Falle and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1547

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1547

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V 200600730

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		CAROLINE GRACE FALLE

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Regina Perton, Member

Date13 July 2007

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Regina Perton

Member

SOCIAL SECURITY ‑ Newstart Allowance ‑ lack of awareness by applicant of underpayment ‑ how far backdating of increase possible ‑ impact of timing of application for review ‑ decision affirmed.

Social Security (Administration) Act 1999 s 109

REASONS FOR DECISION

13 July 2007 Regina Perton, Member     

1.      Caroline Falle has been receiving Newstart Allowance (NSA) since February 2002.  She has been unable to work primarily because of lingering illness.  In late 2005, Ms Falle discovered that she had been underpaid NSA.  The underpayment arose as a result of Centrelink calculating her deemed income based on the deposit held in a bank account in November 2001.  Ms Falle was using the funds held in the account to supplement her social security benefit because the income she received from Centrelink was insufficient to meet her daily living needs.  By late 2005, her bank balance had dwindled to a comparatively low level.

2.      On 23 December 2005, Ms Falle asked Centrelink to review her rate of NSA payments.  Centrelink discovered that it had not updated its records to reflect the lower amount in Ms Falle’s bank account.  Ms Falle’s NSA payments were subsequently increased.  Centrelink decided that Ms Falle was not entitled to payment of arrears for the period 24 October 2001 to 22 December 2005.  An authorised review officer (ARO) of Centrelink affirmed that decision.  On 7 July 2006, the Social Security Appeals Tribunal (SSAT) determined that Ms Falle was entitled to payment of arrears for the period 29 September 2005 to 23 December 2005.  On 15 August 2006, Ms Falle sought review by the Tribunal.

3.      The issue before the Tribunal is whether Ms Falle is entitled to payments of arrears for the period prior to 29 September 2005. 

EVIDENCE

4.      Ms Falle told the Tribunal that when she applied for NSA on 7 November 2001, she declared the total amount held in her bank accounts.  In 2000 she resigned from her public sector position after 16 years, due to physical and emotional difficulties.  Her illness still lingers.  Ms Falle said that she did not realise that she was not being paid the amount of NSA to which she was entitled.  In late 2005, she had a discussion with a girlfriend who was also receiving a Centrelink benefit.  It was only then that Ms Falle realised that she was entitled to a higher rate of NSA.

5.      Ms Falle said that she relied on Centrelink to pay her the correct amount.  She did not understand Centrelink’s process of calculating income and the rates of payment.  Therefore, she was not in a situation to challenge Centrelink’s calculations.  Her illness also impeded her ability to challenge the calculations.

6.      Ms Falle was required to undergo a waiting period because of the funds available in her bank accounts so she was granted NSA from 7 February 2002 Centrelink wrote to Ms Falle on 26 November 2001 and 10 January 2002 and advised her that her fortnightly income from her investments was calculated as $214.13 under the deemed income provisions. 

7.      Centrelink wrote to Ms Falle many times between March 2002 and December 2005.  Most of the letters concerned the need for her to complete application forms for payment or to provide updated medical reports.  Each letter sent by Centrelink cited the rate of deemed fortnightly income as well as the amount received as NSA.  Each letter also informed Ms Falle of her obligation to inform Centrelink of a range of matters within 14 days, including changes in her income and incorrect records of her income. 

8.      In the five letters sent between 10 March 2002 and 10 June 2002, Ms Falle was informed that the fortnightly income on which her NSA was calculated was $188.19, due to a drop in the deemed interest rate.  In letters sent between 3 July 2002 and 12 May 2003, she was informed that the deemed income was $187.62.  Between 14 July 2003 and 23 February 2004, her deemed fortnightly income was recorded as $186.92 and on 7 March 2004 her deemed fortnightly income was recorded as $231.95 because of a rise in the deeming rate of 1 per cent.  There were further changes in deeming rates and letters sent during 2004 and 2005.

9.      In December 2003, Centrelink undertook a review of Ms Falle’s eligibility for NSA.  A copy of the form completed by Ms Falle indicates that the review was primarily concerned with medical and employment issues with no mention of income. 

