Dolan and Secretary, Department of Family and Community Services

[2003] AATA 941

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 941

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2002/1734

GENERAL ADMINISTRATIVE  DIVISION		)
Re		EUGENE DOLAN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date23 September 2003

PlaceSydney

Decision The decision under review is affirmed.

[Sgd] Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit - youth allowance - administrative error - over payment - debt to the Commonwealth - waiver - whether sole administrative error - whether special circumstances - decision affirmed

LEGISLATION

Social Security Act 1991 sections 5, 23, 831, 838, 1223, 1237A, 1237AAD

A New Tax System (Family Assistance) Act 1999 sections 21, 22A

A New Tax System (Family Assistance) (Administration) Act 1999 sections 71, 97, 101

CASELAW

Re Beadle and Director-General of Social Security  (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

September 2003 Mr S. Webb, Member        

1.      Mr Eugene Dolan (“the Applicant”) applied for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 2 October 2002 (T2), which affirmed three prior decisions of an authorised review officer (“ARO”) to raise and recover debts of family allowance and family tax benefit.

2.      At the hearing on 8 September 2003, the Applicant was self represented and the Secretary, Department of Family and Community Services (“the Respondent”) was represented by Mr J. Kenny, from Centrelink’s Service Recovery team.  The Applicant gave oral evidence and the following materials were taken into evidence and labelled.

exhibit          description

T1 – T42Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.

R1Centrelink Annual Parental Income Reassessment form, dated 3 November 1999.

R2Centrelink computer print out of Youth Allowance payments to Miss Arlene Dolan dated 27 August 2003.

background

3.      The following background is drawn from the evidence and is not in dispute.

4.      In August 1997 the Applicant claimed Family Allowance payments in respect of Miss Arlene Dolan, his only child.  Miss Dolan’s date of birth is 30 October 1983.

5.      On 31 August 1999, 9 November 1999, 6 December 1999 and 13 December 1999 the Applicant was informed, inter alia, of his notification obligations (T5, T6, T7 and T8).

6.      On or about 2 November 1999, the Applicant and his daughter lodged an application for youth allowance (T3).

7.      Centrelink erroneously allocated a new customer reference number to Miss Dolan under which Youth Allowance was paid, thereafter, into the Applicant’s bank account.  In consequence of this error the Applicant continued to receive payment of Family Allowance, and subsequently Family Tax Benefit, in respect of his daughter.

8.      On 1 July 2000 Family Allowance was replaced by Family Tax Benefit.

9.      On 17 June 2000, 17 October 2001 and 30 November 2001 the Applicant was informed, inter alia, of his notification obligations (T9, T14 and T16).

10.     On 30 October 2001, or soon thereafter, Miss Dolan made arrangements for her Youth Allowance to be paid into a bank account in her control instead of her father’s bank account.  Youth Allowance was paid into Miss Dolan’s bank account from 12 November 2001.

11.     On 24 April 2002, the Applicant was informed that his Family Tax Benefit had been cancelled and an overpayment debt raised (T17).

12.     On 14 May 2002, the decision concerning overpayment of Family Tax Benefit was reviewed at the Applicant’s request (T21).

13.     On 16 July 2002, an ARO reviewed the decision and decided to raise and recover debts in the amounts of $435.97 (T37), $2,788.60 and $1,949.57 (T38).

14.     On 10 October 2002m the SSAT affirmed the decision of the ARO that the Applicant owed the aforementioned debts (T2).

