Johnson and Department of Family and Community Services

[2000] AATA 424

DECISION AND REASONS FOR DECISION [2000] aata 424

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No A99/406

General Administrative DIVISION         )          

Re      JODIE JOHNSON  

Applicant

And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        

Respondent

DECISION

Tribunal       Mr Peter Bayne, Senior Member  

Date1 June 2000

PlaceCanberra

Decision      The Tribunal sets aside the decision under review. It is not appropriate to raise an overpayment in respect of the amounts paid to the applicant as a rent assistance component of Family Payment in the period from February 1997 to November 1998. Any amounts of overpayment that have been recovered should be repaid to the applicant. 

..............................................

CATCHWORDS
SOCIAL SECURITY – overpayment of rent assistance – no failure to comply with notice under s 872 of the Social Security Act 1991 – s 1224 not applicable – no debt due to the Commonwealth

Legislation

Social Security Act 1991 ss 872, 1224

Authorities

Briginshaw v Briginshaw (1938) 60 CLR 336
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

REASONS FOR DECISION

1 June 2000

Mr Peter Bayne, Senior Member              

1. The relevant primary decision in this matter was to raise an overpayment of Family Payment of $2033.25, being an overpayment of the rent assistance component. The decision was made with reference to section 1224(1) of the Social Security Act 1991 ("the Act"). On 24 February 1999, an Authorised Review Officer (ARO) of the respondent varied that decision so as to commence the period of overpayment from 30 January 1997 (rather than from 1 January) (T 14). The result was that the amount of the debt was reduced to $1941.15. On 6 April 1999, the Social Security Appeals Tribunal (SSAT) decided to remit the matter to the Chief Executive Officer of Centrelink for reconsideration (T 2). That person was directed to waive those portions of the debt that had been incurred on 28 August and 11 September 1997. This is an application to review the decision of the SSAT of 14 April 1999.

2. At the hearing, the Tribunal had before it the documents ("T documents") lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, and a number of documentary exhibits. It should be noted that these Reasons were written without the benefit of access to a transcript of the hearing.

3. The applicant gave evidence and presented her own case.

4. It is accepted that at the beginning of 1997, the applicant was in receipt of the maximum Family Payment and rent assistance available to her. Her husband was then unemployed. On 25 January 1997, the family moved into a house they had purchased. On 6 February, the applicant telephoned the respondent to advise a change of circumstances. There is a dispute about what she said. In any event, she continued to receive a rent assistance component in the Family Payment until she queried the payment on 23 November 1998.

5. The debt raised against the applicant relates to most of the rent assistance paid to her in the February 1997 to November 1998 period.

6. T document 12 is a print-out of what appears on a monitor screen. It indicates that the applicant had informed the respondent that from 6 February 1997, the address of the applicant was now 227 Neill Street, Murramburrah, NSW. After "Address type" it is also written "Is RA being claimed on this address?: Y". The "Y" is said to indicate "Yes". There is no evidence from anyone in the organisation of the respondent as to what were the terms of the conversation. The respondent submits, however, that the question and answer just noted indicate that the applicant had not told the respondent that she no longer required rent assistance.

7. A file note (T 13) made by the ARO on 24 February 1999 is very unclear on this critical issue. In the Background section of the note it is said that "Our computer records indicate that [the applicant's] response to the question, is Rent assistance being claimed on this address? was affirmative". ("This address" was the new address notified by the applicant on 6 February 1997.) But in the Interview section of the note there is no record that this was put to the applicant. All that is said is that "our records indicate that rent assistance was still required".

8. I will dispose of this evidence now. It is not evidence on which I could find that the applicant told the respondent on 6 February 1997 that she still required rent assistance.

9. The applicant's evidence is that on 6 February 1997 she said quite positively that she no longer required rent assistance.

10. In order to resolve this issue of fact, it is relevant to have regard to subsequent events.

11. I note first that the form letters received by the applicant advised her to tell the respondent if she changed her address, and if the amount of rent she paid changed; (see T documents at page 12).

12. On 9 March 1997, the applicant received a letter from the respondent (T 4). It informed the applicant of the new rate of her Family Payment. In part at least, the letter was sent to acknowledge that the applicant had told the respondent of her "new annual income". On its first page it also said " Due to an increase in the cost of living, the amount of rent you must pay before you are entitled to receive rent assistance has increased. This has affected your rate of Family Payment". I was told that this is a standard clause. Later it said "Please read the back of this letter". The back of the letter said that her rent assistance payment was $45.60.

13. According to the terms of the SSAT decision, the applicant told that Tribunal that she could not recall reading that part of the front page of the letter of 9 March 1997 that said " Due to an increase in the cost of living, the amount of rent you must pay before you are entitled to receive rent assistance has increased. This has affected your rate of Family Payment".

14. In evidence before me, the applicant said that what she had absorbed from the front page was that the respondent had acted on information she had given them about a change in income due to her husband having had some work.

