Lampard and Secretary, Department of Family and Community Services
[2005] AATA 457
•20 May 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 457
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/670
GENERAL ADMINISTATIVE DIVISION ) Re VICKI LAMPARD Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr EK Christie, Member Date20 May 2005
PlaceBrisbane
Decision § The Tribunal sets aside the decision under review and in substitution for it decides that the debt due to the Commonwealth be waived under the “special circumstances” provisions of the Social Security Act 1991 for the period 6 December 2000 to 25 October 2001. This means Mrs Lampard’s application for review is partly successful. The Tribunal’s decision takes effect from 7 May 2003.
§ The Tribunal remits the matter to the respondent with a Direction that it calculate the amount of the overpayment that has been recovered over the waiver period that is to be repaid to Mrs Lampard.
[Sgd] EK Christie
Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – overpayment – special circumstances – waiver of whole or part of debt – statutory interpretation: waiver for “special circumstances” and circumstances of the debtor
Social Security Act 1991 s 1184, 1237, 1237A, 1237AAD
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316; (2002) 70 ALD 1
Prince v Secretary, Department of Education, Employment and Youth Affairs (1997) 50 ALD 186
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541REASONS FOR DECISION
20 May 2005 Dr EK Christie, Member 1. This is an application for a review of a decision made by the Social Security Appeals Tribunal (“the SSAT”) on 27 July 2004 to recover a debt of $5,605.32 for disability support pension paid to Mrs Lampard over the period 6 December 2000 to 6 May 2003.
2. In its “Application of the Law and Reasons” the SSAT made the following conclusions:
“35. The Tribunal does not view Mrs Lampard’s circumstances as special in a way that makes it desirable to waive the debt. As discussed above, the primary and root cause of the debt was that she declared income incorrectly. Her health is not good, but that is uniformly the case among recipients of disability support pension, and cannot be ‘special’ in the sense of being uncommon, unusual or exceptional. Financial hardship by itself is specifically stated to be an insufficient basis for this waiver, and in any case, the Tribunal is unwilling to find that Mrs Lampard is in financial hardship given the contradictory nature of the evidence.” (T2, Folio 37)
3. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents) [Exhibit 1] and the various documents lodged by the parties.
4. Mrs Lampard represented herself at the hearing. The respondent was represented by Mr James Howard, a Departmental Advocate.
Issues Before the Tribunal
5. The parties agreed that an overpayment of $5,605.32 had been made to Mrs Lampard and that this amount was a debt that the Commonwealth could recover. However, at the time of the hearing the debt had been fully paid by Mrs Lampard.
6. Accordingly, the only issue for the Tribunal to decide was whether the debt could be waived, in part or in full, under the “special circumstances” or “administrative error” provisions of the Social Security Act 1991 (“the Act”).
7. During the hearing, Mr Howard acknowledged that subsection 1237AAD paragraph (a) was not in dispute. That is, Mrs Lampard had not “knowingly” failed to comply with a provision of the Act or had made false statement or representation.
8. At the end of the hearing the Tribunal decided to exert its inquisitorial powers and obtain further information, in regard to:
(a)A second Centrelink review said to have been undertaken in March 2002;
(b)Any relevant Departmental Policy Guideline or any written material provided to clients by Centrelink that gave information or advice in relation to addressing situations where the “income payment period of the client” did not coincide with the “entitlement payment period of Centrelink”; and
(c)Any file notes, records of telephone queries made by Mrs Lampard with respect to her disability support pension entitlements during the “overpayment period”.
9. In response to this Direction, Mrs Lampard filed documents with the Tribunal on 28 February 2005. In response to the Tribunal Direction, Mr Howard filed supplementary submissions on 7 March 2005; in response to Mrs Lampard’s further documents filed with the Tribunal, Mr Howard filed additional supplementary submissions on 26 April 2005.
Findings of Fact
10. On the basis of the evidence before it, the SSAT made the following findings of fact:
“(i)Mrs Lampard received a disability support pension throughout the relevant period[s];
(ii)She reported amounts of earnings from Bluecare throughout the period that were less than the correct amounts earned by her;
(iii)Centrelink sent her letters frequently during the relevant period stating the basis on which her payments were worked out.” (T2, Folio 37)
11. Mrs Lampard accepted facts (i) and (iii) as being correct but qualified the second finding of fact (ii). She responded by stating that she had always reported her fortnightly earnings from Blue Care Respite and believed the amount of earnings she supplied to Centrelink over the entire period were correct.
