Findlay and Secretary, Department of Family and Community Services

[2002] AATA 1138

DECISION AND REASONS FOR DECISION [2002] AATA 1138

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/225

GENERAL ADMINISTRATIVE  DIVISION       )       
           Re      MELISSA FINDLAY          
  Applicant
           And    SECRETARY, DEPARTMENT  OF FAMILY AND COMMUNITY SERVICES    
  Respondent

DECISION

Tribunal       Dr EK Christie, Member    

Date2 October 2002

PlaceIpswich

Decision      The Tribunal sets aside the decision under review and in substitution thereto decides that the debt accrued from 11 May 2001 to 22 May 2001 should be waived under the special circumstances provision of the Social Security Act 1991 with effect from 14 September 2001.
  ....................(Sgd).....................
  EK Christie
  Member
CATCHWORDS
SOCIAL SECURITY – parenting payment – overpayment – whether there has been an administrative error – whether special circumstances exist – whether debt should be waived

Social Security Act 1991 ss 1237A, 1237AAD

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543

WRITTEN REASONS FOR ORAL DECISION

2 October 2002       Dr EK Christie, Member                

1. This is an application by Melissa Findlay to review a decision of the Social Security Appeals Tribunal ("SSAT") made on 11 February 2002.

2. The SSAT made the following findings of fact (T2, Folio 6):

   "11.After careful consideration of the evidence presented to it, the Tribunal made the following findings:

   (i)Miss Findlay was in receipt of parenting payment single in respect of her son, Alex, when on 26 April 2001 she commenced employment with MBF.

   (ii)On 2 April 2001 Miss Findlay notified Centrelink that she was to start work on a date as yet unknown and that her annual income would be $27,000.

   (iii)On 2 May 2001 Mrs Sherrill Findlay notified Centrelink of the hours worked and the hourly rate of her daughter's earnings."

Issues to be decided by Tribunal

1. The issues before the Tribunal are whether the debt accrued over the period 11 May 2001 to 22 May 2001 should be waived under either:

• the "administrative error" provisions (section 1237A); or

• the "special circumstances" provisions (section 1237AAD);

of the Social Security Act 1991 ("the Act").

1. The Tribunal notes that waiver for "special circumstances" was not considered by the SSAT in their review of the application in February 2002.
   Relevant Legislation

2. Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth may be waived:

   "SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
   1237A(1)        Administrative error.  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.
   Note:   Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
   1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
   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 false representation; or

   (ii)failing or omitting to comply with a provision of this 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."

Tribunal's Evaluation of Facts

1. Firstly, in terms of the credibility and honesty of oral evidence given before the Tribunal, the Tribunal found Melissa and Sherrill Findlay to be witnesses of truth.

2. The Tribunal makes the following findings of fact based on the oral evidence and all of the information available before the Tribunal:

• 1 May 2001:  Sherrill Findlay telephoned Centrelink informing them that Melissa Findlay was not working.  Because she only had an approximate estimate of salary available at this time, Sherrill Findlay gave an undertaking to ring Centrelink with an accurate salary figure.

• 2 May 2001:  Sherrill Findlay provided the Centrelink Beaudesert office with her daughter's salary given to her the previous evening.  Observations by Sherrill Findlay were that this information was entered on the computer by the Centrelink officer.

• 8 May 2001:  Sherrill Findlay telephoned Centrelink to query why Melissa Findlay was still receiving the full pension and was advised Centrelink were looking into it.

• 15 May 2001:  Sherrill Findlay telephoned Centrelink again as she had received no response to her query of 8 May 2001 as to why Melissa Findlay continued to receive social security payment unchanged at the full rate.  Sherrill Findlay was informed by Centrelink that everything was under control and the issue would be addressed by Centrelink and corrected.

