LYSSA-JAYNE COOLEY and and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2012] AATA 854

[2012] AATA 854

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/3608
Re	LYSSA-JAYNE COOLEY
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
File Number	2012/5451
Re	LYSSA-JAYNE COOLEY
APPLICANT
And	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
RESPONDENT

DECISION

Tribunal	Mr R G Kenny, Senior Member
Date	5 December 2012
Place	Brisbane

The Tribunal affirms the decisions under review.

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Mr R G Kenny, Senior Member

CATCHWORDS

SOCIAL SECURITY – Benefits and entitlements – Family tax benefit – Failure to advise of living arrangements for dependent child – Debts to Commonwealth raised for overpayment – Write off of debt – Capacity to repay debt – Waiver of debt – No sole Commonwealth administrative error – No special circumstances – Decision under review affirmed       

SOCIAL SECURITY – Pensions, benefits and allowances – Newstart allowance – Failure to declare correct income – Failure to advise of living arrangements for dependent child – Debts to Commonwealth raised for overpayment – Write off of debt – Capacity to repay debt – Wavier of debt – No sole Commonwealth administrative error – No special circumstances – Decision under review affirmed

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth) ss 21, 22

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ss 25, 71, 95, 97, 101

Social Security Act 1991 (Cth) ss 643, 1068, 1223, 1228B, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) ss 66A, 68, 100

CASES

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

Mr R G Kenny, Senior Member

5 December 2012

BACKGROUND

1. At various times from 2006, Lyssa-Jayne Cooley received forms of income support which were payable in accordance with the terms of the Social Security Act 1991 (Cth) (“the SS Act”), the Social Security (Administration) Act 1999 (Cth) (“the SS Administration Act”), A New Tax System (Family Assistance) Act 1999 (Cth) (“the FA Act”) and A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“the FA Administration Act”).

2. Applying the SS Act and the SS Administration Act, Centrelink determined, on 2 July 2008, 29 May 2009 and 4 January 2010, that Ms Cooley had been overpaid newstart allowance (“NSA”) resulting in debts of $1,177.37, $536.62 and $899.90,[1] respectively, for the periods from 9 April 2008 to 20 May 2008, from 7 January 2009 to 17 March 2009 and from 22 August 2008 to 26 August 2009, respectively. Those decisions were reviewed by an authorised person in Centrelink. The first-mentioned decision was varied, on 5 June 2012, to the amount of $1,330.77. The second-mentioned and third-mentioned decisions were affirmed on 5 June 2012 and 1 June 2012, respectively.

   [1] The debts relating to understatement of income included a penalty component: see 1228B of the SS Act

3. Applying the FA Act and the FA Administration Act, Centrelink determined, on 15 October 2009 and 29 October 2009, that Ms Cooley had been overpaid Family Tax Benefit (“FTB”) in the amounts of $2,188.61, $4,498.14, $4,833.91 and $893.88 for the periods from 1 January 2007 to 30 June 2007, from 1 July 2007 to 30 June 2008, from 1 July 2008 to 30 June 2009 and from 1 July 2009 to 16 September 2009, respectively. On review, those decisions were affirmed by an authorised person on 1 June 2012.

4. On 25 July 2012, those decisions of the authorised review officer were affirmed by the Social Security Appeals Tribunal (“the SSAT”).

   LEGISLATION

5. The SS Act provides in s 643 thereof that NSA is calculated in accordance with ss 1068 and 1068-A1, which enable the effect of a person’s income to be taken into account. Under s 66A of the SS Administration Act, a recipient of NSA is required to advise of a change of circumstances which may affect that payment. Also, s 68(2) of the SS Administration Act enables a notice to be given to a recipient requiring advice of a change in circumstances including income levels. Under s 100(1) of the SS Administration Act, a failure to comply with such a notice results in a reduction in the rate of NSA retrospective from the date of the change of the circumstance not notified. Where the recipient was paid an amount to which she was not entitled, a debt to the Commonwealth arises under s 1223(1) of the SS Act to which a penalty component may be added under s 1228B of the SS Act.

