Keeley and Secretary to the Department of Family and Community Services - [2002] AATA 867

DECISION AND REASONS FOR DECISION [2002] AATA 867

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2002/552
GENERAL ADMINISTRATIVE DIVISION
  Re:         KATRINA JULIE KEELEY
  Applicant
  And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY
  AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       M.J. Carstairs, Member
Date:            3 September 2002
Place:           Melbourne

Decision:For reasons given orally at the hearing, the decision under review is varied in the following terms: that the debt of parenting payment during the period 21 December 1999 to 1 January 2002 is reduced by the amount of one fortnightly payment of parenting payment next occurring after 6 March 2001. In all other respects the decision under review is affirmed.

(sgd) M.J. Carstairs
Member
SOCIAL SECURITY – overpayment - whether applicant owes a debt to Commonwealth - whether debt should be waived - special circumstances - whether receipt in good faith
Social Security Act 1991 ss.1223, 1224, 1237A, 1237AAD
Re Secretary, Department of Social Security and Prince (1990) 22 ALD 503

REASONS FOR DECISION

3 September 2002 M.J. Carstairs, Member

This is an application by Katrina Julie Keeley (the applicant) for review of a decision made by the Social Security Appeals Tribunal on 16 April 2002. The SSAT affirmed a decision of a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent), that an amount of parenting payment (partnered) paid to the applicant, during the period 21 December 1999 to 1 January 2002, should be recovered.
At the hearing the applicant represented herself. Ms C. McInnes, an advocate with Centrelink, represented the respondent. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act1975, as well as exhibits marked A1 and A2 for the applicant. The respondent filed its statement of facts and contentions with the Tribunal on 13 August 2002.
BACKGROUND
Katrina Keeley was born on 22 May 1967. She lives with Paul Speed. She has three children: Alicia, born 8 October 1992; Sean, born 12 January 1999, and William, born 9 September 2001. She has worked for Coles Supermarkets (Store Nº 542) (T24) (Coles) since the early nineties. She had maternity leave from that employment for the birth of her last two children. At other times she has been working part-time and in receipt of parenting payment from the respondent.
In 2001 Centrelink noted that the income being held on the applicant's record at Centrelink, and used for calculating the rate of payment of parenting payment paid to the applicant, was less than her actual income at Coles. As a result of this, Centrelink concluded that the applicant had been overpaid parenting payment and that this overpayment should be recovered. The decision to that effect was made on 28 December 2001 (T13) and the applicant notified on 8 January 2002 (T14). The notice of overpayment showed the period as 26 February 2001 to 18 December 2001, with the amount being $2468.30.
The applicant sought review of that decision on 14 March 2002 (T22). An authorised review officer varied the decision. He decided that the amount of the debt was $4814.23, extending the period over which recovery was sought to the period 21 December 1999 to 1 January 2002. The applicant applied for review of the decision by the SSAT, however the SSAT affirmed the decision. The applicant then sought review with this Tribunal on 27 May 2002.
EVIDENCE
The applicant gave evidence that she had taken maternity leave for the birth of Sean from about July 1998. She returned to her usual work in the meat section of Coles Supermarket about August 1999. She was then earning about $256 for 20 hours work per week. Her work was then reduced to 16 hours per week, which meant that she was earning approximately $181 per week. This was subject to variations for overtime earned, and subject to reductions if she took sick or personal leave, as leave was only available to her under the terms of her employment after a year of employment. She said she advised Centrelink of her return to work and her expected income and later advised that her hours and earnings were reduced. This information was reflected in the documents T4, T5 and T24.
The applicant said that, when her hours increased in early 2001, she organised for a letter from the office manager of Coles to take to Centrelink. She identified that letter as being the one dated 28 February 2001 (T24, p.81). It read as follows:
…
To whom it may concern,
…
Katrina is now rostered to work 26 hours per week. This means that her normal gross weekly earnings are now $352.82.
The letter (T24) had a handwritten note on it:
Photocopied 6/3/01,
Centrelink in Footscray.

