EVELYNE TZIPORI and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS M J Carstairs, Senior Member
[2010] AATA 661
•28 July 2010
Administrative Appeals Tribunal
ORAL DECISION AND REASONS FOR DECISION [2010] AATA 661
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/0052
GENERAL ADMINISTRATIVE DIVISION ) Re
EVELYNE TZIPORI
Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
ORAL DECISION
Tribunal M J Carstairs, Senior Member Date28 July 2010
PlaceBrisbane (heard in Toowoomba)
Decision For reasons given orally at the hearing, the Tribunal varies the Social Security Appeals Tribunal decision in that 25% of the age pension debt amount is waived on grounds of special circumstances.
......................[Sgd]................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Age pension – Overpayment – Error by applicant’s financial advisor – No sole administrative error by Centrelink – Meaning of “special circumstances” – Unfair and unjust to recover whole amount of debt – Decision under review varied – 25% of debt waived on grounds of “special circumstances”.
Social Security Act 1991 (Cth), ss 1237A, 1237AAD
Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9
Beadle v Director-General of Social Security (1985) 7 ALD 670
Oberhardt v Secretary, Department of Education, Employment and Workplace Relations (2008) 174 FCR 157
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Trimboli v Secretary, Department of Social Security (1989) 17 ALD 201
WRITTEN REASONS FOR ORAL DECISION
1 September 2010 M J Carstairs, Senior Member 1. Evelyne Tzipori seeks review of a Centrelink decision which raised against her an age pension debt. After review by the Social Security Appeals Tribunal, the debt was reduced to $6,758.70. This sum reflected a period between 2006 and 2007 when, it is said, she was overpaid age pension because her allocated pensions were incorrectly recorded on Centrelink’s financial recording system, despite Mrs Tzipori having correctly given to Centrelink the relevant information about her investment products.
2. Mrs Tzipori asserts that she ought not be required to repay this debt, as the fault was on Centrelink’s part. To succeed in this argument she needed to show that the overpayment in the period in question was due solely to such administrative error.
ISSUES
3. The disputed issues do not extend to the calculation of the debt, as the parties agreed that it had been correctly calculated. The question here is whether the debt ought to be recovered.
4. As I decided the matter, I came to the conclusion that there were circumstances making it unfair or unjust to recover the whole of the debt amount. I was unable to conclude that the debt arose solely on the basis of Centrelink’s administrative error, such that the debt might be waived on those grounds.
5. I varied the decision under review by waiving 25% of the debt, giving oral reasons for so doing. Mrs Tzipori has requested that I provide written reasons, and these reasons now answer her request.
BACKGROUND
6. There is no need to detail the circumstances in which the overpayment occurred as these are not in dispute, and the facts of this matter were set out most adequately by the Social Security Appeals Tribunal. That tribunal relevantly noted in “Findings of Fact”[1] that:
§ Mrs Tzipori had two allocated pensions—W016 5317 and W116 5317;
§ Centrelink had initially correctly recorded and taken into account both allocated pensions when calculating Mrs Tzipori’s age pension;
§ for some reason, from 24 February 2006 to 18 October 2007, Centrelink took into account only W116 5317 ;
§ Centrelink sent Mrs Tzipori letters mentioning only W116 5317; and
§ it was not until 25 October 2007 that Mrs Tzipori again provided information about the two allocated pensions.
[1] T2 at 31.
7. So it can be said that although the applicant honestly and diligently provided information to Centrelink, Centrelink then made errors that were inadvertent (in the sense of unintentional). That is, I do not accept that Centrelink intended to create the problem that ensued from mistakenly bundling up the two allocated pensions as if only one existed, and then ultimately using the balance of only one of them to assess Mrs Tzipori’s rate of pension.
8. Mr P Nolan of Sparke Helmore, who appeared for the respondent, acknowledged the error on Centrelink’s part but said, nevertheless, that the overpayment was not caused solely by that administrative error. He submitted that the responsibility for the overpayment rests partly with Mrs Tzipori as she (even if also unintentionally) provided incorrect information. It was irrelevant, Mr Nolan said, that the financial advisor had provided that incorrect information on Mrs Tzipori’s behalf. As Mrs Tzipori was partly at fault, Mr Nolan said, the debt could not be waived on the grounds of sole administrative error by Centrelink.
9.
According to the respondent’s submissions there were also no special circumstances upon which to exercise another discretion to waive, which is under
s 1237AAD of the Social Security Act 1991.
CONSIDERATION
Sole administrative error
10. Pivotal to the respondent’s submissions was Exhibit A3, an undated Centrelink “Income Stream/s” form (which the parties agreed was sent about 7 February 2006). That form detailed the one allocated income stream on Centrelink’s records at that time and requested that Mrs Tzipori check whether the information shown was correct and further, that, if it was not, that she provide updated details.
11. The information shown on the “Income Stream/s” form was incorrect, as only allocated pension W1165317 was shown. Mrs Tzipori’s financial adviser committed an error by not providing Centrelink with the correct figures. That error must be attributed to Mrs Tzipori; her financial advisor was her agent.
