Duffy and Secretary, Department of Family and Community Services
[2004] AATA 1316
•10 December 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1316
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/1664
GENERAL ADMINISTRATIVE DIVISION ) Re BENJAMIN KEVIN DUFFY Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal REAR ADMIRAL A R HORTON AO, Member Date10 December 2004
PlaceSydney
Decision The decision under review is set aside and in substitution thereof the Tribunal decides that:
a. A debt is owed by the Applicant in respect of overpayment of disability support pension from 10 July 1997 to 30 June 2000;
b. There is no debt for the period 1 July 2000 to 3 September 2000;
c. The matter is remitted to the Respondent for the re-calculation of the recoverable debt.
[Sgd] REAR ADMIRAL A R HORTON AO
CATCHWORDS
SOCIAL SECURITY – raising and recovery of debt – Disability Support Pension – discrepancy between Applicant’s wages as advised and ATO data matching – requirement to report changes in income to Centrelink – whether such changes were reported – calculation of overpayments and raising of debt – whether overpayments have been correctly calculated - errors not solely attributable to administrative error - consideration as to special circumstances – Applicant has condition of dyslexia – criteria for special circumstances not met – decision set aside
Social Security Act 1991 – sections 1223(1), 1224(1), 1236(1), 1237A(1), 1237AAD
Beadle v Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
REASONS FOR DECISION
10 December 2004 REAR ADMIRAL A R HORTON AO 1. This is an application to review a decision of the Social Security Appeals Tribunal (“SSAT”) dated 29 September 2003 which set aside a decision of a delegate of the Secretary, Department of Family and Community Services (“the Respondent”) dated 27 May 2003, as affirmed by an Authorised Review Officer (“ARO”) on 4 July 2003, to raise and recover a debt of $15,134.28 for overpayment of Disability Support Pension (“DSP”) to Mr Ben Duffy (“the Applicant”). The SSAT decided that there is a recoverable debt for the period 10 July 1997 to 3 September 2000 but no debt for the period 19 December 2000 to 3 July 2001. The SSAT did not define the amount of residual debt owing.
2. At a hearing before the Administrative Appeals Tribunal (“the Tribunal”) on 10 September 2004 and 22 October 2004, Mr Duffy was represented by his uncle Mr Mark Diggins, solicitor. Mr John Kenny, an advocate from the Centrelink Service Recovery Team, represented the Respondent. The Tribunal took into evidence the documents provided by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”), additional T documents (T1-T87), as well as exhibits marked A1 and A2 for Mr Duffy and R1 for the Respondent.
3. In the light of the late receipt of the Respondent’s Statement of Facts and Contentions (Exhibit R1), Mr Duffy requested an adjournment. The Tribunal had been requesting that Mr Kenny file this document since March 2004 with no response. On 5 August 2004, a Senior Member of the Tribunal directed Mr Kenny to provide the Statement of Facts and Contentions by close of business on 27 August 2004. This was not forthcoming, and nor did follow up action by Tribunal staff elicit a response until the 9 September 2004, the evening before the hearing. Failure to provide this document in a timely fashion is inexcusable; it clearly placed Mr Duffy at a significant disadvantage, and hence the Tribunal acceded to the request for an adjournment.
4. At the resumed hearing on 22 October 2004, the Tribunal took into evidence further documentation, Exhibits A3, A4 and Exhibit R2..
5. After lengthy discussion and considerable vacillation, the Respondent conceded that the issue of whether a debt is recoverable during the period 19 December 2000 to 3 July 2001 was not before the Tribunal. That is, the Respondent accepted the decision of the SSAT that there was no debt for that period. The Tribunal accordingly proceeded to consider only the period from 10 July 1997 to 3 September 2000. In a letter to Mr Duffy dated 29 March 2004, the Respondent advised that, following the SSAT decision, there was no debt for the period 19 December 2000 to 3 July 2001 and that the debt for the period 10 July 1997 to 3 September 2000 was calculated as $14,052.25.
