Kennett and Department of Family and Community Services - [2001] AATA 642

DECISION AND REASONS FOR DECISION [2001] AATA 642

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2000/460

GENERAL ADMINISTRATIVE DIVISION       )
           Re      KYLIE KENNETT
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr D.J. Trowse (Member)

Date10 July 2001
PlaceAdelaide

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 14 November 2000, and in substitution therefor, decides that the applicant is not liable to repay the debt of $3,3361.77.
     (Signed)
  D.J. TROWSE
  (Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Parenting Allowance – overpayment – departmental error – payment received in good faith – waiver due to administrative error
Social Security Act 1991 ss. 1223, 1224, 1236, 1237, 1237A, 1237AAD
Re Stewart and Secretary, Department of Family & Community Services [1999] AATA 552
Haggerty v Department of Education, Training & Youth Affairs [2000] FCA 1287
Secretary, Department of Education, Employment, Training & Youth Affairs v Prince (1998) 152 ALR 127

REASONS FOR DECISION

10 July 2001 Mr D.J. Trowse (Member)

This is an appeal by Mrs Kylie Kennett (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 14 November 2000 which affirmed a decision of a delegate of the respondent dated 5 September 2000, which had been affirmed by an authorised review officer on 5 October 2000, to raise and recover a debt of $3,511.15 representing an overpayment of Parenting Allowance paid throughout the period 30 January 2000 to 25 August 2000. After the conclusion of the hearing, the Tribunal was advised that upon checking its calculations the respondent had reduced the amount of indebtedness to a figure of $3,336.77.
The Tribunal received into evidence the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, together with six exhibits. Additionally, the Tribunal heard evidence from the applicant, her husband, Mr Malcolm Kennett, and Ms Eileen Phipps, an employee with Centrelink at the Adelaide Call Centre. The applicant was represented by Mr M. de Rohan of the Legal Services Commission of South Australia and the respondent was represented by Mr J. Underwood, an advocate on its behalf.
The relevant legislation pertaining to the overpayment of benefit and the recovery thereof is found in the following sections and sub-sections of the Social Security Act 1991 (the Act):
"1223(5)        If:
(a)an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment that should have been paid to the person;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
…
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 the social security law or this Act as in force immediately before 20 March 2000 or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth.
…
1236(1)         Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A)        The Secretary may decide to write off a debt under subsection (1) if, and only if:
          (a)       …
          (b)       the debtor has no capacity to repay the debt; or
          (c)       …
          (d)       …
…
1236(1C)        For the purposes of paragraph (1A)(b), if a debt is recoverable by means of deductions from a person's social security payment, the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
…
1237(1)          On behalf of the Commonwealth, the Secretary may waive the Commonwealth's right to recover the whole or a part of a debt from a debtor only in circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD.
…
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.
…
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 knowlingly:
(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."
Notably, the submissions made regarding the possible application of sub-sections 1236(1A) and 1237AAD were but faintly put to the Tribunal. It is fair to say that both parties placed their emphasis on matters directed to the issues of administrative error by the Commonwealth and whether the payments in question were received by the applicant in good faith. Furthermore, it seems that, notwithstanding the preparedness of the authorised review officer to accept the existence of some administrative error, the respondent presented to this Tribunal on the basis of it being free from all error. Of additional interest is the decision of the SSAT that, irrespective of the debt arising solely from the respondent's error, the payments were not received in good faith. That conclusion was reached on the basis that it was reasonable in the circumstances for the applicant to assume that she was being incorrectly paid.
history of the matter and applicant's evidence
The following twelve paragraphs represent a recital of the pertinent facts and the relevant evidence presented by the applicant.
The applicant, who is aged 30 years, is married with two young children. The existence of physical disabilities had impeded upon the husband's ability to find permanent employment and, consequently, he was in receipt of a Government Newstart Allowance up until he located a full-time position on 24 January 2000. Occupation wise, the applicant was unemployed.
For the period prior to 24 January 2000, the applicant was in receipt of a fortnightly Parenting Payment calculated at the higher rate. That increased entitlement was the result of her husband's receipt of the Newstart Allowance from the respondent.
Having been notified of the husband's employment, the respondent wrote to the applicant on 28 January 2000 advising that "We cannot pay you the higher rate of Parenting Payment at this time" and "You may still be eligible for part of the higher rate of Parenting Payment and we will be sending you a form which will allow us to work out how much we can pay you".
Within days of 28 January 2000, the applicant received in the post two requests for information, both of which had their origin in the change of financial circumstances resulting from the husband's full-time employment. One form related to the assessment for Parenting Payment and the other to a determination of Family Allowance/Childcare Assistance.
According to the applicant, those forms, duly signed and completed with one exception, were taken by her and her husband to the Modbury office of Centrelink on 16 February 2000 for lodgement. Also in the applicant's possession at that time was a letter of employment recently received from her husband's current employer which, inter alia, indicated an annual salary entitlement of $24,054. The applicant's evidence was that the interviewing officer at the Modbury office took from her the two forms, one of which remained incomplete, together with a copy of the employment letter and, probably, copies of pay slips covering some casual wages derived by her husband during the period 6 December 1999 to 28 January 2000.
A copy of the form pertaining to the assessment of Parenting Payment which was before the Tribunal shows that, Question 5 headed "Your partner's employment detail" was replied to by someone other than the applicant or her husband. The answer to the question sets out the name of the husband's new employer and details of casual earnings received by him prior to the commencement of the full-time position. With some difficulty, the person completing Question 5 proceeded to strike a fortnightly average income of $523.31 which was then extended to a futuristic per annum amount of $13,606. It is that figure that was applied in calculating the fortnightly Parenting Payment of about $300. Unfortunately, that calculation overlooked the replacement of casual wages with the promised annual income of $24,054. It is clear that, had the husband's estimated income been correctly determined, the applicant would have received only the base Parenting Allowance of $66.20 per fortnight and thus the overpayment.
It was the applicant's testimony that the letter of employment indicating the annual salary of $24,054 and, probably, the pay slips covering past casual earnings were made available to the interviewing officer and that she clearly remembered his obtaining of a photocopy of the letter for retention. Possessed of that information, the officer purportedly told the applicant and her husband that he would complete the answer to question 5 after their departure.
The issue of the husband's income was again raised in the form relating to Family Allowance/Childcare Assistance. Question 7, which called for an estimate of the husband's 1999/2000 taxable income and required a reference to casual earnings, Newstart Allowance and permanent wages for the broken period January 2000 onwards, was answered incorrectly by the inclusion of the per annum wage of $24,054 plus Newstart Allowance.
An ancillary reason for the visit to the Modbury office was the obtainment of a statement setting out details of benefits paid and which was needed by the Housing Trust of South Australia in connection with a regular assessment as to amount of rental to be charged for housing provided to the applicant and her family. The form so procured revealed that the last fortnightly payment of Parenting Allowance received by the applicant amounted to $281.20.
Information before the Tribunal recorded the following payments of parenting benefits occurring on and after the interview at the Modbury office:
Remittance Date  Amount
16.2.00  $281.20
20.6.00  $311.10
3.7.00  $311.10
29.8.00  $311.10
5.9.00  $46.15

