Head and Department of Family and Community Services
[2000] AATA 530
•30 June 2000
DECISION AND REASONS FOR DECISION [2000] AATA 530
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1999/1300
GENERAL ADMINISTRATIVE DIVISION )
Re SANDRA HEAD
Applicant
And DEPARTMENT, FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal MS S M BULLOCK , Member
Date30 June 2000
PlaceSydney
Decision The decision under review is affirmed
………………………………..
Ms S M Bullock
Member
CATCHWORDS
Social Security – parenting payment – overpayment – debt – debt recovery – administrative error - special circumstances.
Social Security Act 1991 ss516E, 509C, 1068, 1223, 1224, 1237A, 1237AAD
McAuliffe v Secretary, Department Social Security (1991) 23 ALD 284
McAuliffe v Secretary, Department of Social Security (1982) 28 ALD 609
Beadle v Director-General of Social Security (1985) 60 ALR 225
Re Green v Secretary, Department of Social Security (1990) 21 ALD 772
REASONS FOR DECISION
MS S M BULLOCK
This is an application for review before the Administrative Appeals Tribunal ("the Tribunal") by Ms Sandra Head, ("the Applicant") of a decision of the Social Security Appeals Tribunal ("SSAT") made on 12 July 1999 (T2). The SSAT decided that a debt of Parenting Payment of $1600.60 existed for the period 1 October 1998 to 21 January 1999 and should be recovered. The SSAT's decision affirmed a decision of an Authorised Review Officer ("ARO") of the Department of Family and Community Services, made on 20 April 1999 (T48), which decided that an overpayment of Parenting Payment of $1299.85 had occurred. The period of the overpayment was from 1 October 1998 to 21 January 1999 but a further recalculation of the debt by a Centrelink officer occurred on 29 April 1999 which extended the debt to its current amount of $1600.61 (rounded to $1600.60) (T50, T51). The original decision to raise an overpayment of $897.80 was made by a delegate of the Department of Family and Community Services on 22 January 1999 for the period 10 December 1998 to 21 January 1999 (T38).
Ms Head provided oral evidence before the Tribunal in Sydney. She was self-represented. The Respondent, the Secretary, Department of Family and Community Services ("the Department") was represented by Mr B Slattery, departmental advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents - T1 to T62") and the following exhibits:
Exhibit A1 Statement by Ms S Head 6 March 2000
Exhibit R1 Respondent's Statement of Facts and Contentions 1 March 2000
Exhibit R2 Computer printout – summary of earnings update 15 October 1999
issues
It should be noted that on 6 March 2000, Mr Slattery advised the Tribunal that the Respondent had decided to waive recovery of an amount of $149.60 from the debt which covered Parenting Payment between 26 October 1998 to 25 November 1998, because of the contributory error to this debt made by the Respondent (Exhibit R1, p12).
The issues in this matter are:
Whether or not an overpayment of Parenting Payment in the amount of $1600.60 occurred between 1 October 1998 and 21 January 1999; and if so,
Whether or not there is a debt owing to the Commonwealth; and if so,
Whether or not there are any grounds not to recover the debt in part or in whole.
legislation
A determination in this matter requires consideration of the Social Security Act (1991) ("the Act").
Ms Head's Parenting Payment and its calculation is dealt with under section 1068 A-E1.
Recipients of parenting payment are obliged to provide certain information to the Department as is provided in section 506E of the Act which as relevant states:
"506E(1)The Secretary may give a person to whom parenting payment is being paid a notice that requires the person to give the Department a statement about a matter that may affect the payment of parenting payment to the person.
506E(2) Subject to subsection (3), a notice under subsection (1);
(a)must be in writing; and
(b)may be given personally or by post; and
(c) must specify how the statement is to be given to the Department; and
(d) must specify the period within which the person is to give the
statement to the Department; and
(e) must specify that the notice is a recipient statement notice given under this Act.
506E(3)A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (2)(c) or (e).
506E(4)The period specified under paragraph (2)(d) must end at least 14 days after the day on which the notice is given.
506E(5)A statement given in response to a notice under subsection (1) must be in writing and in accordance with a form approved by the Secretary.
506E(6)A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) tot the extent that the person is capable of complying with the notice.
506E(7)This section extends to:
(a)acts, omissions, matters and things outside Australia, whether or not
in a foreign country; and
(b)all persons irrespective of their nationality or citizenship."
