Gorman-Ewing and Secretary, Department of Social Services (Social services second review)

[2023] AATA 370

Gorman-Ewing and Secretary, Department of Social Services (Social services second review) [2023] AATA 370 (13 March 2023)

Appid: Gorman-Ewing and Secretary, Department of Social Services

Mattertype:    Social services second review

Division:GENERAL DIVISION

File Number:2020/5832          

Re:Emily Gorman-Ewing  

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

Decision

Tribunal:Member D Mitchell

Date:13 March 2023

Place:Brisbane

The Tribunal sets aside the decision under review and in substitution decides that:

(a)the Applicant was overpaid rent assistance of $20,432.94 for the period 8 April 2013 to 19 April 2019;

(b)the amount overpaid is a debt owed to the Commonwealth; and

(c)recovery of the debt is waived in full pursuant to section 1237AAD of the Social Security Act 1991 (Cth).

............................[SGD]..............................

Member D Mitchell

Catchwords

SOCIAL SECURITY – rent assistance – overpayment – where ceased paying private rent – where not appropriate to write off – where no sole administrative error – where special circumstances established – where Respondent concede the application – decision under review set aside and substituted

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)

Cases

Boscolo v Secretary, Department of Social Security [1999] FCA 106; (1999) 90 FCR 531

Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435

Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693; [2007] AATA 1114

Groth v Secretary, Department of Social Security  (1995) 40 ALD 541; [1995] FCA 1708

Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084

L v Department of Social Security [1981] AATA 57

Re Anderson and Secretary, Department of Families and Community Services (2002) 69 ALD 494

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Ivovic and Director-General of Social Services (1981) 3 ALN N95; [1981] AATA 57

Re Lumsden and Secretary Department of Social Security [1986] AATA 228

Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553; [2001] AATA 72

Re Stubbs and Secretary Department of Families Community Services [2003] AATA 729

Secretary, Department of Social Security v Hales [1998] FCA 219

Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639

Sekhon v Secretary, Department of Family and Community Services (2003) 76 ALD 105; [2003] FCAFC 190

Ward and Secretary, Department of Families and Community Services [2000] AATA 212

REASONS FOR DECISION

Member D Mitchell

13 March 2023

Introduction

1. The decision under review is the decision of the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal dated 5 August 2020.[1] On that date, the SSCSD affirmed the Respondent’s decision to raise and recover a rent assistance debt of $20,432.94 for the period 8 April 2013 to 19 April 2019 (the debt period).[2]

   [1]     Exhibit 1, T Documents, T2, pages 7-22, Decision of the SSCSD.

   [2]     Exhibit 1, T Documents, T2, pages 7-22, Decision of the SSCSD.

2. Ms Emily Gorman-Ewing (the Applicant) sought review of that decision by this Tribunal by way of an application dated 28 October 2020.[3]

   [3]     Exhibit 1, T Documents, T1, pages 1-6, Application for Review. An extension of time to make the application was granted by the Tribunal on 13 October 2020.

   Background

3. The Applicant’s mother was both her representative for these proceedings and her nominee for Centrelink purposes. 

4. On 22 February 2013, the Applicant provided the Respondent with a rent certificate for her accommodation that provided that she started living at the notified address on

   
   

   14 October 2011 and was paying private rent of $170 per week from 5 February 2013.[4] The General Tenancy Agreement stated the term of the agreement was a fixed term starting on 5 February 2013 and ending on 4 February 2014 with an ability to be extended.[5]

   [4]     Exhibit 1, T Documents, T5, pages 56-66, Rent Certificate and Tenancy Agreement.

   [5]     Exhibit 1, T Documents, T5, pages 56-66, Rent Certificate and Tenancy Agreement.

5. The Applicant’s Centrelink record was accordingly updated on the same day.

6. Upon enquiries made by the Respondent, it was discovered that the Applicant resided in that particular rental address from 2 April 2012 to 7 April 2013.

7. Consequently, the Respondent determined that the Applicant had been overpaid rent assistance in the period 8 April 2013 to 19 April 2019 and decided to raise and recover a debt of $20,423.94.

