Fumberger and Secretary, Department of Social Services (Social services second review)
[2023] AATA 3484
•20 October 2023
Fumberger and Secretary, Department of Social Services (Social services second review) [2023] AATA 3484 (20 October 2023)
Division:GENERAL DIVISION
File Number: 2023/6409
Re:Aaron Fumberger
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member D. J. Morris
Date:20 October 2023
Date of written reasons: 26 October 2023
Place:Melbourne
If a copy of the agreement to settle the proceedings is not given to the Tribunal by 5.00 pm (AEDT) on 27 October 2023, then, pursuant to s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975, application 2023/6409 will be taken to be dismissed from 5.01 pm (AEDT) on 27 October 2023 because the Tribunal is satisfied the application is lacking in substance.
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Senior Member D. J. Morris
Catchwords
PRACTICE AND PROCEDURE – applicant was overpaid jobseeker payment – not in contest that overpayment was due to error of respondent – authorised review officer confirmed overpayment and therefore debt – Tribunal at First Review affirmed decision – applicant sought Second Review by Tribunal – respondent made without prejudice offer to settle matter by waiving debt and interest charge – applicant declined to accept offer unless specified conditions were satisfied – applicant sent copy of offer to Tribunal – respondent then made with prejudice offer to applicant - respondent sought directions hearing for Tribunal to decide how to proceed – Tribunal decided hearing could not provide any additional relief to applicant – legislative history of s 42B of AAT Act – application dismissed as lacking in substance – dismissal not to take effect until specified future date
SOCIAL SECURITY – applicant in receipt of jobseeker payment – applicant overpaid when earning other income – applicant had notified respondent of other earnings – error by department – authorised review officer confirmed overpayment and that waiver of debt on basis money received in good faith or special circumstances not applicable – Tribunal at First Review affirmed decision – amount of overpayment and interest garnisheed from applicant on day First Review decision provided to parties – whether this was precipitate action
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)Tribunals Amalgamation Act 2015 (Cth)
Cases
Negri v Secretary, Department of Social Services (2016) 70 AAR 103
Williams and Australian Electoral Commission and the Greens (Party Joined); Re: (1995) 38 ALD 366
Secondary Materials
Dennis Pearce, Administrative Appeals Tribunal (LexisNexis, 5th ed. 2020), pp 336-337
Tribunals Amalgamation Bill 2015 – Explanatory Memorandum – House of Representatives
REASONS FOR DECISION
Senior Member D. J. Morris
26 October 2023
BACKGROUND
The Applicant, Mr Aaron Fumberger, was in receipt of jobseeker payment (‘jobseeker’). There is an income test for jobseeker, which is in s 1068 of the Social Security Act 1991 (‘the Act’). In general terms, ordinary income of a person, such as earnings, is worked out on a fortnightly basis.
Relevantly, the Act provides that ordinary income, except employment income, is to be taken into account in the fortnight in which it is first earned, derived or received. In regard to employment income, s 1073A of the Act provides that where a person receives a payment of employment income in an instalment period, the payment applies from the start of the instalment period and applies for the number of days in the assessment period. The earnings amount attributable to a person in an instalment period is worked out by dividing the amount paid by the days in the assessment period.
Section 43 of the Social Security (Administration) Act 1999 (‘the Administration Act’) characterises what an instalment period is. An instalment period for jobseeker is generally 14 days.
In this case, Mr Fumberger provided Centrelink (part of the Respondent’s Department) with a printout from an employer, Triton Towage Relief Services (‘TRS’), which showed he worked for two days in the 15-day work period between 1 and 15 April 2021, and was paid $1,560 gross for his work. It was established at the First Review hearing that the Applicant would have worked on 14 and 15 April 2021.
Mr Fumberger’s work with TRS involved embarkation on a marine vessel which sailed outside Australia’s borders. Immigration records stated that the Applicant left Australian territorial waters on 15 April 2021. It was not in contest that Mr Fumberger informed Centrelink in a timely matter of his impending departure from Australia, as jobseeker was suspended from 15 April 2021.
However, an error in the Respondent’s Department led to a payment of $539.65 to Mr Fumberger for the period 3 to 14 April 2021, without taking into account his employment income for the fortnightly instalment period from 3 to 16 April 2021.
Because of the payment by TRS on 15 April 2021, under the benefit income test, Mr Fumberger’s jobseeker entitlement for the instalment period should have been reduced to zero.
Accordingly, there was an overpayment, and the amount of $539.65 became a debt due to the Commonwealth under s 1223 of the Act.
