Easton and Secretary, Department of Family and Community Services

[2004] AATA 183

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 183

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1318

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DAVID WILLIAM EASTON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal REAR ADMIRAL A R HORTON AO

Date25 February 2004 

PlaceSydney

Decision The decision under review is affirmed.

[Sgd]  Rear Admiral A R Horton AO 

CATCHWORDS

SOCIAL SECURITY – raising and recovery of debt – workplace injury – weekly workers compensation payment – application for and grant of carers payment – carers payment cancelled when periodic compensation payments taken into account – applicant did not advise Centrelink of changes to income or expectation of compensation payment - applicant considers periodic payments were for work not compensation and completed carer claim form accordingly – lumps sum compensation – preclusion period – decision to raise and recover debt – error not solely attributable to administrative error by respondent – consideration as to special circumstances – criteria for special circumstances not met – decision affirmed

Social Security Act 1991 – ss 17, 1173(1), 1223(1), 1237A(1), 1237AAD

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

Director-General of Social Services v Hales (1983) 47 ALR 281

REASONS FOR DECISION

25 February 2004    REAR ADMIRAL A R HORTON AO        

1.      This is an application to review a decision of the Social Security Appeals Tribunal (“SSAT”) on 21 July 2003 that affirmed a decision of an authorised review officer (“ARO”) of the Secretary, Department of Family and Community Services (“the Respondent”) on 14 May 2003 that affirmed the original decision to raise and recover a debt of $8513.51 resulting from the overpayment of carer payment to Mr David William Easton.

2.      At a hearing before the Administrative Appeals Tribunal on 20 January 2004, Mr Easton was self represented.  Mr L Carter, an advocate from the Service Recovery Team of Centrelink, appeared for the Respondent.   On one occasion the Tribunal adjourned, and on a second occasion, the Tribunal was obliged to advise Mr Easton that the hearing would be concluded unless he tempered his aggressive verbal and physical emotions, an attitude which was not helpful to either the Tribunal or the Respondent in obtaining evidence and ascertaining the relevant facts and circumstances, nor did it assist the Applicant in presenting his case. 

3. The Tribunal took into evidence the documents provided by the Respondent pursuant to s37 of the Administrative Appeals Tribunal Act1975.   As was the case before the SSAT, a significant omission by the Respondent was the claim form lodged in May 2002 (effective to date 25 March 2002) by Mr Easton for the carer payment, given that his response to certain questions formed the basis of the decision by the Respondent to cancel carer payment.  In the event, the Tribunal accepted Mr Easton’s oral evidence as to his responses to those questions.

4.        Following the hearing, the Tribunal sought further documentation from the Respondent by way of the original claim form, a facsimile from Mr Easton’s solicitors to Centrelink, referred to by the SSAT, and details of the final calculation of the preclusion period.  The response was less than adequate, and the shortcomings will be addressed as appropriate in this decision.

EVIDENCE AND FACTS

5.        On 28 June 2000, Mr Easton suffered a work place injury whilst employed by Davids Holdings (now IGA) as a storeman.   It is understood that this employment was funded by Liverpool Chamber of Commerce under a training scheme.  When climbing into the back of a truck as a function of his duties, part of the “rotten” floor collapsed under Mr Easton and he straddled an A frame.  No medical reports as to the extent of his injuries were available to the Tribunal, but he described them as  lacerations and other damage to the knee, and a hernia which later required surgery.  He was transferred by ambulance to the surgery of his general practitioner at Bankstown, Dr Tang.  From subsequent events it is evident that a claim for compensation was lodged. 

6.        Some time after the accident, Dr Tang cleared him to return to light duties at Davids Holdings, but after working for a short time collecting garbage, the company informed him that further light duties work was not available and he was told to “go home”.

Compensation  

7.        Prior to his accident, Mr Easton received a gross weekly wage of $632, which was paid into his bank account.  He thought this continued for some six to eight weeks after the accident, but it could have been longer, before the money going into his account was reduced to $232 net per week.  Mr Easton gave evidence that he received written advice from GIO at about this time, but could not recall what it stated.  In his strong view, this reduced payment was an arbitrary reduction in his take home pay, to the point where he could not meet his commitments, including rent for his Blacktown residence of $160 per week.  He emphatically stated to the Tribunal that he considered these payments to be wages and not a form of periodic compensation payment.  Further, he did not mind which authority was responsible to pay him, his issue being that an arbitrary reduction in his wages, to a point whereby he could not meet his commitments, had been made.   

