Griffiths and Secretary, Department of Family and Community Services
[2004] AATA 607
•16 June 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 607
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/744
GENERAL ADMINISTRATIVE DIVISION )
Re EDWIN GRIFFITHS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Ms M Carstairs, Member Date16 June 2004
PlaceBrisbane
Decision The Tribunal affirms the decision under review insofar as it relates to a debt of age pension for the period 23 May 2001 to 25 February 2003 but waives the debt in the period 23 May 2001 to 15 August 2001 under s1237A of the Social Security Act 1991.
....................[Sgd]....................
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements - age pension – overpayment – wife’s earnings from wages not disclosed – recovery of debt – administrative error – partial waiver
Social Security Act 1991
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186
Re Beadle and Director‑General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1996) 40 ALD 541
Director‑General of Social Services v Hales (1983) 47 ALR 281Haggerty v Secretary, Department of Education, Employment, Training and Youth Affairs (2000) 31 AAR 529
REASONS FOR DECISION
16 June 2004 Ms M Carstairs, Member 1. This is an application by Edwin Griffiths (the applicant) for review of a decision made by the SSAT on 25 August 2003, affirming a decision of a Centrelink delegate that he had incurred an overpayment of age pension in the period 23 May 2001 to 25 February 2003 (‘the relevant period’).
2. At the hearing the applicant represented himself, and was accompanied on the first day of hearing by his wife Mrs Lorraine Griffiths. The respondent was represented by Mr M Hutcheson.
3. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act1975, numbered T1-T46 (‘the T-documents’), as well as exhibits marked A1-A2 for the applicant and R1-R6 for the respondent.
BACKGROUND
4. The applicant is aged seventy-three. His wife is aged fifty-nine. The overpayment that has occurred in this case relates to Mrs Griffiths’ income from employment. During 2000, Mrs Griffiths was receiving newstart allowance, and was obtaining casual employment. In early 2001, she obtained full-time employment through a labour hire company, Manpower Services (Aust) Pty Ltd. In early 2002 she commenced as a full-time casual employee with RPM Homestyle Foods. The income from Mrs Griffiths’ employment was not taken into account by Centrelink in calculating the rate of age pension being paid to the applicant in the relevant period.
5. The resulting overpayment of Mr Griffiths’ age pension was not identified until a data matching exercise between Centrelink and the Australian Taxation Office (‘the ATO’), which revealed Mrs Griffiths had income from employment in the financial years 2000/2001 and 2001/2002. Centrelink then raised a debt. In the course of review processes initiated by the applicant, the debt, previously for a larger amount and longer period, has been re-calculated as $13,641.46, after a waiver of part of the debt for the period up to 23 May 2001. The applicant sought further review of the decision, firstly with an authorised review officer and then by the SSAT. As both have affirmed the decision to raise and recover the debt, the applicant then sought review by this Tribunal on 5 September 2003.
6. The issues for the Tribunal are whether the applicant has a debt of age pension, totalling $13,641.46 for the relevant period and whether the debt or any part of it should be waived.
EVIDENCE
7. Mr Griffiths said that he retired at the age of sixty five, and applied for age pension in about 2000. He said that when he commenced receiving the pension he attended at Centrelink and discussed matters such as his pension rights and obligations. He said he was told to let Centrelink know if his wife’s income changed or if there were changes to bank accounts. He explained that he took his obligations in regard to his and his wife’s payments seriously. He also said that having had a long career in the Army, reaching the rank of Major, and having had experience working in the private sector, he has a good understanding of administrative processes.
8. Mr Griffiths said that his wife obtained intermittent casual work in 2000 when she was receiving newstart allowance. When she took up the employment with Manpower in February 2001, Mr Griffiths took the fortnightly form that she had been receiving for newstart payments to the Centrelink office a few days later, and told them that Mrs Griffiths no longer required newstart allowance as she had obtained full-time work. He said that the fortnightly forms continued to be sent, and he lodged them personally at the Centrelink office with her income details. In April 2001, he said the forms stopped coming in the mail. When this happened Mr Griffiths said he went to Centrelink and was told that there was no need to fill them in anymore. He said that at that time, Mrs Griffiths had not been receiving newstart payments for some months because of the level of her earnings.
9. Mr Griffiths said that, after his wife started full time work, he discussed the assessment of his age pension with a Centrelink officer, Lynden Murphy, at an appointment arranged for 12 June 2001. Mr Griffiths said that he believes that Mr Murphy no longer works at Centrelink. Amongst other things at that interview, they discussed Mrs Griffith’s fluctuating income and it was agreed that an estimate of annual income would be given and that when group certificates were received, these would be provided to Centrelink. Mr Griffiths said that he understood that once the group certificates were provided any reconciliation against earned income would be done then, and any overpayment arising would be repaid by him.
