Goubran and Secretary, Department of Family and Community Service S

[2003] AATA 558

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 558

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No.  N2002/1181

)

GENERAL ADMINISTRATIVE DIVISION		)
Re		SAMI GOUBRAN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date16 June 2003

PlaceSydney

Decision The Tribunal sets aside the decision under review and the entire debt is     waived.  The Tribunal remits the matter to the Respondent to forthwith repay the amount of the debt withheld from the Applicant’s and Mrs Goubran’s entitlements.

(Sgd) Ms N Isenberg
  ..............................................
  Member

CATCHWORDS

SOCIAL SECURITY - Disability Support Pension – overpayment – whether excess payments received by Applicant in good faith – whether failure by Applicant’s spouse to notify Centrelink – whether there was administrative error - special circumstances to waive debt.

LEGISLATION

Social Security Act 1991 – ss. 1223(1), 1223(1AB), 1237A(1), 1237AAD

CASE LAW

Re Mallows and Secretary, Department of Social Security (1997) 50 ALD 265

Re Prince and Secretary, Department of Employment, Education, Training and Youth Affairs (1997) 45 ALD 680

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186

Re Secretary, Department of Social Security and Neuendorf (AAT 13427, 4 November 1998)

Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424

Re: Haggerty v Department of Education, Training and Youth Affairs (2001) 67 ALD 129

REASONS FOR DECISION

16 June 2003 Ms N Isenberg, Member

DECISION UNDER REVIEW

1.        The decision under review before the Administrative Appeals Tribunals (“the Tribunal") was the decision of the Respondent, the Secretary, Department of Family and Community Services dated 7 December 2001 to raise a debt in respect of alleged overpayment of disability support pension between 27 January 2001 and 5 October 2001.  The Authorised Review Officer reviewed the decision on 30 January 2002 and adjusted the period relevant to the decision and also reduced the amount claimed as a debt to $1,862.36.  The Applicant sought review of that decision and it was affirmed by the Social Security Appeals Tribunal (“the SSAT") on 12 June 2002.

BACKGROUND

2.        It was not in dispute that:

·     The Applicant had been in receipt of disability support pension for several years following a severe heart attack in 1994.

·     The Applicant’s disability support pension was affected by his wife’s income. 

·     Mrs Goubran was responsible for all the family’s finances.

·     An overpayment of $1862.36 to the Applicant had occurred in relation to the period 8 March 2001 to 5 October 2001.

ISSUE BEFORE THE TRIBUNAL

3.        Whether Mr Goubran owes a debt to the Respondent due to overpayment of disability support pension from 8 March 2001 to 5 October 2001, in the amount of $1862.36 and, if so, whether there is any basis for not recovering any part of it.

APPEARANCES

4.        A hearing was held before the Tribunal on 29 April 2003 at which the Applicant appeared without representation, but assisted by his wife, Mrs Mona Goubran.  The Respondent was represented by Marian Buckley, an advocate from the Centrelink Service Recovery Team.

EVIDENCE: Documents

5.        The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which the Tribunal took into evidence.

In addition, the following documents were tendered:

Exhibit	Description	Date
T1-T23	Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
A1	Letter from Centrelink to M. Goubran	12/11/1999
A2	Pensioner Security Account	15/09/2000 to 14/12/2000
A3	Payslip from Catholic Education Office to M. Goubran
A4	Streamline Express Account	16/11/2000 to 24/05/2001
A5	Application for Rental Subsidy
A6	Income Statement for Housing Authorities	18/06/2002
R1	Respondent's Statement of Facts and Contentions
R2	Centrelink computer printout – immediate rates notice
R3	Centrelink computer printout – display payments of PEN
R4	Centrelink computer printout – display payments of NSS

EVIDENCE: the Applicant

6.        The Applicant gave sworn evidence and was cross-examined on behalf of the Respondent.  Questions were also put to the Applicant by the Tribunal.

