Leaver and Secretary, Department of Families, Community Services and Indigenous Affairs

[2006] AATA 829

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 829

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2005/1304

GENERAL ADMINISTRATIVE DIVISION		)
Re		JENNIFER LEAVER

Applicant

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

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date29 September 2006

PlaceSydney

Decision The decision under review is affirmed.

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

Ms N Isenberg
  Senior Member

CATCHWORDS

SOCIAL SECURITY – parenting payment partnered – debt due to the Commonwealth – whether debt attributable “solely” to Commonwealth’s error - whether debt should be waived – “special circumstances” – Social Security Act 1991 ss 1223, 1237A and 1237AAD – decision under review is affirmed.

Social Security Act 1991 – sections 1223, 1237A and 1237AAD

Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)

Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787

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

Secretary, Department of Family and Community Services v Jonauskas (2001) 65 ALD 553
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464

REASONS FOR DECISION

29 September 2006 Ms N Isenberg, Senior Member

DECISION UNDER REVIEW

1.      The decision under review before the Administrative Appeals Tribunal (“the Tribunal") was the decision of the Secretary, Department of Family and Community Services ("Centrelink") dated 17 August 2004 as affirmed by the Authorised Review Officer (“ARO”) on 3 May 2005 and the Social Security Appeals Tribunal (“the SSAT") on 31 August 2005 to raise and recover a debt of age pension in the amount of $10,566.69 for the period of 27 June 2001 to 20 January 2004.

BACKGROUND

2.      Most of the facts in the matter were not in dispute and the following findings of fact by way of background can be made. 

3.      On 31 May 2001, Mrs Leaver claimed age pension (T4).  Her husband completed a Module P (Partner Details) where he noted his gross wages as $650.00 per week (T5, p28).  In support of her application Mrs Leaver presented two of her husband's pay slips dated 9 May 2001 and 15 May 2001 which showed gross weekly amounts of $749.00 and $740.00 (T7).    

4.      On 20 June 2001, Centrelink issued a notice advising Mrs Leaver that she had been granted age pension, on the basis that her and her husband’s combined annual income was $39,653.46 (T9).  The notice required her to notify Centrelink within 14 days if the combined annual income increased (T9).  A similar notice was sent to Mrs Leaver on 28 October 2002 informing her that the combined annual income used by Centrelink in calculating her rate of pension was $39,007.50 (T10).

5.      In 2003, Centrelink conducted a data match review with the Australian Taxation Office which revealed that Mr Leaver had been paid $65,508.00 ($1,259.76 per week) in the 2001/02 financial year (T11-T12).  Centrelink had paid Mrs Leaver age pension on the basis of her combined annual income of $39,653.46 ($762.56 per week).  In the 2002/2003 financial year, Mr Leaver earned $71,183.00 ($1,368.90 per week).  From 1 July 2003 to 25 January 2004 he earned $38,298.09 ($1,367.78 per week).  In this period, Centrelink had paid Mrs Leaver on the basis of an annual combined income of $39,007.50 ($750.15 per week) (T2).

6.      As a result an overpayment of $10,566.69 was made to Mrs Leaver during the period 27 June 2001 to 20 January 2004 (T27).

ISSUE BEFORE THE TRIBUNAL

7.      The main issues for me to consider are:

(a)Whether there is a recoverable debt of $10,566.69 for the period 27 June 2001 to 20 January 2004; and if so,

(b)Whether the debt should be recovered.

LEGISLATION

8.      The relevant legislation in this matter is the Social Security Act 1991 (“the Act”) in particular sections 1223, 1237A and 1237AAD.

CONSIDERATION OF EVIDENCE AND FINDINGS

9.      In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.

Is there a recoverable debt?

10.     The rate of age pension which is payable to an applicant turns upon the combined income and assets of the applicant.  During the relevant period, payments of age pension made to Mrs Leaver were calculated on the basis that her husband earned considerably less than he actually did. 

11. Consequently, Mrs Leaver was overpaid $10,566.69 of age pension because she failed to correctly advise Centrelink of her husband’s income from employment. This overpayment amount is a recoverable debt owed by Mrs Leaver to the Commonwealth under subsection 1223(1) of the Act, which states:

“1223(1)         Subject to this section, if:

(a)       a social security payment is made; and

(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

12.     I therefore find that there is a recoverable debt.

Should the debt be recovered?

13. Section 1237A(1) of the Act provides that debts to the Commonwealth may be waived in circumstances where:

(a)the debt arose solely because of administrative error; and

(b)the debtor received the payments in good faith.

Was the debt solely attributable to an administrative error by Centrelink?

14.     Centrelink contended that the word “sole” should be given its ordinary meaning.  In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”.  This ordinary meaning approach was adopted by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996).

15.     This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 paragraph 19 where the Tribunal stated that “solely” in section 1237A(1) should be given its ordinary meaning (“only” or “to the exclusion of all else”).

16.     In this matter, Mr Leaver conceded that he had been in error in recording his gross income as $650.  He explained that he always calculated his "income" as what he brought home (i.e. the net amount) and thought that that was the information that Centrelink required. 

17.     There was some discussion at the hearing about how the amount of income upon which Mrs Leaver’s pension payments were based was reached.  Centrelink had not in fact relied on the $650 recorded by Mr Leaver but had calculated his income on the basis of the average of the two payslips which had been provided.