10. Mr Griffiths said that each time that his wife’s group certificate became available he took it to Centrelink, doing so in about July or August 2001 and 2002. He said in 2001 he recalled that the Centrelink officer, whom he described as heavily tattooed and with hair in a pony tail, wrote details on the copy of the group certificate, and accessed the computer record in Mr Griffiths’ presence. In his written submission (exhibit A1), Mr Griffiths said that, after he had provided the group certificate, he assumed that the reconciliation of his wife’s income with his pension was undertaken and he would be contacted if necessary.
11. The applicant said that he did not receive two letters which were in the T-documents, one dated 29 May 2001 (T8) and one dated 19 June 2001 (T10). He said that he believes that these letters have been fabricated by Centrelink and were not sent on those dates as the letters were not on the file at an earlier stage in the review process. Mr Griffiths said that his wife is a careful record keeper who retains all correspondence from Centrelink. Mr Griffiths said that if he had received the letter stating that their combined income was only $645 (T10) he would have gone immediately to Centrelink to clear the issue up. He pointed out that the date of that letter was within of few days of attending the interview with Lynden Murphy in June 2001.
12. The applicant said that the debt has caused them financial difficulties and has depleted their retirement savings. Mr Griffith’s age pension is being withheld to repay the debt. Mr Griffiths said however that he and his wife own the unit in which they reside, own two older cars and a small boat and that his wife earns $40,000 per year though her income remains variable and she is on casual rates. He acknowledged that he is able to repay the debt if necessary; however he believes that the errors were Centrelink’s, not his. He said that his wife has a heart condition and the recovery of the debt has been stressful for her. Mr Griffiths said that he is concerned that his wife’s Centrelink file has been lost after the first day of hearing by the Tribunal, and he said that the copies of group certificates may have been placed on her file rather than on his.
13. The following letters were in the T-documents, each addressed to Unit 6, 284 Marine Parade, Kingscliff, the applicant’s residential address throughout the relevant period, and each stating that the letter was an information notice under the social security law requiring the applicant to tell Centrelink within 14 days if your combined income increases:
§ letter dated 29 May 2001 (T8) stating that the regular amount of age pension from 21 June 2001 would be $288.25, calculated on total combined assets of $221,090.52 and combined income of $10,915.46.
§ letter dated 19 June 2001 (T10), stating that the regular payment form 19 July 2001 would be $335.50, calculated using combined income of $645.
Earlier notices of a similar kind with the same requirement to advise if your combined income…increases had been sent on 29 June 2000 (T4) and 12 December 2000 (T5). After the letter in June 2001 (T10), no other notices issued to Mr Griffiths. That is, there were no further notices in the relevant period.
14. Computer entries dated 10 April 2001 (T6, T7) recorded that the applicant had provided relevant information to Centrelink. A computer entry dated 12 June 2001 (T9), refers to an interview scheduled for that day. Mr Griffiths confirmed in oral evidence that he attended that interview and retained the card recording the date. The print-outs for Mr and Mrs Griffiths from the Customer Record Access Monitor Report, which is a system which records when Centrelink officers access a recipient’s computerised data, were at T 39 and T40 and showed no entries which reflected information being given to Centrelink about income in the relevant period. There was a record of access to Mr Griffiths’ computer record however for 12 June 2001, the date of the interview scheduled with Mr Murphy.
15. The T-documents included Mrs Griffiths’ group certificates for 2000/2001 and for 2001/2002, as well as the wage records for her employment supplied by Manpower Services for the period 25 February 2001 to 20 January 2002 (T15) and by RPM Homestyle Foods for the period 24 January 2002 to 27 March 2003 (T16 and T18).
CONSIDERATION OF THE ISSUES
16. This matter chiefly concerns recovery of an overpayment of age pension as a result of Mrs Griffiths’ wages not being taken into account in working out the rate of Mr Griffiths’ age pension. Mr Griffiths said that he now accepts that an overpayment occurred, even though the overpayment calculations are complicated and difficult to understand. The Tribunal is reasonably satisfied on the basis sample checks of the debt carried out by the SSAT and the written material setting out the overpayment calculations (T22 and T23) that the calculations of the overpayment are correct.
17. The provisions in regard to debts and recovery under the Social Security Act1991 (the Act) are in par 5.1 of the Act. Before 1 July 2001 the legislation provided that a debt would be established where the received amount had not been correctly calculated using the relevant rate calculator…or for any other reason, the received amount is greater than the amount…that should have been paid to the person: s1223(5). The debt that arises under the legislation if these circumstances are met is the difference between the amount of social security payment received and the correct amount (as recalculated).
