Epaminodas Sakoutis and Secretary, Department of Social Services
[2013] AATA 885
[2013] AATA 885
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/5796
Re
Epaminodas Sakoutis
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mr Dean Letcher, QC, Senior Member Date 13 December 2013 Place Sydney The decision under review is set aside and in substitution for it there be a decision that the proportion of the claimed debt of $14,181.26 referable to the period 18 April 2008 to 6 August 2009 is a debt due to the Commonwealth by the applicant pursuant to s 1223(1) Social Security Act 1991. The proportion of the claimed debt relating to the period 22 September 2006 to 17 April 2008 is waived pursuant to s 1237A(1) of the Social Security Act 1991.
........................[sgd]................................................
Mr Dean Letcher, QC, Senior Member
CATCHWORDS
SOCIAL SECURITY – debt – overpayment of Age Pension – whether debt should be waived – whether debt is attributable solely to an error of the Commonwealth – whether special circumstances exist – decision set aside
LEGISLATION
Social Security Act 1991 ss 1223, 1237A, 1237AAD
Social Security (Administration) Act 1999 s 66A
REASONS FOR DECISION
Mr Dean Letcher, QC, Senior Member
13 December 2013
BACKGROUND
The applicant seeks review of a decision of the Social Security Appeals Tribunal on 14 November 2012 that he was overpaid $14,181.26 Age Pension between 22 September 2006 and 6 August 2009, that this sum is a debt owed to the Commonwealth under s 1223(1) of the Social Security Act 1991 (“the Act”) and that the debt should not be waived under s 1237A(1) or s 1237AAD of the Act.
FACTUAL BACKGROUND
The applicant was born in 1941 in a village on the Greek island of Ikaria east of Athens in the Aegean Sea. His father was a farmer. Due to World War II and the subsequent Greek Civil War no teacher was available at the village school for some years. The applicant began schooling at age 8 and concluded when 13 or 14. He then worked the family farm, later laboured for a plumber and emigrated to Australia where he had a succession of jobs. He had no further formal education. He says he learned to speak, read and write English “in the workplace, read the paper to try to catch up, I never went to school here, I work all the time”.
When approaching age 65 the applicant was unemployed and receiving Newstart from Centrelink. His wife worked at a nursing home. He declared his wife’s earnings in fortnightly responses to Centrelink letters and he received a reduced Newstart amount as a result. He notified Centrelink accurately of her earnings on 6 September and the day before his 65th birthday, when he became eligible for the Age Pension.
Centrelink gave him a Transfer to Age Pension – Income and Asset Review form prior to his 65th birthday. He completed it, but the Centrelink clerk performing the transfer from Newstart to Age Pension made an administrative error and coded the couple’s combined annual earnings as $0 instead of the $30,000 indicated by the applicant. This meant that although the applicant had faithfully declared his wife’s earnings this information was not taken into account for the purposes of determining the amount of Age Pension he was entitled to receive while “Newstart Centrelink” was alerted.
Centrelink wrote to the applicant on 6 and 20 September 2006, both letters contained the phrase “Combined Annual Income = $5.40”. The applicant received the letters, thought the $5.40 could possibly refer to bank interest but his bank assured him it was not and he thought no more of it. Secure in the knowledge that he had made a full disclosure of his circumstances the applicant did nothing further.
He received the full Age Pension until 6 August 2009 when Centrelink notified him that it had been alerted by “data-matching” with the Australian Tax Office to a discrepancy between Centrelink’s records of his wife’s income and the Australian Taxation Office’s record. He was informed by letter dated 8 June 2010 that he had been overpaid Age Pension for three years amounting to over $14,000.
LEGAL BACKGROUND
Under s 1223 of the Act overpayments are deemed to be debts due to the Commonwealth. Section 1237A allows waiver of a such a debt if it is “attributable solely” to an error by the Commonwealth, the person received the payment in good faith, and the debt is raised more than six weeks after the first payment that caused the debt or if the debt arose because a person complied with a notification obligation, the debt is not raised within a period of six weeks from the end of the notification period.
Section 1237AAD of the Act also allows waiver of a debt where there are “special circumstances” and the recipient has not knowingly made a false statement or failed to comply with the Act or the Social Security (Administration) Act 1999.
Section 66A(1) of the Social Security (Administration) Act 1999 provides that a person receiving a benefit must advise of any change in circumstances and requires that this be done within 14 days of the change.