8. Before, during and after the debt period, the Tribunal understands that the Applicant was in receipt of the disability support pension (other than during periods of payment suspension).

9. The evidence before the Tribunal reflects that the Applicant’s mother was her nominee for Centrelink purposes and was responsible for her reporting obligations. The evidence before the Tribunal also reflects the extreme difficulties the Applicant and her mother both had during the debt period, investigatory period and to date as a result of their respective medical conditions.

10. To that end the Applicant was assisted by Ms Abby Cone, solicitor from Townsville Community Centre.

11. As a result of the Tribunal process, the Respondent wrote to the Tribunal on 25 July 2022, advising that it conceded the application and considered that it was not appropriate to invite the Applicant to sign terms of agreement to resolve the application pursuant to section 42C of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) given the evidence before the Tribunal regarding the Applicant’s lack of capacity. The Respondent requested that the Tribunal proceed to make a decision pursuant to section 43 of the AAT Act.[6]

    [6]     Exhibit 3, Respondent’s letter dated 25 July 2022, pages 2-3, paragraphs 3.1-3.4.

12. Ms Cone advised the Tribunal by email dated 6 September 2022 that she had explained the Respondent’s letter of 25 July 2022 to the Applicant and her mother and that they had instructed that they were happy with the position proposed in that letter.[7]

    [7]     Exhibit 4, Email from Ms Cone dated 6 September 2022.

13. Consequently, the Tribunal interpreted the party’s correspondence of 25 July 2022 and

    
    

    6 September 2022 as a request and agreement for the matter to be considered based on the evidence filed. The Tribunal considered that the matter could be adequately determined in the absence of the parties and agreed to review the reviewable decision in accordance with section 34J of the AAT Act.[8] As such, a hearing was not conducted in this matter. The Tribunal’s decision has been reached “on the papers” having considered the documents filed by the parties.

    [8]     The Tribunal sought confirmation from the parties on 1 February 2023 of its understanding and asked that they advise the Tribunal as a matter of urgency – no concerns were raised.

14. The Tribunal admitted into evidence and considered the following:

    ·Exhibit 1, T Documents – Section 37 T-Documents.

    ·Exhibit 2, Documents filed by the Applicant on 4 August 2021.

    ·Exhibit 3, Respondent’s letter dated 25 July 2022.

    ·Exhibit 4, Email from Ms Cone dated 6 September 2022.

15. The Respondent’s concession of the application has the effect of the recovery of the overpayment of rent assistance found to be a debt during the debt period owed by the Applicant to the Commonwealth is no longer being contested. Given the circumstances of this application and in considering whether it is appropriate for the Tribunal to make a decision in accordance with the Respondent’s concession it does not consider it necessary to outline in full the evidence before it.

16. It is important from the outset to make it clear that the Tribunal in no way makes any particular finding with regards to the Applicant’s or her mother’s conduct throughout the debt period or to the time leading up to this to decision, other than to find that they did not knowingly make  false statements or representations or knowingly fail or omit to comply with a provision of the Social Security Act 1991 (Cth) or the Social Security (Administration) Act 1999 (Cth). Rather, the Tribunal acknowledges the difficulties and limitations of the Applicant and the difficulties faced by her mother, whose dedication to her daughters and caring for others were abundantly clear.

    Issues

17. The issues before the Tribunal are:

    1.Whether the Applicant was paid more than her correct amount of rent assistance during the debt period;

    2.If so, whether any such overpayment constitutes a debt to the Commonwealth; and

    3.If so, whether the debt is recoverable in part or in full?

    consideration

18. The law in relation to the payment of rent assistance and recovery of social security debts owed to the Commonwealth is found in the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (Administration Act).

19. The Tribunal must consider whether a rent assistance debt exists for the debt period and if so, whether the debt should be recovered in part or in full.

    Did a debt exist?

    How is the rate of rent assistance calculated?

20. A calculation of a person’s rate of disability support pension includes the consideration of whether they qualify for rent assistance.[9]

    [9] See sections 117, 1064 and 1070A of the Act.

