Frey and Secretary, Department of Family and Community Services

[2005] AATA 667

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 667

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/38

GENERAL ADMINISTRATIVE  DIVISION		)
Re		AMANDA FREY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Rear Admiral A R Horton AO, Member  

Date1 July 2005

PlaceSydney

Decision The decision of the Social Security Appeals Tribunal is set aside and in substitution thereof the Tribunal decides that the debt of $1,823.53 arising from overpayment of the disability support pension is written off in accordance with the provisions of section 1236 of the Social Security Act 1991 (“the Act”).

[sgd] Rear Admiral A R Horton, Member

CATCHWORDS

SOCIAL SECURITY – Disability Support Pension – casual employment – requirement to advise Centrelink of income derived from employment – data matching – debt for overpayment raised – consideration of circumstances – applicant’s whereabouts unknown – applicant no longer in receipt of social security benefits – decision set aside – decision to write off debt

LEGISLATION

Social Security Act 1991 (Cth) sections 1223(1), 1236(1), 1236(3) and 1236(1A)

Social Security (Administration) Act 1999 section 68

REASONS FOR DECISION

1 July 2005     Rear Admiral A R Horton AO, Member   

DECISION UNDER REVIEW

1.        This is an application to the Administrative Appeals Tribunal (“the Tribunal”) to review a decision of the Social Security Appeals Tribunal (“the SSAT”) of 14 December 2004 which affirmed a decision of an Authorised Review Officer (“ARO”) on 28 September 2004 to raise and recover a debt of $1,823.53 in respect of overpayment of disability support pension to Ms Amanda Frey (“the Applicant”).  The original decision by Centrelink in this matter was made on 20 July 2004, where an earlier debt of $1093.56 was amended to $1823.53 to take account of additional information in respect of earnings in the 2000/2001 financial year.

2. This review has been conducted on the papers as requested by Ms Frey (her letter to the Tribunal of 8 April 2005 refers), and as agreed by the Secretary, Department of Family and Community Services (“the Respondent”). I took account of the documents (“T documents” – T1 to T64) provided by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act1975 and a letter from Ms Frey to the Tribunal dated 2 February 2005.

3.        I also took account of a Statement of Facts and Contentions by the Respondent dated 5 May 2005.  This document, which summarises the view of the Respondent, was forwarded to Ms Frey, who until recently resided in the United States of America, through the forwarding address as provided by her.  That document was returned “not known at this address”.  A further copy of the Respondent’s Statement forwarded to the same forwarding address by the Tribunal on 25 May 2005 was also returned.  On 20 June 2005 the Tribunal received a letter dated 18 June 2005 from Ms Frey, advising her new address in Sydney.  That letter provided no further information in respect of this matter and hence I have proceeded to reach a decision on the papers.

BACKGROUND AND REVIEW

4.        Ms Frey was born in Australia on 7 September 1962.  In 1999 she unsuccessfully applied for the disability support pension (“DSP”).  On 4 February 2001 she again applied for the DSP, indicating that she suffered from a condition of depression/anxiety.  She stated in that application that she ceased work in May 2000 following which I assume she was granted Newstart Allowance, this being suspended in November 2000 (T14).  A Treating Doctor’s Report (“TDR”) by Dr K Koutsoullis dated 5 February 2001 diagnosed depression with an inability to return to work at more than 20 hours per week for more than two years.  This diagnosis was confirmed by Dr S Hutchison, Medical Advisor to Centrelink, and DSP was granted as from 5 February 2001. 

5.        Ms Frey was so advised by letter of 31 March 2001 (T22), this document indicating the basis for calculating regular DSP payment based on an annual income of $108.99, confirming that pharmaceutical allowance would be paid, and stating the requirement for Ms Frey to inform Centrelink in various circumstances including increases in income and commencing or recommencing work.  Such information was repeated in letters of 16 May 2001 (T23) and 18 October 2001 (T26), the latter also noting a rental assistance payment. 

