Kaur and Department of Family and Community Services

[2000] AATA 1093

DECISION AND REASONS FOR DECISION [2000] AATA 1093

ADMINISTRATIVE APPEALS TRIBUNAL)
  Nº V00/513
GENERAL  ADMINISTRATIVE DIVISION)

Re:            KULDIP KAUR

Applicant

And:         SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Mrs H.E. Hallowes, Senior Member
Date:             12 December 2000
Place:            Melbourne

Decision:The decision under review is varied to now provide that the sum of newstart allowance overpaid to the applicant for the period 17 September 1997 to 25 September 1998 is $8077.90.   The amount so paid is a debt due to the Commonwealth and it shall not be written off or waived.

(sgd H.E. Hallowes
  Senior Member
SOCIAL SECURITY — newstart allowance — overpayment — whether false statement with respect to partner's earnings — whether special circumstances
Social Security Act 1991 ss.1224(1), 1237A(1), 1237AAD
Freedom Information Act 1982

Condon v Secretary, Department of Family and Community Services

[2000] FCA 268 (decided 14 March 2000)

Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435

REASONS FOR DECISION

12 December 2000  Mrs H.E. Hallowes, Senior Member

1. On 5 May 2000 Ms Kaur lodged an application for review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 27 March 2000.   The SSAT affirmed a decision made by a delegate of the Secretary on 3 September 1999 to raise and recover a debt of $8151.90 in respect of newstart allowance paid to Ms Kaur between 13 September 1997 and 25 September 1998.   The decision was affirmed by an authorised review officer ("ARO") on 15 November 1999.

2. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the documents"), together with further documents provided by Ms P. D'Cunha, an advocate with Centrelink, who appeared for the Secretary at the hearing. It is of concern to the Tribunal that this further material was provided to Ms Kaur by the respondent so shortly before the day of hearing. Ms Kaur's partner, Mr C. Rayner represented her at the hearing.

3. The documents include copies of eight fortnightly newstart allowance continuation forms lodged by Ms Kaur during the relevant period.   Ms Kaur disclosed on the form, lodged with Centrelink on 26 September 1997, that her partner was working full-time and that he earned $400.00 before tax.   She advised that her partner worked between 22 and 26 September.   On most of the other forms before the Tribunal Ms Kaur advised that her partner earned $400.00 before tax and she set out the days he worked, although it appears to the Tribunal from the dates provided that they are not the actual days worked by Mr Rayner, but rather, refer to days at the beginning and end of weeks worked by him.  

4. The material satisfies the Tribunal that it can infer that Ms Kaur had not indicated on the rest of the forms she lodged with Centrelink during the relevant period, which are no longer available, that Mr Rayner earned other than $400.00 each fortnight.   In light of the forms lodged by Ms Kaur on 10 October 1997 with respect to the period 27 September to 10 October 1997, where she did not disclose any amount earned by Mr Rayner but rather provided a name and contact number of Mr Rayner's employer and the dates he worked, which affect the rate of newstart allowance payable to her, it is regrettable that Centrelink did not contact the employer to clarify Mr Rayner's earnings.   It may have saved Ms Kaur a lot of heartache.

5. By letter dated 16 January 2000, Mr Rayner wrote to the SSAT stating, amongst other things:

   . . .
   Essentially, Centrelink has determined that payments were made to Kuldip Kaur on the basis of incorrect information given to them by her.   Centrelink arrived at this decision by examining incorrect information on NSA forms starting at 26/9/97.   Earlier forms, and in particular, forms used specifically to determine the amount payable to someone in the event of their forming a marriage-like relationship with someone who is employed, are correct, and would have been used by Centrelink to revise her entitled.   The fact that her payments were not reduced at that time indicates that Kuldip Kaur was still entitled to an allowance identical with the allowance she was receiving before entering into her relationship with Craig Rayner.   Indeed, this was what Centrelink staff assured her at the time.
   . . .
   Now, once it has been established that Kuldip Kaur and Craig Rayner did provide Centrelink with correct information from the very outset, it should be obvious that the eight forms dating 26/9/97 – 8/5/98 containing incorrect information can be ignored, as Kuldip Kaur's circumstances had not changed, and her NSA was not altered.
   It should be kept in mind that English is Kuldip Kaur's third language, and that she often found it necessary to inquire about questions contained in NSA forms.   She was particularly confused when her NSA forms were switched from a fortnightly to a monthly basis.   Given the size and complexity of the Centrelink bureaucracy, it is perhaps not surprising that she sometimes received different and even contradictory answers to her inquiries.   She did believe, however, that all of her NSA issues had been satisfactorily resolved before she commenced her employment with Jones Stroud (Australia) Pty Ltd.   . . .   (existing emphasis)

6. At the hearing Mr Rayner put to the Tribunal that Ms Kaur's debt to the Commonwealth should be waived under section 1237AAD of the Social Security Act 1991 ("the Act"), which provides:

   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 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.   

