Gilvonio and Secretary, Department of Family and Community Servic Es
[2003] AATA 148
•14 February 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 148
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/613, Q2002/614
GENERAL ADMINISTRATIVE DIVISION ) Re DANTE GILVONIO
NOEMI GILVONIOApplicants
And
SECRETARY, DEPARTMENT OF FAMIILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr I R Way, Member Date14 February 2003
PlaceBrisbane
Decision In relation to matter number Q2002/613:
§ the Tribunal affirms that part of the decision that determined the amount of $5,953.39 is a debt due to the Commonwealth by Dante Gilvonio; and
§ the Tribunal sets aside that part of the decision waiving the right of the Commonwealth to recover that part of the debt which arises in the period 7 July 1998 to 23 October 1998 and in substitution therefore determines to waive the right of the Commonwealth to recover all of the debt of $5,953.39 for the period 9 July 1998 to 27 February 2001.
In relation to matter number Q2002/614:
§ with respect to the decision under review regarding overpayment of Family Allowance:
² the Tribunal affirms that part of the decision that determined that the amount of $3,364.30 is a debt due to the Commonwealth by Mrs Gilvonio for the period 1 July 1998 to 30 June 2000; and
² the Tribunal sets aside that part of the decision to recover an overpayment of Family Allowance in the amount of $3,364.30 for the period 1 July 1998 to 30 June 2000 and in substitution therefor determines to waive the right of the Commonwealth to recover all of the debt of $3,364.30.
§ With respect to the decision under review about overpayment of FTB:
² the Tribunal affirms that part of the decision that determines that the amount of $2,592.09 is a debt due to the Commonwealth for the period 1 July 2000 to 30 June 2000; and
² the Tribunal varies that part of the decision to recover an overpayment of Family Tax Benefit in the amount of $2,592.09 for the period 1 July 2000 to 30 June 2001 such that the Tribunal determines to waive the right of the Commonwealth to recover that part of the debt which arises in the period 1 July 2000 to 7 March 2001, taking into account waiver under the Family Assistance Estimates Tolerance (Transitional) Determination 2001.
(Sgd) I R Way
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – family allowance, family tax benefit and disability support pension - overpayment – whether a debt has arisen – whether there are grounds to justify waiving the repayment of the debt
Family Assistance Estimates Tolerance (Transitional) Determination 2001
Social Security Act 1991 ss 132, 1069-H, 1223, 1224,1236, 1237A, 1237AAD
A New Tax System (Family Assistance) Act 1999 ss 21, 58A New Tax System (Family Assistance) Administration Act 1999 ss 71, 95, 96, 101, 102
Re Butt and Department of Family and Community Services [2000] AATA 623
Re Secretary, Department of Family and Community Services and Jonauskos (2000) 65 ALD 553
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670
Secretary, Department of Family and Community Services v Hales (1998) 153 ALR 259
Re Secretary, Department of Social Security and McAvoy (AAT 11263, 26 September 1996)
Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287REASONS FOR DECISION
14 February 2003 Mr I R Way, Member Decisions under Review
Overpayment of Family Allowance
1. On 6 August 2001 Centrelink made a decision to raise a debt of $10,343.75 due to the Commonwealth by Mrs Noemi Gilvonio for overpayment of Family Allowance (FA) for the period 1 July 1998 to 29 June 2000.
2. On review this debt of $10,343.75 was reduced to $3,364.30. Mrs Gilvonio was informed of this by letter dated 8 January 2002. On further internal review this decision was affirmed.
3. This decision was reviewed by the Social Security Appeals Tribunal (SSAT) on 30 May 2002 and the SSAT affirmed the decision under review.
4. On 16 July 2002, Mrs Gilvonio applied to the Administrative Appeals Tribunal (AAT) for review of the SSAT decision.
Overpayment of Family Tax Benefit
5. On 24 January 2002, Centrelink made a decision to raise and recover an overpayment of Family Tax Benefit (FTB) to Mrs Gilvonio in the amount of $2,592.09 for the period 1 July 2000 to 30 June 2001.
6. On 25 January 2002, Mrs Gilvonio was advised by Centrelink of this FTB debt and that pursuant to the Family Assistance Estimates Tolerance (Transitional) Determination 2001, $1,000 of this debt had been automatically waived leaving a debt due to the Commonwealth by Mrs Gilvonio of $1,592.09. On further internal review this decision was affirmed.
7. This decision came before the SSAT for review on 30 May 2002 and on that date the SSAT affirmed the decision under review. In so doing the SSAT noted that Mrs Gilvonio did not contest this decision.
8. On 16 July 2002, Mrs Gilvonio applied to the AAT for review of the SSAT decision.
Overpayment of Disability Support Pension
9. On 6 March 2001, Centrelink decided to raise and recover an overpayment of Disability Support Pension (DSP) to Mr Dante Gilvonio, Mrs Gilvonio’s husband, in the amount of $5,953.39 for the period 9 July 1998 to 27 February 2001.
10. This decision was affirmed on internal review.
11. On 30 May 2002, the SSAT reviewed this decision and decided to vary the decision such that the amount of $5,953.39 is a debt due to the Commonwealth. However the SSAT waived the right of the Commonwealth to recover that part of the debt which arose in the period 9 July 1998 to 23 October 1998.
12. On 16 July 2002, Mr Gilvonio applied to the AAT for review of this decision.
Hearing by the AAT
13. The matters affecting Mrs Gilvonio are contained on AAT file number Q2002/614. The matters affecting Mr Gilvonio are contained on AAT file number 2002/613.
14. Both matters came on for hearing by the Tribunal on 13 January 2002. All parties agreed that the matters should be dealt with by the Tribunal at the same time and the Tribunal, being satisfied that the matters were closely linked, proceeded with the hearing on this basis.
15. Mr Gilvonio and Mrs Gilvonio were self-represented and gave oral evidence. Mr T Ffrench appeared for the respondent.
16. Both Mr Gilvonio and Mrs Gilvonio arrived in Australia from Peru some ten years ago, their first language being Spanish. Since then Mrs Gilvonio has slowly improved her English skills and now appears to have a reasonable ability to speak and comprehend English. However, Mr Gilvonio has not progressed as well and still has difficulty in English expression and comprehension.
17. In view of Mr Gilvonio’s difficulties with the English language a NAATI accredited translator in the Spanish language, Mrs Dumont, assisted the Tribunal in the hearing. Mrs Gilvonio gave her oral evidence principally in English and Mr Gilvonio solely through Mrs Dumont.
Documents Before the Tribunal
18. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 as follows:
Q2002/613 – T1-T45
Q2002/614 – T1-T35
In addition the Tribunal received into evidence a letter from Centrelink to Mr Gilvonio dated 11 July 2002 (Exhibit A1).
Background
19. A brief summary of the background to this matter, as set out below, is helpful in understanding the issues in this matter.
20. Mrs Gilvonio was in receipt of the maximum rate of FA for the period 1 July 1998 to 30 June 2000 because Mr Gilvonio was in receipt of DSP.
21. Mrs Gilvonio notified Centrelink that she commenced full time work on 16 February 1998 and she also notified Centrelink of her rate of income at that time.
22. During the period 1 July 1998 to 30 June 2000, Mrs Gilvonio’s earnings from her employment increased and Centrelink have no record of being notified of these increases as they occurred.
23. Based on her actual income during this period Centrelink maintain that Mr Gilvonio was not entitled to DSP and hence Mrs Gilvonio should not have been paid FA at the maximum rate.