6. A criterion of eligibility for the FTB in s 21 of the FA Act is that a recipient have an FTB child, as provided for in s 22(1) of the FA Act, in her care. A change of circumstances such as to the care arrangements is required to be advised under s 25 of the FA Administration Act. Under s 71(2) of the FA Administration Act, a debt to the Commonwealth arises if an FTB recipient is paid more than she was entitled to receive.

7. An NSA debt and an FTB debt may be written off under s 1236 of the SS Act and s 95 of the FA Administration Act, respectively. They may be waived under s 1237A or s 1237AAD of the SS Act, or s 97 or s 101 of the FA Administration Act, respectively, because of sole Commonwealth administrative error or because of special circumstances.

   SUBMISSIONS AND ISSUES

8. Mr Bob Hamilton, for the respondent, submitted that the NSA decisions of 2 July 2008 and 29 May 2008 were made on the basis that Ms Cooley had incorrectly reported her earnings to Centrelink with the result that she was overpaid by amounts of $1,330.37 and $536.62,[2] respectively, which were debts due by her to the Commonwealth. He submitted that the NSA decision of 4 January 2010 was made on the basis that Ms Cooley was paid at the single rate for a person with a child in her care. He submitted that her son had remained in Tasmania when Ms Cooley moved to and lived in Queensland. He submitted that she failed to advise of this and that, as a result, was overpaid the amount of $899.90 which was a debt due by her to the Commonwealth.

   [2] See footnote 1 above.

9. Mr Hamilton submitted that the FTB decisions were made on the basis that Ms Cooley did not have an FTB child in her care from 1 January 2007 until 16 September 2009 because her son was not with her in Queensland and that she had not so advised Centrelink. In this case, he submitted that the overpaid FTB amounts were $2,188.61, $4,498.14, $4,833.91 and $893.88 which were debts due to the Commonwealth. Mr Hamilton submitted that Ms Cooley’s overpayments of NSA and FTB were debts for which neither write off nor waiver was appropriate.

10. Ms Cooley conceded that her son was not with her from 1 January 2006 to 16 September 2009 and that Centrelink records indicated that her notified income amounts were less than she received. She said that she was not in a position to dispute the FTB overpayment calculations of $2,188.61, $4,498.14, $4,833.91 and $893.88 or the NSA calculations of $1,330.77, $536.62 and $899.90. She submitted that she had always kept Centrelink informed of her son’s living arrangements and her gross income amounts and that the Centrelink calculations were due to errors made by Centrelink such that any debts against her should be waived.

11. The issues for determination are whether the overpayments of FTB and NSA to Ms Cooley comprise debts due to the Commonwealth and whether any such debts should be written off or waived.

    EVIDENCE

    Ms Cooley

12. Ms Cooley’s evidence was that she came to Queensland from Tasmania in late 2006 without her son, who was to join her when she became settled in accommodation and employment. She agreed that he remained in Tasmania while she continued to be paid FTB until August 2009 and while she received NSA from 22 August 2008 until 26 August 2009. She recalled completing and signing a “…Child Claim for Family Assistance…” form which she lodged with Centrelink on 10 January 2007,[3] with information and advice provided by Centrelink officers. She believed that the form would finalise her FTB payments. Ms Cooley also believed that her FTB payments were part of her NSA entitlements and that it was appropriate for her to receive the FTB and to make payments to her son from those monies. Ms Cooley had no record of any money transfers to her son.

    [3] See Exhibit 1, T-document 4, pp. 39-46.

13. Ms Cooley agreed that she received letters from Centrelink and was aware that she was obliged to keep Centrelink aware of changes in her circumstances. She recalled advising Centrelink from time to time, by telephone, that her son was not living with her in Queensland during the time that she received the FTB. She said that these phone calls were witnessed by her friend, Ms Tina Hooton, with whom she was living until April 2007. Ms Cooley agreed that she had been variously employed by Small Transport, Total Staffing Solutions and Rampage ITEA – BP from time to time including periods in April and May 2008 as well as January to March 2009. She was aware of her obligation to keep Centrelink aware of her gross earnings from that employment while receiving NSA and always did this, usually by attending a Centrelink office with her payslips. She recalled that, on some occasions, she provided Centrelink with the information by telephone and that, on one occasion, she had sent the information by facsimile message (fax). Ms Cooley was unable to recall the times and dates of her telephone advices and had discarded all of her Centrelink documentation when she travelled overseas in 2009. Ms Cooley said that Centrelink records which showed “no earnings” by her were errors by Centrelink.

