Ermis and Department of Family and Community Services
[2000] AATA 653
•3 August 2000
DECISION AND REASONS FOR DECISION [2000] AATA 653
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1999/1461
GENERAL ADMINISTRATIVE DIVISION )
Re AYZIN ERMIS
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Ms S M Bullock, Member
Date3 August 2000
PlaceSydney
Decision The decision under review is affirmed.
[Sgd] S M Bullock
Member
CATCHWORDS
Social Security – Parenting Payment – overpayment – debt - recovery of debt - sole administrative error - special circumstances
Social Security Act 1991 ss 500, 506D, 1068B, 1224, 1237,1237A, 1237AAD
Re Hales and Secretary, Department of Social Security (AAT 12159, 27 August 1997)
Secretary, Department of Social Security v Hales (1998) 153 ALR 259
Re Greenwood and Secretary, Department of Social Security (1991) 64 SSR 897
Re Gerhardt and Secretary, Department of Employment Education and Training (AAT 10941, 17 May 1996)
Re De Neumann and Secretary, Department of Social Security (AAT 11280, 4 October 1996)
Re Beadle and Director–General of Social Services (1984) 6 ALD 1
Re Ivovic and Director–General of Social Services (1981) 3 ALN 95
REASONS FOR DECISION
Ms S M Bullock, Member
This is an application for review to the Administrative Appeals Tribunal ("the Tribunal') of a decision made by the Social Security Appeals Tribunal ("SSAT") on 7 September 1999 that Mrs Ayzin Ermis, the Applicant, owed a debt to the Commonwealth of $370.00 arising out of an overpayment of Parenting Payment for the period 12 October 1998 to 30 January 1999 and that the debt should be recovered in full (T2). The SSAT noted that the actual Parenting Payments totalling $370.00 were paid during the pay periods 22 October 1998 to 25 February 1999. The SSAT's decision affirmed a decision of an Authorised Review Officer ("ARO") of the Department of Family and Community Services made on 16 April 1999 (T31). The ARO's decision in turn affirmed the original decision of a delegate of the Secretary, Department of Family and Community Services ("the Department") made on 25 February 1999 (T21).
A hearing was held before the Tribunal in Sydney on 18 May 2000. Mrs Ermis was represented by her husband, Mr Volkan Ermis. An interpreter in the Turkish language had been engaged to assist Mrs Ermis during the hearing however Mr Ermis deemed the interpreter not necessary and sent the interpreter away. The Tribunal expressed its concern about this event however proceeded on the basis of Mrs Ermis' wishes expressed at the hearing. Mrs Ermis provided oral evidence as did her husband. Mr Ermis interpreted for Mrs Ermis when necessary. The Respondent, the Department, was represented by Ms A Smith, Departmental Advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents" – T1 – T34) and the following exhibits:
Exhibit Number Description Date
A1 Departmental letter to Mrs A Ermis 11 January 2000
A2 Departmental letter to Mrs A Ermis 24 March 2000
A3 Centrelink accounts payable notice 25 February 1999
R1 Respondent's Statement of Facts and Contentions 14 December 1999
R2 Statement by Mrs Ermis 28 August 1999
R3 Centrelink computer user ID, attached computer print outs concerning action on Mrs Ermis' file for 1 September 1998 13 December 1999
R4 Departmental letter to Mrs Ermis 24 July 1998
R5 Tribunal decision of 2 August 1999 concerning another overpayment debt (not the subject of review) 2 June 1999
R6 Statement by Xuan Phuong Lam, Customer Service Officer at Parramatta Centrelink 29 March 2000
legislation
A determination of this matter requires consideration of provisions of the Social Security Act 1991 ('the Act"). Part 2.10 of the Act deals with Parenting Payment and section 500 sets out the qualification criteria. The method of calculating Parenting Payment is set out in section 1068B of the Act.
Section 506D of the Act contains provisions which set out that the Department may give a notice to a recipient requiring certain information to be provided. As relevant, section 506D states:
"506D(1) The Secretary may give a person to whom Parenting Payment is being paid a notice that requires the person to inform the Department if:
(a)a specified event or change of circumstances occurs; or
(b)the person becomes aware that a specified event or change of circumstances is likely to occur.
506D(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances may affect the payment of Parenting Payment.
506D(3) Subject to subsection (4), 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 person is to give the information to the Department; and
(d)must specify the period within which the person is to give the information to the Department; and
(e)must specify that the notice is a recipient notification notice given under this Act.
506D(4) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (3)(c) or (e)."
Section 1224 of Part 5.2 of the Act deals with debts arising from a recipient's contraventions of the Act. As relevant, section 1224 states:
"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."
