Duncan; Secretary, Department of Family and Community Services an D

[2003] AATA 1251

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 1251

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/535

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And LEIGH DUNCAN

Respondent

DECISION

Tribunal Mr B J McCabe, Senior Member

Date12 December 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review. 

(Sgd) B J McCabe
  Senior Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – overpayment of parenting payments – overpayment solely due to administrative error – right to recover debt – whether monies received in good faith – meaning of “good faith” – decision affirmed

Social Security Act 1991, s 1237A

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127

Haggerty v Department of Education (2000) 31 AAR 529
Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484

REASONS FOR DECISION

12 December 2003 Mr B J McCabe, Senior Member

Introduction

1. Centrelink mistakenly paid Mr Leigh Duncan parenting payments in respect of his daughter after she turned 16. Centrelink concedes the overpayment was entirely attributable to its own administrative error, but it wants the money back anyway. The Social Security Appeals Tribunal (SSAT) waived repayment of the debt under s 1237A of the Social Security Act 1991. The applicant challenges that decision before this Tribunal.

2.      The facts are set out in the decision of the SSAT. Mr Duncan said he was content for me to rely upon those findings of fact. He said there were one or two minor errors in the detail: for example, paragraph ten of the SSAT’s decision referred to a letter dated 4 March 2002, when that letter was dated 27 February 2002. Subject to that qualification, I adopt the SSAT’s findings of fact which are summarised at paragraph 28 of the decision:

“On the basis of the evidence before it, the Tribunal made the following findings:

(i)Mr Duncan was in receipt of family tax benefit and parenting payment (single) when his daughter Kimberley turned 16 on 12 February 2002.

(ii)He was paid parenting payment (single) up to and including 27 July 2002, and family tax benefit up to an including 25 November 2002.

(iii)Kimberley Duncan was paid youth allowance on 2 December 2002 in respect of the period from 12 February 2002 to 18 November 2002.

(iv)In the relevant period, Mr Duncan believed that he was not entitled to parenting payments.

(v)In the relevant period, Mr Duncan believed that the payments being made to his bank account were a payment of unknown identity paid to him and a youth allowance paid to his daughter.  He believed both payments to be correct.”

3. The dispute in this case revolves around the proper interpretation of s 1237A. In particular, I must consider whether the payments were “received in good faith”.

4.      I note at the outset there is no suggestion Mr Duncan has acted dishonestly. I am satisfied he was a witness of credit. Mr McQuinlan, for the applicant, said the Secretary was not claiming the respondent acted in bad faith – merely that he did not receive the payments in good faith. Therein lies the dispute.

The Meaning of the Expression “Received in Good Faith”

5.      The SSAT referred to four decisions of the Federal Court that have considered this question. In Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127, Finn J observed (at 130) that the statutory formula in the same form as the one used in the Social Security Act 1991 focused on:

“…the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith.”

6.      Mr Duncan did not know he was not entitled to receive the payments. But should he have known? Mr McQuinlan said it was not reasonable for the respondent to make the assumption that the money he was continuing to receive was paid pursuant to an entitlement when he had not specifically applied for any benefits, and when his daughter had received a letter from Centrelink saying her claim for Youth Allowance had been rejected. Mr Duncan said he was unused to dealing with Centrelink and had provided them with information he thought might have led to an entitlement. He also spoke with a Centrelink officer about his daughter’s situation and he was under the impression the defects in the application were being addressed, and that Centrelink would not necessarily have declined to make the payments in the interim.

7.      In fact, the authorities suggest the reasonableness of the belief is not necessarily relevant. The question was considered by French J in Haggerty v Department of Education (2000) 31 AAR 529. His Honour said (at 534):

“…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.”

His Honour went on to say (at 535):

“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.”

8.      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 an objective test in that sense. That 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’.”

9.      The decision of Cooper J in Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 is consistent on this point. His Honour speaks of a recipient not being able to avoid repayment in circumstances where he or she “turned a blind eye” to the payment in the first place: at paragraph 41.

10.     It is therefore necessary for me to have regard to the respondent’s actual state of mind. I am satisfied he actually believed he was receiving what he was entitled to receive. That belief was not necessarily reasonable given the fact he had not formally applied for benefits, and his daughter had received a letter of rejection in relation to Youth Allowance (although the letter must be read in light of Mr Duncan’s discussions with Centrelink officers who suggested the defects in the application might be readily fixed). He may well have wondered or be puzzled about his entitlements – but that is why he spoke with Centrelink officers on a number of occasions. The responses he received might not have satisfied the “imaginary recipient” referred to by French J in Haggerty, but that is irrelevant. Mr Duncan was unused to dealing with Centrelink, and was almost certainly naïve. In particular, he was naïve to assume Centrelink would pay benefits to his daughter even though her application had been rejected. But I do not accept his assumptions about the behaviour of Centrelink were so idiosyncratic as to prevent him relying on s 1237A.

11.     Mr McQuinlan pointed out Mr Duncan should have advised Centrelink of his belief that his daughter was receiving Youth Allowance. That is true: if he had complied with the directions contained in the letter dated 6 February 2002, the mistake would have been uncovered sooner, and the debt would not have arisen. But that failure does not tell us anything about his state of mind and good faith. The same can be said of Mr McQuinlan’s submission that the respondent was effectively “double dipping”.. (It was pointed out his daughter ultimately received Youth Allowance payments in respect of the same period that parenting payments were made). That may well be true, but it does not suggest a want of good faith. He did not realise he was double dipping, after all.

Conclusion

12.     I am satisfied the respondent received the payments in good faith. The decision of the SSAT is affirmed.

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Senior Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  10 December 2003
Date of Decision  12 December 2003

For the Applicant  Mr McQuinlan, Departmental Advocate
The Respondent appeared in person