Kilinckiran and Secretary, Department of Family and Community Services

[2005] AATA 217

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 217

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/273

GENERAL ADMINISTRATIVE DIVISION

Re:         HATICE KILINCKIRAN

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             15 March 2005

Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) G.D. Friedman
  Member

SOCIAL SECURITY - disability support pension - incorrect notification of earnings - overpayment - debt to Commonwealth - waiver of debt - write-off of debt - data matching legislation 

Data-Matching Program (Assistance and Tax) Act 1990 ss 6, 7

Social Security Act 1991 ss 132, 1064(4), 1072, 1223(1), 1223(5), 1224(1), 1236, 1237A(1),

1237AAD

Social Security (Administration) Act 1999 s 208

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

REASONS FOR DECISION

15 March 2005  G.D. Friedman, Member

1.      This is an application by Hatice Kilinckiran (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 15 January 2004.  The SSAT affirmed a decision of an authorised review officer of Centrelink dated 25 August 2003 to raise and recover a debt of $28,158.51 arising from an overpayment of disability support pension (DSP) between 25 January 1996 and 22 April 2003 (the relevant period).    

2.      At the hearing on 2 September 2004 and 23 February 2005 Ms D. Rasheva of counsel, instructed by Victoria Legal Aid, represented the applicant, with the assistance of an interpreter in the Turkish language.  Mr D. Perdon, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T49), plus three exhibits (Exhibits A1-A3) tendered by the applicant and one exhibit (Exhibit R1) tendered by the respondent.

BACKGROUND

4.      The applicant received DSP from 25 January 1996 and the amount was calculated on the basis of a combined annual income of $18,720.  In a recipient notice dated 18 January 1996 Centrelink advised the applicant that she was required to notify Centrelink if her combined annual income changed or exceeded $360 per week.

5.      On 27 February 1997, in an application to continue DSP while temporarily overseas, the applicant stated that she and her husband did not receive any income from earnings.  She failed to notify Centrelink whether her income had changed since the most recent advice from Centrelink.

6.      On 2 April 1997 and 4 July 1997 Centrelink sent further recipient notices to the applicant.  

7.      On 5 May 2003 a data match with the Australian Taxation Office (ATO) showed that the salary income for the applicant’s husband was $38,153 in 2001/2002 which was not disclosed to Centrelink.  The data match also showed that between 1995/1996 and 2001/2002 Mr Kilinckiran’s gross annual earnings had varied from $26,283 ($505 per week) to $42,300 ($813 per week).  On 9 May 2003 Centrelink decided to raise and recover a debt of $28,535.56. On 26 June 2003 Centrelink reviewed the applicant's debt, increasing it to $29,411 which was the amount by which the applicant’s DSP exceeded her entitlement between 16 November 1995 and 22 April 2003.  On 25 August 2003 an authorised review officer varied the decision and decided to raise and recover a debt of $28,128.51 for the period commencing on 25 January 1996, which was the first payday after the first valid recipient notice was sent to the applicant, and ending on 22 April 2003.

8.      On 14 November 2003 the applicant sought review of the decision by the SSAT.  On 15 January 2004 the SSAT affirmed the decision.  The applicant lodged an application with the Tribunal on 25 February 2004 for review of the SSAT decision.

9.      The issue before the Tribunal is whether the applicant has a debt to the Commonwealth, and if so, whether the debt should be waived or written off. 

EVIDENCE

10.     In an undated written statement received by the Tribunal on 25 June 2004 the applicant said that, in 1995 when she applied for DSP, she was assisted by an employee of Dianella Community Services (Dianella), but she does not recall either this person or any officer of Centrelink explaining to her that she was obliged to notify Centrelink of any changes to her husband’s income.  She said that she does not recall receiving any documents in Turkish that explained her obligations to Centrelink.