8.        Payment details provided by GIO in response to a subsequent request from the Respondent (T13/pp 43-49) would seem to broadly indicate that Mr Easton continued to receive payments in the order of $500 - $600 per week until late in 2000 or early 2001.   Those payments were seemingly paid by GIO to Liverpool Chamber of Commerce and then presumably forwarded to Mr Easton’s bank account.  Thereafter, the quantum of payments, made out to David Easton, reduced until  about July 2001 when they settled in the order of $365 per week gross.  Mr Easton gave evidence that on a number of occasions payments ceased, in his view through a lack of co-ordination and co-operation between the relevant parties, requiring him to take action to have them restored.   At the time these payments commenced, Mr Easton was not in receipt of any social security benefits.

9.        On 8 January 2003, the compensation claim by Mr Easton was settled for a gross sum of $200,000.   In normal circumstances, the amount paid by way of periodic compensation payments to that point is recoverable from the gross compensation payment, this normally being effected prior to the receipt by the claimant of the lump sum payment.  This was presumably not done on this occasion, Mr Easton being called upon to pay back (to GIO) $79,195.  This figure was disputed by Mr Easton, and he gave evidence to the Tribunal that he had ultimately paid $75,000.  Notwithstanding, he argued that he should not have been called on to make any payment, on the basis that periodic monies received had been in the nature of wages.   As to the remainder of the compensation payment, Mr Easton stated that his legal costs were some $44,000 and he owed further monies in respect of rent arrears and gas and electricity charges.  He was thus left with some $75,000.  He stated that he has since met all his living expenses from this residual compensation payment, his financial assets being reduced to about  $30,000 by the date of the hearing.        Mr Easton advised that he has recently been granted Newstart Allowance, from which $54 is taken for debt recovery.

10. In accordance with the criteria in section 1169 of the Act, the Respondent calculated a preclusion period from 8 January 2003 to 14 March 2006 (T12/p42) during which a “compensation affected payment” cannot be paid. Compensation affected payments are prescribed in section 17 of the Social Security Act 1991 (“the Act”), and include “carer payment”. 

Carer Payment

11.      On 25 March 2002, Mr Easton advised the Respondent that he intended lodging a claim for carer payment, this being granted on 9 May 2002 with payments being back dated to 25 March 2002. The payment related to his caring for his neighbour, Mr Douglas McDonald, now aged 86.  In evidence Mr Easton stated that prior to his claim, he had cared for Mr McDonald for about 8 years, initially mowing his lawns, and then undertaking some tasks in the house, given that Mr McDonald sought to maintain his independence.  In early 2002, Mr McDonald collapsed in his home, and Mr Easton sought to resuscitate him and called for an ambulance.  Mr McDonald was admitted to Blacktown Hospital;  Mr Easton stated that he was listed as his guardian.  In discussions with the Aged Care Assessment Team (“ACAT”) at the hospital, wherein it was decided that Mr McDonald could return to his home under the care of Mr Easton, the senior social worker, Ms Helen Taylor drew the attention of Mr Easton to the carer payment benefit, and obtained and helped him to complete the relevant forms.

12. Payment of carer pension ceased on 26 December 2002, when the Respondent became aware of the circumstances of the periodic compensation payments, and applied the criteria in section 1173 of the Act. This relevantly states:

“1173(1) If:

(a)       a person receives periodic compensation payment: and

(b)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and

(c)the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;

the rate of the person’s compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2)     

1173(2)    The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.”

13.      Considering this matter for convenience against fortnightly rates, the rate of compensation payment, as advised by GIO, was $611.40.  The rate of carer payment as recorded at T30 was in the order of $432 gross or $372 net and the Respondent therefore calculated the entitlement to carer payment as nil.  Hence payment of carer allowance ceased.  On the basis that Mr Easton had not indicated at Questions 76 and 77 (as referred to in a file note dated 1 April 2003 (T20/p60)) on the carer payment claim form that he was in receipt of, or had a claim for, compensation resulting from an injury, and further, that he had not advised a change of income (from the $7.50 annual recorded on the claim form) or likely compensation, as required by the letter of notification of the granting of carer payment, the Respondent decided that an overpayment of $8513..51 should be recovered. 

14.      The Respondent was unable to produce the carer payment claim form.   However, the evidence of Mr Easton was (Transcript p15):

“Tribunal:      There is reference to two questions that you had to fill in on the                carer payment form which referred to whether you were in   receipt of any compensation payment? 

Mr Easton:    That’s correct.  I would have said “No”

Tribunal:       You say you would have said “No”?