Also, it appears that the applicant received a Parenting Allowance of $66.20 on 15 February 2000 and for which an information statement was issued for Housing Trust purposes. The reduction in amount is explained by the suspension of the additional benefit during the re-assessment period. Immediately thereafter, the benefit was reinstated, albeit incorrectly, to its formal level.

The payment advice notices forwarded to the applicant at the time of the above remittances indicated under the heading "information used for calculating your regular payment" various factors including her partner's annual income. The amounts so stated were $13,606.06 for the four first mentioned payments and $23,999.82 for the one made on 5 September. The notices covering the four initial payments also instructed the applicant to contact Centrelink in the event of her partner's total personal income exceeding $523.31 per fortnight in the February advice and $530 for the other three.
While unaware of the methodology applied in arriving at the figure of $13,606, the applicant recognised the incorrectness of the statement and, after discussion with her husband, decided to query the matter with Centrelink. The evidence attested to by the applicant was that she telephoned Centrelink within days of receiving the four notices previously referred to and pointed out that the annual income should be $24,054 and not the $13,606 as stated. The applicant's testimony was that, on all occasions excepting the call relating to the August notice, she was told that the incorrect amount of annual income would be rectified and that everything else was in order. The applicant stated that, against that background and the prior provision of financial information to Centrelink, she perceived the amount of $13,606 as being no more than a typographical error and that the amount of Parenting Benefit had been calculated on the basis disclosed to the respondent. that is, an annual income of $24,054. According to the applicant, that belief persisted until the time of her phone call following the receipt of the notice dated 29 August 2000. It was then that Centrelink canvassed for the first time the probability of overpayment.
evidence of malcolm kennett
Mr Kennett told the Tribunal that he was the husband of the applicant and supplied details of his employment which accorded with those previously outlined.
He confirmed that he and his wife attended at the Modbury Centrelink office on 16 February 2000 and that they had submitted to an officer in attendance the forms relating to the assessment of Family Allowance/Childcare Assistance and Parenting Payments, together with the letter of employment detailing his commencement salary of $24,054 per annum.
The witness stated that the interviewing officer informed him and his wife that there was no need to complete question 5 of the Assessment for Parenting Payment form as the required information could be gained from details already supplied by them. Mr Kennett deposed that the quantum of future entitlements was discussed with the officer who indicated that Parenting Payments would continue at a rate similar to those paid in the past, that is, $281.20 per fortnight.
The Tribunal was told by Mr Kennett that he was aware of his wife's receipt of the notices bearing the incorrect data and that, between them, it was agreed that his wife make contact with Centrelink in an effort to have the mistake rectified. On all occasions his wife reported that she had made the request to have the annual income amount altered and that she had been assured that all other matters were in order. It was that outcome which, when taken in conjunction with the forecast made by the interviewing officer at Modbury and the financial detail previously made available, allayed the notion that the amount being received was excessive.
evidence of ms eileen phipps
Ms Phipps stated that she had worked for Centrelink and its predecessor, the Department of Social Security, for 25 years and that, since 1999, she had been employed at the Adelaide Call Centre of Centrelink. It was explained that the function of staff engaged in the Centre was the answering of customer inquiries and the updating of their computer records in accordance with information received.
The witness described the need for Call Centre staff to access, in certain circumstances, computer records in answering client inquiries. If entry is made, the access is automatically logged and given a receipt number. As part of that same process, a record is maintained of the particular information screens referred to by the staff operator. According to Ms Phipps, it is the nature of the query raised by the client that will determine the selection of the particular information screen. In the opinion of the witness, an inquiry of the kind outlined by the applicant would have necessitated an access by the operator to the EANS (Earning) screen and probably the PIAS (Pension Income and Asset Summary) screen within the computer.
