KRZYSZTOF GAGATEK and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2012] AATA 255

[2012] AATA 255

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/4529
Re	KRZYSZTOF GAGATEK
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT

DECISION

Tribunal	Senior Member C R Walsh
Date	1 May 2012
Place	Perth

Decision Summary

The Tribunal affirms the decision under review. 

....(sgd) C R Walsh..............

Senior Member C R Walsh

Catchwords

Social security – disability support pension – whether applicant overpaid disability support pension – whether overpayment a debt due to the Commonwealth – whether the Commonwealth’s right to recover the whole or a part of the debt should be waived – whether debt arose solely due to administrative error made by the Commonwealth – good faith – waiver in special circumstances – decision under review affirmed

Legislation

Social Security Act 1991 – section 117 - section 1064 – section 1223(1) - section 1237 – section 1237A – section 1237AAD

Social Security (Administration) Act 1999 – section 68

Cases

Lohner v Secretary of Social Security (AAT No S94/13, 22 November 1994)

Re Gerhardt and Secretary Department of Employment, Education and Training (AAT 10941, 17 May 1986)

Chapman and Secretary to the Department of Family and Community Services [2003] AATA 436

Pereira and Secretary Department of Employment and Workplace Relations [2007] AATA 1821 (2 October 2007)

Callaghan and Secretary, Department of Social Security [1996] AATA 413 (18 November 1996)

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

Groth and Secretary Department of Social Security (1995) FCA 1708

Re Ivovic and Director General of Social Services (1981) 3 ALN N95

Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25

Timothy Davy and Secretary Department of Employment and Workplace Relations 2007 AATA 1,114

Duarte; Secretary, Department of Family and Community Services [2000] AATA 927 (25 October 2000)

Director-General of Social Services v Hales (1982-83) 47 ALR 281

Secretary, Department of Social Security v Riddell 15 September 1993 No A93/62

Secondary Materials

Nil

REASONS FOR DECISION

Senior Member C R Walsh

1 May 2012

INTRODUCTION

1. Mr Gagatek seeks a review of the decision of the Social Security Appeals Tribunal (SSAT), dated 23 September 2012, which affirmed the decision of a Centrelink Authorised Review Officer (ARO), dated 26 July 2011, to raise and recover a disability support pension (DSP) debt of $18,151.70 for the period 16 September 2005 to 7 January 2010.   

2. The stated reasons for Mr Gagatek’s review application are as follows:

   “The decision is wrong and a different decision should be made.

   Solely as a result of an administrative error made by the Commonwealth, Centrelink overpaid the Applicant disability support pension because it had not taken his combined income fully into account when it calculated his rate of disability support pension, despite the Applicant providing all requested information. The Applicant did not contribute to the error.  The Applicant believed that he was entitled to the payments received during the debt period, at the rate paid, and received the payments in good faith.  The debt should be waived.

   Moreover, the Applicant did not at any stage knowingly make any false statements or representations or knowingly omit to comply with the Social Security Act.  In fact, the Applicant regularly/periodically provided evidence of his financial circumstances including his combined income.  There are also special circumstances in this matter to make it desirable to waive the debt including the Applicant’s poor medical condition (disability), financial circumstances, the Commonwealth’s error that solely and directly caused the miscalculation and the sever financial hardship it would place upon the Applicant if the Commonwealth sought to recover the debt.”

BACKGROUND FACTS

1. Mr Gagatek applied to Centrelink for a DSP on 18 August 2005.  In support of his application for DSP, Mr Gagatek provided Centrelink with a completed Centrelink Income and Assets form, signed by him and his wife and dated 17 August 2005, together with three of his wife’s payslips, to verify her income.

2. Centrelink’s computer records show that Mr Gagatek commenced receiving DSP on 16 September 2005 and that Mr Gagatek was sent a notice on 16 September 2005 that detailed the combined regular fortnightly assessed by Centrelink as being $464.97 and required that he advise Centrelink within 14 days if, among other things, his combined income increased.

3. On 10 August 2007 Mr Gagatek informed Centrelink that he had commenced full-time employment, 35 hours per week, at Chubb Security, earning about $16 per hour.  Centrelink records show that Mr Gagatek’s DSP was suspended, effective 10 August 2007, because of the number of hours he was working.