6. Mr. Diggins for Mr Duffy submitted that if there is any debt in this period, the amount must be questionable given “the ambiguity in the calculations received as evidence by the Tribunal”. It was further submitted that Centrelink failed to resolve these deficiencies in a readily and timely fashion which led to the debt being raised. Consequently, should it be found that a debt exists, such debt should be attributed solely to administrative error and should be waived in whole or in part. Should the Tribunal find that a debt was not due solely to administrative error, then Mr Duffy’s circumstances in respect of his disability, family stresses (whereby he was obliged to leave home due to abuse from his step father) and his difficulties in holding down employment, are such as to warrant waiver in “special circumstances”.
BACKGROUND, EVIDENCE AND FACTS
7. Born in 1979, Mr Duffy sought and obtained special test provisions by way of reader and writer for the 1995 School Certificate Reference Test in respect of serious learning difficulties (Dr J N Parikh) (dyslexia). His evidence was that in conjunction with seeking those special test provisions, he applied for the DSP, this being granted from 11 January 1996 (T3 p.12). As a DSP recipient, Mr Duffy was required to advise Centrelink within 14 days if his income exceeded $47 per week, if he commenced employment or changed his address. At that time, he had a case worker who “helped a lot”, his recollection being that after “a year and a half, maybe two”, his case worker was no longer available.
8. During his later school years, Mr Duffy worked part-time at McDonalds. Immediately after completing the 1995 school year, he obtained full time employment. Whilst the details of that employment are not before the Tribunal, and in any event are outside the period of the raised debt, Mr Duffy stated that his pension ceased because of full-time work. In evidence, Mr Duffy also stated that immediately after leaving school he started, but did not complete, a carpentry apprenticeship. The record shows that pension payments were restored on 5 September 1996 (T4 p.15)
9. A Centrelink (Hornsby) data entry of 7 January 1997, records that Mr Duffy “commenced work again” at Pizza Hut (Yum Restaurants International) on 6 January 1997. Under cross-examination, Mr Duffy agreed that he had probably been working “on a regular basis” with Pizza Hut since 20 October 1996, as shown in the advice received by the Respondent from the company (T52 p.119) and that he could not recall what he may have said to Centrelink on 7 January 1997. This period is outside the relevant period, however, the Respondent raised the issue to undermine the credibility of Mr Duffy.
10. Mr Duffy gave evidence in respect of his place of abode at various times and the T-documents record his advice to Centrelink (T88). In September 1996, when he was undertaking his carpentry course and “working in a couple of other jobs”, he moved from his parents’ home at Cherrybrook to share accommodation. This led to financial problems and in early 1997 he moved back with his parents. It is understood he moved out again some time later for about six months; his tax return showing an address at Waitara in November 1998. (This change of address is not recorded at T88). He returned to his parent’s residence where he remained until December 2000 when, as a result of abuse by his father, he left and lived at his uncle’s home at Aberdeen for the next 6 months. He later moved back to Sydney to a property shared with friends in order to be closer to the employment market. More recently he has variously lived at home with his mother or in rental accommodation.
11. Much of the argument before the Tribunal was in respect of the inconsistencies in the calculation of debts by the Respondent. These inconsistencies were reflective of a general lack of employment data for the period under review, and various internal re-calculations of debt as more information came to hand. In particular, the initial Australian Taxation Office (“ATO”) data matching returns for each year, the details of which are not before the Tribunal but which were obtained by Centrelink in about April 2002, led to the raising of a debt of $14587.66. Mrs Duffy questioned the debt, on behalf of her son. In the ensuing months she kept a telephone and correspondence log detailing her subsequent actions. (T77).