7.        The Applicant said he had been in receipt of disability support pension since about 1994, when he had a serious heart attack.  Twice since that time, he has been asked by Centrelink to attend for medical examination to ensure continuity of his disability support pension.  He understands that he has to notify Centrelink if he undertakes any work.  Because he does not work, he has had no need to keep in touch with Centrelink. 

8.        His wife has been a part-time teacher for some years.  She manages all the family’s financial matters.  He does not look at bank statements.

EVIDENCE:  Mrs Goubran

9.        Mrs Goubran said that after her husband’s heart attack, he had several periods of hospitalisation and ultimately had to resign from his job as a fulltime teacher.  She was caring for him and when the money ran out, she went to Centrelink and ascertained that her husband was eligible for sickness benefits, and later for disability support pension, and she, for a carer’s allowance.  She took care of the claims because, in addition to his heart condition, her husband also had psychological problems.

10.      Eventually, she was able to leave him unsupervised and she was able to undertake some work.  In late 1998, she obtained casual work at Trinity College, although she may have worked only about one day that year.  During 1999, she again worked on a casual basis, being phoned up whenever work was available.  For the latter 3 terms of 2000, she was engaged on a regular ‘part-time’ basis for 2 days per week.  Sometimes, she would also be asked to work a third day as a ‘casual’ as well. 

11.      In 2001, she again worked on a casual basis, that is, as required.  It was difficult to anticipate what work would be available, especially during the beginning of the school year.  No work was available during school holidays.

12.      When she first started work in 1998/9, she did not know how to keep Centrelink informed of her work arrangements, but knew she was obliged to do so.  She would phone up and tell her contact at Centrelink every time she was offered work.  Her pay was erratic and it was also unpredictable when exactly she would actually get paid for her work.  Nonetheless, she would phone and advise Centrelink of her work arrangements.

13.      In 2000, because she was on a regular income, she continued to phone her contact each fortnight to advise of her work arrangements.  When she phoned, her contact would advise her when to phone next.  She was adamant that she would always do this and this evidence was uncontradicted.

14.      In about mid-December 2000, at the end of the school term when she was no longer working, she received a letter from Centrelink to the effect that she would no longer receive a Carer’s Allowance and payments ceased.  She had an interview on 2 January 2001 and was told to apply for Newstart Allowance instead.  She produced a note of that interview where her then contact (‘Annie’) wrote the amount she could expect to receive (Exhibit A2).

15.      She was worried that there would be another problem brought about by the transfer of allowance to Newstart Allowance, so returned to her previous contact for advice.  She was told that now she was in receipt of Newstart Allowance she would be required to fill out a form fortnightly and that there was no need to phone through her work arrangements as she had previously done.

16.      In 2001, there were problems with continuity of payments, which she noticed when she checked her account (by phone) in order to pay bills.  Her payments were stopped and this occurred during a time when she was receiving no money because it was the school holidays.  More than 2 or 3 times, her forms were not processed and she received no payments until she made enquiries. 

17.      In 2002, there was a major problem.  Mrs Goubran was told that her income for a period was in excess of $3,000.00, whereas in fact she had been overseas during that time.  She and her husband were very distressed by such an obvious error and have no confidence in the information Centrelink provides.  She stated that she was ‘not a computer’, she ‘does her job’ and ‘they do their’s’ and that pension recipients are in the hands of Centrelink’s clerks as to what the appropriate payment is.  She had no idea how their various entitlements were, or are presently, calculated.

18.      She said that she knew that her husband’s entitlement would vary according to her income, but she never checked the account to see how much he had received.  Her only interest was whether there was enough in the account to pay the bills.

19.      A result of the present dispute with Centrelink is that there is now a dispute with the Department of Housing. Mrs Goubran has to provide information to that Department about their income twice a year. She was shown Exhibit R2 wherein that Department requested information was requested from Centrelink about income. She said what she received was in a sealed envelope which was conveyed to that Department. The advocate for the Respondent suggested this unlikely to be the case, but Mrs Goubran’s evidence was uncontradicted.

