Inglis; Department of Family and Community Services - [2000] AATA 667

DECISION AND REASONS FOR DECISION [2000] AATA 667

ADMINISTRATIVE APPEALS TRIBUNAL )

) No W1999/326

GENERAL ADMINISTRATIVE DIVISION          )
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Applicant
           And    ALISON INGLIS
  Respondent

DECISION

Tribunal Mr R D Fayle, Senior Member

Date7 August 2000
PlacePerth

Decision      The decision of the Social Security Appeals Tribunal of 9 September 1999 is affirmed.
  .........………………............
  Senior Member
CATCHWORDS
SOCIAL SECURITY – Home Child Care Allowance – Parenting Allowance – Parenting Payment – overpayment of benefit – whether debt due to the Commonwealth – whether waiver appropriate – whether false statement or false representation – whether valid notice of event or change in circumstances – whether overpayment due solely to administrative error – whether payments received in good faith
Social Security Act 1991 ss 506D, 943, 950, 1224(1), 1237A(1), 1237A(1A)
Gerhardt v DEET (unreported, QG 80 of 1996)
Re McGagh and Secretary, Department of Social Security 2 (3) SSR 34
Director General of Social Security v Hangan (1982) 45 ALR 23
Re: Dingli and Secretary, Department of Social Security, (1996) 2 (8) SSR 112
Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1998) 152 ALR 127
Bruneau and Department of Family and Community Services [1999] AATA 48

REASONS FOR DECISION

7 August 2000 Mr R D Fayle, Senior Member

The Secretary, Department of Family and Community Services ("the applicant") raised an overpayment, in relation to payments of Home Child Care Allowance ("HCCA"), Parenting Allowance ("PA") and Parenting Payment ("PP") for periods detailed below. After reconsideration the applicant settled the total debt at $5,879.30, being the amount overpaid to Mrs Alison Inglis ("the respondent"). The respondent requested the applicant's decision be reviewed by the Social Security Appeals Tribunal ("the SSAT"). The SSAT decided on 9 September 1999, that there was a debt due to the Commonwealth but that except for an overpayment in relation to HCCA between 29 September 1994 and 15 December 1994, the debt should be waived. The debt remaining is $205.80.
At the hearing the applicant was represented by Mr Kees de Hoog, Manager, Advocacy & Administrative Law Team. Ms Karen Grove, Advocate, Sussex Street Community Law Service represented the respondent. The respondent gave evidence. Several exhibits were taken into evidence. Documents filed pursuant to s37 of the Administrative Appeals Act 1975 ("T documents") were in evidence.

Facts not in dispute

On 3 July 1993 the applicant wrote to the respondent (Ex. R4) requesting that she provide a forward estimate of her and her partner's taxable incomes for the 1993/1994 year of income. That letter is headed "About Your Family Payment". In response, the respondent completed the questionnaire on the reverse of the form stating that her expected taxable income for the 1992/93 year was $3,254 and for the 1993/94 year was $3,500. The form discloses her partner's estimated taxable incomes for each of those two years of income as $10,000. The form is signed by each on 22 July 1993. It bears the applicant's receipt date stamp of "(indecipherable day) July 1993".
The respondent and her spouse each signed a completed form, on 17 and 18 November 1993 respectively, sent to her by the applicant in relation to its review of the respondent's entitlement to continue to receive Family Payment in 1994. It was received by the applicant on 26 November 1993 (Ex.R3). It has an introduction which reads in part:
"We need you to answer the questions on this form so we can decide whether you can continue to get Family Payment in 1994."
Part 6 of the form (R3) required the respondent to provide an estimate of her and her partner's taxable incomes for the financial year ended 30 June 1993, as their income tax returns for that year of income had not then been lodged. They provided evidence of this in the form of confirmation from their respective Tax Agents. The estimates of taxable income for the 1992/93 year were $3,300 for the respondent and $10,000 for her partner.
The respondent applied for HCCA, she and her spouse each signing the form on 11 August 1994 (T3) which has been acknowledged as received by the applicant on 20 September 1994.
In relation to the information sought at part 7 of that form the respondent disclosed details of her bank balances and under the sub-heading "Other income" ticked only the box designated "Other investments (e.g. convertible notes, debentures, managed investments)". She did not tick any of the other 9 boxes, each designated differently. In particular she did not tick the box designated "Money from any other source (e.g. gifts, annuities, commissions from sales, baby sitting, Family Day Care, rental income)".
The respondent attached to the HCCA application claim form, a copy of a documents provided by Precedent Financial Services (attached to Ex. A1) setting out details of her investment in that provider's Strategic Investment Trust, showing a then balance of $4,971.58.
On 28 October 1994 the applicant wrote to the respondent (T4) advising of her entitlement to be paid HCCA including arrears. That letter included the following paragraph:
"Your total personal income has been assessed at $10.26 per fortnight. You should tell us if your total personal income goes over $10.85 per fortnight."

