Hasandic and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 141

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 141

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/3600

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		ENES HASANDIC

Applicant

And

SECRETARY,

DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Regina Perton, Member

Date17 January 2008

PlaceMelbourne

Decision For reasons given orally at the hearing, the Tribunal affirms the decision under review.

(sgd) Regina Perton

Member

SOCIAL SECURITY – disability support pension – failure to inform Centrelink in a timely fashion of changes in earnings – overpayment – waiver of debt – whether special circumstances exist – decision under review affirmed

Data-matching Program (Assistance and Tax) Act 1990 s11

Social Security Act 1991 ss 117, 1066A, 1223(1), 1237AAD

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

REASONS FOR DECISION

17 January 2008 Regina Perton, Member     

1.      The Tribunal provided oral reasons for decision at a hearing of this matter on 17 January 2008.  On 5 February 2008, Mr Enes Hasandic requested written reasons for decision which are set out below.

2.      Mr Hasandic has been receiving a disability support pension (DSP) from Centrelink since May 2001.  Centrelink is the service provider for the Department of Families, Housing, Community Services and Indigenous Affairs.  Mr Hasandic sometimes works part-time.  His wife also works.  Mr Hasandic has generally been conscientious about reporting his wife’s income.  Mr Hasandic, like others who rely on a social security benefit for income support, is allowed to earn a limited amount of extra income without it affecting his rate of payment.  As Mr Hasandic is a member of a couple, Mr Hasandic’s wife’s income is also taken into account in determining the amount of income he receives.  Once their combined income exceeds a specified amount, the rate of DSP is reduced by a complex formula.  The calculations are done in such a way that they are difficult to reconcile with daily or weekly earnings. 

3.      Mrs Hasandic’s fortnightly earnings are not always consistent.  Mr Hasandic believes he informed Centrelink in a timely manner of his wife’s income and his.  Sometimes notification was delayed because Mrs Hasandic’s payslip, which was prepared in Perth, arrived a few days late.  Centrelink disagrees that it was kept informed of all changes on a regular basis, within the stipulated timelines. 

4.      On 25 October 2006, Centrelink informed Mr Hasandic that he had been overpaid DSP between 9 July 2004 and 19 October 2006, as the result of a discrepancy between the amount of income earned by Mr and Mrs Hasandic and the income declared to Centrelink.  On 27 December 2006, Centrelink raised a debt of $1,548.52, being the amount of the overpayment between 9 July 2004 and 19 October 2006.

5.      On 1 May 2007, an authorised review officer (ARO) from Centrelink reviewed the decision to raise the debt and affirmed the decision that there was a debt of $1,548.52.  On 25 June 2007, the Social Security Appeals Tribunal (SSAT) affirmed the decision concerning the debt.  On 3 August 2007, Mr Hasandic lodged an application for review with the Tribunal.

6.      The issues to be considered by the Tribunal are:

·Does Mr Hasandic owe a debt to the Commonwealth?

·Is the amount of the debt correct?

·Should the debt be waived due to administrative error?

·Should the debt be waived due to special circumstances?

Does Mr Hasandic have a debt to the Commonwealth?

7.      Mr Hasandic started receiving DSP payments on 30 May 2001.  Centrelink wrote to him on many occasions telling him about the amount he would be paid and what his obligations were.  These included informing Centrelink within 14 days if his or his wife’s income exceeded an amount specified in the letter.  Because his and his wife’s fortnightly earnings were variable, he was asked to report fortnightly.  

8.      On 25 October 2006 a data‑matching exercise between Centrelink and the Australian Taxation Office (ATO) for the 2004/2005 financial year revealed a difference between the two bodies as to the combined income of Mr and Mrs Hasandic.  The ATO’s records showed an income of $2,176 for Mr Hasandic but Centrelink’s records showed no income.  Mrs Hasandic’s income was $33,591 in the financial year but Centrelink’s records indicated an income of $28,398.  Centrelink wrote to Mr Hasandic explaining the differences between the two sets of records and invited him to provide further information if he believed the figures were wrong.  Centrelink also wrote to both of their employers asking for pay slips, dates of employment, gross payments etc.  The responses were received during November and December 2006. 