15.     On 29 April 2003, the Applicant made a lump sum payment of $4,700 to clear the debts; having been granted a discount of $974.14.

issues

16.     The issues before the Tribunal are whether the Applicant was overpaid Family Allowance and Family Tax Benefit giving rise to a debt to the Commonwealth and, if so, whether there are grounds for waiver of the debt on the basis of sole administrative error or special circumstances.

evidence of the applicant

17.     The Applicant told the Tribunal that he did not understand the social security system and the various payments he had received since 1997.  He agreed that he knew he was paid Family Allowance and Single Parenting Payment before his daughter turned 16 on 30 October 1999, even though he could not recall the amounts of those payments.  He agreed that he and his daughter lodged a claim for Youth Allowance soon after her 16^th birthday in 1999.  His evidence was that his daughter told him about the allowance and wanted to apply for it.  The Applicant stated that he had no idea what effect his daughter’s Youth Allowance would have on Family Allowance payments.  His evidence was that he relied on Centrelink, believing Centrelink would only pay him what he was entitled to receive. 

18.     The Applicant informed the Tribunal he had but one bank account into which his daughter’s Youth Allowance and other Centrelink payments were paid, as well as his earnings in employment.  His evidence was that he did not scrutinise his bank account statements and could not precisely recall how often he received such statements, noting that he would not keep them in any event.

19.     The Applicant claimed that he did not read Centrelink letters closely and, even when he did, he did not understand what they meant.  He acknowledged receiving Centrelink letters from time to time but could not recall what such letters were about.  He said he believed he had done everything he was required to do by Centrelink and was pleased when his daughter transferred her Youth Allowance payment into her own bank account.  The Applicant’s evidence was that he did not take much interest in matters relating to Centrelink but recognised that there were obligations on him when in receipt of social security payments.

20.     The Applicant explained that he and his daughter live in a house that is mortgaged and their income is sufficient to meet their expenses.  He gave evidence that he earns approximately $498 per week net and expends $200 per week in mortgage payments.  His evidence was that he had increased his mortgage to repay the debt to Centrelink, but otherwise has no debts.  He did not consider that he was in financial difficulty.

21.     The Applicant told the Tribunal he and his daughter are in good health, although his daughter suffers from asthma.  He explained that the reason he applied for this review is that he considers the decision to recover overpayments from him to be unfair as he did not know he was being overpaid, or being paid anything to which he was not entitled and resented being “chased by debt collectors”.

legislation

22.     The relevant legislation in this matter is the Social Security Act 1991 (“the SS Act”), especially sections 5 (repealed), 23, 831 (repealed), 1223, 1237 and 1237AAD, the A New Tax System (Family Assistance) Act 1999 (“the FA Act”), especially sections 21 and 22A, and the A New Tax System (Family Assistance) (Administration) Act 1999 (“the FAA Act”), especially sections 25, 71, 94, 97 and 101.

submissions, consideration of the issues and findings

23.     The Tribunal finds the Applicant to be a witness of truth who appeared to take little interest in the events and circumstances that underlie this review.  Nevertheless, the Applicant’s case, at its heart, is founded on his contention that the recovery of the three debts raised against him is unfair because the debts arose from Centrelink’s error and he was unaware that he was being paid amounts to which he was not entitled.

24. Previous section 5(6)(a) of the SS Act states that a young person cannot be a dependent child for the purposes of the Act, if that person is receiving a social security benefit. “Social security benefit” is defined at section 23 of the SS Act to include Youth Allowance. Previous section 838(1)(a) of the SS Act provides that in order to qualify for Family Allowance a person must have at least one family allowance child, being a dependent child pursuant to previous section 831(1) of the SS Act. Similar provisions apply under the FA Act pursuant to sections 21(1)(a) and 22A(1).

25. It follows in the Applicant’s case that the Applicant ceased to be entitled to Family Allowance on the day that his daughter commenced receiving Youth Allowance. The Tribunal finds Miss Arlene Dolan was granted Youth Allowance on or about 3 November 1999, whereupon the Applicant’s entitlement to Family Allowance ceased. Furthermore, the Applicant was not subsequently entitled to Family Tax Benefit when the FA Act came into effect on 1 July 2000.

