Griffiths and Secretary, Department of Family and Community Services

[2006] AATA 727

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 727

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/1637

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JOHN GRIFFITHS

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms R Hunt

Date18 August 2006

PlaceSydney

Decision The tribunal sets aside the reviewable decision.

[SGD]

Robin Hunt
  Senior Member

Administrative

Appeals

Tribunal

 

ADMINISTRATIVE APPEALS TRIBUNAL      )           No N2005/1637

GENERAL ADMINISTRATIVE DIVISION		)
Re		JOHN GRIFFITHS

Applicant

And

SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

  Respondent

DIRECTION (CORRIGENDUM) [2006] AATA 727

TribunalMs R. Hunt, Senior Member

Date18 September 2006

PlaceSydney

WHEREAS:

1.    The Tribunal released a written decision in this matter, which was dated 18 August 2006.

2.    It has come to the Tribunal’s attention that there were some errors in the decision.

3. The tribunal wishes to amend the written decision so as to rectify these errors and, wishing to do so with the least cost and inconvenience to the parties, applies the provision of section 43AA of the Administrative Appeals Tribunal Act 1975.

NOW THE TRIBUNAL THEREFORE ORDERS THAT:

1.The words “Parenting Payment Single” and the abbreviation “PPS” be replaced with the words “Family Tax Benefit” and “FTB” respectively; and

2.The waiver that is referenced to the social security law be referenced to the family assistance law.

[sgd]Ms R. Hunt

Senior Member

CATCHWORDS

SOCIAL SECURITY – overpayment resulting in debt to Centrelink –administrative error sole cause of debt - good faith – special circumstances – exercise of discretion.

Social Security Act 1991 s 1237AAD

Social Security Administration Act 1999

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

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

Reardon v Secretary, Department of Family and Community Services and [2002] AATA 33

Secretary Department of Education Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127

REASONS FOR DECISION

18 August 2006	Robin Hunt Senior Member
summary

1.          Mr Griffiths, the applicant, has sole custody of his son, Javen. Mr Griffiths was receiving family tax benefit and the parenting payment single in February 2003 when he started to receive child support payments from his former wife in respect of Javen. Prior to receiving any payments Mr Griffiths advised Centrelink that he would soon commence receiving child support payments from his ex-wife through the Child Support Agency. Despite this notification, however, the amounts of child support received by Mr Griffiths were not used by Centrelink to re-calculate his family tax benefit entitlement. Part of the reason for this was the delay in the agency informing Centrelink of the amount forwarded to Mr Griffiths. Mr Griffiths’ child support payments were not taken into account in calculating his family tax benefit entitlement until 23 December 2003. As a result, Mr Griffiths was overpaid and Centrelink raised a debt of $820.13. 

Background

2. Mr Griffiths sought review of a decision of the Social Security Appeals Tribunal (SSAT) dated 23 November 2005. The SSAT held that Mr Griffiths, having been overpaid parenting payment single (PPS) during the financial year ending 30 June 2003, should repay the debt, there being no reason to waive the debt under section 1237A of the Social Security Act. The background facts are not in dispute and are set out in the respondent’s Statement of Facts and Contentions and correspond with the summary above.

Issues

3.          Has Mr Griffiths been paid more PPS than he was entitled to receive during the period ending 30 June 2003?

4.          If so, is this overpayment a recoverable debt owed to the Commonwealth?

5.          Are there special circumstances why the debt should be waived?

Facts

6.          Mr Griffiths has a dependent son and has been raising him on his own since the boy’s mother left Australia for the United States of America in 1992. On 13 February 2003 Mr Griffiths advised Centrelink that his income would in future be affected by child maintenance payments ordered by a court in Nevada.

7.          Mr Griffiths notified Centrelink of the child support payments he was receiving from his wife on several later occasions. Despite this, Mr Griffiths continued to receive the maximum amount of PPS.

8.          On 23 December 2003, after an automatic computer system update, Mr Griffiths was issued with a debt notice for an overpaynment of $820.13 for the period to 30 June 2003.

9.          On 22 July 2004 the decision to raise a debt was reviewed and affirmed by the Original Decision Maker (ODM). A Centrelink Authorised Review Officer (ARO) affirmed the ODM's decision that Mr Griffiths had a recoverable debt. The matter was then reviewed by the SSAT on 23 November 2005 which affirmed that there was a debt and that the debt should not be waived. Mr Griffiths had repaid the debt at the time of the tribunal hearing.

Consideration

10.        The relevant legislation in this matter is contained in the Social Security Act1991 (the Act) and the Social Security (Administration) Act 1999 (the Admin. Act).

11. Section 1223 of the Act provides that if a social security payment is made and a person obtains the benefit of the payment and was not entitled for any reason to obtain that benefit, the amount of the payment is a debt due to the Commonwealth. Mr Griffiths has been overpaid and pursuant to s1223 of the Act, this overpayment is a debt due to the Commonwealth. Mr Griffiths has paid the debt but seeks reimbursement.

Non Recovery of Debts

12.        Mr Griffiths has the capacity to repay the debt having already done so. The further question is whether there are special circumstances that make it desirable to waive the debt.

13. Section 1237A(1) of the Act states that the Secretary must waive the right to recover a debt that:

‘is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment’.

14.        This section 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).

Sole Administrative Error

15.        The Secretary concedes that the debt arose due to sole administrative error made by the Commonwealth. However, the Secretary contends that Mr Griffiths did not receive the payments in good faith because he was  aware his entitlement would require adjustment once he received the maintenance payments even if he could not quantify the amount.