12. Centrelink raised a further request for a data-matching program for the years 1995/1996 to 2000/2001 on 27 March 2003 (T51), the response being provided by the ATO on 3 April 2003. That response provided only limited information in that the relevant employers in each year were not identified, nor the periods of employment with each company. A file note (T57) states that this later response did provide details for the year 2000/2001, these not having been provided previously. Accordingly the debt was recalculated as $15,134.28.
13. Mr Kenny informed the Tribunal that after considerable difficulty the Respondent obtained copies of Mr Duffy’s tax returns from the ATO for each relevant year, except 1998/1999, (the ATO advised that the return for 1998/1999 is no longer available). These tax returns were made available to the Tribunal and Mr Duffy on 14 October 2004 (Exhibit R2). These returns are considered essential in this matter, given the inability of Mr Duffy to recall exactly when and where he worked and for what wages and periods, some four to seven years past. Mr Diggins took particular exception to the inability of the Respondent to obtain accurate data matching information in a reasonable timescale.
14. Mr Duffy said that he informed Centrelink each time he started a new job except when he worked for Larach Zappia Unit Trust and that he was unable to recall the circumstances of that employment. He said that at one point he had two documents which he believed would confirm that he had informed Centrelink, but that they had formed part of the consideration of an earlier issue which resulted in a debt waiver. He recalled speaking with Centrelink by telephone on two occasions when he queried the rate of pension.
15. Mr Duffy described informing Centrelink of his employment and salary:
“So you rang Centrelink and made them aware ---?
So I called them up and I said off the payslip, every time I did it off the payslip, so I couldn’t get it wrong.
And what did they say?
They said, Ok then, fill it in. I hung up the phone…
What did they say? So---?
They said “Okay”, and typed it into whatever they do.
Well, how do you know they typed it in?
You could hear them.
You could hear them typing?
They’re sitting on a computer”
16. From those telephone calls, Mr Duffy believed his pension was adjusted and he recalled receiving at least 10 letters with receipt numbers. When asked by the Respondent whether Centrelink had ever claimed that he owed money due to overpayment of DSP outside the period under review, Mr Duffy stated “yes”, probably five times, and that some of those debts were repaid, whilst he could not recall what happened to the others. Here the Tribunal has some reservations that Mr Duffy may not have fully understood the question and may have been referring to letters from Centrelink relating to the period before the Tribunal, but written in later years.
17. Mr Duffy’s tax return for 1997/1998 sets out his employment details for that year. Mr Duffy confirmed that he had completed this (and the other tax returns). He agreed with the total income figures recorded against each of the three companies for various periods. Mr Duffy’s group certificates (Exhibit R2) record that he was employed by Prime Care Pty Ltd (also referred to as File Force) as a facilities manager from 23 June 1997 to 4 July 1997; Enaya Pty Ltd trading as Power Ford as a mechanic from 10 July 1997 to 20 November 1997 and Larach Zappia Unit Trust from 4 May 1998 to 5 June 1998. (Mr Duffy was unable to recall either his role or the nature of the business in respect of the Larach Zappia Unit Trust).
18. In a statement of 2 April 2004 (T106), Mr Duffy stated that he believed he was working for Variety Timbers as a “labourer, furniture finisher” whilst undertaking a furniture polishing course at TAFE. Under cross-examination, Mr Duffy agreed that he might have worked for Variety Timbers in late 1998, i.e. in the 1998/1999 tax year. He was unable to comment as to whether ‘Russell Symes and Co.’, for whom he did work in 1998/1999, was the same organisation as ‘Variety Timber’. There is no evidence before the Tribunal to suggest that Mr Duffy worked for ‘Russell Symes and Co.’ or ‘Variety Timber’ in 1997/1998.
19. Mr Diggins expressed concern at an apparent discrepancy in respect of Mr Duffy’s income. He referred to an income amount of $5366 as recorded in the group certificates. He argued that a figure of $4816 should be considered. The latter figure is the taxable income for taxation purposes, whereas the former figure of $5366 is the gross income, and therefore the correct figure from which the appropriate DSP payment can be calculated, and in turn, any under or over payments corrected.
