Graham and Secretary, Department of Family and Community Services
[2003] AATA 1082
•29 October 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1082
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2002/1397
GENERAL ADMINISTRATIVE DIVISION ) Re Daniel McMillan GRAHAM Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal P.J. Lindsay, Senior Member Date29 October 2003
PlaceSydney
Decision The decision of the Social Security Appeals Tribunal is set aside. In substitution, the Administrative Appeals Tribunal exercises the discretion in s.1237AAD of the Social Security Act 1991 to waive the right to recover all of the debt of $8,451.49. ...............................................
P. J. Lindsay
Senior Member
CATCHWORDS
Social Security – disability support pension – overpayment - whether debt should be waived in whole or in part – did debt arise from knowingly failing to comply with legislation - whether special circumstances – debt waived – decision set aside.
Social Security Act 1991, ss. 1223, 1236, 1237A and 1237AAD
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Family and Community Services v Hales (1998) 153 ALR 259
Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553
Re Secretary, Department of Family and Community Services and McKenzie [2003] AATA 267
REASONS FOR DECISION
29 October 2003 P.J. Lindsay, Senior Member 1. Daniel McMillan Graham (the applicant) has applied for a review of a decision made by the Social Security Appeals Tribunal (SSAT). Mr Graham had appealed to the SSAT against a decision by Centrelink to raise and recover a debt of $8,451.49 arising from the overpayment of disability support pension from 16 August 1999 to 13 March 2002. The SSAT on 12 August 2002 varied that decision by finding that, due to special circumstances the amount of the debt that arose prior to 8 October 1999 should be waived.
2.
At the hearing in Newcastle, Mr J McClintock, solicitor, appeared for Mr Graham and the Secretary to the Department of Family and Community Services, (the respondent) was represented by Ms M Buckley, an advocate from Centrelink. Mr Graham was the only witness called to give evidence. The Tribunal had before it the documents lodged under s.37 of the Administrative Appeals Tribunal Act 1975 and the exhibits tendered at the hearing.
BACKGROUND3. Mr Graham is 42 and lives in Morisset with his partner Ms Debbie Ann Glohe and their ten year old son. He has been receiving disability support pension since 1992. Although Mr Graham has not been employed since 1992, Ms Glohe has been working and this case concerns the failure by Mr Graham to disclose to Centrelink information regarding Ms Glohe’s employment income. A separate debt for $8,451.49 has been raised against Ms Glohe (T11).
issue
4. By reason of the SSAT’s decision, the debt to be recovered was reduced to $8,066.33. It was agreed by the parties that the only issue for the tribunal to decide was whether there are special circumstances that make it desirable to waive the debt in whole or in part.
5. The relevant provisions of the Social Security Act 1991 (the Act) are as follows:
Section 1223 Debts arising from lack of qualification, overpayment etc.
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
…
Section 1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
EVIDENCE6. A statement made by Mr Graham on 1 July 2003 was accepted in evidence (Exhibit A1). Mr Graham stated as follows:
…
I have received the disability support pension since 1992.
I had a chronic duodenal ulcer and since have had several operations to remove part of my stomach.
I am unable to read and write.
I am in a de facto relationship with Ms Debbie Glohe and I have a dependent child, Jessy Graham, born 6 June 1993.
Debbie commenced working at Coles in 1995.
Because of my literacy problems, I have always relied on Centrelink officers, and before that Department of Social Security staff, to fill in any forms I have had to complete in relation to my pension.
I went to the Centrelink office at Toronto at the beginning of September 1990 [sc. 1999]. I gave the Centrelink officer Debbie’s pay slips and proof of identity. He worked out what I should declare as Debbie’s income.
Because I had always done so in the past and had never had any problems, I relied on the Centrelink officer to complete the form correctly.
I have since found out that Debbie’s income was calculated at $309.00 per week. I don’t know how this figure was reached. I just gave the Centrelink officer Debbie’s pay slips.
The Centrelink officer told me that the pension would go up and down if Debbie’s income changed. He also said I didn’t have to do anything until the next assessment.
