Halls and Secretary, Department of Education, Employment and Workplace Relations
[2012] AATA 802
•15 November 2012
[2012] AATA 802
Division GENERAL ADMINISTRATIVE DIVISION File Number
2011/5231
Re
Jonathan Halls
APPLICANT
And
Secretary, Department of Education, Employment and Workplace Relations
RESPONDENT
DECISION
Tribunal Regina Perton, Member
Date 15 November 2012 Place Melbourne The Tribunal sets aside the decision under review and substitutes a decision that Mr Halls has a recoverable debt of $7,479.36 for the period 7 August 2007 to 23 November 2009.
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Regina Perton, Member
SOCIAL SECURITY – Newstart allowance – variable income – overpayment - debt to Commonwealth - waiver - whether sole administrative error – whether special circumstances exist
Social Security Act 1991 ss 1223, 1236, 1237A, 1237AAD
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
Regina Perton, Member
15 November 2012
Jonathon Halls is a tertiary educator who has been receiving Newstart allowance (NSA) since his work became sessional some years ago. Centrelink, which manages NSA for the respondent, allows a pension recipient a limited amount of income from other sources before it affects the rate of payment. Centrelink reduces the rates of pension once earnings from other sources exceed the specified limited amount.
While Mr Halls generally reported what he believed to be his income to Centrelink, the amount turned out to be less than the actual amount using the methods set out in the Social Security Act 1991 (the Act). Centrelink’s calculations of the debt have varied over the four years since Mr Halls first had a debt imposed. Mr Halls maintains that the calculations of his debt are wrong but he is unable and/or unwilling to try and pursue further information from his former employer. Many of the documents he held containing details of his working hours and the timing of the classes and their nature were disposed of when he moved home some years ago.
In this matter, the Tribunal is required, on the balance of probabilities, to determine whether Mr Halls was overpaid NSA and therefore has a debt to the Commonwealth. The amount of debt, and whether there are grounds to waive all or part of that debt, is also to be considered.
HISTORY
In early 2008 Centrelink began investigating the amount and timing of income Mr Halls received from the University of Ballarat. On 21 February 2008 Centrelink determined that Mr Halls had received more in NSA payments than he was entitled to and raised a debt of $1,567.52 for the period between 11 March 2007 and 6 August 2007.
Mr Halls was employed on a casual and sessional basis so his income varied throughout the year. Reconciliations of Mr Halls’ tax returns and the earnings declared to Centrelink for the financial years 2007/8 and 2008/9 revealed that his income was higher than that which he declared to Centrelink. Information from his employer on timing of payments added complexity.
On 11 October 2010 Centrelink raised a debt of $6,994.37 against Mr Halls for the period from 26 June 2007 to 21 December 2009. A 10 per cent recovery fee was added to the amount resulting in a total debt of $7,693.77.
Mr Halls sought review of the decision to impose a debt of that magnitude. On 9 November 2012, an authorised review officer (ARO) of Centrelink affirmed the decision to raise the debt for that amount. On 1 December 2010 Mr Halls lodged an application with the Social Security Appeals Tribunal (SSAT). On 13 January 2011 the SSAT set aside the decision referring the matter back to Centrelink with the following directions:
a) Mr Halls’ employer, University of Ballarat, be required to provide information showing clearly the days and hours worked and the periods in respect of which the payments made to Mr Halls were made;
b) Once such information is made available to Centrelink, Mr Halls’ entitlement during the period 26 June 2007 and 21 December 2009 is to be recalculated after allocating the income he earned to the correct reporting fortnights for which it was paid; and
c) Any debt remaining after recalculation is recoverable from Mr Halls.
Centrelink sought further information from the employer which was received in late March 2011. On 15 April 2011, a debt of $3,852.80 was raised against Mr Halls in respect of undeclared earnings in the period 26 June 2007 to 18 February 2011.
Mr Halls sought review of Centrelink’s decision. On 18 July 2011 an ARO varied the previous decision and determined that there was a debt of $3,844.10 rather than $3,852.80.
Mr Halls sought review through the SSAT on 3 August 2011. On 4 November 2011 the SSAT set aside the previous decision and substituted a fresh decision that Mr Halls had a recoverable debt of $7,768.09.
Mr Halls lodged an application for review with this Tribunal on 6 December 2011.
DOES MR HALLS HAVE A DEBT TO THE COMMONWEALTH?
Section 1223(1) of the Act allows the Commonwealth to raise a debt against a person if that person is paid a higher social security payment than that to which he or she is entitled. Mr Halls accepts that Centrelink paid him more in NSA than his entitlement. However he believes that the calculations of the amount of overpayment are flawed. He pointed to the various calculations of the debt which differed in some instances by a few dollars and in other cases, by more than $3,000.
