James and Secretary, Department of Education, Employment and Workplace Relations

[2008] AATA 667

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 667

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/2566

GENERAL ADMINISTRATIVE DIVISION		)
Re		Tony James

Applicant

And Secretary, Department of Education, Employment and Workplace Relations

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe

Date31 July 2008

PlaceBrisbane (heard in Lismore)

Decision The Tribunal varies the decision under review so that the portion of the debt which accrued prior to 5 March 2004 is waived pursuant to s 1237A of the Social Security Act 1991. The decision under review is otherwise affirmed.

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

Senior Member

CATCHWORDS

SOCIAL SECURITY – Benefits – Parenting payment – Overpayment – Whether debt has arisen – Debt has arisen – Whether debt should be waived – No special circumstances –Administrative error found – Payments received in “good faith” – Decision varied

Social Security Act 1991 (Cth), ss 1237A, 1237AAD

Secretary, Department of Employment, Education, Training and Youth Affairs v Prince [1997] FCA 1565; (1997) 50 ALD 186

Haggerty v Department of Employment, Education, Training and Youth Affairs [2000] FCA 1287; (2000) 31 AAR 529

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

REASONS FOR DECISION

31 July 2008 Senior Member Bernard J McCabe         

1.      The Secretary to the Department of Employment and Workplace Relations has raised a debt in the amount of $5409.05 against the applicant, Mr Tony James. The Secretary says Mr James was overpaid a parenting payment in the period 22 February 2003 through to 30 June 2005. The overpayment is said to have arisen because the applicant did not provide Centrelink with accurate information about his partner’s earnings during the relevant period.

2.      This case requires me to consider two matters: first, whether a debt has arisen; and, second, if a debt has arisen, whether recovery of that debt should be waived.

The facts

3.      Mr James and his wife were in receipt of social security benefits. Mrs Conway-James (the applicant’s wife) started work on 13 January 2003. Her social security payments were subsequently reduced to nil after she provided details of her earnings to Centrelink. The benefits paid to Mr James between the time his wife started work and 21 February 2003 were adjusted to take into account his wife’s income. The payments were subsequently suspended until a review was conducted to determine whether Mr James remained entitled to the payments in light of the combined income and assets of the couple.

4.      Centrelink wrote to the applicant on 16 April 2003. A copy of that letter is included in Exhibit One, at folio 81. The letter says the applicant was entitled to receive parenting payments on the basis that his wife was being paid a particular amount. The letter went on to say that the applicant must inform Centrelink of any changes in his partner’s income in the future.

5.      Mrs Conway-James’s income did increase above the fortnightly amount identified in the letter from Centrelink. She had a pay-rise in May or early June 2003. That rise reflected in part an allowance she received on top of her base salary. She had further pay-rises on:

·23 January 2004;

·5 March 2004;

·17 September 2004; and

·18 February 2005.

6.      The applicant says he informed Centrelink of all these changes in a timely fashion. He told me at the hearing that he was scrupulous in his dealings with Centrelink because he had encountered difficulties in the past.

7.      Mr James told me that he contacted Centrelink by telephone on 5 June 2003 and reported the change to his wife’s income that occurred a few of days previously. The Centrelink telephone records do not record that information, although they note the fact of a call. Mr James agreed that he did not have a precise recollection of the conversation but pointed out he had no other reason for calling Centrelink at the time. He said he felt sure that he had provided the information in the course of the conversation. 

8.      Mr James also had a meeting at Centrelink on 20 January 2004. The meeting was a “general entitlement service update”. The Social Security Appeals Tribunal noted in its reasons that an interview of this nature would ordinarily canvass details like the partner’s income. There is no express record of that information being sought or provided. Mr James says he cannot remember specifically what he discussed, although he added he “felt sure” this was one of several meetings where he was required to produce copies of his wife’s pay slips.

9.      The applicant said he attended the Centrelink office in Grafton in the days following the pay-rise in September 2004. The Centrelink records do show a contact on 28 September 2004, although those records suggest the meeting related to a “tax lodgement exemption”. It appears the meeting related to the applicant’s entitlement to the family tax benefit. A further meeting occurred on 21 February 2005 following the pay-rise in 18 February 2005. Centrelink’s files note a contact but do not disclose whether the applicant provided information about changes to his partner’s income on that occasion.

10.     Mr James said he assumed that providing information relating to his wife’s income for the purpose of assessing entitlement to family tax benefit would also satisfy his reporting requirement with respect to parenting payment. He also referred to a letter from Centrelink dated 22 November 2005 requiring information and warning that the parenting payment would be cut off if the information was not forthcoming. Mr James pointed out his payments were not subsequently cut off, which suggested the information had been provided. That is fair enough, but the letter relates to a period falling outside the period under review. That evidence does not assist me in these proceedings.

