Koster and Secretary, Department of Education, Science and Training

[2006] AATA 544

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 544

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2005/163

GENERAL ADMINISTRATIVE DIVISION		)
Re		ALEXANDRA KOSTER

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, SCIENCE AND TRAINING

Respondent

DECISION

Tribunal Mr J G Short (Member)

Date23 June 2006

PlaceAdelaide

Decision The application to change the decision of the Social Security Appeals Tribunal made on 13 May 2002 is refused.

..............................................

J G SHORT
  (Member)

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – Youth Allowance – overpayment – whether applicant failed to notify Centrelink of her mother’s employment – recovery of debt – waiver – whether there has been an administrative error – whether there are special circumstances – decision affirmed

Social Security Act 1991 ss 559E(1), (2), (3), 561B(1), 1223(1), (5), 1237A, 1237AAD

Re Secretary, Department of Family and Community Services and Rowe [2001] AATA 152
Re Secretary, Department of Family and Community Services and Ringin [2002] AATA 281
Re Primo and Anor and Secretary, Department of Family and Community Services [2003] AATA 664

REASONS FOR DECISION

23 June 2006        Mr J G Short (Member)

1.      Alexandra Koster applied for Youth Allowance on 12 August 1999.  Payments of Youth Allowance were made to Ms Tanya Scobie’s account (Ms Koster’s mother).  In February 2000 Ms Scobie advised Centrelink of an increase in her income and at the same time surrendered her entitlement to Parenting Payment and Family Tax Benefit.  Centrelink did not action this advice on Ms Koster’s file and consequently Ms Koster’s Youth Allowance continued to be paid to Ms Scobie from at least 3 February 2000 until 17 October 2001.  The total amount paid during this period was at least $7,048.53. 

2.      Centrelink made a decision to raise and recover an overpayment of Youth Allowance in the sum of $7,312.81.  This last mentioned figure was amended by an Authorised Review Officer to a figure of $7,048.53.  The Social Security Appeals Tribunal (the SSAT) affirmed the decision to raise an overpayment, but decided that recovery of the debt should be delayed for 12 months.  This period has now elapsed.  Ms Koster argues that the debt should not have occurred and that recovery should now be forgiven (waived), primarily on the basis that Ms Koster’s mother provided relevant advice to Centrelink and thereafter neither Ms Koster nor Ms Scobie realised that Ms Koster no longer had an entitlement to Youth Allowance.

issues

3.      The issues are:

·whether Ms Koster has a debt payable to the Commonwealth in the sum of $7,048.53; and

·if yes, whether recovery of all or part of this debt should be forgiven.

does ms koster have a debt to centrelink of $7,048.53?

4.      Ms Koster said that her application for Youth Allowance was made at a time when she was under the age of 18 years.  She said that as the payments were made to her mother, she did not appreciate that she had a personal obligation to advise Centrelink of relevant changes of circumstances.  She considered that it was her mother’s obligation.

5. After approximately February 2000, when Ms Scobie increased her working time to 4½ days a week, her income precluded payment of Ms Koster’s Youth Allowance. Sub-section 1223(5) of the Social Security Act 1991 (the Act) applied to debts which accrued prior to 1 July 2001.  This sub-section was to the effect that any time a person received a Centrelink benefit which exceeded their entitlement, then the excess amount was a debt due to the Commonwealth.  In relation to debts accruing after 1 July 2001, the relevant provision is s 1223(1) of the Act and is to the same practical effect.  These sub-sections do not require fault in order to create a debt.  I find that Ms Koster was not entitled to receive payments of at least $7,048.53 paid between 3 February 2000 and 17 October 2001 and as a consequence this sum is a debt recoverable by the Commonwealth.

should recovery of all or part of the debt be forgiven?

6.      Ms Koster argued that the debt should not be recovered as it occurred solely as a result of administrative error on behalf of the Commonwealth.  Section 1237A of the Act provides for forgiveness or waiver of a debt which arose solely as a result of an administrative error made by the Commonwealth.  Ms Koster argued that as the payment of Youth Allowance was made to her mother’s account, then it was her mother who had an obligation to advise Centrelink of relevant changes in circumstances and that in fact her mother did provide such advice directly to Centrelink in early February 2000.  The implication is that any payments of Youth Allowance made thereafter were made because Centrelink was at fault in failing to action that advice in relation to payments made on behalf of Ms Koster.

7.      Ms Scobie said that she could not now recall whether, at the time she advised Centrelink that her income had increased, she also advised Centrelink that Youth Allowance payments, made in respect of her daughter, should be cancelled. 