24. Because Centrelink had no record of Mrs Gilvonio’s increased earnings, Mrs Gilvonio’s FTB payments were also made at an incorrect rate and in addition further incorrect payments were made due to other errors which will be addressed later in these reasons for decision.
Issues
25. The principal issues in this matter are:
§ firstly whether Mrs Gilvonio and/or Mr Gilvonio have received social security benefits to which they are not entitled;
§ if so, what are the amounts of overpayment
§ if there have been overpayments what are the debts due to the Commonwealth; and
§ if there are debts due to the Commonwealth should any of these debts be written off or waived, in whole or in part.
Legislative Framework
26. The Social Security Act 1991 (the Act) relevantly provides as follows:
“132 Secretary may require notice of the happening of an event or a change in circumstances
(1) The Secretary may give a person to whom disability support pension is being paid a notice that requires the person to inform the Department if:
(a) a specified event or change of circumstances occurs; or
(b) the person becomes aware that a specified event or change of circumstances is likely to occur.
(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the payment of the pension.
(3) Subject to subsection (3A), a notice under subsection (1):
(a) must be in writing; and
(b) may be given personally or by post; and
(c) must specify how the person is to give the information to the Department; and
(d) must specify the period within which the person is to give the information to the Department; and
(e) must specify that the notice is a recipient notification notice given under this Act.
(3A) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (3)(c) or (e).
(4) Subject to subsections (4A) and (4B), the period specified under paragraph (3)(d) must end at least 14 days after:
(a) the day of which the event or change of circumstances occurs; or
(b) the day of which the person becomes aware that the event or change of circumstances is likely to occur.
(4A) If a notice requires the person to inform the Department of any proposal by the person to leave Australia, subsection (4) does not apply to that requirement.
(4B) If the notice requires information about receipt of a compensation payment, the period specified under paragraph (3)(d) in relation to that information must end at least 7 days after the day on which the person becomes aware that he or she has received or is to receive a compensation payment.
(5) A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice.
Module H – Family Allowance Income Test
Submodule 1 – General
Persons to whom the income test applies
1069-H1The family allowance income test in Submodule 3 applies to a person unless the person, or the person’s partner, is receiving a social security pension, a social security benefit or a service pension.
Income
1069-H2For the purposes of this Module, a person’s family allowance income for a particular tax year is the sum of the following amounts (income components):
(a)the person’s taxable income for that year;
(b)the person’s adjusted fringe benefits value for that year;
(c)the person’s target foreign income for that year;
(d)the person’s net rental property loss for that year.
Income of members of couple to be added
1069-H3For the purposes of this Module, if a person is a member of a couple, the person’s income for a tax year includes the income for that year of the person’s partner.
Fringe benefits value
1069-H4For the purposes of this Module, a person’s fringe benefits value for a tax year is the sum of the values of all the assessable fringe benefits received by the person in that tax year.
Assumed notifiable events
1069-H5An event is an assumed notifiable event for the purposes of the application of this Module in respect of a person if a family allowance claim form approved by the Secretary that was lodged by or on behalf of the person states that the event is an assumed notifiable event for the purposes of this Module.
Notifiable events
1069-H6An event is a notifiable event for the purposes of the application of this Module in respect of a person if a notice given to the person under subsection 872(1) states that the event is a notifiable event for the purposes of this Module.
Person with unknown income tax year
1069-H7(1) If a person does not have any one or more of the income components for a tax year in accordance with point 1069-H8, the person is taken to have an unknown income for that year.
1069-H7(2) For the purposes of subpoint (1), a person has an income component even though the amount of the component is nil.
Income components for tax year
1069-H8(1) A person’s taxable income for a tax year is:
(a)the person’s assessed taxable income for that year; or
(b)if the person does not have an assessed taxable income for that year – the person’s accepted estimate of taxable income for that year.
1069-H8(2) A person’s adjusted fringe benefits value for a tax year is:
(a)the amount of that value as determined by the Secretary; or
(b)if a determination of that amount for that year has not been made by the Secretary – the person’s accepted estimate of that for that year.
1069-H8(3) A person’s target foreign income for a tax year is the person’s accepted estimate of the amount of that loss for that year..
1069-H8(4) A person’s net rental property loss for a tax year is the person’s accepted estimate of the amount of that loss for that year.
Assessed taxable income
1069-H9A person’s assessed taxable income for a tax year at a particular time is the most recent of:
(a)if, at that time, the Commissioner of Taxation has made an assessment or an amended assessment of that taxable income – that taxable income according to the assessment or amended assessment; or
(b)if, at that time, a tribunal has amended an assessment or an amended assessment made by the Commissioner – that taxable income according to the amendment made by the tribunal; or
(c)if, at any time, a court has amended an assessment or an amended assessment made by the Commissioner or an amended assessment made by a tribunal – that taxable income according to the amendment made by the court.
Accepted estimate
1069-H10A person’s accepted estimate of an income component for a tax year is that income component according to the most recent notice given by the person under point 1069-H11 and accepted by the Secretary for the purposes of this Module.
Notice estimating income component
1069-H11A person may give the Secretary a notice setting out the person’s estimate of an income component of the person for a tax year.
Acceptance of notice
1069-H12The Secretary is to accept a notice referred to in point 1069-H11 for the purposes of this Module only if the Secretary is satisfied that the estimate is reasonable.
…
1223Debts arising under this Act and the 1947 Act
(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:
(a) the recipient was not qualified for the social security payment when it was granted; or
(b) the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.
…
(3) Subject to subsection (4), if:
(a) an amount (the received amount) has been paid to a person by way of family allowance; and
(b) the person’s rate of family allowance is recalculated under:
(i)section 884 (amendment of assessable income); or
(ii)section 885 (underestimate of income): or
(iii)section 886 (failure to notify notifiable event); and
(c) the received amount is more than the amount (the correct amount) of the family allowance payable to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
(4)If:
(a) family allowance is paid to a person in a tax year; and
(b) apart from this subsection an amount of family allowance would become recoverable under subsection (3) before the end of the tax year; and
(c) the amount would be recoverable because of:
(i)an increase in the person’s income; or
(ii)an underestimate of the person’s income;
the amount is recoverable only after the end of the tax year.
…
1224Debts arising from recipient’s contravention of Act
(1) If:
(a) an amount has been paid to a recipient by way of social security payment; and
(b) the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of the Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth. …
…
1236 Secretary may write off debt
(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.
(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) 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.
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a) the debt cannot be recovered by means of deductions from a person’s youth training allowance, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the discharge and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of deductions from a person’s social security payment, the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
…
1237A Waiver of debt arising from error
(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.
(1A) Subsection (1) only applies if:
(a) a debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
(2) If:
(a)a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt. …
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.”
27. The relevant legislative provisions with respect to FTB are contained in A New Tax System (Family Assistance) Act 1999 (the FA Act); and A New Tax System (Family Assistance) Administration Act 1999 (the FAA Act).
28. These Acts provide as follows:
§ FAA Act:
“71 Debts arising in respect of family assistance other than child care benefit and family tax benefit advance
(1) If:
(a) an amount has been paid to a person by way of family tax benefit, maternity allowance or maternity immunisation allowance (the assistance ) in respect of a period or event; and
(b) the person was not entitled to the assistance in respect of that period or event;
the amount so paid is a debt due to the Commonwealth by the person.
(2) If:
(a) an amount (the received amount) has been paid to a person by way of assistance; and
(b) the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;
the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.