20.      She kept a diary throughout her work with the school.  Mrs Goubran estimated she earned about $200 per day as a casual.  She produced a pay slip from May 2002 which showed her gross daily rate at about $213.00 per day at a ‘step 9’ pay rate.  She said she had increased to that pay level but was not sure when this had occurred.  The advocate for the Respondent conceded that in 2001, Mrs Goubran’s pay was about $200.00 gross per day.

SUBMISSIONS: Applicant

21.      It was the position of the Applicant and his wife that ‘every cent’ of her earnings had been declared and that they had been honest ‘from beginning to end’.  It was Centrelink that had made a number of errors for which Mr and Mrs Goubran should not be blamed.  Initially, Centrelink had deducted $150.00 per fortnight from each of their entitlements to pay back the amount in dispute, although, with the intervention of Ms Buckley, this had been reduced to $20.00, and for this, they were grateful.  It was unclear if the entire amount had now been paid but it was agreed that it was likely that that was the case.

SUBMISSIONS: Respondent

22.      It was conceded that Centrelink had failed to transpose the information provided by Mrs Goubran in relation to her income into Mr Goubran’s disability support pension file.  This was the sole cause of the overpayment to the extent of the declared income.

23.      It was said, however, that the Applicant and his wife had not received the payments in good faith.  Mr Goubran had delegated his responsibilities to his wife who, it was submitted, knew she was obliged to provide information to Centrelink. She knew that her income affected her husband’s disability support pension and her own entitlements because they had been affected in the past.  She chose not to trouble herself with the way Centrelink had calculated their entitlements or even to look at bank statements. 

24.      The advocate for the Respondent referred the Tribunal to Re Mallows and Secretary, Department of Social Security (1997) 50 ALD 265 wherein the Tribunal considered the Applicant to have acted with ‘wilful blindness’.. In this regard, the advocate also drew the Tribunal’s attention to Re Prince and Secretary, Department of Employment, Education, Training and Youth Affairs (1997) 45 ALD 680.

25.      The advocate for the Respondent also submitted that Mrs Goubran had in fact understated her income and therefore, as to a portion of the amount overpaid, there was no administrative error solely attributable to Centrelink.  The amount by which her income was said to be underestimated, and the effect that this might have had on her husband’s disability support pension, had not been calculated.  In this regard, the advocate drew the Tribunal’s attention to the disparity in the amounts declared by Mrs Goubran (summarised at T14) and the earnings information provided by her employer (T15).

26. For completeness, the advocate for the Respondent submitted that if the Tribunal were to accept the Respondent’s position in relation to good faith, it would still be open to the Applicant to argue under Section 1237AAD of the Social Security Act 1991 (“the Act”) that the debt should be written off.  It was submitted that there were no special circumstances, such that it would be appropriate for the Tribunal to waive the debt.

FINDINGS

27.      In coming to the correct and preferable decision, the Tribunal took into account all the evidence, submissions, case law and relevant legislation.

28. The Applicant was overpaid disability support pension in the sum of $1862.36 and, as such, was a debt due to the Commonwealth pursuant to sections 1223(1) and 1223(1AB) of the Act.

29.      The issue for the Tribunal was whether the debt should be recovered or waived.

30.      In view of the submissions of the advocate for the Respondent, the first task for the Tribunal was to determine if the financial information provided by Mrs Goubran to Centrelink affected the totality of the amount to which the raised debt related. 

31.      Taking the information provided in T14, Mrs Goubran had advised Centrelink in her Newstart Allowance forms, as follows:

9 February 2001      193.00           La Salle College

23 February 2001    195.00           Trinity College

7 March 2001           400.00           Trinity College

4 May 2001              800.00           Trinity College

18 May 2001            1200.00         Trinity College

1 June 2001             1200.00        Trinity College

32.      Unfortunately, only one of the Newstart Allowance claim forms have survived, that provided by Mrs Goubran on 21 September 2001 in respect of the fortnight 8 September 2001 to 21 September 2001 (T11).  There, she advised as follows:

“Q.     What was the amount earned in the period before tax or other deductions? [Tribunal’s underlining]

Ans.     $800.00

Method of contact:     Telephone.”