20. On 12 October 2004 (Exhibit A3), Centrelink provided Mr Duffy with a PAYG Payment Summary in respect of DSP for the 1997/1998 tax year. Gross DSP payment is recorded as $8,983; a sum Mr Diggins accepted as being correct. This figure accords with the summary of payments (T72 pages 174 – 176). The Tribunal notes that Mr Duffy erroneously included this amount in his 1997/1998 tax return under “Australian government pensions and allowances”.
21. Mr Duffy’s tax return details for the year 1998/1999 are not available to the Tribunal, the ATO having advised the Respondent that the tax return was “no longer available” (Exhibit R2). In response to a request under the Data-matching Program (T51 page 114), the ATO provided details of three payments made to Mr Duffy during the 1998/1999 year of $2694, $385 and $11678, amounting to a total gross income of $14,757. Employer details were not provided. As referred to in paragraph 18 above, one of these periods of employment was probably with Variety Timbers, and another probably with Russell Symes and Co, Pty Ltd. In his statement of 2 April 2004 (T106), Mr Duffy indicated that he had worked on the weekends for Ski Hut, earning about $70 a weekend, and that he had so informed Centrelink. Other than the observation that Ski Hut was also called Paul’s Warehouse, nothing further was elicited in oral evidence in respect of this employment.
22. Employment Declaration Forms provide by the ATO at T96, T97 and T98 refer to Russell Symes and Co., Production Strategies Pty Ltd and St George Wholesale Distributors Pty Ltd. These documents do not provide detail of actual employment periods, nor do they confirm that the three lines of income in the 1998/1999 return relate to those companies. Under cross examination, Mr Duffy was unsure if he had properly completed his tax return for that year; he was unclear as to what work he had done that year, and over what periods.
23. A copy of the tax return for 1999/2000 is before the Tribunal (Exhibit R2). It indicates a gross income of $14, 728. Group certificates record the employers as: Habitat from 1 July 1999 to 4 November 1999 ($7561); Black Stump Enterprises Pty Ltd from 21 January 2000 to 30 June 2000 ($4838); Prime Care Australia for “various” periods ($663); and St George Wholesale Distributors from 10 July 1999 to 30 June 2000 ($1666).
24. In his statement of 2 April 2004 (T106), Mr Duffy stated that he had worked for Black Stump and Prime Care in that tax year. In respect of the former, he stated “When I was given the job, I called Centrelink like I always did and told them that I was starting a casual job and my hourly rate. They said call back every fortnight when I had my payslips with the hours that you have worked and the amount of money you have earnt (sic). So I called them each fortnight with my pay slip…My pension payments were sometime affected and sometimes they weren’t”. The statement of 2 April 2004 makes no mention of employment with Habitat or St George Wholesale Distributors. When asked if he told Centrelink of his employment with St George Wholesalers, Mr Duffy said “yes ...I don’t know who they are. If I had more information and I knew who they are, I could answer that question”. He did not dispute the income as shown on the tax return. He reiterated that he reported his employment and wages to Centrelink.
25. Mr Duffy said that he worked at Habitat as part of a furniture apprenticeship and he had reported the details to Centrelink by telephone.
26. The PAYG Payment Summary (Exhibit A3) for 1999/2000 records a DSP payment from 1 July 1999 to 30 June 2000 of $7445.65. The discrepancy between this figure and that shown as DSP income in the Respondents Statement of Facts and Contentions ($8983.26) was explained by Mr Kenny as reflecting the inclusion of other allowances such as telephone and pharmaceutical. Mr Kenny confirmed that this discrepancy had no significance, the PAYG figure being the correct DSP income, and that a similar explanation sufficed for the discrepancy in the details for 2000/2001.