…
95 Secretary may write off debt
(1) Subject to subsection (2), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(2) 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.
(3) For the purposes of paragraph (2)(a), a debt is taken to be irrecoverable at law if, and only if:
(a) the debt cannot be recovered by means of:
(i)deductions under section 84; or
(iaa)deductions under section 1231 of the Social SecurityAct 1991; or
(ia)setting off under section 84A arrears of family assistance; or
(ii)application of an income tax refund under section 87; or
(iia)setting off under section 87A against advances; or
(iii)legal proceedings under section 88; or
(iv)garnishee notice under section 89;
because the relevant time limit for recovery action under that section has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
(4) For the purposes of paragraph (2)(b), if a debt is recoverable by means of:
(a) deductions under section 84; or
(aa) deductions under section 1231 of the Social SecurityAct 1991 ; or
(b) setting off under section 84A arrears of family assistance; or
(c) application of an income tax refund under section 87; or
(d) setting off under section 87A against advances;
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
(5) A decision made under subsection (1) takes effect:
(a) if no day is specified in the decision- on the day on which the decision is made; or
(b) if a day is specified in the decision- on the day so specified (whether that day is before, after or on the day on which the decision is made).
(6) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.
96 Power to waive Commonwealth's right to recover debt
(1) On behalf of the Commonwealth, the Secretary may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor only in the circumstances described in section 97, 98, 99, 100, 101 or 102.
(2) A waiver takes effect:
(a) on the day specified in the waiver (whether that day is before, after or on the day on which the decision to waive is made); or
(b) if the waiver does not specify when it takes effect- on the day on which the decision to waive is made.
97 Waiver of debt arising from error
(1) The Secretary must waive the right to recover the proportion (the administrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt.
(2) The Secretary must waive the administrative error proportion of a debt if:
(a) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt; and
(b) the person would suffer severe financial hardship if it were not waived.
(3) The Secretary must waive the administrative error proportion of a debt if:
(a) the payment or payments were made in respect of the debtor's eligibility for family assistance for a period or event (the eligibility period or event) that occurs in an income year; and
(b) the debt is raised after the end of:
(i)the debtor's next income year after the one in which the eligibility period or event occurs; or
(ii)the period of 13 weeks starting on the day on which the payment that gave rise to the debt was made;
whichever ends last; and
(c) the debtor received in good faith the payment or payments that gave rise to the administrative error proportion of the debt.
…
101 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 the family assistance law; 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.”
§ FA Act:
“family tax benefit means the benefit for which a person is eligible under DIVISION 1 of PART - 3 …
21 When an individual is eligible for family tax benefit in normal circumstances
(1)An individual is eligible for family tax benefit if:
(a) the individual has at least 1 FTB child (see section 22 and later provisions); and
(b)the individual:
(i)is an Australian resident; or
(ia)is a special category visa holder residing in Australia; or
(ii)satisfies subsection (1A); and
(c) the individual's rate of family tax benefit, worked out under DIVISION 1 of PART - 4 , is greater than nil.
(1A) An individual satisfies this subsection if the individual is the holder of a visa determined by the Minister for the purposes of subparagraph 729(2)(f)(v) of the Social Security Act 1991, and either of the following applies:
(a) the individual is in Australia; or
(b) the individual:
(i)is temporarily absent from Australia for a period not exceeding 26 weeks; and
(ii)the absence is an allowable absence in relation to special benefit within the meaning of PART - 4 .2 of that Act.
(2) However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides.
…
58 Rate of family tax benefit
(1) Subject to sections 60 to 63, an individual's annual rate of family tax benefit is to be calculated in accordance with the Rate Calculator in SCHEDULE 1.
…
Schedule 1 - Family tax benefit rate calculator
PART 1 - Overall rate calculation process
1(1)To work out an individual's annual rate of family tax benefit, add:
(a) the individual's Part A rate calculated under PART - 2 (clauses 3 to 24) or PART - 3 (clauses 25 to 28); and
(b) the individual's Part B rate calculated under PART - 4 (clauses 29 to 33).
…
Schedule 3 - Adjusted taxable income
1Adjusted taxable income relevant to family tax benefit and child care benefit
An individual's adjusted taxable income is relevant to the rate of family tax benefit and child care benefit.
2 Adjusted taxable income
(1)For the purposes of this Act and subject to subclause (2), an individual's adjusted taxable income for a particular income year is the sum of the following amounts (income components):
(a) the individual's taxable income for that year; …”
Mr Gilvonio’s Evidence
29. In his application to this Tribunal for review, Mr Gilvonio gave his reasons for making the application as follows:
“I disagree with the Judge’s decision, she justify that the debt rose in part by error of the system. I think that the system should pay all the amount. Now Centrelink is trying to get back the money that gave me while I was unemployed and sick. I think with this attitude Centrelink is playing with my necessity.
My wife gave all necessary information about her earnings to Centrelink.”
30. In his oral evidence Mr Gilvonio reinforced the point that he had little contact with Centrelink at the relevant time because of his health problems and difficulties with the English language. He said his wife took care of the family financial affairs including dealing with Centrelink and that his wife had advised the respondent as required about her earnings. He highlighted the errors made by the respondent in recording income figures (particularly recording $4,500 income when it should have been $45,000). He also highlighted the difficulties in having to deal with separate assessment offices and officers at Centrelink (seeing different people at different times) and where contrary to his and his wife’s expectations, there apparently was no or little interaction between these separate parts such that information provided to one was not necessarily available to another through the computer system. Furthermore, he said that not only were there errors but also interpretations and advice about rules and procedures differed, depending on who was giving the advice and he thought the whole system was confusing and difficult to understand and cope with.
31. He said, for his own part, at the relevant time in 1998, 1999 and 2000 he was suffering from high depression (this condition commencing in 1993 and resulting in DSP being first paid to him in 1996); and this further exacerbated the difficulties he had in dealing with Centrelink. He said that at that time he was on high doses of anti-depressant medication which tended to immobilise him and make him sleepy and that at the time he was totally dependent on his wife. He said that this situation, since March 2001, had eased and, whilst he was still taking some small amounts of anti-depressant medication as required, he had been back in the work-force since May 2002, working three days (24 hours) a week as an assistant in a warehouse and earning approximately $19,000 per annum. He said that in addition he was undertaking training in refrigeration mechanics, an area in which he previously had worked in Peru.
32. Mr Gilvonio said that his wife not only worked and looked after their three children, but she did the shopping, budgeting, annual tax returns and she also, to the best of her ability, confronted all of the issues and complied with all of the requests posed by Social Security (including sending Centrelink her annual tax returns at the end of each calendar year). He said he thought that his wife had done everything asked of her by Centrelink.
33. The Tribunal notes that Mr Gilvonio was born on 27 July 1949 and Mrs Gilvonio was born on 14 September 1964, that they were married in Peru in 1986 and they live together in a three bedroom Housing Commission home with their three sons Dante (born on 28 October 1982), Michael (born on 27 September 1984) and Fernando (born on 25 June 1992), all of whom currently are students.
34. With respect to their current situation, Mr Gilvonio said that their debts have created very significant stress and anxiety for him, his wife and his three children.
Mrs Gilvonio’s Evidence
35. Mrs Gilvonio told the Tribunal that prior to coming to Australia she had undertaken some training in Peru as an enrolled nurse and after arrival in Australia she undertook some English language courses to improve her English. She said she then enrolled in a registered nurse course at Griffith University during 1995 to 1997 and successfully completed this course, becoming a Registered Nurse. She said she found coping with the course difficult because of her lack of English language skills, however, the University had been very helpful in providing support.
