Fetch and Secretary, Department of Family and Community Services

[2004] AATA 787

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 787

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  N2003/1710

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DAWN FETCH

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal  Rear Admiral A R Horton AO, Member

Date 27 July 2004

Place Sydney

Decision  The decision under review is affirmed.

[Sgd] Rear Admiral A R Horton AO
  Member

CATCHWORDS

SOCIAL SECURITY – raising and recovery of debts – Carer Allowance - Age Pension  – annual income based on Applicant’s husband’s wages – discrepancy between wages as advised and ATO data matching – discrepancies probably relating to employment on flex days and incentive payments –failure to report income changes in accordance with legislation  - errors not solely attributable to administrative error – consideration as to special circumstances – criteria for special circumstances not met – decision under review affirmed

Social Security Act 1991 – sections 8(1), 8(2), 69, 222, 1064, 1223(1), 1224(1), 1237A(1), 1237AAD

Re Beadle and Director General of Social Security (1984) 6 ALD 1

Director General of Social Services and Hales (1983) 47 ALR 281

Hales and Director General of Social Security (AAT 12159, 27 August 1997)

REASONS FOR DECISION

27 July 2004   Rear Admiral A R Horton AO, Member

1.      This is an application to review a decision of the Social Security Appeals Tribunal (“SSAT”) on 8 October 2003 that varied a decision of an Authorised Review Officer (“ARO”) of 18 September 2003, and determined that Mrs Dawn Fetch (“the Applicant”) owed the Commonwealth $2370.90 in respect of an overpayment of Carer Allowance and $4758.83 in respect of an overpayment of Age Pension.

2. In making this determination, the SSAT waived under the provisions of subsection 1237AAD of the Social Security Act1991 (“the Act”) so much of the overpayment of Age Pension, (calculated by Centrelink as $763.46), from that affirmed by the ARO ($5522.29) as being attributable to the period from 6 December 2002 – which resulted from a letter of explanation from the Applicant to Centrelink – to 26 August 2003, this being the date of cancellation of Mrs Fetch’s Age Pension based on the combined income of she and her husband being above the allowable limit.

3. At the hearing on 15 June 2004, Mrs Fetch was self represented. Ms Jane Green , an advocate from the Centrelink Service Recovery Team appeared for the Secretary, Department of Family and Community Services (“the Respondent”). The Tribunal took into evidence the documents provided by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act1975, the Respondent’s Statement of Facts and Contentions with Attachments A to E (Exhibit R1), and Details of Centrelink procedures in respect of Income and Assets (Exhibit R2). 

BACKGROUND AND EVIDENCE

4.      Mrs Fetch lives with her husband in their own home at Woodcroft, and has done so since moving from Blacktown in the early 1990’s.   Her parents separated when she was 3 years of age, and she was brought up by her father.  In 1990, her father who lived independently at Auburn in his own home suffered a stroke leaving him with some paralysis, and minimal ability to walk.  Thereafter, he suffered increasing medical problems including incontinence, loss of memory and numerous admissions to hospital, and he became dependent on ever increasing care from Mrs Fetch.  She observed in evidence that he nonetheless remained independent in mind and in spite of  deteriorating health, sought to maintain his independence, standards and principles as much as possible.  Whilst Home Care provided morning assistance, Mrs Fetch commuted daily from her own home, providing a range of care including breakfast and preparation of lunch and transport to medical appointments and the like as required.  As well, she and her husband had to respond to increasing maintenance and repair commitments on his home.

5.      In 1996, Mrs Fetch’s general practitioner advised her to claim Carer Allowance in view of her commitments.  This was granted, Mrs Fetch perceiving it as a means of reducing the not inconsiderable transport costs between Blacktown and Auburn.   In time her father’s health deteriorated markedly, and following numerous hospitalisations, it was decided that he could no longer live alone and he was moved in with his daughter and Mr Fetch in mid 1999.  His condition continued to deteriorate, and he died in June 2000, his last 19 days being in a nursing home.   

