Georgakakos and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1571

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1571

ADMINISTRATIVE APPEALS TRIBUNAL      )

)       Nos  S 200600177

GENERAL ADMINISTRATIVE DIVISION		)               & S 200600178
Re		ALEX GEORGAKAKOS AND MARIA GEORGAKAKOS

Applicants

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member R W Dunne

Date23 July 2007

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

..............................................

R W DUNNE
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – entitlement to Newstart Allowance – entitlement to Parenting Payment Partnered – raising and recovery of debts due to overpayment of Newstart Allowance and Parenting Payment Partnered – debts due to the Commonwealth – waiver of right to recover debts – waiver in special circumstances – write-off of debts – decision affirmed

Social Security Act 1991 ss 1068(1), 1223(1), 1236(1) and (1A), 1237A(1), 1237AAD

Social Security (Administration) Act 1999 ss 68(2), 72(1)

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Riddell v Secretary, Department of Social Security(1993) 30 ALD 31

REASONS FOR DECISION

23 July 2007   Senior Member R W Dunne

1.      In this matter, the applicants (Alex Georgakakos and Maria Georgakakos) applied for a review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 23 February 2006.  The SSAT affirmed decisions of an Authorised Review Officer of the respondent (“Centrelink”):

·dated 14 November 2005 relating to a debt of $1,774.13 due to the overpayment of Newstart Allowance to Mr Georgakakos; and

·dated 24 January 2006 relating to a debt of $2,172.58 due to the overpayment of Parenting Payment Partnered to Mrs Georgakakos.

2.      At the hearing, Mr and Mrs Georgakakos appeared on their own behalf, while Mr Christian Goldsworthy (from Centrelink Legal Services Branch) appeared on behalf of the respondent.  The applicants gave evidence and Ms Samsara Young, the original decision-maker from Centrelink, gave evidence for the respondent.  The Tribunal received into evidence the T documents (Exhibit R1) and the respondent’s statement of facts and contentions, which included the supplementary T documents numbered 1 to 6 (inclusive) (Exhibit R2), lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, together with the following:

(a)applications for payment of Newstart Allowance dated 20 September 2005 and 4 October 2005 (Exhibit R3); and

(b)      letter from Centrelink to Mr Georgakakos dated 20 September 2005 relating to payment of Newstart Allowance (Exhibit R4).

issues for the tribunal

3.      The issues for the Tribunal are:

(a)      has there been an overpayment of Newstart Allowance of $1,774.13 to Mr Georgakakos under the Social Security Act 1991 (the "Act”);

(b)has there been an overpayment of Parenting Payment Partnered of $2,172.58 to Mrs Georgakakos under the Act;

(c)       if there have been overpayments to Mr Georgakakos and Mrs Georgakakos, are they recoverable by the respondent; and

(d) if there have been overpayments to Mr Georgakakos and Mrs Georgakakos and they are recoverable by the respondent, are there grounds under the Act to waive or write-off all or part of the overpayments?

4.      Mr Georgakakos did not dispute that an overpayment (or overpayments) of Newstart Allowance and/or Parenting Payment Partnered had occurred.  He disputed the amount of the overpayments which Centrelink was seeking to recover.

legislation

5. The following provisions of the Act and the Social Security (Administration) Act 1999 (the “Administration Act”) are relevant to these matters:

The Act

“1068(1)        The rate of:

(a)      newstart allowance; or

(b)      sickness allowance; or

(c)      partner allowance;

is to be calculated in accordance with the Rate Calculator at the end of this section; or

(ca)     mature age allowance under Part 2.12B; or

(d)      widow allowance.

Note:   Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

…

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.

…

1236(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

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 debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

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

…

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.

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 a 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.

Note 1:  Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

Note 2:  This section has effect subject to section 1237AAE in relation to an assurance of support debt.”

The Administration Act

“68(2)The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a)      inform the Department if:

(i)        a specified event or change of circumstances occurs; or

(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;

(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment.

