Kwiatkowski and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2010] AATA 1015

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 1015

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No 2010/2511

GENERAL ADMINISTRATIVE DIVISION		)
Re		LUCYNA KWIATKOWSKI

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal G. D. Friedman, Senior Member

Date26 November 2010

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

...................[signed].....................

Senior Member

ADMINISTRATIVE

APPEALS TRIBUNAL

MR G.D. FRIEDMAN, Senior Member

No. 2010/2511

LUCYNA KWIATKOWSKI

and

SECRETARY, DEPARTMENT OF FAMILIES,
HOUSING, COMMUNITY SERVICES AND INDIGENOUS
AFFAIRS

MELBOURNE

10.09 AM, FRIDAY, 26 NOVEMBER 2010

MR R. JANSZ appears for the applicant
MS S. LANGFORD appears for the respondent

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

MR FRIEDMAN:   [T]he issues before me are:

(1)      Whether Ms Kwiatkowski was overpaid family tax benefit;

(2)Whether the overpayment constitutes a legally recoverable debt to the Commonwealth and, if so, whether there are any grounds to waive or write off the debt, or part of the debt.

With regards to the first and second question, there’s no dispute that an overpayment was made in the amount of $4633.56, and I find that the amount of overpayment is a debt to the Commonwealth under section 71 of the Administration Act.  The full name of that Act – I’m sorry, Ms Madam Interpreter ­ ­ ­

THE INTERPRETER:   Yes.

MR FRIEDMAN:   ­ ­ ­ it might be a little bit hard to interpret.  A New Tax System (Family Assistance) (Administration) Act 1999 [the Administration Act].  That leaves a third question, as to whether the debt should be written off or waived.  Section 95 of the Administration Act refers to writing off of a debt.  I find that the debt is not irrecoverable at law, and I find that it is not appropriate to write off the debt.  The main issue in this case is whether the debt should be waived under section 97 of the Administration Act, and section 101 of the Administration Act.  Section 97 provides that the secretary must waive – and I’m paraphrasing this because it’s a little bit difficult to translate.

The secretary must waive a debt or proportion of a debt that is attributable solely to an administrative error by the Commonwealth if two provisions apply, and that is that the debtor received the amount in good faith, and would suffer severe financial hardship if it was not waived.  And subsection 3 refers to other matters about receiving in good faith, and the period in which the debt is raised.  So the first thing I need to determine is whether the debt was caused by sole administrative error by Centrelink.  Mr Jansz, on behalf of Ms Kwiatkowski, has made submissions and given evidence that Centrelink is entirely to blame for the debt.

He referred to a number of meetings between Centrelink and Ms Kwiatkowski and himself, in which he said that the Centrelink officer, Desiree, made inaccurate records and that, as a consequence of those mistakes, the debt arose.  He also made some more generalised criticisms of Centrelink, including their conduct generally and, in particular, towards Ms Kwiatkowski.  I was referred to a meeting at Fountain Gate Centrelink on 26 November 2007.

Ms Kwiatkowski and Mr Jansz, who was present at the meeting, state that Desiree was informed that Ms Kwiatkowski wanted her family tax benefits entitlement decided at the end of the financial year and not on a fortnightly basis.  The record of that meeting as shown on the Centrelink computer is that Ms Kwiatkowski requested family tax benefit to be received fortnightly based on her estimated income and [the] income of her two children.  Centrelink also has a letter, a copy of a letter dated 3 December 2007 confirming Ms Kwiatkowski’s instructions for fortnightly payments.

Mr Jansz produced to the tribunal a document, which he said, was a record of the meeting at Centrelink on 26 November 2007.  He said he made that file note the following day and the file note includes statements suggesting that the children [would] earn income in excess of the threshold for 2007/2008.  And Mr Jansz says that, notwithstanding the contents of that file note, Centrelink proceeded with fortnightly payments and, as a consequence, Ms Kwiatkowski was left with a debt.  I don’t know when this file note was written by Mr Jansz.  It was suggested on behalf of the respondent that the file note was probably written at some period well after 26 November, as it was not produced to Centrelink until about August 2008.

It was also suggested that a file note of this type is far more detailed than others made by Mr Jansz and the final statement “this is a true statement of what transpired in our meeting of 26 November 2007” is a comment that is unlikely to be included in a file note made on or shortly after a meeting.  I’ve already said that I don’t know when Mr Jansz wrote the file note and I’m not suggesting for one moment any impropriety on his part.  It is true that the contents of that file note are inconsistent with some of the records held by Centrelink and Mr Jansz did admit to some inconsistencies at the Social Security Appeal Tribunal hearing.  Mr Jansz has suggested that the failure by Centrelink to accept that the contents of the file note are true and accurate and were written at the time he said is yet another example of Centrelink’s bullying and harassment of himself and Ms Kwiatkowski. 

In the end, I’m not sure that we will ever know for certain and, in any event, I’m not certain that a determination has to be made on the accuracy of that file note in any case.  I was referred to a Federal Court decision in the matter of Sekhon … in 2003 [Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76] where the court held that:

Administrative error must be the sole cause and not merely one of multiple causes.

