Johnson and Secretary, Department of Family and Community Services

[2004] AATA 759

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 759

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2003/1416

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JACQUELINE JOHNSON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms G Ettinger - Senior Member

Date20 July 2004

PlaceWallsend

Decision The Administrative Appeals Tribunal affirms the decision of the Delegate of the Secretary, Department of Family and Community Services dated 19 March 2003 as affirmed by the Authorised Review Officer on 23 May 2003, and the Social Security Appeals Tribunal on 31 July 2003.

[Sgd]    Ms G Ettinger
  Senior Member 

CATCHWORDS

Social Security – overpayment - whether calculated correctly - special circumstances -  tests applied  – decision affirmed.

LEGISLATION

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

CASES

Beadle v Director-General of Social Security (1985) 60 ALR 225

Secretary, Department of Social Security v Hulls (1991) 22 ALD 570

Secretary, Department of Social Security v Banks (1990) 20 ALD 19

Secretary, Department of Social Security v Ellis (1997) 24 AAR 535

Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464

Director-General of Social Services v  Hales (1983) 47 ALR 281

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

Re Ivovic and Director-General of Social Services (1981) 3 ALN N95

Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690

REASONS FOR DECISION

20 July 2004 Ms G Ettinger - Senior Member    

1.      The decision under review before the Administrative Appeals Tribunal (“the Tribunal”) was the decision of the Delegate of the Secretary, Department of Family and Community Services (“the Department”), (T35) dated 19 March 2003, as affirmed by the Authorised Review Officer (“ARO”), on 23 May 2003, (T49), the latter holding that the debt Ms Jacqueline Johnson, the Applicant in these proceedings owed, was $2,057.15. The Social Security Appeals Tribunal (“SSAT”), affirmed the decision of the ARO on 31 July 2003, (T2), to find an overpayment of parenting payment single for the period 21 June 2000 to 18 June 2001. The reason given for the raising of the debt was that the Applicant had underdeclared her income from employment with the TAB Ltd (“TAB”), and Hunter Retirement Living.

2.      The Applicant was self-represented and the Respondent Secretary, Department of Family and Community Services was represented  by its advocate, Mr L Carter. 

ISSUE BEFORE THE TRIBUNAL

3.The issue before the Tribunal was:

·Whether to affirm, set aside or vary the decision of the Department and the SSAT, to find an overpayment of parenting payment amounting to $2,057.15 for the period 21 June 2000 until 18 June 2001.

4.In coming to a decision, I was also required to consider:

·Whether Ms Johnson owed a debt pursuant to section 1223(1) of the Social Security Act 1991 (“the Act”); and if so

·Whether the calculation of the overpayment of parenting payment was correct;  and if so,

·Whether there was sole administrative error in order to invoke the operation of section 1237A of the Act; or

·Whether there were special circumstances pursuant to section 1237AAD of the Act which applied to enable the Tribunal to waive, in whole or in part, the overpayment of parenting payment made to the Applicant.

5.The issues fall to be determined in the context of the Social Security Act 1991.

BACKGROUND

6.      Ms Johnson whose date of birth is 21 September 1966, gave oral evidence at the Hearings. It was undisputed that she had been receiving pension in relation to her parenting since 1992, and parenting payment single since 1998. Ms Johnson also worked on a part-time and casual basis in paid employment. The employers relevant to the raising of the debt in the relevant period under review here (21 June 2000 to 18 June 2001), were TAB Ltd and Hunter Retirement Living.

7.      I noted that the debt was discovered during data matching operations, and that it had been recalculated during the review period, but that at the time of the SSAT and the application to the Tribunal, the debt was said to be $2,057.15, calculated on a quarterly annualised method appropriate to Ms Johnson’s pension. This was however not without difficulties as certain of Ms Johnson’s pay slips and two review forms were missing.

8.      As I was not satisfied regarding the figures given by the Respondent for calculation of the debt, I adjourned the Hearing after taking the evidence available, and gave the parties the opportunity of verifying their figures. Accordingly, the Applicant produced her tax returns for the relevant year, and the Respondent produced relevant figures in connection with its calculations, and the original documents of Hunter Retirement Living and the TAB, on which they were based. The parties convened for a further two resumed Hearings by telephone on 2 June and 17 June 2004.

9. I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act1975 as R1, and a letter of Dr Bull dated 15 April 2004 as Exhibit A1.

SUBMISSIONS AND CONCLUSIONS

10.     In coming to a conclusion I have had to take into account all the evidence, submissions, case law and legislation to make the correct and preferable decision regarding the  debt of parenting payment. 

11.     I emphasise at the outset that I was firmly of the opinion that Ms Johnson is a witness of truth, and that she did not knowingly conceal earnings or knowingly misstate her situation to the relevant authorities. Mr Carter agreed with me that Ms Johnson was a witness of truth.

the debt

12. I then moved to consider whether a debt had been raised pursuant to section 1223(1) of the Act which relevantly provides:

“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.”

