Evgeniou and Secretary, Department of Social Services (Social services second review)

Evgeniou and Secretary, Department of Social Services (Social services second review) [2019] AATA 634 (4 April 2019)
Division:GENERAL DIVISION
File Number:2018/3249
Re:Paul Evgeniou
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D Mitchell
Date:4 April 2019
Place:Brisbane

The Tribunal affirms the decision under review.
.............................[SGD]...................................
Member D Mitchell
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – overpayment – where data match of income occurred – where no administrative error – where no special circumstances – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Secretary, Department of Social Security v Hales [1998] FCA 219
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
REASONS FOR DECISION
Member D Mitchell
4 April 2019
INTRODUCTION

Mr Paul Evgeniou (the Applicant) was first granted Newstart Allowance (NSA) on 3 March 2007, and has had his payments suspended or cancelled intermittently.[1]
[1] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, Attachment A.
On 1 December 2016, the Respondent sent the Applicant a notice advising him that he had a legally recoverable NSA debt totalling $7545.61, for the period 17 March 2014 to 21 December 2014.[2]
[2] Exhibit 1, T Documents, T 9, pages 57-58, Centrelink Notice: Account Payable.
On 2 January 2017, an authorised review officer (ARO) affirmed that decision.[3]
[3] Exhibit 1, T Documents, T 10, pages 59-67, Decision and notes of Authorised Review Officer.
The Applicant sought a first-tier review of that decision by the Social Services and Child Support Division of this Tribunal (SSCSD), who set aside the decision under review and remitted it back to the Respondent. The Tribunal directed that the debt is to be recalculated in line with the Tribunal’s reasons and any resultant overpayment is a debt to the Commonwealth that must be repaid.[4]
[4] Exhibit 1, T Documents, T 2, pages 3-9, Decision of the Social Security and Child Support Division.
On 23 March 2018, the Respondent recalculated the debt to be $7,517.50 for the debt period 18 March 2014 to 21 December 2014.[5]
[5] Exhibit 1, T Documents, T 15, pages 83-93, Debt Determination and Submission.
Following this, the Applicant sought a second-tier review of this matter by the General Division of this Tribunal, by way of an application dated 12 June 2018.[6]
[6] Exhibit 1, T Documents, T 1, pages 1-2, Application for Review.
On 11 February 2019, a Hearing was held for this application. At the Hearing, the Applicant appeared in person and gave evidence under oath.
The issue to be determined by the Tribunal is whether the Applicant has been paid more than his correct entitlement of NSA and, if so, whether the excess payment is a debt that is recoverable in part or in full.
BACKGROUND
As a result of a data match that occurred with the Australian Taxation Office on 9 September 2016,[7] information was received by the Respondent that indicated that the Applicant had not correctly disclosed the income he had received from the following employers:
(i)The Brad Hooper Family Trust and the Cheryl Fullerton Family Trust;[8]
(ii)Surfers Paradise Golf Club Ltd;[9] and
(iii)Pacific Avenue Wholesale Fruit and Vegetables.[10]
[7] Exhibit 1, T Documents, T 18, pages 109-112, Centrelink mainframe screen printouts.
[8] Exhibit 1, T Documents, T 18, pages 109, 111, Centrelink mainframe screen printouts.
[9] Exhibit 1, T Documents, T 18, page 110, Centrelink mainframe screen printouts.
[10] Exhibit 1, T Documents, T 18, page 112, Centrelink mainframe screen printouts.
Based on the data match information, the Respondent reviewed the NSA paid to the Applicant, between 17 March 2014 and 21 December 2014 (the debt period), formed the view that he had received more NSA then he was entitled to and raised a debt of $7,545.61.[11] The Applicant was notified of this decision by a letter dated