8.      I was referred to a number of decisions of this Tribunal, including Re Secretary, Department of Family and Community Services and Rowe [2001] AATA 152. In that case, the Tribunal considered that the ultimate beneficiary of the funds (the child) was the recipient of the monies and that the parent into whose account the monies were paid, was a trustee of those monies, holding the monies on behalf of the child. The Tribunal went on to say that even if another person attempts to advise relevant changes in circumstances on behalf of a recipient, it does not alleviate the recipient child of the responsibility to notify Centrelink of relevant changes in circumstances. In Re Secretary, Department of Family and Community Services and Ringin [2002] AATA 281, Senior Member Handley considered s 561B(1) of the Act. This section permits the Secretary to issue recipient notification notices to any person on behalf of whom Youth Allowance is being paid. Senior Member Handley reached a view, which I share, that under this legislation the Secretary may issue recipient notification notices to a minor in circumstances where the payments are being made to a bank account controlled by a parent. Mr Handley concluded that the child is also the “recipient” for the purposes of the debt creation provisions.

9.      I follow the decisions of Re Rowe and Re Ringin and have reached the view that notwithstanding monies being paid to an account controlled by Ms Scobie for Ms Koster’s benefit, and notwithstanding that Ms Scobie provided some advice in relation to her circumstances in February 2000, nevertheless Ms Koster retained her obligation to advise Centrelink of relevant changes and as she did not do so it cannot be said that the debt arose solely as a result of administrative error.  In these circumstances I do not enter upon the field of discretion from where I may forgive recovery of all or part of the debt under s 1237A of the Act.

10.     Ms Koster also argued that I should consider the circumstances under which the debt arose, that is Centrelink’s treatment of Ms Scobie’s advice in relation to Ms Scobie’s employment, as giving rise to special circumstances which would warrant the favourable exercise of the discretion prescribed in s 1237AAD of the Act.  This section provides a discretion to forgive recovery of a debt if a decision-maker is satisfied that the debt did not arise, at least in part, from a debtor or another person knowingly making a false statement or failing to comply with the provision of the Act.  I am of the view that neither Ms Koster nor Ms Scobie knowingly failed or omitted to comply with a provision of the Act and consequently, if I am able to find special circumstances in this case which warrant the exercise of the discretion, I may forgive recovery of all or part of the debt.

11.     Ms Scobie referred to a decision of this Tribunal in Re Primo and Anor and Secretary, Department of Family and Community Services [2003] AATA 664. In that case the Tribunal did not refer to either Re Rowe or Re Ringin.  The Tribunal reached the view, in similar circumstances to those of Ms Koster, that a debt existed.  However, the Tribunal in that case decided that unusual or uncommon circumstances arose out of Centrelink’s failure to record information on all files in which that information may be relevant.  The Tribunal consequently decided to forgive recovery of debt.  A different conclusion in relation to special circumstances was reached in Re Ringin. 

12.     I was urged to find that special circumstances arose out of the way the debt occurred.  It was also submitted that Ms Koster had a significant HECS debt.

13.     Ms Koster signed a declaration on 12 August 1999 to the effect that the information contained in her application for Youth Allowance was complete and correct and that she would notify Centrelink in writing within 14 days of any changes to that information.  As mentioned, it was Ms Koster who was the recipient (in the sense of being the ultimate beneficiary), of Youth Allowance payments.  I do not consider special circumstances to arise out of the way in which the debt occurred.  I have also noted Ms Koster’s indication that she is in a reasonable financial position holding shares worth approximately $10,000, having a further $10,000 saved and an unencumbered car worth approximately $7,000.  While I accept that she has a significant HECS debt, approximating $30,000, I do not consider that special circumstances arise out of her financial circumstances.

14.     Having considered all of the evidence and all of the submissions made by and on behalf of Ms Koster, I am not satisfied that it would be appropriate in the circumstances of this case to exercise the discretion to forgive or waive recovery of all or part of the debt.  I am also not satisfied that it would be appropriate to write-off (delay) recovery of the debt although, as foreshadowed by Centrelink at hearing, it seems likely that the most appropriate way to recover the debt would be through periodic payments.

15.     The application is refused.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J G Short (Member)

Signed:         .............J Coulthard.........................................
  Associate

Date of Hearing  9 June 2006
Date of Decision  23 June 2006
Counsel for the Applicant         In person
Solicitor for the Applicant          -
Counsel for the Respondent     Mr C Goldsworthy
Solicitor for the Respondent     Centrelink Legal Services Branch