Hyde and Secretary, Department of Family, Community Services and Indigenous Affairs

[2007] AATA 1922

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1922

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2006/829

GENERAL ADMINISTRATIVE  DIVISION		)
Re		GARY HYDE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date2 November 2007

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  This means Mr Hyde’s application for review is unsuccessful.

...................[Sgd]...........................

Member

CATCHWORDS

SOCIAL SECURITY – disability support payment – employment entry payment – overpayment – debt due to the Commonwealth – waiver for special circumstances – observations: complexity of social security legislation

Social Security Act 1991s 664, 665 1237

Haidar v Secretary, Department of Social Security (1998) 157 ALR 359

Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Dean and  Secretary, Department of Education, Employment and Youths Affairs [2005] AATA 586

Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576

WRITTEN REASONS FOR DECISION

2 November 2007 Dr EK Christie, Member     

1.      This is an application for review of the decision of the Social Security Appeals Tribunal (the “SSAT”) made on 9 October 2006 that decided to raise and recover a disability support pension (“DSP”) debt of $1,420.58 for the period 29 June 2006 to 7 August 2006.

2.      The SSAT found that during the period 29 June 2006 to 7 August 2006 the amount of Mr Hyde’s earnings from the Princess Alexandra Hospital was not taken into account by Centrelink, and that as a result, Mr Hyde was paid more disability support pension than he was entitled to.

3. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) [Exhibit 1] and the various exhibits lodged by the parties.

4.      The applicant represented himself at the hearing. The respondent was represented by Mr R Hamilton, a Departmental advocate. 

Issues Before The Tribunal

5.      At the commencement of the hearing, the parties agreed that the DSP overpayment of $1,420.58 was a debt due to the Commonwealth that could be recovered.

6. The only question for the Tribunal to decide was whether the DSP overpayment of $1,420.58 for the period 29 June 2006 to 7 August 2006 could be waived under the special circumstances provision of the Social Security Act.

7.      At the date of the hearing, the residual balance of the debt was $1,256.  Two instalments had been recovered – an amount of $133 (the period of which was not defined) and an amount of $30.60 for a fortnightly period. 

8.      At the end of the hearing, and with the consent of both parties, the Tribunal exerted its inquisitorial powers and sought expert medical opinion from Mr Hyde’s treating general practitioner, Dr Neville Blomeley.  The medical opinion was to address the question of whether Mr Hyde’s ongoing medical conditions for which he was being treated, as well as the impact of his mother’s death had an impact on his capacity to make rational decisions over the June- August 2006 period when the overpayments occurred.  Dr Blomeley’s report was filed on 3 August 2007.

Facts

9.      On the basis of the evidence before it, the SSAT made the following Findings of Fact [T2, Folio 5 ]:

“•On 12 April 2006 Centrelink sent a notice to Mr Hyde requiring him to advise within 14 days if he started work.

•Mr Hyde started work at the Princess Alexandra Hospital on 19 June 2006 and advised Centrelink of this on 8 August 2006.”

10.     Mr Hyde gave the following responses to the findings of fact made by the SSAT:

(i)That he could not remember whether he received the letter from Centrelink dated 12 April 2006.  Being a social security recipient for some 17-18 years, he had received a great many letters from Centrelink.  However, during cross-examination, he conceded that it was more likely than not that he received this letter.

(ii)He agreed that the second finding of fact was correct.

Statutory Requirements And Case Law

11.     The Tribunal has applied the following legal requirements and principles in its interpretation of the law in its consideration of the outcome for Mr Hyde’s factual situation.

(a)Employment Entry Payments

12. As an incentive for social security recipients to participate in the labour market, they may be eligible for “employment entry payments” on gaining employment whilst serving a six week non-payment period. It is not in dispute that Mr Hyde was qualified for employment entry payments on commencing work on 29 June 2006 under the statutory criteria set out in s 644C of the Social Security Act 1991 (“the Act”): see SSAT decision T2 Folio 6. However, s 665 of the Act requires that a person seeking to receive an employment entry payment must claim the payments within 28 days of starting work.

(b)The Special Circumstances Waiver Provision

13. In this application for review the “special circumstances” provision is another issue in dispute for the Tribunal to decide. Section 1237AAD of the Act provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:

“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 of the debt.”         [Tribunal emphasis].

14. For this section of the Social Security Act to apply to Mr Hyde’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mr Hyde must not have “knowingly” made a false statement or false representation or “knowingly” failed to have complied with a provision of the Act. Both these requirements must be satisfied for Mr Hyde to succeed under the “Waiver in Special Circumstances” provision of the Social Security Act.