6.      In oral evidence, Mrs Fetch provided considerable detail to the Tribunal in respect of her father’s circumstances between 1990 and his death ten years later.   She did so in order to illustrate the effect this had on her life and in turn, that of her husband. She had breast cancer, and gave evidence that she had reluctantly agreed to a mastectomy in order to ensure that she would be capable of looking after her father as he grew older and weaker.   She did not have time to see her own doctor on many occasions in respect of her breast cancer and back problems, and that high blood pressure and stress resulting from the constant attention to her father led her doctor to direct her to slow down.  From 1996, it was in this environment that she was being called on to meet the requirements of Centrelink in respect of the requirements of her Carer Pension, which was approved on 13 September 1996, to date 25 July 1996.   In her own words, “Centrelink was less important” because of the other problems she was dealing with each day.  

7.      The amount of her Carer Pension was based on total yearly income which included financial investments and earnings, and the income on which the pension was calculated was advised to Mrs Fetch at the outset, and on subsequent occasions of a change in yearly income or some other component such as a cost of living increase.   The formatted notification letters from Centrelink require the recipient of a payment to advise Centrelink within 14 days should there be changes in circumstances, one being income.  There is no suggestion before the Tribunal that Mrs Fetch did not receive the original letter or subsequent notifications, and the interpretation of the law has well recognised that posting to the known address is sufficient evidence of receipt.

8.      Throughout the periods under review, Mrs Fetch was not employed, and hence the earnings advised to Centrelink were predominantly those of Mr Fetch from his employment.  In the Income and Investment section of her Carer Pension claim in 1996, Mrs French stated her husband was employed by Integral Energy, (and still is), as a meter reader, with a gross weekly salary of $533.   Her evidence is that she then advised Centrelink on each occasion that he received a “wage rise”. Notification letters by Centrelink in the section 37 documents and a summary of archived filenotes (p217) attest that some changes to fortnightly Carer Pension payments resulted from this advice.

9.      Mr Fetch’s employment did not, according to Mrs Fetch, involve overtime.   However, he periodically worked on flex days and undertook field work, and when he read a certain number of meters he could become eligible for an additional payment.  Such additions to his base rate of pay were shown in fortnightly pay slips, which also indicated gross annual earnings to date as well as other details.   Mrs Fetch stated that generally she would not have been aware of, nor seen, these pay slips.  Where she might have seen them, they would mean little.  They would not have indicated likely annual gross income.  Suffice that Mrs Fetch did not see that she had the knowledge nor the requirement to report in this detail, and at such a frequency.

10.     Carer Payment ceased in late November 1998, Mrs Fetch becoming eligible for, and being granted, the Age Pension on 10 December 1998.   Formatted notification letters advising eligibility and changes in payment rate are similar to those for the Carer Pension and other asset related social security benefits, requiring notification of changes in circumstances, including financial details, within 14 days.  For Mrs Fetch, nothing changed in that her husband continued his employment in the manner described and she advised Centrelink when he received a pay rise.

11.     Following a Data Matching exercise with the Australian Taxation Office (“ATO”) in respect of the 2000/2001 financial year, Centrelink wrote to Mrs Fetch on 29 November 2002, advising that whilst Centrelink records had shown an income for Mr Fetch that year as $34,000, the ATO records indicated his gross income as $42,040.  In reply in a letter of 6 December 2000, Mrs Fetch confirmed that her husband’s only income was that from Integral Energy, and that in her view, “there was only one way this unfortunate error could have occurred” that being “from time to time he may have worked on his flex day.  Also, from time to time, if and when he reads over a certain number of meters, he receives a small incentive payment.  This I overlooked as I do not ask to see my husband’s pay slips each week”. 