The Centrelink officer made a note of our meeting. I have been told that Centrelink no longer have the papers from that meeting, so they do not have a copy of the note.
The pension I received changed now and again. It would go to the bank and it would be $30 or so less and later it would go back to normal.
As a result of what the Centrelink officer told me I believed that I did not have to do anything else until Centrelink until [sic] the next asset and income assessment.
I received letters from Centrelink dated 10 September 1999, 24 September 1999 and 28 September 1999.
Up until recently, no one has read the back of any letter sent to me by Centrelink. I thought the statement on the back of the notices set out how much my income was from Centrelink.
I didn’t ask Debbie to read the letters because I knew what they would be about. I believed they were letting me know that Centrelink had changed my payment because of the information I had given them about Debbie’s income. I did not ask Debbie to read the letters for me because I believed she would just tell me the same as what the Centrelink officer told me.
I believed this the letters [sic] because of what the Centrelink officer had told me and because of the way things had worked in the past.
Debbie was also getting a Centrelink payment. I think it was a Wife Pension DSP or a carer’s pension.
Debbie also got letters from Centrelink in September 1999. She asked me about them because I had taken her pay slips and details in to Centrelink. I told her not to worry about them because they were just letting her know that Centrelink had made changes because of what I had told them. Debbie did not tell me that I was wrong.
I did not rely on Debbie to tell me about what was in the letters because I rely on people in authority like the Centrelink officer, especially if Debbie tells me something different. We only get into arguments otherwise.
Whatever Centrelink has asked me for, I have given them.
I thought Centrelink would make the adjustments when Debbie got pay rises but I did not know how they would work it out.
Up until recently, Centrelink has never asked me to bring a support person when I have gone to their meetings, even though they knew I could not read and write.
7. Prior to receiving disability support pension, Mr Graham was paid unemployment benefit. He said that he always followed the instructions received from the authorities and they would help him complete the relevant forms.
8. Ms Buckley asked the applicant whether he thought he would have to report to Centrelink any income he received. Mr Graham’s response was that he does not receive any income. He admitted that occasionally he has helped a friend who runs a garage. It provides him with the opportunity to feel useful and he does the work for company. Mr Graham referred to an interview at home some years ago with a Centrelink officer who was enquiring about his defacto relationship with Ms Glohe. He said that he told Centrelink whatever they wanted to know about it. He maintained that he still cooperates fully with Centrelink.
9. In September 1999, Mr Graham attended at the Toronto office of Centrelink. Mr Graham explained that he had gone into Centrelink on previous occasions to provide information about Ms Glohe’s income. This time he attended either because he received a phone call from Centrelink or he was following up a letter. There was a letter in the T documents from Centrelink dated 10 September 1999 informing him that his disability support pension had been suspended because he had not responded to a Centrelink income review. At the meeting he produced a number of Ms Glohe’s pay slips. His account of the discussion was that the Centrelink officer was going to examine the pay slips and then adjust his disability support pension if necessary. As Mr Graham indicated that he is unable to read, the Centrelink officer completed the relevant forms for him and advised him that he need not contact Centrelink again until Centrelink conducted a future income review. Centrelink staff had helped him with forms in the past. Mr Graham explained that he thought his disability support pension thereafter might go up or down depending on Ms Glohe’s income. In answer to Ms Buckley, the applicant said he did not know how frequently Centrelink conducted reviews. He said he did not know when the next review would be, he simply relied on the comment from the Centrelink interview in September 1999 that he did not have to undertake another review until requested.
10. Legal Aid, acting on behalf of Mr Graham, sought access to documents held by Centrelink relating to any income and asset review forms completed in 1999 and 2002. By letter dated 25 June 2003 (Exhibit A2) Centrelink replied that it was unable to locate any documents in respect of the 1999 income and asset review.
11. Mr Graham told the Tribunal that he would have given Centrelink Ms Glohe’s pay slips on previous occasions. He explained that he would have provided such information when Centrelink adjusted their combined income in June 1996 and in July 1998. He would have given that information in response to a letter from Centrelink asking for such information.