The applicant said that she wrote those words on the document. The same letter appeared elsewhere in the documents (T17) bearing the date stamp 23 January 2002. She said in her evidence that 6 March 2001 would have been a Tuesday as it was the one-day in the week she did not work and could attend Centrelink. This was checked in the course of the hearing and was correct. She said that her practice was to note on her calendar tasks that she had to do and bills that she had to pay. She said that she is methodical in doing these things. She said she keeps pay slips and records and she had brought a box of pay slips and other materials to the hearing.

The applicant said that, when she took the letter to Centrelink on 6 March 2001, she gave it to the Centrelink officer who photocopied it, wrote her customer record number (CRN) on the document and tossed it into the basket beside her. She recalled that the Centrelink officer did not go into her payment record on the computer screen while she was there. The applicant gave evidence that she made no further contact, as she did not need to as she knew that she had taken the letter to Centrelink. However, she did say that she expected, after notifying Centrelink about her increase in income, that the parenting payment would decrease when she was paid it in the next fortnight. When that did not occur, she said she was surprised. She then telephoned the Centrelink Teleservice Centre and was told by the person answering her call that the system had been updated with the new amount and that everything was correct. She said that she accepted that advice and made no further enquiries.
The applicant said she had specifically stated, during that the Teleservice Centre telephone call, that her wage was $352.82 and that she was told by the Centrelink teleservice officer that the details were updated. She said she had made reference to her partner being on disability support pension during the telephone call and it was confirmed to her that his record was updated as well. She confirmed in her evidence that she knew that, if her income went up, her rate of social security payment decreased.
The applicant also gave evidence that she went to Centrelink each time she had an overtime payment from Coles. She said she went in at least once a month. She said she provided tax returns to Centrelink as soon as she got them and she had also taken in bank statements, probably, she said, every couple of months. She said she had read the letters she received from Centrelink and did not dispute the receipt of those supplied in the documentary material. The applicant also said that her partner, Paul, looks at his letters in regard to disability support pension and then passes them to her.
The applicant gave evidence of the following financial circumstances:
Rent (per fortnight)  $300
Food (per week)  $120—$160
Baby formula (per week)  $60
Training fees-oldest child (per week)         $20
School bus fares (per week)  $20
Day Care for Sean (per week)  $21
Cigarettes (per week)  $135
Alcohol (per week)  $120
The applicant gave evidence that her partner, Paul, is an alcoholic. She said that he is unable to control his drinking. She said that he was hospitalised on several occasions during 2000 with uncontrolled epilepsy. While in hospital, he suffered hallucinations as part of withdrawal symptoms from alcohol. Attempts at rehabilitation have not been successful. She said that he received disability support payment for his epilepsy, which was adult onset epilepsy after head injuries in a car accident in which his best friend was killed. She said that alcohol dependency is one of the conditions for which he receives disability support pension. The applicant said that they are not managing on their income and they were in financial hardship. When Centrelink was recovering the debt of $10 per fortnight, they could not manage and had sought a stay order of the Tribunal.
The applicant gave evidence that she does not know whether her job at Coles will be available to her when she is due to return to work after her latest maternity leave (early 2003), because Coles is now pre-packing meat. She may no longer have a job to return to.
CONSIDERATION OF THE ISSUES
The period of the overpayment in this matter is 21 December 1999 to 1 January 2002. Provisions in the Social Security Act 1991 (the Act) dealing with overpayments are to be found in Part 5.2 of the Act. From 1 July 2001, s1223(1) of the Act has provided:
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 … is a debt due to the Commonwealth … .
Section 1223(1AB) provides:
1223.(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a)the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b)the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c)the payment was not payable;
(d)the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e)the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f)the payment was intended to be made for the benefit of someone else who died before the payment was made.
…
Section 1223(9) provides that, where social security payment is referred to in the section, it includes a reference to part of a social security payment.
Prior to 1 July 2001, s1223(1) and s1224 of the Act provided as follows:
1223.(1) Subject to subsection (1B), if an amount has been paid to a person by way of social security payment or fares allowance on or after 1 October 1997 and:
(a)the recipient was not qualified for the social security payment or fares allowance when it was granted; or
(b)the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.
…
1224.(1) If:
(a)an amount has been paid to a recipient by way of a social security payment or fares allowance, 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 the provision of the social security law or this Act as in force immediately before 20 March 2000, the 1947 Act or the Social Security (Fares Allowance) Rules 1998;
the amount so paid is a debt due by the recipient to the Commonwealth.
Ms McInnes submitted that, while the applicant had clearly advised of her income correctly on two occasions towards the end of 1999, it could not be accepted that she repeatedly came in and advised changes to her income when there was no corroborating evidence of that occurring. She said that a number of notification notices had issued to the applicant. On each occasion it was set out that she was to advise Centrelink if her income went over $362.34 per fortnight.
Ms McInnes submitted that it was unlikely that the applicant had come to Centrelink on 6 March 2001. She said that the applicant's evidence that she later telephoned the Teleservice Centre should not be accepted in the absence of a record from the customer reference access monitoring (CRAM) system. The evidence from the CRAM report did not support the claim that the applicant had telephoned towards the end of March as there was no record of access to the applicant's EANS (or earnings) screen when her computer record was accessed. Ms McInnes submitted that the only evidence of the applicant advising the income between the end of 1999 and 2001 was when the applicant came in and provided relevant information in December 2001, which was when Centrelink checked and confirmed her earnings at Coles.
Ms McInnes submitted that the doctrine of regularity should apply. She submitted that the debt prior to 1 July 2001 was one recoverable under s1224 of the Act. Thereafter, it was recoverable under s1223(1). She submitted that there were no special circumstances as a basis of possible waiver of any part of the debt. Although the financial circumstances were difficult for the family, Ms McInnes said that the discretionary expenditure on alcohol and cigarettes made this case not one where the discretion should be exercised in the applicant's favour. She said this was particularly so because there was no evidence of any attempt to control the alcohol problem. She said the evidence of unpaid debts, of rent arrears ($1400), a fine ($650), and an unpaid amount of $100, were not evidence of extreme hardship. She submitted that the recovery that was being effected by the respondent at the rate of $10 per fortnight was not too onerous.
The applicant submitted that she had complied with her obligations. She said she had notified Centrelink when her income went down. She said that every time she had a change of circumstances she notified Centrelink. She had been to Centrelink, in July 2000, to notify that Sean had been immunised. She had taken the letter on 6 March 2001. She said that she was still angry that, despite telephoning the Teleservice Centre to say that her income was $352 per week, not per fortnight, her record had remained unchanged. The applicant submitted that her partner had attempted rehabilitation, but was unable to accept it. She said that it should be taken into account that, when he was hospitalised during 2000, on one occasion for a period of 10 days, he had hallucinations and could not be allowed to return home. She emphasised that her partner's alcohol problem is not one that he can control. She submitted that, while she might be responsible in part for the overpayment, she did not believe she was fully responsible for it.
The Tribunal has reached a decision taking into account the oral and written evidence, and the submissions made at the hearing. In regard to the overpayment of parenting payment, the Tribunal makes the following findings:

When the applicant returned to work in August, she brought in payslips to Centrelink. She notified a reduction in her pay in December 1999. At that time Centrelink calculated the applicant's average weekly earnings as $181.17. This was the correct calculation, based on income figures provided by her.
The income being used to calculate the fortnightly payments of parenting payment was advised to the applicant in six letters that appear at documents T6 to T11. These are letters dated 9 December 1999, 21 June 2000, 28 July 2000, 12 August 2000, 21 August 2000 and 8 September 2000. It was not disputed before the Tribunal, and the Tribunal accepts, that the applicant received those letters.
The Tribunal accepts that the applicant is methodical and keeps her records. However, the Tribunal does not accept the applicant's evidence that she came in monthly; that she notified Centrelink each time she received overtime payments; that she brought in bank statements and filed tax notices of assessment immediately after receiving them. It is not possible, if the receipt of earnings were notified on so many occasions to Centrelink, that these would not have been recorded at all after December 1999.
The Tribunal does accept that the applicant took the letter that she had requested from Coles in February 2001 to Centrelink on 6 March 2001, despite the absence of the record of its receipt at that time. From the Tribunal's knowledge, her evidence of how the document was taken and placed in a file tray without her computer record being accessed is part of regular practice in Centrelink. Material of this kind is then later stamped and filed if necessary. In other words, it is a credible account of what is likely to occur, and the Tribunal accepts her evidence in regard to that. On this basis the Tribunal accepts that her document was subsequently misplaced.
The Tribunal does not accept that, after receiving the next payment of parenting payment, the applicant telephoned (towards the end of March 2001) and queried why her rate had not gone down. The Tribunal is not prepared to accept that evidence as there is no evidence of access to the computer record at the time, and this would be a necessary part of the kind of enquiry that the applicant was making at the Teleservice Centre. The Tribunal does not accept that the telephone call was made at the end of March 2001.
The Tribunal accepts that the overpayment amounts have been correctly calculated.