Although the applicant said that Centrelink had not contacted him after the 19 September 2006 disclosure, the respondent produced “archive copies” of Centrelink letters of 20 September 2006, 20 April 2007 and 17 April 2008 which the applicant agreed he might have received and read. These “archive copies” were taken from computer records and it was fairly said were not in the same format as the letters actually sent. Indeed, the archive letters were almost impossible for me to decipher although the figures $5.40 and $6.30 could be discerned in a maelstrom of symbols and punctuation marks. At my request, the respondent has attempted to reproduce those letters in approximately the same format as those actually sent. However, that attempt has been largely unsuccessful. The respondent says that:
The data for letters of the period 2006-8 is saved only in the format provided in the Tribunal documents [that is, the “archive copies” at T9 and T10]. There is no hard copy of the letters is [sic] produced within the department, unless a particular letter has been printed off contemporaneously by an officer and placed on a hardcopy file.
In response to a further enquiry by the Tribunal the respondent has confirmed:
It is correct that we are unable to provide a better copy of the letters [that] are T9 and T10 than the archived copies that we have provided.
The applicant was invited to comment on the situation but had no memory of the letters which could take the matter further.
Doing the best that I can, given the paucity of the information about the form of the Centrelink letters from 2006, 2007 and 2008, my view is that the letters dated 20 September 2006 and 20 April 2007 do not state clearly that if his partner earns wages then he must inform Centrelink of any changes, nor that if he does so the amount he receives may be reduced. I do not think that this form of letter gives a direct indication of the applicant’s obligation which the respondent alleges.
The letter dated 17 April 2008 was in a very different form to the previous letters. It appears to have two enclosures; one is an Account Statement and the other is an information notice “What you have to tell Centrelink” but that notice is phrased in a much simpler and direct way than in 2007. It says:
… you must give Centrelink all the information Centrelink needs to assess your payment…
and refers to the obligation to tell Centrelink:
… if any of the things listed below happen or are likely to happen to you and/or your partner.
Most particularly, this section goes on to say:
If any of these changes happen, the amount of payment you get may change. If you are paid too much because you don’t tell Centrelink about any of these changes when you have to, Centrelink may make you pay it back…You must tell us if you and/or your partner: Employment start, stop, go back to or change work in any form of profession, trade, business or self-employment have any change to your income from employment (the amount you earn goes up or down) …
None of the passage quoted above appeared in the 2006 or 2007 letters. While it appears in a strange, fairly ungrammatical form in the archive copy, I believe the probability is that the 2008 letter itself was better expressed and more easily understood. It sets out the facts that if a change occurs in the partner’s work the amount of the payment may change.
It was not apparent to me (and never explained to the applicant before this hearing) that while Centrelink believed that the couple’s joint annual income was nil, the figure of $5.40 was used because that was the rate deemed to accrue to everyone who has a particular amount invested. In 2007 that figure had risen to $6.30 probably in line with inflation but the figure bore no relationship to the reality of Mr and Mrs Sakoutis’ income. I believe the insertion of the deemed amount was an additional confusing factor. Mr Sakoutis was puzzled by it. He told the Tribunal that he enquired from his bank and was told that the figure did not represent his bank interest. I accept Mr Sakoutis’ account and I can understand why he might see the figure as an irrelevant mistake.
Mr Sakoutis agreed that he knew that the Newstart amount he received had been reduced because of his wife’s earnings. “Didn’t you think it strange that the Age Pension amount was not reduced by your wife’s earnings?”, he was asked. He replied: “Because I declared her wage on the 6th September and on another form on the 19th when I changed to Age Pension and I thought it was a different law and because I didn’t receive any fortnightly forms to fill out”. I found his answer convincing and I accept that this was his thinking at the time. I believe Mr Sakoutis commenced receiving the full Age Pension in good faith. He concluded his evidence by saying: “Whatever information was asked, I provided it”.
I find that the payment of the Age Pension in full to the applicant commencing on 20 September 2006 arose solely from the respondent’s administrative error and not through any fault of the applicant. Taking into account Mr Sakoutis’ limited education, limited ability to read complex English and his age I believe it is unreasonable to expect him to have been alerted to the fact that the information he provided to Centrelink both in the Transfer form and personally the day before his Age Pension commenced was not processed by the Age Pension clerk because of a mistake. The Age Pension is provided to many people with limited education, limited English and necessarily of advancing years, Centrelink letters should be clear and simple. These were not. The respondent’s Statement of Facts and Contentions at [30] asserts that Mr Sakoutis “contributed to the debt” by not responding to the September 2006 Centrelink correspondence stating a combined annual income of $5.40. I disagree. That figure is so small that it is obviously nothing to do with any likely actual combined annual income. Indeed it is now explained to be a completely artificial device based on a deemed rate of return on investments regardless of the amount actually received.
