Griffin and Secretary, Department of Family and Community Services

[2000] AATA 1017

DECISION AND REASONS FOR DECISION [2000] AATA 1017

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q00/874

GENERAL ADMINISTRATIVE  DIVISION       )       
           Re      RHONDA GRIFFIN            
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Deputy President DP Breen, Presidential Member      

Date21 November 2000

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.          
  (Sgd)          DP BREEN
  PRESIDENTIAL MEMBER
CATCHWORDS
SOCIAL SECURITY – overpayment – family allowance – whether monies owed in arrears – whether set-off allowed under the Act.
Social Security Act 1991 ss 885, 887(3), 1223(3), 1236, 1237A, 1237AAD
Health Insurance Commission v Peverill (1994) 179 CLR 226
Walker v Department of Social Security (1995) 36 ALD 513
Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

21 November 2000 Deputy President DP Breen, Presidential Member                  

1. This was an appeal against a decision of the Social Security Appeals Tribunal made on 1 September 2000 which affirmed the earlier decision of Centrelink to raise and recover an overpayment of family allowance in the amount of $4,706.20 for the period 11 September 1997 to 18 June 1998.

2. The matter was heard by me on 17 October 2000 in Ballina.  Mrs Rhonda Griffin, the applicant, represented herself.  Mr N Foster, Departmental Advocate, represented the respondent Department.  Mrs Griffin gave oral evidence at the hearing and the "T" Documents were also taken into evidence.

3. Mrs Griffin received family allowance from 11 September 1997 to 18 June 1998 based on estimates of combined taxable income of $26,600 in September 1997 which was revised to $28,100 in January 1998 for the 1997/1998 tax year. However, the actual combined income was just over $40,000 which was more than 110% of her estimate. As such, Section 885 of the Social Security Act 1991 requires that the allowance be recalculated on the basis of the actual income while subsection 1223(3) requires that any such overpayment be recovered.  As a result of the recalculation, a debt of $4,706.20 was raised against Mrs Griffin.

4. It was Mrs Griffin's evidence that she did not intentionally mislead Centrelink but that the changeover from a partnership to a company structure by her family's business made it very difficult to accurately estimate the future income.

5. For the 1998/1999 tax year, Mrs Griffin estimated the combined income as $38,100 but the actual combined income was $30,970 resulting in an underpayment of family allowance. Mrs Griffin requested a review of the rate of payment on 20 March 2000. However, as that was more than 13 weeks after the applicant received notice of the original decision, no arrears are payable before the date of application for review under subsection 887(3) of the Social Security Act 1991.  This means that although Mrs Griffin was in fact paid less than she ultimately was able to establish as the amount she was entitled to, as a matter of law, under the statute as it is relevantly structured, she cannot recover the difference.

6. Mrs Griffin submitted that the amount she was over-paid should be set-off against the amount she was under-paid.  For the remedy of set-off to be available, there must be mutual debts which can be set-off and an equitable basis for so doing.

7. Brennan J (as he then was) in the case of Health Insurance Commission v Peverill (1994) 179 CLR 226 at 242 stated:

   "Once it is appreciated that the right conferred by the Principal Act … is to be discharged by a statutory authority when certain statutory criteria are fulfilled, it is clear that that Act does not create a debt enforceable by action.  The Principal Act is a code prescribing the benefits to be paid and the manner of paying them."

His Honour pointed out that one must look to the statute to see if there is a remedy prescribed and those would be the only remedies available to applicants in general.

1. In the case of Walker v Department of Social Security (1995) 36 ALD 513 at 529, Cooper J, with whom Spender J concurred, stated that the Social Security Act provided a duty to pay monies that the applicant was entitled to and that this duty was enforceable by a public law remedy, not by an action of debt.  Accordingly, no occasion for set-off of mutual debts could arise.

2. There are no facts in this case upon which to distinguish Walker's case.  Mrs Griffin is hindered in her argument on a number of points.  Firstly, she is not entitled to be paid the arrears so there are no monies owed to her by Centrelink.  Secondly, even if arrears were owed, they are only a statutory right, not a recoverable debt against the Commonwealth.  Finally, there is no provision in the Social Security Act allowing for set-off, either in Mrs Griffin's favour or in the Department's favour.  While this result clearly favours the Commonwealth in terms of its ability to recover monies owed to the Department, viz à viz the public's ability to recover monies owed to them, this is a matter for Parliament and is beyond the jurisdiction of this Tribunal to redress.

3. Section 1236 of the Act provides that a debt may be written off if the person is suffering severe financial hardship and has no capacity to repay the debt.  Mrs Griffin said that things were financially very tight for her family. However, both she and her husband are in paid employment and the overpayment is being deducted from her family allowance payments, rather than taken from her other income.  In those circumstances, she has the capacity to repay the debt and it is not appropriate to write it off under this provision.

4. Section 1237A(1) of the Act provides that a debt may be waived if it is solely due to the administrative error of the Commonwealth.  That is not the case here as the payments were made based on the income estimates given by Mrs Griffin.

5. Finally, Section 1237AAD provides that a debt may be waived if there are special circumstances, other than financial hardship alone, and it is more appropriate to waive the debt than to write it off.  The case of Beadle and Director-General of Social Security (1984) 6 ALD 1 required the circumstances to be considered as "unusual", "uncommon" or "exceptional" in order to be classed as "special" under Section 1237AAD.  It cannot be said that the inability to accurately estimate income is an "uncommon" or "exceptional" circumstance.  It is the very nature of these provisions that some people will over-estimate and so may be entitled to back pay, and others will under-estimate and have to repay some of the allowance they received.  There are no other circumstances in this case which could be considered "special".  Therefore, it is not appropriate to waive the debt under this provision.

6. For the above reasons the Tribunal affirms the decision under review.

   I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President DP Breen, Presidential Member

   Signed:         Emma Oettinger
     Associate

   Date/s of Hearing  17.10.00
   Date of Decision  21.10.00
   Rep. for the Applicant              Applicant appeared in person
   Solicitor for the Respondent    Mr N Foster, Departmental Advocate