4. Thus, Mr Gagatek received DSP during the period 16 September 2005 to 10 August 2007 (First DSP Period).

5. Mr Gagatek work from 10 August 2007 until 6 September 2008 and his DSP was suspended during that period.

6. Centrelink records show that on 6 August 2008 Mr Gagatek contacted Centrelink about restoring his DSP and that his DSP was restored on 7 September 2008. 

7. On 10 October 2008 Mr Gagatek provided Centrelink with previous employment details showing that he ceased work on 6 September 2008 and advised Centrelink that his partner had ceased work with Gone Bazaar in November 2007.

10.  Following restoration of his DSP on 7 September 2008, Mr Gagatek continued to receive DSP until 7 January 2010, when Mr Gagatek notified Centrelink that he had commenced work with MSS Security (Second DSP Period).

11.  On 12 October 2010 a review of Mr Gagatek’s DSP payments was triggered by a data matching exercise with the Australian Taxation Office that identified Mrs Gagatek had earnings of $39,784, but Centrelink had assessed only $9,085.

12.  On 8 April 2011 Centrelink determined that, as a result of Centrelink not assessing the full amount of Mrs Gagatek’s earnings, Mr Gagatek had been overpaid DSP and, on 3 May 2011, notified him that the recoverable amount was $18,151.70.

13.  On 26 July 2011 a Centrelink ARO affirmed the decision to recover the amount of $18,151.70 from Mr Gagatek.

14.  On 23 September 2011 the SSAT affirmed the Centrelink ARO’s decision dated 26 July 2011.  Mr Gagatek seeks a review of that decision by this Tribunal.

ISSUES

15.  The issues for consideration by the Tribunal are as follows:

1. Was Mr Gagatek overpaid DSP; if so,

2. Is the overpayment is a debt due to the Commonwealth; and, if so

3. Should recovery of the whole or a part of the debt be waived?

Each of these issues is considered in turn below.

WAS MR GAGATEK OVERPAID DSP?

16.  The legislation relevant to application is contained in the Social Security Act 1991 (Act) and the Social Security (Administration) Act 1999 (Administration Act). 

17.  Section 117 of the Act provides that a person’s rate of DSP is calculated in accordance with section 1064 in Part 3.2 of the Act.  

18.  Section 1064 of the Act provides that a person’s rate of DSP is affected by their and their partner’s income.  A couple’s combined income will reduce the rate of DSP payable to a person.

19.  In support of his claim for DSP (on 18 August 2005), Mr Gagatek provided Centrelink with a completed Centrelink Income and Assets form, signed by him and his wife and dated 17 August 2005, as well as three of his wife’s payslips.  The Income and Assets form stated, under the heading “Your Partner”, that Mrs Gagatek had usual gross fortnightly earnings of $1,254.83 from the Ministry of Education and $122.50 from Gone Bazaar giving a total of $1,377.33 per fortnight.   One payslip from Gone Bazaar, for the period 14 July 2005 to 20 July 2005, showed gross earnings of $61.25.  Two payslips from two different sections within the Department of Education, for the period 15 July 2005 to 28 July 2005, showed gross earnings of $906.36 and $348.47 respectively.  Each of the three payslips was date stamped 18 August 2005 by Centrelink. 

20.  Whilst Mr Gagatek had provided sufficient information to Centrelink to correctly determine Mrs Gagatek’s income and, therefore, there combined income, Centrelink made an error and failed to code the full amount of Mrs Gagatek’s income.  It is not contested by the Secretary that Centrelink incorrectly recorded Mrs Gagatek’s earnings information initially supplied by Mr Gagatek in relation to his claim for DSP on 18 August 2005.  The Secretary’s contention before the Tribunal was that it was most probable that Centrelink arrived at the combined regular fortnightly income of $464.97 by using the income figures of $348.47 per fortnight, provided on one of Mrs Gagatek’s Department of Education and Training payslips, and $58.25 provided on Mrs Gagatek’s payslips from Gone Bazaar.    

21.  On 16 September 2005 Centrelink wrote to Mr Gagatek and advised that his DSP rate from 16 September 2005 was $358.51 based on combined regular fortnightly income of $464.97 and other combined annual income of $90.12.  The Centrelink notice stated that Mr Gagatek was required to inform Centrelink, within 14 days, if his combined income had increased.  There is no documentary evidence before the Tribunal that Mr Gagatek advised Centrelink within 14 days of receiving the 16 September 2005 notice that his combined income was, in fact, greater than the amount stated in the notice (i.e. $464.97).  