Ms Phipps referred to the computer log maintained in connection with calls received from the applicant and, in particular, to calls occurring at about the times the applicant allegedly rang regarding her complaint as to the error made in the statement of her husband's annual income. The witness expressed the view, based on the absence of any log mention of the screens EANS and PIAS for calls on and about 16 February, 20 June and 3 July, that any calls made at those times did not raise the issue claimed by the applicant. Access to the EANS screen was made on 5 September and it was that entry and the disclosure by the applicant that located the overpayment.
submissions
Notwithstanding the applicant's acknowledgment that she is indebted to the Commonwealth in terms of sub-section 1223(5) of the Act, it was contended on her behalf that the debt was attributable solely to administrative error by the Commonwealth and that she had received the offending payments in good faith. On that basis, it was submitted that, in terms of sub-section 1237A(1) of the Act, the Secretary was required to waive the right to recover the amount of $3,336.775. Alternative and less pressing submissions were made regarding the possibilities of write off - sub-section 1236(1A) - and of waiver in special circumstances - section 1237AAD.
The representative of the respondent presented to the Tribunal the following alternative submissions:
(a) that the debt arose by reason of:

the applicant making a false statement in the form of Assessment for Parenting Payment; and/or
the applicant's failure to advise Centrelink of the fact that her partner's fortnightly income exceeded the limits expressed in the payment notices received by her;
and, thus, the debt was created by sub-section 1224(1) of the Act and not sub-section 1223(5).
(b)that the debt was not attributable solely to an administrative error nor did the applicant receive the amount in question in good faith. In those circumstances, it was said that the waiver obligation placed upon the Secretary in sub-section 1237(1) of the Act had no application.
(c) that, in the circumstances of this reference, it was not appropriate to invoke the provisions of sub-section 1236(1A) and section1237AAD of the Act.

Clearly, the submissions outlined in (a) above proceed from the respondent's rejection of the evidence tendered re the lodgement of the employment letter stipulating the annual salary of $24,054 and the occurrence of the telephone communications that the amounts stated in the payment notices were wrong. Also, it appears that the respondent viewed the figure of $24,054 mentioned in the form of request concerning Family Allowance and, supposedly, representing the husband's estimated taxable income for 1999/2000, as being inaccurate to the point of not being suitable for use in the determination of the Parenting Allowance. The suggestion that there existed a lack of good faith has its origin in the proposition that the situation was such that the applicant must have known that the amount being received was excessive and, in taking that view, the respondent appears to have placed some emphasis, unduly in the opinion of the Tribunal, on the substantial variance between the transitional payment of $66.20 and the subsequent remittances of $281.20 and $311.10.
discussion and findings
The first matter to be considered relates to the credibility of the applicant and her husband and the veracity of their accounts as to their dealings with the respondent and its officers. The Tribunal found them to be impressive witnesses and accepts them to be witnesses of truth and their accounts to be honest and accurate.
Based on the acceptance of the evidence attested to by the applicant and her husband, the Tribunal makes the following findings:

that Mr and Mrs Kennett attended at the Modbury office of the respondent on 16 February 2000 and that they handed to an officer of the respondent – a completed form of Request for Income and Asset Details regarding Family Allowance – a partially completed form pertaining to Assessment for Parenting Payment – and the letter of employment which indicated a salary of $24,054 per annum commencing from 24 January 2000.
that question 5 of the Assessment for Parenting Payment was filled in by an officer of the respondent.
that, having regard to the matters discussed, Mr and Mrs Kennett left the Modbury office with an expectancy of receiving continuing Parenting Payments at a fortnightly rate, similar to that previously paid.
that Mrs Kennett telephoned the office of the respondent on the occasions indicated in her evidence and, at those times, pointed out to the other party the errors appearing on the payment notices, and
that, in the course of the above telephone conversation, Mrs Kennett was advised that the incorrect annual income figure would be amended and that all other matters were in order.

