Elomari and Secretary, Department of Family and Community Service S

[2003] AATA 1130

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 1130

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2003/744

GENERAL ADMINISTRATIVE DIVISION		)
Re		Hoda ELOMARI

Applicants

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal  Ms N Isenberg, Member

Date7 November 2003

PlaceYoung

Decision The Administrative Appeals Tribunal affirms the decision under review.

[Sgd] Ms N Isenberg, Member

CATCHWORDS

SOCIAL SECURITY – Applicant lodged claims for social security stating she owned her home – Respondent commenced payment of rent assistance to Applicant – Respondent sent correspondence to Applicant stating payment of rent assistance – Respondent reviewed Applicant’s entitlement to rent assistance – Respondent decided Applicant had not been entitled to any rent assistance and to raise and recover debts for the full amount – Applicant appealed to SSAT – SSAT decided that overpayment from 28 August 1997 to 18 June 1998 is waived on basis of administrative error but otherwise affirmed Centrelink’s decision - issue of whether the Applicant owes debt for rent assistance in total sum of $4147.62 and whether there are any grounds for not recovering all or part of the debt – decision affirmed.

LEGISLATION

Social Security Act 1991, sections 13, 1064-D1, 1069 E2(1), 1223(1), 1237A(1), 1237AAD, 1237A(1)

A New Tax System (Family Assistance) Act 1999

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

CASE LAW

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

Re Ivovic and Director-General of Social Service (1981) 3 ALN 95

Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424

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

Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 592

REASONS FOR DECISION

7 November 2003 Ms N Isenberg, Member

DECISION UNDER REVIEW

1.      The decision under review before the Administrative Appeals Tribunals (“the Tribunal") was the decision of the Social Security Appeals Tribunal (“the SSAT") dated 8 April 2003 (T2) which set aside the decisions of the Secretary, Department of Family and Community Services ("the Respondent") dated 16 October 2002 (T36) and the Authorised Review Officer (“ARO”) dated 18 December 2002 (T43) to raise debts of $3312.05 and $1793.17 to recover overpayments of rent allowance in the periods 28 August 1997 to 28 June 2000 and 1 July 2000 to 23 April, respectively, made to Mrs Hoda Elomari (“the Applicant”).  The SSAT set aside the decision and in substitution decided that the debt arising from the overpayment from 28 August 1997 to 18 June 1998 is waived on the basis of administrative error.  The decision was otherwise affirmed. This is the decision under review.  .

BACKGROUND

2.      On 18 August 1997 the Applicant lodged a claim for parenting allowance, in which she declared that she owned her home.  A note attached to the claim explained that her mother lived with her and it was recorded erroneously that the Applicant paid rent of $100.00 per week to her mother (T9).

3.      On 18 September 1997 Centrelink commenced payment of rent assistance to the Applicant (T12).

4.      On 19 June 1998 Centrelink wrote to the Applicant stating, inter alia, that she was being paid rent assistance (T17/41).

5.      On 25 May 1999 the Applicant lodged another family allowance claim, in which she declared that she was paying off her own home (T18). The following day Centrelink sent a letter to the Applicant again including a reference to her being paid rent assistance (T19).

6.      On 8 September 1999 (T20) and 19 September 1999 (T21), the Applicant was sent further letters, which referred to rent assistance.

7.      From 28 August 1997 to 18 June 1998 the Applicant was paid rent assistance totalling $957.60, and from 19 June 1998 to 28 June 2000 the Applicant was paid rent assistance totalling $2,354.45.  From 1 July 2000 to 23 April 2002 the Applicant was paid rent assistance totalling $1,793.17.

8.      On 15 April 2002, Centrelink sent a letter to the Applicant reviewing her entitlement for rent assistance (T27) and on 18 April 2002, the Applicant replied, providing details that confirmed she was a home-owner (T29).

9.      On 16 October 2002, Centrelink decided that the Applicant had not been entitled to any rent assistance and to raise and recover debts for the full amounts paid (T36).

10.     On 6 November 2002, Centrelink sent a letter to the Applicant (T39) and on 18 December 2002, the ARO affirmed Centrelink’s decision (T43).

11.     The Applicant appealed to the SSAT and on 8 April 2003, that Tribunal decided to substitute a new decision that the debt arising from the overpayment from 28 August 1997 to 18 June 1998 be waived on the basis of administrative error but otherwise affirmed Centrelink’s decision.

ISSUE BEFORE THE TRIBUNAL

12.     The issue before the Tribunal is whether the Applicant owes a debt for rent assistance in the total sum of $4,147.62 and if so, whether there are any grounds for not recovering all or part of the debt.

