Harper and Secretary, Department of Social Services (Social services second review)

[2020] AATA 3819

Harper and Secretary, Department of Social Services (Social services second review) [2020] AATA 3819 (1 October 2020)

Division:GENERAL DIVISION

File Number:          2019/1589

Re:Peter Andrew­­ Harper

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member P Ranson

Date:1 October 2020  

Place:Brisbane

The decision under review is affirmed.

........................[SGD]................................

Member P Ranson

CATCHWORDS

SOCIAL SECURITY – carer payment back paid – whether overpaid newstart allowance – whether overpayment constitutes debt to the Commonwealth - whether debt should be written-off or waived – medical condition – decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)

REASONS FOR DECISION

Member P Ranson

1 October 2020

1. Chronic lymphocytic leukaemia is an extremely debilitating disease requiring ongoing strong chemotherapy. Mr Peter Harper (Mr Harper) suffered from this disease and it severely limited his ability to work and function in society. He has very limited means and lives with his partner in modest accommodation in northern New South Wales (NSW). He also has a debt due to the Commonwealth of almost $10,000 as a result of an overpayment he received.

2. Mr Harper was in receipt of newstart allowance from October 2014 to August 2017. In September 2016, Mr Harper contacted the Department of Social Services (the Department) and applied for carer allowance and carer payment for his partner, Ms Patricia Anne Morgan (Ms Morgan). The application was initially rejected but after Mr Harper provided some additional material, his application was approved with payment backdated to the date of his application in September 2016. As a result, Mr Harper was back paid almost $13,900 in August 2017.

3. A person in receipt of carer allowance and carer payment in Australia is not entitled, at the same time, to receive certain other social security benefits such as newstart allowance.[1] As Mr Harper was in receipt of newstart allowance during the period September 2016 to August 2017 and was then back paid carer allowance and carer payment to September 2016, the Department contended the amount of newstart paid to him during that period of $9,973.52 became a debt due to the Commonwealth.

   [1] See below at [19]

4. According to the Department, it is normal departmental practice in situations like this, where a substantial back payment is made to an applicant, for any overpayments in respect of other benefits to be deducted from the back payment before it is credited to the applicant’s account. If that had occurred, Mr Harper would have been paid approximately $4,000.

5. An important date in this case is 1 August 2017. On that date, the Department wrote three letters. They advised Mr Harper:

   a.    his claim for carer payment was granted, and he would be paid $13,891.17 from 22 September 2016 to 21 July 2017;

   b.    his newstart allowance had been retrospectively cancelled from September 2016 because he was in receipt of carer payment from that date; and

   c.     he had a debt due to the Commonwealth of $9,973.52 in respect of overpaid newstart allowance.

6. Between 9 August 2017 and 11 August 2017, Mr Harper received three payments into his bank account which he says were spent on renovations to his home. The Department then sought repayment of the debt due to the Commonwealth of $9,973.52, which was affirmed by an Authorised Review Officer of the Department.

7. In December 2018, Mr Harper lodged an application for a review of that decision with this Tribunal, which affirmed the decision to recover the debt. Dissatisfied with that decision, Mr Harper appealed again to this Tribunal for a further review.

8. For the reasons set out below, the decision of the Tribunal, see paragraph [‎9], should be affirmed. That means Mr Harper has a debt due to the Commonwealth of $9,973.52 less amounts since paid.

FACTS

1. On 7 March 2019 the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the decision of the Department to raise and recover a newstart allowance debt from Mr Harper of $9,973.52 for the period 22 September 2016 to 21 July 2017 (the Relevant Period). On 24 March 2019, Mr Harper lodged an application for review of AAT1 with this Tribunal.

10.  Mr Harper states in his application for review his reason why he believes the decision is wrong. He states: ‘I was not happy with the decision as [the Department] was the one who made the mistakes in the processing of my claim I am currently unemployed and I might have to do chemotherapy for my chronic lymphatic leukaemia which I was diagnosed with in 2018.’

11.  Based on the above statement, Mr Harper asserts the Department made mistakes and even though he received the funds in August 2017, his later diagnosis of chronic lymphocytic leukaemia is a mitigating factor.

12.  The parties in this case are:

Applicant	Peter Andrew Harper (Mr Harper)
Respondent	Secretary, Department of Social Services (the Respondent)

13.  The hearing in this application occurred on 18 August 2020 (the Hearing). Mr Harper and the Department’s advocate, Ms Gehrke, attended by telephone. Mr Harper gave affirmed evidence.