Section 509C of the Act deals with the rate reduction and as relevant states:
"509C
If:(a) a person who is receiving parenting payment is given a notice under section 506D; and
(b) the notice requires the person to inform the Department of the occurrence of
an event or change in circumstances within a specified period (the notification period); and
(c) the event or change in circumstances occurs; and
(d) the person does not inform the Department of the occurrence of the event or change in circumstances within the notification period in accordance with the notice; and
(e) because of the occurrence of the event or change in circumstances, the person's rate of parenting payment is to be reduced;
parenting payment becomes payable to the person at the reduced rate immediately after the day on which the event or change in circumstances occurs."
Section 1223 of the Act deals with debts arising under the Act and as relevant, subsection 1223(5) deals with incorrectly paid amounts and as relevant states:
"1223(5) If:
(a)an amount (the received amount) has been paid to a person by way of social
security payment on or after 1 October 1997; and
(b) because the received amount had not been correctly calculated ustin the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person under this Act;
the difference between the received amount and the correct amount is a debt due to
the Commonwealth."
Section 1224 of the Act deals with debts arsing from a recipient's contravention of the Act and as relevant provides:
"1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment;
and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii) failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth."
Part 5.4 of the Act deals with the Non-recovery of debts. Section 1223(6) deals with write-off under the Act and as relevant provides:
"1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and
only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts
have been made to locate the debtor; or
(d) the debtor is not receiving a social security payment under this
Act and it is not cost effective for the Commonwealth to take action
to recover the debt."
Section 1237 of the Act deals with the power to waive the right to recover a debt in certain circumstances. Section 1237A deals with the waiver of a debt arising from error and specifically subsection 1237A(1) deals with administrative error and states:
"1237A(1)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.
1237A(1A)
Subsection (1) only applies if:(a) the debt os not raised within a period of 6 weeks from the first payment
that caused the debt; or
(b) if the debt arose because a person has complied with a notification
obligation, the debt is not raised within a period of 6 weeks from the end
of the notification period;
whichever is later."
Section 1237AAD of the Act deals with waiver in special circumstances and as relevant provides:
"1237AAD 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 orthe 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."
background
The facts contained in this section are provided by way of background information and are not in dispute.
Ms Head was born on 4 November 1968. She married on 2 May 1992 and separated on 26 December 1996 (T3). Ms Head has two children, aged at the time of the hearing five years and six years. Both children attend public primary schools.
Prior to and during the period under review, Ms Head had been employed on a casual basis with ADECCO Australia Pty. Ltd.
On 14 September 1998, Ms Head contacted the Department to advise that she had not been employed with ADECCO since 31 August 1998 (T56).
Following Ms Head's advice to the Department of her cessation of employment, she was sent a departmental letter dated 14 September 1998 notifying her that her Parenting Payment would increase and also advising her under section 506E of the Act to inform the Department within 14 days if her circumstances changed, including circumstances such as her income increasing beyond $0.72; if she started or recommenced work; or if her income was incorrect (T19).
From 1 October 1998, Ms Head's Parenting Payment increased to the maximum rate payable at that time of $362.70 per fortnight (T57).
During the week of 21 September 1998, records from ADECCO indicate that Ms Head had recommenced work (T43, p134).
There is no record of Ms Head informing the Department within 14 days of the recommencement of employment.
On 26 October 1998, Ms Head lodged a "Parenting Payment Review form" and a computer record was made of Ms Head providing payslips for earnings in a 12 week period totalling $2477.63 (T57).
As a result of information provided on 26 October 1998, Ms Head's Parenting Payment was reduced to $230.30 per fortnight commencing 12 November 1998 (T27). Ms Head was informed of this by letter of 30 October 1998.
On 30 November 1998, a departmental officer recorded a change of Ms Head's circumstances and earnings for 25 October 1998 and 1, 8, 15 and 22 November 1998 (T60).
On or about 30 November 1998, Ms Head phoned the Department to advise she would not be working at the ADECCO in the near future.
On 1 December 1998, Ms Head was advised by departmental letter of the increase in her Parenting Payment to $362.70 per fortnight to commence on 10 December 1998. The letter contained a recipient notification notice requiring Ms Head to advise the Department within 14 days of changes in circumstances including increase in income beyond $0.36 per annum; if she started or recommenced work; or if her income details were incorrect (T33).
From the Temporary Earnings Report from ADECCO, it is clear that Ms Head worked with this company throughout various times in December 1998 and up until 24 January 1999 (T43).
