Leishman and Secretary, Department of Education, Employment and Workplace Relations

[2008] AATA 297

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 297

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No A2007/2485

GENERAL ADMINISTRATIVE  DIVISION		)
Re		NEIL LEISHMAN

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date14 April 2008

PlaceMilton, New South Wales

Decision The decision under review is affirmed.

...........signed...................................

Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - parenting payment - failure to declare income - overpayment - debt not attributable solely to administrative error - no special circumstances - decision affirmed.

Social Security Act 1991 ss 503, 1068A, 1223, 1224, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999

Sekhon v Secretary, Department of Family and Community Services (2003) 37 AAR 468

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

Groth v Secretary, Department of Social Security (1995) 37 ALD 797

Secretary, Department of Social Security v Hales (1998) 82 FCR 154   

REASONS FOR DECISION

14 April 2008 Mr S. Webb, Member         

1.      Neil Leishman is a sole parent.  He received parenting payment in respect of his three children.  At the time he was earning variable amounts in employment.  He did not report all changes in his weekly earnings and was overpaid parenting payment.  A delegate of the Respondent Secretary determined that Mr Leishman owed a debt to the Commonwealth as a result of the overpayment.  That determination was affirmed on reconsideration, and subsequently on review by the Social Security Appeals Tribunal.  Mr Leishman commenced repaying the debt but is unhappy with these decisions.

2.      Thus, the issues for determination are whether Mr Leishman has a parenting payment overpayment debt and, if so, the amount of the debt and whether there are grounds to write off or waive all or part of the debt.  During the hearing Mr Leishman informed me that he did not dispute that he was overpaid parenting payment or the amount of the overpayment.  I have considered the evidence on this point and I am reasonably satisfied that Mr Leishman was overpaid an amount of $3,388.12 in the period from 10 January 2001 to 8 July 2005.  I so find.

3.      Mr Leishman asserts that a Centrelink officer informed him that he should report his earnings in employment every 12 weeks for the purposes of calculating his entitlement to parenting payment.  He says that he followed this advice and did so, providing all his payslips.  Furthermore, he asserts that he did not know and was not told that he was doing anything wrong by reporting his income every 12 weeks.  In his submission, Centrelink was in error and should not have told him to report in that way.  He says that Centrelink should have told him to report his income every 2 weeks, as subsequently occurred. In Mr Leishman’s submission, he should not be required to repay the parenting payment debt as it was not his fault. 

4.      As will appear, I do not agree.

debt

5.      Prior to 1 July 2001, if an amount of social security payment (including parenting payment) was paid because the recipient failed or omitted to comply with a provision of the social security law, the amount paid is a debt due to the Commonwealth (subs 1224(1) of the Social Security Act 1991 (the SS Act), then in force). After that date, and continuing to apply presently, if a social security payment is made to a person who is not entitled to the payment for whatever reason, the amount paid is a debt due to the Commonwealth (subs 1223(1) of the Act).

6.      Under the Social Security (Administration) Act 1999 (the Administration Act), the Secretary must determine a claim for parenting payment (s36) and must determine to grant the claim if the claimant is qualified and parenting payment is payable (s37). The qualification requirements for parenting payment are set out at s 500 of the SS Act. The rate of a person’s parenting payment is calculated under s 503 of the SS Act, applying the rate calculator set out at s 1068A of that Act. The ordinary income of a claimant is to be taken into account by applying Module E of the rate calculator. By written notice the Secretary may require a claimant to provide, inter alia, information about any change in their income (ss 67 and 68, Administration Act). As can be seen from these provisions, the Secretary must determine the rate of a person’s parenting payment, taking into account changes in their ordinary income from time to time.

7.      Mr Leishman did not dispute that he received notices from Centrelink in which it is stated that he is obliged to inform Centrelink of any increase in his income within 14 days.[1] For example, it is not disputed that Mr Leishman received notices dated 27 November 2000 and 19 January 2001. I am satisfied that these are notices for the purposes of s 68 of the Administration Act and so find. Mr Leishman was employed by the Shoalhaven City Council from 21 February 2000 to 27 October 2000 and from 8 January 2001.[2]  That employment is presently ongoing.  With reference to the period in which the overpayment occurred, the amounts he earned in that employment are set out at T28 folios 121 to 127.  Mr Leishman reported his income, as follows:

[1] See notices at T4-T25 and T46 folios 303 to 323.

[2] T28 folio 119.

8 January 2001       1 week income     $542.10 [3]

[3] T40 folio 240; T42 folio 282.

16 January 2001 mail review, returned on 19 January 2001 including income details [4]

[4] T46 folio 344 and Respondent’s submissions dated 11 March 2008.

17 April 2001           “SA 138 LODGED. NO CHANGE TO INCOME”[5]

9 July 2001              “PPS LODGED. NO CHANGE TO INCOME”[6]

7 September 2001  1 week (regular)    $542.10[7]

4 October 2001       “PPS REVIEW LODGED” “CUST. DID NOT LODGE WAGES PROOF WITH REVIEW”[8]

[5] T46 folio 344.

