Ilich-Gaebler and Secretary, Department of Social Services (Social services second review)
[2016] AATA 155
•16 March 2016
Ilich-Gaebler and Secretary, Department of Social Services (Social services second review) [2016] AATA 155 (16 March 2016)
Division
GENERAL DIVISION
File Number(s)
2015/2966
Re
Tara Ilich-Gaebler
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member CR Walsh
Date 16 March 2016 Place Perth The Tribunal affirms the decision under review.
...........[Sgd].............................................................
Senior Member CR Walsh
CATCHWORDS
SOCIAL SECURITY – overpayment of parenting payment – overpayment a debt due to the Commonwealth – whether debt should be written-off or waived due to sole administrative error by Centrelink or because “special circumstances” exist – decision under review affirmed
LEGISLATION
Social Security Act 1991 – s 503 – s 1068A – s 1223(1) – s 1236(1) – s 1236(1A) – s 1237A(1) – s 1237A(1A) – s 1237AAD(1)
CASES
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1985) 60 ALR 225
Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov v Centrelink [2003] 75 ALD 134
Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs (2010) 185 FCR 52
Groth and Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634Re Ivocic and Director-General of Social Services [1981] AATA 57
SECONDARY MATERIALS
Guide to Social Security Law – s 6.7.3.30
REASONS FOR DECISION
Senior Member CR Walsh
16 March 2016
INTRODUCTION
The Applicant seeks a review of a decision of the Social Security Appeals Tribunal (SSAT)[1], dated 18 May 2015, that the Applicant owes a debt to the Commonwealth (i.e. Centrelink) totalling $37,593.54 as a consequence of being overpaid parenting payments in the period 23 March 2011 to 17 September 2013 (Relevant Period) and that the debt should not be waived or written-off but, instead, recovered from the Applicant.
[1] On 1 July 2015, the SSAT was merged with the Administrative Appeals Tribunal.
FACTUAL & PROCEDURAL BACKGROUND
On 17 March 2011, the Applicant lodged a claim for parenting payment.
On 23 March 2011, Centrelink sent the Applicant a letter advising her that she had been granted parenting payment with a commencement date of 17 March 2011 and that the amount of the payment was assessed based on the Applicant’s annual income of $4,685.44.
A copy of the Applicant’s payslip from South Metro Area Health Service was received by Centrelink Armadale on 23 March 2011. It showed that as at the “Payroll Date” of 13 March 2011 the Applicant’s “Full-Time Salary” was $64,908.00.
On the same date (i.e. 23 March 2011) the Applicant was sent two letters by Centrelink. One letter set out information about the Applicant’s annual income as recorded (incorrectly) in Centrelink’s computer system and about the amount of her parenting payment. The other letter contained information concerning how working affects parenting payments. The content of these letters is discussed in more detail in paragraph 25 below.
During a review of the Applicant’s parenting payment entitlements on 10 April 2014, (which included a discussion between the Applicant and a Centrelink officer), Centrelink discovered that the Applicant’s annual income had been incorrectly recorded in their system, which had resulted in an overpayment of the parenting payment to the Applicant in the Relevant Period. After making relevant enquiries, Centrelink updated their system on 15 August 2015 to show that the Applicant’s “actual earnings” for the Relevant Period were $109,517.03.
On 9 September 2014, Centrelink wrote to the Applicant advising her of the following:
…..The correct amount of your earnings from SOUTH METRO HEALTH SERVICE was not taken into account in payments made to you for the period 23/03/2011 – 17/09/2013 [i.e. the Relevant Period]. The declared income was $982.29 however the actual income as verified with the employer was $111,080.91. This means that you have been overpaid $37,593.54. We are, therefore, required to recover this amount. (Original Decision)
On 8 October 2014, the Applicant requested a review of the Original Decision.
On 16 December 2014, a Centrelink Authorised Review Officer (ARO) affirmed the Original Decision (ARO Decision).
On 12 March 2015, the Applicant applied to the SSAT, for a review of the ARO Decision.
On 18 May 2015, the SSAT affirmed the ARO Decision (SSAT Decision).
On 17 June 2015, the Applicant applied to this Tribunal for a review of the SSAT Decision. The Applicant’s stated “Reasons for Application” are:
I will (sic.) to have my case reviewed on a more personal level. I wish for my personal circumstances to be taken into account. A major Centrelink clerical error has occurred and as a result I have a huge debt that was not initially my fault.
ANALYSIS
Was the Applicant overpaid parenting payment during the Relevant Period?
Section 503 of the Social Security Act 1991 (SSA) provides that if a person is not a member of a couple (as was the Applicant’s case in the Relevant Period), then the person’s parenting payment rate is worked out using the rate calculator at the end of s 1068A of the SSA.
In accordance with the rate calculator, the amount of parenting payment that a person receives is affected by how much annual income that person earns.