On 9 January 1999, a further Parenting Payment Review Form was returned to the Department by Ms Head notifying of earnings on 29 November 1998, 6 December 1998, 20 December 1998 and 27 December 1998 totalling $1239.75. A departmental delegate noted that Ms Head had notified the Department on 30 November 1998 that there would be nil future earnings and concluded: "CUST [Customer] appears to have misrepresented herself and earnings and o/p [overpayment] raised on info received" (Exhibit R1, p5). These details appear to have been recorded from attached payslips which recorded Ms Head's net earnings.
On 22 January 1999, the departmental delegate raised an overpayment of $897.80 from 10 December 1998 to 21 January 1999. Ms Head was advised of this overpayment debt by letter of 29 January 1999 (T62).
On 18 March 1999, following approaches made by Ms Head to the Department to reconsider its decision, the decision maker increased the period under review from 26 October 1998 to 21 January 1999 with a new overpayment debt being calculated of $1299.85 (T45). Ms Head was advised of this by letter of 18 March 1999 (T46).
Ms Head sought a review by an ARO and on 20 April 1999, the ARO affirmed the decision under review but varied the period of overpayment to 1 October 1998 to 21 January 1999 (T48, T49). The debt was recalculated at $1600.60 (rounded) (T50). Ms Head was advised of this decision by way of letter dated 29 April 1999 (T51). Ms Head sought a review of the ARO's decision by the SSAT on 26 May 1999 and on 12 July 1999, the SSAT affirmed the decision under review.
Ms Head made an application for review by the Tribunal lodged on 21 August 1999 and wrote:
"I believe that the overpayment was an error from the 1st instance. Social Security have "misplaced" a 12 weekly review form relevant + payslips for this period. I earnt $22,000 ($6000 was from Centrelink) during 98 – 99 financial year. This figure I have from my group certificates (less when you deduct my car/phone etc.) I believe I have been unfairly dealt with by Centrelink as I have declared my earnings and would like this matter re investigated thoroughly (which I do not believe was done properly by SSAT.) This and because I can not afford a debt like this (or I would not be working) is why I would like the matter reassessed. I hope that my working is not just a waste of time. I declare and have declared all I have earnt and I am here because I am a struggling, single mum, working + trying to give my kids the best life I can, as hard as it is. Can't you see, I am no millionaire, just a very low income earner trying to get anywhere I can in life – I wish I had $$$$ if I did – would I be here wasting time and stressing out over $1600? I don't even own a washing machine, my fridge is dead, I live out West in Housing Commission unit because it is all a sole parent can afford." (T1)
evidence of ms head
Ms Head stated that she is a sole parent of two children. She pays $52 per week for rent for New South Wales Department of Housing accommodation. Ms Head likes to work very much and tries hard to maintain her independence and her employment. She has worked variously as a secretary, cleaning houses, waitressing and in fact takes "whatever is available". Ms Head is currently not working but has her name listed with a number of employment agencies. Ms Head stated that she is trying to make ends meet and does not want to be a burden "on the system". She wishes to be a worthwhile citizen and being employed is part of this.
Ms Head explained to the Tribunal that she generally understood her obligations to inform the Department of changes in her circumstances, including changes in her employment status. Ms Head also informed the Tribunal that she generally read the backs of the departmental letters/notices sent to her. Ms Head stated that she had recognised that she had made errors on occasions in relation to her Parenting Payment, particularly when she recorded on forms details of her net income instead of gross income, as was required on the Parenting Payment Review Forms. Ms Head explained to the Tribunal that it was her practice to notify the Department by telephone when she commenced or ceased work and also to supply income details including her payslips. Ms Head contended however, that the Department should have checked the income details that she had included in her Parenting Payment claim, against her payslips. Such action by the Department would have revealed her error of incorrectly recording net income details. Ms Head stated that she could hardly be trying to defraud the Department by providing false information when she had in fact attached payslips to verify her income details. Her inclusion of net earnings as opposed to the required gross earnings was a genuine and innocent mistake, Ms Head stated. Ms Head contended that it was up to the Department to work out what her payment should be. The Department had all of the knowledge about matters such as the appropriate rate of Parenting Payment. It was the Department's responsibility to correctly assess claims made to it. The fact that Ms Head had supplied payslips which provided the primary source of information for her earnings, should have been closely scrutinised by the Department.