…

72(1)   A notice under this Subdivision:

(a)      must be given in writing; and

(b)may be given personally or by post or in any other manner approved by the Secretary; and

(c)must specify how the person is to give the information or statement to the Department; and

(d)      must specify:

(i)in the case of a notice under section 68 that requires the giving of more than one statement, each relating to the payment of the social security payment in respect of a period—the date by which the person is to give each statement to the Department; or

(ii)in any other case—the period within which the person is to give the information or statement to the Department; and

(e)must specify that the notice is an information notice given under the social security law.

…”

background

6.      The statement of facts and contentions of the respondent sets out, largely in chronological order, some of the factual background to these matters.  The Tribunal understood that Mr and Mrs Georgakakos did not dispute the following background facts, which were found by the SSAT:

(a)      Prior to the raising of the debts, Mr Georgakakos was in receipt of Newstart Allowance and Mrs Georgakakos was in receipt of Parenting Payment Partnered. 

(b)      On 23 November 2004, Mrs Georgakakos was sent a notice by Centrelink setting out the details of her Parenting Payment Partnered entitlement and telling her that she must notify Centrelink, within 14 days, of any changes in her circumstances. 

(c)Mrs Georgakakos started working for Contracting Solutions Australia on 30 May 2005.

(d)      On 31 May 2005, Mr Georgakakos lodged an application form for Newstart Allowance for the period from 9 March 2005 to 31 May 2005.

(e)      On 30 June 2005, Mrs Georgakakos advised Centrelink that she had commenced part-time employment, but no details of her earnings were supplied. 

(f)       Mr Georgakakos’ involvement in a Commonwealth Rehabilitation Service (CRS) program was terminated.  Centrelink was advised by CRS on 16 August 2005 that his involvement in the program had ceased. 

(g)      On 8 September 2005, Mr Georgakakos filed an application form for payment of Newstart Allowance for the period from 10 August 2005 to 23 August 2005 and he declared his wife’s earnings for the period.

(h)      During the period from 30 May 2005 to 4 October 2005 the amount of Mrs Georgakakos’ earnings declared by Mr Georgakakos to Centrelink totalled $3,578.42.

Evidence of Ms Samsara Young

7.      Ms Young told the Tribunal that her role at Centrelink was as a member of the data matching team.  The team would receive income data, based upon tax file number declaration forms lodged with the Australian Taxation Office.  In cross-examination by Mr Georgakakos, Ms Young said that she had been involved in debt collecting at Centrelink for 2 years. 

8.      Centrelink had issued an Employment Declaration to Mrs Georgakakos’ employer (Contracting Solutions Australia) (Exhibit R1, T19 at pages 52-54) and a response had been received on 14 October 2005.  The information in the Declaration was used as an earnings tool to enable a comparison to be made of the benefits that were paid to Mr and Mrs Georgakakos and what was declared by them in their claim forms.  Computer calculations were then made of what Mr and Mrs Georgakakos should have received by way of Newstart Allowance and Parenting Payment Partnered.  Ms Young said that the overpayments and debt calculations had been checked and rechecked by her and she was satisfied as to their correctness.  She referred the Tribunal to the earnings calculations appearing in the T documents (Exhibit R1, T30 at page 87).    

contentions of applicants

9.      Put simply, the applicants’ contention was that all application forms for payment of Newstart Allowance and Parenting Payment Partnered had been submitted to Centrelink during the relevant periods from June 2005 until September/October 2005.  They contended that an overpayment would have occurred during the period up to 30 June 2005, but that the amount of the debt payable by them would have been no more than between $500-$700 in total.

application of the law

10. Under s 68(2) of the Administration Act, a person who is receiving Newstart Allowance or Parenting Payment Partnered may be given a notice which requires the recipient to inform Centrelink of a specified event or change of circumstances or to give Centrelink a statement about a matter that might affect the payment to the person of Social Security benefits. Section 72(1) of the Administration Act sets out the information to be included in the notice, including the period within which the person is to give the information to Centrelink. The Tribunal understood it was accepted by the parties that the letter forwarded to Mrs Georgakakos by Centrelink on 23 November 2004 (Exhibit R1, T3) was a notice in terms of s 68(2) of the Administration Act and had effectively been given to Mrs Georgakakos.