Evidence of Vicki Lampard
12. Mrs Lampard said that some of the information the SSAT relied upon was incorrect with respect to the income earned throughout 2001 - 2003; also, that some relevant evidence was omitted. She stated that, as a consequence, the outcome was unfair to her. As examples, she said that at the start of the 2001 - 2003 period, both she and her husband were unemployed. She had then found work with Blue Care Respite in 2000 and that this involved working in two places – meaning she had two pay packets. Furthermore, she said that the total household income quoted by the SSAT of $5,600 (T2, Folio 36, para 28) was incorrect as this amount applied to the period after May 2003 and not during the overpayment period.
13. Mrs Lampard referred to two Centrelink reviews, relating to social security entitlements received by her husband and herself, that had been undertaken:
(a)The first review had been undertaken in September 2001. This review had been undertaken by Mr Brian Jenkins of the Wynnum office of Centrelink. The review indicated that her husband’s income affected her DSP entitlement over the period 1 July 2001 – 11 September 2001 (T41, Folio 134) and so an overpayment arose. Mrs Lampard said she had made several visits to the Centrelink office to provide all income information (payslips, her husband’s BAS) that was required for the review (T40, Folio 105 - 133). However, the letter from Centrelink (T45) made no reference to any error in the income information she had provided in relation to calculating her disability support pension entitlements. Ms Lampard said that any income discrepancies, on her part, that led to overpayments of her entitlements should have been identified and, in turn, Centrelink should have informed her; and
(b)Mrs Lampard said that a further review was undertaken in March 2002, when she provided more income information to Centrelink in relation to the income of her husband and herself.
14. Mrs Lampard said that she had encountered “untold problems” trying to provide Centrelink with income information with respect to her disability support pension entitlements. She said that whilst there were some periods she had provided the correct income information, she acknowledged that there were other periods when incorrect income information had been provided. This problem arose because the fortnightly period she was paid income by the Blue Cross Respite was out of “synch” [i.e. did not exactly coincide] with the fortnightly period in which Centrelink calculated her DSP entitlements.
15. In these circumstances, she said that she had relied on Centrelink to determine whether the information was correct given that she would estimate the number of hours/days worked with Blue Care Respite each “Centrelink” fortnight and then “calculate” [estimate] the amount earned but not actually paid to her.
16. Mrs Lampard acknowledged, as correct, the following information she had provided to the SSAT:
“10. Mrs Lampard said she had always had a problem reporting her income from her earnings. Centrelink insisted that she report how much she earned in a particular fortnight, but the period differed from the period for which she received payment from her employer. She would ring Centrelink every fortnight on the required day, and would give them, as best she could, the number of hours she worked and rate of pay. She said she knew she had to report the gross amounts.” (T2, Folio 33)
17. However, notwithstanding that she had always reported her income information to Centrelink throughout December 2000 to May 2003, she had received inconsistent advice from Call Centre Staff in relation to her queries on this problem that she raised over time. In support of this statement, she referred to the following Call Centre record of her telephone query:
“Date of Receipt: 11 September 2001
Storage Date:
Auth: B9F Office: WYN
Sum: Cli has been advised to notify earnings each 2 weeks on the day she is paid. Txt: Cli has ben trying to advise earnings up to pension paydays for some reason. as a result, her payslips do not match any notifications, partner is a self employed contractor (lodges abs return) doing panel beating work on a contract basis. Earnings have been incorrectly advised in the past as f/n earnings, with no expenses deducted. Has been instructed to provide p/l statement with BAS statement each 3 months and her own earnings at same time
__________________ANNOTATE BY NKG828 ON 9 OCT 2001
EMPLOYER: BLUE NURSES
ANNOTATE BY NKG828 ON 9 OCT 2001
EMPLOYER: BLUE NURSES, MT GRAVATT RESPITE CENTRE
AGREED PERIOD OF ASSESSMENT: 2WE
CUS ADVISED OF NOTIFICATION OBLIGATIONS – ADVISED TO CALL EVERY 2ND MONDAY TO CO-INCIDE WITH PAY PERIOD ENDS.” (T 38, Folio 103).