36. Following her undergraduate training, Mrs Gilvonio gained full time employment on 16 February 1998 with Princess Alexandra Hospital (PA) commencing at $21 per hour, working 76 hours per fortnight. She said she informed Centrelink of this employment and rate of remuneration and in early March 1998 presented Centrelink with a payslip to confirm her earnings. She also told the Tribunal that she was engaged by PA at Level 1 and that she thought that she would receive annual salary increments for eight years, following the successful completion of her first graduate year with the hospital.
37. She said that prior to her employment at PA she had been in the workforce as a casual/on-call employee, since around 1996, in the field of aged care. During this employment she knew she had to and did respond to Centrelink requests every twelve weeks or so about her employment and pay. She said she knew at this stage (through an interpreter) that she had to tell Centrelink about her employment. She said that she had expected to receive letters from Centrelink about her full time employment with PA but had not received any such letters.
38. Mrs Gilvonio said that during her employment with PA, towards the end of 2000, she also had worked on a casual/on-call basis with a nursing home (Wishart Aged Care), working approximately eight hours per month at $19.00 per hour, but did not tell Centrelink about this until the debt was raised in early 2001.
39. Mrs Gilvonio said that during the relevant time (1998 to 2000) she believed that Social Security/Centrelink was one whole department and that any details given to one part of that organisation would be computerised and would be available to all officers in the department and that there would be a matching of data at the end of every financial year and any discrepancies or disagreements would be sorted out. She highlighted what she saw as a deficiency in Centrelink systems in that in December 1998 she had asked Centrelink for rates of Social Security being paid to her and her husband with respect to an application to the Housing Commission regarding rent levels. She said she thought Centrelink were in error in not letting her know that there had been no income updating since February 1998. She said that in February 2001 however, she had been informed that there had been no update but this was too late to effect any relevant changes.. Furthermore, she said that, in July 2000, her husband had received a letter from Centrelink with respect to him getting back into the workforce and that they both visited Centrelink at Stones Corner in Brisbane where they were shown how to use the computer for job search and Mr Gilvonio was given a job search card and forms to be completed by a Doctor as to his fitness to undertake work. She said that there was no discussion whatsoever at this time about salary records and that, in effect, there had been a complete Centrelink vacuum about their information and records from October 1998 to February 2001.
40. Mrs Gilvonio said that Mr Gilvonio had received a letter from Centrelink on 24 April 1998 informing him that his DSP had been reduced to $79.30 per fortnight because their combined income had increased to $31,113.81. She said she was not sure how Centrelink determined their combined income but thought she had probably given Centrelink payslips as part of an application for bus passes for her children. She said she had informed Centrelink when her son Dante turned sixteen in October 1998, about his continuing in full time study and that she probably would have given details of her earnings to Centrelink at this time. The Tribunal notes that Centrelink wrote separately to Mr Gilvonio and Mrs Gilvonio on 23 October 1998 (613/folio 43, 614/folio 25) informing Mr Gilvonio of a reduction in his DSP to $69.60 per fortnight and informing Mrs Gilvonio that the Department had not received a completed student review form from her with respect to Dante. The letter to Mr Gilvonio in October 1998 stated that his pension was decreased because of the change in circumstances, but did not specify what the change was, nor does the change appear to be linked to income as the total combined yearly income figure of $31,115.25 quoted in that letter is exactly the same as the figure in Centrelink’s previous letter of 24 April 1998.
41. With respect to the impact of the raising of the three debts on Mr Gilvonio and Mrs Gilvonio the Tribunal notes the social worker’s report dated 18 May 2001 (613/folio 150-151). In that report Gusi Carpenter relevantly states:
“I interviewed Mr and Mrs Gilvonio on 24th and 30th April 2001. These interviews were long and in depth and were requested as a result of Mr and Mrs Gilvonio’s level of distress after being informed they had incurred a significant Centrelink debt.
Mr and Mrs Gilvonio have written a letter requesting a review and this social work report is being submitted to present further aspects of the situation as follows:
1.Language barriers
Mr and Mrs Gilvonio are from a Spanish speaking background and arrived in Australia from Peru about ten years ago. During this time, Mrs Gilvonio has slowly improved her English, especially since she has been in the workforce. Mr Gilvonio, however, still experiences some difficulty in his communication, due, in part, to his isolation from people because of his depressive illness and lack of employment. Mrs Gilvonio now appears to have good language and comprehension skills, but the debt is from 1999 when her English language skills were less well developed. I believe that this has had an impact on the ability of Mr and Mrs Gilvonio to understand information provided.
2.Mistrust of Interpreters
Both Mr and Mrs Gilvonio have a strong distrust of interpreters because of issues of privacy and confidentiality and because of their history. They spoke about having seen interpreters for official dealings, and then found that they were related to a next door neighbour. Their distrust is compounded by some negative experiences within the Spanish speaking community in Brisbane, and also by their experiences in Peru. This has resulted in them refusing interpreters and undoubtedly had an impact on their comprehension of information and process with dealings with Centrelink. In fact, Mrs Gilvonio now mostly accompanies her husband and interprets for him.
3.Language of information provided and correspondence sent
From discussions with Mr and Mrs Gilvonio, I do not believe that they have been given information in the Spanish language. This may have led to them not having full understanding of what was being requested.
4.Conceptual barriers
I believe that there are misunderstandings created by language barriers, and that these have been compounded by poor understanding by the Gilvonios of Centrelink concepts and the way the system operates.
5.Political situation in country of origin
Mr and Mrs Gilvonio are from Peru where they experienced community disruption and violence from terrorist activity. I have discussed this situation with them and the coping mechanisms they developed at the time. I believe it has led to a level of post traumatic stress disorder and also resulted in a degree of paranoia – a fact which they themselves acknowledge – and a distrust of Government, which may have led to minimum contact with Centrelink. From their experiences they have developed a nervousness of authority and of doing the wrong thing, and, because of this, I am sure, would not have deliberately mislead Centrelink.
6.Understanding of Centrelink procedures
Mr and Mrs Gilvonio have a strong conviction that they, at the time, had provided all relevant information as requested by Centrelink. The only thing they acknowledge they did not inform Centrelink of was Mrs Gilvonio’s casual temporary employment at Wishart Nursing Home. They believe strongly that the situation of an overpayment is not the result of their misinforming Centrelink and feel it is grossly unfair that they now are placed in hardship because they have to repay the debt.
7.Concerns about ongoing wellbeing
Since arriving in Australia, Mr Gilvonio has become extremely depressed and was previously granted DSP for this condition. He has discussed difficulties sleeping because of sleep apnoea, which, undoubtedly, does not help his depression. I also believe he has lost much of his status and many of his roles within the family and the community since coming to Australia. I have had concerns about his ongoing well being and physical safety because of the above issues.
8.Ongoing Issues
This whole situation appears to have increased the Gilvonio family’s level of paranoia and distrust of the system. Mrs Gilvonio reports that the family now tries to keep any Centrelink payments aside, as they have completely lost confidence in being correctly paid. I believe this further substantiates the fact that they have had poor understanding of information and process in relation to their dealings with Centrelink.”
