Elwaes and Secretary, Department of Family and Community Services - [2001] AATA 309

DECISION AND REASONS FOR DECISION [2001] AATA 309

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2000/1188

GENERAL ADMINISTRATIVE DIVISION     )
           Re      Andrew Elwaes
  Applicant
           And    Secretary, Department of Family and Community Services
  Respondent

DECISION

Tribunal Adjunct Professor L.S. Rodopoulos, Member

Date18 April 2001
PlaceMelbourne

Decision      The decision under review is varied. Mr Elwaes owes a debt to the Commonwealth of $715.60.
  …(sgd. L. S. Rodopoulos)...
  Member
CATCHWORDS
SOCIAL SECURITY - Newstart Allowance - Whether debt owed to the Commonwealth -administrative error - whether debt should be waived - decision varied
Social Security Act 1991 ss. 658, 1223(5), 1224(1), 1237A, 1237AAD
Secretary, Department of Social Security v Prince (1998) 152 ALR 127

REASONS FOR DECISION

18 April 2001 Adjunct Professor L.S. Rodopoulos, Member

This is an application regarding the decision of Centrelink to raise a Newstart debt of $1,073.40 against Mr Elwaes for the period 30 March 1998 to 5 June 1998 (para. 19, p.7). The decision was affirmed by an Authorised Review Officer on the 15 June 2000 and by the Social Security Appeals Tribunal ("the SSAT") on 7 September 2000.
Mr Elwaes requested that the application be decided on the papers. In addition to the T documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 ("the T documents"), Nos. T1-T15 Mr Elwaes has provided two submissions. One submission is dated 14 December 2000 and the other dated 6 March 2001. Ms Carolyn McInnes of the Centrelink Advocacy and Administrative Law Team has provided the Tribunal with a Statement of Case for the Respondent in response to Mr Elwaes submission of 14 December 2000. The Tribunal has ascertained that the Law Team, having received a copy of his submission of 6 March 2001, did not wish to make any further submissions.
The background to this application, accepted by the Tribunal after reading the T documents, is set out in this Statement of Case as follows: "Mr Elwaes was receiving Newstart Allowance when he commenced 'FULL-TIME WORK' on 30 March 1998". On 13 April he lodged an Application for payment of Newstart/Youth Training Allowance form in which he said he had earned $790.65. On receipt of that form, the Department did not pay him any Newstart payment. In the following two fortnights he earned a further $865.25 yet also received $357.80 in Newstart 27 April 1998. This was an administrative error as Mr Elwaes was not subject to the notification requirements leading up to this payment.
Mr Elwaes submitted his next Application form on 15 May 1998 in which he declared he earned $1,236.95 for the period 14 April 1998-1 May 1998. Again he did not receive any Newstart payment.
Mr Elwaes submitted his third Application form on 10 June 1998. On that form he said he was "already employed" but did not declare that he earned $2,356.45 in the period. He received Newstart payments of $715.60 ($357.80 in each fortnight). Mr Elwaes ceased work after 5 June 1998.
In May 1999, the department sought and received employment details about Mr Elwaes' earnings from Diamond Screen Print who confirmed that he was working full-time between 30 March 1998-5 June 1998 and earned $4,710.65.
On 14 October 1999, a decision was made to raise a debt of $1,073.40 for the period Mr Elwaes was working."
Legislation
The relevant legislation of the Social Security Act 1991 ("the Act") is as follows:
"Secretary may require recipient to give particular information relevant to payment of newstart allowance
658(1)The Secretary may give a person to whom a newstart allowance is being paid a notice that requires the person to give the Department a statement about a matter that might affect the payment of the allowance to the person.
658(2)Subject to subsection (2A), a notice under subsection (1):
(a)must be in writing; and
(b)may be given personally or by post; and
(c)must specify how the statement is to be given to the Department; and
(d)must specify the period within which the person is to give the statement to the Department; and
(e)must specify that the notice is a recipient statement notice given under this Act.
658(2A)A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (2)(c) or (e).
658(3)The period specified under paragraph (2)(d) must end at least 7 days after the day on which the notice is given.
658(4)A statement given in response to a notice under subsection (1) must be in writing and in accordance with a form approved by the Secretary.
658(5)A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice.
Penalty: Imprisonment for 6 months.
Note:Subsection 4B(2) of the Crimes Act 1914 allows a court that convicts an individual of an offence to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine that a court can impose on the individual is worked out by multiplying the maximum term of imprisonment (in months) by 5, and then multiplying the resulting number by the amount of a penalty unit. The amount of a penalty unit is stated in section 4AA of that Act.
658(7)This section extends to:
(a)acts, omissions, matters and things outside Australia whether or not in a foreign country; and
(b)all persons irrespective of their nationality or citizenship.
…
Incorrectly paid amount
1223(5)If:
(a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person under this Act;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
…
Debts arising from recipient's contravention of Act
1224(1)If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth.
Note:If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
…
Waiver of debt arising from error
Administrative error
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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
1237A(1A) Subsection (1) only applies if:
(a)   the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b)   if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
Underestimating value of property
1237A(2)If:
(a)   a debt arose because the debtor or the debtor's partner underestimated the value of particular property of the debtor or partner; and
(b)   the estimate was made in good faith; and
(c)   the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
Proportion of a debt
1237A(3)For the purposes of this section, a proportion of a debt may be 100% of the debt.
…
Waiver in special circumstances
1237AADThe 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."