The difficulty Ms Head has in relation to keeping the Department informed of her earnings is that because of her casual work, her earnings change from time to time. The Department however should have guidelines and practices to allow for such unusual circumstances, Ms Head told the Tribunal.
In relation to the period of Parenting Payment after 30 November 1998, from which date Ms Head had notified the Department that she would not be working but infact subsequently did, Ms Head stated that she could not recall whether or not she informed the Department of her work. Ms Head could only say that it was her general practice to keep the Department informed.
Since Ms Head had discovered the difficulties of ensuring the Department was fully informed of her current earnings situation, it had been arranged that she contact the same departmental officer by telephone. This system seems to have been successful thus far, Ms Head informed the Tribunal.
Ms Head explained to the Tribunal that her health is problematic as she is very stressed and anxious over the debt she owes to the Commonwealth. Ms Head stated that she is an honest person and she tries to keep the Department fully informed of her financial and other circumstances. Ms Head's childrens' health is satisfactory, although her daughter will require orthodontic treatment in the near future as she has an abnormal bite which requires correction.
Ms Head's financial situation is "very tight". She has an outstanding rental accommodation account, electricity account and telephone bill. Further, Ms Head informed the Tribunal that she uses her Master Card credit card to purchase food and as a consequence, now has a Master Card debt of approximately $1000.00 upon which she must make repayments on a monthly basis. Ms Head explained that she has an old Commodore car which requires repair, new tyres and in addition she is unsure of how she will be able to afford the registration fee. On average, Ms Head earns approximately $15.00 per hour from which she has to pay the weekly household expenses which includes shopping of $50.00 to $60.00. She stated that this should be $150.00, however unfortunately she cannot afford this amount so Ms Head cuts the cost of her weekly household supplies to the barest minimum. Further, Ms Head is required to pay for petrol to and from work, toll fees and expensive child minding which includes early mornings and late nights. Recently, Ms Head had to borrow money from her mother and she has, in recent times, had to seek financial and other assistance from Anglicare. Ms Head stated that she finds it very difficult to ask for help, but it became a necessity when she realised that she had to feed her children.
Ms Head reiterated that she loves to work and to have her independence. In a statement seeking a stay of the SSAT's decision, Ms Head wrote;
"…I like to feel that it is worth my while and that I am achieving something. I beg you to go over what is a mistake as I wish to continue to work, but if I am going to be penalised and have to pay back lump sums, it is just not worth while – and that is an attitude I hate in single parent mannerisms, because I feel I work, pay tax and would do more if I had better and less expensive daycare – but I don't so I do as much as I can to earn my keep and give the kids a bit better life – but not at the moment I am scraping – I have no food not to mention rego due…
I hope you can work out this situation – I am honest and have been honest in all of my declarations. Please look at this carefully." (T1, pp8, 9)
submissions
Ms Head submitted that she has tried to do the right thing by herself, her children and the community, juggling two small children and work at the same time. Ms Head submitted that she felt penalised by the Department's action. Ms Head submitted that she had unintentionally if at all "ripped anybody off". Further, Ms Head submitted that the penalty that she incurred as a result of the overpayments occurred because of the incompetence of the staff at Centrelink and the Department. Ms Head submitted that the Department's error in this matter is not an isolated incident and cited an example between 4 September 1997 to 27 November 1997 when Centrelink raised a debt against Ms Head of $492.10. Ms Head was later informed that that overpayment was raised incorrectly and she did not owe any money.
The way Ms Head felt at the time of the hearing, she was contemplating whether it was wise to work, because this most recent debt raised by the Department was causing her great stress. Pursuing her appeals was also costing her time and money. Instead of being at the hearing, Ms Head stated that she could have been working and earning money for herself and children.
Ms Head referred to the level of hardship suffered by her during the period under review when an amount of $605.69 was collected by way of withholdings and at that time she had not received any other income. On that occasion, Ms Head was left with $80.00 to survive on after her overpayment withholding had been deducted. During the weeks whilst this money was deducted, Ms Head and her children were "in dire straits". She was behind in all her bills, including rent and was not sure from one day to the next whether she could survive.
Ms Head submitted that she was in a position of financial hardship. In this regard, she has had to take out loans to obtain personal essentials for herself and her family. Ms Head further submitted that she had at all times acted honestly and to the best of her ability and had not intentionally committed any error or taken any money to which she believed she was not entitled. Ms Head submitted that to the best of her knowledge, all the relevant documentation and payslips concerning her earnings were declared to Centrelink.
