Levy (Wegener) and Secretary, Department of Family and Community Services - [2002] AATA 736

DECISION AND REASONS FOR DECISION [2002] AATA 736

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2002/434

GENERAL ADMINISTRATIVE DIVISION       )
           Re      SHERRYN LEVY (WEGENER)
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr J Handley (Senior Member)

Date2 August 2002
PlaceMelbourne

Decision      The decision of the Social Security Appeals Tribunal (i) in so far as it decided to raise a debt, and recover an overpayment, is affirmed; and (ii) the amount of the overpayment is $6,069.31.
  ..........Sgd. Mr J. Handley................
  Senior Member
CATCHWORDS
Social Security – applicant worked whilst being paid newstart allowance – pay periods from employment did not coincide with Centrelink pay periods – whether failed to disclose amounts earned – whether sole error by Commonwealth – decision affirmed.
Social Security Act 1991 – Sections 1237A(1) and 1237AAD

REASONS FOR DECISION

2 August 2002 Mr J Handley (Senior Member)

The applicant applies to review a decision made by the Social Security Appeals Tribunal (SSAT) on 28 March 2002. The SSAT was then reviewing a decision made by an authorised review officer of Centrelink to raise and recover an overpayment of $6,031.90, being Newstart Allowance ("NSA") overpaid in the period 16 August 1996 to 7 April 1999.
The SSAT decided that there was an overpayment, which gave rise to a debt for the period 16 August 1996 until 8 April 1998, in the sum of $2,927.06. Additionally, the SSAT decided that the respondent should recalculate any overpayment for the remaining part of the above period, i.e. between 9 April 1998 and 7 April 1999, having regard to directions that it made.
The hearing was convened in Albury on 15 July. The applicant was represented by her mother, Mrs Lorraine Wegener. The applicant did not appear. Mr Baker appeared on behalf of the respondent.
Mrs Wegener said that her daughter was suffering from stress associated with these proceedings. This was apparently related to the dismissal of fraud charges brought against her by the Director of Public Prosecutions, on behalf of Centrelink in proceedings in the District Court in Albury on 29 June 2001. Whilst those charges were dismissed, Mrs Wegener said that her daughter was profoundly affected by those proceedings and was unable to cope with the prospect of giving evidence in the present application. Additionally, Mrs Wegener said that her daughter is presently 4 ½ months pregnant and was at significant risk of miscarriage.
After much discussion between Mrs Wegener, Mr Baker and myself as to how the matter could proceed in the absence of the applicant, it became clear that Mrs Wegener was conceding, on behalf of her daughter, that she in fact had been overpaid. However it was submitted that the overpayment occurred by error on the part of Centrelink and in those circumstances, the debt should be waived.
I asked Mrs Wegener on three occasions to confirm that in fact she conceded, on behalf of her daughter, that there was an overpayment of NSA. On each occasion, she confirmed that there was an overpayment. On each occasion, she also submitted that her daughter should not have to make any repayment of the amount overpaid, because the overpayment occurred entirely and solely by reason of error on the part of Centrelink.
When this was learnt, Mr Baker submitted that there was no error made by Centrelink. In the alternative, if there was any administrative error made by the Commonwealth, the overpayment was not solely due to any error on its part, and in those circumstances, waiving the debt was impermissible.
Mrs Wegener submitted that the total amount overpaid to her daughter could be calculated at 66 fortnightly payments of $97.19, being a total of $6,413. When one or two fortnightly periods were brought into account, where an NSA payment was not paid, a total nett overpayment of approximately $6,000 was achieved.
Mr Baker, in a series of revised calculations prepared for the hearing submitted the overpayment was $6,069.31. This sum comprised $2,927.06, as the SSAT found being the overpayment between 16 August 1996 and 8 April 1998. The balance, namely $3,142.25, is the sum recalculated as the SSAT directed, for the remainder of the period of overpayment.
The circumstances giving rise to the admitted overpayment may be briefly summarised as follows-.
Mrs Levy was employed by Vic Roads as a casual employee. She was paid either by the hour or by the day, and paid fortnightly. Whilst employed, Mrs Levy also claimed and qualified for NSA. The NSA was paid on a fortnightly basis. The amount paid as NSA had regard to the income she earned, fortnightly, from Vic Roads.
Unfortunately, - and by way of explaining the genesis of this dispute - the fortnightly periods enquired by Centrelink, did not coincide with the fortnightly periods of employment of Vic Roads.
This became obvious when an assessment was made of the pay periods evident by the fortnightly pay slips and the fortnightly newstart questionnaires (identified as 'SU19'), found within the T documents.
For the purposes of these reasons for decision, the fortnights as evident in the SU19 forms, expire 3 days after the fortnightly wage periods of Vic Roads. One example of the SU19 form, found at page 136 of the T documents, inquired as to any work or income of Mrs Levy for the period 12 March 1998 to 25 March 1998. The relevant wages period with Vic Roads was the fortnight expiring on 28 March 1998. The period of employment therefore expired 3 days after the period of time within which the SU19 form enquired. Put in the alternative, the newstart period commenced 3 days before each fortnightly period of employment.
The SU19 form made certain inquiries of newstart beneficiaries with respect to the attempts made to secure employment within the fortnightly period defined upon the form. It also asked questions as to whether work had in fact been undertaken, what was earned and what days were worked.
