Johnson and Secretary, Department of Family and Community Services

[2005] AATA 618

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 618

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2004/714

GENERAL ADMINISTRATIVE DIVISION		)
Re		JACQUELINE JOHNSON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal  Ms N Isenberg, Member

Date29 June 2005

PlaceSydney

Decision The Administrative Appeals Tribunal affirms the decision under review.

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

Ms N Isenberg
  Member

CATCHWORDS

SOCIAL SECURITY – Parenting payment single – Debt due to the Commonwealth – Whether debt attributable “solely” to Commonwealth’s error - Whether debt should be waived – “Special circumstances” – (CTH) Social Security Act 1991 ss 1223, 1237A and 1237AAD.

LEGISLATION

Social Security Act 1991, ss 1223, 1237A, 1237AAD

Social Security (Administration) Act 1999, section 68.

CASE LAW

Secretary, Department of Social Security and Hales (1998) 82 FCR 154

Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)

Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787

Re Beadle and Director General of Social Security (1984) 6 ALD 1

Sekhon v Secretary, Department of Family & Community Services [2003] FCAFC 190     

Secretary, Department of Family & Community Services v Velis (2002) AATA 7890

Secretary, Department of Family & Community Services v Jonauskas (2001) 65 ALD 553

Re Colaiacolo and Secretary, Department of Social Security unreported, decision No 2109, (24 April 1985)

Johnson v Secretary, Department of Family & Community Services (2004) AATA 759 (20/7/04

REASONS FOR DECISION

Ms N Isenberg, Member

DECISION UNDER REVIEW

1.      The decision under review before the Administrative Appeals Tribunal (“the Tribunal") was the decision of the Respondent, the Secretary, Department of Family and Community Services ("Centrelink") dated 20 October 2003 (T3) as affirmed by the Authorised Review Officer (“ARO”) on 23 January 2004 (T15), and the Social Security Appeals Tribunal (“the SSAT") on 30 March 2004 to raise and recover a debt of $3,712.45 for the period of 19 June 2001 to 12 August 2002.

BACKGROUND

2.      Most of the facts in the matter were not in dispute and the following findings of fact by way of background can be made. 

3.      On 27 February 1992, Ms Johnson was granted a sole parent pension and on 20 March 1998 commenced receiving parenting payment single (“PPS”).

4.      In 2001, Ms Johnson declared income from two employers - Hunter Retirement Living (‘HRL’) and TAB Limited. (‘TAB’)

5.      On 30 May 2001, a notice was issued to Ms Johnson stating that her annual income was calculated as $8,126.20 (T9A).  On 11 July 2001, a notice was issued to Ms Johnson stating her annual income was calculated as $14,324.83 (T9B).  

6.      On 4 October 2001, Ms Johnson lodged her review form with Centrelink.  She declared income of $611.62 and $1,657.46 from TAB and HRL respectively (T5).  A notice was issued to Ms Johnson stating her annual income was calculated as $9,888.61 (T9C).

7.      On 27 December 2001, Ms Johnson lodged her review form with Centrelink. She declared income of $497.63 and $2,707.19 from TAB and HRL respectively (T5). 

8.         On 28 December 2001, a notice was issued to Ms Johnson stating her annual income was calculated as $13,994.85 (T9D).

9.         On 18 February 2002, a notice was issued to Ms Johnson stating her annual income was calculated as $13,994.85 (T9E).

10.        On 4 March 2002, a notice was issued at Ms Johnson’s request stating her annual income was calculated as $13,994.52 (T9F) and on 13 March 2002, a further notice was issued stating Ms Johnson’s annual income as being $13,994.79 (T9G).

11.     On 15 March 2002, Ms Johnson lodged her review form with Centrelink. She declared income of $563.07 and $1,165.87 from TAB and HRL respectively (T5,).  

12.     On 13 May 2002, a notice was issued to Ms Johnson stating her annual income was calculated as $7,621.30 (T9H).

13.     On 23 October 2002, a letter was issued to Ms Johnson seeking her employment details (T9J).

14.     On 16 December 2002, Centrelink received Ms Johnson’s wage slips from HRL (T10) and on 17 December 2002, TAB forwarded Ms Johnson’s income details to Centrelink (T11).

15.     Ms Johnson was paid parenting payment single on the basis of having been paid $3,057.17 from TAB and $9,311.87 from HRL.  As a result of a data matching exercise with the Australian Taxation Office, it was found that her income was $7,057.31 and $14,923.94 from those employers (T3).  This means that she declared income of $12,369.04 from TAB and HRL when in fact, her actual income was $21,981.25.

16.     On 20 October 2003, a decision was made to raise and recover an overpayment of $3,712.45 for the period 19 June 2001 to 12 August 2002 on the basis that she underdeclared her income from employment (T12).     

