Fedczyna and Secretary Department of Family and Community Services

[2007] AATA 1057

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2007] AATA 1057

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2006/0543   

GENERAL ADMINISTRATIVE DIVISION		)
Re		ANNA FEDCZYNA

Applicant

And SECRETARY DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date14 February 2007

PlaceSydney

Decision The decision under review is set aside and instead the Tribunal decides that the carer payment debt of $1456.43 owed by the Applicant should be waived.

...................[sgd]......................

Ms N Isenberg
  Senior Member

CATCHWORDS

SOCIAL SECURITY – carer payment – Debt due to the Commonwealth – Whether debt attributable “solely” to Commonwealth’s error - Whether debt should be waived – “special circumstances”.

LEGISLATION

Social Security Act 1991.

CASE LAW

Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787

Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)

Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 50 ALD 186

REASONS FOR DECISION

February 2007 Ms N Isenberg, Senior Member

DECISION UNDER REVIEW

1.        A decision of the Social Security Appeal’s Tribunal made on 5 April 2006 affirming a decision of an Authorised Review Officer (‘ARO’) on 6 December 2005 to raise and recover a $1,589.38 carer payment debt for the period 20 September 2003 to 11 August 2005. The amount was recalculated by Centrelink after the Applicant lodged her application for review to this Tribunal and it came to $1456.43.

BACKGROUND

2.        Ms Fedczyna received carer payment from 3 April 2000 in respect of her mother. On 4 May 2002, Centrelink received a letter from Western Sydney Health dated 19 April 2002, for whom Ms Fedczyna had worked two days per week for since 1997, that Ms Fedczyna’s earnings were $260.84 per week.  When annualised this came to $13,563.68 per annum. 

3.        On the same day, Centrelink wrote to Ms Fedczyna advising her that her rate of carer payment was calculated based on her annual income of $13,951.18.  (This included the amount of $387.50 which is the deemed income from her then savings of $15,500.00.)  In that letter, she was instructed to tell Centrelink within 14 days if her income changed.

4.        On 30 August 2005, Ms Fedczyna’s carer payment was selected for a data match review.  The information from the data match showed a discrepancy in the income Centrelink used for its calculations ($13,563.68) and the gross income of $15,304.00.  This meant Ms Fedczyna’s carer payment had been overpaid.

5.        A debt was raised but on review the debt was recalculated to $1,589.38.  The SSAT affirmed the ARO’s decision to raise and recover that debt.  After Ms Fedczyna’s lodged her application for review to this Tribunal Centrelink again recalculated the debt using Ms Fedczyna’s annualised earnings instead of her fortnightly earnings. The recalculated debt amount was $1,456.43. 

ISSUE BEFORE THE TRIBUNAL

6.        Whether there is a recoverable debt of $1,456.43 for the period 20 September 2003 to 11 August 2005; and if so, whether the debt should be recovered.

LEGISLATION

7.        The relevant legislation in this matter is the Social Security Act 1991 in particular sections 1223, 1237A and 1237AAD.

THE HEARING

8.        l had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence.  Additional documents were also provided.  Ms Fedczyna tendered a copy of a letter from Dr Dawson of Occupational Health Consulting, to whom she had been referred to by her employer.

9.        Ms Fedczyna gave evidence and was cross-examined on behalf of Centrelink.  I also asked her questions.

CONSIDERATION OF EVIDENCE AND FINDINGS

Is there a recoverable debt?

10.      Centrelink contended that the overpayment had arisen because Ms Fedczyna had failed to notify Centrelink of an increase in her income.

11.      Centrelink paid Ms Fedczyna her carer payment on the basis that her income was $13,563.68.  In fact Ms Fedczyna received a gross income of $15,304.00, according to her employer’s records.  Ms Fedczyna did not dispute this.  As a result of this discrepancy Ms Fedczyna was paid a carer payment at a higher rate than she she was entitled.  The overpayment was (ultimately) calculated at $1456.43.

