Fiona Wilson and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs Secretary, Department of Education, Employment and Workplace Relations

[2012] AATA 154

[2012] AATA 154  

Division

GENERAL ADMINISTRATIVE DIVISION

File Number(s)

2011/5168

Re

Fiona Wilson

APPLICANT

And

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Secretary, Department of Education, Employment and Workplace Relations

RESPONDENTS

DECISION

Tribunal	Deputy President P E Hack SC
Date	9 March 2012
Place	Brisbane (heard in Darwin)

The decision is set aside and a decision substituted that $11,925.78 of the debt is waived.

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Deputy President P E Hack SC

Catchwords

SOCIAL SECURITY – Benefits and Entitlements – Overpayment of Benefits – applicant failed to disclose – applicant received money she was not entitled to – discretion to waive all or part of the debt – special circumstances – notional entitlement – poor health – financial situation – decision set aside and substituted

Legislation

Social Security Act 1991 (Cth) ss 1223, 1237AAD
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), ss 71, 101

Cases

Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923; (2008) 174 FCR 157

REASONS FOR DECISION

Deputy President P E Hack SC

9 March 2012

1. The applicant, Ms Fiona Wilson, is the mother of a child, S, born in January 2002. In May 2007, in circumstances not presently relevant, S was taken from her care and was placed into the care of the Northern Territory Department of Family and Community Services. S has not since been returned to the care of Ms Wilson.

2. Ms Wilson did not tell Centrelink that S was no longer in her care with the result that she continued to receive parenting payment (single) and family tax benefit from May 2007 to May 2008 when the Department of Family and Community Services notified Centrelink that S was no longer in Ms Wilson’s custody. Because Ms Wilson was not the “principal carer” of S between May 2007 and May 2008 she received payments of parenting payment (single) ($13,661.97) and family tax benefit ($5,182.32) to which she was not entitled. Centrelink made a decision on 16 June 2008 to raise and recover these amounts as debts. That decision was affirmed on internal review on 3 June 2011 and by the Social Security Appeals Tribunal on 12 October 2011. All of the overpaid family tax benefit and $2,375.19 of the parenting payment (single) has been repaid by withholding amounts from benefits paid to Ms Wilson since the overpayment was detected.

3. Ms Wilson accepts that she was overpaid the amounts of the debt but she says that there are “special circumstances” that make it appropriate to waive all or part of the debts. Two issues arise: (1) did the debts result wholly or partly from Ms Wilson “knowingly” failing or omitting to comply with a provision of the relevant legislation i.e. the obligation to inform Centrelink that S was no longer in her care and (2) are the circumstances “special” such as to warrant the exercise of the discretion to waive all or part of the debt.

4. I have concluded that there was no knowing failure or omission on Ms Wilson’s part and that her circumstances are such as warrant the waiving of much, but not all, of the debt. My reasons follow.

5. The scheme of the legislation need be only briefly noted. By virtue of s 1223 of the Social Security Act 1991 (Cth) and s 71 of the A New Tax System (Family Assistance)(Administration) Act 1999 (Cth) monies paid to a recipient not entitled to them are debts due to the Commonwealth. There is, however, power to waive the right to recover a debt in two circumstances. The first, the power to waive a debt that has arisen solely as a result of administrative error on the part of the Commonwealth has no present application. The relevant power is that in s 1237AAD of the Social Security Act (and in s 101 of the A New Tax System (Family Assistance) (Administration) Act 1999). The former section provides[1]:

   [1] Section 101 of the A New Tax System (Family Assistance)(Administration) Act 1999 is in identical terms.

   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 this Act, the Administration Act or the 1947 Act;

   (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.

6. The Secretaries do not suggest that Ms Wilson made a false statement or a false representation; the case presented was that Ms Wilson knowingly failed or omitted to comply with a provision of the legislation. The submissions did not identify precisely what that provision was however I am prepared to assume that there was a provision that obliged Ms Wilson to notify Centrelink if she was no longer caring for S.

7. The Secretaries submit that Ms Wilson must have known that parenting payment (single) and family tax benefit are payable only when she has the care of a child or children and that Ms Wilson must have made a conscious decision not to inform Centrelink of the fact of the removal of the child S. Moreover, it is said, Ms Wilson received documents from Centrelink on at least a fortnightly basis that told her that she was obliged to notify if, amongst other things, there was a change in the number of children in her care. It is submitted that she must have known from the receipt of these documents of the obligation to inform Centrelink of the removal of S.

8. I do not agree.

9. Ms Wilson is, if I may say so, a fairly unsophisticated person. She is poorly educated (having left school midway through Grade 10) and has had limited employment over the years. She has been in receipt of disability support pension for psychiatric conditions since December 2008. I was struck, however, by her apparent honesty. She says, and I accept, that when S was taken away she was told by the officials from the Department of Family and Community Services that S was being taken only for a day and that “the court” would decide what should happen. I doubt that she was told that the removal would only be for one day but I do believe that that is what she understood was happening. She discussed the matter with her neighbour, an older woman whose judgement she trusted, who suggested she notify Centrelink of the child’s removal. She says that she went to the Centrelink offices, informed the person she spoke to there of the actions of the Department, was asked “has it gone to court yet” and was told that she did not have to change anything until the court decided the matter.  