12.     Further investigation in respect of ATO records for 2001/2002 led to Centrelink initially raising a debt of $2478.17 of Age Pension overpayment, a debt that was affirmed by an ARO on 9 July 2003.   In August 2003, Centrelink sought pay information from financial year 1996/1997 and from Integral Energy, and on receipt of this information, the Age Pension overpayment (to 26 August 2003) was amended to $5522.29, and a debt of $2370.90 was raised in respect of Carer Pension which had been paid from 25 July 1996 to 26 November 1998, as earlier noted.  Thus a total overpayment debt of $7893.19 was advised to Mrs Fetch, this debt being affirmed by an ARO on 18 September 2003. 

13.     On 8 October 2003, the SSAT waived that part of the overpayment debt (Age Pension) that related to the period 6 December 2002 (when Mrs Fetch wrote to the Respondent regarding the advice of overpayment following the Data Matching exercise) to 26 August 2003 – at which time the Age Pension was cancelled because the total income of Mr and Mrs Fetch was calculated as being above the allowable limit.   That variation of the original decision, as subsequently calculated by Centrelink, reduced the Age Pension debt by $763.46, leaving an Age Pension debt of $4758,83, and a total debt in respect of overpayment of both Carer and Age Pensions of  $7129.73.  

14.     In reaching the decision to waive part of the Age Pension debt, the SSAT took account of the endeavours made by Mrs Fetch, subsequent to her letter of 6 December 2002, to keep Centrelink informed of changing circumstances, and of her repeated attempts to clarify the problems, and to obtain advice from responsible staff.   Mrs Fetch provided very detailed written and oral evidence to this Tribunal in respect of these issues, but it is not necessary nor appropriate to detail that evidence in this decision, given that her concerns were recognised and accepted by the SSAT, and the original decision varied accordingly.   Issues in respect of this period from 6 December 2002 are not before this Tribunal. 

15.     At the outset of the hearing, Mrs Fetch was asked whether the statement in the SSAT decision (paragraph 5) that “she does not dispute that she has been overpaid, and she does not question either the earnings information provided to Centrelink by her husband’s employer or Centrelinks calculation of the overpayment.  Mrs Fetch does not dispute that she received letters from Centrelink throughout the period of the overpayment…” accurately reflected her position.   She responded that she could not be certain that the payment details provided by Integral Energy were accurate, but she had no relevant information in that regard.  She further stated she was “not comfortable” with the calculation of overpayments by Centrelink, particularly as the initial calculation of Age Pension overpayment had been amended, but again, she could make no more precise comment. 

16.     Mrs Fetch expressed concern to the Tribunal at the seeming discrepancy between taxable income recorded in ATO Notices of Assessment (Exhibit R1 Attachment E) and that provided by Integral Energy.  The Respondent pointed out, and the Tribunal agreed, that a direct comparison was inappropriate as the former took account of the application of deductions, and that gross income for Mr Fetch had been separately provided under the Data Matching program.      

17.     Reference has been made to the fact that Mr Fetch continues to be employed by Integral Energy.  Reference has also been made to the cancellation of Mrs Fetch’s Age Pension as the couple’s total income exceeds the allowable limit.  As to their financial situation, Mrs Fetch and her husband own their home.  Resulting from the sale of her father’s home at Auburn, and following the receipt of financial advice, they have purchased a house at Taree.  There is no income from this property.

18.     After the hearing Mrs Fetch wrote to the Tribunal (5 July 2004) enclosing a copy of her husband’s PAYG Payment Summary for the year ending 30 June 2004. This document indicates a gross payment (income) of $47,966. Given her other minimal interest from bank accounts, she claimed their total income falls well short of the $55,824 used by Centrelink when considering her eligibility for payment of the Age Pension. This issue is outside the purview of the Tribunal in this matter and as suggested at the hearing, Mrs Fetch should pursue the apparent discrepancy in income with Centrelink.    

ANALYSIS OF EVIDENCE AND FINDINGS   

19.     To summarise, the debt being considered by the Tribunal comprises $2370.90 in respect of overpayment of Carer Pension between 25 July 1996 and 26 November 1998, and $4758.83 in respect of Age Pension overpayment between 10 December 1998 and 5 December 2002.

