Kelly and Secretary, Department of Family and Community Services
[2004] AATA 641
•22 June 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 641
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/164
GENERAL ADMINISTRATIVE DIVISION ) Re GEOFFREY JOHN and CHRISTINE JOY KELLY Applicants
And
SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
Respondent
DECISION
Tribunal Deputy President Don Muller Date22 June 2004
PlaceBrisbane
Decision The Tribunal affirms the decision to:
1. Raise and recover an overpayment of disability support pension in the sum of $1,785.20 from Geoffrey John Kelly;
2. Raise and recover an overpayment of wife pension in the sum of $1,785.20 from Christine Joy Kelly; and
3. Find that there are no circumstances sufficiently special to warrant waiving the right of the Commonwealth to recover the debts.
.................SIGNED.............................
D.W. MULLER
DEPUTY PRESIDENT
CATCHWORDS
SOCIAL SECURITY – overpayment of disability pension and wife’s pension – declaration of earnings incorrect – no special circumstances – no waiver – decision affirmed
Social Security Act 1991: ss1064, 1237AAD
REASONS FOR DECISION
Deputy President Don Muller 1. At all times relevant to this review Geoffrey John Kelly was in receipt of a disability support pension and his wife Christine Joy Kelly was in receipt of a wife’s pension.
2. Geoffrey and Christine Kelly seek review of decisions to raise and recover overpayments of pensions paid to them between 14 November 1996 and 5 June 2001.
3. The rate of pensions paid is based on the rate calculator set out in section 1064 of the Social Security Act 1991. The maximum amount payable is increased if the recipients have dependents, and it is reduced if the recipients receive income from other sources. The increase in respect of dependents is proportional to the number of dependents. The reduction in respect of other income is proportional to the amount of other income.
4. The material placed before the Tribunal leads me to make the following findings of fact:
(a)Throughout the period under review Mr. and Mrs. Kelly were regularly informed that they had to notify Centrelink of any changes to their income from sources other than social security benefits.
(b)Mr. and Mrs. Kelly knew that they had the obligation to inform Centrelink of any income from other sources on a regular basis.
(c)Christine Kelly earned income as a casual shop assistant. Her income varied from week to week. During the period under review she submitted a statement of her earnings to Centrelink every 12 weeks. An average earnings per fortnight for the twelve week period was taken for the purpose of calculating the rates of pension payable to Mr. and Mrs. Kelly.
(d)In a data matching exercise in which Christine Kelly’s declared income to Centrelink was compared with her gross income for tax purposes, it was discovered that for the financial year ending 30 June 2000, Mrs. Kelly had declared total income of $11,118 to Centrelink, but had received wages totalling $16,774.
(e)Centrelink then obtained copies of Mrs. Kelly’s payroll records from her employer going back to 29 June 1996. A recalculation was then done to determine the various rates of pension which should have been paid to Mr. and Mrs. Kelly from mid-1996, based on the payroll figures. It was discovered that Mr. and Mrs. Kelly had been paid more than they were entitled to. Steps were taken to raise and recover the overpayments to each of them.
5. The calculation of the overpayments was marred by some errors in the method of making the calculations. The errors caused a good deal of suspicion and lack of confidence in the minds of Mr. and Mrs. Kelly. The different figures being given for the amount of the debt also made them feel that the claim by Centrelink that a debt was owing did not have any proper basis. Geoffrey Kelly became very upset emotionally because he believed that he and his wife were being unfairly accused of being dishonest.
6. The debt was originally calculated to be $3,250.71 each, based on fortnightly pay periods. The debt was then recalculated to reflect the fact that Christine Kelly had been filing income notices every 12 weeks, not fortnightly. This re-assessment resulted in a figure for the debt of $3,222.99 each.
7. It was then discovered that the person who had calculated the rates of payment had omitted to take into account the fact that Mr. and Mrs. Kelly had a dependent child. There were also some other minor matters relating to Mrs. Kelly’s earnings and some combined financial investments. On 20 November 2003, the debts were recalculated to be $1,785.20 each.
8. When this matter was heard by the Social Security Appeals Tribunal the figure for the debt stood at $1,785.20 each.
9. On the day of this AAT hearing, 28 May 2004, the Tribunal heard evidence from Henry Charles Burns, an employee of Centrelink, a “debt prevention monitoring officer”. Mr. Burns had inspected the files of Mr. and Mrs. Kelly and re-calculated the debts. He discovered that when the third calculation was done in November 2003, to take into account the dependent child of Mr. and Mrs. Kelly, the dependent child was counted twice. Mr. Burns recalculated the debts by taking into account the dependent child once only and the 12 week notification period. He arrived at a debt of $2,455.81 for each of Mr. and Mrs. Kelly.
