Hoadley and Department of Family and Community Services

[2000] AATA 965

DECISION AND REASONS FOR DECISION [2000] AATA 965

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2000/163

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      DOROTHY FLORENCE HOADLEY      
  Applicant
           And    DEPARTMENT OF FAMILY AND COMMUNITY SERVICES           
  Respondent

DECISION

Tribunal       Senior Member Eyre          

Date3 November 2000

PlaceAdelaide

Decision      The decision under review is affirmed             
  ..........................................
  Senior Member W.H. Eyre

CATCHWORDS
SOCIAL SECURITY – Age Pension - overpayment – failure to include superannuation payments as part of income - whether debt should be written off or waived – decision affirmed
Social Security Act 1991 ss68, 69, 1224, 1237, 1237A, 1237AAD

REASONS FOR DECISION

Senior Member W.H. Eyre    

1. This is an application by Dorothy Florence Hoadley ("the applicant") for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 13 April 2000. The SSAT affirmed a decision of the Secretary, Department of Family and Community Services ("the respondent") of 29 February 2000, as affirmed by an authorised review officer on 14 March 2000, to raise and recover an Age Pension debt of $9,338.20.

2. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the "T" documents) together with exhibits tendered by the parties. The applicant tendered two exhibits, and the respondent tendered four exhibits. In addition, the Tribunal heard sworn oral evidence from the applicant.

3. The applicant represented herself at the hearing on 13 October 2000. The respondent was represented by Ms Odgers, departmental representative.
   Issues

4. There was no dispute between the parties that the applicant received $9,338.20 in Age Pension between 24 December 1998 to 17 February 2000 to which she was not entitled (T30/103). The applicant's debt to the Commonwealth pursuant to s1224 of the Social Security Act 1991 ("the Act") arose because of her failure to include Comsuper pension payments as part of her income (T27/90 and T28/91).

5. The issue under consideration, therefore, is whether there are grounds to write the debt off, or waive the right to recover the debt.
   Findings of Fact

6. The Tribunal makes the following findings of fact which are not in dispute:

7. On 16 December 1998, the respondent received a copy of the applicant's Notice of Assessment for the year ending 30 June 1998, stating that her taxable income was $19,834 (T4/25).

8. On 21 December 1998, the applicant lodged her claim for the Age Pension (T5/27-38). 

9. When answering the "Income and Assets" section, the applicant ticked the yes box in reply to the question "Do you or will you get superannuation or other retirement payments?" (T5/34)

10. When answering "Mod I", the applicant answered "No" in reply to Question 11 which asked "Do you (or your partner) have any money invested in approved deposit funds, deferred annuities or superannuation funds?"  The applicant underlined the words "deposit funds" and wrote a query on the form "what are approved deposit funds?" (T20/69)

11. Question 14 of Mod I asked "Do you receive any Australian based superannuation pensions or immediate annuities purchased with rollover monies?"  The applicant answered "yes" and wrote "Norwich immediate annuity".  The applicant also underlined the words "Australian based superannuation pensions or immediate annuities" (T20/70).

12. Question 15 of Mod I asked "has your fund provider given you a schedule of information about your pension/annuity for social security purposes?"  The applicant ticked the "yes" box and wrote on the form "Yes, received recently and you already have a copy of the original. I now have an up-to-date version to give you at the interview. Given to you 7 Jan 99 3.15pm. Mark gave it to Anita." (Applicant's underlining) (T20/70).

13. On 30 January 1999 the respondent wrote to the applicant informing her that she would receive Age Pension in the amount of $289.20 per fortnight starting from 18 February 1999, and arrears of $1,156.80. The letter advised the applicant to "please read the back of this letter. It tells you about your social security rights and what you have to tell us" (T23/81). The back of the letter set out the applicant's payment details, and in particular set out "How we have assessed your yearly income". The applicant's "Deemed Investments" was calculated as $4,538.60 and her "Super/Income Streams" was calculated as $1,881.48. Her total income was calculated to be $6,420.08. The applicant was advised in the letter that she had an obligation under ss68 and 69 of the Social Security Act 1991 to inform the respondent within 14 days if her "income as shown above is incorrect" (T23/82).

14. On 16 April 1999, the applicant wrote to the respondent asking the respondent to check her entitlement to Age Pension (T24/86).  While that letter is not before the Tribunal, the applicant's oral evidence is that she had seen a television program documenting the fact that a person had an account garnisheed by Centrelink just before Easter. The respondent replied to the applicant's letter on 21 April 1999 and enclosed a list of the investments that were included on the applicant's pension assessment.  The letter also suggested that the applicant arrange a meeting with her financial adviser to ensure that she had fulfilled her obligations (T25/87). A print-out accompanying the letter calculated the applicant's annual income as $6,231.74 and again reminded the applicant of her obligation to inform the respondent, amongst other things, if her "income as shown above is incorrect" (T26/88).

15. On 23 November 1999 the respondent performed a data matching exercise, matching Centrelink data with Comsuper data.  Comsuper details recorded that the applicant had a "New Annual" of $18,194.51 and showed an Entitlement Number (T27/90).

10) There was no direct reference to Comsuper or Commonwealth Superannuation on any of the written information provided by the applicant to the respondent.

11) When the Comsuper pension was included in the applicant's income, she became ineligible for Age Pension.  On 25 February 2000 her Age Pension was cancelled (Exhibit R1).

12) A debt in the amount of $9,338.20 was raised in respect of Age Pension overpaid to the applicant from 24 December 1998 to 17 February 2000 (T29/93).  The applicant was informed of the respondent's decision by letter on 29 February 2000 (T30/100).