At all material times the respondent was in receipt of net rental income from a residential property in Gosnells. For the purpose of calculating the overpayment the applicant took the respondent's annual net rental income to be $3,846 (T27).
The respondent lodged a claim form for Family Payment ("FP") on 15 December 1994 (T5). This was completed and signed by her on 5 December 1994 and signed by her spouse but not dated. In that form she disclosed, inter alia, the following (italicised) information:
"[Part] 9 Your and your partner's income
From 1 January 1994, the amount of Family Payment you get is based on your family's combined taxable income, plus the value of certain benefits provided by your and your partner's employer and the value of foreign income.
(a) Taxable income
What was your and your partner's combined taxable income for the financial year 1992/93 (1 July 1992 to 30 June 1993)?
You  $4008
Your partner  $8,830
= Combined
Taxable income              $12,838
(b) Where did you get this figure from?

Tax Notice of Assessment                You (ticked)        Your partner (ticked)
(c)…
(d) What do you estimate* your combined taxable income is for the financial year 1994/95 (1July 1994 to 30 June 1995)
*If your (or your partner's) estimate is too low, any overpayment of Family Payment may have to be repaid. You may be asked for proof to support your estimate (e.g. group certificate, payslips, a letter from your accountant, Tax Agent, or employer).
You  $4000       approx
Your partner  $10,000
=Estimated combined
Taxable Income  $14,000"

The applicant wrote to the respondent on 27 June 1995 in the following terms (selected relevant paragraphs) (T6):
"I am writing to you about the new Parenting Allowance that has replaced the Home Child Care Allowance from 1 July 1995. A new income test started at the same time.
You have been transferred from Home Child Care Allowance to Parenting Allowance and you will now be paid $61.00 every second Thursday, starting on 6 July 1995.
Your Payment is worked out using your income only. The income we have used to work out how much you are paid is shown on the back of this letter. You should tell us within 14 days if your income changes.
…
YOUR FORTNIGHTLY INCOME IS: $10.26
WHEN TO CONTACT US
Under Section 950 of the Social Security Act 1991 you must tell us within 14 days about events or changes in circumstances affecting your payment. …
You must tell us if any of these things happen or is likely to happen:

…
your personal income goes over $10.26 per fortnight
Income includes money you receive or will receive when you:
…
rent or sell any property
…".

The applicant wrote to the respondent on 21 March 1998 (T7), advising her that she would be paid $65.10 every second Thursday, starting on 26 March 1998. This was an increase on what she was then receiving. That letter includes the following sentence;
"Your entitlement has been worked out using your income of $12.91 per fortnight."
The letter contained the same standard information as that in T6 above, relating to what constitutes "income" and events, should they occur, which require her to contact the applicant.
T8 is an internal computer record of the applicant. It bears the "date of receipt" as 16 October 1998 and "storage date" as 28 October 1998. It notes:
"Input income from real estate as per customer advice = $3,814 p.a.. QSS32 sent – 16/10/98 – Customer advised on SC169 that she expects to receive $4,000 for 1997/98 – Need to know source of income – Nothing on system or TXGS.
Customer replied to QSS32 advising that she owns a house in Gosnells. Receives rent of $220.00 PF = $5,720 PA – less 1/3 for expenses $1906 = $3814 PA income. Customer does not lodge a tax return therefore allow 1/3 for expenses – customer did not advise of mortgage debt to be followed up."
The respondent wrote to the applicant on 20 October 1998 providing details, for the year ended 30 June 1997, about the rental income and the various expenses related to the property including her accountant's fees. She also mentioned the "small sum invested with Precedent Financial Services" and interest income "of $353.78 over 12 months" and a "small amount of interest on my savings account".