Good Faith

16.        The Secretary contends that Mr Griffiths did not accept the excess payment in good faith as he was aware of the prospective change in FTB entitlement and in fact alerted Centrelink to the expected child support payments that would reduce his FTB entitlement.

17.        The question of "good faith" has been considered by the Federal Court in several matters such as Secretary, Department of Family and Community Services and Reardon [2002] AATA 33 (19 January 2002) and Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424.

In Secretary, Department of Family and Community Services and Reardon the tribunal found (at 92) that:

“By omitting to fully read the letters, Mrs Reardon was exercising some persistent choice and causing herself to not be fully informed of all the information relating to her Family Allowance.  The Tribunal does not think that it is good enough for Mrs Reardon to assert that given her wilful choice in not reading the reverse of letters, that she should then be able to avail herself of the benefit of section 1237A to have a debt waived because of departmental administrative error.  Mrs Reardon bears some responsibility for informing herself about entitlements.  That she did not do so is to her detriment.”

18.        In the Federal Court decision of Jazazievska v Secretary, Department of Family and Community Services, Cooper J (at 41) concluded:

“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….”

19.        An absence of good faith does not always require egregious behaviour.  On this point, as Finn J pointed out in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127 at 130, the term “good faith” is a protean, that is, a variable one. Consequently “good faith” carries a range of different meanings in different contexts including “an essential knowledge or notice idea”. Depending on context, it can focus on reasons for action or on a person’s state of knowledge when a particular event occurs.  It is true that in the present case Mr Griffiths knew his entitlement would be affected but he did not turn a blind eye or deliberately keep himself misinformed. He chased the respondent for information which it did not supply until after the debt arose. The situation is less clear in Jazazievska and Reardon. However, I consider that the special circumstances provision may be more apt in Mr Griffiths case even though he acted in good faith at all times. 

Waiver in special circumstances

20. Section 1237AAD states that

‘the right to recover a debt can be waived if

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

(i)        making a false statement or 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.’

21.        The term "special circumstances" has been examined by courts and tribunals in many decisions and in different contexts.  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 Toohey J stated:

“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 on 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 have a particular quality of unusualness that permits them to be described as special.”

22.        Mr Griffiths’ child support payments for 5 March, 25 March, 3 April, 6 April, 25 April, and 1 May 2003 were not taken into account by Centrelink for the purpose of calculating Mr Griffiths’ family tax benefit entitlement  until 23 December 2003. 

23.        In giving oral evidence before the tribunal, Mr Griffiths pointed out that he had never failed to notify Centrelink of the increases to his income instituted by his wife’s payment of child support. He further contended that he had received the FTB overpayment in good faith as he was never in a position to quantify his overpayment.  This point was conceded by the Secretary’s representative at the hearing as well as by the Authorised Review Officer (ARO) who first reviewed Mr Griffith’s case. The ARO said:

“I consider that you have received the money in good faith as you have attempted on a number of occasions to alert the Family Assistance Officer that you were receiving the payments from the Child Support Agency. The fact that the payments were not being recognised by the system is in no way any fault of yours. You were powerless to prevent the overpayment. (T20, p47)

24.        Mr Griffiths asserted that he had made strenuous efforts to ensure that Centrelink paid him his correct entitlement. This is borne out by the T-Documents. T 22 details telephone communication between Mr Griffiths and Centrelink staff over a period from 13 February 2003 to 20 June 2003. An entry dated 30 April 2003 records that Mr Griffiths was advised that his FTB was reduced to the base rate to avoid further overpayment. Mr Griffiths told the tribunal that he was informed that if he was overpaid following the reduction of his FTB entitlement to the base rate, that this would be an error on the part of Centrelink and would not affect his continuing entitlement. He believed Centrelink would be precluded from attempting to recoup any overpayment of FTB.  He added that he continued to accept the base rate whether he was entitled to more or not so he would not find himself having to repay money again.

25.        Mr Griffiths told the tribunal that he needed funds to provide for his son’s educational needs. He spoke with conviction about his son’s scholastic efforts and the difficulties he had in providing the books and references that his son had tried to obtain. Mr Griffiths said his son was a good student frustrated by being unable to obtain books from the school library and local council libraries because they were in short supply. He spoke of other special needs for his son which he could not meet. His son needed assistance in maths, but Mr Griffiths explained that he could not afford a tutor. Mr Griffiths said he had to save and budget so he could send his son on school camps and provide him with the school uniform. He further said his son was disadvantaged by the delay in receipt of assistance from his mother and the re-payment of the Centrelink debt.  In my view, his son’s advancement and Mr Griffith’s inability to meet his son’s educational needs amounts to special circumstances in this case.

26. Section 1237 AAD of the Act in essence allows for the waiver of a debt where three conditions are met, namely:

·     That the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation or knowingly omitting to comply with the provision of the social security law;

·     That there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt;

·     That it would be more appropriate to waive than write-off the outstanding debt or part of the debt;

These conditions apply to the circumstances of this matter.

27.        In my view the special circumstances here include the educational needs of Mr Griffith’s son and Mr Griffith’s genuine and continuing efforts to avoid incurring a debt of this kind.  Mr Griffiths, as acknowledged by the respondent’s representative, was always prompt in complying with his obligations. Also, the amount of the adjustment was unforeseeable as illustrated by the top up he received from Centrelink on 16 July 2003. It is therefore appropriate to waive the debt.

Decision

28.        The Tribunal sets aside the reviewable decision.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of  

Signed:         .....................................................................................
  Associate

Date/s of Hearing  23 June 2006    
Date of Decision  18 August 2006
Self-Represented Applicant     John Griffiths
Solicitor for the Respondent     John Kenny