10.     Centrelink records indicate that on 4 January 2005, Centrelink updated Ms Falle’s bank balances from information provided by her in an income and assets review.  Neither Centrelink nor Ms Falle had a copy of the form available but it appears that Centrelink did not update its records of the balances in all her accounts.  Ms Falle told the Tribunal that she recalls providing statements to Centrelink when the amount of money held was about half of the original amount. 

11.     Ms Falle was adamant that she had completed more than one income and assets form.  Therefore, the Tribunal asked that Centrelink search its records to see if there had been other documents provided by Ms Falle in which she provided information about her assets and income.  On 13 April 2007, Centrelink reported to the Tribunal that:

According to Ms Falle’s computer records there were nine automated reviews between 27 November 2002 and 11 December 2006.  Five of these reviews were for rent details, two were in regard to her medical conditions (incapacitated), one related to going overseas (portability) and one was a review of her income and assets which was finalised in January 2005.

…

It is possible that Miss Falle was manually issued income and asset review forms but these should be recorded on the online document recording system….

Centrelink only has evidence of the one Income and Assets form being received by Ms Falle on 4 January 2005.

12.     On 11 May 2007, Ms Falle outlined a number of errors that Centrelink had made in its dealings with her.  She said that despite providing Centrelink with updated information, Centrelink has still failed to update their records.  She stated that:

Unfortunately because Centrelink have lost the records of asset claims that I had filled out and have made many lazy errors I have to suffer severe financial hardship and extra stress just exacerbates my already existing illness.

…

I feel I have been so underpaid for such a long time, I should be compensated.

CONSIDERATION OF THE ISSUES

13.     It is not disputed that Ms Falle may have qualified for payment of NSA at a higher rate at some time prior to 29 September 2005 if the calculations of income had been based on the actual amount held in the bank accounts.

14.     The Tribunal notes that Ms Falle’s sole source of income, which had been cited in Centrelink’s letters, was the interest earned on the bank accounts.  Centrelink based her income on the deemed interest rate current at that time for the amount Centrelink had recorded as being held in Ms Falle’s bank accounts.  Ms Falle did not calculate that figure nor provide Centrelink with income details.  The Tribunal notes that it would be difficult for a person whose assets comprise solely of bank accounts and whose income is solely derived from deemed interest from those accounts to challenge Centrelink’s fortnightly calculations of the interest.  Banks do not usually provide interest figures on a fortnightly basis to their depositors.  Nonetheless, the Tribunal notes that Centrelink also asked that it be informed of changes to the amounts held in the accounts, a figure Ms Falle would have been able to update regularly. 

15. Regardless of the cause or who is to blame for what has happened, it is clear that Ms Falle failed to dispute the figures used by Centrelink to calculate her rate of NSA until 23 December 2005. In looking at how far Centrelink can backdate payments of a higher rate of NSA, the Tribunal is bound by s 109 of the Social Security (Administration) Act 1999 (the Act). Section 109 prescribes different outcomes where a favourable decision is made after review. The date that a favourable decision takes effect depends on when the person affected by a Centrelink decision sought the review. Section 109 provides that:

109.(1) If:

(a)a decision (the original decision) is made in relation to a person’s social security payment; and

(b)a notice is given to the person informing the person of the original decision; and

(c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d)the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the determination embodying the original decision took effect.

109.(2)     If:

(a)a decision (the original decision) is made in relation to a person’s social security payment; and

(b)a notice is given to the person informing the person of the original decision; and

(c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d)the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the application for review was made.

16.     Ms Falle’s NSA payments changed on 29 September 2005 and she was advised of this change on 11 October 2005.  The letter dated 11 October 2005 constitutes notice of a decision for the purpose of s 109 of the Act. On 23 December 2005 Ms Falle contacted Centrelink to enquire about the decision. Therefore, Ms Falle sought review within the 13‑week period of the change in income as from 29 September 2005. The Tribunal concurs with the SSAT’s findings that Centrelink is only able to backdate the payments to 29 September 2005.

17.     There is no discretion in the legislation for the Tribunal to award arrears based on notices of decision that were given more than 13 weeks prior to 23 December 2005.

DECISION

18.     The Tribunal affirms the decision under review.

I certify that the eighteen [18] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  28 March 2007

Date of final submission:              15 May 2007

Date of decision:  13 July 2007
Advocate for the applicant:          Self-represented
Advocate for the respondent:       Ms K. Paul, Centrelink Legal Services Branch