The Respondent' evidence

Before summarising the respondent's evidence, relevant extracts from part 7 "Income" of T3, the respondent's claim for HCCA are reproduced below since it is those parts of the document which are central to the applicant's contention that the respondent failed to satisfy the requirements of sections 943 (re HCCA), 950 (PA) and 506D (PP) and made a false statement in terms of s1124(1) of the Social Security Act 1991. Those provisions are detailed later in these reasons.
Part 7 of T3, the HCCA claim form completed and lodged by the respondent provides:
"7.       Income         We need to know about your (the person claiming HCCA) current income, not that of your partner. This includes your share of any joint income you have (e.g. bank interest). If there is not enough room, please attach a separate sheet of paper with your details.
(a)       Give details of all your bank, building society and credit union accounts. Include term deposits, joint accounts and accounts you hold under any other name.
Name of institution     Type of     Account or Term       Account held in    Total     Interest
and branch               account     Deposit No.           name(s) of         balance     rate
Challenge Bank        Visa       (number given)       (respondent)       1994.81               cheque   13.75
(ditto marks)           Term       (number given)       (respondent)       5274.53     4.6
  Deposit
(b) Do you get any money from wages/salary?  No box ticked
(c)   Other income
      Please tick the box(es) if you own or get (or will get) income from any of the following:
Shares             Other investments (e.g. convertible notes,       Superannuation or
  Debentures, managed investments)                or retirement
  payments
Compensation          Income from          Income from               Boarders or
payments                 overseas                life interests                 Lodgers
Payments from another  Money from any other source (e.g. gifts
Government Department  annuities, commissions from sales,
  baby sitting, Family Day Care, rental
  income)
Self-employed or the owner or part owner of a business or a farm (including a silent partner)
(As mentioned above, only the "Other investments" box was ticked.)
If you ticked any of the boxes, please attach a sheet of paper with full details of investment (name, financial institution, interest), company and dividends, gross fortnightly payment or other relevant details. You must also provide proof of managed investments (e.g. certificates), or if you are self-employed, most recent income tax returns or income and expenditure statements.
Please note: we may need to get in touch with you for more details about the income you get."
The respondent's evidence is that she is currently working part-time as a teacher's aid, having obtained some time ago (before the birth of her first child in 1992) a diploma in teaching. She completed three years study at the former Western Australian Institute of Technology but did not complete the course. She majored in English and English Literature. She confesses to not being quantitatively inclined. She has worked in various occupations and callings including a bookshop and taught English as a Second Language overseas. Whilst she enjoys working with children she prefers to focus her time on looking after her husband and bringing up her children which she and her husband view as very important. She is working because the farm managed and worked by her husband provides little and irregular income. The farm supports his elderly parents as well as themselves. The farm has always struggled and they have very little left over, if anything, after meeting household expenses including clothing her children. The are grateful to receive produce from friends in the district. They regularly kill sheep for meat. Further, the local school has experienced staff shortages and she has agreed to provide assistance realising that this is important for the education and care of the children attending the school, including her daughter. She works part-time, two to three days per week. This is longer than she would like, especially as she is involved in voluntary work in the nearby town. This commitment, together with her work, takes her to town about four days each week leaving her little time to assist her husband and attend to the home duties. She said that if she is required to repay the overpayment which the applicant seeks, then she would be forced to work even longer and compromise her role as mother and wife which she believes would put undue strain on her husband and the family.
Her residential property in Gosnells was purchased several years ago. When she married and moved to the country to be with her husband they decided to try and keep it as a family investment, paying the then mortgage and other expenses from the rent. In 1992, on advice from her accountant, she paid off the mortgage from the funds she held with Precedent Financial Services. The place was vacated not long ago and she has incurred considerable costs in repairing it. She is holding the balance of the money on deposit to pay for the sewage when it is installed in the near future, which she said will cost about $2,000. The property was recently put into the hands of a rental agent for leasing.
In regard to the form at T3 and her failure to tick the box "Money from any other source (e.g. gifts, annuities, commissions from sales, baby sitting, Family Day Care, rental income)" her evidence is summarised below. Before doing so the Tribunal observes that it accepts her evidence as truthful. The respondent was most cooperative with the Tribunal and endeavoured to answer questions put to her by Ms Grove, Mr de Hoog and the Tribunal as fully as she believed she could. She was unable to recall some aspects relevant to the completion of the claim for HCCA (T3) and some relevant events prior to this and after. This, in the Tribunal's opinion, adds credibility to her answers overall.
The respondent said that, to the best of her recollection (which has been refreshed because of these proceedings and those leading to them) when she completed the form she did not fully understand the nature of the questions. She believed that because she had been dealing with the applicant for several years prior to this claim that they would have a file of relevant information on her in any event and would process the claim having due regard to that information, or contact her should they require any further embellishment. She said she subsequently made a claim for Child Disability Support in respect of the care of her daughter who has a physical impairment. That claim was made on or about 7 October 1994 (R8), two months after the claim for HCCA in question (T3). She said that her dealings then with the applicant convinced her that they were very thorough in their investigations. Those investigations resulted in her claim being unsuccessful as in their opinion her daughter did not qualify. This experience she said, gave her to believe that the applicant would not pay any claim unless they were quite certain that the claimant qualified.
She said, in relation to her having ticked the box in paragraph (c) (T3) "Other investments" that she thought that option to be appropriate in relation to her ownership of the Gosnells property and her investment with Precedent Financial Services. Her evidence is that she drew this conclusion because it seemed none of the other boxes were appropriate. She knew she had no shares, was not receiving any superannuation or retirement payments, compensation payments, income from overseas, from boarders or lodgers, nor any other government department. Further, she was not self-employed or part owner of the farm owned by her husband and his parents. She admitted to the Tribunal, with hindsight, that she ought to have ticked the box "money from other sources" although at the time she probably did not read it carefully enough as she had already ticked the "other investments" box believing it to cover her rental property. The Tribunal is satisfied that she genuinely believed that the applicant was apprised of her approximate taxable income and that it would have taken it into account in assessing her entitlement to HCCA. The Tribunal rejects any suggestion that the respondent deliberately suppressed the relevant information about her income from the Gosnells property.
The respondent's evidence is that she complemented the claim with the relevant details about her investment with Precedent Financial Services (see attachments to A1). She has no recollection of providing any information about the Gosnells property rental income.
Mr de Hoog asked the respondent why she did not consider it necessary to contact the applicant when on 28 October 1994, it wrote to her informing her of her entitlement to HCCA and that it had assessed her total personal income as $10.26 per fortnight, which, with hindsight is clearly wrong. The respondent said she had no idea how they had "assessed" her income as that amount. She supposed that because they were aware of her husband's low income they may have taken that into account realising the family's need for assistance. She also thought it possible that the applicant's assessment may have reduced her actual net income (which she believed they knew about and was approximately $4,000) by what a married couple with a child would require to spend for bare necessities of life and the assessed amount was what would be left after reducing actual net income by that amount. She said she thought this possible because she sometimes had about $10 "pocket money" which she described as money left after meeting all essential expenditure. She said that she and her husband spent very little money on themselves because there was no spare money.
Mr de Hoog pressed the respondent as to why she did not follow-up and ask the applicant about how they arrived at the amount when it must have been clear to her that the sum of $10.26 a fortnight was nowhere near her actual fortnightly income. She said, in response, that it was her experience that the applicant was thorough and as she believed they had all the relevant information about her income, she assumed their assessment to be correct. She said she had little understanding of these things and relied on the applicant to get it right. She added that she understood her obligation to notify the applicant about her income would only be actuated if her income rose. As she had withdrawn money from her deposit account and had not increased the rent on the Gosnells property then, if anything, her income had fallen because of the increase in expenses for that property. Therefore, she reasoned, there was no relevant change in her income or circumstances about which she was required to advise the applicant.