22.  Further, there was no documentary evidence before the Tribunal that Mr Gagatek had presented any payslips to Centrelink other than those submitted with his original claim for DSP on 18 August 2005.  The evidence before the Tribunal was that Mr Gagatek next updated his income with Centrelink on 10 August 2007 when he advised Centrelink of his full-time employment with Chubb Security. 

23.  Centrelink’s computer records indicate that on 10 August 2008 Mr Gagatek advised Centrelink that Mrs Gagatek had ceased work with Gone Bazaar in November 2007 and he thought her income from the Department of Education remained the same or could have increased a little.   Then, on 10 October 2008, Centrelink wrote to Mr Gagatek and advised that his regular DSP rate from 7 November 2008 was $450.40 based on combined regular fortnightly income of $348.47 and other combined annual income of $40.  There is no documentary evidence that Mr Gagatek advised Centrelink of his wife’s correct earnings following receipt of that 7 November 2008 notice from Centrelink.  It is also clear from the evidence that Mr Gagatek did not notify Centrelink that his wife had ceased work at Gone Bazaar “within 14 days” of that happening, as he was required to do so.

24.  Centrelink’s computer records show that Mrs Gagatek’s correct earnings from the Department of Education and Training were higher than assessed by it when calculating Mr Gagatek’s DSP rate under section 1064 of the Act.  Taking into account Mrs Gagatek’s correct income (of $39,784), Centrelink overpaid Mr Gagatek $18,151.70 of DSP in the period 16 September 2005 to 7 January 2010.

IS THE OVERPAYMENT A DEBT DUE TO THE COMMONWEALTH?

25.  Section 1223(1) of the Act provides that if a social security payment is made, and the person who obtains the benefit of the payment was not entitled to obtain that benefit, the amount of the payment is a debt due to the Commonwealth.

26.  Mr Gagatek was not entitled to receive the overpaid amount of $18,151.70 and as such that amount is a debt due to the Commonwealth.

SHOULD RECOVERY OF THE WHOLE OR A PART OF THE DEBT BE WAIVED?

27.  Section 1237(1) of Part 5.4 of the Act provides that the Secretary may decide to waive the Commonwealth’s right to recover the whole or a part of a debt from a person in certain circumstances.  A waiver takes effect on the day the waiver decision is made or on an earlier or later day specified in the decision:  section 1237(2) of the Act.

28.  Relevant to this application is the Secretary’s power to waive a debt arising “solely” due to Commonwealth “administrative error” where the debtor received the amount in “good faith” (in section 1237A of the Act) and waiver in “special circumstances” (in section 1237AAD of the Act).

Waiver under Section 1237A – Administrative Error

29.  Section 1237A(1) of the Act states:

“……..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.”  [Emphasis added]

30.  In Lohner v Secretary of Social Security (AAT No S94/13, 22 November 1994) the Tribunal ordered that where an overpayment is “solely” due to the administrative errors made by the Commonwealth, the whole of the debt should be waived.

31.  In this application, the Secretary does not contest that Centrelink made an administrative error when it failed to take into account the full amount of Mrs Gagatek’s income as declared by Mr Gagatek in his initial claim for DSP on 18 August 2005.  Further, the Secretary does not contest that Mr Gagatek received the DSP payments that gave rise to the debt during the relevant period in “good faith”.  Consequently, the critical issue for consideration by the Tribunal is whether the overpayment of DSP to Mr Gagatek is “solely” due to administrative error by Centrelink.

32.  The meaning of the word “solely” was considered by the Tribunal in Re Gerhardt and Secretary Department of Employment, Education and Training (AAT 10941, 17 May 1986) where Deputy President Forgie commented at [40]:

“40. There is nothing in sub-section 289(1) which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth's administrative error (i.e. they are incidental to the Commonwealth's error), then it may be that the debt is attributable solely to the Commonwealth's administrative error. Whether it is or is not attributable in that situation to the Commonwealth's administrative error will be a question of fact.” 

33. Section 68(2) of the Administration Act provides that the Secretary may give a person a notice requiring them to provide information about an event or change in their circumstances that might affect the payment of a social security payment.