12.      Consequently, the amount of the overpayment is a debt owed by her to the Commonwealth under subsection 1223(1) of the Act, which states:

“1223.(1) Subject to this section, if:

(a) a social security payment is made; and

(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

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.”

13.      I therefore find that there is a recoverable debt.

Should the debt be recovered?

The Act makes provision in limited circumstances for debts not to be recovered. For example:

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.”

14.      For a debt to be waived under section 1237A, two conditions must be met, namely that the debt arose solely because of administrative error and the debtor received the payments in good faith.

15.      Ms Fedczyna’s evidence was that she had produced her payslips to Centrelink when requested to do so, which was about every 3 months.  She said Centrelink would telephone her and ask her to bring in her pay slips and that she did this on each occasion she was requested to do so.  She would take them into the Centrelink office, they would be photocopied and the originals returned to her.

16.      She said, and I accept, she has made extensive enquires at Centrelink in order to identify the manager at Auburn Centrelink so as to be able to bring evidence that it was the practice of that office to require production of pay slips to ensure continuity of carer payment.  She felt she had been frustrated in this endeavour by Centrelink’s privacy concerns for its staff.

17.      Ms Fedczyna said that when she gave copies of her pay slips to Centrelink it was then up to Centrelink to make her carer payments correctly using that detailed information.  If Centrelink staff had done their job properly overpayments would have been prevented.

18.      Ms Fedczyna does not know why Centrelink cannot now produce the copies she had provided.  She referred me to the T documents and noted that there were no documents whatsoever between 4 May 2002 and 1 March 2004.  She expressed the view that it was incomprehensible that Centrelink would have continued to pay her carer payment for nearly two years without some contact, either by her or initiated by Centrelink. This, she said, supported her contention that she had supplied the payslips as she had contended.

19.      During the hearing Ms Mclean obtained instructions that there was one Centrelink record (irrelevant to this matter) dated 15 January 2003, and six notations in September 2004 about Ms Fedczyna’s condition and one record in November 2004 in relation to her claim for disability support pension.  It remained that there was no Centrelink record of Ms Fedczyna having contact with Centrelink (or vice versa) on any matter between May 2002 and January 2003 and no contact whatsoever between January 2003 and September 2004.

20.      It was put to Ms Fedczyna that she may have confused her recollection of her attendances with her pay slips in relation to her carer payment with her production of pay slips in relation to her previous parenting payment which she received between 1995 and 2000.  Ms Fedczyna denied that this was the case, saying that she just continued producing the pay slips as requested and that it was only the nature of the pension that had changed, namely from parenting payment to carer payment.

21.      Ms Fedczyna did not know if she had read Centrelink’s letter of 4 May 2002, but it was her practice to read Centrelink letters.  That letter informed Ms Fedczyna that her rate of carer payment was calculated based on her annual income of $13,951.18.  In that letter, she was instructed to tell Centrelink within 14 days if there were changes to any of a long list of circumstances, such as:

“You must tell us if:

You change your address;

You undertake training, education, unpaid voluntary work or paid work for more than 20 hours per week.

You must also tell us if the person(s) you care for:

Has their pension or benefit (if they receive one) cancelled for any reason;

Needs less care;

Dies.

You must tell us if the income or assets of the person(s) you care for change.

You must tell us if:

Your income or combined income, not including financial investment or maintenance, increases;

Your income or combined income has changed;

You start work or recommence work;

You are involved in, or receive a benefit from, a private trust or private income.”

22.      Ms Fedczyna’s evidence was that she understood that she was required to inform Centrelink if her ‘circumstances’ changed.  In her view there was no change: she was still with the same employer, doing the same job and working two days a week.  Any pay increases were CPI increases.  She was still living in her home with her daughter and caring for her mother: ‘there was nothing to notify because nothing had changed’.  In any event she was producing her pay slips on request.

23.      I note that in formulating its May 2002 letter to Ms Fedczyna Centrelink had apparently relied on information provided at that time by her employer.  The papers contained a file note that refers to a fax from the employer – the fax was not provided in the papers – that her weekly income was $260.84 (which would be $521.68 per fortnight) and that she had been paid $10956.09 in the year to date. 