12. Generally, in relation to Centrelink correspondence, Mr Graham said he would ask Ms Glohe to read to him those letters that appeared not to be form letters. An example was the letter dated 10 September 1999 (T3) notifying him that his disability support pension was suspended until he completed the review form that Centrelink had sent. He thought the Centrelink letters dated 24 September 1999 (T4) and 28 September 1999 (T6), received not long after his interview at the Toronto office, were confirming what had been discussed. Each of those letters contained a section headed ‘Important Information’ requiring Mr Graham to tell Centrelink within fourteen days if his combined annual income increased above $11,440.74 (T4) or $16,068.74 (T6). The figure of $11,440.74 was based on Ms Glohe’s weekly income being $220.00, as was reported on 7 July 1998 (T11), and the figure of $16,068.74 was calculated from a weekly income of $309.00 (T11). On reassessment, Centrelink determined the applicant’s combined income to have been understated due to his failure to disclose Ms Glohe’s income from employment at Coles. For instance, in the 12 week period that covered the time of the interview in September 1999, the employment income was reassessed at $5,658.79, that is an average weekly income of $471.56.
13. Under cross-examination, Mr Graham denied that he had neglected to tell Centrelink about changes in their combined income. He said he did what he was asked to do. His evidence was that “I can only go on what Centrelink tell me.” He told the Tribunal he thought that Centrelink would be able to find out about Ms Glohe’s income from other sources. He would respond when the next review was required. When cross-examined about Ms Glohe’s pay slips for the week ending 7 January 2001 (T9-31) Mr Graham’s evidence was that the pay slip information demonstrated that Centrelink was able to obtain such information without recourse to him. The information was provided by the employer in response to the review that Centrelink commenced in February 2002 (T7). He insisted, however, that the particular wages amounts must be wrong. He was adamant that a sales assistant would not receive in excess of $2,350.00 over a one week period, even if that amount included more than one pay and penalty rates for the holiday season. He thought she would certainly tell him if she earnt income of that level. Asked whether he would tell Centrelink about such a level of income, Mr Graham said that while he did not know how Centrelink would learn about changes in Ms Glohe’s wages, he thought Centrelink would have that information. It was his belief that they would be able to get it, as they evidently had done so in this matter. Mr Graham said that, in relation to Ms Glohe’s own dealings with Centrelink, she would rely on what Centrelink had told him.
14. Ms Buckley asked Mr Graham whether he thought that Centrelink should be told about the change in income in January 2001, given that it was more than a year since the meeting of September 1999. Mr Graham disputed that he would have to tell them because Centrelink knew about Ms Glohe’s wages and would adjust his income. Mr Graham said that he was sure that Ms Glohe would tell him about her income from her position as a sales assistant, if he asked. He does not ask her many questions about her income or financial matters generally because he said he does not like to rock the boat. Ms Buckley asked him if he was aware that Ms Glohe had instructed Centrelink not to discuss her affairs with him. His response was that he did not understand that to be the case and moreover he disputed that she would give such an instruction.
15. Ms Glohe looks after the household finances and attends to payment of accounts and the mortgage. Mr Graham believes the mortgage is approximately $100,000.00. They own two Holden sedans which he estimated to be worth a total of approximately $8,500.00. Mr Graham is currently receiving $174.49 in disability support pension and $50.00 is taken from his fortnightly payments towards a debt of $2,550.00 raised by Centrelink in relation to overpaid disability support pension for the period 15 October 1998 to 5 August 1999.
16. Approximately two months ago, Mr Graham was informed by his specialist that he suffers from an iron deficiency. Tablets taken to supplement the level of iron in his blood system do not agree with him. He has been advised to undergo a transfusion to restore his levels of iron. At the moment, he feels tired and lacks energy.
17. Mr Graham said that his son Jessy is experiencing difficulties at school. Mr Graham has approached Centerlink for assistance, so that Jessy can receive some tutoring.