Part 5.4 of the Act deals with the non recovery of debts. Within this part, section 1236 deals with the write-off of a debt in certain circumstances and as relevant states:
"1236 (1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
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)the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.
…"
Section 1237 of the Act sets out that the Secretary may waive the Commonwealth's right to recover a debt in part or a whole in certain circumstances. Section 1237A provides for the waiver of a debt due to sole Departmental administrative error and as relevant states:
"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."
Section 1237AAD of the Act sets out that a debt may be waived in part or as a whole in special circumstances. As relevant, section 1237AAD states:
"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 knowingly 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."
issues
A determination of this matter must consider the following issues:
(a) Whether or not an overpayment of Parenting Payment has been made; and if so
(b) whether or not the overpayment is a debt due to the Commonwealth; and if so
(c) are there any circumstances which would allow for the non-recovery of the debt in part or as a whole?
background
The following information is provided by way of background and the facts contained within are not disputed.
Mrs Ermis was born on 14 June 1968, and married Mr Memouh Volkan Ermis on 2 July 1988. Mr and Mrs Ermis have two sons aged, at the time of the hearing, nine years and six years.
On 12 August 1998, Mrs Ermis reclaimed Parenting Payment. Her payment had previously ceased in July 1998 because her casual earnings from a Franklins store had exceeded the allowable limit.
On 1 September 1998, Mrs Ermis was granted Parenting Payment and advised by letter (T5) that she would receive $65.10 per fortnight. This entitlement was calculated using Mrs Ermis's income on $27.02 per fortnight. On the back of the letter notifying her Parenting Payment, there was information under the heading "WHEN YOU MUST CONTACT US" and amongst other things Mrs Ermis was required to inform the Department in writing or by telephone if she changed her job or recommenced work and if her total personal income exceeded $60.00 per fortnight.
On 28 August 1998, Mrs Ermis made a written statement advising that she had commenced casual employment at Woolworths on 27 August 1998 and that she would notify Centrelink if her earnings were more than $60.00 per fortnight (Exhibit R2).
On 12 October 1998, Mrs Ermis lodged a "Review of your Family Allowance and Childcare Assistance" form in which she advised that her earnings for the previous four weeks were $234.16 (T8).
Also on 12 October 1998, Mrs Ermis' earnings were coded into Centrelink's computer system (T6) and Mrs Ermis was sent a Departmental letter advising her of a change in the rate of Parenting Payment. The income used to calculate the changed rate of Parenting Payment was $117.02 per fortnight. The letter also advised Mrs Ermis that she must tell the Department within 14 days of certain information including if her personal income exceeded $117.02 per fortnight (T13).
On 10 December 1998, a Parenting Payment Review form was issued to Mrs Ermis as recorded on a Centrelink computer activity list print out (T16).
On 23 December 1998, Mrs Ermis was advised by the Department that her Parenting Payment would be $37.00 per fortnight but that $35.15 per fortnight was taken out because of an overpayment. This letter also required Mrs Ermis to notify the Department of certain information including a change of employment or if her income exceeded $117.02 per fortnight (T15).
On 2 February 1999, a manually prepared Parenting Payment Review form was sent to Mrs Ermis. The period covered by the form was from 12 October 1998 to 30 January 1999 (T18).
On 12 February 1999, as a result of Mrs Ermis' Parenting Payment Review form, Mrs Ermis' average earnings for the period was accepted as being $265.00 per week (T19).
On 25 February 1999, a decision was made by the Department to raise and recover a debt of $370.00 (T21).
On 16 April 1999, as a result of Mrs Ermis' request, an ARO reviewed the decision to raise and recover the debt of $370.00 and affirmed that decision.
On 6 May 1999, Mrs Ermis sought a review by the SSAT writing that she was working at Woolworths as a casual employee and her earnings varied from week to week. Sometimes she received no income and at other times greater than $100.00 per week. Mrs Ermis wrote:
"… I am told by Centrelink that I'll receive review forms and I should return them at correct time and I did it. If Centrelink ignore to send me review forms, it is not my fault and it is Centrelink's error.
I received all payments in good faith and I didn't make false statements or a false representation (section 1224) and I told Centrelink within 14 days of starting work.
According to Section 1237 (1) & (1A), this dept [sic] should be waived and not recovered due to it has been caused solely by office error, not mine and dept (sic) has been raised on 25/02/1999 by Centrelink and date of the first incorrect payment was on 22/10/1999. Time difference is more than 6 weeks and Centrelink should not issue a dept (sic)". (T34)On 2 August 1999, an agreement was reached between Mrs Ermis and the Department in relation to a previous overpayment debt for the period 4 June 1998 to 16 July 1998.