18. Mrs Lampard concluded her evidence by stating that each fortnight, throughout the entire period overpayments were received, she had provided Centrelink with estimates of her income details as well as raising queries throughout the entire overpayment period on how to overcome the problem of calculating income for a period which did not coincide with the “Centrelink entitlement period”.
19. During cross-examination by Mr Howard, Mrs Lampard agreed that their current financial situation was that their total income (about $3000 PCM) was greater than their total expenditure (about $1800 PCM). However, Mrs Lampard acknowledged that a significant credit card debt had yet to be paid.
Contentions and Submissions/Supplementary Submissions
20. Mrs Lampard emphasised that the problem had arisen because of fluctuating income she received each fortnight in her work with Blue Care – together with her income payment periods not coinciding with the period Centrelink calculated her disability support pension entitlements.
21. Mrs Lampard submitted that she had been given misleading information by Centrelink Call Centre staff when she acted on Centrelink advice and rang each fortnight to inform Centrelink of her income. She said that on each occasion she rang she spoke to a different person and never received any consistent advice e.g. how to deal with the problem of her income payment period not coinciding with the disability support pension entitlement period.
22. She said that she could not understand how the overpayment problem had arisen given that she had been subject to two internal reviews and had always supplied income information when requested and continually raised queries over time.
23. Mrs Lampard said that she was “shattered” to get into debt and to be “punished” for an overpayment problem she had taken every step to avoid.
24. Mrs Lampard concluded by saying that she had repaid the debt due to the Commonwealth because Centrelink had given her no choice but to do so.
25. At the hearing, Mr Howard submitted that Mrs Lampard had contributed to the administrative error that led to the overpayments of disability support pension entitlements being paid to her. The error leading to the overpayments arose because Mrs Lampard had failed to notify Centrelink of a change of circumstances of her, and her partner’s earnings, within 14 days of any change.
26. He contended that the debt could not be waived under the administrative error provisions of the Act, because in failing to respond to the notification notice within the prescribed 14 day period, in terms of a change in their financial circumstances, Mrs Lampard had contributed to the administrative error. Consequently, the administrative error had not been solely caused by Centrelink.
27. Mr Howard submitted that Mrs Lampard had presented little evidence of “special circumstances” and further submitted that if this were the case, the respondent would point out that a “generous application” of the discretion would frustrate the intended operation of the debt provisions.
28. Mr Howard contended that Centrelink had attempted to help Mrs Lampard as it recognised that Mrs Lampard was having difficulty calculating her income. It was his contention that Centrelink had taken steps to make it easier for Mrs Lampard to correctly calculate her income and so avoid overpayments. However, notwithstanding these efforts taken by Centrelink, overpayments still arose.
29. It was Mr Howard’s submission that the application of the “special circumstances” provision of the Act, with respect to recovery of a debt, in Mrs Lampard’s factual situation only looked at her current circumstances i.e. after the debt period and not the circumstances that gave rise to the overpayment being made. It was his submission that Mrs Lampard’s current financial situation was such that the “special circumstances” provision of the Act did not apply in her factual circumstances to enable the debt to be waived. In addition, whilst there was some evidence of financial hardship, on the part of Mrs Lampard, ss1237AAD paragraph (b) specifically stated that “special circumstances” must be comprised of other than financial hardship alone, in order for part or all of the debt waived.
30. Mr Howard’s supplementary submissions in relation to the four issues raised by the Tribunal Direction can be summarised as follows:
(a)In any consideration of “special circumstances” the person’s current circumstances should be at the forefront of the decision-maker’s mind. That is, the exercise of any discretion to waive should consider Mrs Lampard’s current circumstances at the present time;
(b)Despite Centrelink’s attempts to address Mrs Lampard’s problems for estimating income during the entitlement period, Mrs Lampard still incorrectly declared her earnings;
(c)Throughout the overpayment period, Mrs Lampard failed to correctly inform Centrelink of her earnings; and
(d)There was no basis for waiver of the debt under the Social Security Act.