In conclusion, Ms Head submitted that she is a "true blue Aussie battler".
"I am not on drugs, I like to be a worker, yet, because I have no idea on how to defend myself on this one (the paperwork is immense) I am in trouble. All that I know is that there were no bad intentions, I am not a fraud and cannot afford this debt especially because of neglect."
Ms Head requested the Tribunal to reconsider the decision with all the information she had provided, taking into account the hardship she and her children are experiencing.
Mr Slattery, for the Department submitted that the period under review could be divided into three distinct stages namely from 20 September 1998 to 25 October 1998; from 26 October 1998 to 25 November 1998 and from 26 November 1998 to 19 January 1999, the date when Ms Head returned a Parenting Payment Review Form.
Mr Slattery contended that on 14 September 1998, Ms Head was sent a letter which not only notified her of her rate of Parenting Payment but also constituted a recipient notification notice under section 506E of the Act, which required her to notify the Department within 14 days of certain things including starting or recommencing work, Ms Head increasing her income beyond $0.72 per annum or if her income details were incorrect. This letter was sent after Ms Head advised the Department that she had ceased work from ADECCO from 31 August 1998 (T56). In actual fact, Ms Head had resumed work within a short period after 31 August 1998 and earning records from ADECCO indicate that she earned $191.50 in the week ending 20 September 1998, $395.13 for the week of 27 September 1998 and continuing on for various periods until 18 October 1998 when she earned $427.75 per week gross.
Mr Slattery acknowledged that Ms Head may have been acting in good faith in advising of the cessation of her work from 31 August 1998, but she was also obliged to notify of the recommencement of work, which she did not do. As a consequence of Ms Head notifying of her cessation of work from 31 August 1998, she was paid Parenting Payment at the maximum rate when she was not qualified to have been receiving this rate of payment. Accordingly, section 509C is enacted to work out the rate of Parenting Payment for which Ms Head was entitled. The overpayment commences from the first pay date after 20 September 1998 when Ms Head recommenced work, that is 1 October 1998. Accordingly, as Ms Head failed to notify of changes in circumstances under section 506E of the Act, then reference was had to section 1224 of the Act. Mr Slattery contended a debt arose out of the overpayment of Parenting Payment from the period 1 October 1998 to 25 October 1998 because Ms Head received payment to which she was not entitled and that overpayment had arisen because she had failed to comply with regulations under the Act, namely section 506E. This first period of overpayment ended on 25 October 1998 as that was the day before the Department received a Parenting Payment Review Form from Ms Head, lodged on 26 October 1998.
Turning to the period from 26 October 1998 to 25 November 1998, Mr Slattery submitted that a Parenting Payment Review Form was lodged on 26 October 1998. This form had not been provided to the SSAT but had been located subsequently in a batch of archived departmental material. The Parenting Payment Review Form contained information provided by Ms Head in relation to her earnings, in addition to her payslips except for that representing the week ending 25 October 1998. In the review form, Ms Head had advised that she had been working within the last 12 weeks and provided details of her earnings from ADECCO. The form required that Ms Head provide details of gross earnings before tax or other deductions. However, it has since been acknowledged by Ms Head that she provided her net, after tax earnings.
Mr Slattery acknowledged that while Ms Head had provided incorrect earnings information by supplying net earnings, the Department had received attached payslips apart from that for the week 25 October 1998. Mr Slattery further acknowledged that the Department should have had recourse to the payslips, but it appeared that no reference was made to them or effort taken to check Ms Head's earnings details against the payslip information. Because of this, and because of the omission of one weeks pay, the figure used to calculate Ms Head's rate of Parenting Payment produced a higher Parenting Payment than would have been the case had gross earnings been used and Ms Head supplied complete details of her earnings for the full 12 week period.
Mr Slattery submitted that the information provided by Ms Head about her earnings contained in the review form lodged on 26 October 1998 was false in that the information provided was net rather than gross earnings.
Referring to McAulliffe v Secretary, Department of Social Security (1992) 28 ALD 609, Mr Slattery submitted that the Full Federal Court held that the false statement detailed in section 1224 of the Act need only be a contributing factor in the decision to make a payment or benefit and it need not be the prominent, primary or dominant cause of the overpayment. Mr Slattery contended that the Centrelink officer who assessed Ms Head's income, based on the review form of 26 October 1998, probably only had regard to the earnings details written on the form in answer to Question Nine and did not have regard to the information on the payslips. Accordingly, the incorrect information on the review form provided by Ms Head contributed to the incorrect assessment of earnings and the overpayment of Parenting Payment. Following the reasoning in McAuliffe (supra), Mr Slattery submitted that section 1224 is invoked and amounts overpaid during this second period represented a debt due to the Commonwealth.