[6] T46 folio 344.

[7] T46 folio 344; Respondent’s submissions dated 11 March 2008, Attachment A.

[8] T46 folio 344; Respondent’s submissions dated 11 March 2008, Attachment A.

11 January 2002     “SA138 PPS EVIEW [sic] PROCESSED 11/1/02”[9]

[9] T46 folio 344.

2 April 2002             12 weeks income  $6,720.00[10]

[10]T40 folio 240; T42 folio 276; T46 folios 343-344.

25 June 2002          12 weeks income  $6,719.88[11]

[11] T40 folio 240; T42 folio 275; T46 folio 343.

29 October 2002     12 weeks income  $6,500.00 (later amended to $7,059.68)[12]

[12] T40 folio 240; T42 folios 272-273; and T46 folio 343.

27 December 2002 12 weeks income  $7,462.93[13]

[13] T40 folio 240; T46 folio 343; T42 folio 271.

24 March 2003        12 weeks income  $7,107.55[14]

17 July 2003            12 weeks income  $7,235.96[15]

14 July 2004            2 weeks                 $1,277.04[16]

3 August 2004         2 weeks income    $638.52[17]

17 August 2004      2 weeks income    $1,287.00[18]

Thereafter, income was reported fortnightly.[19]

[14] T40 folio 240; T42 folio 270; T46 folio 343.

[15] T40 folio 240; T42 folio 268; T46 folio 343.

[16] T46 folio 327.

[17] T40 folio 240; T42 folio 262; T46 folios 324-325.

[18] T40 folio 240; T42 folio 261.

[19] T40 folio 240; T42 folios 252-261; T46 folios 340-342.

8.      As can be seen from careful examination of these income and reporting records, Mr Leishman failed or omitted to report increases in his income within the requisite period of 14 days.  It appears, for example, that Mr Leishman’s income increased above the base amount of his declared earnings ($542.10 per week) on 23 February 2001, 23 March 2001, 30 March 2001, 27 April 2001, 11 May 2001, 18 May 2001 and 25 May 2001.  Mr Leishman failed or omitted to report these (and subsequent) increases in compliance with his notified obligations.

9.      I am reasonably satisfied that Mr Leishman failed or omitted to comply with notices setting out his reporting obligations and in consequence received amounts of parenting payment to which he was not entitled.  Applying s 1224 (in force prior to 1 July 2001) and s 1223 (in relation to subsequent periods), Mr Leishman has a debt to the Commonwealth in the amount of $3,388.12.

write off or waiver

10.     Mr Leishman submits that the debt should be waived because he followed the advice he received from Centrelink and reported his income on a 12 week basis.  He says that the debt arises from Centrelink’s administrative errors concerning the information he was given and the reporting requirements that were applied in his case.  Mr Leishman gave evidence that he has experienced severe stress as a result of the debt and is in financial hardship.  He says that he is struggling to repay the debt and that it is difficult to make ends meet from week to week.  In his submission, when these difficulties are considered in relation to Centrelink’s errors and the delay in rectifying the reporting problem, the debt should be waived as requiring him to repay the debt is grossly unfair.

11.     Unfortunately for Mr Leishman, those submissions are not made out.

12. The Commonwealth’s right to recover a debt may be written off (s 1236 of the SS Act) or waived (relevantly s 1237A, s 1237AAD) in certain circumstances.

13.     The question of writing off the debt was not pressed or ventilated at hearing.  Nevertheless, considering the requirements of s 1236, I am satisfied that in Mr Leishman’s case there are no grounds on which to write off the debt.

14.     A debt may be waived if it is attributable solely to administrative error of the Commonwealth and was received in good faith (s 1237A).  The phrase ‘attributable solely to’ refers to the only cause that objectively can be ascribed to the particular debt and requires an objective assessment of causation (see Selway J in Sekhon v Secretary, Department of Family and Community Services (2003) 37 AAR 468 at [35]).

15.     Mr Leishman’s debt arose because he failed to comply with the reporting requirements of which he was notified.  The debt he presently bears is the product of that cause and it is not solely attributable to administrative error of Centrelink. 

16.     Even though Centrelink placed Mr Leishman on a 12 weekly reporting regime, that did not excuse him from complying with the requirement to report any increase in his income within 14 days.  His failure to do so meant that the earnings amount that was applied for the purpose of calculating the rate of his parenting payment entitlement was understated.  This should have been corrected retrospectively once his actual earnings were reported.  I accept that Centrelink did not address this issue in a timely manner and the situation was allowed to persist for many months, thereby increasing the amount Mr Leishman was overpaid, and the amount of his debt.  However, this is not the sole cause of his debt and it is not the sole reason his debt increased.  The other cause is Mr Leishman’s repeated failure to comply with his income reporting obligations.

17.     Nor does the 12 week reporting regime mean that he was entitled to a greater amount of parenting payment than would result if his actual earnings were declared on a fortnightly or weekly basis and applied for the purpose of determining the rate of his parenting payment using the rate calculator at s 1268A.  If that were so, he would be entitled to a greater amount of parenting payment than another person earning the same amount and declaring that income on a regular weekly or fortnightly basis.  Plainly enough, such an approach is inconsistent with the legislation and the statutory requirements set out therein.  Furthermore, such an approach would be unfair for all those recipients of social security benefits who declare their income on a weekly or fortnightly basis. 