Mrs Wegener submitted that the fortnightly pay period, evident from the Vic Road pay slips, recorded the days actually worked within that period and the amounts earned for each of those days. It was her case, on behalf of her daughter, that any day or days "outside" the periods inquired by an SU19 forms, were not recorded on the SU19 form because there was no requirement to do so. That is to say - and using the SU19 period 12 March 1998 to 25 March 1998 by way of example (T documents pages 136 and 137) - the closest corresponding fortnightly wage period was the fortnight ending 28 March 1998. It followed - on Mrs Wegener's analysis– that any days worked before 15 March 1998 (the first day of the period) did not need to be disclosed, as the SU19 form only inquired of work within the period defined by the form. It followed, therefore, that from the pay periods ending 28 March 1998, as is evident in the wage slip at page 107, the day worked, namely 11 March 1998, was excluded from disclosure to the Department because it was a day worked before 12 March. Coincidentally, the sum earnt on 11 March was $97.18. Mrs Wegener submitted, that $97.18 was the sum that when multiplied by 66, produced the sum of $6,413.22 as being the amount actually overpaid (refer paragraph 8 earlier).
This methodology of disclosure and non-disclosure and the resulting overpayment was the basis Mrs Wegener put as the error the respondent caused. That is to say, because the periods of inquiry of the respondent's SU19 forms did not correspond with the wage periods of her daughter, the amount not disclosed amounted to error on the part of the Commonwealth and not on the part of her daughter. This was due, she said, to the incompatibility the 2 applicable periods.
Insofar as the period 16 August 1996 to 8 April 1998 is concerned, the SSAT made its own calculations giving rise to the sum of $2,927.06 as overpaid. The basis for its calculations are tabulated at paragraph 9 of its reasons for decision.
In a comprehensive analysis of the fortnightly payment periods within the above period, the SSAT had regard to the amount actually earned and the amount actually declared as having being earned, for each fortnight, within the period of the SU19 forms. In almost all of the fortnights, the amount declared as earned was less than the amount actually earnt. The pay slips, which recorded the actual dates of each day worked, identified the amount actually earned for each of those days. These calculations could be made, because up to the fortnight ending 7 April 1998, the pay slips identified each day worked.
Insofar as this part of the overpayment debt is concerned, I am satisfied that despite the differing starting and finishing dates for the fortnights of employment and the SU19 forms, Mrs Levy failed to declare, from time to time, the amounts actually earned. This cannot be explained by the differing dates covered by each respective fortnight. By way of example, the fortnight ending 28 March 1998 (payslips, T docs, page 107) records the days actually worked in that period. The closest corresponding SU19 period is 12 March 1998 to 25 March 1998. The applicable SU19 form is found at pages 136 and 137. The pay slip reveals that Mrs Levy worked on 17 March 1998 and earned $97.17. That day worked is not disclosed on the SU19 form. She earned the sum of $586.79, yet the sum of $357.30 only was disclosed to Centrelink. Using this fortnight as an example, the respective amounts earnt, and declared, are consistent with the calculations made by the SSAT (refer para 24).
Additionally, and as a further example, the corresponding pay period for the SU19 period of 26 March 1998 to 8 April 1998 was the fortnight ending 11 April 1998 (page 108). On the applicable SU19 form (pages 134 and 135), Mrs Levy failed to disclose that she worked and received earnings for the day 25 March 1998. Whilst that day was not recorded in the previous SU19 form, it is again a further indication of the failure to disclose earnings. The amount paid with respect to the day 25 March 1998 was $97.18. The amount declared on the SU19 form, as earned within the fortnightly period, was $377. However, for the four days that were actually worked, the sum earned (by reference to the amounts paid for each of those days and also to the pay slip) was stated as $411.12. (refer SSAT calculations at p.24.)
Insofar as the remainder of the period of overpayment is concerned, namely the fortnight period of 21 April 1998 until 7 April 1999, Mr Baker intended to call an officer from the Canberra office of Centrelink, Mr Mount, to explain some calculations that he made for the purposes of the hearing and which are found within the Statement of Fact and Contentions lodged prior to the hearing. These calculations were completed by reason of the pay slips from 21 April 1998 not identifying the days actually worked and the amounts earned for each of those days within each relevant fortnightly period. Mr Mount recalculated the debt for the period commencing 21 April 1998 - as Centrelink was directed to do by the SSAT - by reference to:

observing that 9 working days within each of the fortnightly pay periods were included in the fortnightly period enquired by each SU19 form; and
each fortnightly period of payment of salary was divided by 10 to determine the average daily amount earned in each fortnightly period worked; and
the 9 days actually worked plus the "10th day" from the succeeding fortnightly period were totalled to establish the amount "earned" for the same corresponding SU19 period; and
the amount "earned" was cross-referenced against the amount actually declared and the amount to which there was a newstart payment;

which eventually produced an overpayment, within this latter period, of $3142.25. That sum, plus the sum of $2,927.06, gives a total of overpayment of newstart allowance in the sum of $6,069.31 Centrelink now submits as an overpayment of NSA.