27. A copy of the tax return for 2000/2001 is also before the Tribunal, this being relevant to the period under review which concluded on 3 September 2000, the day prior to Mr Duffy commencing full-time employment with Prime Care Australia (File Force). DSP was suspended as of that date. The total income recorded for that year was $8635, and included employment with Prime Care for “various” periods ($8089), Black Stump Enterprises Pty Limited where the period of employment has been incorrectly identified as from 1 July 2000 to 24 June 2000 ($321), and Coonanbarra Café from 15 June 2001 to 17 June 2001 ($225). Mr Duffy’s statement of 2 April 2004 (T106) confirms that he worked at Black Stump and Prime Care in that financial year.
28. The gross DSP payment recorded at Exhibit A3 for 2000/2001 is $7378; Mr Diggins opined that the Tribunal can rely on the PAYG summaries. Interpretation of the summary of DSP payments (T72 pages 170 – 171) suggests the amount of DSP actually paid for the period up to and including 3 September 2000 was in the order of $2142. The income earned between 1 July 2000 and 3 September 2000 cannot be determined from the group certificates; Mr Duffy’s employment with Coonanbarra Café occurred outside the period, and the precise periods of employment at Prime Care and Black Stump have not been identified.
29. The current circumstances of Mr Duffy are that he receives Newstart Allowance, having injured his knee and being unable to work. From that allowance, he is paying off the debt under review at $54 per fortnight.
SUBMISSIONS
30. Mr Diggins submitted that if there is a debt for the period between 10 July 1997 and 3 September 2000, the amount is questionable given the ambiguity of calculations before the Tribunal. That is, the Tribunal could not “confidently agree” with Centrelink as to the actual amount owed. He attributed the accumulation of any debt to the tardiness of the Respondent in providing accurate and timely documentation, noting that the alleged debt came to light some years after the first debt allegedly occurred. In the circumstances, any debt should be attributed solely to administrative error and should be waived accordingly. Indeed, Mr Kenny had conceded that had he had more time, the summary sheets could have been recalculated more accurately.
31. Mr Diggins submitted that whilst the 1998 and 1999 PAYG payment summaries for DSP were accurate, those for later years were not. He gave no basis for this comment, which conflicts with his earlier view (Paragraph 28). Mr Diggins said that Centrelink’s response to an FOI request (T49) of 24 January 2003 was inadequate, inferring that Centrelink had lost the files. He used this example to further exemplify Centrelink’s poor management and performance.
32. He submitted that Mr Duffy gave truthful evidence and that his inability to recall detail and happenings was reflective of his serious disability. He submitted that Mr Duffy’s disability; poor literacy skills; inability to comprehend Centrelink documentation and calculations nor understand whether he was being paid the correct amount of DSP; family circumstances and the upheaval of leaving home in 2000, and his inability to hold down employment amounted to special circumstances in this case. He referred the Tribunal to a SSAT decision (No.S204567) in respect of Mr Duffy, wherein an Austudy debt was waived due to “special circumstances”.
33. Mr Diggins submitted that the Tribunal should follow the decision in Beadle v Director-Generalof Social Security (1994) 20 FCR 210, and Groth v Secretary, Department of Social Security ((1995) 40 ALD 541 as they related to “special circumstances”, and the principles in Callaghan v Secretary, Department of Social Security (1996) 45 ALD 435 with respect to the meaning of “knowingly”.
34. Mr Diggins then sought leave to depart the hearing before the Respondent’s final submissions, in order to meet travel commitments. The Tribunal agreed because the Respondent relied substantially on its Statement of Facts and Contentions for final submissions.
35. Mr Kenny, for the Respondent, submitted that Mr Duffy failed to notify Centrelink of his various employments, and hence DSP was paid at the full rate. The exception was in respect of his advice on 7 January 1997 that he was commencing work at the Pizza Hut, when he had in fact commenced such work in October 1996. The Respondent submitted that this implies that Mr Duffy lacks credibility in stating that he notified Centrelink of every change of circumstance as required.