18. After 1 July 2001, s1223(1) of the Act provided:
“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.”
19. Section 1223(1AB) refers to the meaning of obtaining the benefit of a social security payment where the person is not entitled. This includes where the payment was made to the person by mistake, as a result of a computer error, or an administrative error, and where the payment was not payable.
20. The Tribunal was satisfied that the amounts overpaid in this case were debts because, prior to 1 July 2001, Mrs Griffiths’ income from salary was not included in the rate calculation process for Mr Griffiths’ age pension. It follows that the amount of age pension which he received was greater than the correct rate: s1223(5) of the Act. After 1 July 2001, the Tribunal was satisfied that the overpayment was a debt under the Act, as the amount paid to Mr Griffiths was not the amount properly payable to him, and he was not entitled to obtain that benefit.
21. Part 5.1 of the Act also deals with non‑recovery of debts. Two provisions require consideration, namely s1237A and s1237AAD. Section 1237AAD of the Act provides that in special circumstances a debt may be waived in the following 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 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.”
22. Section 1237A is a provision which deals with Centrelink error and provides:
“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.”
23. The note to s1237A of the Act makes plain that the 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). Part of the original debt has been waived applying this provision, as referred to above, on the basis that in the period between February and May 2001, Mrs Griffiths was reporting her fortnightly salary on forms submitted for newstart allowance and Centrelink was not cross referencing the salary to Mr Griffiths’ age pension.
24. On the issue of waiver, Mr Griffiths submitted that he had supplied the information about Mrs Griffiths’ salary and, at the interview with Lynden Murphy, had provided an estimate of likely annual earnings and then followed up by providing Mrs Griffiths’ group certificates when these were available. He submitted that Centrelink had already acknowledged their error from February to May 2001 and he said that he did not accept that thereafter the responsibility was suddenly to rest with him, when the debt was really a continuation of the original error.
25. Mr Hutcheson submitted that the debt did not arise solely as a result of administrative error. He submitted that the applicant had been sent letters requiring him to advise changes of income, and Mrs Griffiths’ income was changing frequently. He said that even if it were accepted that Mr Griffiths provided group certificates in July or August 2001 and again in 2002, the respondent relied on the findings of the SSAT that it was likely that Mr Griffiths contributed to the error by insufficiently identifying himself or his purpose in bringing in the information. He also submitted that good faith, as understood in the context of this legislation, could not be established where Mr Griffiths had experience during 2000 when his wife’s earnings had a substantial impact on his fortnightly rate of pension. He submitted that Mr Griffiths had reason to know that he was not entitled to the payment he was receiving, as discussed by the Federal Court in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186.
26. Mr Hutcheson submitted that Mr Griffiths had clear capacity to repay, and that neither write-off nor an exercise of the discretion to waive the debt on the basis of special circumstances was justified in this instance.
27. The special circumstances where the Tribunal can exercise the discretion to waive the debt (s1237AAD of the Act) are limited. The circumstances must be unusual, uncommon or exceptional (Re Beadle and Director‑General of Social Security (1984) 6 ALD 1, Groth v Secretary, Department of Social Security (1996) 40 ALD 541). The Tribunal must balance the several factors that arise, including in particular the fact that a person has received public moneys to which he or she was not entitled; the circumstances in which the debt arose; and the prospects of recovery of the debt in the context of the applicant's overall financial circumstances: Director‑General of Social Services vHales (1983) 47 ALR 281.
28. The Tribunal is satisfied that the overall circumstances in this case do not have the particular quality of unusualness to warrant the exercise of the discretion under s1237AAD. Mr Griffiths acknowledges that with his wife’s earnings, and in spite of their depleted savings, they have a capacity to repay. The balance of the public interest in overpaid moneys in the context of their overall circumstances urges against the exercise of the discretion.
29. In regard to waiver on the basis of administrative error, the issue is more complex. The Tribunal accepts, as did the SSAT, that Mr Griffiths attended an interview on 12 June 2001 with Lynden Murphy and discussed his wife’s income with Lynden Murphy. Further, he has a good recollection of that interview and it is highly probable that the discussions on that occasion included information about his wife’s income, about pension being based on annual income and may also have included, as Mr Griffiths said, discussions about making an estimate of that income. Mr Griffiths also has a clear recollection of who he dealt with on each occasion when he said that he took his wife’s group certificates to Centrelink, and his evidence on this was not challenged. The Tribunal accepts that Mr Griffiths took his wife’s group certificates to Centrelink on two occasions at or about August in 2001 and 2002.