It was Mr Rayner's contention that Ms Kaur sought to comply with relevant forms as best she could in light of her poor literacy skills and therefore her lack of comprehension.   He advised that she had acted in good faith at all times and that she had received misleading advice during the period she was paid newstart allowance.   It was his recollection that he and Ms Kaur had both filled in separate forms at a Centrelink office early in the piece.   However, a copy of the form he believed he had completed was not included in the 273 documents provided to him following a request made under the Freedom Information Act 1982.  

1. Ms D'Cunha outlined to the Tribunal departmental policy with respect to the culling of files in which there has been no activity, which are destroyed after being held from 12 to 18 months.   Searches had been made of two Centrelink offices for relevant documents.   Ms D'Cunha has access to screens on the Centrelink computer which disclose contact was made by Ms Kaur on 22 September 1997 when she advised a change of address.  

2. Ms Kaur told the Tribunal that in September 1997 she had been in receipt of newstart allowance under the Act and she advised Centrelink of her change of address when she went to live with Mr Rayner. Both she and Mr Rayner attended a Centrelink office and they were given forms to complete, which they did together. It has always been her practice to ask for help when she does not understand questions on forms.

3. Ms Kaur arrived in Australia in 1993, aged 17 years and she undertook one year of study in the English language.   She gave evidence that she remembers writing $400.00 as Mr Rayner's earnings on her claim form for newstart allowance.   She had not completed the amount Mr Rayner earned on the form she signed on 10 October 1997 because Mr Rayner had also completed a form on that day and she asked the Centrelink officer to record the same amount that Mr Rayner had put on his form in the space provided on her form.   She was unemployed until 1 September 1999 and she always completed her application for newstart allowance continuation forms at the Centrelink office.   She always asked the officer to check her continuation forms.   She never asked Mr Rayner what he earned.   It was her understanding that his earnings did not change as he had not mentioned any increase in wages to her.   She had not asked for the assistance of an interpreter at the Centrelink office as she did not think she needed one.   It had been explained to her that, if money was earned, it would affect her entitlement.   It was her understanding that Mr Rayner earnt $400.00.   She had assumed that Centrelink had checked Mr Rayner's earnings with his employer and she was never told that the $400.00 she was recording was wrong.  

4. Ms Kaur conceded that she had previously worked for the same employer as Mr Rayner; that she sometimes worked overtime, and that she was paid more than $400.00 per fortnight.  She acknowledged that the dates she had recorded Mr Rayner as working on the continuation forms represented the weeks of his employment rather than particular days.   She said that she had been told to put down weeks.   She could not recall why she had recorded six dates on the continuation form she lodged on 16 January 1998, other than the possibility that the Christmas holidays accounted for the number of periods she recorded.

5. Mr Rayner told the Tribunal that he recollected attending a Centrelink office with Ms Kaur and he said that the sum $400.00 recorded on the application form for newstart allowance, dated 26 September 1997, was in his writing.   The records from Mr Rayner's employer at that time record that he was paid $370.03 gross on 22 September 1997 and $439.41 gross on 29 September 1997.   Mr Rayner told the Tribunal that he "rounded it off".   From the documents before it, the Tribunal notes that Mr Rayner appears to have been paid on a weekly basis.  

6. Ms D'Cunha put to the Tribunal that Ms Kaur had provided incorrect advice to Centrelink with respect to her income. The documents disclose that this was clearly so, whether or not it was Mr Rayner who first recorded the weekly income on Ms Kaur's claim form. The Secretary must rely on information provided to him by claimants in order to determine whether a person is qualified for a pension or allowance under the Act, and whether it is payable. Certainly the Tribunal has concerns about the wording on the forms completed by Ms Kaur, for example, it is confusing as to what information is sought under question 6 on the Application for payment of Newstart/Youth Training Allowance form where provision is made for

   Date(s) worked   ......../......../........          ......../......../........          ......../......../........
     ......../......../........          ......../......../........          ......../......../........

Perhaps it would be clearer if the form provided space for a claimant to record either periods worked or individual days worked within a fortnight.   The Tribunal also notes question 9 where a claimant is asked whether any of the things listed happened during the relevant period.   The only possible item on the list which may be relevant to Ms Kaur's circumstances after she had advised that she was living with a partner is

• you or your partner got any other money

which could be read as meaning any money over and above the $400.00 disclosed but it could also suggest to the reader that it was the receipt of money from some other source.   It was Mr Rayner's memory that he had completed an Assets and Income form on which he disclosed his income.   It is unfortunate, if there was such a form, that it is no longer available.   Ms Kaur has reason to think that Centrelink may have initiated their own enquiries as the claim form includes the advice "We can make any enquiries necessary to help us work out how much we should pay you".  