On 7 September 1999, the SSAT affirmed the decision of the ARO.
On 22 September 1999, Mrs Ermis wrote to the Tribunal stating:
"The reasons why I believe the decision is wrong:
·I didn't make a false statement or a false representation.
·I was told by Centrelink that I'll receive review forms randomly (every 4 to 26 weeks, preferably no longer than 13 weeks) and I should return them. This is the only way regarding to how will I inform Centrelink about my income (sic). Meanwhile, I've trusted that Centrelink would pay me the correct entitlement and won't fail to send forms at correct times. This means any excess payments were received in good faith.
·Dept [sic] has been raised on 19/03/99 by Centrelink and date of the first incorrect payment was on 22/10/1998. Time difference is more than 6 weeks and Centrelink should not issue a dept [sic]. If Centrelink could send review forms at correct time, this inconvenience would not happen". (T1, p1)
evidence of mrs ermis
Mrs Ermis informed the Tribunal that on 12 August 1998 she completed a claim form for Parenting Payment but was not working at that time. Subsequently she commenced casual work at Woolworths on 22 August 1998. On 28 August 1998, Mrs Ermis and her husband attended a Centrelink office to inform the Department that she had recommenced work and to make inquires about her responsibilities. Mrs Ermis wanted to explain to the Officer that her income was variable sometimes $75.00 or sometimes $100.00 per week. Mrs Ermis asked the Departmental Officer, Ms Lam, when and how she should advise the Department about any changes in her income. Ms Lam told Mrs Ermis that the Department would send out review forms from time to time randomly between every 4 to 26 weeks. These forms must be completed by Mrs Ermis and sent back. It was Mrs Ermis' understanding that review forms would be sent no later than every thirteen weeks. Mrs Ermis further informed the Tribunal that she asked should she e-mail or fax information back to the Department and Ms Lam said that the completed review forms could be mailed back to the Department.
Mrs Ermis stated that she or her husband asked could they could have a copy of the Department's guidelines on these matters as she had had an overpayment debt before and did not want to incur another debt. Mrs Ermis told the Tribunal that Ms Lam said that it was not necessary to provide Departmental guidelines to Mrs Ermis. Mrs Ermis recalled specifically being advised by Ms Lam that if her income increased above $60.00 then she must advise the Department of this. The method of advice would be through the Department sending out forms and Mrs Ermis could then record any income details in this form. It was very clear to Mrs Ermis, she told the Tribunal, that the method of informing of changes of income was to be by way of completion of review forms. Mrs Ermis stated following the interview with Ms Lam, everything seemed to "settle down" and then the great shock of receiving a debt notice dated 25 February 1999 occurred.
Following the interview with Ms Lam on 28 August 1998, Mrs Ermis commenced receiving Parenting Payment. She could not recall whether or not she had received a Departmental letter of 1 September 1998 advising her of her Parenting Payment of $65.10 per fortnight. Further, Mrs Ermis could not recall details of the letter advising her that she must inform the Department within 14 days of certain information including if she changed or recommenced work or if her income increased beyond $60.00 per fortnight.
Mrs Ermis stated that there was a conflict in what the Department was indicating as her responsibilities in relation to informing it of increases in income beyond the relevant stated levels. Firstly, there was advice from the Departmental delegate, Ms Lam, that Mrs Ermis should wait until review forms were sent to her by the Department in which she could record any changes of income. In contrast to this, the letters sent out to Mrs Ermis in relation to the rate of Parenting Payment to be paid to her for a specific period indicated that she must tell the Department within 14 days of any increases in income beyond stated levels. Mrs Ermis stated that from her point of view, she was entitled to follow the advice provided to her by Ms Lam at the interview on 28 August 1998.
Mrs Ermis stated that she and her husband now read the back of Departmental letters or notices, and agreed that as stated to the SSAT, neither she nor her husband read the back of the letters until they found out at the SSAT that there was important information on the back of such Departmental notices advising recipients of their responsibilities including when they must contact the Department about certain information.
evidence of mr ermisMr Ermis told the Tribunal that it is a fundamental expectation that advice given to a claimant or recipient by a Departmental officer will be correct information upon which the recipient or claimant is entitled to rely. It is such officers' duty to provide correct information to customers and customers are entitled to believe it. Mr Ermis referred the Tribunal to the analogous situation of a bank officer providing information to a customer and the customer's entitlement to consider that the advice being given is correct.
Mr Ermis told the Tribunal that prior to attending the SSAT neither he nor his wife knew of the information contained on the back of Departmental letters. Mr Ermis stated that the letter is poorly drafted and is a problem for Centrelink because it does not properly nor clearly communicate with its customers.