11. Section 1223(1) of the Act sets out the circumstances where a recoverable debt arises from the receipt of a Social Security payment, including Newstart Allowance and Parenting Payment Partnered. A debt due to the Commonwealth by a recipient may be waived by the respondent, pursuant to s 1237A(1) or s 1237AAD of the Act, if certain circumstances exist. Section 1237A(1) is mandatory where a debt has arisen which is solely due to an administrative error by the respondent.

findings of fact

12.     The Tribunal, after taking into account the evidence as a whole, including the background facts found by the SSAT and submissions by the applicants and on behalf of the respondent, makes the following relevant findings:

(a)      On 31 May 2005, Mr Georgakakos advised Centrelink that he had lost his application form for payment of Newstart Allowance.  He was issued with a replacement form over the counter at Centrelink (Salisbury), covering the 3 month period from 9 March 2005 to 31 May 2005.  In the replacement form, which he lodged with Centrelink on 31 May 2005, he disclosed that neither he nor his wife had worked in the period from 9 March 2005 to 31 May 2005 (Exhibit R1, T5). 

(b)      Mr Georgakakos was sent another application form for payment of Newstart Allowance, covering the 3 month period from 1 June 2005 to 23   August 2005, which he was required to lodge on 23 August 2005 (Exhibit R1, T6, page 24). 

(c)       On 16 August 2005, Centrelink wrote to Mr Georgakakos advising him of his Newstart Allowance payable from 24 August 2005 and telling him to advise of any change in circumstances affecting his payments (Exhibit R2, supplementary document 4). 

(d)      On 26 August 2005, Mr Georgakakos attended at Centrelink (Salisbury) and advised that office that he had again lost his application form for payment of Newstart Allowance that was due to be lodged on 23 August 2005.  He was issued with a duplicate form over the counter for the fortnight period from 10 August 2005 to 23 August 2005.  This form was eventually lodged with Centrelink on 8 September 2005 (Exhibit R1, T12). 

(e)      On 30 August 2005, Centrelink wrote to Mr Georgakakos and informed him that his application form for payment of Newstart Allowance, due to be lodged on 23 August 2005, had not been received (Exhibit R2, supplementary document 5).  In the letter, Centrelink informed Mr Georgakakos that the information that had been used in calculating his Newstart Allowance payment was “Total Fortnightly Income $0.54”. 

(f)       On 7 September 2005, Centrelink issued a notice to Mrs Georgakakos confirming to her that Centrelink regarded “Your fortnightly earned income $0.00” (Exhibit R1, T11, page 35).

(g)      On 7 September 2005, Mr Georgakakos was issued with a notice by   Centrelink that informed him his Newstart Allowance had “been cancelled from 1 June 2005 because we have not received your Application for Payment form” (Exhibit R2, supplementary document 6) .

(h)      On 8 September 2005, Mr Georgakakos attended an interview at Centrelink (Salisbury) and his Newstart Allowance was restored.  Centrelink issued another application form for payment of Newstart Allowance over the counter for the period 24 August 2005 to 6 September 2005.

(i)       On 8 September 2005, Mr Georgakakos declared that his wife had earned income of $848.74 in the period 10 August 2005 to 23 August 2005 (Exhibit R1, T12).

(j)        On 9 September 2005, Mr Georgakakos declared that his wife had earned income of $826.68 in the period 24 August 2005 to 6 September 2005 (Exhibit R1, T15).