24.      I carefully compared the employers’ records provided in September 2005 against the information provided in April 2002.   Firstly, the total payments to date did not add up to the sum purportedly paid.   Also, in no pay fortnight in the 2002/3 year up to April 2002 did she receive $521.68 and in 13 out of 20 pays she received less than this amount.  Her average pay however was in fact $536.62 per fortnight, an amount in excess of that on which Ms Fedczyna’s carer payments were based.  Centrelink appears to have paid Ms Fedczyna a higher carer payment because it relied on a lower base income figure. This base figure was continued to be used through the period under review. 

25.      If I accept that Ms Fedczyna provided Centrelink with her pay slips about every three months when requested to do so, I must come to a view that to have overpaid her carer payment was an administrative error by Centrelink. 

26.      I have no reason to doubt Ms Fedczyna’s evidence that she produced her payslips as she claimed.  She gave clear evidence of being requested by phone every three months or so to produce her original pay slips which were then photocopied by Centrelink counter staff.  There is now however no indication of where they might now be.  For that matter, and most significantly, there are no relevant records at all for a period of nearly 18 months.  It is not a matter of a single document going missing – there appears to have been many of Ms Fedczyna’s documents that cannot now be located. 

27.      In the circumstances she should be given the benefit of the doubt, and I accept that she provided her pay slips to Centrelink on demand during the period under review.  The pay slips were comprehensive, giving the amount paid in the preceding fortnight and in the year to date.  It would have been for Centrelink to make adjustments to Ms Fedczyna’s carer payment accordingly.  I am not encouraged about Centrelink’s management of financial information provided by employers having regard to the miscalculation either by Centrelink (or the employer) upon which it relied in setting the base income for Ms Fedczyna.  

28.      I must then consider if the administrative error was solely due to Centrelink.

29.      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 Department of Employment, Education and Training (AAT 10941, 17 May 1996) paragraph 40, 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.

It makes no difference that those other errors or factors are minor.  If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.  Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.”

30.      This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 paragraph 19. The Tribunal stated that “solely” in section 1237A(1) should be given its ordinary meaning (“only” or “to the exclusion of all else”).

31.      The error was not Ms Fedczyna’s.  Centrelink appears to have failed to act on the information provided by her, i.e. her payslips.

32.      I therefore find that there was an administrative error on Centrelink’s part and that its error was solely responsible for the debt.

33.      Having come to the view that the debt arose solely from an administrative error by Centrelink, I turned to examine the issue of Ms Fedczyna’s good faith.  I find that Ms Fedczyna received the payments in good faith as that expression was interpreted by the Federal Court in Secretary, Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 50 ALD 186 at 188-189 (Finn J). She had complied with all of her obligations to notify Centrelink of her pay, when requested.

34.      Having come to that view it is not necessary for me to consider if there are special circumstances why the debt should be waived.  I note however that Ms Fedczyna attributes her own depressive state – for which she is now receiving psychiatric care - and her mother’s sudden deterioration in health resulting in her being moved into a nursing home, to be directly attributable to the stress associated with this matter. 

35.      I note that Ms Fedczyna works two days per week, and currently her job is at risk following a restructure and her apparent inability to adapt to her new role.  I note also her daughter’s tragic experience last year which has distressed Ms Fedczyna greatly and which is likely to require ongoing dealings with the police and possibly in the courts.  While she owns her own home she cannot afford essential maintenance.  Her household items are old and will need replacing, and her car is 17 years old.

DECISION

36.      For the above reasons, I set aside the decision under review, and instead the Tribunal decides that the carer payment debt of $1456.43 owed by the Applicant should be waived.

I certify that the   preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member

Signed:         .....................................................................................
  Associate

Date of Hearing  25 January 2007
Date of Decision  
Appearance for the Applicant        Self-Represented
Appearance for the Respondent    Jennifer Maclean