6.        In 2001, Ms Frey undertook various periods of casual employment as subsequently determined by Centrelink through a letter to the NSW Department of Education (T24 of 5 June 2001), Australian Tax Office (“ATO”) data matching through the Data-matching Program (Assistance and Tax) Act 1990 (T28 of 4 August 2003 refers) and letters seeking work details from Pace Personnel Pty Ltd (T30 of 17 November 2003), the Department of Education and Training (T31/32 of 17 November 2003) and a letter from Gateway Personnel Pty Limited (T45 of 22 June 2004).

7.        The records from the above documentation indicate that Ms Frey was paid $3,672 by Pace Personnel from 3 September 2001 to 2 November 2001, $216 by the Department of Education and Training from 7 to 13 April 2001 and $2,377.50 by Gateway Personnel from 2 February to 30 March 2001.  These payments have not been challenged, and there is no evidence before me to indicate that Ms Frey declared this income to Centrelink, such that adjustments to her DSP payments could be actioned if necessary. 

8.        On 6 February 2004, Ms Frey was advised by letter from Centrelink  (T37) that as earnings from the Department of Education and Training and Pace Personnel had not been taken into account when calculating periodic DSP payments, she had been overpaid $1093.56 and had thus incurred a debt.  In a letter of 29 February 2004 (T38), in which Ms Frey referred to this advice and also referred to a letter from Centrelink dated 28 January 2004 (which is not before me but which I assume was the first indication of a debt), she sought details as to the makeup of the debt, noting that she was obliged to obtain casual work to supplement the inadequacy of the DSP, particularly in view of her rent and her poor health.     She further expressed concern at a three month delay by Centrelink in approving her DSP in early 2001, forcing her to live on her savings and to borrow money. 

9.        I note that DSP was approved some six weeks after lodgment of the claim in February 2001, being backdated to the date of receipt of the claim.  In claiming that a period of three months had elapsed before she was granted DSP, it may be that Ms Frey was referring to the period dating from the suspension of Newstart Allowance which was advised on 27 November 2000.  Notes on file in the T documents state “client states she was not fit to look for work…advised client of her requirements…client stated that she would not look for work or attend any interviews at Centrelink…I then advised client that I would have to cancel her Newstart Allowance payments as of 11 November 2000 as she was no longer unemployed and looking for work – manual letter printed and forwarded to client today” (T17 dated 22 January 2004) and later at T41 dated 31 May 2004, “Pending this assessment (for DSP) her Newstart Allowance was re-granted from 31 January 2001 …up to and including 27 March 2001.  Her DSP was granted from 5 February 2001 and an internal transfer debt raised”.  

10.      The decision of 6 February 2004 was affirmed after reconsideration and Ms Frey so advised by letter on 31 March 2004, this letter also providing an explanation in response to her letter of 29 February 2004.  Ms Frey acknowledged receipt of that letter on 17 May 2004 (T46), stating that she was now living overseas and accordingly correspondence was through a “post box”, with the inherent delays, and that she sought review by an ARO.  In her letter of 2 February 2005,  Ms Frey states that she is not in receipt of any social security payments, and I am advised that that remains the situation at this time. 

11.      It is evident from a file note of 9 June 2004 (T42) that in reviewing the matter, the ARO observed that advise from the ATO in respect of income derived from employment by Gateway Personnel (stated as $10,019 in the 2000/2001 financial year) had been overlooked.  He directed that details of employment were to be obtained from that company.  A letter to Ms Frey of that date (T44) stated “I have decided that there is insufficient evidence to request a refund of $1093.56”, that further enquiries were to be made and that there might still be an overpayment after further consideration.   I note that a file note entitled “Implementation of ARO’ s Decision” (T43) states that “pending this action (that is further investigation) debt to be written off”. Notwithstanding that a debt that has been written off (which would require reference to section 1236(1A) of the Act) and it can be resurrected under the provisions of subsection 1236(3), I find this an unusual and misleading statement given that the raised debt for overpayment as advised to Ms Frey was being reviewed.