The SSAT stated that the debt for this period arose out of subsection1223(5) of the Act. Mr Slattery did not agree with this finding of the SSAT, contending that section 1224 had application. If the Tribunal was not minded to apply section 1224 of the Act, Mr Slattery submitted that in the alternative then section 1223(5) of the Act applies. In any event Mr Slattery submitted, that a debt was due to the Commonwealth arising out of an overpayment of Parenting Payment during the period 26 October 1998 to 25 November 1998.
Mr Slattery finally turned to the third period under review from 26 November 1998 to 19 January 1999. During this period, Mr Slattery noted that Ms Head had advised of her income by telephone and a departmental letter dated 30 November 1998 advised her that her Parenting Payment would reduce to $73.20 per fortnight (T32).
Prior to receiving the letter of 30 November 1998, Ms Head then advised Centrelink by telephone and as recorded in a computer file note; "she will not be working with the a/n company [ADECCO] in the near future" (T61). With this new information, the Department reassessed Ms Head's Parenting Payment including the fact that her earnings would now be nil, and a letter of 1 December 1998 (T33) was sent advising Ms Head of her increase of parenting payment. This letter also contained a recipient notification notice which advised Ms Head that she must tell the Department within 14 days amongst other things, if she started or recommenced work or if her income increased beyond $0.36 per annum (T33, p100).
Mr Slattery submitted that the Tribunal should have regard to an Employer's Report from ADECCO which indicated that Ms Head continued to receive irregular weekly wages throughout the period 1 December 1998 to January 1999. During this period, Ms Head was receiving incorrectly, the maximum rate of Parenting Payment as the Department believed that her earnings were nil. Accordingly, Mr Slattery submitted that Ms Head was overpaid during the period 26 November to 19 January 1999 and this overpayment constituted a debt pursuant to section 1224 of the Act as Ms Head had failed to notify the Department not only of her increased income but the fact that she had recommenced work. Ms Head had failed to notify the Department within 14 days of her resuming work, following her information between 28 November and 30 November 1998 that she recommenced work in December 1998.
In relation to the non recovery of the debt, Mr Slattery submitted that there was no possibility of waiver of the debt under section 1237A(1) of the Act which deals with the Secretary waiving the right to recover a proportion of the debt that is attributable solely to administrative error made by the Commonwealth, if the debtor received in good faith the payment which gave rise to that proportion of the debt. Mr Slattery submitted that there was a period between 26 October 1998 to 25 November 1998, during which the Department had used incorrect information provided by Ms Head to calculate her Parenting Payment entitlement and had not checked this information against the payslip records also provided by Ms Head. While Mr Slattery conceded that this was Departmental error, he further submitted that the debt had not arisen solely because of the Department's error, but because of the contribution of both the Department and Ms Head to the debt. Ms Head had contributed to the debt because she had provided incorrect earnings information in the form of net figures instead of the required gross figures. While Mr Slattery was at pains to inform the Tribunal that the Respondent did not in any way consider Ms Head to be acting dishonestly or trying to defraud the Commonwealth, he submitted that nonetheless Ms Head had made an error which had been partly responsible for the debt and accordingly the debt from 26 October 1998 to 25 November 1998 could not be waived because of sole administrative error.
Mr Slattery turned next to consider the issue of whether the debt owed by Ms Head could be waived pursuant to section 1237AAD of the Act which deals with special circumstances. Mr Slattery noted that in relation to subsection 1237AAD, the debt had not resulted by Ms Head knowingly making a false statement or knowingly failing or omitting to comply with the provisions of the Act. Further, Mr Slattery submitted that it was not appropriate to write off the debt as Ms Head had a capacity to repay, although very minimal, her whereabouts were known and there was nothing to be gained by postposing the collection of the debt. The remaining subsection 1237AAD(b) required that there are special circumstances other than financial hardship alone, that make it desirable to waive the debt. In this regard, Mr Slattery referred the Tribunal to the discussion of the terms "special circumstances" as discussed in Beadle v Director-General of Social Security (1985) 60 ALR 225 which considered that special circumstances does exist where the circumstances are unusual, and uncommon or exceptional and also where the recovery of the debt would be seen to be "unjust, unreasonable, or otherwise inappropriate". In this regard Mr Slattery further referred the Tribunal to Re Green and Secretary, Department of Social Security (1990) 21 ALD 772. Mr Slattery acknowledged the contributory error by the Department in respect to 26 October 1998 to 25 November 1998 when the departmental officer did not have any regard for payslips provided by Ms Head. While noting that there is some doubt as to whether such a circumstance was sufficiently "special" to warrant waiver, nevertheless, the Respondent has agreed to waive the recovery of the debt for that period only. Referring to the calculations at T50, the debt is reduced $149.60 which represents the total amount overpaid for two paydays. Accordingly Mr Slattery submitted that the new gross debt is $1450.90.
