Feneley and Secretary, Department of Family and Community Service S

[2003] AATA 496

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 496

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/26

GENERAL ADMINISTRATIVE DIVISION		)
Re		WENDY JOY FENELEY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr I R Way, Member

Date30 May 2003 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

....................(Sgd)......................

Mr I R Way
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – family tax benefit – overpayment – whether debt properly raised – whether debt should be recovered – whether administrative error – whether special circumstances exist

Family Assistance (Administration) Act 1999 ss 97, 101

Social Security (Administration) Act 1999 s 237

Re Beadle v Director-General of Social Security (1985) 7 ALD 670

REASONS FOR DECISION

30 May 2003  Mr I R Way, Member         

1.      This is an application by Wendy Feneley (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) made on 4 December 2002, which affirmed a decision of Centrelink to raise and recover an overpayment of Family Tax Benefit (FTB) of $2,288.80 to the applicant during the period 1 July 2001 to 30 June 2002.

2. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T1-T34), as well as the following documentary evidence which was tendered at the hearing:

§Exhibit R1       Respondent’s Statement of Facts and Contentions dated 2 May 2003

§Exhibit R2       Centrelink letter to the applicant dated 18 April 2001

§Exhibit R3       Centrelink letter to the applicant dated 9 July 2001

3.      The applicant was self-represented and gave oral evidence.  Ms Wallis-Dunn represented the respondent.

4.      The background facts in this matter are not in dispute and in view of this, and on the material before it, the Tribunal finds as follows:

§The applicant was in receipt of FTB between 1 July 2001 and 30 June 2002 (T4, p14-16).

§Payment of FTB was based on an estimated income of $53,500.00 from 1 July 2001 (T12, p34-35).

§On 25 September 2001, the applicant advised that her estimate of her and her partner’s income had changed to $78,281.00 (T6).

§On 25 September 2001, the applicant was advised that $78,281.00 was being used to calculate FTB, Part A and her income was too high for her to be paid FTB, Part B (T5, p18).

§From 25 September 2001, payment of FTB was based on income of $78,281.00(T12, p33).

§Actual income for the 2001-2002 financial year was $100,089.00 (T12, p36-39).

§An overpayment of FTB of $2,288.80 in respect of the period 1 July 2001 to 30 June 2002 was calculated (T12, p32).

§On 21 and 22 August 2002, the applicant was advised of the overpayment of FTB (T13 & T14).

§On 26 August 2002, the applicant requested that her FTB payments cease (T15).

§On 13 September 2002, the applicant requested a review of the decision to raise and recover an overpayment (T18, p54).

§Also on 13 September 2003, the applicant wrote to Centrelink advising that she had advised in February 2000 that she had re-entered the work force and that she had been given incorrect information about her entitlement (T19).

§On 3 October 2002, the original decision maker affirmed the decision to raise and recover the overpayment (T22, p61) and notified the applicant accordingly (T23).

§An Authorised Review Officer contacted the applicant on 31 October 2002 (T26) and on 1 November 2002 advised the applicant that she had affirmed the decision (T27).

5.      This matter is to be determined within the provisions of the Family Assistance (Administration) Act 1999 (the Act). 

6.      Whether the applicant received an overpayment of FTB in the amount of $2,288.80 from 1 July 2001 to 30 June 2002 is not in dispute and in view of this and on the material before it, the Tribunal is satisfied that the applicant, during that period, received $2,288.80 of FTB to which she was not entitled and that pursuant to section 71(2) of the Act, this is a debt due to the Commonwealth by the applicant. 

7.      The principle issue then is whether this debt should be recovered or waived.

Legislative Framework

8.      The Act, in respect of waiver, relevantly provides as follows:

“Waiver of debt arising from error

97(1)    The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.

(2)       The Secretary must waive the administrative error proportion of a debt if:

(a)the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and

(b)       the person would suffer severe financial hardship if it were not waived.

(3)       The Secretary must waive the administrative error proportion of a debt if:

(a)the payment or payments were made in respect of the debtor’s eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and

(b)the debt is raised after the end of:

(i)the debtor’s next income year after the one in which the eligibility period or event occurs; or

(ii)the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;

whichever ends last; and

(c)the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.