12.      In her letter of 17 May 2004, Ms Frey reiterated her concern that she had to undertake casual work to augment the inadequacy of the DSP payments, which “were insufficient to pay for healthcare and natural medicine treatments to help my health issues”.   She further wrote that she had not been in receipt of rental assistance which would have ameliorated some of her financial concerns, as her landlord would not countersign the relevant form.  Ms Frey also stated that she did not think it necessary to declare such small amounts of income resulting from work, and went on to say “I was not, after the negative and stressful experiences I had had with Centrelink, prepared to risk any reduction or ceasing of my pension just because I was forced to work for a small portion of the year”.   She emphasised that medical reports were available to Centrelink in support of her health problems.  She concluded by expressing concern that Centrelink had approached her previous employers without her knowledge, in doing so breaching her privacy.

13.      Following review, Centrelink advised Ms Frey (T47 dated 20 July 2004) that a debt in respect of overpayment of DSP had been calculated as $1823.53, this taking into account the previous figure and the relevant payments as provided by Gateway Personnel totaling $2,377.50 (T45 refers).   Ms Frey responded on 31 August 2004 (T51) to the Centrelink letter of 9 June by the ARO Area Hunter.  She objected firstly to the $10,019 assessment by the ATO of income from Gateway Personnel.  There is indeed no evidence before me to support that figure and in any event, Gateway Personnel provided a figure for the relevant period of $2,377.50.  Again Ms Frey questioned the accuracy of the raised debt as “pensioners are allowed to work” and without such work she would live in poverty.  She requested review by the SSAT.

14.      A second letter dated 31 August 2004 (also at T51) to the originator of the Centrelink letter of 20 July 2004, objected to the lack of a response from an ARO as sought by her on 17 May.  It is well to note at this point, that such a response was provided by the Area Hunter ARO on 9 June 2004, wherein he noted, as described in paragraph 11 above, insufficient evidence to request a refund, and that further investigation was being made.   Ms Frey summarized her position in this matter as being that she had not set out to defraud Centrelink, but she was aware that persons on the DSP could work, and she needed to do so as a casual in order to supplement the pension which she considered to be inadequate.  She resented being placed in that position in spite of her health problems, but it was necessary in order to meet her living and medical expenses.  She questioned the calculations used by Centrelink to establish the overpayment figure, considering them to be confusing and “looks to me they contain errors”, but there is no further elaboration.  Income from her casual work was minimal, and she has yet to receive requested advice on the income  that could be earned without detriment to her DSP.  Further, she suggested she was owed money by Centrelink for the period in late 2000/early 2001.  I have earlier addressed that matter in this decision.

15.      On 28 September 2004, the ARO affirmed the decision to raise and recover a debt in respect of DSP overpayment of $1823.53.   Following this decision, Ms Frey wrote to the SSAT on 22 October 2004 (T55) listing a serious of objections to the decision, including her disagreement with the data supplied by employers and the calculations that resulted in the alleged overpayment, the nature and limited extent of her casual employments, inadequate handling of the matters by Centrelink staff, and because the claimed overpayment did not take into account her health problems and her living requirements.  Rent assistance would have been of benefit, and she objected to the need to obtain supporting proof, which her landlord would not provide, in order to receive this benefit. 

16.      In that letter, Ms Frey stated “please note that if I had considered letting Centrelink know of any earnings, this would have meant reduction in my pension;  I would not have been working in the first place if the pension and/or rent assistance was adequate for me to live off…”  and this and an earlier statement in the same vein led the SSAT to conclude that Ms Frey seemed to be aware of some obligation to notify Centrelink of her income and that her pension may reduce as a result. 

Medical Considerations    

17.      In 1999, Dr Cleland of Health Services Australia, had some difficulty in concluding that the condition of Ms Frey  – diagnosed earlier by Dr Louie and others as Chronic Fatigue Syndrome – was other than mild;  he considered it would not severely effect her daily living, or ability to undertake employment.     Two years later, a Treating Doctors Report by Dr Koutsoullis and the subsequent medical Assessment by Dr Hutchison, as earlier referred to, were instrumental in the decision to grant Ms Frey the DSP in 2001.  They indicated a history of depression, numerous referrals for psychiatric examination and treatment, an unfitness for work, and side effects from various medications, with Ms Frey undertaking courses in alternate medicine. 