21. Part 3.7 of the Act contains the provisions for rent assistance. Section 1070B of the Act outlines that a person qualifies for rent assistance if they satisfy the common requirements set out in section 1070C of the Act and any specific requirements applicable to their social security payments.

22. Section 1070C of the Act sets out the common requirements to be eligible to receive rent assistance as follows:

    (a)The person is not an aged care resident and is not taken to be an aged care resident for the purposes of the rate calculator concerned; and

    (b)The person is not an ineligible homeowner; and

    (c)The person pays, or is liable to pay, rent, other than government rent, in respect of a period in respect of premises in Australia; and

    (d)The person’s fortnightly rent is more than the rent threshold amount.

    Did a debt arise?

23. Section 1223(1) of the Act provides that if a person receives a payment that they were not entitled to for any reason, 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.

24. The obligation is on the payment recipient to report any changes in their circumstances, which includes their earnings.[10] This is set out in most letters sent by Centrelink to the Applicant pursuant to section 68 of the Administration Act. Section 74 of the Administration Act provides that it is an offence to fail to comply with a notice given under section 68.

    [10]    Section 66A of the Administration Act.

25. Section 100 of the Administration Act deals with circumstances where a person, who is receiving a social security payment, is given a notice under section 68(2) of the Administration Act requiring them to report a change in circumstances within a specified time. If the change occurs but the person does not inform Centrelink within the notification period in accordance with the notice and the person’s rate of social security payment changes, the social security payment becomes payable to the person at the reduced rate on the day on which the change of circumstances occurred.

26. While the Tribunal understands that during the debt period, the Applicant and her mother were experiencing medical conditions and treatments that affected their capacity to interact with the Respondent, how an overpayment of a social security benefit occurs is irrelevant in determining whether a debt is owed to the Commonwealth exists pursuant to section 1223(1) of the Act. The Act clearly sets out how the rate of rent assistance is to be calculated and incorporated in the payment of the disability support pension payment.

27. The Applicant acknowledges that she was not in rental accommodation during the debt period. There is no evidence before the Tribunal that calls into question the calculation of the debt for the debt period.

28. Having reviewed the evidence before it, the Tribunal finds that the Applicant received more than her entitlement to rent assistance during the debt period. Further, having considered the debt calculation and the supporting evidence provided by the Respondent and in the absence of evidence to the contrary, the Tribunal accepts the debt calculation submitted by the Respondent.

29. As such, the Tribunal finds that the Applicant has a rent assistance debt in relation to the debt period of $20,432.94, which constitutes a debt owed to the Commonwealth.

    Is the rent assistance debt recoverable?

30. As the Tribunal has found that a rent assistance debt in relation to the debt period exists, it must determine whether the debt must be repaid.

31. It is generally expected that debts to the Commonwealth resulting from overpayments are recovered. This proposition was expressed by French J in relation to debt recovery in Secretary, Department of Social Security v Hales [1998] FCA 219 as:

    The taxpayer is entitled to expect that in the ordinary course money paid to people that they are not entitled to received will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned.

32. However, there are circumstances where the recovery of debts is either put on hold for a period of time (written off) or is no longer pursued (waived). Relevant to the Applicant’s rent assistance debt, the Respondent may write off, or waive, her rent assistance debt if the requirements set out in sections 1236, 1237A or 1237AAD of the Act are met.

    Should the Applicant’s rent assistance debt be written off pursuant to section 1236 of the Act?

33. Section 1236 of the Act applies in relation to whether the Applicant’s rent assistance debt for the debt period should be written off.

34. Section 1236(1) of the Act provides that subject to section 1236(1A), the Respondent may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise.

35. Section 1236(1A) of the Act allows the Respondent to decide to 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)it is not cost effective for the Commonwealth to take action to recover the debt.

36. Section 1236(1B) of the Act provides that for the purposes of section 1236(1A)(a), a debt is taken to be irrecoverable at law if, and only if:

    (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.

37. Section 1236(1C) of the Act provides that for the purposes of section 1236(1A)(b), if a debt is recoverable by means of:

    (a)deductions from the debtor’s social security payment; or

    (b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

    (c)setting off under section 84A of that Act;

    the debtor is taken to have a capacity to repay the debt unless recovery by those
    means would result in the debtor being in severe financial hardship.