(4)       For the purposes of this section, the administrative error proportion of the debt may be 100% of the debt.

Waiver in special circumstances

101     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 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 the family assistance law; 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.”

9.      The Social Security (Administration) Act 1999 relevantly provides:

“237(1)  If notice of a decision under the social security law is:

(a) delivered to a person personally; or

(b) left at the address of the place of residence or business of the person last known to the Secretary; or

(c) sent by prepaid post to the postal address of the person last known to the Secretary;

notice of the decision is taken, for the purposes of the social security law, to have been given to the person.

(2)      Notice of a decision under the social security law may be given to a person by properly addressing, prepaying and posting the document as a letter.

(3)      If notice of a decision is given in accordance with subsection (2), notice of the decision is taken to have been given to the person at the time at which the notice would be delivered in the ordinary course of the post unless the contrary is proved.

(4) This section only applies to notices of decisions, and nothing in this section affects the operation of sections 28A and 29 of the Acts Interpretation Act 1901 in relation to other notices under the social security law (for example, a notice that requires a person to inform the Department about some matter or a notice that requires a person to give the Secretary a statement about some matter).”

Applicant’s Evidence and Submissions

10.     In her application for review by the SSAT the applicant stated that she had been misinformed, misled and given wrong information by Centrelink despite several attempts to gain correct information.  And that she had been told that a minimum payment of FTB would be paid regardless of income. In her application to this Tribunal for review the applicant reinforced this statement giving as her reasons for application, “I was misinformed by Centrelink representatives in regards to minimum payments on several occasions.  I would never had incurred a debt if I was correctly advised when I was seeking information”.

11.     In her oral evidence the applicant told the Tribunal that she, her husband and two children, aged 10 and 6, lived in their home at 16 Bombala Street, Broadbeach Waters.  She said they had bought the house some 3½ year ago and the current two mortgage payments were approximately $400 per fortnight and $900 per month respectively.

12.     She said she worked part-time on a commission basis, and her current estimated annual income was approximately $20,000.  She said her husband was employed full-time with an estimated annual income of between $60,000 to $70,000, depending on the amount of over-time that he worked. 

13.     She said that the family financial circumstances were under control and that she saw the family as “Mr and Mrs Average – getting by” and that there was nothing unusual, uncommon or exceptional that she wanted the Tribunal to take into consideration.  In his oral evidence, Mr Feneley drew attention to the significant increase in rates that the family now faced, that the house had been very run down when they bought it and his wife had had to return to work so they would “fix the place up”.  He said that after tax and superannuation payments the family income, in the hand, would be of the order of $850 - $950 per week.

14.     In respect of the circumstances giving rise to the debt, both Mr and Mrs Feneley explained that prior to the debt in question being raised they had had a previous debt of $2,121.53 which was being paid off and that because of the need to repay this debt they had been informed by Centrelink that they had to take FTB payments so that Centrelink could make appropriate deductions.  The Tribunal notes that at the time of the hearing, approximately $290 of this debt was still outstanding, the debt being paid off from automatic deductions of $50 per month which the applicant had arranged through her bank with effect February/March 2003.

15.     The applicant said that despite her requests to Centrelink to stop payments of FTB (because she was concerned about being able to provide accurate estimates and thereby incurring further debts), this had not happened until August 2002 and had Centrelink acted promptly on her request to stop paying FTB she would not be in the situation she is today.  The Tribunal notes that when FTB payments were stopped in August 2002 the level of benefit being paid was of the order of $40 per fortnight and that on the applicant’s current family income any entitlement to FTB would, at least be minimal. 