13) The Original Decision Maker (ODM) affirmed the decision to raise and recover the debt on 2 March 2000 (T32/109), and an Authorised Review Officer affirmed the ODM's decision on 14 March 2000 (T37/121).  The applicant appealed to the Social Security Appeals Tribunal, which also affirmed the decision on 13 April 2000 (T2/6).

14) The applicant appealed to this Tribunal on 10 May 2000 for review of the decision of the SSAT (T1/1).

Applicant's submissions and evidence

1. The applicant informed the Tribunal from the outset that she does not dispute the fact that there was an overpayment of $9,338.20, but she said that she believed that circumstances were such that she should not have to repay the monies.

2. She gave evidence that on Question 14 of Mod I, she underlined the word "superannuation" and ticked the "yes" box (T20/70). She said that this was done to alert Centrelink to the fact that she had superannuation.  In cross examination, the applicant testified that she thought it was sufficient to underline the word "superannuation", and she did not write to Centrelink within 14 days as she knew that they already had all of the correct information.  The applicant conceded in cross-examination that she did not refer to her Comsuper pension in either question 11, 14 or 15 of Mod I.

3. The applicant gave evidence that she had given Centrelink a copy of her "Notice of Assessment" for the year ending 30 June 1998, which showed that her taxable income was $19,834. She queried why Centrelink would believe that her total income was only $6,420.08 (T23/82) when her total taxable income was $19,834.  The applicant was of the opinion that this discrepancy in figures, along with the fact that she had underlined the word "superannuation", should have prompted Centrelink to ask questions of her that would have revealed the existence of the Comsuper pension.

4. In cross-examination, Ms Odgers asked the applicant why she did not question the fact that the letter dated 30 January 1999 calculated her total income as being only $6,420.08 (T23/82).  The applicant testified that she thought that the amount of $6,420.08 was the money that Centrelink was paying her as pension.

5. When the Tribunal calculated that the Age Pension over one year would amount to $7,519.20, and pointed out to the applicant that this was substantially more than $6,420.08, the applicant admitted that she had not made the calculations herself.  The applicant gave evidence that at the time, in December 1998/January 1999, she had been upset because of the heat and the building works going on over the fence.  At one stage her air conditioning broke down, and her neighbour's air conditioner was so noisy that she often could not sleep at night.

6. The applicant concluded her evidence by informing the Tribunal that she had felt concerned when she watched a television program about a woman who had been overpaid by Centrelink and had her bank account garnisheed.  This prompted the applicant to write a letter to Centrelink to ensure that her payments were correct.  She gave evidence that she did not give any financial details in that letter.
   respondent's submissions

7. The respondent submitted that s1224 of the Social Security Act operates to create a debt due to the Commonwealth, as the applicant did not comply with the obligations imposed on her by the notices issued pursuant to ss68 and 69 of the Act. The respondent submitted that the debt had been correctly calculated, and that waiver of the debt pursuant to s1237A of the Act was not appropriate in this case. The respondent finally submitted that no "special circumstances" existed pursuant to s1237AAD of the Act.
   Tribunal's findings

8. The Tribunal would indicate that it has considered all of the evidence before it, including the oral submissions of the applicant. The Tribunal, as stated above in paragraph 4 of these reasons, finds that the debt was properly raised pursuant to s1224 of the Act, and that the debt to be repaid to the Commonwealth amounts to $9,338.20.

9. At issue is whether it is appropriate in the circumstances to write off or waive the debt or part of the debt pursuant to the provisions of the Act.

10. In relation to writing off the debt, the Tribunal has had regard to the provisions of s1236 of the Act. The Tribunal finds that the applicant's circumstances do not fall within the requirements of s1236(1A). The Tribunal makes particular note of s1236(1A)(b) which provides that the Secretary may write off the debt under subsection (1) if "the debtor has no capacity to repay the debt". At the date of the hearing, the applicant's own evidence was that she had already repaid approximately $1500 of the debt, and was paying $400 a month. Section 1236 is therefore not applicable as the applicant does have the capacity to repay the debt in instalments.

11. In relation to waiver, the Tribunal has also had regard to section 1237A(1) which provides:

    "1237A Waiver of debt arising from error

    (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.

    …" 

The Tribunal finds that this section cannot in the circumstances of this case operate to waive the debt or part of the debt, as the debt is not "attributable solely to an administrative error" of the respondent. The respondent correctly notified the applicant of her obligation pursuant to s69 of the Act to inform the Department within 14 days if her income as shown in the letter was incorrect. While the Tribunal does not doubt the veracity of the applicant's evidence, the Tribunal finds that the respondent complied with its duties under the Act. In particular, the respondent could not reasonably be expected to know that the applicant was in receipt of Comsuper payments from the way the applicant had completed her application for Age Pension and the way she answered the questions in Mod I, or by virtue of its receipt of the applicant's income tax assessment notice for the financial year that ended some 6 months prior to her application for Age Pension, or by reason of the combination of these facts.

1. The Tribunal further finds that there are no special circumstances pursuant to s1237AAD of the Act that would make it appropriate to waive the debt or part of the debt. The section provides:

   "1237AAD Waiver 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 the debt.
   …"

2. The Tribunal has taken into consideration the applicant's evidence in regard to the building works, the heat, the air conditioning problems and the general stress that the applicant has suffered.  The Tribunal also notes that the applicant is saving up to buy a small house so that she can move out of her townhouse.  However, the Tribunal does not consider that these circumstances are so special as to make it desirable to waive the debt or part of the debt.

3. Accordingly, for the reasons given above, the decision under review is affirmed.