15. I do not see an inconsistency here. The sentence about the rent assistance is a standard clause and does not indicate that the recipient of the letter is in fact receiving rent assistance. I accept that the applicant focussed on the information on the front page that told her that the respondent had acted on her information about a change in income.

16. I accept that the applicant did not read the second page of the letter to her of 9 March 1997.

17. On 27 August, the applicant completed and submitted a Claim for Parenting Allowance. This is a different type of payment, although I was told that the claim form is part of a bundle of documents that includes a claim for Family Payment. At Question 32, the applicant said that she and/or her husband owned their home; (see Exhibit R 1). In evidence, the applicant explained that she applied for the Parenting Allowance because her husband's employment circumstances had changed. She filled out the claim form in the Young office of the respondent, dealing with the same people she dealt with about Family Payment.

18. The respondent's system absorbed this information and the rent assistance component of the Family Payment was stopped, although not immediately. Exhibit R 4 tells us that the Family Payment paid on 25 August included the rent assistance component, as did the payment of 11 September. The Family Payment paid on 25 September was much reduced, reflecting the cessation of the rent assistance component.

19. On 8 September 1997, the applicant received a letter telling her that she was to receive a Parenting Allowance, and another telling her that the rate for Family Payment was $62.60. (The previous rate was $272.24.) Whoever wrote the second latter was aware that the applicant was not entitled to rent assistance.

20. The respondent submitted that once informed of this marked drop in her Family Payment entitlement, the applicant should have realised at least from that point on that she was not entitled to rent assistance. This was put to the applicant in cross-examination. The applicant's response, which I accept, is that she thought that this was related to advices she had given in respect of changes in family income. She also said, and I accept, that she thought the arrears payments were similarly related.

21. It appears that after the applicant had advised the respondent of another change in income, some person in the respondent's organisation re-calculated her Family Payment entitlement, but mistakenly assumed that the applicant was entitled to rent assistance. Thus, she was paid some arrears of rent assistance, and the new rate of Family Payment included a rent assistance component.

22. On 1 October 1997, the applicant received a letter telling her that the rate for Family Payment was $211.94, and that she had been sent $149.74 arrears a week earlier. There was no statement about why this amount had been paid. Nor did the front page include any reference to rent assistance. On the other hand, the second page said that her rent assistance component was $31.64.

23. She did not read the second page of the letter of 1 October 1997.

24. On 3 February 1998 the applicant received another letter about her Family Payment. It notes that the respondent was recovering an overpayment. This is unrelated to the rent assistance and there was no element of fraud involved in the circumstances that gave rise to the overpayment. The second page said that her rent assistance component was $32. The applicant said that she did not read this page.

25. On 23 March the applicant received another letter about her Family Payment. It also notes that the respondent was recovering an overpayment. The second page said that her rent assistance component was $41.15. The applicant said that she did not read this page.

26. On 9 November 1998 the applicant received another letter about her Family Payment. It was prompted by another change in the applicant's family income. The second page said that her rent assistance component was $37.30. The applicant said that she did not read this page.

27. The applicant says that on 23 November 1998 she received a letter in the same form as the previous letters but which was explicitly about her rent assistance. It advised of an increase due to cost of living increase. The respondent concedes that this could have happened. She then rang Centrelink at Orange and told them she was not entitled to rent assistance. She told them that she had so informed them in February 1997, and she referred to her claim for Parenting Allowance (Exhibit R 1). A screen print-out at T 10 of 23 November 1998 records this information.

28. In the light of the information provided by the applicant, the respondent raised a debt against the applicant.
    relevant law

29. Section 872(1) of the Act provides:

    872(1) The Secretary may give a recipient of family allowance a notice that requires the recipient to inform the Department if:
    (a) a specified event or change of circumstances occurs; or
     (b) the recipient becomes aware that a specified event or change of circumstances is likely to occur.

1. Section 1224(1) provides:

   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.

consideration

1. The respondent argued that the letters that the applicant had received concerning her Family Payment, (and it was accepted that she had received some prior to 6 February 1997), amounted to notices to the applicant that she should inform the respondent that she no longer required rent assistance when she moved into her home; (section 872 of the Act).

2. It is then contended that the applicant did not inform the respondent on 6 February 1997 that she no longer required rent assistance when she moved into her home. Thus, she failed to comply with section 872(1). She was then paid rent assistance to which she was not entitled because she had failed or omitted to comply with a provision of the Act, thus bringing section 1224(1) into operation.

3. I find that the applicant did tell the respondent on 6 February 1997 that she had changed her address because she had moved into her home and that she no longer required rent assistance. I make this finding having regard to a number matters.

4. The first is my assessment of the applicant's credibility. While there are limitations to the validity of an assessment based on the manner in which a witness gives evidence, I was struck by the forthright manner in which she did give evidence. In a word, I found her believable.

