Love and Secretary, Department of Social Services (Social services second review)
[2016] AATA 8
•14 January 2016
Love and Secretary, Department of Social Services (Social services second review) [2016] AATA 8 (14 January 2016)
Division
GENERAL DIVISION
File Number(s)
2014/5681
Re
Tobias Love
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Deputy President Dr P McDermott RFD
Date 14 January 2016 Place Brisbane The decision under review is set aside and in substitution the Tribunal decides that $23,235.82 is waived from the debt pursuant to s 1237AAD of the Social Security Act1991 (Cth).
............................................................
Deputy President Dr P McDermott RFD
CATCHWORDS
SOCIAL SECURITY – debt recovery and waiver – failure to notify of income – disability support pension – overpayment due to undeclared income – debt of disability support pension occurred – knowingly – special circumstances – more appropriate to waive the debt than to write it off
LEGISLATION
Social Security Act 1991 (Cth) ss 1064, 1237AAD
Social Security (Administration Act) 1999 (Cth) ss 68, 196
Administrative Appeals Tribunal Act 1975 (Cth) s 32
CASES
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Secretary, Department of Social Security and Gray-Corking (1997) 11 SSR 152
Backhouse and Secretary, Department of Family and Community Services [2000] AATA 139
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Severino and Secretary, Department of Family and Community Services [2005] AATA 745
William David & Ann Dora Moore, Secretary, Department of Social Security [1998] AATA 626
Re Secretary, Department of Social Security and Bliss (1997) 2 SSN 112
Balancio v Department of Family and Community Services (2003) 74 ALD 204
Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553
Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162
Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745
Secretary, Department of Social Services v Hales (1998) 82 FCR 15
REASONS FOR DECISION
Deputy President Dr P McDermott RFD
14 January 2016
This is an application for review of a decision to raise and recover a debt from the applicant, Mr Tobias Love, in the amount of $29,044.78. The decision was affirmed by an Authorised Review Officer (“ARO”),[1] and subsequently the Social Security Appeals Tribunal (“SSAT”).[2]
[1] Exhibit 1, T Documents, T 6, pages 77-83. Authorised Review Officer decision and notes dated 12 August 2014.
[2] Exhibit 1, T Documents, T 2, pages 12-12. Social Security Appeals Tribunal decision dated 17 October 2014.
BACKGROUND
The applicant was diagnosed with Cystic Fibrosis (“CF”) at two years of age.[3] In November 2008 he commenced casual employment at Big W, a division of Woolworths Limited.[4]
[3] Exhibit D, para [5]. Statutory declaration of Tobias Love dated 17 June 2015.
[4] Ibid para [30].
On 1 September 2009 the applicant’s mother and authorised nominee, Ms Duce, lodged a claim for the Disability Support Pension (“DSP”) accompanied by an Income and Assets form.[5] Neither of those documents disclosed that the applicant was earning income.[6] The rate of DSP paid to a person is affected by their income.[7]
[5] Exhibit A, T Documents, S 2 and 3, pages 3-44. Claim for Disability Support Pension and Income and Assets form dated 1 September 2009.
[6] Ibid.
[7] Social Security Act 1991 (Cth) s 1064.
The applicant was granted DSP for the period between 23 October 2009 and 15 November 2013 which began by advance payment in September 2009.[8] The rate of that pension was calculated on the basis that the applicant was not engaged in casual employment.[9]
[8] Exhibit A, T Documents, T 11, page 94; T 21, page 223.
[9] Respondent’s Statement of Facts, Issues and Contentions, page 2, para [7].
The applicant did not notify Centrelink of his employment status until 22 September 2011 when he contacted them via telephone. It was then recorded that earnings commenced from that date at a gross amount of $40 per week.[10]
[10] Exhibit A, T Documents, T 20, page 221. Document list and selected file notes.
Centrelink commenced an investigation of the applicant’s income on 24 October 2013[11] and sent his employer two Employment Report requests covering different periods on 14 November 2013[12] and 7 April 2014.[13] The second report indicated that the applicant’s gross earnings between 4 July 2009 and 12 April 2014 were $94,278.58.[14] Centrelink calculated that the applicant had been overpaid DSP and determined on 11 June 2014 to raise and recover a debt of $29,044.78.[15]
[11] Ibid page 218.
[12] Exhibit A, T Documents, T 4, page 62. Employment report dated 25 November 2013.