The fact that Ms Kwiatkowski approached Centrelink and said, that after three fortnightly payments were made in December 2007, she wished to have those payments stopped, and her entitlement decided at the end of the financial year, suggests to me that, at the time, she believed that there would be an entitlement of some kind to family tax benefit for that financial year.  I can find no evidence, apart from comments made in Mr Jansz’s file note, that Ms Kwiatkowski told Centrelink that the children’s earnings would be over the threshold for that year.  In fact, Mr Jansz made complaints to Centrelink on 13 and 14 December 2007 that withholdings were being taken out of her fortnightly payments for previous FTB debts.

And Ms Kwiatkowski contacted Centrelink on 3 January 2008 to once again inquire why withholdings were being taken out of FTB payments fortnightly.  The reality of the situation is that David and Danielle earned more than the threshold for FTB payments for 2007 and 2008.  Ms Kwiatkowski was sent letters by Centrelink informing her of her FTB payments that were being made.  The letters also set out the basis for the payments of FTB and the letters required her to notify Centrelink if circumstances regarding her children’s income, among other things, changed, including whether her children were likely to have adjusted taxable income above $11,929 in that income year.  She did not do so.  Consequently, the debt amount arose because the children’s income exceeded the threshold amount and Ms Kwiatkowski did not inform Centrelink in response to their requests that I have just outlined. 

Consequently, those are the two reasons for the debt arising and, even if I were to accept Mr Jansz’s and Ms Kwiatkowski’s evidence about the role played by Desiree and other Centrelink officers, I could not find that the debt arose solely because of Centrelink error.  As a consequence of that finding, that is, that the debt is not attributable solely to administrative error made by the Commonwealth, there is no requirement for me to consider whether the debt was received in good faith under section 97 subsection (2), or the elements of subsection (3).

The other relevant section regarding a waiver is section 101 of the Administration Act.  That provides me with the power to waive part or all of the debt if I am satisfied that the debt did not result wholly or partly from the person making a false statement or failing or omitting to comply with the law – and I’m paraphrasing the section.  That is subsection (a).  [A]nd subsection (b) is that there are special circumstances, other than financial hardship alone, that make it desirable to waive.  I will deal with subsection (b), special circumstances.

There are a number of relevant decisions regarding special circumstances, and they are set out in paragraph 76 of the respondent’s statement of facts and contentions.  Those decisions make it clear that special circumstances requires circumstances that are unusual, uncommon, or exceptional.  I accept that Ms Kwiatkowski has health issues.  I accept that she is under a lot of strain generally, and also because of these proceedings, and her claim before the Transport Accident Commission.  However, I don’t believe that those health issues of themselves make her application unusual, uncommon, or exceptional.

Her family circumstances are such that she has a husband who is in full time employment, and her children, David and Danielle, are both living independently at home.  Her husband is paying off the mortgage, and her daughter has indicated that she will be providing whatever financial assistance she can to Ms Kwiatkowski.  I accept that her circumstances are difficult, but I do not find that they are unusual, uncommon, or exceptional that would constitute special circumstances, other than financial hardship alone, that make it desirable to waive the debt.

Consequently, she does not satisfy subsection (b) of section 101 of the Administration Act.  Therefore, she cannot satisfy section 101 and it is not necessary for me to consider whether she made a false statement or failed to comply with the law, nor is it necessary for me to consider subsection (c), whether it is more appropriate to waive than … write off the debt or part of the debt.  In view of my finding on sections 97, 95 and 101, I am unable to waive or write off the debt.

I have taken into account the comments made by Mr Jansz, in particular, about the actions of Centrelink, and I accept that Mr Jansz and Ms Kwiatkowski feel very strongly at what they call persecution and bullying by Centrelink.  Mr Jansz has made it clear that he has certain avenues open to him to address those issues, and it’s not for me to make any comment about those issues, because my sole task is to make the correct and preferable decision on the waiver or write off of the debt, and, as a consequence, I will not be making any of those comments, but will leave it to Mr Jansz to do whatever he believes is appropriate.

So taking into account my findings this afternoon, I am affirming the decision under review.  Ms Kwiatkowski, I’m sorry I can’t help you with the decision, but I can only be guided by the law.  I’m not hearing any comment unless you don’t understand what is being interpreted.  All I’m saying to you is, I can’t help you because I can only deal with the law.  Those other matters concerning the behaviour of Centrelink, Mr Jansz has well in hand and I’m sure you can rely on him as you have been.  Is there any difficulty in understanding your translation?

THE INTERPRETER:   This is a – she understood ­ ­ ­

MR FRIEDMAN:   Well, I’m not – I’m not debating – I’m not going to comment, I’m only saying to you that I can only deal with the law.  And I also just want to say to you, Ms Kwiatkowski, that Mr Jansz has been a very passionate and assertive advocate for you, and I hope you appreciate the efforts that he’s made on your behalf.  Mr Jansz, thank you very much for your assistance.

END OF EXTRACT