11.     The applicant stated that she recalls receiving several letters from Centrelink during the relevant period, but as she does not speak or understand English she took no action, other than asking her daughter and an employee of Dianella to explain the contents to her.  She said that she attended various medical appointments and was assisted by a Turkish interpreter, but was never asked questions about her husband’s earnings, or advised of the need to inform Centrelink of any changes in his income.  The applicant emphasised that she suffers from a number of medical conditions and has become extremely anxious at the prospect of repaying a large sum of money to Centrelink.

12.     In oral evidence the applicant stated that when lodging forms with Centrelink she did not understand the requirements or the processes involved, even when an interpreter was provided to assist her.  She told the Tribunal that she was not aware, and no officer at Centrelink suggested, that she could ask Centrelink to send her documents in Turkish.  She stated that, because of her medical conditions and lack of knowledge of English, she is unable to work.

13.     In a letter dated 3 June 2004 (Exhibit A2) Ms M. Bagdas, former employee of Dianella, stated that the applicant does not speak, read or write English.  Ms Bagdas said that the applicant would not and could not intentionally mislead Centrelink because she is honest and her cultural background requires her to respect government departments or face serious consequences.  Ms Bagdas stated further that the applicant sincerely believed that Centrelink had access to income details through the ATO each year, and that she was receiving her entitlement.  Ms Bagdas referred to financial hardship faced by the applicant and her husband, and said that the matter is having a detrimental effect on the applicant’s physical and emotional well-being.

CONSIDERATION OF THE ISSUES

14. Payment of DSP is subject to an income test and is affected when a partner’s income exceeds a threshold (s 1064(4) and s 1072 of the Social Security Act 1991 (the Act)). Section 132 of the Act, in force at the relevant time, provided that a person receiving DSP must notify Centrelink within 14 days of any changes in circumstances (including changes to the amount of combined income).

15. The Data-Matching Program (Assistance and Tax) Act 1990 (the Data Matching Act) provides:

6(1)        Subject to subsections (2) and (3):

(a)data about persons may be transferred between agencies; and

(b)data about persons may be matched or otherwise dealt with by the matching agency or the tax agency; and

(c)the results of the matching may be given to source agencies;

in accordance with the data matching program made up of data matching cycles the steps in which are set out in section 7.

(2)          There are to be no more than 9 data matching cycles in any one year.

(3)          Only one data matching cycle is to be in progress at any one time.

Section 7 of the Data Matching Act lists seven steps in the data matching cycle. Step 3 provides:

STEP 3

7.        The tax agency uses tax data from not more than the 4 financial years immediately before the current financial year and data given to it under Step 2 to find out the following available data in respect of each person who has a tax file number:

(a)tax file number;

(b)personal identity data;

(c)declared income;

(ca)the date of the most recent assessment under the Income Tax Assessment Act 1936 of the person’s declared income;

(cb)the amount of spouse rebate;

(d)surname and any other name or initial of any other name of a spouse in respect of whom spouse rebate is claimed;

(e)surname and any other name or initial of any other name of any spouse of the person.

8.        The tax agency gives the matching agency the data found out under paragraph 7 and any identification numbers for the purposes of personal assistance of the person.

8A.     If the tax agency gives the matching agency tax file numbers under paragraph 8, the tax agency may indicate to the matching agency which, if any, of those tax file numbers, according to the tax agency’s records, may have become known to, or used by, a person not authorised to know or use that tax file number.

16.     Ms Rasheva did not dispute that the applicant had been overpaid or the amount of overpayment.  However, she submitted that the debt should be waived because the overpayment was attributable solely to administrative error made by the Commonwealth.  She referred to a computer document, created by Centrelink on 7 December 1995, which listed an incorrect amount for her husband’s earnings, resulting in an error in her payments.  Ms Rasheva also noted that Centrelink failed to assist the applicant or properly advise her of her responsibilities and did not take into account her poor command of English.  Ms Rasheva emphasised that Centrelink failed to carry out a review or follow up of the applicant’s income and assets during the relevant period, and submitted that, if such a review had been undertaken, the overpayment would have been significantly lower.