Mr de Hoog put the same question to the respondent in relation to the applicant's letter to her of 27 June 1995 (T6) about her entitlement to the new PA (which replaced the HCCA), in which it is stated that "your fortnightly income is $10.26". Her answer to this was the same except to say that having completed the claim form in relation to FP on 5 December 1994, disclosing her and her husband's actual taxable incomes for 1992/93 and estimated for 1994/95, she was convinced that she did not understand how the applicant had calculated their figure. She said she assumed that any information provided to the applicant relative to any claim or benefit would be used by them in assessing all entitlements. She said she did not really appreciate the nuance between the FA and the FP although she thought the former was for her benefit whereas the latter was for her children's benefit. She admits that with hind-sight and knowing now what she does as a result of these experiences, the applicant's calculation of her fortnightly income is clearly wrong. But her evidence is that that was not apparent to her at the time.
When questioned by the Tribunal about her experiences with the applicant she said that prior to this matter coming to her notice when told about the overpayment claim, she had little reason to doubt that the applicant was not reasonably efficient. She did qualify this by saying that when she telephoned the applicant she never knew to which branch she was connected unless she asked. Her more recent experiences, since the overpayment claim, have been far from satisfactory. She finds it necessary to use the telephone because of her isolation. That is a very frustrating experience. It usually entails having to hang on for a long time before speaking to anyone and when she does get through she finds that the person more often than not has never dealt with her before and frequently needs to confer with a supervisor. Her dealings in this respect, she said, are quite frustrating. She said that she does not now have the confidence in the applicant that she had before and she now realises that extreme care needs to be exercised when dealing with them, because you cannot rely on them getting it right even if you provide accurate information (ergo her experience).

The legislation

The following provisions of the Social Security Act 1991, as it was at the relevant time, are reproduced insofar as they are relevant.
Secretary may require notice of the happening of an event or a change in circumstances
943(1) The secretary may give a person who is receiving home child care allowance a notice that requires the person to inform the Department if:
(a)       a specified event or change of circumstances occurs; or
(b)       the person becomes aware that a specified event or change of circumstances is likely to occur.
943(2) An event or change of circumstanes is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the payment of the home child care allowance.
943(3) Subject to subsection (4), 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 person is to give the information to the Department; and
(d)must specify the period within which the person is to give the information to the Department; and
(e)must specify that the notice is a recipient notification notice given under this Act
943(4) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (3)(c) or (e).
943(5) – (8)     not directly relevant.
Sections 950, dealing with Parenting Allowance (PA), and section 506D, dealing with Parenting Payment (PP) are, for all intents and purposes, identical with section 943 above. That is, there is a requirement to comply with any notice requesting information that may affect the entitlement to the benefit.
Subsections 1224(1) and 1237A are also relevant in the present context. These are reproduced below:
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.
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 is 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;