16.     The Tribunal further notes that Centrelink, by letter of 18 April 2001, advised the applicant that $53,500 was being used as her combined income in determining her payments and she was given an opportunity to revise this figure.  In the absence of any revised figure, Centrelink rolled over the figure of $53,500 to year 2001/2002 and notified the applicant of this on 9 July 2001.  Following the applicant notifying a revised estimate of income of $78,281 (in September), Centrelink recorded this level and advised the applicant, on 25 September 2001, that her FTB was being calculated on this estimate. Centrelink, in the absence of any contrary notification from the applicant, continued to use this figure for the remainder of the financial year and it was not until reconciliation with taxable income figures from the ATO in August 2002 that it became apparent that the applicant’s estimate was significantly lower than her actual combined taxable income, with a resultant notification to the applicant on 21 August 2002 of the overpayment of $2,288.80.  On 26 August 2002, the applicant requested Centrelink to cease paying FTB fortnightly on the basis that she would claim any eligibility for FTB at the end of the financial year.  On 28 August 2002, Centrelink ceased paying fortnightly FTB. 

17.     It was the applicant’s evidence that she always responded to Centrelink on time.  However, she found Centrelink’s responses to her requests to be very slow.  It was the applicant’s evidence also that she had been told by Centrelink that she was receiving the minimum payment of FTB and that the amount of her estimated income did not matter because she was at the minimum level of benefit. 

18.     In respect of receipt of correspondence from Centrelink, the applicant initially said she could not say she had not received the letters sent to her.  However, she was unable to recall any details.  Later in her evidence, she said that she had probably received a letter about revising her estimate of income because she had informed Centrelink in September 2001 of the increase in estimated income to $78,281. 

19.     It was the applicant’s submission that her debt arose out of Centrelink’s errors and that therefore she should not be required to repay the overpayment. 

Respondent’s Submissions

20.     The respondent submitted that the applicant had been advised, by letter, of the rate of income on which her FTB was based and that, as she had failed to notify Centrelink of her income increasing above her estimated rate of $78,281, the debt is not attributable solely to administrative error. 

21.     It further submitted that there is no evidence that recovering the debt would cause financial hardship nor are there special circumstances such that it would be appropriate to waive the debt and that therefore the decision under review should be affirmed.

Consideration

22.     As indicated above the principle issue in this matter is whether the debt of $2,280.80 due to the Commonwealth by the applicant should be waived. 

23.     The first question before the Tribunal is whether the debt or any proportion of the debt is attributable solely to an administrative error made by the Commonwealth.

24.     On 9 July 2001, 25 September 2001, 19 February 2002 and 12 March 2002 Centrelink sent letters to the applicant at her home address in respect of family assistance. 

25.     The applicant was unable to say that she had not received these letters. However, she did have difficulty in recalling any details of having received the letters or their contents.  She did, however, on further reflection say that she probably did receive at least one of the letters which caused her to inform Centrelink of a revised estimate of income.

26. The Tribunal is mindful that, pursuant to section 237 of the Social Security (Administration) Act 1999, notices of decisions sent by prepaid post to a person’s postal address are taken to have been given to a person.  And in this case the applicant has confirmed that at the relevant times her home and postal address was as stated on the letters and the respondent has confirmed that there is no record of any of the letters being returned to sender.

27.     The letter of 9 July 2001 (Exhibit R3) clearly is a decision that the applicant is entitled to payment of FTB based on a combined income of $53,500 and furthermore requires the applicant to inform Centrelink of changes in income when such changes are known.

28.     The letters of 25 September 2000, 19 February 2002 and 12 March 2002 likewise are decisions informing the applicant that she is entitled to receipt of FTB based on a combined income of $78,281 and requiring the applicant to notify changes of income when such changes are known. 

29.     The Tribunal is satisfied that, for the purposes of considering this matter, the applicant did receive the above letters.

30.     The Tribunal notes that the applicant was also sent a general letter about family assistance dated 18 April 2001 (Exhibit R2).  This letter explained that the applicant’s rate of FTB was being assessed on an estimated income of $53,500 for the 2000/2001 financial year.  Enclosed with this letter was an information sheet which gave the FTB rates and income limits which applied from the beginning of the 2001 financial year.  This letter also stated “if your estimate is lower than your actual income from the financial year you may receive too much Family Assistance and you will have to repay the money”, and “you can change your income estimate as often as you need to by writing to us, telephoning or coming in to see us at any Family Assistance Office.  To avoid or reduce any possible overpayment, you should tell us your new income estimate as soon as possible”.