38. The term severe financial hardship is not defined in the Act, however, has been considered by the Tribunal in a number of cases.

39. In Re Lumsden and Secretary Department of Social Security [1986] AATA 228, the Tribunal considered that for financial hardship to be established, a person’s entire financial position would need to be materially less than the current rate of pension.

40. In Re Stubbs and Secretary Department of Families Community Services [2003] AATA 729, the Tribunal remarked at [20] that:

    …Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature ….

41. In L v Department of Social Security [1981] AATA 57, the Tribunal stated at [66]:

    In summary, I consider that matters relating to the personal financial hardship of the individual are always relevant in any decision as to write off under subsection 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation ….

42. The evidence before the Tribunal is that the Applicant is in receipt of fortnightly payments of disability support payment. Further, the Tribunal has found that the Applicant’s rent assistance debt for the debt period exists.

43. In the absence of evidence to the contrary, the Tribunal is satisfied that the Applicant’s rent assistance debt for the debt period is not irrecoverable at law, that the Applicant’s whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt. As such, the Tribunal must further consider whether the Applicant has capacity to repay the debts.

44. There is no evidence before the Tribunal in relation to the Applicant’s present financial circumstances. As such, it is not in a position to make a finding that a requirement to repay the debts by way of a deduction from her disability support payments or by way of a repayment plan would cause severe financial hardship.

45. Consequently, the Tribunal finds that the Applicant’s rent assistance debt for the debt period cannot be written off pursuant to section 1236(1) of the Act.

    Should the Applicant’s rent assistance debt be waived due to sole administrative error pursuant to section 1237A of the Act?

46. Section 1237A of the Act applies in relation to whether the Applicant’s rent assistance debt for the debt period should be waived due to a sole administrative error having been made by the Respondent.

47. Section 1237A of the Act provides that the Respondent 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.

48. Selway J, in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at paragraph [35] stated:

    The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.

49. Relevantly, in Ward and Secretary, Department of Families and Community Services [2000] AATA 212, Deputy President Forgie held at [47]:

    This means that the Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor.

50. Having reviewed the evidence before it, making reference to the fulsome summary provided in the SSCSD decision by Member Bradley, the Tribunal finds that the Applicant’s rent assistance debt arising during the debt period resulted from her failure to accurately report her living arrangements and as such, did not result from an administrative error, let alone a sole administrative error.

1. Consequently, the Tribunal finds that the Applicant’s rent assistance debt cannot be waived pursuant to section 1237A of the Act.

   Should the Applicant’s rent assistance debt be waived due to special circumstances pursuant to sections 1237AAD of the Act?

2. Section 1237AAD of the Act applies in relation to whether the Applicant’s rent assistance debt for the debt period should be waived due to the presence of special circumstances.

3. Section 1237AAD of the Act provides that the Respondent may waive the right to recover all or part of a debt if they are satisfied that:

   (a)  the debt did not result wholly or partly from the debtor or another person knowingly

   (i)   making a false statement or a false representation; or

   (ii)  failing or omitting to comply with a provision of this Act, the Administration  
    Act or the 1947 Act; 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.

4. The Act does not provide a definition of “knowingly”, however it has been discussed in numerous Tribunal decisions. In Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, it was stated at [48]:

   There is nothing in section 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.

5. In Re Anderson and Secretary, Department of Families and Community Services (2002) 69 ALD 494, the Tribunal stated at [27]:

   … It is open for the Tribunal to infer that the applicant has actual knowledge of his obligations under the Act where there are opportunities for that knowledge to be gained and where there are no obstacles to him acquiring that knowledge. In this case, the applicant has had the opportunity to gain an understanding of his obligations under the Act through the provision of advice letters to him from the respondent. The Tribunal is not aware of any obstacles that would prevent Mr Anderson from understanding those letters and gaining that knowledge.