36. Mr Kenny contended that whilst the FOI request was for documents and was treated accordingly, there was nothing in the electronic records to support the contention of Mr Duffy that he informed Centrelink on each occasion of change of circumstances and employment parameters. T105 shows receipted calls from 31 August 2000 (there is only one such call recorded in the period under review). Mr Kenny stated that whilst receipting had been introduced prior to that date, it had not become mandatory until more recently. Mr Kenny could not therefore understand the evidence of Mr Duffy that he had received “lots of receipts”. As to the discrepancies referred to by Mr Diggins, Mr Kenny stated that the Respondent relied on the DSP payment summaries (T72). Mr Kenny conceded that the initial debt calculations had not been as accurate as they should, which resulted from sparse information as to employment periods and employers, and the difficulty in obtaining details from of tax returns.
37. He opined that the Mr Duffy had not kept Centrelink informed of his employment and thus his DSP payments had not been adjusted, leading to the debt. He did not see that the particular disabilities of Mr Duffy contributed to the circumstances in which the debt arose, namely, “failure to notify”. As to the quantum of the debt, Mr Kenny stated that it is “in the right ball park, but I can’t make any higher claims for it than that and I am certainly not asserting that such a debt should be affirmed”. He suggested the debt needed to be remitted for a re-calculation.
ANALYSIS OF EVIDENCE AND APPLICATION OF LAW
38. A person’s DSP rate is worked out according to the formula at section 117 of the Social Security Act1991 (“the Act”). Until he turned 21 on 19 April 2000, the rate of DSP payment for Mr Duffy was calculated against pension rate calculator D at section 1066A. The rate of pension is subject to income and asset tests, the former being relevant in this matter.
39. There is no evidence to support the contention of Mr Duffy that he informed Centrelink at all times of his employments and any changes in circumstances in respect of those employments. Prior to the advice by Mr Duffy on 31 August 2000 that he expected to commence full-time work with File Force on 4 September 2000, there is no record either electronically or in file notes before the Tribunal to substantiate the claim. The previous Centrelink letter on file, dated 18 April 1997, refers to DSP payment from 1 May 1997 at the full rate existing at that time, the implication being that any annual income from employment was within the $5,200 “earnings disregarded” limit. An historical document list (T75) indicates a request for documentation on 7 November 1997 and nothing further until 7 July 2000, that being in respect of Austudy.
40. DSP payments from 6 September 1996 to 27 September 2001 are recorded in a Payment Summary (T72). This document has not been challenged. In general terms it indicates that payments, broadly equating to the maximum payment rate, were made to Mr Duffy throughout the period under review by the Tribunal. The documentation before the Tribunal in respect of income (other than DSP) as detailed in the tax returns has not been challenged. That documentation confirms that the income of Mr Duffy was $5366 in 1997/1998, $14,757 in 1998/1999 and $14,728 in 1999/2000. For those years, Mr Duffy was earning in excess of the income free amount, and hence an overpayment of DSP occurred. Thus there is a recoverable debt for the period 10 July 1997 to 30 June 2000.
41. The period from 1 July 2000 to 3 September 2000 is contentious. The Payment Summary indicates that DSP payments at or about the maximum rate were regularly paid in that period. The tax return indicates an annual income of $8635, but the employment periods identified in the group certificates are not definitive in supporting an argument that any income was earned in the period under review. Mr Duffy was employed by Black Stump Enterprises in the previous year and such employment continued into the year under review. There is no evidence however to suggest what, if any, income was earned from this source between 1 July and 3 September 2000. The situation with Prime Care Australia is similar in that actual work periods are not identified. The employment with Coonanbarra Café took place outside the period under consideration.
42. On balance, the claim that an overpayment occurred for the period between 1 July 2000 and 3 September 2000 cannot be supported. Accordingly the Tribunal is satisfied that the Mr Duffy was not overpaid DSP during this period, and there is no basis on which to raise a debt under sections 1223 or 1224 of the Act. The recoverable debt is therefore re-defined as that occurring in the period 10 July 1997 to 30 June 2000.