30. On the basis of these findings, the Tribunal was satisfied that Mr Griffiths had an honest belief that his wife’s earnings were being taken into account and reconciled against group certificates once he supplied them. Even if another person might have been more alert to the marked reduction that occurred with his age pension in 2000 when his wife was earning that year, and questioned when this did not occur in 2001 and 2002, the Tribunal accepts his evidence that that was not his state of mind.
31. The Tribunal was satisfied therefore that the payments of pension were received by Mr Griffiths in good faith, within the meaning of the Federal Court decisions, Prince and Haggerty v Secretary, Department of Education, Employment, Training and Youth Affairs (2000) 31 AAR 529. In the latter case, the Court said that it is necessary to focus on the actual state of mind of the applicant. The Court said (at p 534):
“I do not take what his Honour said in that case (Prince’s case) as supporting the proposition that a person can be found to be receiving payments other than in good faith simply by reason of the fact that there are facts in existence which are known to the recipient sufficient to negative the recipient’s entitlement. In my opinion that is not a sufficient criterion. Knowledge of relevant facts is not enough to generate reason to know of the lack of entitlement.”
32. On the other hand, Mr Griffiths acknowledged that he understood that he had obligations to advise his wife’s income. This income was highly variable as shown in the documents at T15 and T16, and it was necessary for a correct calculation of his rate of age pension under the rate calculators that his wife’s income be known.
33. The Tribunal accepts that letters were sent to Mr Griffiths on 29 May 2001 and 19 June 2001, and is satisfied that the computerised versions of those letters produced for the hearing reflected the content of the letters. The Tribunal accepted the respondent’s explanation that the letters were archived in the Centrelink computer system and the originals not retained. The letters were correctly addressed. The Tribunal accepts the accuracy of the computer record of the mailing of those letters by Centrelink (exhibit R6). The legislation allows for service to be deemed in these circumstances. However even if the two letters at T8 and T10 had not been sent or delivered, earlier letters had put Mr Griffiths on notice that he was required to advise Centrelink if combined income increased. The notices at T4 and T5 sent to Mr Griffiths in 2000 clearly stated this obligation. Notices such as these have an ongoing effect. It follows that whenever Mrs Griffiths’ income increased it was necessary that Centrelink be advised. The Tribunal was satisfied that this did not occur on a sufficiently regular basis to enable Centrelink to correctly calculate the rate of pension to which Mr Griffiths was entitled.
34. Taking all the evidence into account the Tribunal is reasonably satisfied that there was administrative error in this case, and that, until August 2001, the error was solely on the part of Centrelink, because Mr Griffiths had discussed his wife’s earnings at an interview with a Centrelink officer on 12 June 2001 and had taken the group certificates at or about August 2001. After that time, Mr Griffiths contributed to the debt because he did not advise Centrelink when earnings changed. In the week commencing 12 August 2001, Mrs Griffiths’ earnings were $794.85 for 19 August $280.09, $327.78 for 2 September 2001, and $894.22 for 9 September 2001. Providing the group certificate for the period 2000/2001 related only to a previous tax year and did not fulfil his ongoing obligation, as notified to him in several letters, to advise when combined income increased.
35. The Tribunal takes into account the Centrelink computer records for the relevant period and does not accept that the applicant advised when his wife commenced employment in 2002 with RPM Homestyle Foods. The Tribunal accepts the applicant’s evidence that group certificates were provided when received by his wife for the 2001/2002 tax year, however the Tribunal does not accept that, after about mid August 2001, the debt was solely due to administrative error on the part of the Commonwealth. Thereafter, and for the whole of the remainder of the relevant period, the debt was contributed to, in part, by the failure of the applicant to comply with his ongoing obligations to advise his wife’s variable income and change of employer in January 2002.
36. As there is no record of the exact date on which the group certificates were supplied to Centrelink in 2001, the Tribunal decides that the date shall be taken as 15 August 2001. The group certificates are dated in July 2001, and selecting a date in August 2001 allows for service of the group certificates and takes into account Mr Griffiths’ recollection that it was in August 2001 that he took the group certificates to Centrelink. For these reasons, under s1237A of the Act the Tribunal waives the debt for the period 23 May 2001 to 15 August 2001. It will be necessary for the respondent to recalculate the amount that is repayable, based upon these reasons.
DECISION
37. The Tribunal affirms the decision under review insofar as it relates to a debt of age pension for the period 23 May 2001 to 25 February 2003 but waives the debt in the period 23 May 2001 to 15 August 2001 under s1237A of the Act.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M Carstairs, Member
Signed: Sarah Oliver
AssociateDates of Hearing 24 February 2004, 16 and 30 April 2004
Date of Decision 16 June 2004The Applicant appeared in person
For the Respondent Mr Hutcheson, Departmental Advocate
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