAD
Social Security (Administration) Act 1999 – s 68
Condren and Secretary, Department of Family and Community Services [1999] AATA 575
Re Perkich and Secretary, Department of Social Security (1997) 49 ALD 137
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security and VYS (1995) 40 ALD 745
REASONS FOR DECISION
INTRODUCTION
1. On 13 January 1999 Centrelink determined that Marcus Di Fiore (“the Applicant”) owed a debt of $2,143.50 to the Commonwealth, this arising from payment of Disability Support Pension (“DSP”) to the Applicant during the period 29 October 1998 to 24 December 1998, at which time he was in gaol. The debt of $2,143.50 has been fully recovered by the Commonwealth.
2. On review, the Social Security Appeals Tribunal (“SSAT”), on 30 September 2005, affirmed Centrelink’s decision to raise and recover the debt of $2,143.50.
3. On 7 October 2005, the Applicant applied to the Administrative Appeals Tribunal (“the Tribunal”) for review of the SSAT’s decision.
4. The Tribunal had before it the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1 – T32), and the following exhibits:
·Respondent’s Statements of Facts and Contentions with Annexures 1, 2 and 3 – Exhibit R1.
·Centrelink computer printout of nominee arrangements as at 3 February 2006 – Exhibit R2
5. The Applicant was self represented and he and his mother, Mrs RJ Di Fiore, gave oral evidence to the Tribunal. Mr G Lozynsky represented the Department of Employment and Workplace Relations (‘the Respondent”).
BACKGROUND
6. Background facts of this matter are not in dispute and in view of this and on the material before it, the Tribunal finds as follows:
a) The Applicant was born on 14 June 1968;
b) The Applicant began receiving DSP in 1984;
c) The Applicant was in gaol from 9 October 1998 to 12 July 2000;
d) The Applicant was in receipt of DSP (and associated allowances) during his time in gaol, up to and including 24 December 1998;
e) Payment of DSP to the Applicant ceased from 25 December 1998 until he was released from custody, when payment of DSP commenced once more;
f) Payments of DSP (and associated allowances) for the period 29 October 1998 to 24 December 1998 were sent to the Applicant’s nominated bank account, the total amount being $2,143.50;
g) The Applicant was fully aware at the relevant time that he must tell Centrelink within 14 days if he was charged with an offence and in custody on remand or in gaol after being convicted of an offence.
ISSUES AND LEGISATIVE FRAMEWORK
7. The issues in this matter are:
·whether the Applicant owes a debt of $2,143.50 to the Commonwealth for the period from 29 October 1998 to 24 December 1998; and if so,
·whether there are any grounds for not recovering all or part of the debt.
8. This matter is to be determined within the provisions of the Social Security Act 1991 (“the Act”) and the Social Security (Administration) Act 1999 (“the Administration Act”). The relevant provisions of the Act are:
“s 23(1) social security pension means:
…
(b)a disability support pension;
…
s 132(1)The secretary may give a person to whom disability support 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.
(now s 68 of the Administration Act)
…
1158An instalment for a social security pension, a social security benefit, a parenting payment, a mobility allowance or a pensioner education supplement is not payable to a person in respect of a day on which the person is:
(a) in gaol; or
(b)undergoing psychiatric confinement because the person has been charged with committing an offence.
...
1224(1) 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.
Note: if the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
…
1236(1A)The secretary may decide to write off a debt under subsection (1) if, and 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.
…
1237(1)On behalf of the Commonwealth, the Secretary may waive the Commonwealth’s right to recover the whole or part of a debt from a debtor only in the circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD and, if the debt is an assurance of support debt, subject to section 1237AAE.
…
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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
…
1237AADThe 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 false representation
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.”
THE APPLICANT’S EVIDENCE AND SUBMISSIONS
9. The Applicant told the Tribunal that he is single and lives at home with his mother, paying board of $90.00 per week.
10. The Applicant said he attended a special school until aged 16 and suffers from epilepsy, dizziness and learning difficulties. He said he never attained a school certificate but recently has been able to complete two TAFE courses at Certificate 4 level (in tourism and assessment workplace training) and one at Certificate 2 level (in I.T.). He told the Tribunal that apart from some work experience as part of the TAFE courses, he has never been employed but would like to be. He said he had stopped taking medication for epilepsy at about age 14 and that he no longer suffers fits, only dizziness. He said that apart from this he had no other health problems.
