Kop and Secretary, Department of Family and Community Services

[2005] AATA 963

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 963

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/1146

GENERAL ADMINISTRATIVE  DIVISION

Re:         ROBBERT KOP

Applicant

And:       SECRETARY,
  DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             3 October 2005

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) Regina Perton

Member

SOCIAL SECURITY – age pension – overpayment – recipient of Dutch pension – Dutch pension indexed and adjusted – failure to inform Centrelink of increases in income – variation of debt after SSAT decision ‑ waiver of debt – write‑off of debt ‑ whether special circumstances exist – decision under review affirmed

Social Security Act 1991 ss 1223(1), 1223(1AB), 1237A(1), 1237AAA, 1237AAD

Social Security (Administration) Act 1999 s180

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

Re Beadle and Director-General of Social Security (1985) 7 ALD 670,

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

REASONS FOR DECISION

3 October 2005  Regina Perton, Member

1.      Robbert Kop, now 77 years old, was born in the Netherlands and receives age pension from both the Australian and Dutch governments.  Under a bilateral agreement implemented on 1 April 1992, certain Australian residents who were born in the Netherlands are entitled to a part pension paid by the Dutch government.  The rate of Australian age pension is adjusted to take account of the Dutch income.    

2.      Mr Kop was granted the Dutch age pension on 1 August 1993 and the Australian age pension from 12 August 1993.  His rate of Dutch pension was regularly indexed.  On 15 April 2003, Centrelink, which administers programs for the Department of Family and Community Services, determined that Mr Kop had been paid a higher Australian pension than he was entitled to between 9 January 1997 and 8 April 2003.  Mr Kop was advised that, as a result of the overpayment, he owed a debt of $2,111.98 to the Commonwealth.  

3.      Mr Kop sought review of Centrelink’s decision.  On 14 November 2003, an authorised review officer affirmed the decision to raise and recover the debt.  On 1 March 2004, the Social Security Appeals Tribunal (SSAT) also affirmed the decision.  Mr Kop applied to this Tribunal for review of the decision on 4 October 2004.  After he lodged the application for review, Centrelink recalculated his debt amount as being $2,743.52.  Mr Kop has already repaid the $2,111.98 debt as initially calculated.

4.      Mr Kop believes that his debt, and that of others in the same position, should be waived as he argues that it has arisen due to a failure by Centrelink to honour an undertaking made in 1992.  Mr Kop, who is the spokesperson for the Associated Netherlands Societies in Victoria on matters pertaining to the bilateral agreement, provided extensive written material and oral evidence to the Tribunal detailing the dispute that he and others are having with Centrelink. 

5.      Mr Kop indicated that at community information sessions during 1992, Dutch and Australian government officials led attendees to believe that the Dutch government would keep the Australian agency informed about the actual entitlements of Australian residents receiving Dutch pensions.  Mr Kop submitted that there had been no suggestion that the Dutch pension recipients would have to provide individual information independently to Australian officials about their Dutch income.  He stated that the Dutch government had regularly informed Centrelink of the indexation of pensions but that this information had not been entered as data for individual Australian age pension recipients.  Mr Kop described the stress that Centrelink’s action had caused to the 4,000 or so persons on Dutch and Australian pensions, most of whom are now in their late seventies or older.  He stated that with no forewarning, these older persons found themselves saddled with an unexpected debt.  

6.      Mr Robert Elings, a retired air force officer whose parents were also affected, works as a volunteer helping older Dutch persons in similar situations to Mr Kop.  He gave oral evidence at the hearing at the request of Mr Kop.  He described the results of his investigations and his dealings with Australian authorities in an attempt to resolve the impasse between members of the Dutch Australian community and Centrelink.

7.      In this matter, the Tribunal is required to consider whether Mr Kop should have to repay the debt to the Commonwealth due to overpayment of his Australian age pension.  Mr Kop argues that the overpayment is not his fault but is due to Centrelink’s inaction in not recording the information it received from the Dutch authorities on the files of individual recipients.  Mr Kop said that he and the others believed that they did not need to inform Centrelink of changes to their rate of benefits as the data would be updated centrally.  Mr Kop concedes that he has been overpaid based on Centrelink’s calculations but points to the difficulties in checking the amount due to the changes in exchange rates and the lapse of time.  He submits that any debt that has arisen should be waived due to special circumstances.

8.      The specific issues to be considered by the Tribunal are:

·Does Mr Kop owe a debt to the Commonwealth?

·Did the debt arise solely because of a Commonwealth administrative error?

·Should the debt be waived on other grounds?

Is there a Debt to the Commonwealth?