42. In her oral evidence Mrs Gilvonio confirmed and clearly demonstrated her very deep distress and feelings of responsibility about unknowingly getting the family into debt and the anger her husband displayed about the debts. She said that after being told about the debts in March 2001 her husband had shut himself out from her and though they were still living in the same house at the time they were not speaking to each other nor were they sharing the same bed. She said the situation was made worse by her husband’s depression and by her work pressures, as she worked at night and had difficulties sleeping. She said the situation had got to the point where her husband had lost trust in her and was on the point of leaving and the children were also very upset at getting less money. She said in her family the belief is that arguments between husband and wife should not “be taken across to other days”, and in order to reconcile their circumstances she gave her husband a signed written undertaking stating that she was truthful in all things and if she did wrong she would give him half of her income.
43. She said that following notification of the debt in March 2001 she now goes to all windows at Centrelink to make sure all parts of Centrelink have the information required.
44. With respect to the decision related to FTB, Mrs Gilvonio said the review officer was wrong in saying she had failed to advise of her income, resulting in incorrect payments of DSP to Mr Gilvonio thereby resulting in payment of FTB at the incorrect rate from 1 July 2000 to 30 June 2001. She said she did provide estimates of income each year to Centrelink at Stones Corner, to the best of her recollection these estimates being $39,000 for year 1998/99; $40,000 or $41,000 for 1999/2000; and $42,000 for 2000/2001. She said she thought records were only kept by Centrelink for two years and she had been unable to find any records of providing these estimates (the Tribunal notes there are no relevant records in the T documents). She also said that she had no idea of the levels of income at which DSP was affected.
45. The Tribunal notes that Mrs Gilvonio provided an estimate of income of $45,000 early in March 2001 and that Centrelink incorrect coded this as $4,500 resulting in an incorrect payment of FTB. The Tribunal also notes that Mrs Gilvonio accepts that she was notified of these income amounts in letters sent to her on 14 March 2001 and 5 April 2001. However she said she did not respond to these letters by letting Centrelink know the income figure of $4,500 was wrong because at this time she had too much on her mind to deal with the matter.
46. The Tribunal is mindful that Mrs Gilvonio’s son Michael turned sixteen on 27 September 2000, that he was granted Youth Allowance (YAL) from this date, and that notices were sent to Mrs Gilvonio on 19 September 2000, 6 March 2001 and 5 April 2001 notifying her that FTB was also being paid for Michael. Mrs Gilvonio accepts that she received these letters but again did nothing about them, again for the reason that she was experiencing “very troubled times”. Mrs Gilvonio also made the point that she would have expected cross-checking within Centrelink to avoid “mix-ups”.
47. With respect to financial matters, Mrs Gilvonio said that she currently works and receives between $1,150 and $1,250 in the hand per fortnight, that the children do not work, and that she receives approximately $60 per fortnight in social security benefits. She said she had provided estimates of annual income to Centrelink for next year, these estimates being on the high side and comprising $50,000 for herself and $19,000 for her husband. She said that they were currently repaying the debts at $40 per fortnight and with tight budgeting and shopping for bargains the family was able to cope with the provision of every day necessities and the rent of their Housing Commission home ($145 per week). She said that the cost of her husband’s medication and medical treatment created difficulties and that because of his bad back he may not be able to continue working. She said she had stopped her second job, being “just too tired”.
48. With respect to the debt for DSP, Mrs Gilvonio tendered a letter Mr Gilvonio had received on 11 July 2002 (Exhibit A1). This letter followed on from the SSAT decision to waive part of this debt and the letter clearly states that the whole debt had been cancelled. Mrs Gilvonio said that they had received, without explanation, $800 into their bank account from Centrelink some four weeks prior to receiving this letter and when she approached Centrelink (two different people on two separate occasions) to make the point that she thought deletion of all of the debt was wrong, she was told not to worry about it.
49. In cross-examination when taken to Centrelink’s letter to Mr Gilvonio dated 24 April 1998 (613/folio 79) and 23 October 1998 (613/T10), Mrs Gilvonio said that she could not remember if she looked at the back of these letters where it tells recipients what they must tell Centrelink and, in any event, at the time she would have found the wording far too complex to understand; nor did she understand fully what was meant by income, wages and investment earnings; nor did she or her husband avail themselves of interpreters (for the reasons already given above); and finally she was not aware of the way in which Centrelink did its various calculations.
50. The Tribunal notes that Mrs Gilvonio in applying to this Tribunal for a review gave as reasons for her application as the following:
“I do not agree with the decision.
§ I did notify family allowance dept about my income every time they requested it. They should have use this data to work out my Family Allowance entitlement.
§ No one mention to me that my income details weren’t use at all, as my husband was recipient of DSP.
§ I did notify Centrelink about my income in a fortnightly bases as I worked 2 casual jobs. My earning and time work was very unstable. Once I started a full time job with a more stable earning and time work, no one at Centrelink clarify that I had to keep bringing in my pay slips as I used to.”
51. The Tribunal also notes that in applying to the SSAT for review of the decision regarding DSP and FA, Mrs Gilvonio gave the following reasons as to why she believed it was incorrect:
“Both debts of DSP and family allowance had because Centrelink argue that I failed to advice the department my income.
I have do it in many occasions.
Beside I though I was been pay and my husband as well as we didn’t receive or were notify of any abnormality until February 2001.”
And that Mrs Gilvonio in applying to Centrelink for an internal review of the decision regarding FA stated:
“I, Noemi L. Gilvonio with Centrelink reference number 404 227 427S, write to you to appeal against the decision taken by Family Allowance officer to rise the debt of $10343.75 from July 1998 to 29 June 2000.
I was contacted on the 25th July 2001 by Centrelink officer, because they were advised by DSP that we were not entitle to receive support income payments after 1st July 1998. The officer said that my family allowance was base upon my husband DSP, therefore they did not request my income details at that time.
However, I recalled very well, that I was asked to give details of my annual income every year. Therefore, I believed that my family allowance was being pay according to my income. I did not know that my Family allowance was being paid, based on my husband’s pension. It was never mention to me. When I inquired, to what happened with my income details that I had given before. They answered that, even-though, I had told them about my income in the past, it was not taken in consideration because their computer system overrides this information automatically, when one of the partners is paid a pension. I think, that it is unacceptable and unfair because I had given the Family allowance department the information that they requested. It is not my fault that they did not use my income details information properly.
Now, I am being asked to pay back $10343.75 due to this glitch. According to the account payable letter, this amount will not be the only one to be pay back. There will be an ‘X’ amount to be pay back from July 2000 to June 2001 on my family allowance. At the moment, I find myself in a very complicated and delicate situation. Because I will have to pay back to Centrelink around $16500 dollars:
$ 5953.39 from my husband pension
$10343.75 from family allowance
$…..xx.xx from July 2000
$16297.14 plus
How I may suppose to deal with this. I am the only income earner in my household, my husband is looking for a job but it is difficult for him as his English is not good enough yet and is recovering from his illness.
I beg you to review my case as it is quite upsetting.”
Considerations
52. At the outset it must be said that the Tribunal finds Mr Gilvonio and Mrs Gilvonio to be credible applicants/witnesses and the Tribunal is satisfied that they both answered questions put to them truthfully, forth-rightly and to the best of their ability.
53. The first question for the Tribunal is whether Mr Gilvonio and Mrs Gilvonio have received social security benefits to which they were not entitled, and if so, in what amounts.