13. Mr Carter submitted that a parenting payment had been made to Ms Johnson, and found to be in excess of her entitlement because she had declared her income from the TAB and Hunter Retirement Living incorrectly, and that accordingly, a debt had arisen pursuant to section 1223(1) of the Act. Mr Carter submitted that the calculations were done on the basis of the employer records. He said that the figures for Hunter Retirement Living indicated Ms Johnson’s income for the relevant period, was $7,171.15, and $7,524.90 for the TAB. These totalled gross earnings of $14,696.05, he said. I noted the submission that Ms Johnson had been paid $8,674.15 in parenting payment over the same period, whereas her entitlement was $6,617, and that accordingly the overpayment was $2,057.15.

14.     I noted that a deduction of $826.39 for the period 24 June 2001 from the earnings figure of $14,696.05 needed to be made because 24 June 2001 was outside the relevant dates (21 June 2000 to 18 June 2001). This adjusted the income figure to $13,870.66 for the relevant period, instead of the figure on which the Respondent and the SSAT relied, which was $13,822, actually shown as $13,821.93 at T25/90.  Figures supplied by the Respondent indicated that Ms Johnson had only declared earnings of $8,897 for the relevant period although her tax return for the year ending 30 June 2001 indicated earnings of $7,119 and $6,703 (totalling $13,822). 

15.     In a letter dated 10 May 2004 to the Tribunal, the Respondent also indicated with reference to T25/90, that the income for the period 14 January 2001 to 7 April 2001 had been entered as $1,335.54 instead of $1,359.25. Mr Carter indicated that the Respondent would not be seeing to disturb the debt calculation to reflect that error.

16.     The Applicant insisted she had always declared the amounts earned in her two casual part-time jobs, and had always concentrated on doing the right thing.

17.     I have noted the submissions and the calculations on which they were based, and acknowledge the fact calculations were made and remade which have confused the Applicant and disquieted her. I accepted also that she declared her earnings correctly in the tax return for the relevant period. I have also accepted the figure of $13,822 as the Applicant’s income for the relevant period rather than the higher figure of $13,870.66. However, the under declaration of income and resulting overpayment of parenting payment remains.

18. Therefore, because Ms Johnson was paid $2,057.15 parenting payment in excess of her entitlement, a debt has arisen pursuant to section 1223(1) of the Act. That must be recovered unless there is a reason to waive some or all of it. Accordingly, I moved to consider waiver under section 1237A of the Act.

sole administrative error

19.Section 1237A of the Act provides the following with respect to the waiver of a debt arising from error:

“1237A          Waiver of a debt arising from error

Administrative error

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.

Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

…

Proportion of a debt

1237A(3)For the purposes of this section, a proportion of a debt may be 100% of the debt.”

20.     In connection with whether sole administrative error had arisen, Ms Johnson said that she had submitted all documentation as soon as possible, detailing certain delays, and said that she was astounded when documents such as payslips and review forms were found to be missing from Centrelink files.

21.     Mr Carter submitted that the calculations were made from employer records, but agreed, having recalculated the debt, that there had been some administrative errors made. He emphasised however, that it was not sole administrative error, and that the overpayment arose because Ms Johnson had underdeclared her income for the relevant period, indeed showing a pattern of this behaviour. This was by way of  contrast to an earlier view expressed by him at a different time during the Hearings when Mr Carter agreed with me that Ms Johnson was a witness of truth.

22. Mr Carter submitted that as the errors in the documentation were not a case of sole administrative error, the debt had to be recovered, and could not be waived pursuant to section 1237A of the Act. He submitted the SSAT decision be affirmed.

23. I considered the calculations of the debt and the various versions given to Ms Johnson, as well as her reaction of disquiet. However I was satisfied that the errors of the Respondent were minor errors of calculation and delay, but that Ms Johnson was responsible for the underdeclaration of her earnings which caused her to be over paid parenting payment. This could not then be classified as sole administrative error and section 1237A of the Act could not be applied to waive the debt.

24.     I moved then to consider Ms Johnson’s circumstances, and see if they could qualify as “special circumstances” pursuant to section 1237AAD of the Act in order to waive all or part of the debt.

consideration of special circumstances

25.In considering “special circumstances”, I have noted that section 1237AAD of the Act provides as follows:

“1237AAD      Waiver in Special Circumstances     

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 a 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.

Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.”