Submissions – the applicant

Mr de Hoog, for the applicant, submitted that the respondent had not notified the applicant that she was in receipt of rental income until her letter of 20 October 1998. By not ticking the correct answer to the Part 7(c) question in her claim form applying for HCCA (T3), she did not alert the applicant to the fact that she was then receiving net income from rent. This he submitted, relying on Re: Dingli and Secretary, Department of Social Security (1996) 2 (8) SSR 112, was tantamount to making a false representation. He further submitted that it is incumbent on each claimant to provide the information requested because notwithstanding that the respondent may have other relevant information on record in relation to prior claims, circumstances do change and the applicant ought to act only on current information. Therefore, the fact that the respondent had, prior to submitting her claim for HCCA in September 1994, provided the applicant with information about her and her spouse's taxable incomes (R5 and R4) is not to the point. T3, the HCCA claim form clearly requested information about the respondent's "current income" as stated in the recital to Part 7 of the claim form. And it further instructs claimants "if there is not enough room [to provide the information], please attach a separate sheet of paper".
Mr de Hoog submitted that the letter from the applicant to the respondent, dated 28 October 1994 (T4) following the applicant's claim for HCCA, is a notice under s943 of the Social Security Act 1991 ('the Act"). The respondent's failure to advise the applicant within 14 days of receipt that her fortnightly personal income exceeded $10.85 constitutes a failure to comply with the notice: Re McGagh and Secretary, Department of Social Security 2 (3) SSR 34. He further submits that the same applies to the letters sent to the applicant on 27 June 1995 (T6) and 21 March 1998 (T7), except in regard to the latter the fortnightly income amount, above which the respondent was required to inform the applicant, had increased to $12.91.
Mr de Hoog submitted that as a result of the false representation, that is, the failure to answer fully the questions in the HCCA claim form (T3) as mentioned, an overpayment of HCCA prior to 15 December 1994 of $205.80 arose. That is a debt due to the Commonwealth pursuant to s1224(1) of the Act. He further submitted that the information about the respondent's and her spouse's taxable incomes contained in the FP claim form (T5) received by the applicant on 15 December 1994 did not correct the previously mentioned false representation in relation to HCCA. His reasons for this contention are:
(a)The claim form related to an entirely different benefit, namely FP. He cites the decision in Gerhardt v DEET (unreported, QG 80 of 1996) in support;
(b)the claim form makes no mention of the respondent's rental income nor that she owned the Gosnells property which was leased; and
(c)the rate of FP payable was determined by the applicant having regard to the then notified current rate of income: Div 5, Part 2.18 of the Act. He submitted that the disclosures in the claim form (T5) that the respondent's actual taxable income for the 1992/93 year of $4,008 and her estimated taxable income for 1994/95 of "$4,000 approximately", were not necessarily inconsistent with a current income of $10.26 per fortnight. The Tribunal understands this submission to be founded on the concept that the estimate was for the current financial year and made mid-way through it, on 5 December 1994. Examples provided by Mr de Hoog included seasonal or casual workers' intermittent earnings.
For the above reasons the applicant has raised an overpayment in relation to payments after 15 December 1994 as the respondent's failure to advise it of the current rental income perpetuated her previous false representation on which the applicant relied to assess her current fortnightly income. The overpayments are therefore debts due to the Commonwealth pursuant to s1224(1).
Mr de Hoog submitted, in the alternative, that if the information provided by the respondent in the claim for FP (T5) was sufficient to correct the false statement, the mere failure to comply with the notice of 28 October 1994 was a contributing cause to the ongoing overpayment. Therefore, the amounts overpaid to the respondent are debts to the Commonwealth pursuant to s1224(1) of the Act. He relies on the decision in Director General of Social Security v Hangan (1982) 45 ALR 23, in support.
Mr de Hoog further submits, in the alternative, that even if the disclosures of the respondent in the FP claim form (T5) received on 15 December 1994 were sufficient to correct her previous false representation, her failure to respond to the letter of 27 June 1995 is tantamount to a false representation. That letter informed her that the fortnightly income used for the new PA was taken as $10.26 which, the letter states "is worked out using your income only. … You should tell us within 14 days if your income changes". So, he concludes, in any event there is an overpayment recommencing on or about 27 June 1995 as that failure carried over even after the respondent received the applicant's letter of 21 March 1998 (T7). That letter informed her that her "entitlement [to PP] has been worked out using your income of $12.91 per fortnight".
Mr de Hoog submitted that no part of the debt can be waived under s1237A of the Act as none of it is "attributable solely to an administrative error made by the Commonwealth". And in any event the overpayments were not received by the respondent "in good faith" as is required by that provision. He submitted that she must have known that the amount of fortnightly personal income being used by the applicant to calculate her entitlements to HCCA, then PA and PP were wrong. He cites Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1998) 152 ALR 127 in support.
Mr de Hoog further submitted that there are no grounds to write-off the debt pursuant to s1236 of the Act. The Tribunal takes this to be a submission that the respondent has a capacity to repay the debt as the other provisions of s1236(1A), the only available grounds for write-off, are clearly not satisfied on the evidence. The Tribunal agrees with this submission – the evidence is that the applicant has the capacity to repay the debt (if any). She is currently employed, albeit part-time and does have potential separate income from the lease of her home. In the Tribunal's opinion, should there be a debt due to the Commonwealth, she has the capacity to repay it by instalments over time even though this would impact adversely on her family.