17.     Ms Rasheva submitted that the applicant received the payments in good faith because she was not aware of her obligations during the relevant period.  Ms Rasheva also submitted that the applicant believed that Centrelink and the ATO were linked, so that Centrelink would be aware at all times of her husband’s income.  Ms Rasheva noted that the SSAT was satisfied that the applicant did not knowingly or deliberately fail to comply with her notification obligations.  She noted that Ms Bagdas described the applicant as an honest person.

18.     In respect of the overall circumstances of the case, Ms Rasheva submitted that special circumstances exist to justify waiver of the debt.  She referred to the applicant’s various medical conditions, her husband’s age and the likelihood that his employment may be discontinued in the near future.  She also said that the applicant and her husband face considerable difficulty in meeting their everyday living expenses and mortgage repayments.  Ms Rasheva submitted, in the alternative, that the debt should be written off in full or in part because of administrative error by Centrelink, the applicant’s financial circumstances and her medical conditions.

19. In written submissions made after the hearing, Ms Rasheva said that Centrelink is precluded from seeking to recover any part of the overpayment because, at the time the data match was carried out on 14 March 2003 (Exhibit R1, attachment A), Centrelink was only able to seek information regarding the applicant’s husband’s income for the preceding four years (Step 3 of s 7 of the Data Matching Act). She stated that on 14 March 2003 the current financial year was 1 July 2002 to 30 June 2003, so that, on 18 April 2000 (the date nominated by Centrelink after the initial data match), the 4-year limitation set out in Step 3 expired. Ms Rasheva said that this date was derived by adding four years to the commencement date of 18 April 1996, being the date (specified in T10, page 35) on which the applicant failed to advise of her husband’s earnings. She said that the request by Centrelink for information from 2001/2002 back to 1995/1996 was outside the provisions of the Data Matching Act.

20.     Ms Rasheva submitted that, for these reasons, Centrelink cannot recover any of the debt accruing prior to 2000/2001, and that the Tribunal should exercise its discretion to waive the remainder of the debt arising from 18 April 1996 to 18 April 2000, because Centrelink had failed to comply with enabling legislation.

21.     Mr Perdon submitted that the applicant was overpaid DSP for the relevant period, because her husband’s total income was not taken into account.  This was because the information provided by her regarding her husband’s actual income was incomplete and inaccurate.  As an example, he referred to the applicant’s statement of 27 February 1997 that neither she nor her husband had any income.  Therefore, the debt to the Commonwealth could not be attributable solely to administrative error by Centrelink.  Mr Perdon also submitted that the applicant did not receive the payments in good faith, because Centrelink had sent her notices during the relevant period advising of the requirement to notify it of changes in circumstances.  He submitted that there was no basis upon which the debt should be waived.

22. In respect of compliance with the Data Matching Act, Mr Perdon stated that Step 3 of s 7 of that Act is addressed to the ATO, whereas s 3 describes the respondent as an assistance agency and nominated officers of the respondent as the matching agency. He said that s 7 does not contain debt creation powers or recoverability provisions for social security law. Mr Perdon submitted that in this case the ATO only matched the 2000/2001 income year, which was within the 4 financial years prescribed in Step 3 of s 7.

23. Mr Perdon stated that the respondent made a number of enquiries of the ATO on 23 April 2003 (T9, page 26) in relation to several other financial years. He said the release of information by the respondent was made pursuant to a certificate issued under s 208 of the Social Security (Administration) Act 1999 (the Administration Act). He submitted that the recoverability of the debt is not limited to the four financial years before the data match in 2002/2003, nor is the respondent precluded from seeking recovery of any debts before 18 April 2000.

24.     In reaching its decision, the Tribunal takes into account the oral and written evidence and the submissions made by the parties.

25. The Tribunal notes the documentary evidence of earnings by the applicant’s husband during the relevant period. The Tribunal accepts the calculations made by Centrelink and finds that, under s 1223(1), s 1223(5) and s 1224(1) of the Act before 1 July 2002, and s 1223(1) of the Act after 1 July 2001, the DSP payments made to the applicant during the relevant period constitute an overpayment, resulting in a debt to the Commonwealth of $28,128.51.