6. In Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, Deputy President Forgie referred to her decision in Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72 at [74]:

   … I concluded that 'knowingly' means actually knowing as opposed to the other two of the three degrees of knowledge. The first of the other two sorts is the sort of knowledge that comes from deliberately refraining to make enquiries because the enquiries will lead to answers that are not desired by the enquirer. The second is constructive knowledge in the sense that the person ought to have known the specific information or had the means of knowledge.

7. In the evidence before the Tribunal, the Applicant indicated that she was not aware that she was receiving rent assistance during the debt period and thought she had communicated her correct address.

8. Given the evidence before it, in particular the medical evidence, the Tribunal finds that the Applicant did not knowingly make a false statement or knowingly fail to comply with her reporting obligations during the debt period. The Tribunal notes that given the Respondent’s concession in this application, this point is not in contention.

9. In considering whether special circumstances exist (other than financial hardship alone) that make it desirable to waive the Applicant’s rent assistance debt for the debt period, the Tribunal notes that the Act does not provide a definition of special circumstances. The general proposition established by relevant Federal Court decisions, however, makes it clear that special means something different from the usual or ordinary.[11]

   [11]   Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545per Kiefel J; Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639, at [51]; Boscolo v Secretary, Dept of Social Security[1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs[2010] FCA 1084, at [37].

10. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal held at paragraph 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 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.

11. In Re Ivovic and Director-General of Social Services [1981] AATA 57, the Tribunal stated:

    Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount to “special circumstances” …., the use of the word “special” is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case … In the exercise of the discretion …., the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the …. Act.

12. The Tribunal is cognisant that the bar to establish special circumstance for the purposes of section 1237AAD of the Act is high. It is not uncommon for social security recipients to be experiencing financial hardship and physical and mental health conditions, as such the presence of these factors alone do not usually amount to a finding that special circumstances exist.

13. Each matter must, however, be considered on its own merits, based on the evidence before the Tribunal. The evidence before the Tribunal indicates that the Applicant’s mental health and capacity to engage with the Respondent combined with her mother’s physical and mental health conditions together with her personal circumstances with regard to her family and carer situations (as the Applicant’s nominee for Centrelink purposes) are more severe that of other social security recipients who have incurred debts.[12]

    [12] The Tribunal has not outlined in detail the Applicant’s or her mother’s circumstances as given the nature of this matter and the Respondent’s concession and request that the debts in questions be waived as a result of special circumstances. To do so would only cause unnecessary stress and humiliation for the Applicant and would not have been disclosed had the application resolved pursuant to a decision made in accordance with section 42C of the AAT Act.

14. In considering the Applicant’s and her mother’s circumstances as a whole and the impact they have had and continue to have on their capacity to engage with the Respondent in a fulsome manner and in the proceedings before the Tribunal, the Tribunal considers that her circumstances are unusual, uncommon and exceptional when compared to other social security recipients who have incurred debts and that an injustice would arise should she be required to repay the debt.

15. As such, based on the evidence before it, the Tribunal is satisfied that, for the purposes of section 1237AAD of the Act, special circumstances exist that make it desirable to waive the Applicant’s rent assistance debt in relation to the debt period and that it is more appropriate to waive the debt rather than write it off.

16. Consequently, the Tribunal finds that the Applicant’s rent assistance debt in relation to the debt period are to be waived pursuant to section 1237AAD of the Act.

    DECISION

17. For the reasons outlined above, and consistently with the submissions of the parties, the Tribunal sets aside the decision under review and in substitution decides that:

    (a)

    the Applicant was overpaid Rent Assistance of $20,432.94 for the period

    
    

    8 April 2013 to 19 April 2019;

    (b)the amount overpaid is a debt owed to the Commonwealth; and

    (c)recovery of the debt is waived in full pursuant to section 1237AAD of the Social Security Act 1991 (Cth).

I certify that the preceding
67 (sixty-seven) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell

..................................[SGD].....................................

Associate

Dated: 13 March 2023

Hearing on the Papers:

3 March 2023

Applicant’s representative:

Ms Sharon Gorman

Assisted by:
Ms Abby Cone
Townsville Community Law

Solicitors for the Respondent:

Ms Gillian Gehrke
Sparke Helmore Lawyers