9. During late 2002 and early 2003, at a time when Centrelink was introducing a computer-based system which automatically updated overseas pension information, checks were made of the pension payments of persons who received Australian and Dutch age pension. On reconciling Mr Kop’s records in April 2003, Centrelink found that he had been overpaid the Australian age pension from 9 January 1997 to 8 April 2003. The overpayment arose due to a failure to record increases in Mr Kop’s Dutch pension on his Centrelink file. The overpayment was calculated at $2,111.98. Section 1223(1) of the Social Security Act 1991 (the Act) allows the Commonwealth to raise a debt if a person is paid a social security payment to which he is not entitled. Section 1223(1AB) provides that a debt can be raised whether the payment was due to a computer or administrative error on the part of Centrelink or due to the actions of the recipient.

10. On 23 February 2005, Centrelink informed Mr Kop that it had recalculated the debt at $2,743.52. Centrelink stated that the error occurred due to the initial calculations being based on 40 per cent of the Dutch pension rather than the 44 per cent which Mr Kop is actually receiving. Section 180 of the Social Security (Administration) Act 1999 allows Centrelink to vary a decision after the SSAT has reviewed it but before the Tribunal has made its determination.  When that happens, the Tribunal is to consider the decision as varied as the reviewable decision. 

11.     Centrelink presented a detailed printout of its fresh calculations dated 16 February 2005.  Mr Kop pointed out that he was not in a position to challenge the amount due to the variations in exchange rate and pension payments over the period covered.  In the absence of any evidence indicating the fresh calculations by Centrelink are incorrect, the Tribunal finds that Centrelink overpaid Mr Kop and that he owes a debt of $2,743.52 to the Commonwealth .

Did the Overpayment Arise Solely because of a Commonwealth Administrative Error?

12.     Mr Kop argues that the debt arose due to Centrelink’s failure to utilise the information it received from Dutch authorities about pension rates.  He stated that during 1992, at information seminars on the recently introduced bilateral agreement, Dutch officials told the attendees that the Netherlands department responsible for age pension would keep its Australian counterpart informed about recipients’ entitlements.  Mr Kop quoted the Dutch officials as saying that the Australian Department of Social Security (as it was then named) would know more about a person’s Dutch entitlements than the recipient would.  Mr Kop indicated that the Australian officials who were present at those meetings did not demur from that observation.  Nor did they warn those present that they would need to individually inform the Australian agency about the amount received in Dutch pension.  Mr Kop also stressed his concern about the length of time Centrelink had taken to check pension amounts.  He pointed out that things would have been much easier for everyone if the overpayment had been identified at an earlier stage.  He stated that he had contacted Centrelink about other matters over the years and had not been asked to verify the amount of the Dutch age pension he and his wife received.

13.     Centrelink provided to the Tribunal and Mr Kop the text of letters sent to Mr Kop concerning his age pension.  On 20 September 1993, Centrelink wrote to Mr Kop to advise him of an increase in his pension and other matters.  In the letter Centrelink advised Mr Kop that if his and his wife’s combined income went above a specified level, he must tell Centrelink within 14 days.  He was also warned that if you are paid too much pension because you did not tell us what you were supposed to, you may have to pay back what you have been overpaid.  Centrelink sent similar letters to Mr Kop on 19 March 1994, 21 April 1994, 17 September 1994, 24 October 1994, 2 December 1994, 11 March 1995, 16 September 1995 and 7 May 1996.  While these letters preceded the debt period, they all contained the warning that Mr Kop was required to inform Centrelink of any increase in income above a specified level. 

14.     On 7 August 1996, Centrelink wrote to Mr Kop to advise him that his Australian pension rate had been lowered because his and his wife’s income had increased following his wife’s qualification for a Dutch age pension.  Among other things, Mr Kop was informed that he must tell Centrelink within 14 days if his and his wife’s combined annual income exceeded an amount specified in the letter.  His income in the following financial years exceeded the amount specified.

15.     On 25 July 2002, Centrelink discovered that Mrs Kop had been overpaid due to unrecorded increases in her Dutch pension.  It adjusted her Australian payments from that date.  Centrelink wrote to Mr Kop on that same day.  Mr Kop was advised that if his and his wife’s combined income exceeded a specified amount, he must inform Centrelink within 14 days.  Centrelink sent a similar letter on 23 December 2002.  As indicated earlier, Centrelink subsequently determined that Mr Kop had been overpaid for several years and raised a debt of $2,111.98.

16. Section 1237A(1) of the Act provides for waiver of a debt arising from solely from administrative error:

1237A(1)…. 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.