In his written and oral submissions, Mr Halls submitted that the information provided by his employer was in some aspects, deficient and in other aspects, wrong. He stated that problems arose due to his short-term casual contracts which formed the larger part of his employment with the university. He submitted that the person from the university supplying the information to Centrelink had not provided what had been requested. Mr Halls stated that the university should have provided timetables that showed when and where he taught; unit descriptions which showed when final assessments were due which was well after the teaching itself was completed as well as contacting his course coordinators to make enquiries of the various aspects of his duties. He pointed out in a submission received on 17 May 2012, that:
An examination of timetables and a discussion with course supervisors would reveal that my hours of work can vary considerably from week to week. Moreover, a discussion with my supervisors would also revealed that the payment of an equal amount per fortnight across the period of the contract is purely an administrative convenience and does not reflect the actual hours and dates worked. The supervisor would have drawn attention to the fact that all contracted periods of casual teaching/tutoring includes periods of vacation (semester breaks), public holidays, student placements, timetabling adjustments and extended periods when no teaching or other work is done while students complete their final major projects, which together mean that the hours worked in any fortnight are highly varied. The supervisor would have also pointed out that periods of casual teaching/tutoring contracts are artificially stretched to cover several months beyond the teaching period, so that casual staff and not disconnected from the University’s computer system, preventing them from completing end of year marking and final results calculations and reporting, which is required for students to proceed to the next year and to graduate. The absurdity of tying access to the computer system to receipt of pay has been pointed out many times, but to no avail. Instead, supervisors artificially ’stretch’ the casual contracts….
The Tribunal offered Mr Halls the opportunity to provide further information including supplying timetables from the relevant periods and any other information such as that from his former supervisors. Mr Halls conceded that it would be difficult to gather information from the supervisors and that he was not in a position to do so nor to gather further documentation concerning timetables and the like for the debt period.
During a directions hearing on 29 August 2012 Mr Halls said that he cannot get further information as the university has restructured the relevant department and the staff are not interested in helping him. He said that he has no authority to get them to investigate on his behalf. He has no diaries or records, and is not sure about the dates of intensive courses but believes they started five or six years ago. Mr Halls said that he did not trust the calculations but is so exhausted by the process that he now wants a decision based on the information available. Given the complexity of the calculations and the circumstances, he was not in the position to provide an alternative debt figure.
Centrelink sought information from the university on three or four occasions either of its own initiative or at the request of the SSAT. The agency has calculated Mr Halls’ entitlements based on the best available information. In circumstances such as these, it is not practical for the Tribunal to direct that further investigations be undertaken given the unlikelihood of further useful information being available.
The Tribunal is satisfied, on the balance of probabilities, that the most recent calculation provided by Centrelink is the appropriate figure to use. The latest figures lower the debt that was calculated at the SSAT level by approximately $290.
The Tribunal is satisfied that Mr Halls was overpaid NSA between 7 August 2007 and 23 November 2009. The Tribunal is satisfied that Mr Halls incurred a debt of $7,479.36 to the Commonwealth.
SHOULD THE DEBT BE WAIVED DUE TO ADMINISTRATIVE ERROR?
Section 1237A(1) of the Act provides for waiver of a debt arising solely from administrative error:
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).
There is no evidence to suggest that administrative error on Centrelink’s part led to the overpayment. Therefore, waiver of the debt due to administrative error is not available.
SHOULD THE DEBTS BE WRITTEN OFF?
Section 1236(1A) of the Act allows a debt to be written off. This may occur where the debt is irrecoverable at law, or the debtor has no capacity to pay, or their whereabouts are unknown, or if it would not be cost-effective to take action to recover a small debt. However, none of the provisions applies to the present circumstances.
SHOULD THE DEBT BE WAIVED DUE TO SPECIAL CIRCUMSTANCES?
Section 1237AAD of the Act provides for waiver of the debt 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, the Administration 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.
The Tribunal is satisfied that Mr Halls did not knowingly or deliberately fail to inform Centrelink of the actual amount of income he earned. Therefore, he meets the requirements of s 1237AAD(a) of the Act.
The term special circumstances is not defined in the legislation. For the Tribunal to exercise its discretion to determine that Mr Halls’ situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25). In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases (at [26]). Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case (at [26]).
Mr Halls provided information about the difficult financial circumstances he now faces. Since being made redundant from the University of Ballarat some eight years ago, he has found it increasingly difficult to find work. He faces age discrimination as well as being described as over-qualified. He receives a small gross income based on working on short term contracts. He tried running his own recruitment business but that, too, provided very little income despite his efforts. He now lives in substandard housing with an outstanding mortgage and drives an old car. He suffers from clinical depression and anxiety. He pointed out that he lives below the Henderson Poverty Line.
The Tribunal is sympathetic to the circumstances in which Mr Halls now finds himself. However, the Tribunal is not satisfied that the situation that he is in is vastly different from the situation of other social security recipients who have incurred debts due to overpayments. As has been often commented on in the press in recent times, the rate of NSA paid to single recipients like Mr Hall can make it difficult to make ends meet but his situation is no different to others relying on NSA. Mr Halls remains on social security benefits and is able to repay his debt in instalments taken out of their fortnightly payments. The amount Centrelink is to withhold per fortnight is negotiable.
The Tribunal is not satisfied that the circumstances in this case constitutes special circumstances (other than financial hardship alone). Hence, the Tribunal decides that the waiver provisions of s 1237AAD of the Act should not be invoked.
The Tribunal finds that Mr Halls owes a debt of $7,479.36 to the Commonwealth.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision that Mr Halls has a recoverable debt of $7,479.36 for the period 7 August 2007 to 23 November 2009.
I certify that the preceding 29 (twenty -nine) paragraphs are a true copy of the reasons for the decision herein of Regina Perton, Member. ...........................[sgd].............................................
Administrative Assistant - Legal
Dated 15 November 2012
Date of hearing 25 June 2012 Date final submissions received 29 August 2012 Applicant Self-represented Advocate for the Respondent Ms A Bramley Solicitors for the Respondent Department of Human Services Legal Division
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