12. I accept Mr Nolan’s submission that whatever one might think of the question of administrative error on Centrelink’s part prior to the debt period, once the notice at Exhibit A3 was sent to Mrs Tzipori, the onus shifted to her to provide Centrelink with the requested information.
13. Thus, the Tribunal accepts the respondent’s submission that sole administrative error does not exist here, based on those facts, and at that time. Having made that finding, I am unable to waive the debt or any part of it on the grounds of sole administrative error under s 1237A(1) of the Act. That discretion is a very limited one, entirely reliant on administrative error being the sole factor. That is not the case here.
Special circumstances
14. I would firstly comment that I agree with the Social Security Appeals Tribunal’s conclusion that Mrs Tzipori received the overpayments of age pension in good faith.
15. In that regard, it is also quite plain that it is possible to consider whether the grounds of waiver for special circumstances exist because that discretion, under
s 1237AAD of the Act, is only available where it can be established that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or false representation; or by failing to comply with a provision of the legislation.16. As I approached the questions here, it seemed to me that the unusual extent of administrative error that occurred ought properly to be taken into account when considering this alternate head of discretion. However, it is important to consider the language of s 1237AAD, which requires that “special circumstances” be shown.
17. That phrase has a broad meaning, as has been noted in a number of decisions of the Federal Court. The Court in Beadle v Director-General of Social Security (1985) 7 ALD 670 stated at 674 that it did “not think it is possible to lay down precise limits or precise rules” about what constitutes special circumstances. The Court continued that “special circumstances” is sufficiently understood not to require judicial gloss.
18. French J (as he then was) in Secretary, Department of Social Security v Hales (1998) 82 FCR 154 noted, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion ... The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
19. The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450, that each case is to be considered on its merits:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
20. As the cases of Beadle, Hales and Riddell indicate, the wording of s 1237AAD of the Act is broad and does not, financial hardship alone aside, impose a fetter on the matters which may be considered by the decision maker. See also Trimboli v Secretary, Department of Social Security (1989) 17 ALD 201 at 209 and Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9 at 17-18 [33] in relation to “the importance of maintaining flexibility in determining what constitutes special circumstances”.
21. The evidence in this case is that Mrs Tzipori’s financial circumstances are straitened. Her financial hardship ought to be taken into account in this matter in considering recovery. Relevantly, Mrs Tzipori referred to the following:
§ Her financial products have been affected by a downturn in markets after the “global financial crisis”;
§ Her statement of financial circumstances revealed that, although it could not be said that her situation is dire (it being the case that her income at the moment is slightly more than the aged pension), she is only just managing her expenses. She described her situation as pretty much “line-ball” and has had unexpected outlays, like for dental work, which make things very difficult for her;
· Mrs Tzipori pointed out that the balances in her allocated pensions are reducing and the effect of this debt is serious for her as an aged pensioner, who, because she is retired, is unable to re-build her finances. Her finances would be unexpectedly depleted by the debt being raised against her.
22. Of course it is a primary consideration here that Mrs Tzipori received money in excess of her entitlements, from the public purse. Only after due weight has been given to that fact can the others be considered: see Hales.
23. Although the error by Centrelink was not the sole cause of the overpayment, the extent of the Centrelink error ought to be taken into account in considering the exercise of discretion for special circumstances. This is despite the Act providing for administrative error under another head of power. In that regard the Federal Court decision in Oberhardtv Secretary, Department of Education, Employment and Workplace Relations (2008) 174 FCR 157 serves to remind that the discretion is a broad one, in which all relevant matters can be considered, even if provision is made for them elsewhere in the Act.
24. This is a case which warrants the exercise of the discretion, because it would be unfair and unjust to recover the whole amount of this debt from Mrs Tzipori. Inadvertent errors do occur but when they place people like her, retired from employment, in more difficult financial circumstances by having to repay for errors not of their own making, then the discretion allows some justice to be done where otherwise the outcome would be unfair and unjust. As Mrs Tzipori said, she did everything to ensure that mistakes with her pension did not occur.
25. It is appropriate to waive 25% of the debt on the grounds of special circumstances. I note that the current rate of recovery is $20 per fortnight, being withheld from Mrs Tzipori’s fortnightly age pension. This seems appropriate, given what Mrs Tzipori said about only just making ends meet, however the rate of recovery is a question that Centrelink can determine from time to time and change accordingly, if need be.
DECISION
26. For reasons given orally at the hearing, the Tribunal varies the Social Security Appeals Tribunal decision in that 25% of the age pension debt amount is waived on grounds of special circumstances.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member.
Signed: ......................[Sgd]..............................................
Mátyás Kochárdy, AssociateDate of Hearing 28 July 2010
Date of Oral Decision 28 July 2010
Date of request for Written Reasons 12 August 2010
Date of Written Reasons 1 September 2010
The Applicant was self-represented
Solicitor for the Respondent Mr P Nolan, Sparke Helmore
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