15.     The meaning of the term “knowingly” has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 where the Tribunal stated (at 445):

“There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act of or omission.”

And later,

“Knowingly omitting them is something different from fraudulently omitting them and I draw a distinction in this case’  [Tribunal emphasis].

16.     The common law meaning and application of the expression “special circumstances” has been considered by the Federal Court and the Tribunal on many occasions. The relevant legal principles that have emerged, over time, that have been applied to provide a meaning for “special circumstances” can be summarised as follows:-

a.“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional”.

[See Re Beadle and Director-General of Social Security (1984) 6 ALD (at 3)]

b.“…would require something to distinguish [the case to be decided] from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

[See Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545]

c.“To some extent the question whether there were special circumstances must depend on how it came about that the error occurred …There will be a requirement that the circumstances are such that takes the case out of the ordinary.”

[See Dranichnikov v Centrelink [2003] FCAFC 133]

(c)      Special Circumstances and Health Issues

17.     In considering the issue of  “special circumstances” to the factual situation of  Mr Hyde, I have given due regard to the following legal principle as to the breadth of the discretion in relation to “special circumstances”:

The Full Federal Court, in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 at 450: commented:

“Each particular case must be considered on its merits.  It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other’ [emphasis added].

18.     Accordingly, in the context of Riddell’s case, the following principles emerge from a review and analysis of cases decided by the Tribunal as to the circumstances which fall within the meaning of “special circumstances” because of the impacts of the medical condition on the social security recipient. The Tribunal in Re Dean and  Secretary, Department of Education, Employment and Youths Affairs [2005] AATA 586, reviewed cases decided by the Tribunal as to the circumstances which came within the meaning of “special circumstances” – in the context of overpayments of social security benefits, because of the impacts of the medical condition on the social security recipient. The Tribunal in Dean’s case concluded that the application of “special circumstances” involved a consideration of the impacts of the medical condition on the social security recipient’s capacity to make rational decisions in managing their day to day affairs.

19.     With respect to “special circumstances”, the application of the law in cases decided by the Tribunal also involves a consideration of the impacts of the medical condition on the Social Security recipient’s capacity to make rational decisions in managing their day to day affairs. 

Evidence of Gary Hyde

20.     The evidence of Mr Hyde that is relevant in understanding how the DSP overpayment problem arose during the period 19 June 2006 to 7 August 2006 can be summarised as follows.

21.     Mr Hyde has a long history of receiving social security benefits following a work place accident whilst being employed by BHP as a miner at Broken Hill.  He suffered significant injuries to his back and shoulders.  For the first 12-13 years after the accident he was virtually on unemployment benefits the entire time.

22.     Following this period, Mr Hyde became entitled to receive DSP.  He has received DSP entitlements for the last five years.

23.     He has sought employment appropriate for his orthopaedic conditions and capabilities, on two occasions, since receiving DSP.  He sought paid work to improve his self esteem and to improve his standard of living.  He gives a picture of a harsh existence with little savings to cover unforeseen financial costs or emergencies.

24.     Mr Hyde has sought employment on two occasions only.  In 2002 he worked with a company (NULEC) for five weeks.  He had given himself six weeks to try out this job.  After six weeks he ceased work because his “back went”.  He advised Centrelink after he left the job.  A debt had not been raised because the employment entry payment to which he was entitled, offset the amount he owed.  He had not made any claim with Centrelink for this payment until he knew he could have continued working beyond the six week period.

25.     He said that be believed the same position also applied when he commenced work at Princess Alexandra Hospital on 19 June 2006.  Like his assessment of his employment capability at NULEC, he once again decided to not inform Centrelink until he knew he was capable of working in this job for six weeks.  Based on his actual experience with Centrelink at NULEC in 2002, when he received no penalty for taking the same approach, he believed that there was no reason why he could not use the same approach when commencing work at Princess Alexandra Hospital.  However, this time he has been penalised and now has to repay the amount of DSP received in June – August 2006.  This outcome has confused him as he can see no consistency between the two Centrelink decisions for the same fact situation when he commenced working at NULEC and Princess Alexandra Hospital. 

26.     In response to a Tribunal question, Mr Hyde said that he had received no information from Centrelink about employment entry payments; nor had he raised any query with Centrelink about these payments before commencing work in June 2006.