The testimony of Ms Phipps and, in particular, the reliance by the respondent on the Computer Record Access Monitor Reports (CRAM Reports) as a record of events requires attention. On this issue the Tribunal finds itself in agreement with the following comments made by Senior Member J.A. Kiosoglous MBE in the case of Re Stewart and Secretary, Department of Family & Community Services [1999] AATA 552:
"… The Tribunal considers that where a discrepancy arises between a customer's version of events and the CRAM details, preference should not automatically be given to the CRAM report over the evidence of a customer. The nature of the Department's Call Centre, and the volume of the enquires it deals with create a large number of variables which must be taken into account. Whilst it may be possible to give evidence as to what is supposed to be said to customers, it is not possible in most cases to say what was actually said. In such cases, the Tribunal considers that it should base its findings on an assessment of the credibility of the customer. If the customer is found to be a credible witness, then this should take preference over the computer records. If however there are some discrepancies which the Tribunal is satisfied, on all the evidence, cast doubt on the accuracy of the customer's version, then preference should be given to the Department. …"

Additionally, the Tribunal is fortified by the consistency of the applicant's evidence on this issue and refers specifically to the note made by the respondent at the time of the phone call made by the applicant on 5 September 2000 and which, when translated into longhand, reads "client rang 5/9/00 to advise partner on traineeship since January 2000 earning $24,000 pa. Has rang previously she stated but nothing updated."

The respondent's censuring of the applicant for not complying with the payment notification that contact should be made if fortnightly earnings exceed certain pre-set limits calls for comment. Bearing in mind the prior advice of the annual income figure of $24,054, there has been no change in financial circumstances and, thus, one is left to ponder the logic of repeating the same information. Certainly, the applicant could see no reason to re-advise data already in the respondent's possession. However that may be, the Tribunal is satisfied that the applicant did contact the respondent on the issue of annual income and that, accordingly, there was no failure or omission to comply with the provisions of the Act.
decision
The Tribunal is firmly of the view that the applicant had made available to the respondent all of the information necessary for the correct assessment of the Parenting Allowance. Furthermore, it is obvious that the overpayment occurring during the relevant period is the direct result of the respondent not accounting for the increase in earnings from the full-time position. This, in the opinion of the Tribunal, is a classical example of departmental error. Moreover, the Tribunal is satisfied that the applicant did not contribute to this erroneous situation.
In considering whether the monies were received in good faith, the Tribunal turns to the decision of French J in Haggerty v Department of Education, Training & Youth Affairs [2000] FCA 1287 for guidance. In that case, the learned judge had cause to examine what he called the Good Faith Criterion and his comments are of assistance:
"…
15. The criterion of receipt in good faith may be characterised as a positive one as counsel for the respondent submitted. That is not to say that a recipient of a mistaken payment must prove that he or she has considered the entitlement to the money and positively concluded that there is an entitlement. There is no question of an onus here to be met by the recipient who claims benefit of the mandatory waiver. Nor is there some twilight zone between good faith and want of good faith. …
16. Consistently with what his Honour [Finn J] said in the Prince case [Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1998) 152 ALR 127], want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non-entitlement in the mind of some imaginary recipient. …"
The Tribunal accepts the applicant's belief that she was duly entitled to the payments in question and, in doing so, has had regard to all the circumstances including the understanding gained at the Modbury interview that payments would continue at a similar level and, also, to the telephonic reply that all other matters were in order. On this basis, the Tribunal concludes that the payments giving rise to the debt were received in good faith. In this situation, the Tribunal finds that, in terms of sub-section1237A(1) of the Act, the Secretary must waive the right to recover the amount of $3,336.77.
In view of the above, the Tribunal sees no need to consider the submissions relative to debt write-off or the existence of special circumstances.
For the reasons stated, the Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 14 November 2000 and in substitution therefor decides that the applicant is not liable to repay the debt of $3,336.77.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Mr D.J. Trowse (Member)
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  31 May 2001
Date of Decision  10 July 2001
Counsel for the Applicant        Mr M. De Rohan
Solicitor for the Applicant         Legal Services Commission
Counsel for the Respondent    Mr J. Underwood
Solicitor for the Respondent    Centrelink