1. Letters sent to Ms Kaur advised her that she must tell Centrelink if, amongst other things, "your partner's income changes from the rate last notified or the income shown above is incorrect".   The Tribunal was unable to see where Mr Rayner's income was recorded on the letters so it was necessary for Ms Kaur to recall the rate of income she had last notified.

2. The Tribunal is satisfied on the evidence before it that Ms D'Cunha's contention is correct; that Ms Kaur has been paid social security payment to which she was not entitled, and the amount so paid is a debt due to the Commonwealth under subsection 1224(1) of the Act, which 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;

   (c)(Omitted)

   the amount so paid is a debt due by the recipient to the Commonwealth.

   Note:   if the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229).   If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).  

3. Ms Kaur made false statements as to her income and the rate of newstart allowance paid to her was based on that information.   It has not been established to the Tribunal's satisfaction that Ms Kaur or Mr Rayner provided correct information "from the very outset" (paragraph 5 above).   Subsection 1237A(1) provides that the right to recover a debt which is solely attributable to administrative error made by the Commonwealth must be waived if the debtor receives the payment in good faith.   As Ms Kaur provided incorrect information to Centrelink, the Tribunal is satisfied that the debt is not attributable to Commonwealth error even though Centrelink advises claimants that Centrelink has the power to make enquiries to help work out the correct rate of any payment.   Whether or not Mr Rayner provided other information to Centrelink with respect to his income, as he told the Tribunal that he recorded the $400.00 as his weekly earnings on the first claim form amongst the documents, it appears to the Tribunal to be unlikely that he would have recorded some other amount on an Assets and Income form.  

4. Turning to the word "knowingly" in section 1237AAD of the Act, in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 the Tribunal, having considered a number of authorities, said, at page 445:

   (48) There is nothing in s 1237AAD which suggests that the word "knowingly" should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.

   (49) In this case, the emphasis of Mr and Mrs Callaghan's evidence was more upon their belief that the one department paid them than upon their state of mind in complying with their obligations under the Act. Mr Callaghan has acknowledged that he had received notices under s 727 of the Act and that he had read at least one of them. I am satisfied both on the material in the T documents and on his oral evidence that he received more than one of them and that he read the first one. On the basis of the notices themselves I am satisfied that they clearly set out his obligation to advise the department should his income, or that of Mrs Callaghan, change. I am also satisfied from the notice that it quite clearly stated that income included Austudy benefits. Taking into account Mr Callaghan's knowledge of the notice and of his having read at least one of them, I find that he knew that he had an obligation to advise of a change in Mrs Callaghan's income. Therefore, when he failed to advise of the change he knowingly omitted to comply with a provision of the Act.

5. Having heard Ms Kaur's evidence, the Tribunal is prepared to give her the benefit of any doubt and to find that she did not "knowingly" give false information to Centrelink as contended by Ms D'Cunha.   She relied on Mr Rayner for that information and she did not have actual knowledge, although it is somewhat surprising that, having worked at the same place of employment as Mr Rayner, she was not aware that his income may fluctuate each fortnight, depending on whether he worked overtime.  

6. In Condon v Secretary, Department of Family and Community Services [2000] FCA 268 (decided 14 March 2000) Lehane J said ". . . whether particular circumstances are 'special' involves questions of fact and degree". Although the Tribunal is of the opinion that, despite many improvements to forms over time, they may still be misleading or misunderstood, and that Ms Kaur relied on Mr Rayner to advise his correct fortnightly gross income, her circumstances are not special such that the Tribunal should exercise its discretion in her favour. The Tribunal acknowledges that her communication skills are limited, but the debt should not be waived. Her circumstances are similar to many other applicants whose income varies fortnight to fortnight which causes a burden both to the client and to Centrelink in determining a correct rate of pension or allowances.

7. At the hearing Ms D'Cunha put to the Tribunal that Ms Kaur's debt was $8077.90, being for the period commencing 17 September 1997 until 25 September 1998, 17 September 1997 being the date on which Ms Kaur became partnered.   The original decision had calculated the debt from 13 September 1997.  The Tribunal, for the above reasons, will therefore vary the decision under review.

   I certify that the nineteen [19] preceding paragraphs are a true copy of the reasons for the decision herein of 
   Mrs H.E. Hallowes, Senior Member
   (sgd)    Catherine Thomas
             Personal Assistant

   Date of Hearing:  10.08.00
   Date of Decision:  12.12.00
   Solicitor for the Applicant            Mr C. Rayner, applicant's partner
   Solicitor for the Respondent:       Ms P. D'Cunha, Advocate with Centrelink