11. In respect of social security benefits, it was the Applicant’s evidence that he currently receives $647.74 per fortnight (DSP, rent assistance, pharmaceutical allowance and pension education supplement) and that in addition to the board he pays to his mother he also pays $20.00 per fortnight against another debt due to the Commonwealth. He said he had no assets and that his total debts amounted to about $5,000.00 which he was managing to slowly pay off.
12. In respect of bank accounts, he said his social security benefits were paid to an account he had with the Police Credit Union and that there were no accrued funds in this account.
13. At the time he was in gaol, he said he had an account with the Commonwealth Bank in Wollongong and that this was the nominated account for receipt of social security benefits. He said he did not access this account during his time in gaol and could not recall being aware of payments being made to the account at that time.
14. He said that soon after being gaoled he had applied for bankruptcy and that from late 1998/early 1999 he was bankrupt for about three years. He explained that because of his bankruptcy, Centrelink had not been able to recover the debt due to the Commonwealth until such time as his bankruptcy was discharged.
15. The Applicant said “he knew 100 per cent” that he had to tell Centrelink, within 14 days, about being in gaol. He said when he was checked into gaol he told a prison officer who was doing his check-in that he was in receipt of DSP and that Centrelink needed to be told. He said the officer told him that the gaol authorities would contact Centrelink to let them know he was in gaol, and he thought that this meant he had met his obligation to inform Centrelink about being in custody. When asked why he did not call or write to Centrelink personally, he said that he could not make telephone calls directly until he had a code number and a pin number and this usually took a couple of months. He said that he could have written a letter to Centrelink (after vetting by the authorities), but that he was “not a letter person”. In answer to a question from the Tribunal, the Applicant said he had not followed up with the prison authorities whether or not they had contacted Centrelink on his behalf.
16. When asked about visits from his mother while he was in gaol, he said she came to see him a few days after he was admitted to prison and regularly thereafter, and that his mother was particularly helpful in assisting him apply for bankruptcy. He said he was 90 per cent certain that his mother had also taken an application form to Centrelink (from him), making her his nominee and that she had informed Centrelink about him being in gaol. The Tribunal notes that Centrelink records do not show that Mrs RJ Di Fiore was at any time a nominee. However, the records show that in September 1999 there was a release of information to Robyn Joy Di Fiori (T11/20) and that on 27 January 1999 it was noted in regional Wollongong records that the Applicant was in bankruptcy (T10/19). The Applicant said that it was possible his mother could have told the Centrelink office at Wollongong about his bankruptcy.
17. It was the Applicant’s evidence that he could not remember knowing about the debt due to the Commonwealth while he was in gaol and he thought that he did not know about the debt until he was released from gaol.
18. In essence, the Applicant agreed that he knew he had to inform Centrelink about being in gaol. He submitted that, in his view, he had fully met his obligation by telling the Corrective Services he was receiving DSP and that Centrelink had to be informed; and his acceptance of the officer’s word that Centrelink would be informed by the prison authorities. He said that in any event he could not make a direct call to Centrelink by phone at the relevant time because of prison restrictions and that he was “not a letter person”. He thought his mother had informed Centrelink that he was in gaol. He submitted that having done everything, to the best of his knowledge, to inform Centrelink within 14 days about being in prison, his debt should not have been raised and it should be waived or recalculated.
19. In respect of his bankruptcy, the Applicant submitted that it was because of this that he did not take much notice of the fact that he had a debt. The Applicant further submitted that it was not until he came out of bankruptcy that he started to look at the circumstances surrounding the raising of the debt. Having heard nothing about the debt while in gaol, he said he had assumed that everything had been “fixed up” in respect of payment of his DSP.
EVIDENCE OF MRS RJ DI FIORE
20. Mrs RJ Di Fiore, the Applicant’s mother, told the Tribunal she dealt with mail addressed to the Applicant while he was in gaol. In response to a letter to the Applicant from Centrelink at the end of 1998 or early 1999 she visited the Centrelink regional office at Dapto. She had difficulty in remembering the date of the letter or its contents but said she thought it most likely related to her son’s debt and that in discussion with the staff at Dapto all she could remember was talking about her son being in gaol. The Tribunal notes the letter to the Applicant from Centrelink, dated 14 January 1999, informing the Applicant of the overpayment of DSP in the amount of $2,143.50 (Exhibit R1).