17. The Tribunal sympathizes with Mr Kop’s situation and his misplaced reliance on the comments made at the 1992 information sessions. The Tribunal is satisfied that Mr Kop acted in good faith and did not deliberately fail to inform Centrelink of increases in his income. However, the Tribunal does not agree with Mr Kop that the blame lies entirely with Centrelink. Centrelink sent many letters to Mr Kop over the years since he began receiving the Dutch and Australian age pensions. Each of the letters specified in paragraphs 13 to 15 spelled out the requirement to inform Centrelink if his and his wife’s combined income exceeded the level specified in the particular letter. Mr Kop did not do so. As a result, the Tribunal is not satisfied that the debt has arisen solely due to administrative error by Centrelink. Therefore, the debt cannot be waived pursuant to s 1237A(1) of the Act.

Should the Debt be Waived on Other Grounds?

18. Unless a debt arises solely out of an administrative error by the respondent resulting in an overpayment (s 1237A(1) above), or a debt is less than $200 and is not recoverable from social security benefits and the cost of retrieval outweighs the debt (s 1237AAA), or in certain other limited circumstances, none of which is applicable to Mr Kop, there is no discretion to waive a debt; unless s 1237AAD applies.

19. 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.

20. The Tribunal is satisfied that Mr Kop did not inform Centrelink about the increases in his and his wife’s income as he believed Centrelink already had that information. There is no evidence to suggest that Mr Kop deliberately withheld information from Centrelink. The Tribunal finds that Mr Kop did not knowingly make false statements or representations to Centrelink; nor did he deliberately fail to comply with a provision of the Act. He therefore meets the criteria in s 1237AAD(a) of the Act.

21.     Mr Kop submitted that his situation, and those of other pensioners similarly affected, should be described as special circumstances.  He stated that all were senior members of the community, most of whom had migrated soon after World War II.  Many of the people affected were unskilled and were not educated in English.  They relied on the information that they were given at the time the bilateral arrangements between the Australian and Dutch governments commenced.  He and Mr Elings also cited the length of time it had taken Centrelink to discover the overpayments as a factor to be taken into account.  They pointed out that had Centrelink undertaken more regular audits, it would have been much easier as the debt would have been smaller and easier for the person overpaid to repay.

22.     Mr Zita, representing Centrelink, submitted that there are no special circumstances that would justify waiving the debt.  He cited Re Beadle and Director-General of Social Security (1985) 7 ALD 670, in which the Full Federal Court looked at the term special circumstances in the context of extending the time to lodge a claim for an allowance for caring for a handicapped child.  The Full Court endorsed the approach taken in the Tribunal’s decision (Re Beadle and Director-General of Social Security (1984) 6 ALD 1) which stated that special circumstances must be unusual, uncommon or exceptional (at 4).  Mr Zita stated that Mr Kop is one of 4,000 Dutch pension recipients who have incurred similar debts out of more than 13,000 who have had their payments reviewed since 2002.  He indicated that similar reviews were conducted of Australian residents who received pensions from the United States of America, Canada and Austria, which resulted in a number of debts being raised for members of these groups.  On that basis, Mr Zita submitted that Mr Kop’s circumstances were not out of the ordinary or special.

23.     The Tribunal can understand why Mr Kop might feel frustrated and angry at the situation in which he and other Dutch pension recipients have found themselves.  No doubt, he would much rather have received a lesser fortnightly benefit over the almost six years during which he was overpaid, than incur the debt for the overpayment at the end of the period.  However, Mr Kop received moneys to which he was not entitled.  The Tribunal is required to consider whether it is desirable that he be allowed to retain the extra moneys that would otherwise be repayable to the Commonwealth on the basis of special circumstances (other than financial hardship alone).  

24.     For the Tribunal to use its discretion to determine that Mr Kop’s situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary.  In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases (at paragraph 26).  She was considering s 1237AAD which is the relevant section of the Act in this matter. Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case (at paragraph 26).

25.     The Tribunal is not satisfied that the situation that Mr Kop finds himself is vastly different from other social security recipients who have incurred debts due to misunderstanding or overlooking legislative requirements or mistakenly believing that Centrelink receives updated information from other sources, thereby absolving them of the requirement to inform Centrelink of increases in income.  The Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone). Hence, the waiver provisions of s 1237AAD of the Act do not apply.

26.     The Tribunal finds that Mr Kop owes a debt of $2,743.52 to the Commonwealth, of which $2,111.98 has already been repaid.

DECISION

27.     The Tribunal affirms the decision under review.

I certify that the twenty‑seven [27] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       (sgd) Olympia Sarrinikolaou

Clerk

Date of hearing:  9 March 2005
Date of decision:  3 October 2005
Advocate for applicant:                Self-represented
Advocate for respondent:            Mr W Zita, Centrelink