54. Central to answering this question is the matter of Mrs Gilvonio’s income during relevant periods. The Tribunal is satisfied, based on Mrs Gilvonio’s income tax returns included or referred to in the T documents, that her actual income during the relevant periods was as follows:
§ 1996/97 - $19,118.00
§ 1997/98 - $23,550.00
§ 1998/99 - $38,316.00
§ 1999/00 - $40,759.00
55. Also relevant to consideration of this question is the age and status of Mr Gilvonio and Mrs Gilvonio’s children. The Tribunal is satisfied that Mr Gilvonio and Mrs Gilvonio have three sons living at home and still undertaking full time studies as follows:
§ Fernando – DOB 25 June 1992
§ Michael – DOB 27 September 1984
§ Dante – DOB 28 October 1982
56. With respect to DSP paid to Mr Gilvonio the Tribunal is satisfied, on the material before it, that Mr Gilvonio received a total of $5,953.39 DSP from 8 July 1998 to 27 February 2001, none of which he was entitled to receive because of the level of earnings of Mrs Gilvonio at the relevant time.
57. With respect to FA paid to Mrs Gilvonio the Tribunal is satisfied, on the material before it, that Mrs Gilvonio received $3,364.30 FA from 1 July 1998 to 30 June 2000 to which she was not entitled. In being so satisfied the Tribunal is mindful that the respondent has applied the ruling in Re Butt and Department of Family and Community Services [2000] AATA 623 with respect to entitlements of family payment to be paid pursuant to section 1069-H of the Act.
58. With respect to FTB, after considering all of the material before it, the Tribunal is satisfied that Mrs Gilvonio received $2,592.09 in FTB during the period 1 July 2000 to 30 June 2001, to which she was not entitled.
59. Insofar as debts due to the Commonwealth, the Tribunal is satisfied pursuant to section 1223(3) of the Act that there is a debt due to the Commonwealth by Mrs Gilvonio in the amount of $3,364.30 because of the overpayment of FA.
60. The Tribunal is satisfied, pursuant to section 71(2) of the FAA Act, that there is a debt due to the Commonwealth by Mrs Gilvonio of $2,796.97 because of the overpayment of FTB. The Tribunal is also satisfied that in this case the Family Assistance Estimates Tolerance (Transitional) Determination 2001 applies, such that the respondent has correctly waived $1,000 of the overpayment pursuant to this determination, thus leaving a debt due to the Commonwealth of $1,796.97.
61. The Tribunal is also satisfied, pursuant to section 1223(1) of the Act that there is a debt due to the Commonwealth by Mr Gilvonio of $5,953.39.
62. This then leaves the central issue in these matters, namely whether there are circumstances which would warrant write-off or waiving of any of the debts in whole or in part.
63. Turning first to write-off.
64. The provisions of both the Act (section 1236) and the FAA Act (section 95) with respect to write-off are couched in similar terms and the Secretary may write-off a debt 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)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.”
65. Clearly in this case none of the provisions of the Act apply and the Tribunal is satisfied that the write-off of any of the debts is not appropriate.
66. Turning then to waiving of any of the debts.
67. The relevant provisions of the Acts for consideration in this matter are section 1237A and section 1237AAD of the Act (with respect to FA and DSP) and section 97 and 101 of the FAA Act with respect to FTB.
68. Dealing firstly with the debt due to the Commonwealth by Mr Gilvonio and overpayment of DSP.
69. On the evidence before it, the Tribunal is satisfied that the overpayment of DSP to Mr Gilvonio results, at least in part because of errors made by Mrs Gilvonio, acting for Mr Gilvonio with respect to notification of Mrs Gilvonio’s correct level of income. Whether such errors by Mrs Gilvonio and Mr Gilvonio arose from their lack of understanding of English, and/or Centrelink systems and requirements, is not relevant to the Tribunal’s consideration of the application of section 1237A.
70. The plain fact remains, regardless of the cause, that Mr Gilvonio and Mrs Gilvonio made errors such that the Tribunal is satisfied that the debt is not attributable solely to an administrative error made by the Commonwealth.
71. As such, waiving the debt under section 1237A is not an available course of action and the Tribunal so finds.
72. This then leaves consideration of special circumstances pursuant to section 1237AAD of the Act.
73. There is no suggestion by the respondent and the Tribunal accepts that neither Mr Gilvonio or Mrs Gilvonio have made a false statement or false representation about this matter.
74. With respect to consideration of whether Mr Gilvonio and/or Mrs Gilvonio knowingly failed or omitted to comply with the provision of the Act, the Tribunal is mindful that in Re Secretary, Department of Family and Community Services and Jonauskos (2000) 65 ALD 553, the Tribunal said (at 571):
“(68) … I…maintain the position I adopted in [Re Callaghan and Secretary Department of Social Security (1997) 45 ALD 435] when I said (at 445):
‘(48) There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.’
(69) I reached that conclusion after considering the discussion of ‘knowledge’ by Matheson J in Hooi v Brophy (1984) 52 ALR 710; 3 IPR 16. He referred at ALR 712-13; IPR 19, to a discussion of ‘knowledge’ by Devlin J (as he then was) in Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383 at 385:
‘There are, I think, three degrees of knowledge which it may be relevant to consider in cases of this sort. The first is actual knowledge, and of course, the justices may find it because they infer from it the nature of the act that was done for no man can prove the state of another man’s mind: and they may find it, of course, even if the defendant gives evidence to the contrary. They may disbelieve him, and think that that was his state of mind. They may feel that the evidence falls short of that, and if, they do, they have then to consider what might be described as knowledge of the second degree: they have to consider then whether what the defendant was doing was, as it has been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. I do not think it necessary to look further, certainly not in cases of this type, than the expression used by Lord Hewart CJ in a case under this section. Evans v Dell (1937) 53 TLR 310 at 313: “…the respondent deliberately refrained ‘from making inquiries’, the results of which he might not “care to have”.
The third sort of knowledge is what is generally known in the law as constructive knowledge. It is what is encompassed by the words ought to have known in the phrase ‘known or ought to have known’.. It does not mean actual knowledge at all: It means that the defendant had in effect the means of knowledge.’ [My emphasis]
(70) It seems to me that it is the first type of knowledge, actual knowledge, that it is meant by the reference to ‘knowingly’ in s 1237AAD. … [I]t seems to me that its use of ‘knowingly’ in s 1237AAD is a deliberate choice and means actual knowledge. That is not to say that recklessness is irrelevant in s 1237AAD for it is relevant in determining together with other matters, whether or not there are special circumstances.”
75. It is clear on the evidence before the Tribunal that, during the period July 1998 to February 2001, Mr Gilvonio was suffering from a mental illness and difficulties in the use and understanding of the English language to such an extent his wife, Mrs Gilvonio, undertook on his behalf all of the family’s dealings with Centrelink and management of the family’s financial matters. The Tribunal is therefore satisfied that it cannot be said, following the approaches above, that Mr Gilvonio knowingly failed or omitted to comply with provisions of the Act. The question then is whether Mrs Gilvonio (acting in her “carer” role) knowingly fail or omitted to comply with a provision of the Act.
76. On the evidence before it the Tribunal is satisfied that, at the relevant time, Mrs Gilvonio had a significant lack of understanding of Centrelink systems and methods of calculation and furthermore she honestly believed she had provided information about income as required and had faith in Centrelink taking appropriate and necessary action. This conclusion is borne out by her acceptance of the reduction of Mr Gilvonio’s DSP in October 1998 due to changed circumstances (which were not specified by Centrelink), probably arising from her claim for Youth Allowance for her son Dante. After consideration of all of the material before it the Tribunal finds that Mrs Gilvonio with respect to the payment of FA did not knowingly fail or omit to comply with a provision of the Act. In arriving at this view, the Tribunal has taken into account that the respondent had issued notices, pursuant to section 132(1) of the Act requiring Mr Gilvonio to notify it within fourteen days of a number of matters including changes in income.
