Edye and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 1656

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1656

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/0766

GENERAL ADMINISTRATIVE DIVISION		)
Re		TANA  EDYE

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal R Hunt, Senior Member

Date10 August 2007

PlaceSydney

Decision The decision under review is affirmed in that I find the applicant does have a debt to the Commonwealth. The matter is remitted to the respondent for calculation of the outstanding balance owed by the applicant.

…..........[Sgd]..........................

R Hunt

Senior Member

CATCHWORDS

SOCIAL SECURITY – widow’s allowance – casual work – obligation to report change in circumstance – failure to notify Centrelink of change within 14 days - debt to the Commonwealth – no waiver – no special circumstances

Social Security Act 1991 ss 94(1), 94(5), 1223(1), 1223(5), 1237A, 1237AAD

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

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

REASONS FOR DECISION

10 August 2007  R Hunt, Senior Member

Introduction and Summary

1.      Centrelink records show that the applicant, Ms Tana Edye, had been receiving social security assistance since 1997 and continuing at the time when she disputed the reviewable decision before the tribunal. Ms Edye was receiving the widow’s allowance when she re-commenced work in late 2005. She notified Centrelink of this on 19 December 2005. However, she was required to notify Centrelink every 14 days of any change to her circumstances and Centrelink’s records show she was a day late in notifying her earnings for the period 16 December 2005 to 29 December 2005.

2.      The date by which she was required to notify Centrelink of any change for that period was 5 January 2006. Centrelink records show no notification until a telephone conversation took place on 6 January 2006. The late notification, which is the only notification by Ms Edye recorded for the period, resulted in an overpayment to Ms Edye. This overpayment gave rise to a debt to Centrelink.  Ms Edye claims that she was in constant contact with Centrelink and did not fail to notify her circumstances but she is unable to produce any corroborating evidence of this. Centrelink records also show that during the time Ms Edye was receiving social security payments, she was sent regular notices informing her that she was required to notify Centrelink if her circumstances changed. 

3.      The Social Security Appeals Tribunal found that Ms Edye failed to notify Centrelink as required and therefore had a recoverable debt of $483.23 for the period 16 December 2005 to 29 December 2005.  This is the amount of the debt raised by Centrelink but the respondent conceded for the review that the initial debt had been reduced by some payments. Consequently, I have found that Ms Edye does have a debt to Centrelink but that the original debt has been reduced. The respondent concedes the remaining debt amounts to $333.32.

Issues

2.        The issue before the Tribunal is whether Ms Edye received an overpayment for the period from 16 December 2005 to 29 December 2005, and if so, whether the overpayment gave rise to a recoverable debt. If this is so, the next issue is whether the debt should be waived.

Did Ms Edye Receive An Overpayment?

4.      Section 100(1) of the Social Security (Administration) Act 1991 (the Administration Act) provides:

100 (1) Subject to subsection (2), if:

(a)       a person who is receiving a social security payment is given a notice under subsection 68(2); and

(b)       the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and

(c)       the event or change of circumstances occurs; and

(d)       the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

(e)       because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

the social security payment becomes payable to the person at the reduced rate on the day on which the event or change in circumstances occurs.

5. Section 1223(1) of the Social Security Act 1991 (the Act) provides:

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 to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

6.      Ms Edye told the tribunal that during the relevant period she was working for the Just Group and that she always notified Centrelink as to any change in her circumstances but claimed that Centrelink did not record all of her calls. She also gave evidence that a few years ago the automated phone system used by Centrelink “failed me”. Nevertheless the only record held by Centrelink of notification of Ms Edye’s change in circumstances during the relevant period was on 6 January 2006.

Is There a Debt to the Commonwealth?

7.      Centrelink records also show that during the time Ms Edye was receiving social security payments, she was sent regular notices informing her that she was required to notify Centrelink if her circumstances changed.  The records therefore indicate that Centrelink was meeting its obligations under section 100(1) of the Administration Act. Ms Edye has not disputed the adjusted calculations which reduced her entitlements from time to time but complains that she also met her obligations about keeping Centrelink informed of any changes to her situation. This required her to notify Centrelink of her income every 14 days as it was variable. Ms Edye gave evidence that her employment was irregular for a period in late 2005 and early 2006 but that she never failed to keep Centrelink informed.

