Jacqui Grey v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2011] AATA 415
•17 June 2011
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 415
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/4305
GENERAL ADMINISTRATIVE DIVISION ) Re Jacqui Grey Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms K Hogan, Member Date17 June 2011
PlacePerth
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal under review.
.......[sgd K Hogan]................
Member
CATCHWORDS
SOCIAL SECURITY — overpayments — Garnishee Notice
LEGISLATION
SocialSecurity Act 1991(Cth)
Social Security (Administration) Act 1999 (Cth) s 151, s 179, s 181, s 1230C (1) and (2), s 1233, s 1234
Administrative Appeals Tribunal Act 1975 (Cth)CASES
Kevin Walker v Secretary, Department of Social Security [1997] FCA 589
REASONS FOR DECISION
17 June 2011 Ms K Hogan, Member History
1.On 9 August 2008 a Centrelink Officer decided that the applicant had been overpaid $129,745.79 of disability support pension for the period 16 July 1992 to 24 July 2007 and the amount of the overpayment was a recoverable debt.
2.As a result of a review on 10 September 2008 Centrelink reduced the debt by $69,219.12 to $60,526.67.
3.On 18 November 2008 Centrelink wrote to Ms Grey confirming that the debt of $60,526.67 is to be repaid by way of fortnightly payments of $20.00 with the first repayment due to Centrelink by 21 November 2008.
4.On 21 May 2010 the District Court of Western Australia (No: 2266 of 2007) made the following orders in relation to Ms Grey’s personal injuries claim arising out of a motor vehicle accident which occurred on 6 October 2004:
(a)judgment be entered for Ms Grey against the Defendant for $80,000.00 which was to be paid into the Jacqui Marie Grey Trust; and,
(b)the Defendant pay Ms Grey’s costs of the action fixed at $20,000.00 inclusive of disbursements.
5. By Deed of Trust, undated, a trust named “The Jacqui Marie Grey Trust” was settled by Mr James Langford Fallows and Ms Beverley Ann O’Halloran (as trustees) and Ms Grey (as the sole beneficiary).
6. The trust fund comprised an amount of $67,500.00 (being the award of $80,000.00 less $12,500.00 paid to Ms Grey’s solicitors, Kuscevich & Associates and barrister Mr Julian Johnson).
7. On 3 June 2010 Centrelink wrote to Ms Grey to advise that the balance outstanding of her debt was $59,706.67 and that they had instructed the Insurance Commission of Western Australia to withhold $55,000.00 or the total of the money from her compensation payment ordered by the District Court on 21 May 2010 whichever is the smaller.
8. On 3 June 2010 Centrelink wrote to the Insurance Commission of Western Australia requesting that $55,000.00 or any amount that leaves a balance of $500.00 in the account, whichever is smaller, to repay the debt owed by Ms Grey to Centrelink.
9. On 14 June 2010 Ms Grey requested a review by an Authorised Review Officer (“ARO”) of the decision of 3 June 2010 to garnishee $55,000.00 from her compensation payment.
10. On 7 July 2010 a Centrelink ARO decided to vary the decision made on 3 June 2010. The ARO decided that only $30,500.00 should have been garnisheed from Ms Grey’s compensation payment and that $24,500.00 (of the total $55,000.00 garnisheed) should be returned to Ms Grey.
11. On 28 July 2010, Ms Grey appealed the decision made by the ARO to the Social Security Appeals Tribunal (“SSAT”).
12. On 13 September 2010, the SSAT affirmed the decision of the ARO.
13. On 28 September 2010 the applicant appealed the SSAT decision to this Tribunal.
Issues
14. It was not in dispute that the applicant owed a debt to Centrelink.
15. The issues to be considered by this Tribunal are:
(a)whether Centrelink issued a garnishee notice to the applicant and the Insurance Commission of Western Australia in accordance with relevant social security law; and,
(b)the extent of the jurisdiction of the Administrative Appeals Tribunal.
Legislative Framework and Policy
16. The legislation relevant to this decision is contained in the Social Security Act 1991 (“the Act”) and the Social Security (Administration) Act 1999 (“the Administration Act”).