77. For the above reasons the Tribunal finds that in this matter, the first limb of section 1237AAD is satisfied.
78. With respect to special circumstances, the Tribunal notes that although special circumstances are not defined in the Act, the approach to be taken in interpretation and application of the discretionary provisions of the Act have been dealt with by the Tribunal and the Federal Court in numerous cases. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 it was said:
“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.”
79. This decision was generally affirmed on appeal by the Full Court of the Federal Court of Australia in Beadle v Director-General of Social Security (1985) 7 ALD 670, where it was said:
“the phrase ‘special circumstances’, although lacking precision, is sufficiently understood in our view not to require judicial gloss.”
80. Furthermore the Tribunal is mindful that all of the circumstances in a particular case must be considered and the Tribunal should adopt a flexible response to such circumstances bearing in mind the need to consider community interest in the recover of public monies.
81. In this respect the Hon Justice French in Secretary, Department of Social Security v Hales (1998) 153 ALR 259 said:
“The evident purpose of section 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial constraint upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the Section a fetter upon its application which is not mandated by its words is to erode its useful purpose.”
82. Furthermore, to waive the debt under this provision, it must be more appropriate to waive rather than write off the debt. In these circumstances, Mrs Gilvonio is in receipt of income in excess of $45,000, and therefore can be said to have the capacity to repay the debt. In Re Secretary, Department of Social Security and McAvoy (AAT 11263, 26 September 1996) the Tribunal referred to the need to balance the competing interests in the burden of repayment for the individual over a period of time against the community interest in recovery of public moneys. Further, in Hales (supra), the Federal Court said:
“From time to time in the administration of social security benefits, overpayments occur. Sometimes these are the result of innocent non-compliance with the requirements of law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place. The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.”
83. The respondent submitted that, as a professional nurse in full time employment, Mrs Gilvonio has a continuing capacity to pay this debt.
84. With respect to financial hardship, on the evidence before the Tribunal, the Tribunal finds that the financial circumstances of the Gilvonio family cannot be said to constitute financial hardship. The Tribunal accepts Mrs Gilvonio’s evidence that the niceties of life are beyond the families resources, however, on her own evidence the family’s annual income is of the order of $60,000 per annum and the family is coping with every day living within this amount. The Tribunal is mindful that Mr Gilvonio has a back problem and that there are some concerns about his ability to continue as a warehouse assistant. However, he is undergoing further training and work experience as a refrigeration mechanic and there are prospects of employment in this field.
85. The Tribunal notes that in addition to Mrs Gilvonio’s heavy burden as family financial provider (and manager) at the relevant time and the confusion she had in her mind about Centrelink’s systems and methods of calculation, Mrs Gilvonio has experienced severe marital and family problems and distress as a result of shouldering the blame for the debt. In considering the weight to be given to the confusion Mrs Gilvonio (and Mr Gilvonio) had about Centrelink’s modus operandi and correspondence the Tribunal has accepted the comments made by Gusi Carpenter (social worker) with respect to the effects of significant language barriers, the applicants’ mistrust of interpreters, difficulties arising because of information and correspondence not being provided by the respondent in the Spanish language and concerns about Mr Gilvonio’s well being. In the light of Gusi Carpenter’s report and on the evidence before it the Tribunal is satisfied that, taken together, the problems and difficulties faced by Mrs Gilvonio and Mr Gilvonio, as set out above, are such that special circumstances apply.
86. In arriving at this conclusion, the Tribunal has taken into account the following, from Jonauskas (supra) which the respondent drew to the Tribunal’s attention:
“(79) I am not satisfied that Mr Jonauskas’ circumstances are special. Many people who are on the age pension suffer from ill health and have difficulties in managing their affairs because of it. Many have some degree of difficulty in reading letters whether because of lack of English or because of problems caused by ill health. This does not justify their being careless or reckless about the manner in which they manage their affairs. They may seek assistance from family members although they are not obliged to. There are avenues of assistance available to them and one of those is to telephone the department, and now Centrelink, for assistance and guidance as to a person’s obligations. People who have difficulties and have the capacity to understand any obligations that he might have known he was under but, by making no attempt to read the letter of 22 July 1997 (or subsequent letters) chose not to know about them. In view of this, I have concluded that there are no special circumstances making it desirable to waive the debt.”
87. In Jonauskas there was no suggestion that either Mr or Mrs Jonauskas had difficulties with the English language and the Tribunal in that matter found that Mr Jonauskas took no interest in the letter sent to him other than to look at the amount he would be paid; and that he was careless as to whether the letter contained information as to matters he was required to deal with. These circumstances are quite different to those before this Tribunal where the problem is rooted in language and cultural difficulties to the point where there is incapacity to understand obligations. The Tribunal is satisfied that neither Mr Gilvonio or Mrs Gilvonio were “careless or reckless” in attempting to deal with Centrelink matters. As such the Tribunal has found the above passage from Jonauskas of little assistance in determining this matter.
88. The Tribunal has also taken in account the fact that Centrelink has exacerbated the situation by not only wrongly applying the SSAT’s decision to recover part of the debt owing by Mr Gilvonio, deleting the whole of the debt, but also, on Mrs Gilvonio’s evidence, when pressed by her because of the apparent error, telling her to forget about it. Furthermore, on Mrs Gilvonio’s evidence, a refund of $800 for monies already paid by them was sent to their bank account (a month or so before the deletion letter) without explanation. The Tribunal is therefore satisfied that the whole of the debt due to the Commonwealth, in relation to the overpayment of DSP to Mr Gilvonio, in the amount of $5,953.39 should be waived. In so determining the Tribunal is satisfied that it is more appropriate to waive rather than write-off the debt.
89. Dealing then with the debt due to the Commonwealth by Mrs Gilvonio for overpayment of Family Allowance.
90. For the reasons given above, the Tribunal is satisfied that the debt is not attributable solely to an administrative error made by the Commonwealth and as such waiver under section 1237A is not appropriate.
91. As has already been indicated there are special circumstances in this matter with respect to language difficulties, health difficulties, lack of comprehension of Centrelink modus operandi and correspondence and the heavy burden being taken by Mrs Gilvonio with respect to provision and management of family financial matters and affairs.
92. In this matter consideration needs to be given to Mrs Gilvonio’s knowledge of the need to report pay details regularly when she was working as a casual employee and whether this knowledge was such that she knew benefits paid were related to income and furthermore that regular returns needed to be made to Centrelink about pay levels.
93. The Tribunal accepts Mrs Gilvonio’s evidence that when she engaged in full time work and told Centrelink about this, including her level of remuneration, that was a different situation to casual work where time at work (and pay) varied and Centrelink sent out forms regarding information to be provided about pay every twelve weeks or so. The Tribunal also accepts Mrs Gilvonio’s evidence that she did provide to Centrelink details of taxable income at the end of each calendar year (although no relevant records of this are available) and that she thought she had done “the right thing” in this regard. With respect to the provision of interpreters, as has already been indicated, the Tribunal accepts the statements made by Gusi Carpenter (social worker) and the oral evidence of Mrs Gilvonio such that the Tribunal is satisfied that the failure to use available interpreters has a strong degree of specialness.