26.     In support of the argument that special circumstances applied to her in order to waive the debt, Ms Johnson said that she found it difficult to support her two children, aged 13 and 12 on social security payments. She also explained that she had injured her back at work, and undergone back surgery on 7 January 2004. Ms Johnson said that the first six months after the back operation she was on complete rest, and emphasised that she cannot, and does not, engage in paid work.  The Applicant said that her back condition has caused her to be unable to bend, she has problems with her hips and left leg and foot, and she emphasised that she has difficulties driving.

27.     Mr Carter also made submissions regarding special circumstances. He referred to the leading case of Beadle v Director-General of Social Security (1985) 60 ALR 225, and submitted that Ms Johnson’s circumstances were not so “unusual, uncommon or exceptional” so as to qualify as a “special circumstance”.He submitted that the fact Ms Johnson was a single mother supporting two children did not constitute special circumstances, neither did the evidence before the Tribunal indicate that she was in severe financial hardship. Mr Carter also submitted that notwithstanding her back problem, Ms Johnson was able to drive and participate in daily activities.

28.     I noted that in Beadle v Director-General of Social Security (supra), the Federal Court defined “special circumstances” as being those which are “unusual, uncommon or exceptional” and that this has been reinforced in many following cases that have been decided since, including Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, Secretary, Department of Social Security v Banks (1990) 20 ALD 19 and Secretary, Department of Social Security v Ellis (1997) 24 AAR 535.

29.     In Beadle v Director-General of Social Security (supra), the Federal Court, in examining “special circumstances”  within the terms of section 102(1) of the 1947 Act said:

“It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.”

30.     I find, relying on authority in Beadle and Director General of Social Security (supra) (1984) 6 ALD 1, Re Krzywakand Secretary, Department of Social Security (1988) 15 ALD 690, Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, and Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985) that unless the circumstances of Ms Johnson’s case are so “unusual, uncommon or exceptional” then I am precluded from exercising the discretion to waive all or part of the debt.

31.     I noted that In Director-General of Social Services v  Hales (1983) 47 ALR 281 Sheppard J said:

“The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common; they will be impecunious and in straitened circumstances.”

32.     I was mindful of Ms Johnson’s  financial circumstances which is one criterion for me to assess in relation to “special circumstances”.   Ms Johnson is a single mother, and is raising two children, now aged, 12 and 13. There is also no doubt that she is in straitened circumstances. However that does not distinguish her from a whole group of people who are recipients of social security benefits. 

33.     I respectfully agree with the findings in Beadle v Director General of Social Security (supra) and Hales (supra) that financial hardship is a circumstance of almost every person who is obliged to rely on income support. 

34.     I turned then to consider Ms Johnson’s health issues. There is no doubt that she suffered a back injury during the course of  her work, that she underwent  surgery in 2004 following her injury on 26 October 2001, and that she receives compensation.  However the evidence which I accept, is that she is able to function adequately, look after her children and drive her car.

35.     Notwithstanding the letter of Dr N Bull dated 15 April 2004 (Exhibit A1), in which he referred to pain and disability related to Ms Johnson’s back injury, stress related to her family situation, and the dealings she has had with the Department over the debt, there was no item of a medical nature so compelling that I could find it  to be so “unusual, uncommon or exceptional” as to qualify as a “special circumstance”.

36.     I noted also that Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 had been decided pursuant to the 1947 Act and that Deputy President Todd had said at paragraph 24:

“In the various decisions which turn on this question, the Tribunal has consistently searched for circumstances which are ‘unusual, uncommon or exceptional’ to ascertain whether strict application of s 153 is ‘unjust unreasonable or otherwise inappropriate’...It appears that the useful guidelines for the exercise of the discretion set out in Re Krzywak (1988) 15 ALD 690 have been followed by the Tribunal in later decisions. The factors to be considered are thus financial hardship; legislative changes; incorrect legal advice; and ill health…”

37.     However I was satisfied that no evidence was given, and no submissions made with regard to Ms Johnson’s circumstances to convince me that the correct and preferable decision would be, in applying the law regarding “special circumstances”, to waive all or part of the debt.  There have been no legislative changes affecting  her situation, and she has not been given incorrect legal advice. There has been nothing so “unusual, uncommon or exceptional” in viewing the totality of circumstances in this case so as to warrant applying the discretion regarding “special circumstances” in favour of Ms Johnson. 

38.     Therefore the debt of $2,057.15 must be recovered.

39. I have also considered the application of section 1236 of the Act, and considered whether it was appropriate to exercise the discretion to write off the debt. I was not satisfied that this was the correct and preferable course as Ms Johnson, whilst not affluent in any way, has some capacity to now repay her debt in small instalments.

DECISION

40.     The Tribunal affirms the decision under review.

I certify that 40 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger - Senior Member

Signed:         Neil Glaser
  Associate

Dates of Hearing  20  April; 2 June &  17 June 2004      
Date of Decision  20 July 2004
Applicant  Self-Represented
Respondent  Mr L Carter