17.     On 20 July 2004, the Administrative Appeals Tribunal affirmed a previous decision to raise and recover a parenting payment single debt of $2,057.15 for the period 21 June 2000 to 18 June 2001; Johnson v Secretary, Department of Family & Community Services (2004) AATA 759 (T22).

ISSUE BEFORE THE TRIBUNAL

18.     1)        Whether Ms Johnson’s overpayment of parenting payment single    of $3,712.45 incurred between 19 June 2001 to 12 August 2002, is a         recoverable debt under the Social Security Act 1991; and  2)        If so, whether there are any grounds for not recovering all or part          of the debt.  

LEGISLATION

19. A person’s entitlement to parenting payment single is subject to the recipient correctly declaring her income and assets to Centrelink. It also requires the recipient to comply with notices sent to her from time to time. Section 68 of the Social Security (Administration) Act 1999 allows the Department to issue a notice to a person in receipt of parenting payment single to inform the Department of a change in circumstances.

20.     In relation to recoverability of overpayments, the relevant legislation in this matter is the Social Security Act 1991 (“the Act”) in particular sections 1223, 1237A and 1237AAD.

THE HEARING

21.     A hearing was held before the Tribunal on 8 June 2005 at which Ms Johnson was self-represented.  Centrelink was represented by George Lozynsky, an advocate from the Legal Services Branch.

22.     I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence.

23.     Ms Johnson gave evidence and was cross-examined on behalf of Centrelink.  I also asked her questions.

CONSIDERATION OF EVIDENCE AND FINDINGS

24.     In coming to the correct and preferable decision, I took into account all of the evidence, submissions, case law and relevant legislation.

IS THERE A RECOVERABLE DEBT?

25. Centrelink contended that an overpayment of $3,712.45 has arisen because Ms Johnson failed to correctly declare to Centrelink income from employment. Consequently, the amount of the overpayment is a debt owed by her to the Commonwealth under subsection 1223(1) of the Act, which states:

1223(1) Subject to this section, if:

(a) a social security payment is made; and

(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the                 person and the debt is taken to arise when the person obtains the   benefit of the   payment.”

26.     There was no dispute that Ms Johnson had been paid more PPS than that to which she was entitled.

27.     I therefore find that there is a recoverable debt.

SHOULD THE DEBT BE RECOVERED?

28. The Act makes a provision in limited circumstances for debts not to be recovered.

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.”

29.     For a debt to be waived under subsection 1237A(1), two conditions must be met, namely that the debt arose solely because of administrative error and the debtor received the payments in good faith.

WAS THE DEBT SOLELY ATTRIBUTABLE TO AN ADMINISTRATIVE ERROR BY CENTRELINK?

30.     In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”.  This approach was used by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996) paragraph 40 , in which the Tribunal stated:

“There is nothing in sub-section 289(1) which indicates that any meaning should be given to “solely” other than its ordinary meaning.  Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error.  The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error.

It makes no difference that those other errors or factors are minor.  If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.  Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.”

31.     This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 paragraph 19. The Tribunal stated that “solely” in section 1237A(1) should be given its ordinary meaning (“only” or “to the exclusion of all else”).

32.     Ms Johnson’s evidence was that she consistently provided her payslips to Centrelink.  In the review forms she provided she did not detail her income but instead attached her payslips.  She said she was scrupulous in providing the payslips, often delaying her review form if she knew a payslip was imminent.  She would pin them to the notice board at home until it was time to send them in.  She demonstrated how she would either staple them to the form, or, if they were too bulky (as was often the case with TAB payslips) she would fold the review form into 3, with the payslips inside.  She conceded that she may have missed some payslips, but thought she caught them up in the next review form.  

33.     She said she was told that Centrelink transcribed that information from the payslips onto the computer.  Sometimes her payslips would be returned to her, and sometimes they were not.

34.     In cross-examination it was suggested to Ms Johnson that she had failed to disclose her income on the form.  Ms Johnson’s position, which is legitimate, in my view, is that she provided the raw data. 

35.     However, Ms Johnson further contended that any ‘understatement’ of her income had occurred because Centrelink had lost some of her payslips, and not transcribed the information from the payslips correctly.

36.     She said she had asked to provide the forms fortnightly but had been told she could not, and must continue to provide them 12-weekly.

37.     A comparison of the lodged forms and the data matching showed the following:

Form Lodged	TAB Actual	TAB Declared	HRL Actual	HRL Declared
4/10/2001	Declared amount correct	$611.62	$2,071.95	$1,657.46
27/12/01	$1,679.17	$497.63	$2,718.24	$2,707.19
15/3/02	$1,988.03	$563.07	$2,623.92	$1,165.87

38.     To have relied on Centrelink to undertake the calculations, in my view, demonstrated some naiveté on Ms Johnson’s part, preferring to rely on Centrelink’s calculations on the basis of the material supplied by her, rather than making the calculations herself and providing the payslips as evidence of her calculations.