17. Section 1230C (1) of the Act sets out the method of recovery of debts by the Commonwealth including repayment by instalments and by garnishee notice.
18. Section 1230C (2) of the Act relevantly provides that garnishee action can only proceed if the person has failed to enter into a reasonable arrangement to repay the debt.
19. Section 1233 of the Act sets out the procedures for issuing a garnishee notice.
20. Section 1234 of the Act provides that the Secretary may enter into an arrangement with a person in regard to the repayment of a debt.
21. Section 151 of the Administration Act permits the SSAT to exercise all the powers and discretions that are conferred by the social security law on the Secretary with some listed exceptions. Under sub-section 151(2) (a) of the Administration Act, one of these exceptions is the power and discretion of section 1233 of the Act.
22. Section 179 of the Administration Act provides that the AAT can review decisions previously reviewed by the SSAT and which have been affirmed, varied, set aside. In matters set aside by the SSAT and sent back to Centrelink for reconsideration with directions or recommendations, those directions or recommendations can also be reviewed by the AAT.
23. Section 181 of the Administration Act limits the decisions the AAT can review to those reviewed by the SSAT.
24. Social Security legislation is interpreted with the assistance of the Guide to Social Security Law (“the Guide”)
EVIDENCE
25. The Tribunal was provided with a number of documents including:
(a)the section 37 documents; and
(b)written submissions from the parties.
26. The Tribunal heard evidence from the applicant and the respondent.
27. Subsequent to the hearing, the applicant was afforded the opportunity to provide evidence of her attempts to enter into an appropriate repayment schedule with the Secretary. The applicant provided a letter dated 27 May 2011. The respondent provided a response by email dated 7 June 2011.
Applicant’s Contentions
28. On 11 August 2008, Centrelink wrote to her advising that she had a debt and invited a repayment plan.
29. On 18 November 2008, Centrelink wrote to her to confirm that she agreed to repay the debt by way of fortnightly payments of $20.00.
30. The applicant acknowledges that she owes a debt to Centrelink.
31. The applicant accepts that the social security legislation enables Centrelink to garnishee amounts and that nothing in the legislation provides for a reduction in the amount of the garnishee because of severe financial hardship.
32. In the calculations used by the ARO which refunded to her $24,500.00 from the compensation lump sum, the officer failed to take into account the cost of her carer, John.
33. In regards to her expenses from the $80,000.00 compensation held in the Jacqui Marie Grey Trust, she has paid $42,565.00 as follows:
(a)$12,500.00 to her solicitor and barrister;
(b)$17,000.00 for a new van;
(c)$10,000.00 for a hoist for the new van;
(d)$3,065.00 for a bath hoist.
34. Her electric wheelchair requires maintenance and she will need to replace the chair.
35. She is the beneficiary of a family trust fund set up by her late father, Ronald Edward Grey.
36. The trustees are her brother and sisters. She would like to remove them as trustees.
37. She thinks the Secretary should have gone after the family trust and not the Jacqui Marie Grey Trust. Her sister filled out the forms applying for disability pension. Her sister said not to tell anyone about the family trust. By not telling the truth in the beginning, the family created the social security debt and the money should come from the family trust.
38. She reviews a fortnightly payment from the family trust and has no savings.
39. On 25 May 2010 the District Court of Western Australia judged that she was to receive $80,000.00 which was to be paid into the Jacqui Marie Grey Trust.
40. On 3 June 2010 a Centrelink officer decided that the existing payment arrangement of $20.00 per fortnight was no longer reasonable in view of the compensation payment. A Centrelink officer telephoned her on the same day in order to enter into a new payment arrangement, however her phone kept “dropping out”.
41. Members of the debt recovery team in Victoria were very rude during their telephone dealings with her.
42. On 3 June 2010 Centrelink wrote to her and to the Insurance Commission of Western Australia to advise that an amount of $55,000.00 or the total amount of her compensation payment would be garnisheed.
43. The applicant’s lawyers, Kuscevich & Associates advised Centrelink on 21 June 2010 that she was prepared to pay a ‘one off’ payment of $4,000.00 plus the balance at $100.00 per fortnight.
44. On 14 June 2010 she requested a review by an ARO of the decision of 3 June 2010 to garnishee $55,000.00 from her compensation payment.