Referring to the Centrelink "Parenting Payment earnings review" form, for the period 12 October 1998 to 30 January 1999 (T18), Mr Ermis noted this was the type of form they had expected as a result of their discussions with Ms Lam.
Noting Ms Lam's statement in which she confirmed that she had spoken to Mr and Mrs Ermis on 28 August 1998, Mr Ermis referred the Tribunal to his belief that nowhere in that statement had Ms Lam indicated her advice to Mr and Mrs Ermis that forms would be sent to Mrs Ermis every 4 to 26 weeks. Ms Lam noted:
"Mr Ermis asked me a number of questions about parenting payment and how they were to report his wife's earnings. Because his questions to me were very specific about the reporting of earnings, I made a particular point of telling him that his wife needed to notify Centrelink if her casual earnings from her employment at Woolworths went above $60.00 per fortnight. I also told him that Centrelink reviews Parenting Payment from time to time and sends out forms for that purpose. I showed Mr Ermis some printed information about reviewing parenting payment from a parenting payment User Guide, which is for use by Centrelink staff in their duties. Mr Ermis said he wanted a copy of this material but I said it was not necessary.
I have been shown a copy of the letter sent to Mrs Ermis dated 24/7 /98 which is at attachment 3, and in particular the reverse side of this letter. There are handwritten notes on the back of this letter. These notations were written by Mr Ermis. The notations were copied by him from the parenting payment User Guide material which I showed him….
I recall contacting Mrs Ermis by telephone in January 1999. The purpose of my telephone call was to ask her about the review form I had sent to her [review form sent 10 December 1998 (T16)]. Although her English was very limited she was able to tell me her husband had returned the form to Centrelink. Because I had not been able to locate that form, I therefore sent her a duplicate form… document T18. This is the duplicate parenting payment review form which I sent to Mrs Ermis…The information she provided on this form was used to calculate the debt of parenting payment". (Exhibit R6)
Ms Smith postulated to Mr Ermis that it was possible that the discussions he and his wife had with Ms Lam could have been misunderstood by them in relation to the review process. Mr Ermis did not agree.
There was a review form issued on 10 December 1998 but Mr Ermis stated that he was not sure whether he received this. This was confirmed by a print out of an Activity List screen at T16 in which it was indicated that a review form had been sent on 10 December 1998 but that the Centrelink officer had not received anything and accordingly had telephoned Mrs Ermis about this. A manual form was then prepared and sent on 2 February 1999 (T18).
Mr Ermis stated that there were also telephone calls made by the Departmental officer, Ms Lam, to Mr and Mrs Ermis in which certain information was sought by Ms Lam and provided by Mr or Mrs Ermis.
Mr Ermis informed the Tribunal that currently Mrs Ermis is working permanent part-time, earning approximately $340.00 per week for twenty-one hour's work. Mr Ermis earns approximately $60,000.00 per year gross and earns approximately $3343.00 net per month. Mr and Mrs Ermis and their two sons enjoy sound health but both children attend weekly coaching classes which are expensive.
Mr Ermis confirmed for the Tribunal that he and his wife are managing financially and that he has considerable funds in a bank account. Mr and Mrs Ermis have no other investments or property.
submissionsMr Ermis submitted on behalf of Mrs Ermis that there had been administrative error by the Department in not following its own review procedures. Mr and Mrs Ermis had been advised that the Department would randomly but regularly send out review forms on which Mrs Ermis was to record relevant details including any increases in income. The advice provided to Mr and Mrs Ermis by Ms Lam was clear and Mr Ermis submitted that he and his wife were entitiled to consider this advice as correct and to rely upon it. Mr Ermis submitted further that Mrs Ermis had received the Parenting Payment in good faith, considering that the Department would know its own guidelines and would be best placed to assess the rate of Parenting Payment which it paid to its customers.
Mr Ermis wished the Tribunal to consider the further example of administrative incompetence by the Department when referring to exhibits A1, A2 and A3 which are documents sent to Mrs Emis indicating that the debt owed by her had not been repaid. Mr Ermis stated that the Department seemed not to be aware of the proceedings before the Tribunal in relation to the matter and they should have ceased sending debt notices until such time as the Tribunal proceedings were resolved. This was yet another example of the poor administration of the Department, Mr Ermis submitted.
Noting that neither he nor his wife had read the information contained on the back of the Departmental notices of 1 September 1998, 12 October 1998 and 23 December 1998, this did not detract from Mr Ermis' forceful contention that it was the Department's sole administrative error which caused the overpayment debt of $370.00.
Mr Ermis submitted that the children were so anxious about the debt owed to the Department that they were worried that the sheriff was going to come around to their home and take their furniture including their television.