As a consequence of these findings, the Tribunal further finds that there is a debt for the whole of the period 21 December 1999 to 1 January 2002, except for the fortnight in March 2001 after the applicant's notification of the receipt of a higher amount of income. The Tribunal considered the exercise of the discretion to waive any part of the debt in the applicant's case. Section1237A provides for this. Although the Tribunal finds that there was administrative error by Centrelink in not recording the information provided on 6 March 2001, the applicant did not receive subsequent payments in good faith. Once the applicant saw, in her next payment of parenting payment, that the amount had not been reduced as she expected, she was aware that the amount was incorrect. She did not notify Centrelink. Therefore, the Tribunal, applying Re Secretary, Department of Social Security and Prince (1990) 22 ALD 503 finds that the overpayment, while made on the basis of administrative error, was not received in good faith. No further notices issued to the applicant during 2001 that put her on notice of the continuing incorrect amount being used to calculate her rate. However, the Tribunal is satisfied that there is not a basis to waive the debt as occurring solely from administrative error, as the payment was not received in good faith, as that term is to be understood in the Act.
The Tribunal carefully considered the provisions for special circumstances in s1237AAD of the Act. However, the circumstances are not such as to warrant the exercise of discretion in the applicant's case. While the Tribunal recognises the difficulty of the financial circumstances for the family unit, there is the prospect that the applicant will be earning additional income when she returns to work. Recovery can be effected, in any event, from the ongoing parenting payment, taking into account the family's circumstances from time to time. The debt should not be written off under s1236 of the Act, nor should it be waived. However, in view of the difficult circumstances at present, further recovery should be delayed until March 2003, when it is expected that the applicant will have returned to work after maternity leave.

For these reasons, the amount of the debt is to be re-calculated. That is, the overpayment is to be reduced by the amount of parenting payment (partnered) made in the fortnight after the applicant advised her increased income on 6 March 2001. In all other respects the decision under review is affirmed.
DECISION
For reasons given orally at the hearing, the decision under review is varied in the following terms: that the debt of parenting payment in the period 21 December 1999 to 1 January 2002 is to be reduced by the amount of one fortnightly payment of parenting payment, next occurring after 6 March 2001. In all other respects the decision under review is affirmed.
I certify that the twenty-seven [27] preceding paragraphs are a true copy of the reasons for the decision herein of
M.J. Carstairs, Member
(sgd)      Catherine Thomas
             Clerk
Date of Hearing:  28 August 2002
Date of Decision:  3 September 2002
Solicitor for the Applicant:           Nil — IN PERSON
Advocate for the Respondent:    Ms C. McInnes, Centrelink