9.      On 27 December 2006, Centrelink determined that Mr Hasandic had been overpaid $1,548.52 in DSP and raised a debt for that amount. 

10.     An ARO and the SSAT reviewed the debt and determined that the calculated amounts were correct and that they had to be paid. 

11. Section 1223(1) of the Social Security Act 1991 (the Act) allows the Commonwealth to raise a debt if a person is paid a social security payment to which he is not entitled. 

12.     The Tribunal is satisfied that Mr Hasandic was overpaid DSP during the relevant period and that he owes a debt to the Commonwealth as a result.

Is the amount of the debt correct?

13.     Mr Hasandic believes that the debt has not been calculated correctly.  This view arises partly because of the complex formula used by Centrelink to calculate income and the way it is expressed in its documentation.  The amount of the debt has now been recalculated on a number of occasions, with the latest being after the lodgement of the application to the Tribunal.

14.     Mr Hasandic is still not satisfied with the calculations but has not satisfied the Tribunal that his alternative calculations are correct.  The Tribunal is satisfied that Centrelink has now checked the figures several times.  In the absence of evidence to the contrary, the Tribunal is satisfied that Centrelink’s calculations are correct.  Mr Hasandic was overpaid DSP due to his having a higher combined income than that used by Centrelink to calculate his entitlement.  He therefore owes a debt to the Commonwealth of $1,548.52.

Should the debt be waived due to administrative error? 

15.     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).

16.     Mr Hasandic believes that he kept Centrelink informed of his wife’s income and his income at all times, when he was working.  Centrelink records do not reflect this.  Mr Hasandic also queries the information provided by his wife’s employer but has not been able to provide evidence supporting his claims.

17.     Centrelink sent numerous letters to Mr Hasandic in which his and his wife’s annual income was cited and in which he was reminded of the need to keep Centrelink informed of changes.  Even if, as he claims, Mr Hasandic provided some information in person to Centrelink staff at his local office that was not recorded or wrongly recorded, Centrelink nonetheless informed Mr Hasandic that he was obliged to advise it if the figures were wrong and/or if his combined income changed.  The Tribunal is satisfied that the overpayment was not wholly due to administrative error on the part of Centrelink and therefore waiver of the debt due to administrative error is not available.

Should the debt be waived due to special circumstances?

18. 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 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.

19.     The term special circumstances is not defined in the legislation.  For the Tribunal to use its discretion to determine that Mr Hasandic’s situation constitutes special circumstances, it must be satisfied that there is something to make this case different from others who are in similar situations to Mr Hasandic.  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.  Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case.

20. The Tribunal is satisfied that Mr Hasandic meets the requirements of s 1237AAD(a). However, he is required to also meet 1237AAD(b) for the Tribunal to waive the debt on the basis of special circumstances.   The Tribunal accepts that Mr Hasandic has health problems.  The Tribunal also accepts that he still has a mortgage on his house.  However, the Tribunal is not satisfied that the situation in which Mr Hasandic finds himself is vastly different from other social security recipients who have incurred debts due to misunderstanding or overlooking legislative requirements.  Mr Hasandic remains on a social security benefit and is able to repay the debt in instalments taken out of his fortnightly payments.  The amount to be withheld per fortnight is negotiable.  The amount of the debt is relatively small.

21.     The Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone). Hence, the waiver provisions of s 1237AAD of the Act do not apply.

22.     The Tribunal finds that Mr Hasandic owes a debt to the Commonwealth for the overpayment of DSP between 9 July 2004 and 19 October 2006.  The total debt is $1,548.52. 

DECISION

23.     The Tribunal affirms the decision under review.

I certify that the twenty-three [23] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Dates of hearing:  17 January 2008

Date of decision:  17 January 2008
Advocate for applicant:                Self -represented 

Advocate for respondent:            Mr Faisal Bakhtiar, Centrelink Legal Services