[13] Exhibit A, T Documents, T 5, page 68. Employment report dated 15 April 2014.
[14] Ibid page 75.
[15] Exhibit A, T Documents, T 20, page 217. Document list and selected file notes.
A notice was sent to the applicant to notify him of the debt on 10 July 2014.[16] The applicant subsequently requested review of the decision on 19 June 2014.[17]
[16] Exhibit A, T Documents, T 25, pages 241. Letter to applicant dated 10 July 2014.
[17] Exhibit A, T Documents, T 20, page 216. Document list and selected file notes.
On 12 August 2014 the ARO affirmed the decision to raise and recover the DSP debt from the applicant.[18] On 17 October 2014 the SSAT reviewed and affirmed the decision.[19]
[18] Exhibit A, T Documents, T 7, page 84. Authorised Review Officer decision and dates dated 12 August 2014.
[19] Exhibit A, T Documents, T 2, page 12. Decision of Social Security Appeals Tribunal dated 17 October 2014.
EVIDENCE
The medical report drafted by Dr Bell provides that the applicant has CF and a related “lung disease with moderate bronchiectasis and airflow obstruction, pancreatic insufficiency and fluctuating bowel habit”.[20] Dr Bell provided that, at the date of writing (20 August 2015), the applicant was in reasonably good health. However, he indicated that the applicant’s lung capacity would deteriorate at a rate of two per cent per year and that this would “progress significantly over the next five to ten years”.[21] Dr Bell provided that as the applicant’s health deteriorates that he would have to spend an increasing amount of time on this daily therapy and up to a quarter of each year in hospital.[22]
[20] Exhibit C, para [4]. Report of Dr Scott Bell dated 20 August 2015.
[21] Ibid para [6].
[22] Ibid para [6].
The applicant has significant ongoing medical expenses. He deposed that he is required to pay the full fee for medical consultations because he does not currently have a health care card.[23] Consequently, he does not seek medical attention “unless it is really bad”.[24] He does not receive a discount on his medicine, nebuliser or PEP mask equipment.[25]
[23] Exhibit D, para [56]. Statutory declaration of Tobias Love dated 17 June 2015.
[24] Ibid.
[25] Ibid.
The applicant expected to graduate with a Bachelor of Psychology from James Cook University in December 2015.[26] The applicant wishes to pursue a career in psychology because he wishes to “make a contribution” and “to give something worthwhile back to his family and to other people”.[27]
[26] Exhibit E, para [3]. Statutory declaration of Tobias Love dated 20 August 2015.
[27] Ibid para [16].
The applicant anticipates that he will be required to complete a five-year internship to become a registered psychologist.[28] He estimates that the expenses involved in the internship would be at least $32,000.[29] The wage of a provisional psychologist is less than what he currently receives at Big W.[30] Consequently, the applicant will be required to continue to work at Big W in order to meet his expenses.[31]
[28] Ibid para [9].
[29] Ibid para [11].
[30] Ibid para [5].
[31] Ibid para [14].
Ms Duce lodged a claim for the applicant to receive the DSP on 1 September 2009.[32] The applicant signed the application.[33] Ms Duce gave evidence that she received assistance from a young female staff member at Earlville Centrelink in completing the application.[34] Ms Duce informed the staff member that the applicant had “a little part time job at Big W, but the hours were casual and changed” and that he was studying on a full-time basis.[35] The staff member then informed Ms Duce that she “just had to write down that he was studying fulltime [sic]”.[36]
[32] Exhibit A, T Documents, S 2, pages 3-28. Claim for Disability Support Pension dated 1 September 2009.
[33] Ibid page 28.
[34] Exhibit F, para [25]. Statutory declaration of Kathryn Duce dated 17 June 2015.
[35] Ibid.
[36] Ibid.
There is a contention as to whether or not Ms Duce actually received this advice. The respondent has submitted that:[37]
“there is no evidence that the applicant or his nominee were advised not to report earnings. It is… unlikely that the applicant was advised not to report any earnings or a change in earnings”.
[37] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page 9, para [44].
The applicant and Ms Duce were sent 20 pieces of correspondence from Centrelink between 25 September 2009 and 8 December 2012.[38] The majority of these documents contained a notice which provided that the applicant was required to contact Centrelink if he commenced work or if his income increased within 14 days.[39]
[38] Exhibit A, T Documents, T 25, pages 264-408. Letters to applicant and nominee dated between 25 September 2009 and 8 December 2012.