26. The Applicant was paid an amount of $435.97 in Family Allowance from 30 October 1999 until 30 June 2000 and Family Tax Benefit payments totalling $2,788.60 in the period 1 July 2000 to 30 June 2001 and $1,949.57 in the period 1 July 2001 to 16 April 2002. The Applicant does not dispute that he was overpaid in these amounts, totalling $5,164.14. Section 1223(1) of the SS Act and section 71 of the FAA Act apply:

“1223   Debts arising from lack of qualification, overpayment etc.

1223(1)Subject to this section, if:

(a)     a social security payment is made

(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

71Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

No entitlement to amount

(1)        If:

(a)an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance) in respect of a period or event; and

(b)the person was not entitled to the assistance in respect of that period or event;

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

27. The Tribunal finds the Applicant is liable to repay to the Commonwealth debts raised pursuant to sections 1223 of the SS Act and 71 of the FAA Act in total amount of $5,164.14.

28. The questions arising for determination in the Applicant’s submission are whether there are grounds to waive the debt. In the first instance, the Applicant relies on sections 1237A of the SS Act and 97 of the FAA Act, contending the debt was caused solely by Centrelink’s administrative error and, in consequence must be waived.

29.     The Respondent conceded that Centrelink erroneously allocated a customer reference number to Miss Arlene Dolan when processing her application for Youth Allowance.  It is alleged that this occurred because of a misspelling of Miss Dolan’s second given name, Mary, and indeed that name is spelt Meary on the Youth Allowance claim form (T3, f17).  There is no evidence before the Tribunal indicating which spelling of Miss Dolan’s second given name had previously been used for Centrelink’s purposes and the Tribunal cannot, therefore, make any findings in that regard. 

30. The Tribunal pauses to note that relevant correspondence from Centrelink to the Applicant and to Miss Dolan concerning the grant of Youth Allowance are not in evidence. The absences are of concern for two reasons. The first is that the Tribunal does not have all the relevant evidence before it and the second is that the Respondent has been less than thorough in the task of compiling documents pursuant to section 37 of the Administrative Appeals Tribunal Act 1975..  In this case, however, the absence of the documents does not preclude the conclusion of the matter on the evidence that is before the Tribunal.

31. For a debt to be waived pursuant to section 1237A of the SS Act or section 97 of the FAA Act, the debt must have been solely caused by the administrative error of the Commonwealth. If the debt was contributed to by an error of the claimant or by any other factor outside the administrative error of the Commonwealth the administrative error waiver provisions do not apply. Such is the case in the matter at hand.

32.     The Applicant and his daughter completed a claim for Youth Allowance (T3) and in so doing the Applicant, being the parent, ticked “No” in answer to question 5 at page 23 of that claim form.  The question was “Are you receiving a payment from Centrelink?”  The correct answer would have been “Yes”, because at that time the Applicant was indeed receiving a payment from Centrelink, in the form of Family Allowance.  The Applicant went on to answer subsequent questions (T3, f37 and 38):

“Q.      What payment do you receive?

A.        Ended

Q.       Your Customer reference Number?

A.        203-998-4644

Q.Are you receiving a pension, benefit or allowance from another government agency?

A.        No

Q.       What payment do you receive?

A        PPS.  Till July 99.”

33.     The Tribunal accepts the Applicant’s explanation that his failure to declare his receipt of Family Allowance was an oversight and the answers he gave concerned the cessation of Parenting Payment Single in the July 1999.  Even so, his error cannot be ignored if it contributed to cause the debt for which he is liable.

34.     The Respondent submitted that the Applicant’s error did in fact contribute to cause the debt, contending that Centrelink processed Miss Dolan as a new customer because the Applicant indicated that he was not receiving a Centrelink payment by ticking the “No” box on the form.  It was for this reason that Miss Dolan was allocated a new Customer Reference Number when in fact she had an existing number. The Respondent submitted that for this reason, her details were not cross referenced to those of her father in consequence of which his Family Tax Benefit was not cancelled as it should have been.  However, the simple fact is that the Applicant provided his correct Customer Reference Number, thereby indicating, prima facie, that he was a customer of Centrelink whose claim and entitlement history could be examined and verified using that number.   It is clear that no such verification was carried out.  Nonetheless, it cannot be said that the Applicant’s error was without consequence.  It is clear that his error contributed to the overpayment that is now raised as a debt for which he is liable.  The Tribunal so finds.