Submissions – the respondent

Ms Groves submits that the evidence is clear, that the respondent's failure to tick the "Money from any other source …" box in the HCCA claim form (T3) was an oversight and not a deliberate attempt to mislead the applicant. She had believed that by ticking the box [income from] "Other investments", she had provided correct information and on the basis of previously advised information (R4 and R5), she had informed the applicant of her income situation at that point in time.
Ms Grove on behalf of the respondent submitted that in the claim for FP (T5) the respondent disclosed, in answer to the question at Part 8 of the claim form, that she was then (in December 1994) in receipt of both Family Payment and HCCA. This, she submits, is a full, honest, accurate and sufficient disclosure on the part of the respondent to discharge her obligations under the Act. Further, that disclosure founds a reasonable basis upon which the respondent could draw her conclusion that the information therein disclosed would be used by the applicant in assessing her entitlement to the two benefits, not just the FP.
Ms Grove submitted that the respondent's disclosure, in December 1994, of her taxable income for the year ended 30 June 1992 and her estimated taxable income for the year ended 30 June 1994 ought to have been recorded "in the system" by the applicant. She submits that the applicant's computer file note (at T8) on 16 October 1998, that there was "nothing on the system or TSGS" about her income level of $4,000 is an administrative error. That note, she submits can only be a reference to the source of income, which in context, does not matter as the Act is only concerned with "income" or "ordinary income" earned, and not with its sources. She submits that even if the respondent had not notified the applicant that her income included net rent, that does not matter if she notified the applicant in writing of the correct amount of her income.
It was submitted that the evidence supports the respondent's contention that she had no reason to believe that she had an obligation to notify the applicant following receipt of the letters from it of 28 October 1994 (T4), 27 June 1995 (T6) and 21 March 1998 (T7). Her evidence establishes that she believed that the applicant had in its possession reliable information about her level of income. It had not increased but if anything, decreased. Therefore, she believed that was not a notifiable event since they were only interested in when her income rose. The respondent cites Dingli and DSS (supra) in support. Further, she assumed, in the light of the information that she had supplied to the applicant, particularly in relation to the FP claim form in December 1994, that they had their own way of assessing her fortnightly income. Her evidence is that her rationalisation of this is plausible, even if naive. No other notifiable events had occurred.
It was submitted by Ms Grove, in relation to the applicant's evidence about her accepting the applicant's assessment of her income as $10.26 per fortnight (T4 & T6) and $12.91 per fortnight (T7) that she had no way of knowing how that was arrived at – its basis is nowhere disclosed. Further, her evidence is that at the time, the respondent trusted the applicant (almost implicitly) to get their calculations right. She did not feel it was her duty or her obligation to check their calculations, especially as no basis for them was provided. She had no reason at that time to believe the applicant's assessment was wrong.
Ms Grove submitted that insofar as the debt for an overpayment (between the time she commenced to receive HCCA and 15 December 1994) is concerned, the fact that the applicant has in its possession reliable information about the respondent's income (R5 & R4), which they did not use, points to administrative error.
Ms Grove submitted that if there was an error on the part of the respondent, which amounts to a false representation contained in the claim form for HCCA (T3) lodged on 20 September 1994, (which is denied), that error was rectified by disclosures in the claim form for PA lodged on 15 December 1994 (T5). Therefore, it is submitted, the original error cannot continue to be the causal event giving rise to an overpayment subsequent to proper notice to the applicant of the correct information. Otherwise, it is submitted, that would render pointless notification obligations and potentially render a person liable indefinitely for the consequences of subsequent acts, over which they have no control. On this basis it was submitted that the advice contained in the claim form for PA lodged on 15 December 1994, provided the correct information. The fact that the applicant did not act on it was the sole cause of the overpayments arising from that time – that is, the overpayment would not have arisen if the applicant has assessed the income properly; Bruneau and Department of Family and Community Services [1999] AATA 48. It was submitted that in any event the debt arising from 15 December 1994 should be waived pursuant to s1237A of the Act. In this respect, Ms Grove submitted that the evidence clearly shows that the respondent received the payments in good faith. She was unaware that she was receiving overpayments of HCCA, PA and PP. She did not know nor could she have known or have any reason to know that she was not entitled to the payments as she had provided the applicant with all the information (at least from 15 December 1994) which she thought was required (and indeed, was required) to assess her income: Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (supra).
Ms Grove made further submissions in relation to waiver pursuant to s1237AAD but for reasons to follow it is not necessary for the Tribunal to consider these. The Tribunal accepts her submissions that the respondent did not knowingly make a false representation. If one was made then it was innocent. The evidence of the respondent is accepted in this respect. It supports her reasons for not contacting the applicant after receiving the three letters, T4, T6 and T7 because her income had not changed, at least had not risen, and she accepted the stated fortnightly income amount out of a (reasonable) belief that they were correct in this respect. This obtains even though, with hindsight, the respondent accepts that these calculations were significantly erroneous.