1. The Respondent provided a Statement of Facts, Issues and Contentions dated 11 July 2019 (SFIC), which sets out in detail the law relevant to this case with which the Tribunal concurs. As a copy of the SFIC was provided to Mr Harper prior to the Hearing, that law will not be reproduced in this decision other than to confirm the relevant legislation is contained in Social Security Act 1991 (Cth) (the Act).

15.  The Respondent’s SFIC identified the issues to be decided in this case as:

a.    Whether Mr Harper was overpaid newstart allowance totalling $9,973.52 for the Relevant Period;

b.    Whether this overpayment constitutes a debt to the Commonwealth; and

c.     Whether recovery of any or all of the debt should be waived.

16.  The following documents were admitted into evidence:

Exhibit 1	Section 37 T-Documents.
Exhibit 2	The Secretary’s Statement of Facts, Issues and Contentions dated 11 July 2019.
Exhibit 3	Applicant’s statement of financial circumstances dated 12 June 2019.
Exhibit 4	Bundle of Coles receipts dated 1, 2, 3, 7, 8 and 9 June 2019.
Exhibit 5	Caravan insurance renewal letter dated 7 May 2019.
Exhibit 6	Westpac accounts balance overview dated 12 June 2019.
Exhibit 7	Credit line statement dated 9 May 2019.
Exhibit 8	Australia Post receipt for credit line payment dated 24 May 2019.
Exhibit 9	Ballina Headland Leisure Park receipt dated 14 May 2019.
Exhibit 10	Ballina Headland Leisure Park receipt dated 30 May 2019.
Exhibit 11	GIO CTP insurance renewal notice (undated) with associated receipts.
Exhibit 12	Letter from Dr David Jackson, Clinical Haematologist, dated 6 June 2019.
Exhibit 13	Applicants open letter (undated).

1. The historical facts around the social security benefits paid to Mr Harper, and the origin of the debt currently in dispute, are set out in detail in paragraphs 3 to 20 of the SFIC. In summary, Mr Harper was in receipt of newstart allowance from 19 October 2014 to 1 August 2017. On 23 September 2016, Mr Harper lodged an application to claim carer payment which was initially rejected. The Department wrote to Mr Harper requesting further information and after he requested an extension of time, which was granted, further information was provided including a completed Income and Assets form SA369.

18.  After the initial rejection of the application, yet more information was provided to the Department, and on 1 August 2017 the Department formally advised Mr Harper his claim for carer payment was granted ‘and he would receive an arrears ­­­payment’­[2] (emphasis added) for the Relevant Period.

[2] SFIC at [16].

19.  The granting of the carer payment, the cancellation of his newstart allowance and the formal advice regarding the newstart allowance debt of $9,973.52 were all advised to Mr Harper in letters to him from the Department dated 1 August 2017.

RELEVANT LAW

20.  Newstart allowance (now referred to as jobseeker payment)[3] is not payable to a person if they are already receiving a social security pension, another social security benefit, a service pension or support supplement becomes payable to that person.[4] A social security pension includes a carer payment.[5]

[3] As of 20 March 2020, pursuant to s 2 of the Social Services Legislation Amendment (Welfare Reform) Act 2018 (Cth).

[4] Section 614 of the Act.

[5] Section 23(1) of the Act.

21.  If a social security payment is made and the person who receives it was not entitled for any reason to obtain that benefit, the amount of that payment is a debt due to the Commonwealth by that person.[6] As noted in the previous paragraph, a social security pension includes a carer payment.

[6] Section 1223(1) of the Act.

EVIDENCE

22.  Mr Harper’s evidence consists of his open letter (Exhibit 13), which is undated and received by the Tribunal on 26 June 2019, supported by Exhibits 3 to 12.

Mr Harper’s written submission

23.  In support of his application for review, Mr Harper wrote an undated letter to the Tribunal, which was received on 26 June 2019 (the Written Submission). This was entered into evidence at the Hearing as Exhibit 13.