[39] Ibid.
Ms Duce had read at least two of the letters from Centrelink that were addressed to her.[40] She found the letters upsetting.[41] She does not remember getting any letters asking if the applicant’s circumstances had changed.[42]
[40] Exhibit F, para [26-29]. Statutory declaration of Kathryn Duce dated 17 June 2015.
[41] Ibid para [28].
[42] Ibid para [35].
Whilst being the nominee, Ms Duce was working shift work and administering hours of physiotherapy with her sons.[43] She deposed that she “was absolutely exhausted all of the time” to the extent that she “would crawl into bed crying”.[44]
[43] Ibid.
[44] Ibid.
The applicant gave evidence that Ms Duce had informed him of her conversation with the female staff member at Centrelink.[45] The applicant understood that Ms Duce was informed that he was not required to report his income because he was working on a casual basis and studying full-time. Consequently, the applicant declined an offer of a permanent part-time position with Big W because he believed that his DSP payments would only continue if he was working casually.[46]
[45] Exhibit D, para [39]. Statutory declaration of Tobias Love dated 17 June 2015.
[46] Ibid paras [40] and [46].
The applicant read at least one of the notices that were addressed to him. Ms Duce deposed that the applicant “would have opened the mail if it was addressed to him”.[47] The applicant deposed that he had read a letter from Centrelink dated approximately September 2011 that provided that he was required to contact Centrelink if his circumstances or income change.[48] The applicant interpreted the notice as indicating that he was not required to report to Centrelink because his circumstances had not changed from when he began receiving the DSP.[49]
[47] Exhibit F, para [31]. Statutory declaration of Kathryn Duce dated 17 June 2015.
[48] Exhibit D, para [46]. Statutory declaration of Tobias Love dated 17 June 2015.
[49] Ibid.
The applicant contacted Centrelink via telephone on 22 September 2011 to have his payment account details changed. The applicant indicated that he was working on a casual basis during a telephone conversation with a Centrelink staff member.[50] The amount that the applicant was recorded as only earning was $40 per week.[51] However, the applicant deposed that he stated his earnings were $40 for Thursday nights.[52] The staff member recorded that the applicant commenced work from the date of the telephone conversation.[53]
[50] Ibid [43].
[51] Exhibit A, T Documents, T 20, page 221.Document list and selected file notes.
[52] Exhibit D, para [44]. Statutory declaration of Tobias Love dated 17 June 2015.
[53] Exhibit A, T Documents, T 20, page 221.Document list and selected file notes.
On 24 October 2013 Centrelink commenced investigating the applicant’s earnings.[54] The applicant contacted Centrelink on 18 November 2013 to request that his DSP payments be suspended to prevent any further overpayment.[55]
[54] Ibid page 218.
[55] Exhibit D, para [47]. Statutory declaration of Tobias Love dated 17 June 2015. Exhibit A, T Documents, T 20, page 218. Document list and selected file notes.
Centrelink sent two Employment Report requests to Woolworths Limited on 14 November 2013[56] and 7 April 2014.[57] It was calculated from the verified earnings provided by Woolworths Limited that the applicant had a DSP debt of $29,044.78.[58]
[56] Exhibit A, T Documents, T 4, page 62. Employment report dated 25 November 2013.
[57] Exhibit A, T Documents, T 5, page 68. Employment report dated 15 April 2014.
[58] Exhibit A, T Documents, T 13, page 107. ADEX debt explanation. See also T 20, page 220. Document list and selected file notes.
On 1 May 2014 the applicant was sent a notice pursuant to s 196 of the Social Security (Administration) Act[59] requesting him to contact Centrelink by 22 May 2014 to discuss the overpayment.[60] The applicant did not contact Centrelink within the specified period. On 11 June 2014 the DSP debt was raised and the applicant’s DSP was cancelled.[61]
[59] Social Security (Administration) Act 1999 (Cth) s 196.
[60] Exhibit A, T Documents, T 25, page 251. Letter to applicant dated 1 May 2014.
[61] Exhibit A, T Documents, T 20, page 217. Document list and selected file notes.
SUBMISSIONS
The applicant made a number of concessions in his Statement of Facts, Issues and Contentions. The applicant submitted that the only issue for the Tribunal to determine was whether all or part of the recovery of the DSP debt should be waived pursuant to s 1237AAD of the Social Security Act[62] (“the Act”).[63]
[62] Social Security Act1991 (Cth) s 1237AAD.