45. As a result of her request, on 7 July 2010, for a review by an ARO of the decision of 3 June 2010 the ARO decided that only $30,500.00 should have been garnisheed from her compensation payment and that $24,500.00 (of the total $55,000.00 garnisheed) should be returned to her.
46. She said she made other attempts to enter into a revised repayment schedule and these attempts were not in the section 37 documents. The Tribunal allowed the applicant time until 3 June 2011 to provide further evidence of such attempts. The applicant submitted a letter dated 27 May 2011.
47. She contended that Centrelink could only proceed with garnishee action if the person had failed to enter into a debt repayment arrangement prior to the garnishee action being initiated and that she had entered into a debt repayment arrangement prior to the garnishee action being initiated. [A1 paragraph 20]
48. She had a right to decline to amend her repayment plan. [A1 paragraph 30]
Secretary’s Contentions
49. The Secretary contends that section 1233(1) of the Act provides that a garnishee notice can be issued to a person who holds or may subsequently hold money for or on account of the debtor or some other person for payment to the debtor.
50. The Secretary contends that the Insurance Commission of Western Australia was such a person as it was representing the defendant in a compensation matter and held the money pending payment of the eventual judgment sum to Ms Grey.
51. Consequently it was the insurer who was required to comply and did comply with the garnishee notice and not the trust fund.
52. The applicant objected to the garnishee as she required the money for purchases.
53. The social security law is silent in regard to hardship caused by garnishee.
54. The Centrelink’s e-reference, which contains the procedures to be followed by Centrelink employees, allows Centrelink to refund all or part of the garnishee if there are exceptional and unforeseen circumstances that result in real financial hardship.
55. The Secretary considers that the refund of $24,500.00 represented an appropriate reconsideration of the financial hardship suffered by Ms Grey.
56. The garnishee action was lawful because it was the insurer who was required to comply with the garnishee notice and not the Jacqui Marie Grey Trust.
57. The Secretary considers the applicant’s letter dated 27 May 2011 contained “no new information regarding Ms Grey's AAT application because the copies of the online documents she has provided are already contained in the Respondent's Section 37 Documents (T Documents) at T10:p.74-75 and T16:p.157-165”.
58. The Secretary contends that section 179 of the Administration Act restricts the Tribunal’s consideration to a determination of whether the garnishee notice was correctly issued and further contends that the Tribunal has no jurisdiction to review the amount of the garnishee.
59. Whilst sub-section 151(1) of the Administration Act provides that the SSAT can exercise all the powers and discretions that are conferred by the social security law on the Secretary, sub-section 151(2)(c) of the Administration Act specifically excludes the SSAT from being able to exercise any power or discretion in regard to garnishee action.
60. The SSAT powers to review decisions under section 1233 of the Act were considered by the Full Federal Court in Walker v Secretary, Department of Social Security [1997] FCA 589.
61. The majority of the Full Federal Court held:
“ Decisions under s 1233 are not in the class of decision declared by s 1250 to be non-reviewable by the SSAT and s 1253(4) (f) does not purport to make decisions under s 1233
non-reviewable: s 1253(4) appears to have a more narrow objective than that. All that s 1253(4)(f) in terms does, is withdraw from the SSAT the right to exercise the powers and discretions conferred by s 1233 on the initial decision-maker, when it is reviewing a decision made under s 1233. The sub-section does not purport to deny the SSAT power to examine whether the original exercise of those powers and discretions has miscarried but is confined to limiting only the range of decisions the SSAT itself can make, once it decides that interference with the decision under review is justified.