21. It was Mrs RJ Di Fiore’s evidence that she did not at any time attend any other Centrelink office in respect of her son’s affairs other than the one visit to Centrelink at Dapto. She said that she could not remember whether she had handed in a nominee form to the Centrelink office at Dapto nor could she remember signing a nominee form.
22. Mrs RJ Di Fiore told the Tribunal that she first visited her son in gaol a few days after he was admitted and that she continued to visit him every three weeks or so after that.
RESPONDENT’S SUBMISSIONS
23. In summary, the Respondent submitted that the Applicant had failed or omitted to comply with the Act in knowingly failing to notify Centrelink within 14 days of his imprisonment and that whilst in gaol the Applicant had been paid DSP in the amount of $2,143.50 to which he was not entitled, this amount of $2,143.50 being a debt due to the Commonwealth by the Applicant. The Respondent further contended that the Applicant’s failure to tell Centrelink, within 14 days, about his imprisonment, if not constituting wilful blindness, amounted at the very least to recklessness.
24. It was submitted that while it might have been the Applicant’s view at the time of his imprisonment that the prison system would notify Centrelink of his incarceration, such a belief does not discharge the Applicant’s personal obligation to notify Centrelink of his being in gaol. In respect to this submission the Respondent referred the Tribunal to Condren and Secretary, Department of Family and Community Services [1999] AATA 575 and Re Perkich and Secretary, Department of Social Security (1997) 49 ALD 137.
25. The Respondent submitted that Centrelink only became aware of the Applicant’s imprisonment because of a data matching exercise, that there is no record of the Applicant’s mother notifying Centrelink of his imprisonment prior to the data matching exercise and that there is no evidence to support the Applicant’s claim that his mother was his nominee with Centrelink or that she had notified Centrelink of her son’s imprisonment during the period October to December 1998.
26. It was submitted that the debt has already been recovered and write-off is not appropriate. It was further submitted that it is not appropriate to waive the debt in whole or in part because it cannot be said that the debt arose from a sole administrative error nor can it be said that there are special circumstances in this matter.
27. It was therefore submitted that the decision under review should be affirmed.
CONSIDERATION
28. There is no dispute between the parties and the Tribunal accepts that within the provisions of s 23 and s 1158 of the Act, the Applicant received social security benefits which were not payable to him during the period of his imprisonment, except for the first pay day during that period. The total amount of overpayment is $2,143.50 covering the period 29 October 1998 to 24 December 1998. S 1224(1) of the Act states that such an overpayment is a debt due by the Applicant to the Commonwealth if it was paid because the Applicant failed to comply with a provision of the Act. In this case the Respondent contends that the Applicant failed to inform Centrelink, pursuant to s 132 of the Act, that he was in gaol and the Respondent only discovered the Applicant was in gaol because of a data matching exercise. The Applicant readily concedes, and the Tribunal accepts, that he was fully aware of the need to inform Centrelink within 14 days that he was in gaol.
29. The Applicant contends that he met his obligations to inform Centrelink by telling a prison officer that he was receiving DSP and by that prison officer agreeing that he would inform Centrelink that the Applicant was in gaol, as requested by the Applicant. The Applicant further contends that he thought his mother had also informed Centrelink that he was in gaol and that she had his authority to be his nominee with Centrelink.
30. The Applicant’s mother gave evidence to the Tribunal, but she was unable to say that she had ever signed a nominee form, or taken a nominee form to Centrelink, or that she had ever approached Centrelink about her son’s imprisonment during the period October to December 1998. The Tribunal appreciates that Mrs RJ Di Fiore had difficulty in recalling events in 1998 and 1999, however, on her evidence, such as it is, and taking into account that there are no records of Mrs RJ Di Fiore being the Applicant’s nominee and no records of her informing Centrelink at the relevant time of her son’s imprisonment, the Tribunal is satisfied that Mrs RJ Di Fiore did not notify Centrelink of her son’s imprisonment, prior to Centrelink discovering this fact through a data matching exercise, at which time Centrelink ceased payment of DSP.