20. Section 8(1) of the Act relevantly defines income as “an income amount earned, derived or received by the person for the person’s own use or benefit”.   Income amount is further defined as including personal earnings, moneys and profit.     Earned, derived or received is defined in section 8(2) as:

“(a)an income amount earned, derived or received by any means; and

(b)           an income amount earned, derived or received from any source (whether within or outside Australia)” 

21. Section 1064 – A2 of the Act prescribes that the combined income of a couple will be considered when calculating certain social security benefits and this applies to both Carer Pension and Age Pension. Hence the earnings of Mr Fetch form the major component of the total income upon which the rate of pension is calculated. Under the conditions of sections 69 and 222 of the Act, the applicant for an Age Pension and Carer Pension respectively has a responsibility to notify changes in circumstances, including changes in income. That responsibility is further advised, and elaborated upon, in the format letter from Centrelink advising the granting of a pension, and again is advised in periodic letters referring to changes in the rate of payment. In this matter, Mrs Fetch accepted that she had received the relevant letters.

22.     Sections 1223 and 1224 refer to the raising and recovery of debts.  Relevantly, the latter states that an amount paid to a recipient or another person “who failed or omitted to comply” with a provision of the Act is a debt due by the recipient to the Commonwealth. The former, in force from 1 October 1997, states that an amount of social security payment paid thereafter when the amount “was not payable” to the recipient is a debt due to the Commonwealth. 

23.     There is no evidence before the Tribunal to suggest that the overpayment debt in respect of the two pensions has been incorrectly calculated  (the Tribunal accepts that the original calculation of Carer Pension was reworked after receipt by Centrelink of information from Integral Energy).  The evidence before the Tribunal is that Mrs Fetch was properly advised as to the income basis upon which payment rates were calculated, and that she must, in accordance with the legislation, advise changes in income.  By her evidence, this she did but only to the extent of advising periodic increases in her husband’s normal wage.   For the reasons given to the Tribunal, she did not advise Centrelink of periodic payments in respect of work on flex days and meter readings, and hence these were not taken into account by Centrelink.  There is no suggestion that Mrs Fetch deliberately failed to provide this information.

24.     Mrs Fetch accepts that an overpayment was made, and the Tribunal finds that such overpayments constitute a debt by Mrs Fetch to the Commonwealth.  In making this finding, the Tribunal draws on the decisions, as submitted by the Respondent, in Director General of Social Services and Hales (1983) 47 ALR 281 and Hales and Director General of Social Security (AAT 12159, 27 August 1997), in terms of the obligation of the recipient to comply with notices from the Respondent.  

25. Section 1236 of the Act provides an authority to write of such a debt and relevantly states:

“1236.(1)        …

1236(1A)The secretary may decide to write off a debt under subsection (1) if, and only if:

(a)       the debt is irrecoverable at law; or

(b)       the debtor has no capacity to repay the debt;or

…

(c)it is not cost effective for the Commonwealth to take action to recover the debt.”

26.     The Secretary did not think those circumstances applied, a similar conclusion being drawn by the Tribunal.   The debt is not irrecoverable at law, and Mrs Fetch has the capacity to repay, given the full employment of her husband and their assets.

27. Section 1237A of the Act provides the authority for the Secretary, and hence the Tribunal, to waive the Commonwealth’s right to recover the whole or part of a debt in a number of circumstances, and states relevantly:

“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.

…

1237(1A)        Subsection 1 only applies if:

(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or        

…”

28. The Respondent submitted that there was no sole administrative error with respect to the remaining error. The Tribunal concurs with this view, the overpayment for both the Carer Allowance and the Age Pension having resulted from a lack of definitive and regular information from Mrs Fetch as to income, which was necessary to enable Centrelink to calculate the correct rate of payment. In the circumstances, there is no provision for waiver under section 1237A of the Act.