94. For the reasons given above the Tribunal, on balance, is satisfied that the circumstances pertaining to the debt due to the Commonwealth for overpayment of FA, are, pursuant to section 1237AAD, special circumstances, and, it being more appropriate to waive rather than write-off the debt, determines that the whole of the debt of $3,364.30 should be waived.
95. Finally the question of waiving or otherwise of the FTB debt of $1,592.09 needs to be considered.
96. Waiver of this debt, pursuant to section 97 of the FAA Act requires, under subsection (2)(b), that the debtor would suffer severe financial hardship if the debt were not waived. For the reasons given above, the Tribunal is satisfied that Mrs Gilvonio would not suffer severe financial hardship if the debt were not waived and hence section 97 has no application in this matter.
97. With respect to special circumstances, the provisions of the FAA Act are identical to those in the Act, as set out above.
98. For the reasons given above the Tribunal is satisfied that there are special circumstances (other than financial hardship alone) in this matter and as such subsection (A)(1) and (b) of section 101 are satisfied.
99. This then leaves the question as to whether Mrs Gilvonio knowingly failed or omitted to comply with the provisions of family assistance law.
100. The FTB overpayment has three parts, namely:
§ Payment at the incorrect rate until 6 March 2001 because of Mr Gilvonio not being entitled to DSP;
§ An error by Centrelink in wrongly recording the estimate of income provided by Mrs Gilvonio on 7 March 2001 resulting in an incorrect payment; and
§ An overpayment for Mrs Gilvonio’s son Michael, who turned sixteen in September 2000 and was granted YAL from 27 September 2000, whilst Mrs Gilvonio continued to receive FTB.
101. Dealing with each of these in turn.
102. The payment of FTB from 1 July 2000 to 6 March 2001 can be seen as a continuation of the debt of FA and, for the reasons already given, the Tribunal is satisfied that this portion of the debt does not arise from Mrs Gilvonio knowingly failing or omitting to comply with a provision of family assistance law. It follows that the Tribunal is satisfied that this part of the debt should be waived.
103. With respect to the error made by Centrelink, the Tribunal finds that Mrs Gilvonio was informed of the incorrect income amounts in advices sent to her on 14 March 2001 and 5 April 2001 and that Mrs Gilvonio did not notify Centrelink that the income amounts were incorrect. The Tribunal is satisfied on balance that Mrs Gilvonio became aware of the debt of FA in March 2001 and that at this stage and thereafter she had sufficient awareness and knowledge about keeping Centrelink correctly informed and her language skills have improved to the point such that she should have notified Centrelink about the errors.
104. The Tribunal therefore finds that, with respect to this part of the debt, section 101(a)(ii) is not satisfied and it follows that waiver under section 101 of this part of the debt is not appropriate.
105. With respect to the overpayment of FTB for Michael, the Tribunal, for the reasons given above is of the view that Mrs Gilvonio should have been in a position to correct the errors upon receipt of Centrelink’s letter of 6 March 2001 and as such any payments received after this date were not received in good faith. In arriving at this conclusion the Tribunal has followed the reasoning set out by his Honour Justice French in Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287 where his Honour said:
“As Finn J observed in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (supra) at 130, the section, then s 289 of the Act, asks that a quite specific question be addressed, namely was the payout received in good faith. Its sole concern is with whether a particular state of affairs exists at the time that the payment is received. Accepting correctly, in my respectful view, the protean character of the term ‘good faith’, His Honour identified it as ‘an essentially knowledge or notice idea in both statutory and common law contexts involving property dealings…’.. Nevertheless it can vary significantly given the purpose it is intended to serve. In one context it may focus inquiry upon a person’s reasons for acting and in another, to a person’s state of knowledge when a particular event occurs. His Honour said, at 130:
‘For my own part, I consider the burden of the formula in the section 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.’
I do not take what his Honour said in that case as supporting the proposition that a person can be found to be receiving payments other than in good faith simply by reason of the fact that there are facts in existence which are known to the recipient sufficient to negative the recipient’s entitlement. In my opinion that is not a sufficient criterion. Knowledge of relevant facts is not enough to generate reason to know of the lack of entitlement.
The criterion of receipt in good faith may be characterised as a positive one as counsel for the respondent submitted. That is not to say that a recipient of a mistaken payment must prove that he or she has considered the entitlement to the money and positively concluded that there is an entitlement. There is no question of an onus here to be met by the recipient who claims benefit of the mandatory waiver. Nor is there some twilight zone between good faith and want of good faith. A waiver can only, in my opinion, be declined where there has been a receipt, without good faith, of moneys mistakenly paid. This accords with the general approach taken by Finn J whose construction of the provision is related to the criteria for want of good faith.
Consistently with what his Honour said in the Prince case, want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non-entitlement in the mind of some imaginary recipient. That proposition is quite consistent with the view that the existence of such facts may support an inference that the recipient disbelieved or doubted or was suspicious about his or her entitlement. ‘Reason to know’ as Finn J used that term in Prince does not necessarily import a criterion of imputed as distinct from actual want of good faith as I have described it.”
106. Following the Tribunal’s findings above, the Tribunal is satisfied that that portion of the FTB debt due to the Commonwealth for overpayments during the period 1 July 2000 to 6 March 2001 should be waived, however, the debt during the period 7 March 2001 to 30 June 2001 remains a debt due to the Commonwealth by Mrs Gilvonio.
107. In summary:
In relation to matter number Q2002/613:
§the Tribunal affirms that part of the decision that determined the amount of $5,953.39 is a debt due to the Commonwealth by Dante Gilvonio; and
§the Tribunal sets aside that part of the decision waiving the right of the Commonwealth to recover that part of the debt which arises in the period 7 July 1998 to 23 October 1998 and in substitution therefore determines to waive the right of the Commonwealth to recover all of the debt of $5,953.39 for the period 9 July 1998 to 27 February 2001.
In relation to matter number Q2002/614:
§With respect to the decision under review regarding overpayment of Family Allowance:
² the Tribunal affirms that part of the decision that determined that the amount of $3,364.30 is a debt due to the Commonwealth by Mrs Gilvonio for the period 1 July 1998 to 30 June 2000; and
² the Tribunal sets aside that part of the decision to recover an overpayment of Family Allowance in the amount of $3,364.30 for the period 1 July 1998 to 30 June 2000 and in substitution therefor determines to waive the right of the Commonwealth to recover all of the debt of $3,364.30.
§With respect to the decision under review about overpayment of FTB:
² the Tribunal affirms that part of the decision that determines that the amount of $2,592.09 is a debt due to the Commonwealth for the period 1 July 2000 to 30 June 2000; and
² the Tribunal varies that part of the decision to recover an overpayment of Family Tax Benefit in the amount of $2,592.09 for the period 1 July 2000 to 30 June 2001 such that the Tribunal determines to waive the right of the Commonwealth to recover that part of the debt which arises in the period 1 July 2000 to 7 March 2001, with adjustment as appropriate pursuant to the automatic waiver provisions of the Family Assistance Estimates Tolerance (Transitional) Determination 2001.
I certify that the 107 preceding paragraphs are a true copy of the reasons for the decision herein of Mr I R Way, Member
Signed: .......................................................................................
AssociateDate of Hearing 13 January 2003
Date of Decision 14 February 2003The Applicants Appeared in Person
Solicitor for the Respondent Mr T Ffrench, Departmental Advocate.
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