(k)      On 20 September 2005, Mr Georgakakos declared that his wife had earned income of $850.00-$900.00 in the period 7 September 2005 to 20 September 2005 (Exhibit R3, T35).

(l)       On 4 October 2005, Mr Georgakakos declared that his wife had earned income of $1,003.00 in the period 21 September 2005 to 4 October 2005 (Exhibit R3, T36).

(m)     On 14 October 2005, Mrs Georgakakos’ employer (Contracting Solutions Australia) advised Centrelink that her gross income during the period 30 May 2005 to 9 October 2005 totalled $9,259.60 (Exhibit R1, T19 at page 55).  If this gross wages figure is adjusted to cover the period from 30 May 2005 to 4 October 2005, the amount becomes $9,143.63. 

(n)      In applications for payment for Newstart Allowance lodged with Centrelink by Mr Georgakakos during the period 30 May 2005 to 4 October 2005, he declared the amount of wage earned by Mrs Georgakakos during this period to total $3,578.42.

consideration

13.     Mr and Mrs Georgakakos made every effort to explain to the Tribunal their situation and the circumstances in which they found themselves.  They properly acknowledged that they had been overpaid Social Security benefits during the relevant periods from June 2005 to September/October 2005.  However, it was obvious that they had difficulty in understanding the manner in which the overpayments (and the debts) had been calculated by Centrelink. 

14.     It was the applicants’ argument that they could not have been paid Newstart Allowance and Parenting Payment Partnered unless claims forms for payment had been lodged.  As the Tribunal understood it, the applicants were saying that claim forms for payment of Newstart Allowance had not been lodged by Mr Georgakakos in respect of the period from I June 2005 to 9 August 2005.  However, notwithstanding this, if in fact it was the case, the Tribunal has found on the evidence that Mr Georgakakos’ Newstart Allowance was restored from 1 June 2005 (see paragraph 12(g) and paragraph 12(h) of these reasons).   

15.     Having considered all the evidence before it, particularly the overpayment printouts for Mr and Mrs Georgakakos in the T documents (Exhibit R1, T30 and T31), the Tribunal is satisfied that:

(a)      during the period 15 June 2005 to 4 October 2005, Mr Georgakakos received Newstart Allowance totalling $1,774.13 in excess of his correct entitlement; and

(b)      during the period 14 June 2005 to 6 September 2005, Mrs Georgakakos received Parenting Payment Partnered totalling $2,172.58 in excess of her correct entitlement. 

16.     The excess payments were calculated as follows:

Mr Georgakakos

Date from	Old fortnightly rate	Adjusted fortnightly rate	Adjustment
15 June 2005	$360.30	$187.89	$172.41
29 June 2005	$360.30	$143.27	$217.03
13 July 2005	$360.30	$98.30	$262.00
27 July 2005	$360.30	$144.55	$215.75
10 August 2005	$360.30	$151.84	$208.46
24 August 2005	$360.30	$40.44	$319.86
7 September 2005	$170.90	$0.00	$170.90
21 September 2005	$365.00	$157.27	$207.73
Total	$2,697.70	$923.57	$1,774.13

The Tribunal notes that, according to the overpayment printout (Exhibit R1, T30, page 82), Mr Georgakakos was advised by Centrelink that his wife’s declared income during the relevant period was $3,578.42, whereas her actual income was $9,143.63, which meant he had been overpaid Newstart Allowance of $1,774.13.

Mrs Georgakakos

Date from	Old fortnightly rate	Adjusted fortnightly rate	Adjustment
1 June 2005	$360.30	$349.52	$10.78
15 June 2005	$360.30	$0.00	$360.30
29 June 2005	$360.30	$0.00	$360.30
13 July 2005	$360.30	$0.00	$360.30
27 July 2005	$360.30	$0.00	$360.30
10 August 2005	$360.30	$0.00	$360.30
24 August 2005	$360.30	$0.00	$360.30
Total	$2,522.10	$349.52	$2,172.58

The Tribunal notes that, according to the overpayment printout (Exhibit R1, T31, page 94), Mrs Georgakakos was advised by Centrelink that her declared income during the relevant period was $848.74, whereas her actual income was $6,931.50, which meant she had been overpaid $2,172.58.