Mr Ermis contended that he and his wife had done everything correctly, completed forms when they had arrived and returned them. The fact that the Department had lost one of the Parenting review forms was not Mrs Ermis' fault and yet another example of the administrative error for which Mrs Ermis should not be held responsible. Mr Ermis submitted that he did not want Mrs Ermis to pay for Centrelink's mistakes.
Mr Ermis concluded that the only issue in this matter was the sole administrative error of the Department and the incorrect information provided by Ms Lam which they had relied on. Mrs Ermis had received her Parenting Payment in good faith and there was no attempt to defraud the Department.
Ms Smith submitted that Mrs Ermis was sent Departmental notices on 1 September 1998, 12 October 1998 and 23 December 1998 requiring her to advise the Department within 14 days of certain circumstances including increases in income beyond stated levels within the letter. In particular, the notice of 12 October 1998 which required Mrs Ermis to notify within 14 days if her income increased beyond $117.02, was relevant to the issue under review. Mrs Ermis did not advise of her increase in income beyond this date and therefore was not in compliance with the notice which had been issued under section 506D of the Act. In such circumstances, the Department was unaware of her increased income and she was paid $370.00 in Parenting Payment to which she was not entitled. This excess in Parenting Payment was accordingly, Ms Smith submitted, a debt due to the Commonwealth raised under subsection 1224 (1) of the Act.
Even though Mrs Ermis was told that there would be review forms sent from time to time, it did not absolve her from her responsibility to inform the Department within 14 days of certain circumstances including an increase in income, Ms Smith submitted.
In written submissions to the Tribunal, the Respondent referred to Re Hales and Secretary and Department of Social Security (AAT 12159, 27 August 1997) which considered the issue of a failure to comply with notices under the then subsection 132 (1) of the Act (which refers to recipients of Disability Support Pension, but corresponds with the wording contained in section 506D referring to Parenting Payment). In that decision, the Tribunal stated:
"In the Tribunal's opinion, although s.132 (1) of the Act does not expressly impose an obligation on the recipient of the notice given under that subsection to comply with that notice, it does so impliedly. That implied obligation arises from the express authorisation of the Respondent, by that subsection, to give a recipient of DSP " a notice that requires the person to inform" the DSS if a specified change of circumstances occurs. It follows that a failure by a recipient of such a notice to inform the DSS of the matter specified therein constitutes not only a failure to comply with the notice given under s.132 (1) but also a failure to comply with s.132 (1) itself. This view is consistent with the approach taken by the Federal Court in Greenwood (above) (see 26 ALD at page 566) and by the Tribunal in McCagh above…"
The Tribunal decision in Re Hales (supra) was affirmed on appeal to the Federal Court in Secretary, Department of Social Security v Hales (1998) 153 ALR 259.
Ms Smith referred the Tribunal to the fact that the failure or omission to comply with the Act as contained in the requirement in section 506D to respond to Departmental notices, "does not need to be the dominant or effective cause of an overpayment for it to be recoverable under section 1224 of the Act". In this regard, the Tribunal was referred to Re Greenwood and Secretary Department of Social Security (1991) 64 SSR 897 in which the Tribunal noted that:
"The Tribunal does not regard this as a situation of comparison between the departmental default as the "predominant", "real" or "effective" cause of the overpayment and some contribution by reason of her inaction or omission. To approach the matter that way would be to resurrect the error manifested in earlier Tribunal decisions which was exposed by the Federal Court in Director-General of Social Services v Hangan (1982) 45 ALR 23 and Director-General of Social Services v Hales (1983) 47 ALR 281. In each case the full Federal Court discussed the aspect of s.246 (1) that two requirements of that provision must be separately satisfied, namely the amount must have been paid "in consequence of" a failure to comply with the provision of the Act and also that the amount would not have been paid "but for" the failure or omission…"
Having submitted that there was a debt owed by Mrs Ermis of $370.00 to the Commonwealth, Ms Smith turned to the issue of whether the debt should be recovered. Ms Smith submitted that the debt could not be waived under section 1237A of the Act, as there was no sole administrative error. For a debt to be waived under section 1237A, Ms Smith submitted that two conditions must be met, namely that the debt arose solely because of departmental administrative error and that the debtor received the payments in good faith. Ms Smith contended that the word "sole" should be given its ordinary meaning. In the Concise Oxford Dictionary, "sole" is defined as "one and only, exclusive, alone, unaccompanied". This approach was used by the Tribunal in Re Gerhardt and Secretary Department of Employment Education and Training (AAT 10941, 17 May 1996), in which the Tribunal stated:
"There is nothing in sub-section 289(1) which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error."