31.     The Tribunal is satisfied that, for the purpose of considering this matter, the applicant did receive this letter.

32.     It is against the contents of these letters that the Tribunal has assessed the applicant’s evidence that she was misinformed, misled and given wrong information by Centrelink, namely that she would receive a minimum of FTB regardless of income.

33.     The Tribunal is mindful that many social security recipients find the social security legislation complex and difficult to understand.  The Tribunal is also mindful that letters from Centrelink such as those above contain details the comprehension of which requires careful reading. 

34.     However, based on the contents of the above letters there is a reasonably clear need for a recipient of the letters to advise changes in estimated income and reasonably clear information about what might happen if estimates are too high or too low.  The Tribunal therefore is satisfied that the applicant must bear some responsibility for not advising Centrelink of changes in estimates of income.  The Tribunal is also satisfied that, on the information it had about income estimates and the applicant’s subsequent actual combined taxable income of $100,089 for the 2001/2002 year, Centrelink has acted appropriately. The Tribunal is therefore satisfied that no proportion of the debt of $2,288.80 is due solely to an administrative error made by the Commonwealth and, as such, waiver of the debt under section 97 of the Act is not appropriate.

35.     In making this finding the Tribunal notes that, even if all or a proportion of the debt can be attributed solely to an administrative error made by the Commonwealth, for the provisions of section 97(1) to apply, the applicant must demonstrate that she would suffer severe financial hardship if the debt were not waived. 

36.     Severe financial hardship is not defined in the Act  However, the meaning of the term, while not implying destitution goes beyond straightened financial circumstances and imports a need for the particular circumstances of a person to include suffering of a severe or extreme nature.  In the present case, the applicant, on her own evidence, is able to repay existing debts to the Commonwealth at $50 per month, maintain her own home, including mortgage repayments, provide for daily living needs including school fees for her two children and keep her credit card expenditures under control.  The Tribunal accepts that the increase in Council rates has caused some financial difficulty.  The Tribunal is also mindful that the applicant, at her current rate of combined income, would not be eligible to receive FTB payments.  However, on all of the material before it, the Tribunal is satisfied that, while the family’s circumstances require careful financial management, it cannot be said that the applicant would suffer severe financial hardship if the debt in question were not waived. 

37.     Turning then to waiver in special circumstances.

38.     With respect to special circumstances, the Tribunal notes that although special circumstances are not defined in the Act, the approach to be taken in interpretation and application of the discretionary provisions of the Act have been dealt with by the Tribunal and the Federal Court in numerous cases.  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 it was said:

“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 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.”

39.     This decision was generally affirmed on appeal by the Full Court of the Federal Court of Australia in Beadle v Director-General of Social Security (1985) 7 ALD 670, where it was said:

“the phrase ‘special circumstances’, although lacking precision, is sufficiently understood in our view not to require judicial gloss.”

40.     As has been indicated above, while the family’s financial circumstances are such that careful financial management is necessary, the Tribunal is satisfied that the applicant’s financial circumstances are not so difficult as to constitute hardship that would justify a finding of special circumstances.  The Tribunal is also satisfied that there are no other circumstances which are so unusual, uncommon or exceptional as to justify a find of special circumstances.

41.     That being so it is not possible to exercise a discretion to waive the applicant’s debt, pursuant to section 101, and the Tribunal so finds.  In making this finding the Tribunal is mindful that there has been no suggestion in this matter that the applicant or her husband have acted other than honestly and the Tribunal was impressed by the sincere, forthright and frank way in which they presented their case.  However, the application of the law in this matter clearly leads to there being a debt due to the Commonwealth that cannot be waived under the discretionary provisions of the Act.

42.     The Tribunal therefore affirms the decision under review.

I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Mr I R Way, Member

Signed:         Sarah Oliver

Associate

Date of Hearing  9 May 2003
Date of Decision  30 May 2003
The Applicant Appeared in Person  
For the Respondent                  Ms H Wallis-Dunn, Departmental Advocate