34.  In Chapman and Secretary to the Department of Family and Community Services [2003] AATA 436 the AAT considered the relevance of Centrelink notices in considering whether a debt was due “solely” to administrative error.  Senior Member Handley said at [39]: 

“39. In the present case Mrs Chapman received a number of letters from the DSS which contained information which was obviously incorrect. The contents of the letters should have given her a sufficient clue or put her on notice that the administration of her benefits was fundamentally flawed. She acknowledged that the contents of the letters with respect to the rate of income of her husband was absurd but she did not telephone the respondent or write either by letter, email or facsimile. She did not attend a social security office personally. She was obliged under the recipient notification obligations to notify the DSS and she did not. I would have thought that Mrs Chapman would have been suspicious of her entitlement to receive a benefit at the same rate that was being paid before her husband commenced to earn a full time income.”     

35.  Mr Gagatek’s “Statement of Facts, Issues and Contentions”, under the heading “Contentions”,  provides:

“21.At all material times the Applicant provided Centrelink with accurate and correct information regarding his financial, social and medical condition.  The applicant successfully discharged his obligation pursuant to s68 of the [Administration Act].

22.           Centrelink incorrectly recorded the Applicant’s financial circumstances.

………..

27.If a debt exists the Applicant contends that the debt is solely attributable to the administrative error on the part of the Commonwealth.  The Applicant has at all times acted in good faith and provided the respondent with all information as and when necessary.

28.Whilst the Applicant may have received letters from Centrelink during his disability support pension, he was unaware of any error in that he simply honestly and reasonably believed the Respondent had appropriately determined the social security benefit payments.  The Applicant did not understand or realise that Centrelink made an error regarding the relevant assessable income.  The Applicant possesses no special skill or knowledge regarding Centrelink processes or calculations.  Therefore the Applicant had no way of knowing whether Centrelink had a special method of determining the assessable income upon which the social security benefits were to be determined.  As such no contribution to the error ought to be afforded to the Applicant.  The only way the Applicant could have possibly have known was either to seek independent legal or accounting advice or have special knowledge of Centrelink’s operations and procedures.  To require such a high onus on those acting in good faith ought not be appropriate and reasonable in the circumstances. ……As such the Applicant contends that pursuant to section 1237A of the [Act] the debt ought to be waived as the debt is attributable solely to an administrative error made by the Commonwealth….”

36.  Mr Gagatek’s representative in this application (his son) made similar oral submissions before the Tribunal.

37.  Further, in his oral submissions Mr Gagatek’s representative relied on the Tribunal’s decision in Pereira and Secretary Department of Employment and Workplace Relations [2007] AATA 1821 (2 October 2007) in support of the view that Mr Gagatek’s debt should be waived as it arose “solely” due to Centrelink administrative error.  Briefly, in that case, through a series of Centrelink administrative errors and an omission by Ms Pereira to report to Centrelink a one- off bonus payment, Mrs Pereira incurred an overpayment of parenting payment single (PPS) of $2,019.59 for the period 9 September 2003 to 30 May 2005.   In summary, the Tribunal found that “sole” administrative error caused the overpayment of PPS for the period 4 March 2004 to 7 February 2005 since, during that period, Ms Pereira reported all of her earnings and that she simply accepted whatever Centrelink wrote in its letters as correct.  However, according to the Tribunal, “sole” administrative error did not cause that part of debt which related to the $404 bonus received by Ms Pereira on 15 March 2005, which bonus she neglected to report to Centrelink, or to that part of the debt/overpayment “which related to Centrelink coding each of the three Blueberry farms earnings separately, an which accordingly did not lead to an adjustment of Ms Pereira’s PPS.”  The Tribunal commented at [65] “Most importantly, ……, Ms Pereira did not report the final payment within the statutory period and thus contributed to the error.”  Thus, the Tribunal waived that part of the debt which arose “solely” due to Commonwealth administrative error, but not the remaining part of the debt.

38.  The evidence before the Tribunal is that Mr Gagatek was sent a notice by Centrelink on 16 September 2005 that detailed the combined regular fortnightly earnings assessed by Centrelink as being $464.97 and required that he advise Centrelink within 14 days if, among other things, his combined income increased.  Mrs Gagatek’s earned income increased in the pay period ending on 1 December 2005, and in pay periods after that date, and Mr Gagatek did not advised Centrelink of those increases as he was required to.  