(a) Waiver for Special Circumstances
§Whilst a wide range of circumstances may be taken into account when considering whether or not it is appropriate to waive a debt, the decision-maker did not have an unfettered discretion to waive debts;
§That in exercising any discretion for “special circumstances”, a decision-maker is entitled to consider the entirety of a person’s circumstances, including placing a person’s current circumstances “at the forefront” relative to “past” circumstances;
(b) Centrelink Guidelines for Circumstances where Income Payment Period and Social security Entitlement Period do not Coincide
31. Mr Howard stated there were no official guidelines in existence that outlined procedures relating to situations where a customer’s pay and declaration fortnights were “mismatched”. However, Mr Howard submitted if a Centrelink customer service officer was aware that a customer’s pay and declaration fortnights did not match, and this was creating a problem for the customer, the officer would discuss this with the customer in an attempt to solve the problem.
32. It was Mr Howard’s contention that Centrelink officers realised that Mrs Lampard was having some difficulty in declaring her income earned and attempted to assist her to develop strategies to enable her to accurately declare her earnings.
(c) Centrelink Review on 6 March 2002
33. Mr Howard stated that a search of records had been undertaken, but no trace could be found of a review undertaken around this period of time – other than an electronic record indicating that Centrelink had planned to review Mr Lampard’s earnings in September 2002. However, this review was cancelled as Mr Lampard’s income had previously been declared.
(d) Records of Telephone Discussions Regarding Payment
34. Mr Howard acknowledged that a review of Mrs Lampard’s record – specifically electronic file notes, revealed that Mrs Lampard had contacted Centrelink at various times to declare her and/or her partner’s income.
35. It was Mr Howard’s contention that on several occasions in September and October 2001 it was apparent that Centrelink staff had discussed Mrs Lampard’s notification obligations with her, and encouraged her to contact Centrelink at times that coincided with the end-dates of her pay periods (T38, Folio 103; T39, Folio 104; T46, Folio 144 and T47, Folio 145).
36. Mr Howard conceded that no other records of conversation involving discussion of pay periods and declaration periods could be found. It was his contention that the contents of the electronic file notes [paragraph 35] made it “clear” that Centrelink officers urged Mrs Lampard to declare her earnings at the end of her pay periods when she would have been fully aware of her earnings for the past fortnight.
37. Mr Howard stated that during the “overpayment period”, Centrelink had sent numerous notification notices to Mrs Lampard informing her of her obligations as a social security recipient. Mr Howard acknowledged that Mrs Lampard was aware of these obligations and had contacted Centrelink on various occasions to notify of her - and her husband’s - earnings.
38. However, it was his contention, based on reliance of the SSAT’s findings, that Mrs Lampard had either declared (i) her nett wage – rather than her gross wage; (ii) had declared such a figure that was incorrect; or (iii) had failed to declare her earnings at all. It was his further contention that Mrs Lampard was well aware of her obligations to report gross income to Centrelink as she had been advised of this requirement – by telephone and in writing – on many occasions.
39. In her supplementary submissions, Mrs Lampard stated that she had encountered problems with social security entitlements, over time, including a situation in which the SSAT had waived a past overpayment, because the administrative error had been solely caused by the Commonwealth. It was her submission, as a social security recipient, that she truly believed that all the financial information she had provided to Centrelink was true and correct over the period disability support pension overpayments were received.
40. Mrs Lampard submitted that it was quite clear from the Monthly Calendar for 2001 [for January to March as an example] that the dates for the “Blue Care fortnightly wage periods” clearly did not match up with the dates for fortnightly social security entitlement payment periods [see Exhibit 4].
41. Mrs Lampard stated that a request for a ”Business Income & Assets Details” form was made on 16 August 2002 by Mr K Webster, Manager, Centrelink at Wynnum. It was Mrs Lampard’s contention that, at no time during this review, was she given any indication of an overpayment problem because of incorrect information she had provided to Centrelink.
42. Mrs Lampard submitted throughout the overpayment period 2000 – 2003, she had always made regular phone calls to Centrelink to provide them with information in relation to her family’s earnings. She had phoned Centrelink every two weeks, in this regard, in respect to fortnightly letters from Centrelink because her income (and her partner’s) changed regularly.
43. Mrs Lampard stated that her fortnightly earnings had always been calculated by providing Centrelink with her work days and then to “try to fit it into these dates”. She acknowledged that this would always be a problem when Centrelink were cross-matching. However, because Centrelink had insisted on the information for these dates she had complied with this request.