24.  In the Written Submission, Mr Harper asserts he should not have to pay back the debt he acknowledges he owes the Department on the basis he was not responsible for the raising of the debt. He rightly points out he did not ask for his carer payment to be backdated to the date of the original application. Under the Social Security (Administration) Act 1999 (Cth), the Department can, in certain circumstances, backdate payment of benefits to the date the original claim was lodged or notified. Whether the Department should have backdated the claim is not an issue in this case. The issue is they did backdate the claim and they paid Mr Harper the arrears. That is, he received the back payment, which he acknowledges.

25.  Mr Harper does say: ‘I would have been happy to repay the amount from the start of when they approved it even though it was not my fault.’ As set out in paragraph 16 of the SFIC, on 1 August 2017 the Department formally advised Mr Harper his claim for carer payment was granted and he would receive an arrears payment for the Relevant Period.[7] Accordingly, as ‘the start of when they approved it’ coincides with the commencement of payment, there would be no arrears in that scenario.

[7] T22 p 135

26.  In paragraph 40 of the SFIC, the Secretary: ‘accepts that it is responsible for the creation of the debt by issuing the total sum of [c]arer [p]ayment arrears due for the period 22 September 2016 to 21 July 2017 instead of paying the Applicant the difference between the amounts of [n]ewstart [a]llowance already paid to him and the [c]arer [p]ayment arrears owed for that period.’ In paragraph 41 the Department goes on to say: ‘the way in which this payment was made to the applicant is not the usual administrative practice for payment of arrears.’ Notwithstanding the Department strayed from its usual administrative practice of paying the difference rather than the full amount and then claiming back an overpayment, the calculation of the carer payment is not in dispute and Mr Harper did receive the full amount of the arrears. There was no error of calculation, only a lapse of usual administrative practice.

27.  Mr Harper continues in the Written Submission to outline the medical condition he was suffering from, chronic lymphocytic leukaemia, which he describes as manageable but incurable with the potential to turn aggressive at any time. He advises he was currently (June 2019) undergoing chemotherapy which was not due to finish until November (presumably 2019) and he was unable to work due to the ongoing requirement for blood tests and visits to medical specialists. He does not state his medical condition is the reason he is unable to or should not have to repay the debt. Presumably the reason his medical condition is referred to in his submission is for the purpose that it may give rise to special circumstances under which repayment of the debt can be waived. This is discussed in detail later in this decision.

28.  Mr Harper provided a Statement of Financial Circumstances using the relevant Department form (SOFC). In the SOFC, he confirms he has no paid work and his partner, Ms Morgan, is a pensioner.

29.  The SOFC reveals:

a.    His income is $715 per fortnight, which is equivalent of $18,590 per annum. Ms Morgan receives a pension from the Department of $560 per fortnight, which equates to $14,560 per annum. Their combined income is then $33,150 per annum against which their living expenses total $20,070 per annum. That leaves a surplus of $13,080 per annum or $252per week before debt servicing.

b.    Their combined debts, exclusive of the Department debt referred to in this decision, total $20,107, which requires debt servicing of $670 per month or $8,040 per annum. This debt servicing reduces their surplus from $13,080 to $5,040, or $97 per week.

c.     The relocatable home and its contents in which Mr Harper and Ms Morgan live is listed with the current market value of $43,000 owned 100% by Mr Harper.

30.  Exhibits 3 to 11 are a bundle of receipts and statements from Coles supermarket, Westpac, Creditline, Ballina Headlands Leisure Park, GIO insurance and Australia Post. The contents of this bundle are all dated between May and June 2019, which is around the time the application for this review was made. Except for the GIO insurance renewal, which is in the name of Ms Patricia Horrigan (presumably Ms Morgan), and the statements from Ballina Headlands Leisure Park, which are in both Mr Harper and Ms Morgan’s name, the remainder of the receipts and statements appear to be in the name of Mr Harper. Whilst these receipts and statements no doubt support the cost of living set out in the SOFC, they appear to be no more than normal living expenses and add no weight to Mr Harper’s stated position.

1. The final element of Mr Harper’s evidence is Exhibit 12 which is a letter dated 6 June 2019 from Dr David Jackson, Clinical Haematologist of Northern NSW Local Health District. Dr Jackson confirms Mr Harper: ‘has been diagnosed with chronic lymphocytic leukemia and is undergoing strong chemotherapy with Fludarabine, Cyclophosphamide and Rituximab.’ Dr Jackson does not state when this diagnosis was made or when the chemotherapy treatment commenced. Dr Jackson does state Mr Harper: ‘will be unable to pursue any employment for at least the next nine months.’ This suggests Mr Harper will be able to return to employment at some time in the future. Whilst it is clear Mr Harper was, in 2019, suffering from and being treated for leukaemia, there is nothing in Dr Jackson’s letter to indicate this condition arose anytime proximate to the incurring of the debt in August 2017.