29. Section 1237AAD of the Act provides an authority wherein a waiver may be considered in special circumstances. The term “special circumstances” is not defined in the Act, but the view of Toohey J in the Federal Court decision in Re Beadle and Director General of Social Security (1984) 6 ALD 1 has been widely followed. His Honour stated:

“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 on 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.  That 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.”

30.     The Respondent submitted that public policy presumption was important in considering whether special circumstances were present, referring the Tribunal to Re Hales.   (In that decision, Sheppard J stated that notwithstanding hardship, the recovery of payments to which a person was not lawfully entitled must be of paramount consideration).   The Respondent submitted that the differences between the income data provided to Centrelink, upon which pension rates were calculated, and the actual income (or earnings of Mr Fetch) was significant.  Further, Centrelink did not become aware of the type of work and the additional earnings – on top of his “standard” wage – that might be earned by Mr Fetch, until so advised in the letter of 6 December 2002 from Mrs Fetch, that letter resulting from Centrelink advice as to the results of Data Matching. 

31.     The Respondent acknowledged the difficulties facing Mrs Fetch in looking after her father, but submitted that was recognised in the granting of Carer Pension.  Mrs Fetch’s health problems were also acknowledged but not seen as being sufficient to be considered special circumstances. 

32.     Mrs Fetch expressed concern at both the time taken by Centrelink to identify that actual income was in excess of that being used to calculate pension payment rates, and the delays in Centrelink finalising details of the claimed overpayments.  The Tribunal has already stated that problems identified by Mrs Fetch in her dealings with Centrelink had been recognised and taken into account by the SSAT in reaching a decision to waive any debt from 6 December 2002.  Thus the Tribunal sees that further comment is unnecessary.

33.     The Tribunal did see it appropriate to consider whether Mrs Fetch had received adequate advice as to the procedures that might be followed given her husband’s varying weekly wages.  Exhibit R2 was provided by the Respondent.  It refers to Centrelink “best practice” and notes that if a customer has employment income that is variable, it may be averaged over a suitable period.  It states that the advantages and disadvantages should be discussed with a customer at the outset.  In hindsight, that procedure may well have minimized the problem of overpayment in this matter.   However, there has been no suggestion put to the Tribunal that Mrs Fetch appreciated at the time the variable nature of her husband’s earnings, or the extent thereof, and the Tribunal finds it not unreasonable that this option was seemingly not raised by Centrelink at the outset in either 1996 when Carer Pension was granted or two and a half years later when the Age Pension was granted.  Thus this is not a matter that might be considered as a special circumstance.

34.     As regards other considerations, the Tribunal accepts that the requirements of looking after her father imposed considerable difficulties on Mrs Fetch, particularly in respect of her time prior to her father moving to her home.  Nonetheless, these circumstances were not “unusual, uncommon or exceptional”; they are unfortunately somewhat common in today’s society.  The Tribunal cannot accept that they totally precluded Mrs Fetch from acknowledging and attending to the requirements implicit in her Carer Pension grant.  The same must apply to the period of the Age Pension, and the Tribunal also takes into account that the particular demands placed on Mrs Fetch by her father’s medical conditions were no longer present after June 2000.

35.     The health problems suffered by Mrs Fetch as given in evidence, are acknowledged but again the Tribunal cannot find them to be such that they can be considered special circumstances.   Their effect on Mrs Fetch is understood, but as described and in the context of this matter, and over the period during which overpayment occurred, they are not seen as meeting the relevant criteria as followed under Re Beadle. In summary, the Tribunal finds that the debt to Mrs Fetch in respect of overpayment of Carer and Age Pensions cannot be waived under the provisions of section 1237AAD of the Act.

DECISION

36.     The decision of the SSAT that the balance of the debt (that is as occurred between 25 July 1996 and 5 December 2002) is to be recovered is affirmed.

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of  

Signed:         Neil Glaser

Associate

Date of Hearing  15 June 2004

Date of Decision                   27 July 2004

Representative for the Applicant               Mrs Fetch

Advocate for the Respondent                    Ms Jane Green