31. The Applicant’s contention is that he thought he had notified Centrelink about his imprisonment because he had told a prison officer that he was in receipt of DSP, that he knew Centrelink had to be told and that on request the prison officer agreed to make arrangements to tell Centrelink. The Tribunal is satisfied that the Applicant believed the prison authorities would notify Centrelink about his imprisonment. The Tribunal is mindful that the Applicant, at the time, also would have had difficulties in making a direct telephone call to Centrelink because of prison restrictions. The Tribunal notes the Applicant’s submission that even though he could have arranged for a letter to be sent to Centrelink at the relevant time he was not in the habit of writing letters. The Tribunal also notes the Applicant’s evidence that he did nothing to check that his request to prison authorities in respect to notifying Centrelink had been complied with.
32. In considering this matter the Tribunal has taken into account that in Condren (supra) and Re Perkich (supra) it was found that the act of requesting prison authorities to contact Centrelink does not discharge an Applicant’s personal obligation to notify Centrelink of changes. The Tribunal agrees with this finding and adopts the same approach in its consideration of this matter.
33. After consideration of all the material before it and the submissions of both parties, the Tribunal is satisfied that the Applicant failed to comply with his obligation to inform Centrelink of his imprisonment within 14 days of this occurrence and therefore, he has failed to comply with s 132 of the Act.
34. The Tribunal is satisfied that the Applicant received an overpayment of $2,143.50 because he failed to comply with s 132 of the Act, and that, pursuant to s 1224 of the Act, this amount is a debt due to the Commonwealth by the Applicant.
35. The question then arises as to whether the debt can be written off or waived.
36. The Secretary may decide to write-off a debt under s 1236 of the Act and these provisions are set out above. The debt has been repaid and clearly the provisions of s 1236 do not apply and the debt cannot be written off.
37. S 1237A(1) of the Act provides that a debt may be waived if that debt is attributable solely to an administrative error made by the Commonwealth. As indicated above, Centrelink discovered that the Applicant was imprisoned as a result of a data matching exercise and the Applicant, because of his failure to notify Centrelink, was at least partially to blame for the overpayment of DSP. There is no evidence to support a claim that the overpayment of DSP to the Applicant was due solely to an administrative error made by the Commonwealth and the Tribunal is satisfied that overpayment was not attributed solely to an administrative error made by the Commonwealth. The debt therefore cannot be waived pursuant to s 1237 of the Act.
38. Section 1237AAD of the Act makes provision for the write-off of a debt if the Applicant knowingly failed to comply with a provision of the Act and there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt. Both limbs of s 1237AAD must be satisfied if the debt is to be waived. Putting aside the question of knowingly failing to comply with the Act, the Tribunal has firstly looked at whether there are special circumstances in this matter.
39. Special circumstances are not defined in the Act. However, the meaning of the term has been extensively examined by the Tribunal and the Federal Court and for the Tribunal to be satisfied that the circumstances in this case are special, they must be unusual, uncommon or exceptional to such an extent that it would be unjust, unreasonable or otherwise inappropriate to recover the debt: Re Beadle and Director-General of Social Security (1984) 6 ALD 1.
40. The Applicant has repaid the debt and on his own evidence his financial circumstances do not constitute hardship and the Tribunal so finds.
41. In respect of his health, the Applicant clearly has a medical condition that significantly affects his wellbeing. However, he is coping with his health problem and has recently been able to successfully complete a number of TAFE courses. In any event, as noted in Secretary, Department of Social Security and VYS (1995) 40 ALD 745, “it must be acknowledged that there is nothing special or unusual about recipients of DSP being in ill health”.
42. After consideration of all of the material before it, the Tribunal finds that there are no special circumstances in this matter that make it appropriate or desirable to waive the debt pursuant to s 1237AAD of the Act.
43. For the above reasons the Tribunal affirms the decision under review.
I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Mr I Way, Member.
Signed: Associate
Date/s of Hearing 15 March 2006
Date of Decision 30 March 2006
Representative for the Applicant Self
Advocate for the Respondent George Lozynsky
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