26. In respect of the actions of Centrelink under the Data Matching Act, the Tribunal notes that s 7 of that Act refers to steps in the data matching cycle, but does not limit the respondent’s ability to recover monies. The Tribunal accepts the submission by Mr Perdon that s 7 does not contain debt creation powers or recoverability provisions for the social security law, and that, in the original data match of 14 March 2003, the ATO only matched 2000/2001 income, which was within the four financial years as prescribed in Step 3 of s 7 of the Data Matching Act. The Tribunal also accepts the submission by Mr Perdon that the release of information by the respondent to the ATO was made pursuant to a certificate under s 208 of the Administration Act.

27.     For these reasons, the Tribunal does not accept the submission by Ms Rasheva that Centrelink has failed to comply with enabling legislation and is precluded from seeking to recover any part of the overpayment.

28. Section 1236 of the Act provides for a write-off of a debt owed to the Commonwealth under certain circumstances. The Tribunal notes that the applicant’s husband is in full-time employment. The Tribunal finds that the applicant has the capacity to repay the debt by deduction from ongoing social security payments, and that the debt is not irrecoverable at law. Therefore, the circumstances for a write-off are not present.

29.     Section 1237A of the Act provides for waiver of a debt arising from 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

1237A(1A)     Subsection (1) only applies if:

(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

30. The Tribunal acknowledges that, after 18 January 1996, the respondent incorrectly maintained earnings of $360 per week instead of $390 per week as notified by the applicant. However, the Tribunal finds that from this date Centrelink sent recipient notices to the applicant under s 132 of the Act, informing her of information held by Centrelink concerning the amounts of her combined yearly income. The notices stated that she was required to inform Centrelink of any changes in circumstances. On her own evidence she did not read the notices carefully or actively seek the assistance of a family member or an interpreter. She provided incorrect information to Centrelink about her combined income.

31.     The Tribunal notes that the applicant has a poor understanding of English and the processes involved in the calculation of DSP.  However, on balance, the Tribunal is satisfied that the information provided to Centrelink by the applicant about her combined income in the relevant period was incomplete and inaccurate. Accordingly, the Tribunal finds that the applicant’s debt to the Commonwealth was not attributable solely to administrative error by the Commonwealth.  Therefore, the debt cannot be waived under s 1237A of the Act.  

32.     Section 1237AAD of the Act provides for waiver of the debt in certain other 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.

33.     In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the Tribunal held that the special circumstances, referred to in s 1237AAD(b), must be unusual, uncommon or exceptional.  The Tribunal takes into account that Centrelink has a range of material produced in the Turkish language, and that the applicant was a client of Dianella since 1995 and received assistance from that agency with her application for DSP.

34.     The Tribunal also takes into account the evidence from Ms Bagdas concerning the applicant’s character, her medical conditions, her level of understanding of English and the social security system, and her husband’s medical conditions and his employment situation.  The Tribunal notes the applicant’s financial situation and accepts that her dealings with Centrelink regarding the debt have caused anxiety and uncertainty for her.     

35.     On balance the Tribunal is satisfied that, although the applicant’s overall situation may have been difficult, the circumstances in this case are not unusual, uncommon or exceptional, and do not constitute special circumstances (other than financial hardship alone).  Therefore, the waiver provisions of s 1237AAD of the Act do not apply.

36.     Therefore, the applicant owes a debt to the Commonwealth in the amount of $28,128.51, which cannot be written off or waived.

DECISION

37.     The Tribunal affirms the decision under review.

I certify that the thirty-seven [37] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Dates of hearing:  2 September 2004

23 February 2005

Date of decision:  15 March 2005
Counsel for applicant:                  Ms D. Rasheva
Solicitor for applicant:                  Victoria Legal Aid  
Advocate for respondent:            Mr D. Perdon, Centrelink