1 December 2016.[12]
[11] Exhibit 1, T Documents, T 8, pages 47-48, ADEX debt explanation for debt ID 9152 1199.
[12] Exhibit 1, T Documents, T 9, pages 57-58, Centrelink Notice: Account Payable.
Whilst in receipt of NSA, the Applicant was sent a number of notices by Centrelink setting out his reporting obligations, his requirement to report his earnings and how any reported income would affect his NSA payment.[13]
[13] Exhibit 1, T Documents, T 4, pages 39-41, Centrelink Notice: how work affects your payments; T 5, pages 42-43, Centrelink Notice: Your newstart allowance – appointment details; T 6, pages 44-45, Centrelink Notice: Your newstart allowance; T 7, page 46, Correspondence from Centrelink; Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, Attachment B.
On 2 January 2017, an ARO affirmed the decision to raise and recover the debt. The ARO made the following key findings:[14]
[14] Exhibit 1, T Documents, T 10, pages 59-67, Decision and notes of Authorised Review Officer.
·On 18 February 2014, 14 April 2014 and 31 March 2014 the department sent you letters which advised you that, amongst other things, you were required to advise, within 14 days, if you started work, or your income increased.
·On 13 May 2014, you were sent an SMS which asked you to update your employment details with the department following receipt of information about your employment status which could affect your payment rate.
·Employment Pathway Plans you signed with your Job Network Member on 31 October 2013, 7 February 2014, 24 March 2014 and 19 May 2014 included information on your obligation to advise the department of any income you earned during the fortnight in which it was earned.
·The Employment Pathway Plan you signed on 24 March 2014 stated that you ‘agree to undertake 50 hours of Casual work from 19 March 2014 to 24 December 2014 and will report (your) earnings to Centrelink’.
·The Employment Pathway Plan you signed on 19 May 2014 states that you ‘agree to undertake 20 hours of Casual work from 19 May 2014 to 19 November 2014 and will report (your) earnings to Centrelink’.
·During the period 17 March 2014 to 21 December 2014 you were working for The Brad Hooper Family Trust * the Sheryl Fullerton Family Trust, Surfers Paradise Gold Club Ltd and Pacific Avenue Wholesale Fruit & Veg.
·You did not give the Department of Human Services full details of your earnings from employment with The Brad Hooper Family Trust & The Sheryl Fullerton Family Trust Surfers Paradise Gold Club Ltd and Pacific Avenue Wholesale Fruit and Veg.
·From 17 March 2014 to 21 December 2014 your Newstart Allowance rate was based on income that was less than the income you received for this period.
·During the period 17 March 2014 to 21 December 2014 you received Newstart Allowance totalling $9,377.05.
·You were entitled to receive $1,831.43.
·On 1 December 2016 the department raised and sent you a notice of a debt.
On 29 June 2017, the Applicant sought review of the decision by the SSCSD.[15] On