Member Byers at First Review found that it was not contested that administrative error by the Department was the sole cause of the debt. He then considered whether the money had been received in good faith. The learned Member decided that there was no suggestion of dishonesty, and that Mr Fumberger took steps to clarify the overpayment with the Department. However, the First Review also found that, because there was a lack of a positive belief that the payment was correct, it could not find that the money was received in good faith.
Debts can also be waived in whole or part under s 1237AAD of the Act, which applies where special circumstances are found, other than financial hardship alone. The Tribunal at First Review accepted Mr Fumberger’s evidence that he had found owing the debt stressful, especially when there was no fault on the debtor’s part, but did not find that this constituted ‘special circumstances’ in the terms of the Act. The Tribunal at First Review further noted that the Applicant was in secure employment and should have been able to repay the debt by instalments without undue difficulty. On 24 August 2023, the Tribunal at First Review affirmed the reviewable decision.
On 29 August 2023, Mr Fumberger applied for a Second Review in the General Division of the Tribunal.
On 15 September 2023, a legal officer of the Respondent’s Department wrote to the Applicant on a ‘without prejudice’ basis and relevantly said:
I have received instructions to make an offer to settle this matter. If you were to accept this offer, the debt and the interest charge would be waived in full. As you have already repaid the debts, you would be refunded a total of $557.51. Your outstanding debt balance would be 0.00.
Attached to the letter was a document headed ‘Notice of agreement to settle proceedings’ which stated that the Respondent agrees to waive his right to recover the entirety of the debt and interest charge, pursuant to s 1237AAB(2) of the Act and (if signed) the application would be taken to be dismissed pursuant to s 181 of the Administration Act. The offer to settle was available until 29 September 2023.
Mr Fumberger responded with a letter dated 15 September 2023 to the 15 September 2023 offer and said he would ‘gladly accept’ the Respondent’s offer provided six specified conditions were met. The Respondent then provided a ‘with prejudice’ offer dated 19 September (otherwise identical to the 15 September offer) to the Applicant and the Tribunal.
In a covering email to this with prejudice offer on 19 September 2023, the Respondent stated that the matters raised by the Applicant in his specified conditions were not relevant to the debt matter and therefore were not matters for the Tribunal in terms of the Second Review. The Applicant responded that he believed they were relevant and then said:
If you or Services Australia choose not to agree to my “offer” I will go very public with my experience with Service Australia [sic] including your offer to waive the debt because Services Australia blatantly stole from me, which is the reason you have made contact with me. Unless I am mistaken …
DIRECTIONS HEARING
The Tribunal conducted a directions hearing by telephone, as is permitted under s 33A of the Administrative Appeals Tribunal Act 1975 (‘the AAT Act’). Mr Fumberger represented himself and made submissions. The Respondent was represented by Ms Stefana Doslo, a senior legal officer of the Department.
The Tribunal took into account the following documents:
a)Volume of documents (‘TD’) lodged on 27 September 2023 under s 37 of the AAT Act (Exhibit R1);
b)Letter ‘without prejudice’ and offer dated 15 September 2023 from Respondent to Applicant (R2);
c)Response dated 15 September 2023 from Applicant to Respondent (R3);
d)Letter ‘with prejudice’ and offer dated 19 September 2023 from Respondent to Applicant (R4);
e)Email from Applicant to Respondent dated 19 September 2023 (R5);
f)Email from Respondent to Applicant dated 19 September 2023 (R6); and
g)Email from Respondent to Tribunal dated 9 October 2023 (R7).
RESPONDENT’S SUBMISSIONS
Ms Doslo confirmed that the Respondent had requested the telephone directions hearing so that the Tribunal could determine how best to proceed in the matter. In response to direct questions from the Tribunal, she advised that the amount of the jobseeker overpayment debt and interest had been recovered from the Applicant through a garnishee order, and that the amount had been fully recovered. She confirmed that the offer made to Mr Fumberger to waive the debt and interest would therefore result, if the parties signed the agreement, in a payment to him of $557.51 – being the amount of the overpayment and the interest charged.
APPLICANT’S SUBMISSIONS
Mr Fumberger told the Tribunal this was the third occasion where he had correctly reported to the Department when he was earning income and it had been incorrectly dealt with. He said he was frustrated with how Centrelink has treated him.
In response to the Tribunal’s query as to why he had refused the offer of settlement from the Respondent, Mr Fumberger said that he had not refused it, but accepted he had placed six specified conditions on his acceptance of it.
Mr Fumberger said that he wanted to proceed to a substantive hearing because he considered that the Respondent’s Department had ‘stolen’ money from him by way of the garnishee order and deduction of the overpayment and interest. He said that he regarded this as ‘illegal’ because it had been done when his matter was still before the Tribunal for review. He told the Tribunal he intended to take separate legal action in regard to the garnishee.