[63] Applicant’s Statement of Facts and Issues in Contention, page 1, para [6].
Section 1237AAD of the Act provides:[64]
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, the Administration 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.
[64] Social Security Act 1991 (Cth) s 1237AAD.
In relation to s 1237AAD(a), the applicant submitted that neither he nor Ms Duce had knowingly made a false statement or a false representation, nor had they knowingly failed or omitted to comply with a provision of the relevant legislation.[65]
[65] Applicant’s Statement of Facts, Issues and Contentions, page 1, para [8].
Both the applicant[66] and the respondent[67] referred to the decision in Re Callaghan and Secretary, Department of Social Security[68] where the Tribunal held that “knowingly” means:
“actual knowledge, rather than constructive knowledge… to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time to events surrounding the false statement or the act or omission”.
[66] Ibid [9].
[67] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page 12-13, para [51].
[68] (1996) 45 ALD 435 at 445 at [48].
The respondent submitted that Ms Duce and the applicant knowingly made a false representation by indicating that the applicant was not in receipt of an income.
The respondent submitted that the applicant was informed of his obligation to report his income and changes in income in the numerous information notices issued pursuant to s 68(2) of the Social Security (Administration Act).[69] The applicant’s failure to advise Centrelink of his income within 14 days of receiving the notice amounted to knowingly omitting to comply with the Act.
[69] Social Security (Administration Act)1999 (Cth); Respondent’s Statement of Facts, Issues and Contentions, page 13, para [55].
The respondent submitted that actual knowledge can be inferred because the applicant had received and read at least one notice from Centrelink.[70] In supporting this submission the respondent referred to Re Callaghan where it was held:[71]
“Taking into account Mr Callaghan’s knowledge of the notice and of his having read at least one of them, I find that he had an obligation to advise of a change in Mrs Callaghan’s income. Therefore, when he failed to advise of the change he knowingly omitted to comply with a provision of the Act”.
[70] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page 13, para [55].
[71] Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 at [48].
The applicant submitted that Ms Duce did not have actual knowledge that she was making a false statement or false declaration because of the advice she received from the Centrelink staff member.[72] The notice did not alert Ms Duce to her obligation because she had received advice to the contrary.
[72] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, pages 2-3, para [11].
The applicant submitted that Ms Duce had a limited capacity to comprehend administrative correspondence because she was exhausted from the combination of her work commitments and her role as carer for the applicant and his brother.[73]
[73] Ibid para [12].
The applicant submitted that he did not knowingly omit to comply with his obligations under the Act. The applicant did not have actual knowledge that he was required to report his income because Ms Duce had relayed to him the advice she received from the Centrelink staff member. Consequently, the applicant believed that he was not required to report his income to Centrelink because he was employed on a casual basis and was studying on a full-time basis. The written notices did not lead the applicant to believe that he was required to report to Centrelink because his circumstances had not changed.[74]
[74] Applicant’s Statement of Facts and Issues in Contention, 27 August 2015, page 3, para [13].
The applicant submitted that he acted in accordance with the belief that he was not required to report his income. First, the applicant had declined an offer of a permanent part-time position at Big W because he believed that the change in his position status would affect his DSP allowance.[75] Secondly, the applicant requested that his payments be suspended after discovering that he had been overpaid. It was submitted that the applicant’s behaviour reflected an “innocent misunderstanding and naivety of his obligations to report his income”.[76]
[75] Ibid para [14].
[76] Ibid para [15].
It was the applicant’s submission that he was naive about his obligation to report his income to Centrelink.[77] The decision in Re Secretary, Department of Social Security and Gray-Corking[78] was referred to in support of the submission that being naive of an obligation to disclose does not amount to actual knowledge.
[77] Ibid [13].
[78] (1997) 11 SSR 152.
The respondent insisted that the applicant had knowingly omitted to comply the information notices. The respondent relied on the decision in Backhouse and Secretary, Department of Family and Community Services[79] where the applicant was “careless” in reading Departmental notices and in not advising the Department of its errors. The Tribunal held that the applicant:[80]
“must accept some responsibility for her actions as [being careless] is simply not good enough… when the funds of the public purse are concerned”.
[79] [2000] AATA 139.
[80] Ibid at para [45].