Discussion and reasons for decision

Having regard to the evidence the Tribunal concludes that the respondent, by not providing full information in her claim for HCCA (T3) about her then actual income, has failed to provide sufficient information for the applicant to assess properly her entitlement to HCCA. Because the applicant was not informed of her total income, particularly her then annual net rent from the Gosnells property, it was not in a position to assess her entitlement correctly. The Tribunal is satisfied that the applicant did receive reliable and accurate information about the respondent's personal income at that time (August 1994) in so far as it related to her earnings from her bank deposits and managed investments. But the Tribunal is equally satisfied that no relevant information was provided about her net rental income. The submission of Mr de Hoog in this respect is accepted and finds support in Re: Dingli (supra). In that case Deputy President Blow decided that failure to respond to a direct question about the applicant's husband's income (by leaving the question blank) was a false representation. The fact that the applicant may have had on record previously written details about the respondent's income is not sufficient to excuse her from providing accurate information about the level of her current income at the time of applying for the HCCA. As Mr de Hoog pointed out, her income could well have changed and it was up to her to tell the applicant about it, not up to them to ferret out the information from past records, which may or may not have then been reflective of the actual current income.

For those reasons the Tribunal affirms the decision under review to the extent that it affirms that the respondent received an overpayment for the period up to and including 8 December 1994, which is a debt to the Commonwealth pursuant to s1224 of the Act. That amount is $205.80. As will be shown later, the Tribunal is also of the opinion that there are no grounds for waiver of this amount.
The evidence supports the submission of the applicant that the respondent also received an overpayment in the period from 8 December 1994 to 22 October 1998. That follows because the applicant was assessing the respondent's entitlement to the HCCA, the FP and the FA on the basis of an incorrect figure for personal income of the respondent. The evidence is clear in this respect. Those respective debts have been calculated as (see A1):

HCCA overpaid 8 December 1994 – 22 June 1995 480.20
FP 26 March 1998 – 22 October 1998 859.20
FA 1 July 1995 – 12 March 1998 4,334.10
$5,673.50