33.      Centrelink’s records (Exhibit R4) show that in respect of that period a ‘stimulus’, that is, advice from Mrs Goubran, was received, and on 24 September 2001, she was paid $89.34 by way of Newstart Allowance for the period.  Other entries in Exhibit R4 suggest a pattern of ‘stimulus’ information followed within days of varying amounts (from $3.06 to $322.80) in payment of Newstart Allowance.  The amount of Newstart Allowance paid to her was affected by the ‘stimulus’ information. 

34.      It is therefore unclear at what stage, if at all, the information provided by Mrs Goubran’s employer was taken into account.  Furthermore, the Tribunal found it impossible to correlate the information.  For example, in relation to the information provided by Mrs Goubran in respect of the fortnight 8-21 September 2001, the employer had advised that it paid Mrs Goubran, to the effect:

“14 September 2001            $854.88 (gross)

28 September 2001             $1068.60 (gross)” 

35.      It was Mrs Goubran’s evidence, which the Tribunal accepts, that she was paid each fortnight she worked but that payment was not received until up to a fortnight later.  This was borne out by a comparison between the entries in T15 and the entries in her bank statement (Exhibit A4).

36.      From the employer’s information, the only conclusion which the Tribunal can reasonably reach is that in the fortnight ending 14 September 2001, Mrs Goubran worked some days and that in the fortnight ending 28 September 2001, she also worked some days, probably more than the previous fortnight as she was paid more. 

37.      Because these periods do not correspond with the Newstart Allowance reporting periods, it was unclear how information provided by an employer in this form could ever be of assistance in ascertaining what a Newstart Allowance applicant had ‘earned’ during the relevant period.  The employer’s information relates to payment, and this is not the criterion by which an applicant’s entitlement is assessed.

38.      The Applicant’s evidence was that she kept a diary of her work and had phoned her contacts on each occasion she had an offer of work.  When she went onto Newstart Allowance, she conscientiously filled out the forms.  The only example available shows that she recorded 4 days and that she said she had earned $800.00, an amount the advocate for the Respondent had conceded represented 4 days at that time. 

39.      The Tribunal prefers Mrs Goubran’s evidence as to her record keeping and advice to Centrelink to that relied on by Centrelink, namely the employer’s information as to her payments, received even later than disclosed, and for unidentified periods.  The Tribunal finds Mrs Goubran to have been a scrupulous record-keeper who had a history, on her evidence, of advising Centrelink of the changes to the family’s circumstances on each occasion she was offered work. 

40.      The Tribunal therefore finds that Mrs Goubran, on the balance of probabilities, had advised as to the whole of her earnings during the relevant period.  Consequently, the Tribunal finds that the whole of the amount overpaid to Mr Goubran was as a result solely of Centrelink’s administrative error in failing to transpose the information provided by Mrs Goubran into his file.

41. Having come to that view, the Tribunal turned to consider if the payment had been received by the Applicant in good faith, that is, the further criterion for waiving the debt where the debt has arisen solely due to administrative error, in accordance with Section 1237A(1) provides as follows:

“Administrative error
1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).”

42.      In Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186 Finn J said at 189:

“… 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.
… the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise.”

43.      The state of mind of Mr and Mrs Goubran at the time of receipt of the payments is therefore the Tribunal's main inquiry.  In Re Secretary, Department of Social Security and Neuendorf (AAT 13427, 4 November 1998) the Tribunal applied the decision in Prince (supra) by reference to the particular circumstances and considerations of the recipient in that case, that is, subjectively.

44.      In Mallows’s case (supra), to which the advocate for the Respondent had referred, it was found that there was a ‘degree of wilful blindness’.