Re Gerhardt (supra) was referred to with approval in Re De Neumann and Secretary, Department of Social Security (AAT 11280, 4 October 1996).
Ms Smith referred the Tribunal to the fact that Mrs Ermis and her husband had told the SSAT that they had made an inquiry, at the time of advising Centrelink of Mrs Ermis' commencement of work at Woolworths, including how Mrs Ermis should report her casual earnings. It was stated to the SSAT that Mr and Mrs Ermis were told that they would be sent review forms which Mrs Ermis was to complete (T2). Ms Smith contended that this is, in fact, what happened. Mrs Ermis was sent a Family Payment Review form in October 1998 (T8) and using this form Centrelink staff reviewed her Parenting Payment and the rate was reduced on the basis of the reported earnings. Ms Smith contended that it is immaterial whether the form used to update Mrs Ermis' earnings was a Family Payment Review form, or a Parenting Payment Review form. Further, Ms Smith noted that the SSAT decision at paragraph 13 noted that Mr Ermis had also expressed the view that whatever the type of review form used, the information was provided to Centrelink and should be passed on by family allowance staff to the Parenting Payment staff. This was in fact done, Ms Smith's written submission indicated, therefore, Mrs Ermis and her husband had their expectations met on that occasion.
Another review form was issued by Centrelink on 10 December 1998 but was not returned to the Centrelink office. There is no evidence, Ms Smith contended, as to whether the form was mislaid by Centrelink or not received by Mrs Ermis in the first place, or whether in fact it had been returned by Mrs Ermis but not received by Centrelink. In any event, a further manually prepared form was issued by Centrelink on 2 February 1999 (T17).
Ms Smith contended that there is no evidence that the apparent loss of the review form issued on 10 December 1998 was a result of administrative error. In any case, Ms Smith submitted that the fact that the Applicant may have been told that she would be sent review forms does not absolve Mrs Ermis of her responsibility to advise of changes to her income within 14 days. These responsibilities were quite clearly set out in writing on the reverse side of letters sent to Mrs Ermis on 1 September 1998, 12 October 1998, and 23 December 1998.
Ms Smith contended that Mrs Ermis did not receive the Parenting Payments from 12 October 1998 to 30 January 1999 in good faith. Comparing Mrs Ermis' current situation to a similar situation experienced by Mrs Ermis in July 1998, Ms Smith noted that Mrs Ermis was working casually for Franklins and had incurred a previous Parenting Payment debt of $260.00 for the same reason as the debt currently under review. Mrs Ermis' previous Parenting Payment was cancelled from 24 July 1998 and she was informed by letter that the reason for cancellation was that her income was above the allowable limit (Exhibit R4). The previous debt matter was subsequently settled and agreement reached at the Tribunal (Exhibit R5). Mrs Ermis then signed a statement on 28 August 1998 stating that she would advise the Department if her income was above $60.00 per fortnight. Accordingly, Mrs Ermis was well aware that her income would have an effect on her rate of Parenting Payment as she had experienced this before and Ms Smith submitted that Mrs Ermis knew or had reason to know that from 12 October 1998 her fortnightly earnings had in fact risen above the income limit of $117.02.
Ms Smith submitted that in all the circumstances the debt did not arise because of sole administrative error. In addition, the excess Parenting Payments were not received in good faith and therefore the debt could not be waived under subsection 1237A(1) of the Act.
Finally, Ms Smith considered section 1237AAD of the Act which allows for the waiver of the debt in part or as a whole if there are special circumstances found to exist. For the meaning of special circumstances, the Tribunal was referred to Re Beadle and Director-General of Social Security (1984) 6 ALD 1 in which Toohey J 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."
"Special circumstances" were also considered in Re Ivovic and Director-General of Social Services (1998) 3 ALN 95 in which the Tribunal noted:
"…Thus whilst keeping the dominant principle of [recovery of a debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate…"
Considering Mrs Ermis' circumstances, which were examined by the SSAT and about which Mr and Mrs Ermis provided evidence to the Tribunal, Ms Smith submitted that there was nothing that was unusual, exceptional or uncommon about the situation so as to set Mrs Ermis apart from others in receipt of income support payments. Ms Smith noted that both Mr and Mrs Ermis were employed, they were in good health and they were financially secure. Noting that the SSAT had concluded that the recovery of a debt would not be unjust or unreasonable, Ms Smith concurred with that opinion and contended that there was nothing currently in Mrs Ermis' circumstances which met the description of "special" so as to permit waiver of the debt of $370.00 under section 1237AAD of the Act.