8.      Unfortunately, Centrelink records do not fully reflect notification of earnings within the 14 days required on all occasions. The records show, in particular, that her notification for the period 16 December 2005 to 29 December 2005 was a day late. I accept Ms Edye’s evidence that she did make efforts to meet her notification obligations and that this was a difficult time for her.  It may be that Ms Edye attended Centrelink offices during the relevant time and there was a breakdown in communication when she thought she had told Centrelink about her income for the period in question.

9.      I refer to Centrelink records as follows. These records tend to show regular contact by Ms Edye but reflect some discrepancies. On 19 December 2005, Ms Edye contacted Centrelink and advised that she had commenced employment with the Just Group on 12 December 2005.  She advised that at that stage, she did not know her earnings. On 23 December 2005, Ms Edye notified Centrelink of her earnings with the Just Group. On 23 December 2005, a debt of $99.49 was raised against Ms Edye for overpayment of widow allowance for the payment period 2 December 2005 to 15 December 2005.  A notice of recovery of $99.49 was sent to Ms Edye on the same date. On 23 December 2005, Centrelink sent Ms Edye a letter informing her of how her pension was reduced by her income and advising her of her reporting obligations.

10.     On 6 January 2006, Ms Edye contacted Centrelink and advised of her earnings from the Just Group. On 6 January 2006, Ms Edye’s earnings were checked and a debt in the sum of $483.32 raised for overpayment of widow allowance. On 9 January 2006, a notice of recovery of $483.32 for the payment period 16 December 2005 to 29 December 2005 was sent to Ms Edye. On 12 January 2006, Ms Edye notified Centrelink of further earnings from the Just Group. On 17 January 2006, Centrelink wrote to Ms Edye requesting that she provide full details of her employment/earnings by 7 February 2006.

11.     On 19 January 2006, Ms Edye wrote to Centrelink requesting a review of the two decisions to raise debts in the sum of $99.49 and $483.32 on the ground that she reported her earnings at the specified times. On 25 January 2006, Ms Edye contacted Centrelink requesting a review of the two decisions. On 25 January 2006, the original decisions were affirmed as the officer found Ms Edye did not advise Centrelink of her income within 14 days of the payment period.  On the same day, Ms Edye was notified in writing. On 6 February 2006, Ms Edye requested a review by an Authorised Review Officer (ARO). On 1 March 2006, the ARO found that Ms Edye had correctly notified her earnings for the period 2 December 2005 to 15 December 2005 and set aside the decision that there was a debt of $99.49 for that period. The ARO affirmed the debt of widow allowance for the period 16 December 2005 to 29 December 2005 in the amount of $483.32.

12.     On 1 March 2006, the ARO notified Ms Edye of his decision to set aside the debt of $99.32 and to affirm the debt of $483.32. On 17 March 2006, Ms Edye entered into an agreement with Centrelink for the payment of outstanding debts. This history illustrates Ms Edye’s continuous involvement with Centrelink and her efforts to clarify her position. It also illustrates Centrelink’s efforts to accommodate Ms Edye’s changing circumstances.

13.     On 7 April 2006, Ms Edye lodged an appeal with the Social Security Appeals Tribunal (SSAT). On 25 May 2006, the SSAT affirmed that Ms Edye owed a debt to the Commonwealth of $483.32 for the period 16 December 2005 to 29 December 2005 because she did not notify her changes in income within 14 days, and that the debt must be repaid. On 22 June 2006, Ms Edye lodged an application for review by the Administrative Appeals Tribunal.  Her application stated, inter alia, “I am writing to request the AAT review a decision taken by the ... (SSAT) in regard to a Centrelink account for the amount of $483.32”. This is the decision under review.