10. At the hearing, the advocate for the Respondent, Ms. Joy Hamilton, conceded on behalf of the Respondent that recovery of the difference between the true debt $2,455.81 each and the figure initially before the tribunal $1,785.20 should be waived.
11. The overpayments are currently being recovered at the rate of $10 per fortnight each.
12. Christine Kelly, acting for both herself and her husband, submitted that the circumstances of their cases were sufficiently special to warrant waiving the right of the Commonwealth to recover any of the debts. She submitted:
(a)Geoffrey Kelly suffers from Multiple Sclerosis. He has chronic pain syndrome, severe obstructive sleep apnoea and other problems. He has difficulty coping with the pressures of life.
(b)The imposition of this debt has been extremely stressful for Mr. Kelly. He believes that his family has done nothing wrong and is being unfairly victimised.
(c)The imposition of these debts has placed such a strain on the marriage that Mr. Kelly now sleeps in a shed in the backyard. He has become too volatile to live with.
(d)Mrs. Kelly fears for Mr. Kelly’s future psychiatric wellbeing if these debts are not waived.
(e)Although they own their own home, the imposition of the debt will place increased pressure on an already fragile financial position.
13. With the passing of time, the documents submitted by Christine Kelly every 12 weeks during the period under review, have been destroyed. However, the computer records remain. Those records show the rates of pension paid and the notified income of Mrs. Kelly upon which those rates were based. For example, the records show that on 5 November 1996 Centrelink was notified that Mrs. Kelly earned “LAST 12 WEEKS $1424”. The payroll records from Mrs. Kelly’s employer show for the 12 week period the following gross earnings.
2 Nov 1996 $276.20 14 Sept 1996 $200.55
26 Oct 1996 $120.33 7 Sept 1996 $ 66.85
19 Oct 1996 $120.33 31 Aug 1996 $ 66.85
5 Oct 1996 $151.20 24 Aug 1996 $201.06
28 Sept 1996 $155.87 17 Aug 1996 $ 66.85
21 Sept 1996 $254.03 10 Aug 1996 $ 66.85
There were also some small bonuses and allowances. The total of earnings for the 12 week period was just over $1700, which is clearly in excess of the declared amount of $1424 on which the pension was calculated.
14. I have not done the exercise for all of the 12 week periods but Mr. Burns has. He gave evidence that he checked the figures when he did his re-calculation of the overpaid amounts.
15. I am satisfied that Geoffrey Kelly and Christine Kelly were overpaid pensions between 14 November 1996 and 5 June 2001, in the sum of $2,455.81 each.
16. There is no claim by the Secretary that Christine Kelly was dishonest in any way. I make no comment about that. However, the fact remains that Mr. and Mrs. Kelly received more pension than they were entitled to over about 4½ years and the overpayment represents a debt to Centrelink which should be repaid.
17. There has been some criticism of Centrelink by Mr. and Mrs. Kelly to the effect that Centrelink should have somehow been more vigilant and picked up the debt sooner. I do not understand that criticism. Centrelink acted on the figures supplied by Mrs. Kelly and the figures were wrong. Mr. and Mrs. Kelly should accept a high proportion of the blame for the debt. They should also realise that if the correct figures had been supplied, they would not have received as much pension as they did over the 4½ years.
18. I feel a great deal of sympathy for Geoffrey Kelly so far as his debilitating illness is concerned. However, to suggest that Centrelink is in some way responsible for aggravating his illness and that that is a reason for waiving the right of the Commonwealth to recover the debt, is, in my view, not a reasonable proposition. Whilst it is true that the calculations of the debts should have been handled better, Centrelink is in no way responsible for creating the debts.
19. In my view the Respondent has been very generous in waiving the right to recover the full amount of the debts ($2,455.81 each), leaving them at $1,785.20 each. The Respondent has also been generous in re-claiming the debt by way of withholdings at the almost insignificant level of $10 per fortnight each.
20. Section 1237AAD of the Act allows for waiver of the right to recover the debt in “special circumstances”. It reads:
“Waiver in 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.”
21. There are no circumstances sufficiently special to warrant the waiver of the right to recover the debt.
22. The decisions to raise and recover debts of $1,785.20 from each of Geoffrey John Kelly and Christine Joy Kelly are affirmed.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller
Signed: .....................................................................................
C. O’Donovan, AssociateDate/s of Hearing 28 May 2004
Date of Decision 22 June 2004Applicant Mrs. Kelly, herself
Respondent Ms. J. Hamilton, departmental advocate
0
0
0