45.      More recently, this theme was discussed in Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 Cooper J said at 435 to 436, as follows:

“… The issue of good faith is… to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.
A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists.”

46.      The Tribunal found Re: Haggerty v Department of Education, Training and Youth Affairs (2001) 67 ALD 129 to be particularly relevant, where French J (at 534) said:

“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.” [Tribunal’s underlining]

47.      Therefore, where there is a doubt or suspicion on the part of the recipient, coupled with some objective basis for that doubt or suspicion, there will be a want of good faith.  However, the mere existence of a fact that would raise a doubt or suspicion in an "imaginary recipient" will not necessarily impute a lack of good faith on the part of the recipient in a particular case.

48.      The Tribunal accepts that Mr Goubran had delegated the family’s financial management to his wife.  In those circumstances, the Tribunal considered it was Mrs Goubran’s state of mind that was relevant.  Her evidence was that their payments from Centrelink varied according to her earnings.  She did not look at bank statements as her only concern was whether there was enough money in the account to pay the bills.  Even if she had looked at her bank statements, such as Exhibit A4, they were only provided 6-monthly. In the Tribunal’s view, immediate reconciliation was unlikely.  Mr and Mrs Goubran had had some disquieting experiences where Centrelink had made errors, but unless there was no money in the account to pay bills, Mrs Goubran assumed Centrelink had accurately undertaken the calculations.  The Tribunal accepts that she was entitled to form that view.

49.      Against this evidence, the advocate for the Respondent had noted that Mrs Goubran had enquired about her husband’s payment on 12 February 2001, so was checking her husband’s payments.  Mrs Goubran, however, said that she would phone up to enquire when their funds were depleted and she was relying on payment to meet bills.  The timing of this enquiry, at the very beginning of the school year, is consistent with her evidence that she had not worked for some weeks and when there was very little work at the beginning of the school year for casuals. 

50.      The advocate for the Respondent had also relied on the fact that ‘immediate rate notices’ had been issued to the Department of Housing in May 2001.  It was contended that these contained information about Mr and Mrs Goubran’s Centrelink payments in the preceding 6 months.  No copy of the notice was provided to the Tribunal but it accepts that such information may be relevant to the Department of Housing and that Centrelink may from time to time provide such information. It was the Applicant’s evidence that the notice was given to her in a sealed envelope so she did not know what it contained.  Exhibit R2 suggests that a copy was faxed to the Department of Housing and the original posted to Mrs Goubran.  She denied that this had occurred, and in the absence of evidence to the contrary, the Tribunal accepts her account. 

51.      As to whether Mr and Mrs Goubran’s actions constituted receipt of the payment in good faith, the Tribunal considers that, as in Jazazievska (supra), neither the Applicant nor Mrs Goubran turned a "blind eye" to circumstances that raised doubt or that they failed to make reasonable enquiries where doubt existed.  It is possible that a person with fewer other concerns would have made further enquiries.  However, the decisions in Prince (supra) and Haggerty (supra) establish that it is the state of mind of the individual concerned at the relevant time that is to be considered and that the mere existence of a fact that would raise a doubt or suspicion in an "imaginary recipient" will not necessarily impute a lack of good faith on the part of the recipient in a particular case.

52. The Tribunal therefore concludes that the Applicant received the payments in good faith and it follows that, pursuant to section 1237A of the Act, the debt must be waived.

53. Having come to this view, it was not necessary for the Tribunal to consider the provisions of Section 1237AAD.

DECISION

54.      The Tribunal sets aside the decision under review and the entire debt is waived.  The Tribunal remits the matter to the Respondent to forthwith repay the amount of the debt withheld from the Applicant’s and Mrs Goubran’s entitlements.

I certify that the 54 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member.

Signed:  (Sgd) Kwai-Ling Wong                  .......................................................................................

Associate

Date/s of Hearing  29 April 2003

Date of Decision  17 June 2003

Representative for the Applicant    Self

Advocate for the Respondent        Ms M. Buckley