5. Secondly, there is the undisputed fact that she told the respondent that she was not paying rent when on 27 August, she completed and submitted a Claim for Parenting Allowance. This is strong evidence that in relation to her Family Payment she was not engaged in an exercise of hiding the fact that she no longer paid rent. That, of course, is not the end of the matter. It may still be the case that she had not complied with the pre-6 February 1997 notices that required her to positively inform the respondent that from that date she no longer paid rent. It is, however, a piece of evidence probative of the fact that she did tell the respondent on 6 February 1997 that she no longer required rent assistance. This is so on the basis that it indicates that she was at a later time not too far removed from the relevant date quite frank about her situation in this regard when asked by the respondent. I find that it is likely that she was so asked on 6 February 1997, and that she gave the same answer as she did on 27 August 1997.

6. I have dealt above with file note (T 13) made by the ARO on 24 February 1999.

7. I am not satisfied that it is appropriate to raise a debt under section 1224(1). This, I consider, is the correct way to state the question to be addressed; cf Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 at 345. The standard of proof is the civil standard of proof on the balance of probabilities, (cf Evidence Act 1995, section 140(1)).

8. In the application of this standard, the nature and consequences of these proceedings must be taken into account: cf Evidence Act 1995, section 140(2)), and Briginshaw v Briginshaw (1938) 60 CLR 336 at 342; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450. In this latter case, the majority of the High Court said:

   The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conductor fraud ((1) See, e.g., Hocking v. Bell (1945) 71 CLR 430, at p 500; Rejfek v. McElroy (1965) 112 CLR 517, at pp 519-521). On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear ((2) Briginshaw v. Briginshaw (1938) 60 CLR 336, at p 362; Helton v. Allen (1940) 63 CLR 691, at p 701; Hocking v. Bell (1944) 44 SR (N.S.W.) 468,at p 477 (affirmed in Hocking v. Bell (1945) 71 CLR, at pp 464, 500); Rejfek v. McElroy (1965) 112 CLR, at p 521; Wentworth v. Rogers (No.5) (1986) 6 NSWLR534, at p 539 or cogent ((3) Rejfek v. McElroy (1965) 112 CLR, at p 521) or strict ((4) Jonesco v. Beard (1930) AC 298, at p 300; Briginshaw v. Briginshaw(1938) 60 CLR, at p 362; Helton v. Allen (1940) 63 CLR, at p 711; Hocking v. Bell (1944) 44 SR (N.S.W.), at p 478 (affirmed in Hocking v. Bell (1945) 71CLR, at pp 464, 500); Wentworth v. Rogers (No.5) (1986) 6 NSWLR, at p 538)proof is necessary "where so serious a matter as fraud is to be found" ((5)Rejfek v. McElroy (1965) 112 CLR, at p 521). Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct ((6) See, e.g., Motchall v. Massoud (1926) VLR 273, at p 276) and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J. commented in Briginshaw v. Briginshaw ((7) (1938) 60CLR, at p 362; and see, also, Helton v. Allen (1940) 63 CLR, at p 711):

   "The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved ...".

9. I have taken into account that the allegation made against the applicant is that she failed to comply with obligations imposed on her by the Act to provide information relevant to the amount of social security support she received. There was no allegation of fraud or deception. Nevertheless, the allegation is a serious one, and no doubt the records kept by the respondent would retain a finding that it was made out. Moreover, if the allegation were made out, the consequences for the family cash-flow would be far from minimal.

10. As I see it, a finding that the applicant did tell the respondent on 6 February 1997 that she no longer required rent assistance is the end of the matter. The applicant did not fail to comply with section 872(1). On the contrary, she did. Thus, since she did not fail or omit to comply with a provision of the Act, section 1224(1) did not come into operation.

11. On this basis, it is not relevant that the applicant failed to read the back of several letters she received after 6 February 1997. Once she had discharged her obligation to notify the respondent of the relevant change in circumstances, no inaction on her part thereafter could be a failure to notify in that particular respect. If it could be shown that she did at some point after 6 February become aware that she was in receipt of rent assistance to which she was not entitled, then the Commonwealth might have some other kind of remedy against her. But a debt cannot be raised under section 1224(1). (I should add that I do not think that the applicant became aware that she was in receipt of rent assistance to which she was not entitled until late November 1998.)

12. The appropriate decision in these circumstances is to set aside the decision under review. I decide in its stead that it is not appropriate to raise an overpayment in respect of the amounts paid as a rent assistance component of Family Payment in the period from February 1997 to November 1998. Any amounts of overpayment that have been recovered should be repaid to the applicant.

    I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Mr Peter Bayne, Senior Member

    Signed:         .....................................................................................
      Associate

    Date/s of Hearing  29 February 2000
    Date of Decision  1 June 2000
    Counsel for the Applicant        self
    Representative for the Respondent        Cheryl Collis