44. Mrs Lampard concluded with the submission that although she continued to inform Centrelink of income details, there was no Centrelink record of the continual trouble that persisted in her trying to report her income details. Furthermore, she acknowledged that Centrelink did try and help with the problem of getting her pay period on the pay sheet for her social security entitlements – but this only occurred for a period of 3 months, when the problems recurred.
45. Further supplementary submissions were filed by Mrs Lampard on 13 May 2005. The additional submissions raised can be summarised as follows:
“(a) Centrelink or respondent does make note of the help they had given to me. But they do not mention the amount times that I had trouble reporting income details, the amount of times that Centrelink change the rules on reporting income details and how they made changes to my pension. Not only did I have trouble with reporting income detail, I had trouble reading and understanding the letters that they send out to us. They never mention how the Centrelink call staff change my pension and what I was allowed every fortnight. Call staff would change the amount pension due on the Thursday they would stop on the Thursday and someone else would do something else;
(b) Most of the time when I would speak staff it would be the call centre and then I would then always go and see staff at our local Wynnum Office. This was usually because I had a problem with the reporting process;
(c) When phone conversations took part with Centrelink some conversations where [sic] not even recorded I was given no receipt numbers for call. I must admit sometimes I would get lazy and not ask for numbers because I would always like to believe that the people at the call centre were doing there [sic] job and recoding information correctly….something that I will never do again I have learnt; and
(d) I believe that this problem happens to a lot of people who work and try and record income details with Centrelink… I have lost faith in a system that is supposed to help people who need it. But it is ture. What ever happen to a system that was suppose to help us, this system has really let me down.”
The Tribunal’s Decision-Making Powers
46. “The question for the determination of the Tribunal is whether the decision [under review] was the correct one [that is, when there is only one decision] or preferable one [that is, when a range of decisions is available] on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, [per Bowen CJ and Deane J, at 68].” There are a range of decisions possible in this application for review. That is, whether the debt due to the Commonwealth may be waived, in part or in full.
47. Administrative decision-makers are generally required to address the evidence before them and not confine themselves to evidence before a prior decision-maker whose decision is being reviewed unless the relevant legislation requires a decision to be based upon the circumstances at a particular point of time: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326. In this application for review, the Tribunal considers all the evidence and information before the Tribunal at the date of the hearing, including the supplementary submissions in response to the Tribunal Direction provided by Mrs Lampard.
Statutory Requirements And Case Law
48. Section 1237 of the Social Security Act 1991 provides for factual situations where a debt due by a recipient of social security to the Commonwealth may be waived, either in part or in full. These factual situations relate to overpayments arising from “administrative error” - or where there were “special circumstances” that led to the overpayment.
49. Section 1237A provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “administrative error”:
“SECTION 1237A – WAIVER OF DEBT ARISING FROM 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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).” [Tribunal emphasis]
50. For this section of the Social Security Act to apply to Mrs Lampard’s factual situation, Mrs Lampard must not have contributed, in any way, to the administrative error that led to the overpayment. In addition, Mrs Lampard must have received her overpayments of social security entitlements in “good faith”. Both these requirements must be satisfied in order for Mrs Lampard to succeed under the “administrative error” provisions of the Social Security Act.
51. The legal meaning of “good faith” was considered by the Federal Court in Prince v Secretary, Department of Education, Employment and Youth Affairs [1997-98] 50 ALD 186. In this case, Finn J stated:
“if that person knows or has reason to know that he or she is not entitled to a payment received - i.e. is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith…the [legislation] does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise”.
52. Section 1237AAD provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:
“1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
“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. [Tribunal emphasis]
53. For this section of the Social Security Act to apply to Mrs Lampard’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mrs Lampard must not have “knowingly” made a false statement or false representation or failed to have complied with a provision of the Social Security Act. Both these requirements must be satisfied for Mrs Lampard to succeed under the “special circumstances” provisions of the Social Security Act. However, the respondent has conceded that there is no dispute that Mrs Lampard did not “knowingly” make a false statement or false representation or failed or omitted to comply with a provision of the Social Security Act.
54. The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”. In that case the Tribunal said (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.”
55. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course 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.”