In conclusion Ms Smith contended that the $370.00 in excess of Parenting Payment received by Mrs Ermis constituted a debt under subsection 1224(1) of the Act and that there were no grounds for waiving the debt in part or as a whole. In such circumstances Ms Smith contended that the decision of SSAT should be affirmed.
findingsThe Tribunal has reached a decision in this matter taking in to account the oral and documentary evidence, the submissions and by applying the legislation and case law.
Mr and Mrs Ermis provided frank evidence with Mr Ermis also representing his wife. The Tribunal was concerned, and expressed this concern that the services of the Turkish interpreter were not utilised. Respecting the wishes of Mrs Ermis, there was no interpreter used, but the Tribunal still holds the view that the information interpreted may not have been fully understood, particularly given some of the complex issues. The Tribunal also notes that at the time Mr and Mrs Ermis attended the Centrelink office and held discussions with Ms Lam on 28 August 1998, there was no interpreter present and it is arising out of that interview, that Mr and Mrs Ermis contend that the mistakes by the Department were made, based on the advice given by Ms Lam. Even though Mr Ermis appears to be fluent in spoken and written English, the Tribunal is left wondering whether or not the absence of the interpreter on that occasion, may well have been the cause of the advice not being fully understood in all its complexity by Mr and Mrs Ermis.
Mr and Mrs Ermis maintain that they understood that the Department was to be kept informed of variation of income above stated limits commencing with a variation of income above $60.00 per week. They were given notices about the various rates of Parenting Payment which on the back of the notice included information as to what Mrs Ermis was required to inform the Department about within 14 days. This included information as to an increase in income above $60.00, as described in a letter of 1 September 1999 (T5); above $117.02 as noted in a letter 12 October 1998 (T13); and also above $117.02 as noted in a letter of 23 December 1998 (T15). The Tribunal finds that the instructions on the back of these letters were quite clear and indicated when Mrs Ermis, as a recipient of Parenting Payment, must advise the Department of changes in income above the stated levels.
This method of informing the Department of Mrs Ermis' circumstances was not the only means by which the Department informed itself of its recipients particular circumstances. In this regard, as Ms Lam had informed Mr and Mrs Ermis, there would be review forms sent from time to time on which Mrs Ermis must complete the required details. Ms Lam's statement to the Tribunal of 29 March 2000 (Exhibit R6) indicates that there were two methods of the Department keeping itself informed and these were specified as Mrs Ermis informing the Department within 14 days if her casual earnings from her employment at Woolworths went above $60.00 per fortnight or above other stated income limits, in addition to the Department sending out reviews of Parenting Payment from time to time which Mrs Ermis was required to complete. The Tribunal considers that it is more likely that Ms Lam discussed both methods of the Department informing itself of Mrs Ermis' changes of circumstances including increases of income. However, even if Ms Lam only advised Mr and Mr Ermis of the one method of informing the Department of changes in income by way of the form, this did not absolve Mrs Ermis from her responsibility to read the letters sent to her about Parenting Payment and particularly the information as it related to circumstances about which Mrs Ermis was required to notify the Department within 14 days. Mr and Mrs Ermis stated to the Tribunal that they did not know of the requirement to report within 14 days to the Department until they had attended the SSAT. Mrs Ermis was sent notices under section 506D of the Act on at least three occasions in which it clearly stated on the reverse of the letter the information which she was required to provide to the Department within 14 days. Further, Mrs Ermis and her husband stated they did not read the reverse side of the letter which has clearly printed "WHAT YOU MUST TELL US". While Mrs Ermis' English skills are not proficient, there has been no indication that Mr Ermis' language skills are not fluent. Mr Ermis has taken a primary role in Mrs Ermis' dealings with the Department and certainly has the ability to understand Departmental notices. That Mr and Mrs Ermis did not read this material is to their detriment and an omission on their part. Unless Mrs Ermis informed the Department of her increase in income, it was not able to make a proper assessment of her rate of entitlement to Parenting Payment. The Tribunal also notes that on 28 August 1998, Mrs Ermis made a statement that she would inform the Department of any increase in income beyond $60.00 per fortnight and she had previously incurred an overpayment debt because of a failure to keep the Department informed of increases in income. The Tribunal finds that Mrs Ermis' inaction in keeping the Department informed of her increases in income is surprising given these circumstances.
The Tribunal therefore finds that Mrs Ermis failed to comply with a number of notices under section 506D of the Act to notify of her increase in income. This particularly applies in relation to the period under review of 12 October 1998 to 30 January 1999 in which Mrs Ermis' earnings were greater than $117.02 and were in fact $265.00 per week. Mrs Ermis therefore received Parenting Payment greater than that to which she was entitled. Under the provisions of subsection 1224(1) of the Act an amount of Parenting Payment of $370.00 was paid to Mrs Ermis because she failed or omitted to comply with section 506D of the Act in that she did not advise of increase in income as required and notified in Departmental notices. Accordingly a debt of $370.00 is due to the Commonwealth.