Mr Slattery submitted that there were no other special circumstances which warranted the waiver of any further amount of the debt. While noting Ms Head's strained financial circumstances, Mr Slattery noted that there were no other special circumstances presented in the evidence and accordingly, as the legislation required that special circumstance cover more than financial circumstances alone, then no further waiver of the debt could apply. Accordingly, Mr Slattery contended that the decision of the SSAT be varied with respect to a gross amount of the debt only to $1450.90 and that the revised debt should be recovered in full from Ms Head.
findingsThe Tribunal has reached a decision in this matter taking into account the oral and documentary evidence, Ms Head's and Mr Slattery's submissions and by applying the legislation and case law. The Tribunal considered that Ms Head provided frank and truthful evidence and considered her to be a person of credit.
The first issue for the Tribunal to determine, is whether or not there is an overpayment of Parenting Payment and if such an overpayment exists, does this constitute a debt under the Act?
The Tribunal finds it convenient to adopt the three periods of Parenting Payment submitted by Mr Slattery as reflecting the payment history.
period one: from 20 september 1998 to 25 october 1998Ms Head was served with a recipient notification notice on 14 September 1998 which under section 506E of the Act required her to provide the Department with information within 14 days about such matters as a change in income, incorrect income details or if she recommenced of started employment. This included providing specific information to the Department if her income increased beyond $0.72 per annum.
Ms Head, having advised the Department that she was not working beyond 31 August 1998, had in fact worked during the week of 20 September 1998 up until the week ending 18 October 1998. The rate of Parenting Payment Ms Head received was calculated as if she was not in receipt of any earnings. Ms Head was however, employed and receiving earnings. Ms Head therefore received Parenting Payment to which she was not entitled.
Ms Head had not only failed to notify the Department of working but also that her income or earnings had increased beyond $0.72 per annum. In such circumstances, Ms Head was in breach of section 506E of the Act and an amount of Parenting Payment was paid to her which should not have been. Accordingly, the Tribunal finds that pursuant to section 1224 of the Act, money was paid to Ms Head which should not have been and this was due to her failure and omission to comply with the provisions of the Act.
period two: from 26 october 1998 to 25 november 1998On 26 October 1998, Ms Head lodged a Parenting Payment Review Form which included payslips for her earnings during this period apart from earnings for the week of 26 October. The Parenting Payment Review Form also had recorded on it by Ms Head, her net earnings for the period. Unfortunately, Ms Head was required to provide gross earnings. The Tribunal does not consider that the incorrect information provided by Ms Head as to her earnings was deliberately included and further, the Tribunal does not find that there was any intent by Ms Head to defraud the Department. Ms Head simply made an error. The fact that Ms Head provided payslips as evidence of her earnings further reinforced the Tribunal's view that she in no way intended to falsely provide information in order to derive benefit. The consequence of Ms Head providing incorrect information was compounded by the Department's failure to have regard to the correct earnings information contained in the accompanying payslips. These errors contributed to Ms Head's Parenting Payment being calculated at a rate higher than that to which she was entitled, had either she provided that correct earnings information or the Department checked the payslips provided to it. The Tribunal has adopted the reasoning arising out of McAuliffe (supra) in that while there was a false statement made, it need only be a contributing element to the debt arising. It is also in the Tribunal's view important to note that for the purposes of section 1224 any error or false information need not have been made with intent. Accordingly, the Tribunal finds that during the period 26 October 1998 to 25 November 1998, the overpayment of Parenting Payment amounts to a debt pursuant to section 1224 of the Act.