It is not in dispute that:
· The Applicant was paid parenting payments for the Relevant Period on the basis that she was earning an annual income of $4,685.44 rather than $109,517.03, as it should have been;
· During the Relevant Period the Applicant was paid parenting payments totalling $43,047.40. However, based on the ARO’s calculations, the Applicant should have been paid $5,453.86, i.e. based on an annual income amount taken from the Applicant’s payslips from South Metro Health Service for the Relevant Period. The SSAT agreed with the ARO’s calculations: SSAT Decision at [12];
· The Applicant’s rate of parenting payment was not calculated using the correct information about her annual income, which resulted in her receiving an amount that she was not entitled to receive; and
· The Applicant was overpaid parenting payments during the Relevant Period in the amount of $37,593.54.
Does the Applicant have a debt due to the Commonwealth?
Section 1223(1) of the SSA Act provides that, if a social security payment is made and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
It is not in dispute that:
· The Applicant was paid parenting payments during the Relevant Period in the amount of $37,593.54. Those payments were based on incorrect information that the Applicant’s annual income was $4,685.44 during the Relevant Period, when the Applicant’s actual income during the Relevant Period was $109,517.03. The Applicant should have been paid no more than $5,453.86 in parenting payments during the Relevant Period but, instead, was paid $37,593.54 more in parenting payments than she was entitled to; and
· The $37,593.54 in parenting payments paid to the Applicant in the Relevant Period to which she was not entitled is a debt due to the Commonwealth (i.e. Centrelink) pursuant to s 1223(1) of the SSA.
Should recovery of the Applicant’s debt be written off or waived?
Write-off
Section 1236 of the SSA states:
(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.
(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)it is not cost effective for the Commonwealth to take action to recover the debt. [Emphasis added]
The Tribunal finds that the Applicant’s debt should not be written off pursuant to s 1236 of the SSA because:
· the Applicant’s debt is not irrecoverable at law;
· the Applicant has the capacity to repay the debt;
· the Applicant’s whereabouts are known; and
· it is cost effective for the Commonwealth (i.e. Centrelink) to take action to recover the debt.
In relation specifically to the Applicant’s “capacity to repay the debt” (for the purposes of s 1236(1A) of the SSA), the Tribunal notes that the evidence (including the Applicant’s oral evidence at the hearing of this application) establishes that the Applicant is employed as a midwife in a hospital and she appears to have significant savings. A Bank West bank statement shows that in 2011 the Applicant had $108,001 in savings in her “Smart Esaver” account. Further, at the hearing before the SSAT, on 18 May 2015, the Applicant stated that, at that time, she had savings in excess of $60,000: SSAT Decision at [37].
Waiver – sole administrative error by Centrelink
Section 1237A(1) of the SSA provides that 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 (i.e. Centrelink) if the debtor received, in “good faith”, the payment that gave rise to that proportion of the debt. Section 1237A of the SSA states:
(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.
(1A) Subsection (1) only applies if:
(a)the debt is not raised within a period of 6 weeks from the first payment that cause 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 the later. [Emphasis added]
Section 6.7.3.30 of the Guide to Social Security Law (Guide)[2] states the following in relation to the meaning of “sole administrative error” and “good faith”:
Sole administrative error
The requirement that part of the debt must have arisen ‘solely’ from administrative error means that there must have been no other factors that caused the debt to arise or contributed to the debt arising. The part of the debt must have arisen as a result of administrative error alone.
Good faith
If a recipient knows or had reason to know that they were not entitled to a payment they received, they cannot be said to have received the payment in good faith.
The decision of whether the recipient received the payment in good faith must be based on the recipient’s state of mind at relevant times, based on the best evidence available.
It is essential to consider all circumstances of a case, including, but not limited to:
oinformation given to the recipient via letters and other literature, interviews, and phone contact. This may help to establish the recipient’s reasonable expectation about their payments.
[2] It is well-established that the Tribunal should apply ministerial guidelines unless, in a particular case, there are cogent reasons for not doing so: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645 per Brennan J.
Centrelink acknowledges that a copy of the Applicant’s payslip from South Metro Area Health Service for the “Payroll Date” 13 March 2012 was received by Centrelink, Armadale, on 23 March 2011 and that this payslip showed that the Applicant’s full-time salary was $64,908.00 and that this amount was incorrectly entered into Centrelink’s records.
Centrelink also acknowledges that there was an administrative error made by it, to the extent that the Applicant’s salary was incorrectly recorded in Centrelink’s computer system (and thus the Applicant’s entitlement to parenting payments in the Relevant Period was calculated incorrectly). However, as contended by Centrelink, its administrative error only partly resulted in the over-payment of parenting payments to the Applicant in the relevant Period. That is, the over-payment was not “solely” the result of administrative error on the part of Centrelink. The reason for this is as follows.