1. The Tribunal's findings as above, were corroborated by the conclusions of the SSAT (T2, Folio 6, paragraph 8):

   "The evidence clearly establishes that Mrs Findlay kept meticulous records of her contact with Centrelink on her daughter's behalf, and her diary entries show that she was commendably persistent in querying the rate at which Miss Findlay's payments continued after she had commenced full-time work.  As she was able to provide the Tribunal with a coherent account of the sequence of events the Tribunal is satisfied she did in fact notify Centrelink on a number of occasions that her daughter had commenced employment with MBF…..the Tribunal is satisfied that, through the agency of her mother, Miss Findlay complied with her obligation to notify Centrelink that she had started work and to provide income details."

2. The Tribunal accepts the evidence of Melissa Findlay that her mother had a Centrelink authority to act on her behalf in dealings with Centrelink and that she had relied on her mother to carry out such a role.  In addition, the Tribunal accepts Melissa Findlay's evidence that her mother would inform her of queries she had raised with Centrelink, either in advance, or immediately after the query being made to Centrelink.

3. The Tribunal agrees with the following observations of Senior Member Handley in Re Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543, with respect to advice given to social security recipients by Departmental officers:

   "Any failure to regard the seriousness of the consequences of the giving of wrong advice as not being a circumstance special to the person or persons who have suffered as a result of that advice would be cruel.  Citizens are entitled to act upon the advice given to them by representatives of government through its departments and agencies.  Citizens also are entitled to have confidence in the advice that they are given by persons in authority and who represent government departments and agencies.  Citizens should be entitled to expect nothing less."

4. In this case the Tribunal finds that Melissa and Sherrill Findlay had relied on advice given to them by a Centrelink staffer on queries raised on a number of occasions as to whether the correct social security entitlements were being paid to Melissa Findlay.  In addition, that it was plausible, as stated in their oral evidence, to rely on the Centrelink advice as being correct, given they had confidence in the Centrelink staffer based on their past dealings with her.
   Consideration of the Issues

5. The Tribunal firstly considers whether the debt can be waived under the "special circumstances" provisions of the Act (section 1237AAD).

6. The respondent has acknowledged that there was no dishonest intent on the part of the applicant to defraud the Commonwealth.  At the hearing, the respondent also acknowledged that the "knowingly contravened" test in section 1237AAD was not in dispute, that is, this requirement was not an obstacle to the application of this section of the Act.

7. The next issue for the Tribunal to consider is whether paragraph (b) of section 1237AAD of the Act is satisfied – that is, whether there are "special circumstances (other than financial hardship alone) that makes it desirable to waive" the right to recover all or part of the debt.  The Tribunal has had to consider the meaning and application of the expression "special circumstances" on many occasions.  The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of "special circumstances".  In that case the Tribunal said (at 3):

   "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."

8. The Tribunal finds that, based on the above Tribunal findings of fact, that there are circumstances in this application for review that justify the description of "unusual" or "uncommon" to come within the legal meaning of "special circumstances", because:

• Sherrill Findlay's evidence of providing advice and raising queries with Centrelink with respect to the amount of social security entitlements on a number of occasions, that were not acted upon, are clearly circumstances which would be "uncommon" or "unusual" in the day-to-day operations of Centrelink;

• The Tribunal makes the observation that if no query had been raised then the "special circumstances test" would have been difficult, even impossible, to satisfy.

1. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on "special circumstances" and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court's decision in Beadle, observed that special circumstances:

   "…would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary."

2. The Tribunal considers that in the circumstances of this case something "unintended" even "unjust" has occurred and so triggers off the "special circumstances" provisions.

3. Given this finding, there is no need for the Tribunal to consider waiver under the "administrative error" provisions of the Act.

4. This means Melissa Findlay's application for review is successful and all moneys received by Centrelink should be refunded to Miss Findlay.

5. The decision under review is set aside and in substitution thereto decides that the debt accrued from 11 May 2001 to 22 May 2001 should be waived under the "special circumstances" provision of the Social Security Act 1991.  The date of effect of this decision is 14 September 2001 (see T18, Folio 41).

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  2 October 2002
Date of Decision  2 October 2002
Date of Written Reasons         5 November 2002

The applicant was represented by her mother, Mrs S Findlay
Solicitor for the Respondent    Mr S Letch, Departmental Advocate