43. Section 1236 of the Act provides the authority to write off the debt 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 …
(d)it is not cost effective for the Commonwealth to take action to recover the debt”.
The debt is recoverable at law and it is clearly cost effective for the Commonwealth to take appropriate recovery action. As to subparagraph (b), Mrs Duffy indicated in correspondence that Mr Duffy does not have the capacity to repay the debt. Mr Duffy is presently not able to work due to an injury. He is in receipt of Newstart Allowance at the present time, from which a fortnightly debt payment of $54 is being deducted. The Tribunal is of the opinion that Mr Duffy has a capacity to repay the debt.
44. Section 1237 of the Act provides the authority to waive whole or part of the debt in certain circumstances. Section 1237A pertains to administrative error on the part of the Respondent, wherein that proportion of a debt that is attributable solely to an administrative error by the Commonwealth, if received in good faith, may be waived. Waiver is not allowed for a part or whole of a debt that was caused partly by administrative error and partly by other factors such as an error by the debtor. The finding of the Tribunal is that Mr Duffy failed to inform Centrelink of his earnings during the relevant periods. Thus the overpayments did not occur solely as a result of any error by the Respondent. Hence a waiver under section 1237A is not appropriate.
45. In making this finding, the Tribunal is cognisant of the views of Mrs Duffy in particular, and Mr Diggins, that the performance of Centrelink, in dealing with Mr Duffy and in calculating and raising the debt, contributed markedly to the adverse situation. It is not the role of the Tribunal to address the specifics of how individual employees within Centrelink did or did not perform their duties, although such comment has been made in respect of the preparation by the Respondent for this hearing. As to the matters relating to the calculation of the debt, documentation on file indicates that Centrelink informed either Mrs Duffy or Mr Duffy of the recalculation by letter in August 2002, when data-matching revealed some details of employment. Centrelink contacted Mrs Duffy again in May 2003, when more specific data became available in May 2003. Thereafter, it seems the normal process of review took place.
46. Section 1237AAD provides the authority to waive all or part of a debt due to “special circumstances” :
“1237AAD Waiver in special circumstances
The secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not arise wholly or partly from the debtor or another person knowingly:
(i) making a false statement or representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act: and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive: and
(c )it is more appropriate to waive than to write off the debt or part of the debt.”
47. Special circumstances is defined by Toohey J in the Federal Court decision in Re Beadle v Director-General of Social Security (1985) 7 ALD 670:
"An expression such as "special circumstances" is, by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
48. Neither the Respondent nor the SSAT considered the circumstances in this matter to be "special", the latter observing that "the tribunal is not satisfied that Mr Duffy’s learning disability is a special circumstance. ..He has been able to maintain short term employment over a number of years… asserted his independence by moving out of home at various times. Had the option of seeking assistance from his mother but refused to do so…a number of stressful dealings (by Mrs Duffy) with Centrelink not a special circumstance…” and finally “The tribunal accepts that Mr Duffy may be experiencing stress and anxiety because of the debt, but this is a circumstance which would effect many Centrelink customers who have debts, and is not enough to take Mr Duffy’s case out of the ordinary”.
49. Mr Diggins submitted that the disability of Mr Duffy in respect of his literacy skills and his ability to comprehend Centrelink documentation and calculations and his inability to hold down employments, and his family circumstances were all sufficient reasons to consider “special circumstances” to be appropriate.
50. A letter dated 26 September 2003 from the Ms Dianne Anagnos of Welfare Rights Centre, Sydney to the SSAT (T78A) contended that the debt should be waived under the provisions of section 1237 AAD of the Act. It drew on Re Callaghan (supra), wherein the presiding Deputy President stated that the word “knowingly’ should not be given any other meaning than that a person has actual knowledge, and in this case Mr Duffy did not have actual knowledge that his rate of DSP was being incorrectly assessed by Centrelink. The submission refers to Mr Duffy’s “severe learning disability” and his “extreme difficulty in understanding correspondence and filling out basic forms”.