Are the debts recoverable by the Commonwealth?

17. Mr and Mrs Georgakakos accept that they have been overpaid Newstart Allowance and/or Parenting Payment Partnered, their dispute with Centrelink being the amount of the overpayment(s). As has already been mentioned, the Tribunal is satisfied that the overpayments and the debt calculations have been correctly determined by Centrelink. Section 1223(1) of the Act provides that, where a Social Security payment (such as Newstart Allowance and Parenting Payment Partnered) is made and the recipient was not entitled to the payment, the amount is a debt due to the Commonwealth by the recipient and is taken to arise when he or she obtains the benefit of the payment. In the case of Mr Georgakakos and Mrs Georgakakos, the Tribunal agrees with the conclusion reached by the SSAT. The Tribunal is satisfied that:

(a)      Mr Georgakakos was overpaid Newstart Allowance of $1,774.13; and

(b)Mrs Georgakakos was overpaid Parenting Payment Partnered of $2,172.58,

and that those overpayment amounts are debts recoverable by the Commonwealth under s 1223(1) of the Act.

Are the debts able to be written-off under s 1236(1A) of the Act?

18. Under s 1236(1A), the respondent may write-off a debt, for a stated period or otherwise, only in the following situations:

(a)      If the debt is irrecoverable at law.  The Tribunal has already found that the debts in the present case are recoverable at law.

(b)      If the debtor has no capacity to repay the debt.  On the evidence before it, the Tribunal is satisfied that the applicants have capacity to repay the debts.

(c)If the applicant’s whereabouts are unknown.  This exception is not presently applicable.

(d)      If it is not cost effective for the Commonwealth to take action to recover the debt.  Having regard to the submissions put to it by Mr Goldsworthy, the Tribunal accepts that it is cost effective for the Commonwealth to take action (or to continue to take action) to recover the debts.

19. It follows that the debts are not capable of being written-off, for a stated period or otherwise, pursuant to s 1236(1A) of the Act.

Are there grounds to waive recovery of all or part of the debts under s 1237A(1) of the Act?

20. There can be no question that the applicants did not receive in good faith Newstart Allowance and Parenting Payment Partnered, which were overpaid during the relevant periods. However, in considering the application of s 1237A(1), the Tribunal is not satisfied, on the evidence before it, that any part of the debts was attributable solely to an administrative error made by the Commonwealth. In these circumstances, the debts should not be waived under s 1237A(1) of the Act.

Are there special circumstances under s 1237AAD of the Act?

21. Under s 1237AAD, the Tribunal may waive the right to recover all or part of the debts if it is satisfied that there are special circumstances (other than financial hardship alone) that make it desirable to waive the debts. The expression “special circumstances” has been considered on numerous occasions by Courts and Tribunals. In the case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal said (at page 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 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. 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."  (emphasis added)

22.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Re 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. ..."

Finally, in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31, the Full Court of the Federal Court said at page 38:

"Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other."

23.     The Tribunal understands that Mr and Mrs Georgakakos are experiencing difficult times and, like the SSAT, it appreciates that they are trying to survive and raise a family on a limited income.  However, the Tribunal is satisfied that their financial circumstances, whilst they may be straitened and stressful at times, are not such that they can be categorised as “special”.  Thus, the Tribunal is of the view that there are no special circumstances that would warrant the waiving of the debts, and the Tribunal so finds.

decision

24.     The Tribunal affirms the decision under review.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

Signed:         ............J Coulthard.........................................
  Associate

Date of Hearing  2 May 2007
Date of Decision  23 July 2007
Advocate for the Applicants     In person

Advocate for the Respondent   Mr C Goldsworthy

Centrelink Legal Services Branch