However, I think there is a real question as to the applicant’s responsibility for the overpayment as the years passed. It is conceded that he might have received and read the Centrelink letters of April 2007 and 2008. Each of those letters contained a heading to the effect: “What you have to tell [us/Centrelink]”. Each letter went on to state the things he had to tell Centrelink and the 2007 letter included:
If your income changes (income means your gross income before you pay any tax, or if self-employed, your net profits after allowable deductions), that is if:
your combined income, not including financial investments or maintenance increases
you or your partner start work or go back to work
you or your partner start any form of profession, trade business or self-employment… [my emphasis]
The respondent contends that the use of “combined” and “you or your partner” would convey to any reader that the earnings of the spouse require disclosure. I disagree. The word “combined” could well refer to the amount received by the pensioner from a combination of wage, interest payment or other miscellaneous amount. I think it is not at all clear that it refers to the pensioner’s income combined with that of his spouse. The subsequent items do mention “you or your partner”, but none describes the situation of Mr and Mrs Sakoutis. They did not “start work,” nor start any form of “profession” or business. There was no significant change at all – Mrs Sakoutis continued on in exactly the same job she had before. In fact, I find the elaboration on what “income” means in the first sentence to induce confusion rather than clarity. The 2008 letter is much better expressed.
In his evidence Mr Sakoutis was asked:
Q: Did it occur to you to tell Centrelink when her pay increased?
A: Yes
Q: When did you do that?
A: After I entered age pension in September Centrelink sent me a magazine and when $165.00 a fortnight my pension is not affected. After my application the income was $55.00 that my wife received and because it was under $165.00 I didn’t do anything. I did not advise the increase because I thought it was of no effect.
This evidence was given through a Greek interpreter. While it was unclear, I thought that the applicant had misunderstood Centrelink advice that he could himself earn up to $165.00 a fortnight without his pension amount being affected. His understanding was that because his wife’s wage increased by only $55.00 over the period, he had no obligation to tell Centrelink. Nonetheless, this showed he had some grasp of the fact that Centrelink could reduce his pension according to his wife’s earnings. When that basic level of understanding was combined with the much clearer statements in the 2008 letter I think that the applicant was on notice that his wife’s earnings could affect the amount he received. I believe that after he received the 2008 letter the applicant should have enquired about his position and if he had told Centrelink of his wife’s earnings he would have received a reduced pension. Until receipt of the 2008 letter I believe the applicant did not knowingly fail or omit to comply with the Act. In my opinion, after receipt of the letter dated 17 April 2008 the overpayment ceased to be “attributable solely to administrative error made by the Commonwealth” within the meaning of s 1237A of the Act. After that time I think the receipt of the full pension was partly attributable to Mr Sakoutis failing to pursue enquiries when he was on notice that his wife’s income might affect his pension. I believe that up to that time he received the overpayment in complete good faith and satisfied the provisions of s 1237A.
I am not satisfied that after receipt of that letter of 17 April 2008 there existed special circumstances within the meaning of s 1237AAD making it desirable that the debt arising after that time be waived. I am not satisfied that the applicant knowingly failed or omitted to comply with his disclosure obligations under the Act after that time but I do not find the special circumstances which are necessary to found the discretion to act under s 1237AAD.
CONCLUSION
I am satisfied on the evidence before the Tribunal that the proportion of the claimed debt of $14,181.26 relating to the period 22 September 2006 to 17 April 2008 is attributable solely to an administrative error made by the Commonwealth and the applicant received in good faith the payments that gave rise to that proportion of the debt. Pursuant to s 1237A(1) of the Social Security Act 1991 the respondent must waive the right to recover that proportion of the claimed debt.
DECISION
The decision under review is set aside and in substitution for it there be a decision that the proportion of the claimed debt of $14,181.26 referable to the period 18 April 2008 to 6 August 2009 is a debt due to the Commonwealth by the applicant pursuant to s 1223(1) Social Security Act 1991. The proportion of the claimed debt relating to the period 22 September 2006 to 17 April 2008 is waived pursuant to s 1237A(1) of the Social Security Act 1991.
I certify that the preceding 25 (twenty -five) paragraphs are a true copy of the reasons for the decision herein of Mr D Letcher, QC, Senior Member ..............[sgd]..........................................................
Associate
Dated 13 December 2013
Date of hearing 2 November 2013 Date final submissions received 28 November 2013 Applicant In person Advocate for the Respondent Ms S Mantaring, Department of Human Services
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