CONSIDERATION
Written reasons for oral decision
The Tribunal provides these written reasons to the Applicant and the Respondent to explain in more detail why the matter was dismissed. In Negri v Secretary, Department of Social Services (2016) 70 AAR 103 (‘Negri’), Bromberg J considered a matter before the Tribunal where an oral decision had been given and a statement of written reasons subsequently provided. In considering the extent to which the Tribunal could edit or elaborate its oral reasons when producing written reasons, His Honour said at [27]:
as long as the reasoning remains consistent, there can be no objection to the provision of a more-elaborate exposition of the same reasoning that was orally explained. What is not permissible is altered or new reasoning. The Tribunal is not permitted to substantially divert from the reasoning upon which its decision was made, but is permitted to explain that reasoning differently and, in doing so, is required to address the matters specified in s 43(2B).
In preparing these written reasons, I am satisfied that they reflect the oral reasons given on 20 October 2023, consistent with the approach suggested in Negri. New reasoning for the decision that the Tribunal said it would dismiss the application on the basis that it lacks substance has not been introduced, however, I have included more detail of the relevant provisions in the law and a brief discussion of when a matter might be brought to the Tribunal for a collateral purpose.
The questions before the Tribunal
The Tribunal explained to the parties that it was constrained to consider the reviewable decision before it, which was the authorised review officer’s (‘ARO’) decision of 16 January 2023 (TD, p 53).
The Tribunal said that there were three questions which the Tribunal had to consider in terms of the substantive matter. The first question is whether there was an overpayment of jobseeker to Mr Fumberger in the specified period because account was not taken of other income he received. The second question is whether that overpayment was solely attributable to administrative error by the Department. If the first two questions are answered ‘yes,’ the third question is whether the debt can be waived on the basis that the Applicant received the money in good faith, or that there are special circumstances that merit the waiver of the debt.
The six conditions that Mr Fumberger sought to impose on his acceptance of the settlement offer were set out in his letter to the Department of 15 September 2023. The letter relevantly said (all as written):
I will gladly accept your offer if you agree to the following:
·Along with the moneys unlawfully “recovered” I will receive $10,000 to compensate for my emotional expenditure in relation to this matter.
·All current debt to Services Australia of a similar nature will be waived.
·All monies recovered from debts of a similar nature with Services Australia within the preceding five years will be reimbursed.
·The protocols for persons that receive Family Tax Benefit will change. Persons will not receive the Family Tax Benefit until they have had their income tax assessed for the previous year. This will ensure that persons will not end up with $80,000 debts. How can that even happen? How irresponsible is Services Australia?
·The family of persons that decided to end their own life that had a Robo Debt at the time will be compensated $1,000,000.
·[Name redacted] will take full ownership and accountability for Services Australia and as such will make a very public apology to that effect. The public address will include details of the total dollar value of the debts waived. Advice for families of persons that chose to end their own life that had Robo Debts at the time to be in contact with Services Australia so they can be compensated as above.
The Tribunal explained to the Applicant that he was perfectly entitled to raise points of public policy with the Department, or indeed more widely, but they were not matters within the competence of the Tribunal in determining this matter. In particular, the Tribunal explained that it does not have the power to order compensation in matters such as this. The Tribunal stressed that its role is confined to examining the reviewable decision, in the terms of the three questions listed earlier in these reasons.
The Tribunal further pointed out to the Applicant that, by refusing to accept the settlement offer from the Respondent, he was in effect denying himself a ‘gift’ of $557.51, because the offer included repayment of monies which were originally an overpayment. Mr Fumberger acknowledged that he realized this was the effect of what he was doing.
The Tribunal noted that the Respondent’s letter relating to the settlement offer stated that the offer remained open until 29 September 2023, which date had passed. Ms Doslo said she was instructed that the offer remained open if the Applicant changed his mind and decided to accept it, following the directions hearing. The Tribunal asked for a date range during which the settlement offer would remain open, and Ms Doslo nominated 27 October 2023, which is seven days from the date of the directions hearing.