APPEARANCES

13.     A hearing was held before the Tribunal sitting in Young on 13 October 2003 at which the Applicant appeared without representation but with the assistance of Mr Saad Metqal, accredited interpreter in the Arabic language.  The Respondent was represented by Mr Luke Carter, an advocate from Centrelink Service Recovery Team.

LEGISLATION

14.     The relevant legislation in this matter is contained in the Social Security Act 1991 (“the SS Act”). Section 1069 E2(1) applies with respect to payment of rent assistance as part of family payment. This section states:

“1069 – E2(1)  Subject to point 1069-E3, an amount by way of rent assistance is to be added to a person’s standard family allowance rate if:

(a)the person is not an ineligible homeowner; and

…

(b)the person pays, or is liable to pay, rent (other than Government rent)

…”

15. Subsections 1223(1) and 1237A(1) of the SS Act are relevant to recovery of the debts:

“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.

…

…

1237A(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.”

…

16. Section 1237AAD sets out the conditions for a waiver of debt in ‘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 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 debt or part of the debt.”

17.     The legislation applicable to this case, in respect of the rent assistance paid as part of family tax benefit from 1 July 2000, is contained in the A New Tax System (Family Assistance) Act 1999 (“the FA Act”) and A New Tax System (Family Assistance)(Administration) Act 1999 (“the FA(A) Act”). Section 71 of the FA(A) Act provides for amounts paid under the FA Act to which the person was not entitled to be raised as a debt. Section 97 of the FA(A) Act states that:

“97      Waiver of debt arising from error

97(1)The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

97(2)    The Secretary must waive the administrative error proportion of a debt if:

(a)the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

(b)the person would suffer severe financial hardship if it were not waive.

…”

18.     Under section 101 of the FA(A) Act, a debt may be waived where there are ‘special circumstances’, other than financial hardship alone, making it desirable to do so when certain other conditions are met.

EVIDENCE: Documents

19.     The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which the Tribunal took into evidence. No documents were tendered by either party.

EVIDENCE and SUBMISSION: the Applicant

20.     The Applicant gave evidence and was cross-examined on behalf of the Respondent.  Questions were also put to the Applicant by the Tribunal.

21.     At the outset the Applicant stressed that she had never sought rent assistance from Centrelink.

22.     The Applicant told the Tribunal that she lived with her husband and 7 children in their home at Lot 3, Chums Lane, Young.  They have no mortgage, having paid off a $20,000 loan, which they had borrowed from the bank to do renovations.  She said that up until July 2003 her mother had lived with them and had paid $100 per week in rent.

23.     The Applicant agreed that she had completed a claim for parenting allowance dated 18 August 1997.  She said in cross-examination that she generally did not understand forms at all and needed assistance in completing them.  Sometimes a telephone interpreting service was used.

24.     Attached to the form of 18 August 1997 was a note from ‘The Employment Specialists’ in Young stating that (T9/27):

“Customer & partner own Lot 3 Chums Lane, Hoda’s mother lives with customer & partner & she pays $100.00 per week to her mother.”(sic)

25.     The Applicant was asked where that information had come from and she said that she had shown the person one of the receipts, which she had given her mother each week.

26.     The Applicant conceded that she had received letters from Centrelink, including the letter of 19 June 1998 (T17/41). She was asked about the entry in that letter, which states:

“19 June 1998

…

You will be paid $666.44 for Mouhamad, Walid, Samir, Safa, Ibrahim and Marwa every second Thursday, starting on 2 July 1998.

Your Family Allowance has gone up because Samir has turned 13.

…

Your payment of $666.44 is made up of

Family Allowance $555.40

Includes Rent Assistance $45.60

Family Tax Payment $65.44

…”

27.     The Applicant said that when she received letters from Centrelink, or anyone else, she just ”read the amounts” she was to receive.  As she had not asked for rent assistance she had no reason to expect that she would receive it.  She is unable to read English and has never tried to read Centrelink’s letters.  Neither her husband nor her mother can read English either. 

28.     She told the Tribunal however that in 1998 her three eldest children were aged 17, 15 and 13 and were all at Young High School and proficient in reading English.  She said she did not ask her children to read that letter or any of Centrelink’s other letters because it was ”no big deal” and was ”nothing serious”.  These letters related to her ”normal pay”..  It was pointed out to her that the letter of 19 June 1998, for example, informed her that there was to be a new rate of pay as Samir, her third child had turned 13.  She said she already knew that because Samir had told her it would increase.  She said he had obtained that information at school.

29.     When asked why it did not occur to her to question the amount she was paid she said she had no idea she was receiving an amount she was not entitled to, so had no reason to question the payments.