There are only two SU19 forms within the T-documents referable to the period 16 August 1996 to 8 April 1998. It is for this period that the SSAT made the calculations found at page 23-24 and which give rise to the overpayment assessed at $2927.06. Because there is an absence of all the SU19 forms within this period it is not possible to review, for each fortnight, the amounts earned and the amounts declared as earned. However the SSAT must have had access to all the SU19 forms to allow it to make its calculations. Additionally, on the examples of the fortnights ending 25 March and 2 April (refer paragraphs 20 and 21 earlier) there was a failure to disclose the total amounts earned. There was also a failure to disclose all the days worked. This has caused the overpayment. Little turns on the absence of all SU19 forms because the applicant concedes an overpayment.
I also note that the SU19 form at page 178 covers the period 31 December 1998 to 13 January 1999. The applicant declares on that form that she did not work or earn monies between 24 December 1998 and 12 January 1999 because she was on holiday, however-

In the SU19 of the previous month (page 178) the applicant declared that she did work on 24 December and;
Her payslips for the fortnight ending 2 January 1999 and 16 January 1999 show that she did earn salary.

In all of the circumstances little turns on the absence of all the applicable SU19 forms, or the methodology of the respondent's calculations because an overpayment is conceded (paragraphs 5, 6 and 8) and it closely resembles the sum now calculated by the respondent (paragraph 9). The overpayments were not, in my view, by error on the part of the Commonwealth. The overpayment has occurred because the applicant has failed to disclose the totality of her earnings. It appears that she also failed to make this disclosure on a fortnightly basis. The examples given earlier show that days actually worked and corresponding amounts earnt were also not declared. Nothing points to any error made by the Commonwealth, rather it calculated NSA entitlement following the representations Mrs Levy made to it. Additionally, the explanations offered by Mrs Wegener at paragraph 16 are not credible. Periods of work not captured by the "incompatible" SU19 forms, can and should have been declared on the preceding or succeeding SU19 forms.
The Legislation
Section 1237A of the Act refers to waiver of debt arising from error. Section 1237A(1) reads:
"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."
Insofar as this section is concerned, I am satisfied that the whole of the debt cannot be attributable solely to an administrative error made by the Commonwealth. It follows, therefore, that the Secretary is not entitled to waive the debt or part of it.
Section 1237AAD provides that a waiver is permitted in "special circumstances".    That section reads:
"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 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."
The applicant did make false statements (refer earlier) which have given rise to the overpayment. The statements - being the information declared in the SU19 forms, were untrue (refer McAuliffe v Secretary, Department of Social Security (1991) 13 AAR 462 at 476). Whether the applicant "knowingly" made the false statements is another matter. She did not give evidence and I am unable to find that she "knowingly" - or knew - she was making false statements (although it would be surprising that in each fortnight in a 2 ½ year period, Ms Levy did not know she was making false statements or representations). If the applicant were able to satisfy s.s(a) of the above section, there are some circumstances other than financial hardship alone, which may be relevant in assessing whether those circumstances are special and whether the debt should be waived. Those circumstances would be the apparent stress and illness suffered by the applicant by reason of these proceedings. Mrs Wegener said that her daughter is currently prescribed medication for stress and she has suffered stress related headaches of a severity which caused her doctors to recommend a brain scan. Additionally she is presently 4 ½ months pregnant and is at risk of miscarriage. I also note that the applicant incurred legal costs in excess of $5,000 in defending the criminal proceedings in the District Court. However the amount overpaid is a considerable sum of public monies and Ms Levy and her husband are both working. It would appear that she is capable of making some repayment towards the debt, even if only on an instalment basis, however, I also note that she will only be working for another three or four months when she proposes to take maternity leave. She and her husband have considerable debts and Ms Levy intends to return to work after the birth of her child on a part time basis.
In all of the circumstances, I am not satisfied that it is "desirable" to waive the debt, because I am unable to find that the applicant's circumstances are "special". I will direct however that repayment of the debt should not commence until after the birth of the applicant's child and then after a statement of financial circumstances has been provided to the respondent. The capacity of the applicant to repay the debt can then be assessed.
In all of the circumstances the decision of the SSAT insofar as it found that there was an overpayment of NSA, should be affirmed. I am satisfied that the overpayment is in the sum of $6,069.31 as was submitted by the respondent at the hearing.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley (Senior Member).
Signed:         Katherine Navarro...........................................
  Associate
Date/s of Hearing  15 July 2002
Date of Decision  2 August 2002
Counsel for the Applicant        Mrs Lorraine Wegener
Solicitor for the Applicant         N/a
Counsel for the Respondent    Mr Terry Baker
Solicitor for the Respondent    N/a