27.     Mr Hyde lodged all his payslips received for the six week period from 19 June 2006 to 30 July 2006 with Centrelink on 8 August 2006 (T9).

Consideration of the Issues AND FINDINGS OF FACT

28.     In this application for review, I consider all the evidence and information before the Tribunal as at the date of the hearing “to the extent those facts are relevant to the decision by reference to the subject matter, scope and purpose of the legislation…”.

[See Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at 367].

29. I find Mr Hyde to be an honest and credible witness who has struggled to understand his specific legal obligations under the Social Security Act – a problem which has been given some recognition by our Courts. For example, the decision of the Federal Court in Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576 contains the following passage:

“The area of social services legislation is a complex one as the terms of the previous legislation and judicial decisions upon it have demonstrated. That is what the draftsman of this legislation may have sought to overcome. Regrettably, the replacement consists of a maze of provisions made the more complex by prolix definitions, provisos and exceptions. Both those who claim entitlements under it and those responsible for its administration will not always find it easy to discover whether or not a benefit is payable. …”

And

“It must be remembered that the[Social Security] Act makes provision for many different types of social security payments and benefits, a number of them expressed in complex and highly technical terms. A significant proportion of those who receive such benefits are likely to be disadvantaged. Some of them will have great difficulty in dealing with bureaucracy, and will find the entire process of complying with the requirements of the Act almost beyond them.”

30.     Furthermore, I find that there has been no intent on My Hyde’s part to defraud or to deceive Centrelink.

31.     The overpayment problem arose for Mr Hyde because he failed to raise any query with Centrelink to help him understand his legal obligations under the Social Security Act  and his entitlement to employment entry payments and DSP.

32.     I find that the facts before me indicate that Mr Hyde failed to notify Centrelink, within 14 days of commencing work at Princess Alexandra Hospital, that he had commenced work. 

33.     In terms of whether the debt should be offset by his entitlements under the employment entry provisions, I find that this cannot be applied to Mr Hyde’s case.  The payment cannot be used to offset the debt as Mr Hyde failed to notify Centrelink that had commenced work.  Unfortunately for Mr Hyde, this is a legal obligation that must be complied with to be eligible for employment entry payments.

34.     Next, I consider whether the special circumstances waiver provision may apply in Mr Hyde’s case.  This requires an assessment of two issues.

35.     In terms of whether Mr Hyde knowingly contravened a provision of the Social Security Act, I find that this is not the case.  Mr Hyde did not have actual knowledge that he contravened the legislation because he has relied on a factual situation with NULEC in 2002, when he was not penalised.  In addition, my finding that Mr Hyde is an honest witness is relevant in concluding that he did not “knowingly” contravene a provision of the Social Security Act.

36.     In his report, dated 3 August 2007, Dr Blomeley states:

“Thank you very much for your letter of March 2007.  I have been seeing Mr Hyde for a number of years.  He has had a number of problems, mostly long term problems with lumbar spine degeneration with disc protrusion.  He has cervical spondylosis.  He does have some primary rotator cuff pathology in his shoulder as well, and he suffers migraines.  He also has hypertension, and has been treated over a time with Coversyl.  Apart from that, he takes Panadeine Forte on a regular basis in that period of time for treatment of his chronic pain.  He also takes Voltaren and Pariet for reflux problems.  I don’t believe Mr Hyde takes excessive medication, and he has taken Panadeine Forte for a long period of time, thus I don’t think this has any impact on his ability to make rational decisions.  Mr Hyde went through a normal grieving process when his mother died, but again I don’t feel it would have had any significant impact on his ability to make rational decisions.”

37.     Based on the expert medical opinion of Dr Blomeley, I can make no other finding than to conclude that:

(i)Mr Hyde’s ongoing medical conditions, and their treatment (including medication);  and

(ii)The impact of his mother’s death;

did not affect his capacity to make rational decisions to manage his day to day affairs over the period overpayments of DSP were made to him.

38.     As a result, there are no “special circumstances”  that justify waiver of the debt.

DECISION

39.     For all of the above reasons, the decision under review is affirmed.

40.     Whilst this outcome may seem harsh, it would be more appropriate to describe the outcome as unfortunate.  The legislation gives me no other option than to make such findings.  There is no discretion in the legislation for me to make any other decision, as a matter of law, for Mr Hyde.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         ………………………….
  B. Hitchcock, Personal Assistant

Date of Hearing  29 March 2007 
Date of Decision  2 November 2007 
The Applicant was self represented
For the Respondent                  Mr R Hamilton, Departmental Advocate