In relation to s 1237AAD(b), both the applicant[81] and the respondent[82] recognise that there is no precise or exhaustive definition for “special circumstances”. This finding was made in Beadle and Director-General of Social Security.[83]
[81] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, page 4, para [17].
[82] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page 14, para [57].
[83] (1984) 6 ALD 1 at 3.
Both parties[84] referred to the decision in Groth v Secretary, Department of Social Security[85] where it was held that “special circumstances” requires:
“something to distinguish [the] case from others, to take it out of the usual or ordinary case”.
[84] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, page 4, para [17]; Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page.14, para [57].
[85] (1995) 40 ALD 541 at 545.
The applicant submitted that there were four factors that distinguished his case from the usual and ordinary case.[86] First, the applicant’s health was submitted to be a factor that indicated that there were special circumstances.[87]
[86] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, pages 4-9.
[87] Ibid pages 4-6.
The applicant submitted that his CF has taken a significant physical, emotional, financial and social toll on him. The decision of the Tribunal in Severino and Secretary, Department of Family and Community Services[88] was raised as authority that the applicant’s health could be taken into account. In Severino it was held that the applicant’s CF was “undoubtedly the most significant fact to consider” in determining that special circumstances were applicable.[89]
[88] [2005] AATA 745.
[89] Ibid at [31].
The second factor that the applicant raised was his limited life expectancy. The applicant referred to the expert opinion of Dr Bell that the applicant’s life expectancy was 50 years.[90] It was submitted that the applicant would be unlikely to have the capacity to repay the debt during his lifetime.[91]
[90] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, pages 4-6; Exhibit C, Report of Dr Scott Bell dated 20 August 2015.
[91] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, page 9, para [45].
The respondent submitted that the applicant was capable of repaying the debt. The respondent highlighted that the applicant had demonstrated his ability to make repayments of $100 per fortnight since July 2014.[92] It was further submitted that, in the event that the applicant’s earning capacity decreases, he would be able to seek further review of recovery of the debt or apply for the DSP again.[93]
[92] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, page 15, para [58].
[93] Ibid page 15, para [59].
The third factor related to the applicant’s family.[94] It was submitted that the applicant’s family has overcome significant adversity. The applicant’s family continues to go through hardship, with Ms Duce having to care for both the applicant and his brother, Padraig, who also has CF.[95]
[94] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, pages 6-7.
[95] Ibid page 7, para [33].
The fourth factor concerned the applicant’s career ambitions.[96] The applicant would incur substantial costs over the next five years in order to be registered as a psychologist.[97] He would be required to continue to work at Big W in order to meet these costs and other expenses. [98] Therefore, he would have a decreased capacity to repay the debt.[99]
[96] Ibid pages 7-8.
[97] Ibid pages 7-8, paras [38-39].
[98] Ibid page 8, para [40].
[99] Ibid pages 7-8.
In relation to s 1237AAD(c), the respondent made submissions that a write off of the debt was inappropriate.[100] The applicant also conceded that it was not open to the Tribunal to write off the debt.[101]
[100] Respondent’s Statement of Facts, Issues and Contentions, 4 June 2015, pages 7-8.
[101] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, page 9, para [45].
The applicant referred to the decision in William David & Ann Dora Moore, Secretary, Department of Social Security[102] where the Tribunal provided that the determination of whether it is desirable to waive the debt requires the Tribunal to consider:
“whether [the applicant’s] character is such that it would be unjust, unreasonable or otherwise inappropriate on the part of the Commonwealth to recover the debt”.
[102] [1998] AATA 626 at [21].
The applicant submitted that it would be unjust, unreasonable or otherwise inappropriate to recover the debt because the quantum is a heavy burden and is unlikely to be discharged; the debt would create an emotional encumbrance; there is no guarantee that the his financial position will improve; and there is no financial assistance available from third parties.[103]
[103] Applicant’s Statement of Facts, Issues and Contentions, 27 August 2015, page 19, para [45].
FINDINGS
The Tribunal has reached a decision in this matter taking into account the submissions of both parties and the relevant authorities.
There is no dispute and the Tribunal so finds that there is an overpayment debt due to the Commonwealth in the sum of $29,044.78. This debt arose because the applicant was overpaid a DSP between 23 October 2009 and 18 November 2013.
There is no dispute and the Tribunal so finds that the applicant and Ms Duce did not indicate that the applicant was employed when the claim for the DSP was lodged. The applicant did not inform Centrelink that he was employed until 22 September 2011. Centrelink did not have an accurate record of the applicant’s earnings until Woolworths Limited provided details of the applicant’s gross earnings on 15 April 2014.