8 February 2018, the SSCSD set aside the decision under review and remitted it back to the Respondent with directions that the debt is to be recalculated in line with the SSCSD’s reasons and any resultant overpayment is a debt to the Commonwealth that must be repaid.[16]
[15] Exhibit 1, T Documents, T 11, pages 68-69, Request for Statement.
[16] Exhibit 1, T Documents, T 2, pages 3-9, Decision of the Social Security and Child Support Division.
On 23 March 2018, the Respondent recalculated the debt to be $7,517.50 for the debt period.[17]
[17] Exhibit 1, T Documents, T 15, pages 83-93, Debt Determination and Submission.
The relevant law in relation to the payment of NSA and recovery of debts to the Commonwealth is found in the Social Security Act 1991 (the Act), the Social Security (Administration) Act 1999 (Administration Act).
Issues
The issues for the Tribunal to consider are:
1.Whether, the Applicant has been paid more than his correct amount of Newstart Allowance during the period of 17 March 2014 to 21 December 2014; and
2.If so, whether the excess payments a debt that are recoverable in part or in full?
Did the Applicant receive the correct amount of NSA between 17 March and 21 December 2014?
Section 643 of the Act provides that a person’s rate of NSA is worked out using the Benefit Rate Calculator B found at the end of section 1068 of the Act. Module G, of section 1068 of the Act, provides a Method Statement for calculating the effect that a person’s ordinary income has on the maximum payment rate of NSA.
Section 1223(1) of the Act provides that if a person receives a payment that they were not entitled to for any reason the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
The obligation is on the payment recipient to report any changes in their circumstances, which includes their earnings – this is set out in most cases by letters sent by Centrelink pursuant to section 68 of the Administration Act.
Section 100 of the Administration Act provides that a person who is receiving a social security payment is given notice under section 68(2) requiring them to report a change in circumstance within a specified time. If a change occurs, but the person does not inform the Department and the person’s rate of social security payment changes, the social security payment becomes payable to the person at the reduced rate on the day on which the change of circumstances occurred.
The Respondent contends that the Applicant failed to comply with the information notices issued to him under section 68(2) of the Administration Act. As such, his NSA is reduced under section 100(1) of the Administration Act from 18 March 2014.[18]
[18] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, page 4, paragraph 24.
The Respondent further contends that the Applicant received payments in excess of his correct entitlement because his income was not taken into consideration when he was paid his NSA entitlements. The Respondent contends that the debt has been correctly calculated as $7,517.50, for the debt period 18 March 2014 to 21 December 2014.[19]
[19] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, page 4, paragraph 25.
At Hearing, the Applicant told the Tribunal:
oHe knew about his income reporting requirements;
oHe often had issues with the Centrelink telephone reporting system and would need to call on numerous occasions to get through;
oHe was reporting his income to the Salvation Army who were assisting him to find work;
oHe thought that the Salvation Army were also reporting his earnings to Centrelink;
oHe worked three jobs during the period in question and that when he reported his earnings he combined the earnings together and reported a single amount;
oHe would not know whether there is a debt, he believes what he received was what he was entitled to as he had reported all of his earnings; and
oHe would pay if he had made a mistake however he believes he did the right thing.
On cross-examination, the Applicant told the Tribunal:
oHe did not accept that he under declared his earnings;
oAgreed he worked at Pacific Avenue, Wholesale Fruit and Vegetables, that the income listed in the T-documents was correct and that his payment was stopped but then restarted. The Applicant was not aware of any back payment he received, he had reported his earnings and just received what he was meant to;
oIf he was overpaid, he would not have known; and
oConfirmed he understood that both the Salvation Army and he had reporting obligations.
A question arose at the Hearing in relation to an NSA payment made to the Applicant on 19 August 2014 for the period 22 July 2014 to 18 August 2014. The Applicant’s contention was that he had reported all of his earnings. The Respondent sought leave to provide post hearing submissions on the point. Submissions dated 4 March 2019 were received and outlined that the Respondent’s contentions had not altered in relation to the debt calculation and recovery of the debt.[20]
[20] Secretary’s Further Written Submissions, dated 4 March 2019.
The evidence before the Tribunal provides that for the debt period the Respondent paid the Applicant $9,331.81, however, he was entitled to be paid $1,814.31 and, consequently, had been overpaid $7,517.50.[21]
[21] Exhibit 1, T Documents, T15, page 85, Debt Determination and Submission.
The Applicant, during the debt period, declared earnings of $9,449.00. However, following receipt of further information, the Respondent formed the view that the Applicant’s earnings for this period was actually $15,480.00.[22]
[22] Exhibit 1, T Documents, T10, page 61, Decision and notes of Authorised Review Officer. Noting the Applicant’s debt was recalculated due to confirmation of income: T15, page 85, Debt Determination and Submission.
The letters sent by the Respondent to the Applicant throughout the debt period clearly outlined the Applicant’s obligations to report his earnings. The Applicant acknowledged that he understood his reporting obligations and that he believed that he had done everything he was required to do and had reported his earnings.
There is no evidence contradicting the amounts considered to have been income earnt by the Applicant in relation to his employment with The Brad Hooper Family Trust and the Cheryl Fullerton Family Trust; Surfers Paradise Gold Club Ltd; and, Pacific Avenue Wholesale Fruit and Vegetables are correct. In fact, the evidence before the Tribunal is overwhelming clear.
Based on the evidence before the Tribunal I find that the Applicant received more NSA than he was entitled to during the period 18 March 2014 to 21 December 2014 and as such this overpayment is a NSA debt owed to the Commonwealth.
NSA Debt repayable in part or in full?
As I have found that the NSA debt exists, I must consider whether the debt must be repaid.
It is generally expected that debts to the Commonwealth are recovered. This proposition was expressed by French J in relation to debt recovery in Secretary, Department of Social Security v Hales [1998] FCA 219 as:
The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to received will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.
However, there are circumstances where the recovery of debts is either put on hold for a period of time (written off) or are no longer pursued (waived). Relevant to the Applicant’s NSA debt, the Respondent may write off, or waive, his NSA debt if the requirements set out in sections 1236, 1237A or 1237AAD of the Act are met.
Should the Debt be written off pursuant to section 1236 of the Act?
Section 1236(1) of the Act provides that, subject to section 1236(1A), the Respondent may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise.
Section 1236(1A) of the Act allows the Respondent to decide to write off a debt 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)It is not cost effective for the Commonwealth to take action to recover the debt.
The Respondent contends that section 1236 of the Act has no application in the present matter as there is no evidence that the debt is irrecoverable or that the Applicant has no capacity to repay the debt, the Applicant’s whereabouts are currently known and it submits that it is cost effective for the Commonwealth to take action to recover the debt.
A Centrelink information letter was issued to Manolas Brothers Delicatessen Pty Ltd on