18.     Mrs Leaver said that she told the clerk at Centrelink that her husband's income "fluctuated".  She said she was told at the time that if things changed then she should contact Centrelink.  As her husband's income continued to "fluctuate" she did not think she had to inform Centrelink.  She was adamant that if she had been told at the outset that she had to advise Centrelink when her husband's income exceeded a certain amount then she would "never have got [herself] into this mess".  By way of contrast she noted that presently she is obliged to inform Centrelink fortnightly as to her husband's earnings.  As a result her payments are rarely the same, but she is confident that what she receives nowadays is accurate.

19.     She conceded that she had received the letters of 20 June 2001 and 28 October 2002 but did not think to look on the back and read the "small print".

20.     Mrs Leaver believed that because her pension payments fluctuated this was in response to her husband's fluctuating income.  She understood Centrelink to have told her on a number of occasions that it engaged in data matching with the Australian Taxation Office and assumed that her payments varied because of that information which Centrelink had received.  An examination of the pattern of payments made to Mrs Leaver, however, shows that after that the initial payment she received a consistent amount for several pays.  Then, at the commencement of the next quarter, she received the same amount plus about $9 for telephone allowance.  Mrs Leaver’s payment was then adjusted for CPI and the same pattern continued for the remainder of the time that pension was paid.  While I accept that these payments varied, they did not "fluctuate", which suggests no pattern whatever, with decreases as well as increases.

21.     I therefore am unable to find that while there was an administrative error on Centrelink’s part which was solely responsible for the debt.

22.     Having come to the view that the debt did not arise solely from an administrative error by Centrelink, it is not necessary for me to examine the issue of Mrs Leaver’s good faith.  I unreservedly accept however that there was no intention by Mrs Leaver to deceive Centrelink in the estimation of her husband's income.  She had left the form for him to complete, and it is perhaps unfortunate that the payslips that she provided to Centrelink were at the lower end of her husband's weekly pay.  I accept too that Mrs Leaver, not having been a recipient of age pension previously, merely accepted what she was paid as being the amount to which she was entitled.

Are there special circumstances why the debt should be waived?

23. A further provision of the Act allows for waiver of debts in what is termed “special circumstances”.

“1237AAD. The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)making a false statement or false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.”

24.     The term “special circumstances” has been examined by this Tribunal and the Federal Court.  In Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, Toohey J stated:

“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 on 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.”

25.     Mr and Mrs Leaver pay rent of $210 per week which I do not consider to be excessive.  Mr Leaver still works as a car salesman and told me that he earns around $60,000 gross per year, including Sunday shifts and commissions.  They have no debts and have no dependent children.  Although they have provided some support to members of their family, they no longer do so.  They have not been obliged to seek assistance from charities.  Mrs Leaver (senior) is proposing to sell her own home and purchase a house for herself and Mr and Mrs Leaver.  Mrs Leaver receives carer payment (in respect of her mother-in-law), rent assistance and pharmaceutical allowance.  She also receives carer allowance.  Mrs Leaver is entitled to a pensioner concession card which gives her health concessions and benefits, including prescription medicines at a concessional rate.

26.     By comparison with most recipients of Social Security benefits, the Leavers’ financial situation is relatively good.

27.     Mrs Leaver provided a detailed statement which had been prepared with the assistance of Legal Aid.  That statement included information about some very difficult aspects of Mrs Leaver's family history and the unfortunate health problems suffered by several members of her extended family.  Currently, Mrs Leaver provides a high level of care for her mother-in-law who now resides with her and her husband.  Mrs Leaver (senior) is very frail. 

28.     Mrs Leaver has some health problems which cause her some discomfort and require surgery, but she has been too busy assisting other members of her family to undergo the required surgery.  She has also been discouraged from surgery by her brother-in-law's bad experience in the same hospital where her surgery was scheduled.  Both she and her husband suffer high blood pressure.  Mr Leaver has circulatory problems as a result of his diabetes and is also due to have his gall bladder removed soon.

29.     These health issues do not constitute special circumstances. Nor is it something that is uncommon, unusual or exceptional for persons who are in receipt of age pension to suffer ill health (see Secretary, Department of Family and Community Services v Jonauskas (2001) 65 ALD 553). In Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 the Tribunal found ill health alone was not enough to be considered a special circumstance.

30.     From the information provided and her demeanor before me I find Mrs Leaver to be a kind and generous woman who is devoted to her family.  However I do not find that the unfortunate circumstances of her extended family assist in my assessment of whether her circumstances are special.

31.     I find that the circumstances of this matter, when taken together, are not special in that they are not "unusual, uncommon or exceptional" and do not "have a particular quality of unusualness that permits them to be described as special": Re Beadle and Director General of Social Security (supra). For these reasons I find that Mrs Leaver’s circumstances are not special within the meaning of section 1237AAD of the Act. Accordingly she must pay the whole of the debt due to Centrelink. Notwithstanding that she did not set out to mislead Centrelink she has had the benefit of an amount in excess of $10,000 to which she was not entitled, and this must be repaid in full.

DECISION

32.     The Administrative Appeals Tribunal affirms the decision under review.

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member

Signed:         A. Krilis
  Associate

Date of hearing  5 September 2006
Date of Decision  29 September 2006
Representative for the Applicant    Self
Advocate for the Respondent        George Lozynsky