30.     The Applicant said that all her children still live at home.  Her husband receives the disability support pension and she does not work outside the home.  The two eldest children have part-time jobs, as that is all that is available in the area.  The third child is an apprentice gyprocker.  Only sometimes do they make financial contributions to the home.  The three youngest children are at school.

31.     The Applicant said in relation to the mortgage that she and her husband had borrowed $20,000 from the bank in about 1997 or 1998 but that had now been paid off.  She was asked in cross-examination about her answer to a question in a claim for Family Allowance dated 25 April 1999 where she said:

“Do you:

…

pay off you own home?  Yes

(e.g mortgage)”

32.     She said that by her answer she meant that she owned her own home and it had already been paid off.

33.     She said in relation to the family’s financial situation that she sometimes has to borrow money from relatives, as it is difficult to support 7 kids.  She sometimes needs money for shopping, food or school needs.  She might borrow $100 or $200 and will repay it by instalments of $50 when she can.  However currently she owes nothing.  Sometimes she will run out of money on the Monday before the next fortnightly Thursday social security payment. 

34.     By way of conclusion she said that as she had never sought rent assistance, she had no idea she was receiving it.  She said that Centrelink should ”pay for their mistakes” and she wants Centrelink to repay the amounts that have already been deducted from her pension in payment of the debt.

35.     She said that in future she will show ”everyone who reads English” any letter she receives.

SUBMISSION: Respondent

36.     The Respondent contended that the Applicant had no entitlement to any rent assistance in the period 19 June 1998 to 23 April 2002 during which time she was living at Lot 3 Chums Lane, Young.

37.     Overpayments were caused by the Applicant's failure to notify Centrelink that she was a home-owner in accordance with letters sent to her in the above period stating that she was being paid rent assistance. The Respondent asserted that the overpayments must be recovered.

38. Rent assistance for recipients of parenting allowance is paid under section 1064-D1 of the SS Act which states:

“1064-D1.An additional amount to help cover the cost of rent is to be added to a person’s maximum basic rate if:

(a)       the person is not an ineligible homeowner; and

…

(c)the person pays, or is liable to pay, rent (other than Government rent);...”

39. The term 'rent' is defined in section 13 of the SS Act:

“13(2)  Amounts are rent in relation to the person if:

(a)       the amounts are payable by the person:

(i)as a condition of occupancy of premises, or of a part of premises, occupied by the person as the person's principal home; or

(ia)as a condition of occupancy of premises, or of a part of premises, occupied by the person to allow him or her to provide personally a substantial level of care in a private residence for another person who needs, or in the Secretary's opinion is likely to need, that level of care in a private residence for at least 14 consecutive days or

…

(iv)for lodging in premises- that are the person's principal home;

...and

(b)       either:

(i)the amounts are payable every 3 months or more frequently; or

(ii)the amounts are payable at regular intervals (greater than 3 months) and the Secretary is satisfied that the amounts should be treated as rent for the purposes of t is Act.”

40.      The Respondent contended that the Applicant was aware or ought to have been aware, from 18 June 1998, that she was not entitled to be paid rent assistance, as she received letters to that effect on and from that date.

41.     The Respondent contended that, as from 18 June 1998, the incorrect payment of rent assistance was not due solely to administrative error and the payments were not received in good faith. The Respondent asserted that the Applicant should have enquired as to the meaning of the letters she had received, taking into account her poor command of English, and should have made relevant enquiries as to the content of those letters.

42.     The Respondent contended that, with respect to the rent assistance paid as part of family payment totalling $2,354.45, from 18 June 1998 to 30 June 2000, and as part of family tax benefit totalling $1,793.17, from 1 July 2000 to 23 April 2002, the following applies:

(a)That a debt for $2,354.45 can be raised under section 1223(1) of the SS Act;

(b)That a debt for $1,793.17 can be raised under section 71 of the FA(A) Act;

(c)That there was no administrative error on the part of Centrelink on or after 18 June 1998 (Section 1237 A(l) of the SS Act in respect of the debt of $2,354. 5 and section 97 of the FA(A) Act in respect of the debt of $1,793.17);

(d)That section 97 of the FA(A) Act is not satisfied as the debt was not raised due to sole administrative error and recovery of the debt would not cause severe financial hardship to the Applicant if it were not waived,

43.     The advocate for the Respondent referred the Tribunal to the decisions of Re Beadle and Director General of Social Security (1984) 6 ALD 1 and Re Ivovic and Director-General of Social Service (1981) 3 ALN N95 as to the meaning of ‘special circumstances’.