Submissions

In its Statement of Case the Respondent concurs with the determination of the SSAT that the overpayment of $357.80 of the 27 April 1998 arose through administrative error (T2, p.9, para. 26). However it does not concur with the SSAT's determination that the overpayment of $715.60 paid for the period 12 May 1998-8 June 1998 arose solely (my emphasis) through administrative error pursuant to s. 1237A as Mr Elwaes failed to declare his earnings on his Application form. While the Department failed to act on his advice that he was "already employed" (full-time) he nevertheless contributed to the overpayment by not declaring his earnings as required by Question 9.
In his painstaking response to the respondents Statement of Case Mr Elwaes concludes that s. 1237A of the Act does not apply to his circumstances and he officially withdraws his appeal regarding this section of the Act:
"In preference of making my appeal application solely in accordance with section 1237AAD Social Security Act 1991. Against Centrelink's 14/10/99 decision to recover a debt of $1,073.40." (submission of 6 March 2001, p.4)
Mr Elwaes then proceeds to argue the case pursuant to s. 1237AAD(b) that 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. Mr Elwaes incorrectly argues that administrative error constitutes "special circumstances" pursuant to s. 1237AAD(b) of the Act.
This Tribunal has chosen to deal with these two overpayments separately. The amount of Newstart Allowance of $357.80 paid on 27 April 1998 is conceded to have arisen from administrative error due to s. 658(1) not being met and that, therefore, s. 1237A(1) applies namely:
"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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor)."
At the SSAT Mr Elwaes is recorded as having said that:
"…he was unsure of the specifics of the newstart allowance income test and when he lodged his April form thought that he may have been entitled to some part-payment of newstart allowance. When he did not receive payment for this fortnight he was satisfied that the level of his earnings precluded payment. Mr Elwaes did not therefore expect to receive any further payments of newstart allowance." (T2, p.6 para.13)
The Tribunal is not aware of Mr Elwaes past history with Centrelink and whether or not he has prior knowledge and experience as a social security recipient. Assuming that he has limited prior knowledge and experience and noting the sense of outrage underlying the tone of his submissions regarding the injustice he claims to have been accorded Centrelink through "administrative neglect" (submission of 6 March 2001, p.31) the Tribunal accepts that Mr Elwaes received the payment of 27 April 1998 in "good faith" as set down in Secretary, Department of Social Security v Prince (1998) 152 ALR 127. Therefore the Tribunal will determine that this portion of the debt be waived pursuant to s. 1237A(1).
However this approach is not extended to the balance of the debt. The Tribunal has taken into account the respondent's view that Mr Elwaes' letter of 19 June 2000 (T15, p.41-44) indicates that he was aware from the commencement of his full-time employment that his Newstart payments should cease. He argues that a client has no onus of responsibility to ensure that the correct entitlements are being paid. Mr Elwaes states:
"…I'd go as far to state the onus of liability to ensure termination of Newstart allowance to a person fully employed is totally the responsibility of Centrelink administrative staff, in respect of both payments and the allocation of Newstart application forms, (barring extenuating circumstances or some obscure administrative policy prerequisite, per the latter, I'm currently unfamiliar with).
THE ONUS OF ADMINISTRATIVE RESPONSIBILITY IS NOT THE CLIENT'S." (T15, p.41)
The Tribunal considers that there is a joint responsibility entailed and whilst allowing for the "benefit of the doubt" in terms of the 27 April 1998 payment the Tribunal is puzzled as to why Mr Elwaes continued to submit the forms or at the very least why he did not seek clarification from Centrelink as to why he was continuing to receive the forms when he was in full employment. Further Mr Elwaes claims that he was not aware that these payments had been made as he received cash payment from his employer. Consequently, he states:
"…I always had ready cash in pocket available to me, notwithstanding a person fully employed wouldn't expect to receive newstart payments. This mentality led me to be blasé when receiving bank statements which I simply filed for that years tax purposes without actually reading. The first inkling I had of this issue was when I received the "account payable" blue form on 14 October 1999." (T15, p. 41)
Without the benefit of speaking with Mr Elwaes the Tribunal questions this statement given that financial year had passed and presumably Mr Elwaes would have completed his taxation obligations for the year 1997-1998 by October 1999 and therefore noted the payments on his bank statements. Having carefully read the evidence before it the Tribunal agrees with the respondent that a debt under s. 1224(1)(b)(ii) has been incurred as Mr Elwaes failed to comply with the s. 658 notice by not answering Question 9 regarding income earned for the period 12 May 1998-8 June 1998.
Accordingly as a debt has been raised pursuant to s. 1224(1) consideration of waiver is precluded pursuant to s. 1237AAD(a)(ii) of the Act.
The decision under review will be varied.
I certify that the nineteen (19) preceding paragraphs are a true copy of the reasons for the decision herein of
Adjunct Professor L. S. Rodopoulos, Member
Signed:         .....................................................................................
  Personal Assistant
Decided on the Papers at the request of the applicant.
Date of Decision  18 April 2001