10. Despite the absence of any note within Centrelink’s records of such a conversation (and acknowledging that Centrelink staff would ordinarily make a note of such conversations), I accept that Ms Wilson did have a conversation with a Centrelink officer from which she concluded, genuinely and reasonably, that no action need be taken until the court had determined the matter. Ms Wilson, even now, displayed a fragile emotional state when speaking of the events of the time; I do not doubt that she was in an even more fragile emotional state immediately following the removal of her daughter. Even now she displayed little comprehension of the processes by which her daughter was removed from her care; at the time I expect that she had even less idea of those processes. There was fertile ground for mutual misunderstanding. I am however satisfied that Ms Wilson is being truthful when she says that she left with the understanding that she claims.

11. There are two particular reasons that I reach that view beyond the generally favourable impression I had of her. First, Ms Wilson plainly lacks the guile and sophistication to invent such a conversation; had she been pernicious she would have invented a much simpler conversation or explanation. And, as she said, it was she who told an officer of the Department of Family and Community Services in May 2008 that she was still receiving parenting payment and family tax benefit. To do so is inconsistent with the action of a person who is receiving a benefit which she knows that she has no entitlement to. It is, however, consistent with a person who believes that she has an entitlement to benefits until the court decides, but who is waiting for the court to determine the matter.

12. It must also be acknowledged that Ms Wilson had experience, in connection with her son, of going off and on benefits when the son left, and then returned to, her custody. But, as she said, that was a quite separate matter; those arrangements were family arrangements and did not involve any court determination.

13. In the period between May 2007 and May 2008 Ms Wilson had many contacts with Centrelink and she did not inform Centrelink of the fact of the removal of S. And, in that time, she received many letters telling her of the need to notify any change in the children in care. But I accept that she believed that she had been told that she was not required to do so until the court made a decision.

14. I am then satisfied that the debt did not result, wholly or partly, from Ms Wilson knowingly failing or omitting to comply with a provision of the legislation.

15. The question then is whether there are special circumstances other than financial hardship alone. It is neither necessary nor desirable to define what special circumstances might be; it is enough to say that there must be something to distinguish the case from others, to take it out of the usual or ordinary case. There are, in my view, three features that satisfy me that there are special circumstances that make it desirable to waive. They are what the Secretary’s submissions described as “notional entitlement’, Ms Wilson’s health and Ms Wilson’s financial state.

16. The term “notional entitlement” is somewhat of a misnomer because it would be impossible for Ms Wilson to now establish that she was qualified for Newstart allowance between May 2007 and May 2008 and, in particular, to establish that she was seeking to engage in employment and undertake activities required by Centrelink and suchlike. Notional entitlement, in this context, is no more than a recognition of the high probability that Ms Wilson would have applied for, and been granted, another equivalent benefit from the date of removal of S from her care, had she notified Centrelink of the fact of the removal. Here Centrelink was notified on 8 May 2008 that S was in the care of the Department of Family and Community Services. Ms Wilson’s parenting payment and family tax benefit was cancelled with effect from that date. On 16 May 2008 Ms Wilson claimed Newstart allowance. It was granted with effect from that date. In early December 2008 she went on to disability support pension. There is, therefore, every reason to suppose that Ms Wilson would have applied for, and been granted, Newstart allowance on and from 29 May 2007 had she notified Centrelink on that day of the removal of S from her care.

17. The decision of Spender J in Oberhardt v Secretary, Department of Education, Employment and Workplace Relations[2] is authority for the proposition that notional entitlement is not necessarily excluded in considering whether special circumstances exist for the purposes of s 1237AAD of the Act. In my view the likelihood that Ms Wilson would have received a similar benefit, had the true position been disclosed, is relevant in establishing that the present circumstances are out of the ordinary.

    [2] [2008] FCA 1923; (2008) 174 FCR 157.

18. To that may be added that Ms Wilson suffers from very poor health. It would be unnecessarily intrusive to detail her ills; they are recorded in paragraph 8 of the decision of the Social Security Appeals Tribunal. She has a need for medical treatment that at present she cannot afford. It is enough to note that she has been receiving disability support pension continuously from December 2008. Compounding her poor health is Ms Wilson’s precarious financial situation, set out in Exhibit 4.    

19. I am satisfied that there are, in Ms Wilson’s case, special circumstances that make it desirable to exercise the discretion to waive all or part of the debt. Given that a considerable part of the debt has been repaid I propose to waive part only of the debt. The total overpayment was $18,844.29. Ms Wilson has repaid $7,557.51 of that amount leaving $11,286.78 outstanding. I propose to waive $11,925.78 of the debt. The effect of that decision will be that amounts deducted from Ms Wilson’s disability support pension after the commencement of these proceedings, a total of $639 to 20 February 2012, will be refunded to her. I intend that she have a modest capital sum that might assist her to seek to get her life back on track and perhaps take some small steps to having some contact with her children.         

I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC.

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Associate

Dated  9 March 2012

Date(s) of hearing	1 March 2012
Applicant	In person
Advocate for the Respondent	Ms M Brazier, Department of Human Services