Mr Harper’s oral evidence

32.  The bulk of Mr Harper’s oral evidence centred around his apparent belief the payment of the arrears to him should not have to be repaid because in his mind he received newstart allowance up to approximately the end of July 2017 and carer allowance from the beginning of August 2017, such that there is effectively no overlap in the receipt of those benefits. He agrees he is not entitled to receive both payments for the same period. He does not appear to accept the lump sum payment he received in August 2017 covered the Relevant Period, although at one point in his evidence he did acknowledge he had been back paid.

33.  He was also adamant he should not have to pay back a debt created by being back paid to the date of the original application, on the basis the original application was rejected. He seems to be of the opinion it was an error on the part of the Department to pay him from the date of the original application and as such, that is, the Department’s error, he should not have to repay the amount he was back paid. He also stated he understood he was not entitled to receive both carer payment and newstart allowance at the same time. So, having acknowledged he was not entitled to receive both payments at the same time and that he had been back paid an amount of carer payment, regardless of when the carer payment began, that is, the date of the original application or the date of the second application, Mr Harper remained of the view that this was somehow an error on the Department’s part and as such he had no obligation to repay.

34.  Some relevant quotes from the transcript of the Hearing are as follows:

Reference	Speaker	Quote
Page 15,  lines 23-26	Mr Harper	But what I’m trying to say is because the first one was rejected, right? And then youse have indexed it, well, you sent me all the money. And obviously I wasn’t entitled to it.
Page 16, lines 30-35	Mr Harper	I was not in receipt of anything to say that it’s an overpayment. If I would have been in the receipt a week or so before to say, ‘Oh, we’ve made a mistake’, I probably would have paid the whole lot back mate, in one hit. But I was in – I did not get no correspondence until about three or four days after the fact. Alright? And then by then I’d done a lot of work around the house.
Page 18, lines 38-42	Member	Well, that being the case, since you’ve agreed that is what has happened, then the law says you’re not entitled – no one – is entitled to both. This isn’t directed at you. The law applies to everyone, and you can’t get both. So since you got carer, you’re then not entitled to newstart for the same period.
Page 18, line 44	Mr Harper	I can – I can understand that. [In reply to the comment by the Member referred to above.]
Page 19, lines 32-33	Member	Did it not strike you as odd when almost $10,000 [sic - $13,891.17] turned up unannounced in your bank account from Centrelink [the Department]?
Page 19, lines 43-44	Mr Harper	Well I just thought when that happened that youse had back paid me.

35.  It is clear to the Tribunal from the Department’s written submission and oral evidence at the hearing, and despite his objections to the contrary, Mr Harper acknowledges he was overpaid newstart allowance for the Relevant Period.

RESPONDENT’S RIGHT TO RECOVER

36.  The Respondent’s right to recover a debt may be either written-off or waived in certain circumstances, such as where the debt is due solely to the Department’s administrative error or due to the applicant’s special circumstances.

Write off

37. Section 1236 of the Act provides for the possibility of delaying the recovery of the debt for a period. This is referred to as write-off. If a debt is irrecoverable at law, or the debtor has no capacity to repay the debt, or the debtor’s whereabouts are unknown despite reasonable efforts to locate the debtor, or it is not cost-effective for the Commonwealth to take action to recover the debt, the Respondent may decide to write-off the debt for a stated period.

38.  Mr Harper agrees he has a debt due to the Commonwealth, which is recoverable. During cross-examination by Ms Gehrke at the Hearing, Mr Harper acknowledged he was currently repaying the debt at the rate of $15 per fortnight, reduced from $96 per fortnight, by way of deduction from his carer allowance.[8] The analysis of Mr Harper’s SOFC set out above paragraph [‎28] shows he has the capacity to repay the debt at the current rate of $15 per fortnight without causing him severe financial hardship. Mr Harper’s whereabouts are known and have not changed and the repayment by way of deduction from his carer allowance makes a cost-effective for the Commonwealth to recover the debt.

[8] Transcript at page 22 lines 38 – 42.