56. The Explanatory Memorandum [“EM”] to the Social Security Legislation Amendment (Carer Pension and Other Measures) Bill 1998 is significant in addressing some issues raised by the respondent in relation to the application of the “special circumstances” provision to Mrs Lampard’s factual situation:
(a) Under “2. Background [Special Circumstances]” the EM states:
“The problem is that there are some cases involving an innocent mistake by a debtor that makes waiver desirable although not possible under the current waiver provisions. Accordingly, it is proposed to insert a new special circumstances waiver provision, but with some restrictions on the circumstances under which the new clause can be used.
The new special circumstances clause will be available where:
§ there are special circumstances other than financial hardship alone;
§ the Secretary is satisfied that the debt did not arise wholly or partly because of deliberate fraud by the debtor (including deliberate non-compliance with the Principal Act); and
§ it is more appropriate to waive the debt than to write off the debt pursuant to section 1236.”
(b)Under “4. Explanation of the Changes”, the EM refers to the meaning of “special circumstances” as defined in Beadle’s case – but subject to several exceptions to the broad definition:
(i)“… that the Secretary will be prevented from exercising the discretion in section 1237AAD where the debt arose either solely or partly because of deliberate fraud by the debtor or another person….That is, the discretion may be exercised where a debt arose wholly because of an innocent mistake.”
and
“… The rationale for this exception is that it is not considered appropriate to provide relief under section 1237AAD if a debtor has deliberately set out to defraud the Commonwealth.”
(ii)“Secondly, financial hardship, of itself, is not a sufficient reason to waive under the new special circumstances provision.”
(iii)“Thirdly, it must not be more appropriate to write off the debt than to waive the debt. Consideration as to the circumstances of a debtor are central to a decision to write off a debt under section 1236 of the Principal Act and should not be the basis for a decision to waive. Where a debtor has no present capacity to repay it is proper that write off action be taken, leaving the Commonwealth with the right to commence recovery proceedings at a later stage if the person’s financial circumstances improve.” [Emphasis added]
57. The Tribunal has applied the EM to its interpretation and consideration of the “special circumstances” provision in Mrs Lampard’s factual situation.
Consideration of the Issues
58. The first issue for the Tribunal to consider is the factual evidence relating to whether the debt could be waived under the “administrative error” provisions of the Social Security Act.
59. The Tribunal concludes that both Centrelink and Mrs Lampard have contributed to the administrative error that led to the overpayments of disability support pension being made to Mrs Lampard.
60. The Tribunal recognises the difficulty Mrs Lampard experienced in “matching” her fortnightly Blue Care income payments with her fortnightly social security entitlements – given that both fortnightly periods did not correspond. However, the evidence and information before the Tribunal indicates that Mrs Lampard correctly declared gross income for a short period of time relating to the Centrelink review in September 2001. However, beyond this period, there were many instances when nett income was declared, or income was not declared correctly, or income was not declared (see T2, Folio 36).
61. Whilst the Tribunal understands the factual situation and difficulty for Mrs Lampard that led to such an outcome, the Tribunal has no option other than to conclude that the debt cannot be waived under the “administrative error” provisions of the Social Security Act.
62. The next issue for the Tribunal to consider is whether the debt could be waived under the “special circumstances” provisions of the Social Security Act.
63. The issue whether Mrs Lampard had “knowingly” failed to comply with a provision of the Act, or had made a false statement or representation, was not in dispute (see paragraph 7). Furthermore, there was no dispute on the evidence before the Tribunal that Mrs Lampard persisted in seeking advice and/or querying problems with Centrelink relating to estimates of her fortnightly “Blue Care income payments” with her fortnightly Centrelink disability support pension entitlements – given that both fortnightly periods did not correspond. Accordingly, in this situation, the Tribunal concludes that the debt has not arisen as a result of Mrs Lampard “deliberately setting out to defraud the Commonwealth”.
64. The Tribunal has applied the legal principles, by the Federal Court, that define the meaning of “special circumstances” (see paragraphs 53, 54) and has considered the following findings of fact in its evaluation of the legal principles for this application for review:
(a)It is clearly evident that the dates for the fortnightly “Blue Care wage periods” did not clearly match up with the dates for “fortnightly DSP entitlement periods”. This lack of synchronisation of both time periods created difficulty for Mrs Lampard in correctly estimating her current rate of income to correspond with the disability support pension entitlement period.