Applications may not be for a collateral purpose
The Tribunal has held that it is not proper for a person to bring a matter to the Tribunal for a collateral purpose. The leading case is Re: Williams and Australian Electoral Commission and the Greens (Party Joined) (1995) 38 ALD 366 (‘Williams’). In Williams, the Tribunal’s President, Justice Mathews, and two judicial Deputy Presidents, Justices Hill and Beaumont, constituted the Tribunal. Relevantly, Their Honours said, at [40]:
In this case the outcome of the proceedings, whether successful to the applicant or otherwise will be devoid of any practical effect. Nor is there any reputation at stake or “face” to be saved. The interest which gave the applicant standing to commence the proceedings has long ceased to exist. He has no legitimate interest in pursuing them further. Accordingly, in our opinion, whilst the proceedings were not instituted vexatiously, they have become vexatious … It would impose unnecessary expense and hardship upon the respondent and the Greens if the case were to proceed further. Accordingly, we consider that the application should be dismissed as requested.
I do not squarely say that Mr Fumberger’s desire to proceed to a substantive Second Review hearing amounts to him wanting to pursue this matter for a collateral purpose, but there are indications that could be the case. The Applicant himself in his oral submissions at the directions hearing said that he had done his own back-of-the-envelope calculation and estimated that his matter had already cost the Department in the region of “$5,000”. The Tribunal has no view about that calculation, other than to say that there is obviously a cost to the Respondent of preparing documents and, in this case, engaging legal representation, and an inherent administrative cost to the public purse of the Tribunal considering the matter.
However, if the Tribunal were to conclude that Mr Fumberger was seeking a Second Review purely to ventilate the public policy matters that he listed in his six conditions for accepting the settlement offer, that would amount to a matter being pursued for a collateral reason, and would be grounds for dismissal on the basis that the matter was being brought vexatiously.
TRIBUNAL’S POWER TO DISMISS
The Tribunal noted that s 42B(1) of the AAT Act provides as follows:
(1)The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:
(a)Is frivolous, vexatious, misconceived or lacking in substance; or
(c)Has no reasonable prospect of success; or
(d)Is otherwise an abuse of the process of the Tribunal.
Before 2015, this part of the AAT Act gave a discretionary power for an application to be dismissed if the Tribunal was satisfied that it was a vexatious application. In the Tribunals Amalgamation Act 2015 (Cth), the Parliament amended this section and expanded the range of reasons that might be cited in terms of a discretionary dismissal. The Explanatory Memorandum in relation to the Tribunals Amalgamation Bill relevantly stated:
This amendment would modernise the language of existing paragraph 42B(1)(a) and clarify the policy surrounding the grounds for dismissal. The proposed new grounds are similar to dismissal powers available to other bodies. For example Rule 26.01 of the Federal Court Rules 2011 allow for summary judgment on matters which have no reasonable prospect of success, or are an abuse of process. Similarly, section 47 of the Queensland Civil and Administrative Tribunal Act 2009 provides for dismissal of applications where the application is frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process. These powers would provide the Tribunal with greater power to dismiss unmeritorious matters early where appropriate.
This explanation of the range of reasons was desirable, because applicants can bring perfectly reasonable applications to the Tribunal which, because of a change in the position of a party, no longer have substance. It gave the Tribunal wider scope to consider whether a matter should be dismissed, depending on the particular circumstances.
The Tribunal stated that it did not consider Mr Fumberger’s application for Second Review was vexatious. At the time he lodged his application on 29 August 2023, he had a legitimate matter that he was entitled by law to have reviewed at Second Review.
The Respondent then made a ‘without prejudice’ settlement offer to the Applicant. He was entitled to reject it. That is a matter for him. However, the Applicant chose to send a copy of the settlement offer to the Tribunal, and the Respondent subsequently did so, as well, this time ‘with prejudice.’ The terms of the settlement offer therefore have come into the knowledge of the Tribunal from both parties, and they do affect my decision on whether this matter should proceed to a substantive hearing.
The Tribunal explained to the Applicant that the relief that he was offered by the terms of the settlement offer was such that he could not achieve a more favourable outcome at Second Review. I noted that it was not contested by the parties that there was an overpayment of jobseeker. The Applicant confirmed that. I noted that the overpayment was due to an error by the Department, in spite of the Applicant advising them of his impending earnings, and that the fact of this means the overpayment was due to sole administrative error, within the terms of that phrase in s 1237A of the Act. Whether the debt can be waived in this circumstance then turns on whether the overpayment was received in ‘good faith’ or whether, under s 1237AAD, there are special circumstances that merit a debt waiver.
I noted that the First Review recorded Mr Fumberger’s oral evidence that he was ‘curious’ about the payment coming into his account. Mr Fumberger agreed that was the word he used. He said that was why he contacted Centrelink about it. Although there has not been a substantive hearing and I am not at the stage of examining whether that means that the money was received in good faith, my preliminary view is that the Applicant, as someone familiar with regular payments from Centrelink, knew that he had received an amount of money which appeared to have been paid to him incorrectly. That view is bolstered by the ARO’s notes of a conversation the ARO had with the Applicant on 16 January 2023. The notes state (TD, p 57):
The customer stated he received a letter to advise his JobSeeker Payment had been suspended when he left the country. He rang and reported his earnings when he go [sic] back into the country on 7 May 2021 but his payment had already been issued. The customer advised [that it] was not his fault that he was paid before he reported. He rang and queried the payment of JobSeeker payment when it went into his bank account.