As stated above (in paragraph 5), on 23 March 2011 the Applicant was sent two letters by Centrelink. One letter set out information about the Applicant’s annual income which Centrelink had incorrectly recorded in its computer system and about the amount of the Applicant’s parenting payment. The other letter, titled “How work affects your payments”, provided, among other things, the following:
You are probably aware that if you work, your Centrelink payment may be reduced… You may still qualify for some payment while you are working. The Table below shows how earning affect your payment.
Fortnightly income Centrelink Payments reduced by $0 - $146.00 (plus $24.60 for each additional child- this is called the free area) Nil Above the free area 40 cents for each dollar above the free area
The information in these two letters, dated 23 March 2011, about the Applicant’s income and the effect on her parenting payments, should have caused the Applicant to believe that her payments had been incorrectly calculated. The Applicant should have known that the parenting payments she was receiving were being calculated using incorrect information about her annual income. It follows that it was a combination of error by Centrelink and error by the Applicant that resulted in the over-payment of the parenting payment to the Applicant in the Relevant Period, and not solely administrative error by Centrelink. Consequently, the overpayment of parenting payments to the Applicant in the Relevant Period is a debt to the Commonwealth which should not be waived pursuant to s 1237A of the SSA.
At the SSAT hearing the Applicant stated that she may not have read the entire contents of all the letters from Centrelink and, if she had, she would have advised Centrelink of changes in her income: SSAT Decision at [26].
Similarly, in her evidence before the Tribunal at the hearing of this application, the Applicant acknowledged that she did not properly read the Centrelink letters dated 23 March 2011, as she assumed that they accurately reflected the information she had provided the Centrelink officer, called “Mark”, when she visited Centrelink Armadale on 23 March 2011. The Applicant stated that she was not claiming “sole” administrative error on the part of Centrelink and agreed that that she was partly responsible for the administrative error which occurred and resulted in the overpayment of parenting payments in the Relevant Period.
The Applicant told the Tribunal that it was her recollection that the Centrelink officer she met with, at Centrelink Armadale on 23 March 2011, and who was responsible for entering her annual income incorrectly into Centrelink’s records (named “Mark”) “had a large noticeable growth/tumour over his Left eye” and she clearly remembers having had concerns that day that “he was not fit to carry out his job”. The Applicant’s position is that this Centrelink officer should in some way be held accountable for his actions. The Tribunal does not have jurisdiction to resolve complaints against the conduct of Centrelink officers. However, there may be other avenues of redress open to the Applicant.
Waiver - “special circumstances”
Section 1237AAD(1) of the SSA provides that the Secretary “may” waive the right to recover all or part of a debt if he 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, the Administration 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. [Emphasis added]
It is not in dispute that the Applicant’s debt did not result from the Applicant knowingly making a false statement or failing to comply with a provision of the SSA. The relevant issue to be determined here is whether there are “special circumstances” that make it desirable to waive the debt.
The expression “special circumstances” has been considered extensively by the Federal Court and Tribunal in the social security and family assistance law context. Broadly, it has been held that for circumstances to constitute “special circumstances” they must be circumstances which are “unusual, uncommon or exceptional,” “markedly different from the usual run of cases,” “special” or “out of the ordinary” and they include “events which would render the (strict application of the rule in question) unfair or inappropriate:” see for example, Re Ivocic and Director-General of Social Services [1981] AATA 57 at [45]; Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 per Toohey J; Beadle and Director-General of Social Security (1985) 60 ALR 225 at 228 as per Bowen CJ, Fisher and Lockhart JJ; Groth and Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J; Dranichnikov v Centrelink [2003] 75 ALD 134 at [66] per Hill J; Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25 at [33] and Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114 at [80]. Circumstances might be “special”, although they apply to more than one person or class of persons, provided they are not of universal application (for example, they are a common or universal characteristic of social security recipients): see Fischer v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs (2010) 185 FCR 52 at [65].
There is nothing in the evidence which supports a finding that the Applicant’s particular circumstances constitute “special circumstances” in the sense described above. As stated, the Applicant is employed as a midwife in a hospital and appears to have significant savings, which are factors that point to her being in a better position to re-pay a debt than most people who are recipients of social security benefits. Indeed, by her own admission in her evidence before the Tribunal, the Applicant’s circumstances are not “special circumstances”.
Consequently, the Applicant’s debt should not be waived due to “special circumstances” pursuant to s 1237AAD(1) of the SSA.
DECISION
For the above reasons, the Tribunal affirms the SSAT Decision.
I certify that the preceding 35 (thirty five) paragraphs are a true copy of the reasons for the decision herein of Senior Member CR Walsh ........[Sgd]................................................................
Administrative Assistant
Dated 16 March 2016
Date(s) of hearing 10 March 2016 Applicant In person Representative for the
RespondentMs S Yik-Long Solicitors for the Respondent
Australian Government Solicitor
Key Legal Topics
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Administrative Law
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Statutory Interpretation
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Procedural Fairness
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