The issue for the Tribunal to determine relates to debt recovery generally and specifically the exercise of s 1237AAD of the Act.[104] The section was referred to when outlining the parties’ submissions.
[104] Social Security (Administration Act) 1999 (Cth) s 1237AAD.
The first requirement for a waiver under s 1237AAD turns on whether the applicant or another person knowingly made a false declaration or omitted or failed to comply with the relevant legislation.[105]
[105] Ibid s 1237AAD(a).
The Tribunal found both the applicant and Ms Duce to be truthful in their evidence and were frank and credible witnesses.
Ms Duce was fully aware that the applicant was employed at the time of lodging the DSP claim on 1 September 2009. The omission of the applicant’s employment details on the Income and Assets form prima facie prevents a waiver. It was provided in Re Secretary, Department of Social Security and Bliss[106] that:
“s 1237AAD does not require an intention to defraud, all that is required to make the ameliorating discretion of the section non applicable is the intentional making of a statement or representation with knowledge of its falsity”.
[106] (1997) 2 SSN 112.
The current circumstances can be distinguished from those in Bliss on the basis that Ms Duce believed that the applicant’s income should not be reported. It is difficult to accept that a staff member of Centrelink actually gave Ms Duce this advice.
It is accepted, however, that Ms Duce understood from the conversation with the Centrelink staff member that she was not required to report the applicant’s income. Ms Duce did not knowingly make a false declaration because she was either misinformed or misunderstood what the staff member told her.
A distinction was made in Re Secretary, Department of Social Security and Gray-Corking[107] between naivety about a person’s obligation to disclose and knowingly failing to do so. The Tribunal accepts that Ms Duce was naive in following what she understood to be the advice of the Centrelink staff member.
[107] (1997) 11 SSR 152.
It is accepted that between 25 September 2009 and 8 December 2012 Ms Duce and the applicant received up to 20 pieces of written correspondence between them. These documents contained information notices pursuant to s 68(1) of the Social Security (Administration) Act.[108] Each of the notices required the recipient to advise of changes in the applicant’s earnings within 14 days.
[108] Social Security (Administration Act) 1999 (Cth) s 68(1).
It is accepted that Ms Duce’s extremely demanding work and family commitments had inhibited her capacity to comprehend the Centrelink correspondence. The Tribunal has had regard to the decision in Balancio v Department of Family and Community Services[109] where the mental health of the applicant was taken into account in finding that they did not have the capacity to understand their obligations. Ms Duce did not knowingly omit to comply with a condition of the Act but rather her inhibited functioning capacity prevented her from doing do.
[109] (2003) 74 ALD 204 at 209 at [33].
The applicant received and read at least one of the Centrelink information notices in September 2011. The Tribunal has had regard to the decision in Re Callaghan where the Tribunal found the reading of a Centrelink information notice amounted to knowledge of an obligation to advise of a change of income.[110]
[110] Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 at [49].
It is accepted that the applicant had been informed by Ms Duce that he was not required to report his earnings if working on a casual basis and organised his affairs accordingly. This distinguishes the matter at hand from Re Callaghan.[111] In the present matter the applicant did not knowingly omit to comply with the notices because he believed that he was not required to report casual earnings and that his circumstances had not changed from when the application for the DSP was lodged.
[111] Ibid.
It is accepted that the applicant did not knowingly falsely represent his earnings or the amount of time that he had been employed to the Centrelink staff member who answered his telephone call on 22 September 2011. The applicant’s details were most likely recorded incorrectly due to a misunderstanding between the parties to the conversation.
The applicant could have sought clarification with Centrelink as to whether the advice Ms Duce had received was correct. It was set out in Re Secretary, Department of Family and Community Services and Jonauskas[112] that the onus to meet obligations defined in Centrelink correspondence is on the recipient. The applicant did not proceed with diligence until 18 November 2013 when he requested that the DSP payments be suspended. This occurred only after Centrelink commenced investigating the applicant’s earnings on 24 October 2013. Therefore, he bears some responsibility for not causing the debt to be discovered earlier.
[112] (2001) 65 ALD 553 at 566 and 569.
The second requirement for a waiver under s 1237AAD is that there are special circumstances that make it desirable to waive the right of the Commonwealth to recover all or part of the debt. The SSAT did not find that special circumstances existed.