39.  The Tribunal finds there is no case for the debt to be written-off.

Administrative error waiver

40. Pursuant to section 1237A of the Act, the Respondent must waive its right to recover the proportion of a debt that is attributable solely to an administrative error by the Commonwealth if the debtor received the funds in good faith and the debt is not raised within a period of six weeks from the first payment that caused the debt.

41.  It is unfortunate there was a breakdown in administrative practice by the Department in that the full amount of the carer payment arrears for the Relevant Period was paid to Mr Harper, rather than the difference between the amount of those arrears and the amount of newstart allowance which had already been paid to him for that period. The fact remains Mr Harper received notice of the debt within six weeks of the first payment of the carer payment arrears. He received letters from the Department, advising him of three matters, viz, his carer payment had been approved and backdated, he therefore had been overpaid newstart allowance and a debt had been created for the overpayment. All those letters were dated 1 August 2017 and were posted to his usual address. He acknowledges receiving those these letters. The funds, representing the arrears of the carer payment, were received by Mr Harper approximately a week after the letters were sent. Mr Harper says he did not receive these letters until after he received the funds and had he known prior to receiving the funds he would have repaid the debt in full at that time. Instead, without first checking why he had received funds, he set about renovating his home with those funds.

42.  There was also no error in the calculation of the arrears of the carer payment and Mr Harper received the cash.

43.  The Tribunal finds while there was a breakdown in administrative practice by the Department it does not raise a case for a waiver of the debt by reason of administrative error as the debt was raised within 6 weeks of the first payment of carer payment arrears made to Mr Harper.

Special circumstances waiver

44. Pursuant to section 1237AAD of the Act, the Respondent may waive the right to recover all or part of a debt which does not arise by the debtor making of a false statement or representation, and there are special circumstances, other than financial hardship, that make it desirable to waive the debt.

45.  The term ‘special circumstances’ is not defined in the legislation however, the courts[9] have sought to define the expression as being unusual, uncommon or exceptional circumstances, but not unique, in the case at hand.

[9] For example, in Beadle and Director-General of Social Security (1984) 6 ALD 1.

46.  In the Written Submission, Mr Harper discusses his then current medical condition, see paragraph [‎27]. Whilst the Tribunal has no doubt Mr Harper was suffering from the medical condition described in his submission and confirmed by the letter from Dr Jackson, see paragraph [‎31], there is no evidence to indicate when this condition arose, to what extent it continues, and more specifically, whether it was known in 2017 when the debt arose. Mr Harper does not specifically state his medical condition and his financial circumstances, as set out on his SOFC, are the basis for a claim of special circumstances. However, it can be inferred from their inclusion in his submission he sees them as such.

47.  Mr Harper received the funds and spent them in effecting renovations to his home before first ascertaining why he had received the funds and whether they were his to spend. By his own admission, had he known about the overpayment of newstart allowance and the resultant debt before he received the funds, he would have set aside enough to repay the debt. Mr Harper asserts he did not receive the letters dated 1 August 2017 prior to receiving the funds.

48.  The Tribunal finds the medical condition of Mr Harper and his financial circumstances, both now and in 2017, do not amount to special circumstances for the purpose of debt waiver. Certainly, by his own admission, Mr Harper conceded he could have set aside enough funds from the back payment of carer allowance to repay the debt in full in August 2017.

CONCLUSION

49.  The issues in this case are set out in paragraph [‎15]. In summary, the issues are whether Mr Harper was overpaid newstart allowance for almost a year from September 2016 to July 2017, if so, does that overpayment constitute a debt due to the Commonwealth and whether the recovery of any of the debt should be written off or waived. The Tribunal notes Mr Harper agreed to a payment arrangement in respect of the debt where he is currently paying $15 per fortnight, reduced from $96 per fortnight.

50.  Mr Harper acknowledges he was overpaid newstart allowance in the amount of $9,973.52, which must be repaid to the Commonwealth. Whilst Mr Harper was suffering from significant adverse health conditions and he is a person of limited means, there are no circumstances in which the Respondent should either write-off or waive the debt.

DECISION

51.  The decision under review is affirmed.

I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Member P Ranson

…………………[SGD]………………………..

Associate

Dated: 1 October 2020

Date of Hearing:	18 August 2020
Final Submissions Received:	19 July 2019
Solicitor for the Respondent:	Ms Gillian Gehrke, Services Australia