11.     I am satisfied Mr James was a truthful witness. He appeared to offer a frank account and did not exaggerate or sound more definite about the evidence where it suited his case to do so. I accept his explanation that he provided Centrelink with information on 5 June 2003 about changes in his wife’s earnings that occurred shortly before. Although he did not have a precise recollection of what he told Centrelink in that conversation, I accept his explanation that he had no other reason to contact Centrelink at that time. I also accept that he provided Centrelink with accurate information about his wife’s earnings in the course of the “general entitlement service update“ that occurred on 20 January 2004. I acknowledge he does not have a precise recollection of the meeting, and that the records do not reflect the information he says he thinks he provided. But I am satisfied from his account that he was open and honest with Centrelink, and appeared to be cautious in his dealings as a result of what he described as a previous bad experience. Given (a) a review of this nature would ordinarily extend to the matters in question here, and (b) Mr James thinks these matters were discussed, I am satisfied it is likely the information would have been forthcoming at the meeting, even if it was not properly recorded.

12.     It follows I am satisfied that the failure to correctly calculate the applicant’s entitlement to parenting payment up until the next pay-rise that followed the meeting on 20 January 2004 (ie, the rise which occurred on 5 March 2004) is solely attributable to the respondent’s failure to take account of what it had been told.

13.     It is more difficult to be sure of what passed between the applicant and Centrelink in the subsequent contacts. There appears to be some confusion about the obligation to disclose. Mr James may have thought he was providing information for more than one purpose, when in fact the information was only be used by Centrelink for the express purpose for which it was obtained (ie, assessing entitlement to the family tax benefit). While information may have been provided to the applicant, I cannot be satisfied that the respondent was solely at fault. It seems likely that the applicant made incorrect assumptions about his obligation to contact Centrelink.

The law

14.     Given my findings of fact, there is no doubt the applicant received parenting payments that he was not entitled to receive if his wife’s income had been properly taken into account. It follows that a debt in the amount of the overpayment of $5409.05 was properly raised against him. The question is whether the recovery of that amount, or a portion of it, should be waived.

15. Section 1237 of the Social Security Act 1991 permits waiver in limited circumstances. Applicants commonly rely on the power in s 1237AAD to waive a debt where the applicant is affected by “special circumstances”. The expression “special circumstances” is a term of art in social security law. It is taken to be a reference to circumstances that set the applicant’s case apart from the usual run of cases. That is, he or she must face circumstances that are extraordinary or unusual. It is usually not enough to establish that the applicant experiences financial difficulties; many recipients of social security benefits are in financial difficulty.

16. I was not referred to any evidence that suggested Mr James and his family faced circumstances that could be described as special in the relevant sense. It follows that I cannot waive the debt pursuant to s 1237AAD.

17. The other provision which could be relevant is s 1237A. That provision permits waiver where the overpayment is solely attributable to administrative error on the part of the Commonwealth. I have already found that some of the payments were solely attributable to administrative error on the part of the Commonwealth, while other payments were due to errors on the part of both the applicant and the respondent. The earlier payments might attract the operation of s 1237A, but the latter payments do not. I will confine my comments to the circumstances of the earlier payments.

18. It is not enough to establish that the overpayments occurred solely as a result of mistakes made at Centrelink. Section 1237A also requires that the debtor receive the payments “in good faith”. The meaning of that expression has been considered in a number of cases, including Secretary, Department of Employment, Education, Training and Youth Affairsv Prince [1997] FCA 1565; (1997) 50 ALD 186, Haggerty v Department of Employment, Education, Training and Youth Affairs [2000] FCA 1287; (2000) 31 AAR 529 and Pledger v Secretary, Department of Families and Community Services [2002] FCA 1576. In Prince, Finn J emphasised a person could not receive a payment in good faith if he knew or suspected he was not entitled to that money. In Haggerty, French J cautioned it was necessary to consider the state of mind of the individual concerned in order to assess good faith. His Honour pointed out that the recipient did not lack good unless that person knew or suspected a mistake had been made. In Pledger, Weinberg J suggested the expression “good faith” was a reference to acting honestly.  

19.     I am satisfied from the applicant’s account before the Tribunal that he was acting in good faith when he received the payments from Centrelink. There was no evidence to suggest he was or should have been aware of any anomalies in the payment that would have given rise to a suspicion that he was receiving money to which he was not entitled. Indeed, there is no evidence that the applicant carefully scrutinised the amount of the payments that he was receiving: it seems he applied for assistance, provided information in accordance with what he understood were his obligations and received and used the money without further question.

Conclusion

20. The Tribunal varies the decision under review so that the portion of the debt which accrued prior to 5 March 2004 is waived pursuant to s 1237A of the Social Security Act 1991. The decision under review is otherwise affirmed.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed:.................................[Sgd].............................................
  Michael Buckingham, Associate

Date of Hearing  21 April 2008
Date of Decision  31 July 2008
Applicant was self-represented  
Advocate for the respondent     Mr M Amundsen, Centrelink