In the opinion of the Tribunal the respondent's disclosures contained in the claim form for FP, signed on 5 December 1994 and received by the applicant on 15 December 1994, contain sufficient information for the respondent to have then correctly assessed the applicant's entitlements. The form asks whether the claimant "or their partner receive or are claiming a benefit or pension or allowance from Social Security". This is at Part 8 of the questionnaire. The respondent answered "yes" to this and provided the following information in relation to the "Type of payment" question – "Family Payment and HCCA". And in answer to the question "In which State or Territory did you claim?" she correctly answered "WA". Further, as already discussed, she then advised accurate information about both her and her husband's taxable incomes for the 1992/93 year of income and her estimate of her and her husband's taxable incomes for the current year ending 30 June 1995, which at the time was almost half over (T5). Time would show that her estimate of $4,000 was more than her actual taxable income of $3,711 (T12). Therefore, had the applicant adopted an expected income of $4,000 (or indeed an income of $4,008 based on the 1992/93 tax assessment), for the purpose of assessing the applicant's entitlement to FP and HCCA from 15 December 1994, no overpayment would have subsequently arisen. That is, assuming that the applicant did not make an error in transposing the information and making its relevant calculations. In the opinion of the Tribunal the decision in Gerhardt (supra) does not necessarily support the applicant's contention in this regard. That is, that because the claim form for FP (T5) does not directly related to the claim for HCCA then to ignore or overlook it in relation to assessment of HCCA entitlement, is not an administrative error. In Gerhardt, concerning a claim for Austudy, Ryan J said:
"However, the findings of fact in this case are that the assessing officer, rather than being aware of the figures in the [income tax] notice of assessment and choosing to disregard them, had simply overlooked those figures.
… Here a reference to overseas income was simply overlooked in a document because it appeared in a document supplied for another purpose and not specifically designed to draw the assessing officer's attention to its existence. To this extent the error of Mrs Gerhardt in not attaching the required documentation, was still operative. Thus, the administrative error of the respondent cannot be said to have been the sole error, and it follows that, in accordance with s289(2) of the Student and Youth Assistance Act 1973, there was no requirement on the respondent to waive the debt incurred by the two applicants." (p.8)
However, in the present case the claim form for FP (T5) specifically asks, at question 8, about concurrent benefits being received or claimed. That information was fully disclosed. The only apparent purpose of the question must have been intended to alert the applicant to the fact for the purpose of ensuring consistency of assessment of all entitlements coming to the respondent from the applicant. In the Tribunal's opinion the applicant's failure to act on this important disclosure in respect not only of the then applied for FP but also the existing HCCA payments, is solely an administrative error of the applicant. For had it done so no overpayments would have been made not only in respect of the ongoing HCCA but also of the new entitlement to FP. The fact is that crucial information provided at the direction of the applicant was not acted upon by it and consequently the original error (the false representation in T3) of the respondent was simply not corrected. That can only be regarded as two errors on the part of the applicant, not an administrative error contributed to by the respondent. The Tribunal finds that, in these respects and in terms of s1237A of the Act, that the overpayment from 15 December 1994 was attributable solely to administrative error. Further support for this conclusion is found in Re: Bruneau and Secretary, Department of Family and Community Service [1999] AATA 48 at paragraphs 29-33, a case, in a relative sense, with not too dissimilar facts to those in the present.
No evidence about how the applicant calculated the mysterious figure of $10.26 referred to in either T6 nor indeed T4 was given nor provided to the respondent, so one can only speculate as to how it was arrived at, and, according to her evidence, that is exactly what the respondent did. Her musings about how the applicant may have arrived at its "assessment" seemed plausible to her at the time, especially as she and her husband were experiencing straitened circumstances. The Tribunal accepts the submissions of Ms Grove in relation to the question of whether the respondent received the overpayments in good faith. His Honour Finn J's November 1997 judgment in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (supra), is a much cited precedent which must now be regarded as the correct position in relation to whether a claimant receives social security benefits in good faith (as that phrase, in the context of s1237A(1), is used). A fundamental finding of fact in that case was that Mr Prince was aware that he received Austudy payments to which he was not entitled, having previously taken steps to cancel those payments. The court was considering the provisions of s289(2) of the Student and Youth Assistance Act 1973, which is couched in virtually identical terms to s1237A of the Act. In the course of his judgment his Honour said:
"The section asks that a quite specific question be addressed: was the payment received in good faith? It is quite unconcerned, for example, with whether, after 22 December, Mr Prince acted in good faith toward DEETYA. Its sole concern is with whether a particular state of affairs exists at the time a payment (or payments) is received.
… Its concern is with the state of mind of the person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.
… [The section] does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise."
It is clear from the facts in this case that the respondent understood that she had notified the applicant of all relevant information to enable it to determine her entitlements. However, she did make an unwitting false representation in her application for HCCA received by the applicant on 20 September 1994 (T3). She effectively corrected that false representation by disclosures in her claim for FP, received by the applicant on 15 December 1994 (T5). The respondent's belief that she was entitled to the payments was founded on her lack of appreciation as to how the applicant assessed the amount of $10.26 fortnightly income stated in its letter to her of 28 October 1994 (T4). Her naively assumed rationalisation as to what that figure represented was compounded by the applicant when it repeated the (incorrect) amount in their letter to her of 27 June 1995 (T6). This was despite her having previously fully disclosed her (much higher) income in the FP claim form received by the applicant on 15 December 1994. In the opinion of the Tribunal the respondent, at all material times, did not know that she was not entitled to the entire payments being made to her for HCCA, FP and FA, at least until alerted to this fact in October 1998. Indeed, the Tribunal accepts that her assumption at the time and in the context of her evidence, was quite rational and that she believed she was entitled to the (over) payments.
For those reasons the Tribunal distinguishes the facts in this case from those before the Federal Court in Prince. The Tribunal concludes that having no knowledge that she was not entitled to the overpayments in question, arising from 15 December 1994 due solely to administrative error, the respondent received them in good faith and therefore they should be waived pursuant to s1237A of the Act.

Decision

For the above reasons, pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 9 September 1999 is affirmed.

I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R D Fayle, Senior Member
Signed:
     ............……………………… …………..
   Associate
Date/s of Hearing  12 July 2000
Date of Decision  7 August 2000
Counsel for the Applicant        Mr K de Hoog
Solicitor for the Applicant         Advocacy and Administrative Law Team, Centrelink

Counsel for the Respondent Ms K Grove
Solicitor for the Respondent Sussex Street Community Law Service

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Citations

Inglis; Department of Family and Community Services [2000] AATA 667

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Davis and Department of Education, Training and Youth Affairs [2001] AATA 168

Cases Citing This Decision

2

Botfield and Repatriation Commission [2004] AATA 567

Davis and Department of Education, Training and Youth Affairs [2001] AATA 168

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Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287