Mr Easton:    Absolutely.  I didn’t believe that – as far as I was concerned Workers Compensation …There was no compensation.  Compensation was the lump sum I got at the end of it all, as far as I was concerned.  To the best of my knowledge that’ s what was happening.  I didn’t – I don’t understand how you’re getting, how it’s considered workers compensation when your work has to pay you.  It’s not like you went to work drunk … they sent me into a truck that should not have been on our premises, in our workplace, …under the WorkCover Authority you’re meant to be safe at work…”

15.      Mr Easton stated he was aware that GIO was paying him, but that he was not aware that it was compensation.  When asked why did he think GIO was now making fortnightly payments, he stated “because they are an insurance company.  It means nothing to me.  It means that someone has got to pay me.  I don’t care who pays me each week.  I was injured…it was their fault and they were negligent which is why they paid me.”     In respect of the requirement by the Respondent to report changes in circumstances, as detailed in the carer payment approval, Mr Easton stated  “I would have received a letter from Centrelink saying “here’s your carer payment, welcome, this is how much money your getting.  Yes, sure”.   When asked by the Tribunal whether he was aware that the letter required him to inform Centrelink if he was receiving compensation, Mr Easton responded “Didn’t read it, wouldn’t read any of it…I’d read enough documents, I didn’t read nothing that comes from anybody”.

16.      Mr Easton has not received the carer payment since 26 December 2002, and he is considered to be ineligible because of the preclusion period.  On his evidence, he continues to care for Mr McDonald, where he tends to his living requirements as necessary, including responses to calls during the night, preparing meals, showering and cleaning up, shopping and banking.   Whilst Blacktown Hospital has organised some home care for limited periods on three days of the week, Mr Easton considers Mr McDonald to be “totally dependent” on him as he provides care “24 hours a day”, in what he considers to be “a life commitment”. 

17.      Mr Easton initially described his own life as relatively normal, but then said his injuries had affected every part of his life.  He is impotent, his leg continues to give trouble and he has a permanent limp, his knee locks and he cannot run, a situation he finds particularly distressing as a former champion runner.  He cannot get employment because of his injuries and because employers are not prepared to consider a person on compensation.

LEGISLATION AND DECISION

18. Section 1173 of the Act has already been referred to in that it applies where a person receives periodic compensation payments and was not receiving a compensation affected payment at the time. In those circumstances, it requires that the daily rate of compensation affected payment be reduced by the daily rate of periodic compensation. Those circumstances apply in this matter. When the rate of compensation affected payment for the period in question is considered against the rate of periodic compensation being received, the correct rate of compensation affected payment must be nil. On that basis, the Respondent ceased payment and raised a debt for recovery.

19. The right of the Commonwealth to recover such overpayment is addressed in section 1223 of the Act, which states, as may be relevant:

“1223(1) Subject to this section, if:

(a)       a social security payment is made: and

(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.

…

1223(1AB)      Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:

(a)the payment was made to the person by mistake as a result of a computer error or an administrative error;

(b) the person for whose benefit the payment was intended to be made was not qualified to receive the payment;

(c)…

(d)the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;

…”

20.      The position of Mr Easton is that the payments he received were effectively a continuation, albeit at a reduced rate, of the wages to which he was entitled.  He supports this view by arguing that the fact that GIO, rather than his employer, was making the payments, was of no concern to him, as this was a matter between the various parties.  He acknowledges that GIO informed him, when sending pay slips, that “this is your statutory rate of payment”..  In evidence, he referred to seeing a solicitor at that time, who made reference to Workers Compensation.  Whilst he considers himself to be still employed by Davids Holdings, there is no evidence before the Tribunal to suggest that is the case, nor has he worked for that company since shortly after his injury in 2000.

21.      Reference has previously been made to a request by the Tribunal for a facsimile by Mr Easton’s solicitors, referred to in the SSAT decision.  As recorded by the SSAT, that facsimile requested an estimate of the preclusion period and compensation charge, and indicated “that Mr Easton was continuing to receive weekly workers compensation payments.”   The Respondent was unable to provide either this facsimile or the response, an unacceptable response given its relevance to this review.     However, the Tribunal must draw the inference from this facsimile request and the wording therein, that Mr Easton was well aware that he was receiving compensation payments.  While the Tribunal acknowledges the view of Mr Easton  that his employer was responsible for him being injured, it cannot accept that Mr Easton did not know that the payments he received were periodic compensation payments.  Therefore, it was appropriate for the Respondent to take these into account when calculating an entitlement to a social security benefit, and the Tribunal so finds.

22.      Section 1236 provides the authority for a debt to be written off.  It relevantly states:

“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)       …       

(d)it is not cost effective for the Commonwealth to take action to recover the debt”

23.      The Tribunal finds that the debt is recoverable by law on the evidence before it, and that Mr Easton has the capacity to repay this debt, both from the residual compensation settlement money and by the means presently being taken to pay off this debt ($54 per fortnight).

24. Section 1237 of the Act provides the authority to waiver the Commonwealth’s right to recover the whole or a part of a debt in certain circumstances. Section 1237A(1) requires that if the debt is not raised within a period of six weeks from the first payment, “the Secretary must waive the right to recover the proportion of the debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments …”.    The Act does not permit waiver of part of a debt caused by both administrative error and any other factor. The Tribunal accepts that the Respondent granted carer payment on the information provided by Mr Easton on the claim former for care payment. Mr Easton conceded that in response to the relevant questions as to whether he was receiving compensation payment or a compensation payment was pending, he answered “No”. On that information, he was considered qualified and eligible for the carer payment, which was granted. There is no evidence that the resultant debt, which arose because of the application of section 1173 of the Act, which indicated that he was not entitled to any carer payment, resulted from an administrative error by the Commonwealth.. The Tribunal finds that the debt cannot be waived under section 1237A.