51. The Welfare Rights Centre letter also referred the SSAT to Secretary Department of Social Security v Hales (1998) 51 ALD 695 where French J stated:
“The evident purpose of s1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words”.
52. The Tribunal takes due account of the various authorities as noted, and the submissions by Mr Diggins and the Welfare Rights Centre, but they must be considered against the evidence before the Tribunal. There is no doubt that Mr Duffy has a condition of dyslexia which, as identified by Dr Parikh, results in “serious learning difficulties” which he described as “unable to concentrate, unable to fill in average application forms and unable to learn without special assistance”. That condition did not preclude Mr Duffy from obtaining numerous periods of employments over differing periods with various employers during the period under review. Nor did it preclude him from independently completing his taxation returns each year. Whether his condition was responsible for the termination of individual employments, as postulated by Mr Diggins, cannot be sustained by the evidence available. The only instance referred to by Mr Duffy was in respect of the cessation of work for Black Stump Enterprises where he had problems with the manager.
53. From his evidence, Mr Duffy was assisted in gaining employment by his mother at Prime Care (File Force) and, on an occasion after the period under review, by his father in the motor industry. On other occasions, he himself sought and obtained casual or permanent work, and presumably through his own initiative, apprenticeship and training courses. He has clearly been industrious both during his later school years and thereafter, in seeking employment. He knew that he had to inform Centrelink of a change in circumstances, his evidence being that he knew what had to be done, having learnt that from his caseworker. Yet the evidence is that he did not keep Centrelink informed of his employment and income changes.
54. There is no evidence that he informed Centrelink of his change of abode when he moved into rented accommodation at Waitara in 1997/1998, where he remained for about six months. This was the second period in which he had opted to live away from home, thereby demonstrating an ability to be reasonably self sufficient.
55. Mr Diggins referred to the difficult circumstances in late 2000 which led to Mr Duffy having to leave his parents’ home. This clearly was a distressful time, as evidenced by the granting of Crisis Payment and the effect it had on Mr Duffy’s ability to cope in the immediate term is understood. These circumstances took place some three months after the end of the initial period under review (September 2000) and six months after the end of the revised period under review (30 June 2000) as determined by this Tribunal. On the evidence, it can be given little weight.
56. Mr Diggins raised considerable concern at the differing calculations of claimed debt over a lengthy period. Whilst this is a matter of concern, it is a reflection of the paucity of employment details available to the Respondent. Indeed, the evidence of Mr Duffy did little to clarify some issues; in two cases his evidence being that he did not know who the companies were. The overpayment amount initially before the Tribunal, is reasonably accurate, albeit that the Respondent was not prepared to concede its accuracy. Suffice that as no debt has been found for the period 30 June 2000 to 3 September 2000, in any event, the overpayment will require re-calculation.
57. The Tribunal finds to its reasonable satisfaction that notwithstanding the disability of Mr Duffy and the limitations this imposes upon him, and his family circumstances, “special circumstances” do not exist. Accordingly the Tribunal determines that :
a)The decision under review is set aside and in substitution thereof the Tribunal decides that:
(i)There is a recoverable debt for overpayment of disability support pension from 10 July 1997 to 30 June 2000;
(ii)There is no debt for the period 1 July 2000 to 3 September 2000;
(iii)The matter is remitted to the Respondent for the re-calculation of the recoverable debt.
I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of REAR ADMIRAL A R HORTON AO
Signed: A. Krilis Associate
Date/s of Hearing 10 September 2004 and 22 October 2004
Date of Decision 10 December 2004
Representative for the Applicant Mr Diggins
Advocate for the Respondent Mr Kenny
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