The Tribunal turned to consider the issue of recovery of the debt.
The Tribunal does not consider that there is any possibility for write-off under section 1236 of the Act as there is nothing to be gained from postponing the collection of the debt, Mrs Ermis' whereabouts are known and the debt can be recovered.
Considering the issue of sole administrative error, Mr and Mrs Ermis contend that the error causing the overpayment of $370.00 to Mrs Ermis was solely attributable to the Department's mistakes. In this regard, Mr and Mrs Ermis submitted that they were given certain advice by Ms Lam which they understood to mean that the method the Department used to inform itself of changes in circumstances including increases in income, was that Mrs Ermis would be sent review forms form time to time usually not any less than every 13 weeks. Mr and Mrs Ermis submitted that they were entitled to accept this advice from someone holding herself out to be a representative of the Department. The Tribunal considers that this advice was most probably provided to Mr and Mrs Ermis, but thinks it unlikely that Mr and Mrs Ermis were not also advised that they had a responsibility themselves to inform the Department of any changes of income within a 14 day period. Even if this were not the case, and Ms Lam only provided advice as to one method of keeping the Department informed of changes in income, this does not absolve Mrs Ermis from her responsibility, with her husband's assistance, of reading the notices sent to her which clearly declared that there were certain pieces of information which Mrs Ermis must inform the Department about within 14 days. Again, clearly on the reverse side of the letter it indicated that Mrs Ermis must inform the Department of her increase in income above $117.02 for the period from 12 October 1998 to 30 January 1999 during which the overpayment occurred. Very simply, there is no way that, on the evidence available to the Tribunal, Mrs Ermis can escape her responsibility arising out of those notices sent to her pursuant to section 506D of the Act.
In such circumstances, the Tribunal is unable to find that there is sole administrative error as there is clearly an error on Mrs Ermis' part. This also applies to the submissions in relation to the mislaid review form issued on 10 December 1998. Even if the Department had mislaid or lost the form, this still does not take away Mrs Ermis' obligation to inform the Department within 14 days of an increase in income. On this same point, the Tribunal has no clear evidence that the form was returned to Centrelink, although there is a note from Ms Lam of a telephone discussion with Mrs Ermis that she believed her husband had taken the form to Centrelink. Accordingly, the Tribunal finds that there is no possibility of a waiver of the debt under subsection 1237A (1) of the Act.
Turning to consideration of whether or not a part or a whole of the debt should be waived because of special circumstances existing in Mrs Ermis' case, the Tribunal is of the view, as reached by various Tribunals and courts that "special circumstances" exist where a person's circumstances are unusual, uncommon or out of the ordinary and that to not exercise the discretion contained in section 1237AAD of the Act would be unjust, unfair or inappropriate. The Tribunal does not consider that Mr and Mrs Ermis set out in any way to deceive or defraud the Department. The Tribunal is of the view that Mrs Ermis received the payments of Parenting Payments in good faith therefore. However, given the evidence available to the Tribunal, Mr and Mrs Ermis are both employed, their income is secure and they are, as Mr Ermis stated, managing their finances well. Mr and Mrs Ermis' health is understood to be good and there are no health problems associated with either of their children. While the Tribunal notes that the children are receiving educational coaching, this is not a circumstance which the Tribunal on the evidence available to it, could consider special in the legislative sense. While the Tribunal attaches no blame or findings of dishonesty on the part of Mrs Ermis or her husband, there was an omission in that Mrs Ermis and her husband did not read the Departmental notices sent to Mrs Ermis.
In all these circumstances, the Tribunal does not consider that there are any special circumstances which would allow the exercise of the discretion contained in section 1237AAD of the Act to allow a waiver of the debt in part or as a whole. Accordingly, considering all of the evidence and for the reasons set out above, the Tribunal finds that there is a debt owed by Mrs Ermis to the Commonwealth pursuant to subsection 1224(1) of the Act and further, there are no circumstances which would allow for the write-off or waiver of the debt. Therefore the debt owed to the Commonwealth of $370.00 should be recovered in full.
The Tribunal therefore affirms the decision under review under section 43 of the Administrative Appeals Tribunal Act 1975.
I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Ms SM Bullock.
Signed: .....................................................................................
AssociateDate/s of Hearing 18 May 2000
Date of Decision 3 August 2000
Representative for the Applicant Mr M V Ermis, Mrs Ermis' husband
Representative for the Respondent Ms A Smith, Departmental Advocate
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