39.     In relation to the notices issued to her, Ms Johnson stated that she “never really looked at the income amounts, [she] just expected Centrelink to do its job” (T2, p5).  Centrelink submitted that a recipient of an income support payment must take some responsibility to know her obligations and to read the notices issued to her.

40.     Notwithstanding that I found Ms Johnson to be a witness of truth, I consider the disparity between the information recorded by Centrelink as her income on the basis of the payslips to be so large, as to have reservations that the wrong amount could possibly have been recorded by mis-adding the payslips.  The ‘error’ occurred on several occasions and for large amounts of money.

41.     Further, Ms Johnson was consistently informed about the basis on which her payments were being made, ie her income on an annualised basis having regard to the information upon which Centrelink was proceeding.  Ms Johnson said the letter looked like a form letter.  Centrelink submitted that it would not have been unreasonable for Ms Johnson to have made appropriate enquiries with Centrelink regarding the income amount being maintained by Centrelink to assess her rate of payment.

42.     She also told me that she does not retain her payslips, nor check her group certificate.

43.     Again, I consider that she has conducted her financial affairs with some naiveté.  The information was available to her and she did not challenge it.

44.     I therefore find that while there may have been an administrative error on Centrelink’s part, that error was not solely responsible for the debt. (see Sekhon v Secretary, Department of Family & Community Services [2003] FCAFC 190, Secretary, Department of Family & Community Services v Velis (2002) AATA 780).

45.     Having come to the view that the debt did not arise solely from an administrative error by Centrelink, it is not necessary for me to examine the issue of    good faith.

ARE THERE SPECIAL CIRCUMSTANCES WHY THE DEBT SHOULD BE WAIVED?

46. A further provision of the Act allows for waiver of debts in what is termed “special circumstances”.

“1237AAD. The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)making a false statement or false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.”

47.       While there is no doubt that a person has an obligation to comply with the requirements of the letter in accordance with Secretary, Department of Social Security and Hales (1998) 82 FCR 154, I find that Ms Johnson did not knowingly omit to comply with the Act. She thought that providing the raw data should suffice.

48. Centrelink contended that the discretion available in section 1237AAD of the Act should not be exercised in circumstances where a recipient has not complied with their obligations to advise Centrelink of changes in their circumstances. In Re Secretary, Department of  Family & Community Services and Jonauskas (2001) 65 ALD 553, the applicant was careless in failing to read the back of notices sent to him by Centrelink and in doing so, the Tribunal saw no grounds for finding special circumstances in waiving the debt.

49.     The term “special circumstances” has been examined by the Tribunal and the Federal Court.  In Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, Toohey J stated:

“An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend on the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

50.     Other than her position that Centrelink had made the mistake which gave rise to the overpayment Ms Johnson submitted that her health and her financial situation should also be taken into account.

51.     Ms Johnson told me that her back has recently been operated on, but she is still in pain.  However, I observe that her back condition has not prevented her from undertaking full time studies, driving or participating in daily activities.  I must agree with Centrelink’s contention that Ms Johnson’s back condition does not constitute special circumstances nor does it give rise to something that is uncommon, unusual or exceptional.  In Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 the Tribunal found ill health alone was not enough to be considered a special circumstance. I accept that Ms Johnson is hardworking and stoic and, to the extent she is able, has kept up normal activities.

52.     Ms Johnson told me that she gets almost no support from her former husband, and said she struggles to support her teenage children.  She must seek assistance from the Salvation Army and other welfare organisations.  She finds it degrading to have to ask her mother for help.  She neither smokes nor drinks, nor spends money on anything for herself. 

53.     Centrelink contended that Ms Johnson’s current financial situation is not beyond ‘straitened’ circumstances and exceptional.  This is evidenced by the fact that she is presently in receipt of compensation while the insurance company continues meets all her medical bills (T2, p8).  She is still employed by her employers and has no significant debts (T2, p8-9). 

53a.      On the basis of Ms Johnson’s evidence I find that she is experiencing financial hardship.

54.     However, in Re Colaiacolo and Secretary, Department of Social Security unreported, decision No 2109, (24 April 1985) the Tribunal stated that the factor of financial hardship alone is not sufficient to amount to special circumstances unless it is “exceptional” and not merely “straitened”.

55.      The breadth of the discretion in relation to “special circumstances” was commented on by the Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 at 38:

“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”

56.     I do not find the circumstances of this matter, when taken together, to be special in that they are "unusual, uncommon or exceptional" and "have a particular quality of unusualness that permits them to be described as special": Re Beadle and Director General of Social Security (supra). 

DECISION

57.     The Administrative Appeals Tribunal affirms the decision under review.

I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed: Niamh Kinchin
.....................................................................................

Associate

Date of Decision  29 June 2005
Representative for the Applicant               Self-represented
Representative for the Respondent          George Lozynsky, an advocate   from   the Legal Service Branch,   Centrelink