25.      Reference was earlier made to the inability of the Respondent to provide the actual claim form completed by Mr Easton, and in a file note, questions 76 and 77 were referred to being applicable.   This does not appear to be the case, the relevant questions being 61 and 62.  Whilst this indicates a lack of attention to detail by the Respondent, it does not alter the fact that Mr Easton himself was quite clear in stating that he had answered in the negative to the questions as to whether he was receiving, or might receive, compensation payments.

26. Section 1237AAD of the Act provides an authority to waiver the debt “in special circumstances”, and states relevantly:

“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 result wholly or in part from the debtor or another person knowingly:

(i)        making a false statement or a false 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 hardships 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.”

27. Special circumstances is not defined in the Act, but the view of Toohey J in the Federal Court decision in Re Beadle and Director General of Social Security (1984) 6 ALD 1 has been widely followed. He stated:

“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.”  

28.      Neither the Respondent nor the SSAT considered the circumstances in this matter to be “special”, the latter observing that “it is an all too common scenario for those who have compensable injuries to experience the sort of financial and personal problems enunciated by Mr Easton”, his circumstances not being sufficiently different from other recipients of settlements to justify a departure from the general rule.   In the view of the Tribunal, these assessments pay insufficient regard to the particular circumstances that led to granting of a carer pension to Mr Easton.  Contrary to what one may consider the usual situation, Mr Easton is caring for a person who is aged, not related, lives separately and requires daily attention.  In doing so, and on the evidence that has not been refuted, he was doing so, and continues to do so, by arrangement with ACAT at Blacktown Hospital.  Such an arrangement seemingly reduced the care load and related financial costs to that facility.    

29. However, the criteria in section 1237AAD has a number of parts. Whilst “special circumstances” might be considered to exist in accordance with subsection (b), the conditions of subsection (a)(i) (or (ii)) must also be met. In this matter, the Tribunal must be satisfied, in accordance with that subsection of the Act, that the debt did not result wholly or in part from “the making of a false statement or false representation”.   The Tribunal cannot be so satisfied, the evidence being that Mr Easton did not properly declare his compensation, or anticipated compensation, when applying for the carer payment.  The Tribunal acknowledges the financial difficulties suffered by Mr Easton, and the continuing existence of a preclusion period, but also takes account of the decision in Director-General of Social Services vHales (1983) 47 ALR 281 in which Sheppard J stated that notwithstanding hardship, the recovery of payments to which a person was not lawfully entitled, must be a paramount consideration. Mr Easton is paying off his debt, and is in receipt of the residual lump sum compensation.

30.      Given that “special circumstances” as defined in section 1237AAD are deemed not to exist, the decision of the SSAT that Mr Easton has an overpayment of $8513.51, recoverable by the Commonwealth, is affirmed.

31.      A related issue, but one not specifically before the Tribunal, is whether the preclusion period has been correctly calculated.  This was estimated at T12/p42 on 7 January 2003.  A number of the relevant entries on the associated request for estimate were not completed in spite of the notation on the form that the originator of the request must ensure that all information is provided.  A request to the Respondent after the hearing requesting details of the final calculation again, and as with other requests previously referred to, failed to illicit an adequate response.  It may well be that the preclusion period is correct, but it is clearly appropriate that the Respondent undertake a review.  In summary, the Tribunal views with concern the omissions by the Respondent in this matter.

31.      The circumstances of Mr Easton and his carer role of Mr McDonald deserves further comment, and in the view of the Tribunal, consideration by the Respondent.  Mr Easton is, due to the existing preclusion period, not entitled to be paid carer payment.   Yet he continues to fulfil an essential role in providing a very wide range of services to Mr McDonald, a person who is not related with the onus of responsibility that might entail, but “merely” a neighbour.  On the evidence, this role is recognised and endorsed by the relevant health authorities, and is undoubtedly to the benefit of both Mr McDonald and those authorities, yet the legislation precludes Mr Easton from being financially compensated for such service.   Having been refused a carer payment, Mr Easton could well have reached a decision that he should no longer accept the commitment he had, indeed, given himself.  That he did not do so, reflects well on him.   

32.      The decision under review is affirmed.

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of REAR ADMIRAL A R HORTON AO

Signed:         Associate

Date of Hearing  20 January 2004
Date of Decision  25 February 2004
Representative for the Applicant               Mr David Easton (Self-represented)   
Advocate for the Respondent                    Mr Luke Carter