44. It was submitted that the Applicant’s circumstances were examined by the SSAT, and it was found that there was nothing unusual, exceptional or uncommon about her situation so as to set her apart from others in receipt of rent assistance payments. The SSAT also concluded that recovery of the debt would not be unjust or unreasonable. The Respondent concurred with the opinion of the SSAT and contended that there is nothing in the Applicant’s circumstances that fits the description of being special, so as to permit waiver under either section 101 of the FA(A) Act, or section 1237AAD of the SS Act.

45.     In conclusion, the advocate for the Respondent submitted that the sum of $4,147.62 constitutes a debt owed by the Applicant to the Commonwealth and that there are no grounds for waiving the debt in whole or in part.

FINDINGS

46.     In coming to the correct and preferable decision, the Tribunal took into account all the evidence, submissions, case law and relevant legislation.

47.     It should be noted at the outset that the original decision dated 16 October 2002related to overpayments of rent assistance for an additional period, namely from 28 August 1997 to 18 June 1998 but the SSAT waived the portion of the Applicant’s debt that related to that period, a sum of $957.60.  It did so on the basis that the overpayment was due solely to Centrelink’s administrative error.

48. The Tribunal is satisfied that the debt in this case has been properly calculated and that the unwaived portion of it, which is in issue, totals $4147.62 made up of $2354.45 under the section 1223(1) of the SS Act and $1793.17 under section 71 of the FA(A) Act.

49. A debt may be waived in accordance with section 1237A(1) of the SS Act and section 97 of the FA(A) Act but a pre-condition is that the debt arose solely through administrative error made by the Commonwealth and the person received the money in good faith.

50.     The Applicant’s position was that as she had never claimed rent assistance, any payment by Centrelink was not her mistake.  While the Tribunal accepts that the Applicant at no time claimed rent assistance, and had always been frank with Centrelink about her property ownership, it could not, however, be said that she had received the money in good faith.

51.     In Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 Cooper J said at 435 to 436 in relation to section 1237A(1) of the SS Act:

“…..  [the section] is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it.  It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.

A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists.”

52.     In Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 French J at 534 said:

“Consistently with what his Honour said in the Prince case, 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. "Reason to know" as Finn J used that term in Prince does not necessarily import a criterion of imputed as distinct from actual want of good faith as I have described it.”

53.     The Tribunal considered that the Applicant is not entitled to seek to avoid her responsibilities in relation to the appropriate amount of her entitlements by choosing not to read correspondence sent to her.  It is true that she cannot herself read English but at the relevant dates she had teenage children capable of doing so, had she asked.  She thought it ‘no big deal’ and was prepared only to read the amount she was to be paid, without question as to what it might relate.  Further the Tribunal does not accept that to rely on information about her Centrelink entitlements on the basis of what her son was told at school was to act in good faith in relation to her payments.

54.     Under section 1237AAD of the SS Act and 101 of the FA(A) Act, a debt may also be waived where there are ‘special circumstances’, other than financial hardship alone, which make it desirable to waive.

55.     Neither Act provides guidance as to the meaning of the term ‘special circumstances’. In Beadle v Director-General of Social Security (1985) 60 ALR 225, the Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 228). The Court affirmed the decision of the Tribunal (Re Beadle (supra)) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances must be “unusual, uncommon or exceptional” and must have a “particular quality of unusualness that permits them to be described as special".

56.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle (supra), observed (at 545) that ‘special circumstances’:

“…would require something to distinguish… [the]… case from others, to take it out of the usual or ordinary case. … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

57.     The Tribunal accepts that although the Applicant may experience some day to day financial hardship it is satisfied that there are no other circumstances which would make her circumstances ‘special’ such that it would be desirable to waive the debt.

58. In addition, consideration must be given to the writing off of the debt in accordance with section 1236 of the SS Act and subsection 101(c) of the FA(A) Act. One potentially relevant factor is if the debtor has no capacity to repay the debt. In this case, while the Applicant’s expenses sometimes exceed her income she is managing to make ends meet through the assistance of others and, at the same time, is making fortnightly repayments to Centrelink. Perhaps more significantly, the Applicant is, with her husband, the owner of an unencumbered residential property. The Tribunal also observed that in 1997 she and her husband apparently financed their overseas travel for a period of about 2 months.

59.     The Tribunal is satisfied that the Applicant has the capacity to repay the debt through deductions from her social security payments and, in that situation, the debt should not be written off.

DECISION

60.     The decision to raise and recover a debt of $4147.62 is affirmed.

I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed:         A. Krilis
  Associate

Date of Decision  7 November 2003
Representative for the Applicant               Self - Represented
Representative for the Respondent          Mr Luke Carter