The Tribunal is guided by the decision in Hogan v Secretary, Department of Employment, Education and Workplace Relations[113] where it was held that in determining whether “special circumstances” exist the Tribunal has “a broad discretion to respond to a wide variety of circumstances”.
[113] [2011] AATA 162 at [82].
The meaning of “special circumstances” was considered in Re Beadle and Director General of Social Security,[114] where it was held that:
“The qualifying adjective [of special circumstances] 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”.
[114] (1984) 6 ALD 1 at 3.
The Tribunal has had regard to the context and finds that there are three factors that have rendered the applicant’s circumstances to be sufficiently unusual, uncommon and exceptional to render them special. First, the applicant and his family have overcome significant adversity. Ms Duce continues to undergo hardship as the primary caregiver for the applicant and his brother. The applicant is required to financially support himself and contribute towards the family’s shared expenses.
Secondly, the applicant has a serious health condition which has an ongoing impact on his life. The impact of CF on the health of the applicant was found to be “undoubtedly the most significant fact to consider” in the determination of special circumstances in Severino and Secretary, Department of Family and Community Services.[115]
[115] [2005] AATA 745 at [31].
CF takes a significant physical, financial and social toll on the applicant. It was held in Re Secretary, Department of Social Security and VYS[116] that it is not unusual, uncommon or exceptional for a recipient of DSP to have health problems. However, the evidence suggests that the effects of the disability suffered by the applicant could be distinguished from those of the ordinary recipient of the DSP.
[116] (1995) 40 ALD 745.
The SSAT made findings that the applicant had the capacity to repay the debt by instalments. However, the evidence of Dr Bell suggests that it is inevitable that the applicant’s ability to complete work will decrease over the next five to ten years due to the deterioration of his lung capacity.
The Tribunal has had regard to the respondent’s submission that the applicant could apply for a further review if his earning capacity decreases. However, it seems unnecessary to prepare for a future contingency that could be addressed presently.
Thirdly, the applicant is working towards becoming a psychologist. The Tribunal notes the applicant’s desire to contribute to society through his career for which he should be commended.
The SSAT found that the ability of the applicant to repay the debt would improve after he had graduated from his degree. However, the applicant will be unable to generate earnings greater than the costs of professional developmental until he becomes a registered psychologist. It has been estimated that this will take five years. The encumbrance of a debt on the applicant will only make this period even more arduous for him.
The Tribunal considers that the circumstances described above are sufficiently special as to make it unjust and unreasonable not to have regard to them. The Tribunal has determined that it is more desirable to waive a part or whole of the debt rather than write it off.
Thus having determined that s 1237AAD of the Act applies, it remains for the Tribunal to further determine the extent of waiver. The decision of Secretary, Department of Social Services v Hales[117] provides that s 1237AAD empowers the Tribunal to provide a flexible response in view of the special circumstances that are present. The Tribunal determines that an amount of $23,235.82 should be waived. This represents a waiver of 80 per cent of the debt which recognises the special circumstances that are present and reflects that the applicant bears some responsibility for not causing the debt to be discovered earlier, with the consequence that the amount of DSP overpaid to him might have been reduced.
[117] (1998) 82 FCR 154 at 162.
Accordingly, for all the reasons set out above and in the circumstances of this case, the Tribunal decides, pursuant to s 32 of the Administrative Appeals Tribunal Act,[118] that the decision under review is set aside and in substitution the Tribunal decides that pursuant to s 1237AAD of the Act, an amount of $23,235.82 is waived from the debt.
[118] Administrative Appeals Tribunal Act 1975 (Cth).
The Tribunal expresses its appreciation to Legal Aid Queensland and counsel for the applicant in providing comprehensive submissions as to the applicant’s circumstances.
CONCLUSION
The decision under review is set aside and in substitution the Tribunal decides that $23,235.82 is waived from the debt pursuant to s 1237AAD of the Social Security Act1991 (Cth).
I certify that the preceding 78 (seventy-eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President Dr P McDermott RFD ..............................[Sgd].........................
Associate
Dated 14 January 2016
Date(s) of hearing 14 October 2015 Advocate for the Applicant Mr J Gibney, Legal Aid Queensland Solicitors for the Respondent Ms M Brazier, Department of Human Services
Key Legal Topics
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Procedural Fairness
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Jurisdiction
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Remedies
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Statutory Construction
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