39.  As stated earlier, there was no evidence before the Tribunal that Mr Gagatek presented any payslips to Centrelink after the three payslips he provided in support of his initial claim for DSP on 18 August 2005.  Further, there is no documentary evidence that Mr Gagatek advised Centrelink that his combined income had increased from the amount advised in the Centrelink notice dated 16 September 2005, within 14 days, as he was required to, or of Mrs Gagatek’s increased income on, or after, 1 December 2005.  Consequently, the Tribunal considers that Mr Gagatek’s debt was not “solely” attributable to Commonwealth (Centrelink) administrative error and that Mr Gagatek contributed to the debt occurring :  cf Pereira and Secretary  where the Tribunal found that “sole” administrative error caused the overpayment of PPS for the period 4 March 2004 to 7 February 2005 since, during that period, Ms Pereira reported all of her earnings. 

40. Further, the Tribunal notes that there is no requirement that the recipient of a social security payment, including DSP, have specialist skill or knowledge to satisfy the requirement (in section 68 of the Administration Act) to notify Centrelink of their correct income or changes to their circumstances. The Tribunal takes the view that Mr Gagatek contributed to the overpayment of DSP by failing to notify Centrelink that his combined income was wrongly recorded on the Centrelink notices that were sent to him.

41.  Consequently, the Tribunal finds that even though the DSP payments that gave rise to the overpayment were received by Mr Gagatek in “good faith”, the debt cannot be waived under section 1237A of the Act since Centrelink’s administrative error was not the “sole” cause of Mr Gagatek’s debt.

Waiver under section 1237AAD – Special Circumstances

42.  Sections 1237AAD of the Act provides that 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 a false representation; or

(ii) failing or omitting to comply with a provision of [the Act], the

Administration 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.”

43.  The meaning of ‘knowingly’ was discussed by the Tribunal in Callaghan and Secretary, Department of Social Security [1996] AATA 413 (18 November 1996), where Deputy President Forgie concluded at [48] that:

“There is nothing in section 1237AAD which suggests that the word “knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act.  That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.”

44. There is no evidence before the Tribunal to indicate Mr Gagatek “knowingly” made any false statement or representation to Centrelink or that he “knowingly” failed or omitted to comply with the Act or the Administration Act for the purposes section 1237AAD(a) of the Act. That is, there is nothing to suggest that Mr Gagatek “knowingly” failed to advise Centrelink that his combined income had increased from the amount advised in the notice of 16 September 2005, or of Mrs Gagatek's increased income on or after 1 December 2005. Therefore, it is appropriate for the Tribunal to consider the application of the “special circumstances” waiver in section 1237AAD of the Act to Mr Gagatek.

45.  The term “special circumstances” is not defined in the Act.  However, the term has been extensively considered in case law and the most frequently cited cases are as follows:

• Beadle and Director- General of Social Security (1984) 6 ALD 1 where the Tribunal stated (at 3):

  “...An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special...” [Emphasis added]

  On appeal, the Full Federal Court agreed with the approach of the Tribunal and its conclusions: see (1985) 60 ALR 225 at 230.

• Groth and Secretary Department of Social Security (1995) FCA 1708 where the Federal Court stated:

  “...The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss...it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of Terziman follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied...” [Emphasis added]

• Re Ivovic and Director General of Social Services (1981) 3 ALN N95 where the Tribunal stated:

  “…The reference to special circumstances “by reason of which” a person liable “should be released” requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes…Thus whilst keeping the dominant principle of [recovery of debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise…” [Emphasis added]

• Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25 where the Federal Court stated:

  “…There is less overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case…” [Emphasis added]

• Timothy Davy and Secretary Department of Employment and Workplace Relations 2007 AATA 1,114 where Deputy President Forgie stated at [80], in part:  

  “…“special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances…that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it…He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement…The system of administration of the Social Security Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act… “ [Emphasis added]

• Duarte; Secretary, Department of Family and Community Services [2000] AATA 927 (25 October 2000) where Dr Campbell commented at [44-45]:

  “...while inferences of administrative tardiness have been alleged in the speed with which the overpayment issues have been dealt with since first knowledge of the overpayments by the Applicant, the Tribunal has difficulty in concluding that administrative error and/or tardiness are uncommon, unusual or exceptional by their very occurrence. In further delineation of the issue the Tribunal has looked to the effects that such actions may have had on upon the Respondents to see whether there were any effects which could be seen to be unusual, uncommon or exceptional. In this matter, at most it would have appeared to cause some stress, particularly for the first Respondent, but in terms of effect the stress does not appear to have prevented her from carrying on a normal and busy work schedule

  ...As a consequence of the examination of the particular circumstances, the Tribunal finds that such circumstances either alone or together do not constitute special circumstances.” [Emphasis added]

46.  In determining whether a debt should be waived, it is appropriate for the Tribunal to examine all factors relevant to the case, the wider scheme of the overall administration of the Act and the wider public interest of recovery moneys to which the recipient was not entitled:  see the Full Federal Court’s decision in Director-General of Social Services v Hales (1982-83) 47 ALR 281 and the Tribunal decision in Secretary, Department of Social Security v Riddell 15 September 1993 No A93/62.