18.     It follows therefore that Mr Leishman’s debt, in whole or in part, is not attributable solely to administrative error of the Commonwealth and cannot be waived under s 1237A.

19.     A debt may be waived in whole or in part if there are special circumstances rendering it appropriate to do so (s 1237AAD).  The phrase ‘special circumstances’ has been considered in many cases in this Tribunal and the Courts.  It refers to the existence of something that is unusual, uncommon or exceptional in the particular circumstances (Re Beadle and Director-General of Social Security (1984) 6 ALD 1) or to the occurrence of something that is unfair, unintended or unjust (Groth v Secretary, Department of Social Security (1995) 37 ALD 797).

20.     Mr Leishman detailed his living expenses, income, assets and liabilities in oral evidence which I accept.  I find that he is in constrained financial circumstances and has little money left over from week to week after covering his reasonable expenses.  Nevertheless, Mr Leishman is in full time stable employment and earns a reasonable wage, sufficient to support himself and his children.  If recovery of the debt is the cause of financial hardship, it is open for him to negotiate a lower rate of repayment or recovery with the Respondent Secretary.  I accept that Mr Leishman experiences stress as a result of these proceedings and issues concerning the raising and recovery of the debt.  However, there is no medical evidence of any significant ill-health or disabling disorder that sets his case apart from the usual.  His three children are in good health and attend school.  The family is in reasonable housing.  I am satisfied that Mr Leishman’s domestic circumstances are not out of the ordinary.  These are not circumstances that render it appropriate to waive any part of Mr Leishman’s debt.

21. Mr Leishman’s submission concerning lack of fairness as a result of perceived errors of Centrelink is not made out. I accept his evidence that he was told to report his income every 12 weeks and that there were delays in addressing discrepancies in his actual income and the income used to calculate the rate of his parenting payment. Furthermore, it is reasonable for a person such as Mr Leishman, who is not an expert in social security law or in the application of rate calculators under the SS Act, to rely on advice that he is given by Centrelink officers. However, those factors do not excuse him from complying with his legal obligations as formally notified.

22.     If Mr Leishman was confused about his income reporting requirements, the obligation was on him to raise the matter with Centrelink and ensure that he was reporting his income correctly.  There is evidence that he contacted Centrelink on various occasions and discussed issues relating to his income and entitlements.  Nevertheless, it is plain enough that Mr Leishman did not comply with his reporting obligations in relation to increases in his income and there is no evidence that he was advised by Centrelink officers that he did not need to so comply.  Careful examination of the records establishes that Mr Leishman failed to comply with the 12 week reporting regime on at least five occasions.  He failed to report his income on 4 October 2001.  He reported income on 29 October 2002, 24 March 2003 and 17 July 2003, but only after more than 12 weeks had elapsed.  He failed to report his income in the period from 17 July 2003 to 14 July 2004. 

23.     It is more probable than not, although it is far from certain, that in January 2001, Centrelink officers advised Mr Leishman that he must report his actual earnings initially on a 12 week cycle and that this was done on the basis that his earnings in employment were regular and stable.  It appears that Mr Leishman proceeded on this basis and simply chose to ignore the formally notified income reporting obligations.  There three things to say about this aspect of Mr Leishman’s case.  First, as can be seen from the earnings information provided by his employer, Mr Leishman received income over and above his regular gross income as a result of overtime and other penalty payments.  He failed to declare these increases in his income with the result that he was paid amounts of parenting payment above his entitlement.  Second, Mr Leishman was placed on a 12 week reporting regime based on the expectation that his income was regular and stable.  Mr Leishman failed to comply with this reporting requirement on at least five occasions with the result that the income was understated for the purpose of calculating the rate of his parenting payment.  Third, as I have said, the existence of such a reporting regime did not excuse him from the obligation he was under to comply with the formally notified requirement to inform Centrelink of any increase in his income within 14 days.  His failure to comply with these notified obligations meant that his income was understated for the purpose of calculating the correct rate of his parenting payment.

24.     I am reasonably satisfied that these are not special circumstances and that nothing unfair, unintended or unjust has occurred.  As French J said in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, at 155: “The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way that is appropriate to the circumstances”.  That observation is apposite here.  There are no grounds made out that render it appropriate to waive all or part of Mr Leishman’s debt to the Commonwealth and it remains for the Secretary to recover those monies in a way that is appropriate, having regard to the particular circumstances in which Mr Leishman finds himself and to which he refers in written submissions received by the Tribunal on 28 March 2008.

25.     The decision under review is affirmed.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

Signed:       ...signed................................................

Jane Gribble

Associate

Date of Hearing  26 February 2008
Date of Decision  14 April 2008
Representative for the Applicant             Self                
Representative for the Respondent        Jillian Furner
  Centrelink Legal Services