31 May 2018 and was returned dated 13 June 2018. At that date, the letter provided that the Applicant was employed by Manolas Brothers Delicatessen, that employment was likely to continue and that the Applicant’s gross wage varies each week but on average is $747.00 per week.[23]
[23] Exhibit 1, T Documents, T1 7, pages 98-99, Centrelink Notice: Request for information.
At the Hearing, the Applicant told the Tribunal that his current financial circumstances were bad, he does not have a house but sleeps at friends’ houses and that he lost his house due to stress. The Applicant also told the Tribunal that he was still employed by Manolas Brothers Delicatessen and that he now earns between $500 and $550 after tax per week and that the $747.00 amount was what he earnt during the summer period.
Based on the evidence before the Tribunal I am satisfied that the debt is recoverable at law, the Applicant has the capacity to repay the debt, his whereabouts are known and that there is no evidence to suggest it is not cost effective for the Commonwealth to take action to recover the debt. Consequently, I find that the Applicant’s NSA debt cannot be written off pursuant to section 1236 of the Act.
Should the Debt be waived due to sole administrative error pursuant to section 1237A of the Act?
Section 1237A of the Act provides that the Respondent 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.
Selway J, in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at paragraph [35] stated:
The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.
The Respondent contends that there has not been an operative (sole) administrative error on the part of the Department as the notices issued to the Applicant under subsection 68(2) of the Administration Act clearly required him to inform the Department of a change to his circumstances which included income and that the debt arose due to the Department not receiving the correct details of the Applicant’s income until after a data match with the ATO.[24]
[24] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, page 5, paragraphs 34-35.
The Applicant told the Tribunal at the Hearing that he thought he had reported what was required. The Applicant told the Tribunal that he had done everything right and would not know if a debt had arisen.
As discussed above, the Respondent sent a number of letters to the Applicant during the debt period and the Applicant acknowledges his obligations to report his earnings.
Based on the evidence before the Tribunal, I am not satisfied that the Applicant’s NSA debt was a result of a sole administrative error. Consequently, I find that the Applicant’s NSA debt cannot be waived pursuant to section 1237A of the Act.
Should the Debt be waived due to special circumstances pursuant to section 1237AAD of the Act?
Section 1237AAD of the Act provides that the Respondent may waive the right to recover all or part of a debt if they are 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, the Administration 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.

The Respondent accepts that the Applicant did not knowingly fail to comply with subsection 68(2) of the Administration Act. However, the Respondent contends that section 1237AAD cannot apply as the Applicant’s circumstances are not special.[25]
[25] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, page 6, paragraph 38.
The Act does not provide a definition of special circumstances. However, the general proposition, established by relevant Federal Court decisions, make it clear that ‘special’ means something different from the usual or ordinary.[26]
[26] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545per Kiefel J; Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones(2012) 89 ATR 267; [2012] FCA 639, at [51]; Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084, at [37].
In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held at paragraph 3:
An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances answer any of these descriptions must depend upon 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.
In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, the Tribunal stated:
Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount to “special circumstances” …., the use of the word “special” is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case … In the exercise of the discretion …., the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the …. Act.
The Respondent contends that when the circumstances of the Applicant’s case are considered in their entirety, including the circumstances giving rise to the overpayment, it cannot be said that the circumstances in this case warrant the exercise of the discretion in section 1237AAD of the Act.[27]
[27] Exhibit 2, Secretary’s Statement of Issues, Facts and Contentions, page 7, paragraph 45.
At the Hearing, the Tribunal asked the Applicant about his circumstances in relation to debt recovery. The Applicant told the Tribunal that he does not have special circumstances. He said:
“I just did the right thing, went in accordance with the Salvo arrangements and reported what I thought I should have reported. I did everything right. If I didn’t I knew they would know and it took 5 years for them to say there is an issue – I thought, I did everything right.”
As previously outlined, the Applicant told the Tribunal that his current financial circumstances were bad. The Applicant does not have a house but sleeps at friends’ houses as he lost his house due to stress. The Applicant also told the Tribunal that he was still employed by Manolas Brothers Delicatessen and that he now earns between $500 and $550 after tax per week.
Further, on cross-examination, the Applicant was asked whether he agreed that he can repay the debt. The Applicant told the Tribunal, “If I have done something wrong then I would repay, do what I have to.”
I accept that the debt did not result from the Applicant knowingly making a false statement or representation or knowingly failing to comply with the subsection 68(2) of the Administration Act reporting requirements.
Based on the evidence before the Tribunal, in particular that given by the Applicant at the Hearing, I do not consider that the Applicant’s circumstances are sufficiently special or unusual to warrant the exercise of the discretion in section 1237AAD of the Act to waive the debt. Consequently, I find that the Applicant’s NSA debt cannot be waived pursuant to section 1237AAD of the Act.
CONCLUSION
I find that the:
(a)Applicant was paid more than his correct amount of Newstart Allowance during the period of 17 March 2014 to 21 December 2014;
(b)Applicant’s Newstart debt for the period 17 March 2014 to 21 December 2014 is correctly calculated as $7,517.50 and is a debt owed to the Commonwealth;
(c)Requirements of sections 1236, 1237A and 1237AAD of the Act are not met; and
(d)Applicant’s Newstart debt is recoverable in full.
Accordingly, the decision under review is affirmed.

I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell

.............................[SGD]...................................
Associate
Dated: 4 April 2019

Dates of hearing: 15 February 2019

Applicant: In Person

Advocate for the Respondent: Ms Jacky Vetter

Solicitors for the Respondent: Sparke Helmore Lawyers

[2019] AATA 634

4 April 2019

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Appeal

Dates of hearing:	15 February 2019
Applicant:	In Person
Advocate for the Respondent:	Ms Jacky Vetter
Solicitors for the Respondent:	Sparke Helmore Lawyers