47.  Mr Gagatek’s “Statement of Facts, Issues and Contentions” provide:

“29…….the Applicant contends that if a debt is considered to exist and the Applicant is responsible to pay that debt, the debt should be waived by reason of special circumstances pursuant to section 1237AAD of the [Act].  The Applicant did not at any stage make any false statements or representations or knowingly omit to comply with the [Act].  At all times the Applicant was co-operative and openly informed Centrelink of his financial, social and medical situation.  A combination of the Applicant’s poor mental and physical health, financial circumstances, Centrelink’s error that solely and directly caused the miscalculation and the severe hardship it would cause the Applicant are grounds for a waiver of the debt.”

48.  Mr Gagatek’s representative made similar oral submissions as well as relying on the Tribunal’s decision in Pereira and Secretary (discussed in paragraph 37 above) in support of the contention that Mr Gagatek’s debt should be waived under section 1237AAD of the Act.  In that case, the Tribunal found that, in the alternative (i.e. if the debt could not otherwise be waived under section 1237A of the Act), Centrelink’s administrative errors may be held to constitute “special circumstances” in themselves and that, in the totality of the circumstances of that case, it could exercise the discretion in section 1237AAD of the Act and waive part of the debt.

49.  As regards the issue of whether there are “special circumstances” (other than financial circumstances alone) which make it desirable to waive Mr Gagatek's debt, whilst the Tribunal acknowledges that Mr Gagatek suffers medical conditions for which he receives DSP, significant medical conditions are a factor common to recipients of DSP, there is nothing unusual, uncommon or exceptional about that:  Beadle, Duarte, Groth and Angelakos.  Also, based on the evidence before the Tribunal, Mr Gagatek’s medical conditions did not prevent him starting a new vocation in security and obtaining employment in that industry at Chubb Security and, later, MSS Security:  Duarte.

50.  Further, although there was no documentary evidence before the Tribunal regarding Mr Gagatek’s financial position, Mr Gagatek’s representative submitted that repayment of the debt would cause Mr Gagatek “severe financial hardship”.  Mr Gagatek’s representative told the Tribunal that:

“…the Applicant had moved up the ranks to a supervisor role at a factory which was his sole employer since migrating to Western Australia.  Once he was injured and certified unfit for work and disabled the Applicant was unable to return to that line of work.  Since then the Applicant has had to find a new vocation and has dedicated himself to be educated in security.  The Applicant has had to start afresh in a new line of work.  The additional disability support pension was used to maintain his mortgage repayments, pay necessary bills and support his family.”

51.  This contention was also made in Mr Gagatek’s “Statement of Facts, Issues and Contentions”.  That may be so, but difficult financial circumstances are common among recipients of welfare payments generally and cannot be said to be unusual, uncommon or exceptional in the context of other recipients of income support payments:  Beadle, Groth, Re Ivovic, Angelakos, Timothy Davy and Duarte.

52.  Accordingly, whilst Centrelink administrative error may by itself constitute a “special circumstance” (Pereira), considering the totality of the circumstances, the wider scheme of overall administration of the Act and the public interest of recovery moneys to which the recipient of a social security benefit was not entitled, the Tribunal takes the view that Mr Gagatek’s circumstances are not sufficiently special to warrant an exercise of the discretion in section 1237AAD of the Act to waive all or a part of his debt for overpayment of DSP for the relevant period:  Timothy Davy, Ivovic, Riddell and Hales.       

DECISION

53.  For the above reasons, the Tribunal affirms the decision of the SSAT dated 23 September 2011. 

I certify that the preceding 53 (fifty three) paragraphs are a true copy of the reasons for the decision herein of Senior Member C R Walsh.

....(sgd) T Freeman...................

Associate

Dated 1 May 2012

Date(s) of hearing	30 March 2012
Representative for the Applicant	Mr K Gagatek
Representative for the Respondent	Mr P Maishman