18.      In a more recent Medical Review for DSP purposes (T27, 1 May 2003), this being the only other medical report before me, Ms Frey describes her illnesses as depression, anxiety, chronic pain in back, neck, forearms, headaches and migraines, and notes her treatment as chiropractic, massage and acupuncture.   Dr Hwee Nee Tan diagnoses depression with anxiety, notes a history of psychiatric examination and differing antidepressant medication.  He sees the condition as remaining unchanged for the future and contributing to chronic headaches and back pain, poor concentration and personal difficulties.  I note in the various correspondence from Ms Frey her continuing health difficulties, and an inability to undertake other than intermittent casual employment.

LEGISLATION AND DECISION       

19.      I find that the evidence is clear that Ms Frey worked on a casual basis for Gateway Personnel from 2 February 2001 until 30 March 2001 with earnings of $2377.50, for the Department of Education from 7 to 13 April 2001 with earnings of $216 and for Pace Personnel from 3 September 2001 until 2 November 2001 with earnings of $3672).  The evidence arises from a Data Matching exercise with the ATO, subsequent earnings being validated by the respective companies.  As I have earlier noted, there is no evidence before me to support the contention that earnings from Gateway Personnel, as provided by the ATO, were in the order of $10,019, nor was a figure other than $2377.50 used in the calculation of debt.

20. I further find that Ms Frey was advised by letter on three occasions (31 March 2001, 16 May 2001 and 18 October 2001) of the annual income upon which her DSP payment was based, and that within 14 days she must advise Centrelink of any increase in income and if she started or recommenced work. There is no indication that she did so, and hence her earnings, relatively small though they may be, were not taken into account when calculating her DSP payment rate. Those letters arose from the authority vested in the Secretary under section 68 of the Social Security (Administration) Act 1999, wherein the recipient of a social security payment is required to inform the Department of certain events or changes in circumstances. 

21.      I am satisfied that Ms Frey was overpaid DSP and a debt for the amount of $1,823.53 has been properly raised under the provisions of section 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”

22.      The debt, as initially advised to Ms Frey, was $1,093.56.  As it transpired, further consideration revealed that the earnings from Gateway Personnel had not been taken into account and hence a revised debt of $1,823.53, that being the raised debt before this Tribunal.   Ms Frey has raised doubts as to the veracity of the calculations, but she has placed no alternate evidence before me.

23. Section 1236 of the Act provides the authority whereby a debt may be written off, (albeit it may be recovered at some later time). Subsection 1236(1A) of the Act relevantly states:

“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)the debtors whereabouts are unknown after all reasonable attempts have been made to locate the debtor; or

(d)the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt”.

24.      In this matter, the debt is recoverable at law, and there is no evidence before me to suggest that Ms Frey does not have the capacity to repay the debt.  Equally, there is no evidence before me to indicate that she does have the capacity, and I observe that she is no longer in receipt of any social security payment from which periodic payments might be drawn.   At issue is whether the debt might be written off under the provisions of subsection 1236(1A)(d) of the Act.

25.      Notwithstanding my finding that Ms Frey received advice from Centrelink that she must advise of any increase in income and if she started or recommenced work,  which she failed to do, I consider it appropriate to exercise the discretion in subsection 1236(1A)(d) of the Act and write off this debt.  Ms Frey has been absent from Australia for more than 12 months, and whilst she herself sought review by the Tribunal of the decision to impose this debt, she was not contactable for some time either by the Tribunal or the Respondent.  She is not in receipt of any social security benefits, and I assume that has been the case since she moved overseas, or at least shortly thereafter, and I have reservations as to the cost effectiveness for the Commonwealth to continue to take recovery action at this time.  I emphasise “this time”, as in accordance with the provisions of the Act, the debt of $1,823.53 may be recovered at a later date.

26. The decision of the Tribunal is that the decision of the SSAT is set aside and in substitution thereof, the debt of $1,823.53 arising from overpayment of the disability support pension is written off in accordance with the provisions of section 1236 of the Social Security Act 1991.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Rear Admiral A R Horton, Member

Signed:         L. Feely
  Associate

Date of Decision  1 July 2005
Solicitor for the Applicant               Self-Represented
Advocate for the Respondent        Mr Luke Carter