This suggests that, in reviewing a decision to which s 1253(4) applies, the SSAT can properly determine that a power or discretion conferred by s 1233 has been erroneously exercised and can, accordingly, set that decision aside pursuant to s 1253(1)(c). But in so far as s 1253(4)(f) denies the SSAT power to exercise for itself the powers and discretions conferred by s 1233 on the original decision-maker, the SSAT could not substitute a new decision of its own for a decision determined by it to have been erroneous. Nor can s 1253(4)(f) be interpreted as permitting the SSAT to send a matter back for reconsideration with "directions", ie, binding directions; that, as the learned primary judge said, would be to permit the SSAT to do indirectly what s 1253(4) prevents it doing directly. See also Minister for Immigration and Ethnic Affairs v Pochi [1981] HCA 58; (1981) 149 CLR 139 at 142. The next question is whether the SSAT could send the matter back for reconsideration with "recommendations", ie, non-binding recommendations. The position of a decision-maker to whom a matter is remitted for consideration with non-binding recommendations under a provision such as s 1253(1)(c)(ii) can, we think, be taken to be that which the High Court in Pochi at 143 said the Minister was in, when the AAT remitted a matter for his reconsideration in accordance with its recommendations under the legislation then in force governing migration appeals to that tribunal:
" Although the Minister would be obliged to reconsider the matter, he would not be bound to exclude from his consideration evidence which the Tribunal ... considered was of insufficient probative value, or to give weight to material which the Tribunal ... considered to be of decisive importance. He would not be required to accept as correct any views as to the facts, or as to the weight of the evidentiary material, expressed by the Tribunal ...; he would merely be required to have regard to the Tribunal's recommendation."
If the SSAT were to set aside a decision under s 1233 and send it back to the Secretary for reconsideration in accordance with non-binding recommendations, that would not, we think, involve anything prohibited by s 1253(4): if the SSAT did that, it could not be said to be exercising any of the powers or discretions conferred on the original decision-maker. Pochi shows that such a limited power cannot be dismissed as lacking any utility. There is therefore no good reason why s 1253(3) and (4) should not be read as conferring such a power on the SSAT.
Even if it is assumed that there are no impediments for constitutional reasons in construing s 1253(1), (3) and (4) as prohibiting merit review of those decisions listed in s 1253(4) of the kind ordinarily performed by an administrative tribunal such as the SSAT or the AAT, but as permitting a limited review by both those Tribunals of decisions listed in the sub-section to read these provisions as confining the SSAT to a power of review analogous to the judicial review available at common law would fail to give any recognition to the entitlement we think the SSAT has, if it sets aside a decision within s 1253(4), to send the matter back to the Secretary with non-binding recommendations, something outside the scope of judicial review at common law.
We therefore think that s 1253(4) should be read as permitting the SSAT to review decisions within s 1253(4) for any error of fact or law, but as preventing the SSAT, even where it identifies error in such a decision, from making any decision of its own on the merits. That is the sole province of the Secretary. But that the SSAT cannot do more than set aside an erroneous DSS decision within s 1253(4) and remit it to the DSS for reconsideration does not absolve the SSAT from examining the DSS decision for error. It follows that the only orders the SSAT may make on the review it can conduct of decisions within s 1253(4) are either to affirm the decision or to set it aside and, if it sets the decision aside to remit the decision for reconsideration, with or without non-binding recommendations.
It is with some diffidence that we have reached this conclusion. Section 1253(4), however, neither permits unrestricted merit review by the SSAT of the various decisions of the Secretary referred to in the sub-section nor does it prohibit all review of those particular decisions. It is not possible to discern why this intermediate approach was adopted with respect to the unrelated decisions listed in s 1253(4). But the sub-section is, in our opinion, intractable in so far as it can only be read as providing for a limited review of the decisions there referred to which is less expansive than full merit review, but a review nevertheless.
Ordinarily, the AAT, in exercising its review powers under s 43 the Administrative Appeals Tribunal Act, can conduct a full merit review of its own. But s 1283(1) and (2) the Social Security Act limit the AAT's authority to review of the relevant DSS decision as dealt with by the SSAT. It follows that, since the SSAT, on review of a decision within s 1253(4), can only determine whether the DSS decision in question is erroneous or not, the AAT cannot conduct a merit review itself of the DSS decision and is confined to determining whether the DSS decision as dealt with by the SSAT is erroneous in fact or law.
The learned trial judge was in error in failing to recognise that, notwithstanding s 1253(4), the AAT was bound to consider whether Mr Walker 's complaints about the DSS decision were made out: only once a conclusion was reached on that issue could the AAT properly determine whether to affirm the DSS decision as affirmed by the SSAT or to set it aside and remit it to the DSS for reconsideration.”…
Findings
62. The applicant contended that the Secretary should have issued the garnishee notice against the family trust.
63. The Tribunal considered whether a garnishee notice can be issued against a trust fund.
64. The Guide provides that the only circumstances in which a garnishee notice may be issued against a trust fund is where the debtor is owed money by the trust fund or where the trust fund does not have the true nature of a trust.