35.     In the Respondent’s submission, the Applicant failed to comply with his notification obligations of which he was informed in writing on several occasions (T5, T6, T7, T8, T9, T14 and T16).  The Applicant knew of his obligation to notify Centrelink of any change in his circumstances, even though his evidence was that he neither read in detail nor understood the letters he received from Centrelink.  It is a fact that the Applicant did not inform Centrelink that his daughter had claimed and was receiving Youth Allowance. The Applicant does not dispute it.  In his submission, he thought he had complied with Centrelink’s notification requirements, by completing the relevant claim forms for Youth Allowance and the Annual Parental Income Reassessment and submitting these to Centrelink.

36.     The Tribunal finds it is reasonable to expect that, by submitting a properly completed claim form for Youth Allowance to Centrelink, a person may satisfy the notification obligations in relation to that allowance.  It is reasonable to expect that such a claim that is properly made would cause Centrelink to cancel any Family Allowance payments in respect of the claimant.  However, in the Applicant’s case, the Youth Allowance claim form was not properly completed and, although innocent of ill intent and inadvertent, this error contributed to the continuance of Family Allowance and subsequently Family Tax Benefit payments.

37. This being the case, the Tribunal finds the debts cannot be waived on the ground of sole administrative error pursuant to sections 1237A of the SS Act or section 97 of the FAA Act.

38. The second limb of the Applicant’s submission relies on the existence of “special circumstances” that make it appropriate to exercise the discretion conferred by section 1237AAD of the SS Act and section 101 of the FAA Act, to waive a debt.

39.     The Applicant agreed that he and his daughter are not in financial difficulty, although his financial circumstances were somewhat straitened.  The Applicant is in full time employment and his daughter is in part time employment.  Their weekly income covers their expenses if they are frugal and careful.  The Applicant suffers from glaucoma, for which he takes medication, and his daughter suffers from asthma.  The Tribunal is satisfied that the Applicant’s financial and health circumstances are not “special circumstances” for present purposes.

40.     The question arises whether Centrelink’s administrative error is a sufficient circumstance to warrant exercise of the discretion to waive the debts.  The Tribunal is satisfied that it is not.  It is true that a person in the Applicant’s position should be able to rely upon Centrelink to ensure that he is only paid what he is entitled to receive.  Such reliance must be predicated upon the Applicant providing complete and correct information to Centrelink, on the basis of which his entitlements can be properly assessed.  In this case, the Applicant did not provide Centrelink with the necessary information, even though such information was readily available to Centrelink, had it seen fit to cross check the Applicant’s details behind his Customer Reference Number.  

41.     Successive courts and tribunals have considered the interpretation of the term “special circumstances”.  It is accepted that for circumstances to be special they must be unusual, uncommon or exceptional (Re Beadle and Director-General of Social Security (1984) 6 ALD 1), or where the strict application of a provision of the relevant act gives rise to something unfair, unintended or unjust (Groth v Secretary, Department of Social Security (1995) 40 ALD 541).

42. The Tribunal is satisfied that the circumstances of the Applicant, when considered in their entirety, do not constitute “special circumstances” whereby it would be appropriate to waive his debts, in part or in whole, pursuant to section 1237AAD of the SS Act or 101 of the FAA Act. This being the case, the decision under review must be affirmed.

decision

43.     The decision under review is affirmed.

I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

Signed:         A. Krilis
  Associate

Date/s of Hearing  8 September 2003
Date of Decision  23 September 2003
Representative for the Applicant    self represented
Advocate for the Respondent        Mr John Kenny