18. A report dated 19 May 2003 by Ms Barbara Aldrich, psychologist, was accepted in evidence as Exhibit A3. Ms Aldrich noted from the history she received that Mr Graham left school at around age 13 and started working as a labourer. He had always been in classes for children of lower ability. Although he has not mastered reading, he is reasonably proficient at arithmetic. He was a quiet and well behaved pupil. Ms Aldrich conducted a number of tests. She found that Mr Graham was in the normal range of intellectual ability in the cognitive diagnostic battery, which is a method for assessing and differentiating among aspects of cognitive dysfunction. As Mr Graham is unable to read, he was able to complete only the performance subtests of the multidimensional aptitude battery, which is designed to provide a measure of general aptitude or intelligence in the form of a profile containing verbal and performance subtests. Ms Aldrich extrapolated from the performance battery to conclude that Mr Graham has an IQ of around 85, which would place him in the lower normal range of IQs. Mr Graham completed a self administered personality assessment inventory aimed at providing information relevant to clinical diagnosis, treatment planning and screening for psychopathology. The results showed that he is preoccupied about his health. Ms Aldrich found no diagnosable mental illness. The applicant is functionally illiterate and of low normal intelligence, and the reason for his learning deficit was his lower IQ rather than his inadequate early schooling.
19. Ms Aldrich concluded that Mr Graham is very embarrassed about his inability to read and write. Although she noted that he would not fail to understand Centrelink letters at all, his consequent dependence on others would mean he requires assistance with anything other than the routine. He tries to be independent and maintain a sense of self worth, and Ms Graham concluded that he probably acted under this constraint when he assumed the Centrelink letters of 24 and 28 September 1999 were routine in nature. In her view “He firmly believed that the system of relying on Centrelink staff to fill forms in for him accurately that had prevailed for years was still working and he did not anticipate any problems.” She considered that his struggle to maintain dignity and not run to Ms Glohe for help about what he considers simple matters, would be exacerbated by his lower intelligence. Ms Aldrich stated that “Given his intellectual ability, Daniel Graham would not have thought too deeply about the machinations around his pension. … He would never have assumed that the letters would be anything but the routine communications from Centrelink – his thought processes do not work that way.”
findings and consideration
20. Mr McClintock accepted that it was not appropriate for the debt of $8,066.33 to be written off as Mr Graham’s circumstances do not meet the requirements of s.1236(1A) of the Act as to the debt being irrecoverable at law. Further, the tribunal accepts the respondent’s submission that waiver of the debt under s.1237A is not appropriate since the debt was not attributable solely to an administrative error made by the Commonwealth, the applicant not having complied with Centrelink’s letters dated 24 September 1999 and 28 September 1999.
21. As for s.1237AAD, Mr McClintock submitted that the debt did not result from Mr Graham knowingly making a false statement or knowingly failing to comply with the Act, and in this regard he relied on the interpretation given to ‘knowingly’ in Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553. He cited Re Secretary, Department of Family and Community Services and McKenzie [2003] AATA 267 in support of his submission that Mr Graham’s circumstances are unique or special and there would be an unfair or unjust result if ignored. Mr McClintock submitted that the tribunal should accept the applicant’s evidence that during the interview in September 1999, he requested the Centrelink officer to note the advice given that Mr Graham would not have to contact Centrelink again until the next review. He referred to the note that Centrelink no longer held a record of the review (T18).
22. For the respondent, it was submitted that s.1237AAD refers to the debtor or ‘another person’ knowingly failing to comply with the legislation. Ms Buckley submitted that it should be inferred that Ms Glohe, who does not suffer from impairments such as those that affect the applicant, knowingly failed to comply the Act and the debt arose from her so failing. Ms Buckley contended that the applicant’s daily activities are proceeding satisfactorily, and she referred to his assisting with the mechanical work, albeit he suffers from disabilities. The applicant has a house and a car, as well as a modest pension. She argued that the SSAT’s decision should be affirmed.