period three: from 26 november 1998 to 19 January 1999During this period, on about 28 November 1998 or soon after, Ms Head advised the Department that she would not be working at ADECCO in the near future. Ms Head had previously advised the Department of her receiving income from ADECCO. A letter had been sent to Ms Head prior to her telephone advice being acted upon, which reduced her parenting payment to $72.20 per fortnight based on the earnings information she had previously provided. Once advised of Ms Head's cessation of work this was absorbed by the Department and the previous earnings information was deleted. Ms Head's Parenting Payment was re-calculated at the maximum rate to take note of her notification that her earnings had reduced to nil. The difficulty for Ms Head is that during this last period, as revealed by objective earnings information from ADECCO, it is apparent that she was employed. A third recipient notification was sent to Ms Head on 1 December 1998 detailing her higher rate of Parenting Payment and once again advising Ms Head of her obligations to inform the Department within 14 days of such things as her income increasing or of her starting or recommencing employment. Ms Head did not notify the Department of her recommencement of work during the week of 6 December 1998 nor of her continuing work up until 19 January 1999. Ms Head had therefore once again breached her obligations under section 506E of the Act and as such was paid an amount of Parenting Payment to which she was not entitled. Again, the Tribunal finds in these circumstances that a debt arises under section 1224 of the Act as Ms Head failed to notify the Department within 14 days of her recommencing work and of her changed income earnings situation.
The Tribunal has looked at the calculations of the debt for the entire period under review and considers the calculations are correct. Thus, the Tribunal finds that Ms Head owes a debt of $1600.60 from 1 October 1998 (the first pay day after 20 September 1998 when Ms Head recommenced work) until 20 January 1999, the day the Department became informed of further earnings information from Ms Head.
The Tribunal is satisfied that on the available evidence nothing is to be gained by writing off the debt pursuant to section 1236 of the Act. Ms Head's whereabouts is known, she is able to make repayments of the debt although in very minimal amounts and nothing would be gained by postponing the recovery of the debt.
The Tribunal considered whether waiver of the debt is possible under section 1237A(1) in terms of there being sole administrative error. The Tribunal finds that the Department did commit an administrative error by not referring to the primary documents of payslips provided by Ms Head as evidence of her earnings. Unfortunately, the Department's error was compounded by Ms Head's own error in that she provided incorrect or false information on her Parenting Payment Review Form of 26 October 1998 which was in the form of net earnings as opposed to the required gross earnings. Because there was contributory error on both parts in the development of the debt, during the second period the Tribunal is unable to waive any of the debt because there is no sole administrative error.
Finally, the Tribunal turned to consider whether or not, pursuant to section 1237AAD of the Act, there are any circumstances which could be considered special and which would allow the Tribunal to waive a part of whole of the debt. The term "special circumstances" has been defined by a number of Tribunals and Courts and generally is considered to be present in circumstances which are unusual or unique, or in which it would be considered unfair or unjust not to waive a part or whole of the debt due to the Commonwealth.
In Ms Head's circumstances, there is little doubt in the Tribunal's mind that her financial situation is extremely tight. Ms Head is to be commended for her efforts to try to continue to remain employed. She is attempting to provide a better life particularly for her children and her efforts in very difficult circumstances should be recognised. While there are certainly difficult financial circumstances for Ms Head, the Tribunal is unable to identify any other circumstances which in the legislative sense could be considered special. While the Tribunal acknowledges that Ms Head is stressed by having to repay the debt, her health, on the evidence available to the Tribunal, is satisfactory as is the health of her two children. There are no other circumstances which the Tribunal is able to identify, apart from those already identified and acted upon by the Department in terms of its contributory error being recognised as a special circumstance and waiver being provided in the form of $149.60.
The Tribunal accordingly agrees with the Respondent that $149.60 should be waived in the special circumstances of the Department having committed an administrative error. The debt is thus considered to be $1450.90. There are no other special circumstances apart from financial hardship alone, which would allow the Tribunal to waive a part of whole of the debt.
56.. In such circumstances, the Tribunal varies the decision under review in as much as the gross amount of debt is $1450.90 but pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review (as varied) in that there are no special circumstances to allow for the non recovery of the debt and in such circumstances an amount of $1450.90 should be recovered in full.
I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of MS S M BULLOCK
Signed: .....................................................................................
AssociateDate/s of Hearing 7 March 2000
Date of Decision 30 June 2000
Representative for the Applicant Self represented
Representative for the Respondent Mr B Slattery, Departmental advocate
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