(Emphasis added.)
My preliminary view therefore is that the ARO’s conclusion (and, for that matter, the considered analysis by Member Byers at First Review) that the overpayment cannot be said to have been received in good faith should not be disturbed. Mr Fumberger was aware that he had received an overpayment and had initiated contact with Centrelink to query it. In this respect, the Applicant had acted responsibly.
The ARO further noted, in terms of whether special circumstances warrant the waiver of a debt, that a person’s circumstances need to be sufficiently unusual or uncommon to be termed ‘special,’ and there was no evidence that this is the case.
The offer made to the Applicant
As mentioned above, Ms Doslo said she was instructed that the Respondent’s settlement offer would remain open for the Applicant’s consideration, and nominated a further period of seven days, until 27 October 2023. Ms Doslo also noted the requirements of s 181 of the Administration Act.
Part 4A, Division 4 of the Administration Act relates to AAT First Reviews and Second Reviews. Section 181 of the Administration Act states:
Settlement of proceedings before the AAT
(1)The Secretary may agree, in writing, with other parties to settle proceedings before the AAT that relate to the recovery of a debt.
(2)If proceedings are settled and the Secretary gives the AAT a copy of the agreement to settle the proceedings, the application for review of the decision the subject of the proceedings is taken to have been dismissed.
Therefore, a matter needs to be before the Tribunal for a settlement agreement to be executed between the Secretary and a party and provided to the Tribunal under s 181 of the Administration Act, in which case the matter is automatically dismissed by force of s 181(2).
Professor Pearce in Administrative Appeals Tribunal, 5th Edition, writes:
The AAT has made it clear that the power in s 42B is to be used carefully. If a legitimate purpose could be achieved by allowing the application to continue, it should not be prevented: Re: Marnotta Pty Ltd and Secretary, Department of Health and Ageing (2004) 82 ALD 514; [2004] AATA 326. However, if the application can serve no purpose for the applicant, it should not continue to use Tribunal time and resources …
The Tribunal can only reach a conclusion that an application will serve no purpose after considering the merits of the application for review. I have done that above, and have concluded that, because of the Respondent’s settlement offer, the application now is lacking in substance. However, if I were to have dismissed the matter at the end of the directions hearing, that would preclude execution of the settlement agreement which Mr Fumberger emphasised he had not (yet) completely rejected.
To allow Mr Fumberger further time to consider the settlement agreement before him, the Tribunal decided to give seven days for the Respondent to provide any signed settlement agreement. If no terms of agreement are received by the Tribunal, the application will be dismissed under s 42B of the AAT Act. In this matter there is no better relief that can be given to the Applicant than that which is being offered to him by the Respondent in the settlement agreement.
A FINAL MATTER: WAS THE GARNISHEE ORDER PRECIPITATE?
Mr Fumberger said that a garnishee order was placed on him before he lodged his application for Second Review. Ms Doslo confirmed during the hearing that her instructions are that the Department placed a garnishee order on Mr Fumberger’s income on 24 August 2023, i.e. the date the First Review decision was provided to the parties.
The Tribunal notes that it is lawful for the Respondent to act in this way. However, it also expresses the view that, in a situation where both parties are advised of the First Review decision and of the statutory right to seek a Second Review within a specified time period, it would be best practice administratively for any action by the Respondent to wait for that period to expire or, if the Applicant sought a Second Review, the disposition of that Second Review. I do think that the Respondent acted precipitately in this respect. I note Ms Doslo told the Applicant directly during the hearing that it is open to him to seek administrative review of the decision to impose a garnishee order, because that is a separate administrative decision of an officer of the Department.
DECISION
If a copy of the agreement to settle the proceedings is not given to the Tribunal by 5.00 pm (AEDT) on 27 October 2023, then, pursuant to s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975, application 2023/6409 will be taken to be dismissed from 5.01 pm (AEDT) on 27 October 2023 because the Tribunal is satisfied the application is lacking in substance.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Senior Member D. J. Morris
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Associate
Dated: 26 October 2023
Date of hearing:
20 October 2023
Applicant:
Represented himself
Advocate for the Respondent:
Ms Stefana Doslo
Solicitors for the Respondent:
Services Australia
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