23. In Re Jonauskas Deputy President Forgie interpreted ‘knowingly’ in s.1237 AAD to imply a person’s actual knowledge of their making a false statement or failure to comply with the legislation. Here, Mr Graham says that when he met with the Centrelink officer in September 1999 for a review of his disability support pension, he handed over Ms Glohe’s pay slips. Aware of his inability to read or write, Mr Graham says the official helped him to complete the paperwork relying on the documents that he had furnished. I accept that evidence. In common with the SSAT, I am not able to determine how Ms Glohe’s weekly income was calculated at $309.00, a figure which appears to understate the income considerably (T11). Nevertheless, on the evidence before the tribunal, I am unable to find that Mr Graham knowingly made a false statement or representation to Centrelink at the interview.
24. In addition, Mr Graham says the official informed him that he need not do anything until the next review and that a note was made of that advice. Unfortunately, in responding to the applicant’s request under the Freedom of Information legislation for a copy of forms completed at that interview, Centrelink was unable to locate such documents. Nevertheless, considering the evidence of Ms Aldrich, and given the applicant’s assumption that the Centrelink letters of 24 September 1999 and 28 September 1999 were no more than confirmation of the arrangement discussed at the meeting, I am satisfied that the applicant did not have actual knowledge of his obligation to inform Centrelink of changes in Ms Glohe’s income. I find, therefore, that he did not knowingly fail to comply with the Act. There is no evidence concerning Ms Glohe’s actual knowledge as to the requirements of the Act. Thus I am unable to be satisfied that Ms Glohe did knowingly fail or omit to comply with the Act, or did knowingly make a false statement to Centrelink as to the income she earnt at Coles. Consequently Mr Graham’s debt did not arise wholly or partly from the act or omission of ‘another person’.
25. Are there special circumstances other than financial hardship alone that make it desirable to waive the debt? In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J said in relation to the expression ‘special circumstances’ that it requires “ … something to distinguish [a] case from others, to take it out of the usual or ordinary case. … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.” (at 545). The tribunal is also mindful of the public interest in effecting recovery of public monies paid out in error (Secretary, Department of Family and Community Services v Hales (1998) 153 ALR 259).
26. Mr Graham’s poor literacy and low intellect, in combination with his efforts to be self-reliant in order to build his self-esteem, have contributed to his inability to appreciate how Centrelink goes about adjusting his pension. Mr Graham can be distinguished from the applicant in Re Jonauskas who was considered to have the capacity to understand his situation and to comprehend Centrelink’s letters, and I accept the evidence of Mr Graham and Ms Aldrich in this regard. Due to his impairments, Mr Graham has in the past depended upon Centrelink for assistance. I do not perceive his inaction to be turning a blind eye to matters. Mr Graham pointed out that a few years ago, Centrelink interviewed him at home regarding his relationship with Ms Glohe. Centrelink was aware of his poor literacy skills yet still communicated with him through correspondence. I accept his evidence that that as a result of the advice given at the interview in September 1999, he was led to believe he did not have to contact Centrelink again until he was required for the next review. In the interim he thought Centrelink would obtain the relevant information to adjust his pension. Confirmation of this misapprehension on his part was evident during the hearing when the applicant was questioned about the level of wages paid to Ms Glohe early in January 2001. That Ms Glohe has instructed Centrelink not to divulge information concerning her dealings with the agency suggests that she would not necessarily tell him about any increases in the pay she received from Coles.
27. Additionally, I accept that Mr Graham’s health has been threatened by a condition of recent onset that will require treatment by way of blood transfusion. Mr Graham’s evidence regarding his concern for Jessy’s learning difficulties and his inability to afford tutoring is accepted.
28. These circumstances, assessed as a whole, take Mr Graham’s case out of the ordinary. I am satisfied they are special circumstances. In the tribunal’s view if these circumstances were not taken into account, it would lead to an unjust or unfair outcome. Accordingly, as there is no basis on which to write off the debt, the tribunal will exercise the discretion in s.1237AAD. The right to recover the entire debt of $8,451.49 should be waived.
I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of P.J. Lindsay, Senior Member:
Signed: .......................................................................................
AssociateDate of Hearing 17 October 2003
Date of Decision 29 October 2003
Solicitor for the applicant Mr J McClintock
Respondent’s representative Centrelink
1
3
0