65. The Tribunal is satisfied that the terms of the trust created by Ms Grey’s late father’s Will were created to provide for the future support of Ms Grey. The terms of the trust make the family trust fund a trust.
66. There is no evidence before the Tribunal that any amount of money is owed by the family trust fund to the applicant in her capacity as the sole beneficiary of the trust.
67. The consequence of this is that no amount could at this time, be garnisheed from the family trust fund.
68. The Tribunal finds that the issue in this case to be decided is restricted to a determination of whether the garnishee notice was correctly issued and further finds that the Tribunal has no jurisdiction to review the amount of the garnishee.
69. The issue is whether the garnishee notice issued to the Insurance Commission of Western Australia was lawful pursuant to section 1230C.
70. The applicant did not dispute the existence of the debt. Centrelink issued the garnishee notice in order to recover the debt which arose in relation to an overpaid disability support pension.
71. Section 1233 of the Act gives Centrelink the power to issue a garnishee notice.
72. Centrelink records show that such a notice was issued to the Insurance Commission of Western Australia on 3 June 2010 in the terms set out in sub-section 1233(1) of the Act, specifying the sum to be withheld of $55,000.00 or any amount that leaves a balance of $500.00 in the account whichever is smaller.
73. As required by sub-section 1233(4) of the Act, a copy of the garnishee notice was sent to Ms Grey.
74. The Tribunal is satisfied the procedures for issuing a garnishee notice pursuant to section 1233 of the Act were followed by Centrelink.
75. The Tribunal notes however, that there are limitations on the exercise of the discretion to issue a garnishee notice.
76. The Guide states at paragraph 6.7.2.50 “that a garnishee notice can only be issued after all other recovery options have failed”. The Guide also states “the debtor should have been informed that garnishee is one of the recovery options available before garnishee action is commenced”.
77. In this case, recovery action through fortnightly instalments of $20.00 was in place prior to the garnishee notice being issued and had been in place for a number of years.
78. Following the District Court orders dated 25 May 2010, Centrelink determined that the $20.00 per fortnight repayment arrangement was no longer reasonable.
79. It is not disputed that a Centrelink officer contacted Ms Grey on 3 June 2010 to enter into a new arrangement for recovery, but that she declined to enter into any new arrangement for recovery and declined to any partial garnishee to repay her debt.
80. The Tribunal finds that on receipt of $80,000.00, recovery at $20.00 per fortnight was no longer reasonable and agrees with the respondent in that regard.
81. The Tribunal accepts that the applicant’s lawyers, Kuscevich & Associates advised Centrelink on 21 June 2010 that the applicant was prepared to pay a ‘one off’ payment of $4,000.00 plus the balance at $100.00 per fortnight. Whilst this may not have been an acceptable option it is indicative of an alternative recovery option to which there is no evidence of a response.
82. Whilst the ARO found that the telephone call from Centrelink on 3 June 2010 to the applicant amounted to “genuine attempts” to contact her to negotiate an alternative arrangement the Tribunal finds that a single telephone conversation constitutes an attempt but not “attempts”.
83. The Tribunal does not accept that the issuing of a garnishee notice on 3 June 2010, on the same day that a Centrelink officer contacted Ms Grey by phone to enter into a new arrangement for recovery, satisfies the requirement that “a garnishee notice can only be issued after all other recovery options have failed ”.
84. On consideration of all the evidence before the Tribunal, the Tribunal finds that the garnishee action does not comply with section 1230C.
Decision
85. The Tribunal sets aside the decision of the Social Security Appeals Tribunal under review.
I certify that the 85 preceding paragraphs are a true copy of the reasons for the decision herein of Ms K Hogan, Member
Signed: …………….[sgd D Brodie]………………………
AssociateDate of Hearing 16 May 2011
Date of Decision 17 June 2011
Representative for the Applicant SelfRepresentative for the Respondent Mrs M Conlon
Departmental Advocate
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