14. I have considered Ms Edye’s claim in accordance with the applicable legislative provisions. Section 100(1) (e) goes on to provide that if, because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced, the social security payment becomes payable to the person at the reduced rate on the day on which the event or change in circumstances occurs. Centrelink records show that this is what happened in Ms Edye’s case. The variation in her income for the period meant that her social security entitlement was reduced. As a result, she was overpaid. The next consequence is that, under section 1223(1) of the Act, Ms Edye’s payment was affected. Having obtained the benefit of the payment to which she was not entitled, the amount of the payment became a debt to the Commonwealth and the debt was taken to arise when she obtained the benefit of the payment. Therefore, I find that this aspect of the decision under review is correct and that Ms Edye has a debt to the Commonwealth pursuant to section 1223(1) of the Act although the amount of the debt is somewhat less than that found by the SSAT.

Should the Debt be Waived?

15. The operation of section 1223(1) seems very harsh to Ms Edye as she tried to keep Centrelink informed and was not dishonest but simply a day late in reporting her situation. While I have some sympathy for her, the options for forgiveness available under the legislative scheme are few.

16. Section 1237A of the Act provides for waiver of a debt to the Commonwealth arising from sole administrative error by the Commonwealth, if the payment was received by the debtor in good faith. In this case, I am unable to find that the debt was attributable solely to administrative error by the Commonwealth, so the debt cannot be waived on this ground. While Ms Edye believes she informed Centrelink within time, she has not produced any evidence to support her belief.

17. Section 1237AAD of the Act provides for waiver of a debt in certain other 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 result wholly or partly 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 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.

18.     I accept that Ms Edye did not knowingly fail or omit to comply with section 100 of the Administration Act. Centrelink records show it was her usual practice to meet her obligations although she may have slipped up on more than one occasion. The next step is to examine whether there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt.

19.     The leading case generally followed in making a determination about special circumstances is Beadle and Director-General of Social Security (1984) 6 ALD 1, where Toohey J stated that the circumstances must have a particular quality of unusualness. More recently, in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 Besanko J stated, in respect of special circumstances (at paragraph 33):

… the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances… It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case…there must be something that distinguishes the case from the ordinary or usual case ….

20.     I accept that Ms Edye is in financial difficulty but I do not accept that she is in dire straits.  Ms Edye gave evidence that her situation has improved since December 2005 and she now has a better job. She no longer relies on social security assistance. The Centrelink debt is an extra burden for her but she has already reduced it as Centrelink automatically deducted some amounts when she was still in receipt of social security payments. Ms Edye would now have to make arrangements to actively repay the debt by some other means. This is no doubt very tiresome and inconvenient and will also mean it takes longer for her to recover and re-establish herself financially and emotionally. It will be a drain on her limited resources. However, her situation does not make her circumstances out of the ordinary, exceptional or unusual. Many people with limited resources have to repay debts to Centrelink and the amount Ms Edye owes is not a great amount compared with some overpayments that applicants are required to repay. In my view, her circumstances are not so unusual, uncommon or exceptional as to set Ms Edye apart from other income support claimants and do not fall within the ambit of special circumstances. It follows that I am not satisfied that her circumstances constitute special circumstances for the purposes of section 1237AAD. Therefore, the waiver provisions of s 1237AAD of the Act do not apply.

conclusion

21.     Ms Edye does have a debt to the Commonwealth as a result of the overpayment to her explained above. However, the amount of the debt found by the SSAT has been reduced because of deductions Centrelink made from payments to Ms Edye when she was still a recipient of social security payments. As this is the situation, I think it inappropriate for me to affirm the decision of SSAT without qualification. I will remit the matter for confirmation of the precise amount of the debt outstanding. 

Decision

22.     The decision under review is affirmed in that I find the applicant does have a debt to the Commonwealth. The matter is remitted to the respondent for calculation of the outstanding balance owed by the applicant.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Hunt

Signed: Talaishia Collis
  Associate

Date/s of Hearing  5 July 2007        
Date of Decision  10 August 2007  
Solicitor for the Applicant          Self-Represented           
Solicitor for the Respondent     Ms Glenda Heggen – Centrelink Legal Services