(b)That in these circumstances, confronted with such a problem in reporting her income from her earnings, Mrs Lampard continued to ring Centrelink every fortnight to inform them as best she could, the number of hours worked and the rate of pay that were estimated to apply over the fortnightly disability support pension entitlement period;
(c)Mr Howard has conceded that there are no Policy Guidelines in existence that outlined procedures relating to a situation where a customer’s pay and declaration fortnights were “mismatched” that could assist a client;
(d)The SSAT has made the following observations on Centrelink’s approach to resolving the problem associated with “mismatched” periods, the problem experienced by Mrs Lampard:
“15.A number of Centrelink documents stated total amounts declared by Mrs Lampard for her earnings as compared to total amounts earned by her….The result therefore depends not only on the figures provided by her but also on the method used by Centrelink at the time to average income and the date chosen by Centrelink to be the date of effect. In the view of the Tribunal, the highly artificial resulting amount cannot reasonably be described as the amount of earnings that she declared….” (T2,Folio 34) (Emphasis added); and
(e)The Tribunal acknowledges that assistance was given by Centrelink to Mrs Lampard in order to address this difficulty during a review undertaken in September 2001 i.e. to develop “strategies” to accurately declare her earnings. As the SSAT observed (at T2, folio 37), during this period Mrs Lampard “correctly declared the gross amount – as shown on payslips for those three and a small number of other fortnights”.
65. Accordingly, the Tribunal concludes that there are “uncommon” or “unusual” circumstances in Mrs Lampard’s factual circumstances that warrant the description of “special” during the period from the commencement of her disability support pension entitlement and ending some time shortly after the review period in September 2001. These “special circumstances” reflect inconsistent Centrelink advice against a background of constant queries made and income information provided by Mrs Lampard, and in circumstances where no Departmental Policy Guidelines existed that could be applied to address a problem situation – or to provide consistent advice where a customer’s pay and declaration fortnights were mismatched.
66. With respect to the Centrelink review, earning information for Mrs Lampard and her partner were provided by Mrs Lampard and filed with Centrelink, Wynnum on 24 September 2001 (T40, Folio 105); the response from Centrelink, Wynnum was sent to Mrs Lampard on 25 September 2001 (T41, Folio 134) – together with notification notices (T42, T43). A filenote on 9 October 2001 (T46, Folio 144) indicated that Mrs Lampard rang with a query indicating that the problem of matching payslips with disability support pension still existed. The next notification notice (T49) was sent to Mrs Lampard on 25 October 2001.
67. Given the factual history of the “mismatch problem” encountered from the time disability support pension payments commenced, together with the outcome achieved with the review in September 2001, the Tribunal can make no other finding than to conclude that the “special circumstances” that led to the overpayment can only apply over a limited time period: 6 December 2000 to 25 October 2001. Beyond the latter date, the Tribunal concludes, on the balance of probabilities, that the “mismatch problem” and issues associated with correctly assessing gross income payments could have been resolved.
68. In arriving at this conclusion that a partial waiver for “special circumstances” is to apply, the Tribunal concludes that consideration of the “circumstances of a debtor” [viz. Mrs Lampard] are only central to a decision to write-off a debt and are not the basis for a decision to waive [see Explanatory Memorandum].
69. The Tribunal makes the observation that Mrs Lampard’s evidence was that she had fully repaid the debt because Centrelink had given her no choice but to do so. Her oral evidence before the Tribunal was that this repayment was made against a background of exacerbation of a significant credit card debt arising from a period of time where her family had very limited financial resources. The Tribunal makes the observation that recovery of a debt due to the Commonwealth imposes an obligation on Centrelink to arrive at an amount which can be recovered by instalments, following the preparation of a Statement of Financial Circumstances by Mrs Lampard. In Mrs Lampard’s case the Tribunal can only assume that such an obligation was adhered to by Centrelink.
70. For all of the above reasons, the Tribunal sets aside the decision under review and in substitution for it decides that the debt due to the Commonwealth be waived for the period 6 December 2000 to 25 October 2001, with the date of effect of the Tribunal’s decision from 7 May 2003.
I certify that the 69 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: Camille Banks
AssociateDate/s of Hearing 2 February 2005
Date of Decision 20 May 2005
The Applicant appeared in person
For the Respondent Mr J Howard, Departmental Advocate
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