14. Ms Cooley was referred to the record of a telephone conversation she had with an authorised review officer on 31 May 2012.[4] She agreed that, in the main, it was an accurate representation of the exchange between them. This included statements by her that “she tried to stop the FTB payments many times but it continued to be paid”; that she had attended the Mitchelton Centrelink office between October 2006 and April 2007 and spent “all day trying stop the FTB”; that she denied lodging a claim for FTB on 10 January 2007; and that any signature on that claim form was not hers. Ms Cooley disagreed that she had told the authorised review officer that she had been advised by Centrelink that “she was ‘doing the right thing’ if she was still getting FTB and sending the money to her son”. Rather, she said, she had told Centrelink that she was sending money to her son but not that it was the FTB payment.

    [4] See Exhibit 1, T-document 10, p. 153.

15. Ms Cooley was referred to Centrelink forms entitled “Customer Declaration Form for Newstart Allowance”, dated 11 January 2007[5] and 29 August 2008[6]. Therein, Ms Cooley declared that her son was in her care. In her evidence, Ms Cooley agreed that she had completed these forms and said that she had been instructed by a Centrelink officer on what to include in the forms. Her relationship to her son is described as “mum” in those forms and Ms Cooley said that she queried that with the Centrelink officer who advised that the form would be amended. She said that she advised Centrelink that her son was not in her care at the times she completed the forms.

    [5] See Exhibit 1, T-document 5, pp. 47-50, esp. p. 47.

    [6] See Exhibit 1, T-document 6, pp. 51-54, esp. p. 51.

16. Ms Cooley said that she had experienced health problems with periodic internal infections requiring her to be hospitalised from time to time, including January and October 2011. She explained that she is currently living in premises owned by friends who allow her to stay without paying rent. She has no savings and pays monies to them when she is able to obtain work. She owns a car which she purchased in 2011 for $6,700 and continues to look for work. Ms Cooley described her health as being “settled” but explained that it could flare up again at any time.

    Centrelink Records

17. Centrelink records show that, on 12 December 2006, Ms Cooley was advised that social security payments paid to her in relation to her son had been cancelled because her son had claimed or indicated that he intended to claim a Commonwealth payment in his own right.[7] The record also shows that, on 14 December 2006, Ms Cooley enquired of Centrelink why her payments had been stopped.[8] Ms Cooley again contacted Centrelink on 20 December 2006 advising that she was unsure of what was happening with her payments[9] and, on 2 January 2007, about claiming newstart allowance.[10] On 10 January 2007, her son’s claim to Centrelink was withdrawn and Centrelink was advised by Ms Cooley that there had been no change to her care arrangements and that her dependent child had not left her care.[11] She also lodged the “…Child Claim for Family Assistance…” form with Centrelink on that day. FTB and NSA at the single rate with dependent child were then paid to her.

    [7] See Exhibit 1, T-document 16, p. 423.

    [8] See Exhibit 1, T-document 15, p. 412.

    [9] See Exhibit 1, T-document 15, p. 412.

    [10] See Exhibit 1, T-document 15, p. 411.

    [11] See Exhibit 1, T-document 15, p. 45.

18. Centrelink obtained Ms Cooley’s employment details, including dates worked and wages earned, from Total Staffing Solutions,[12] Small Transport[13] and Rampage for the periods in which she was engaged by them. Centrelink’s computer entries for April and May 2008 record no income by Ms Cooley during that period. Ms Cooley lodged NSA declaration forms with Centrelink on 11 January 2007[14] and 2 September 2009[15] in which she described her son as being in her care. She lodged Application for Payment Forms with Centrelink on 22 April 2008, 21 May 2008 and reported no earnings; her NSA was based on that level of income.[16] In the period from 1 January 2009 to 17 March 2009, Ms Cooley did not advise of earnings from Total Staffing Solutions though she did advise of earnings from Rampage in that period. Again, her NSA was based on zero earnings from Total Staffing Solutions.

    [12] See Exhibit 1, T-document 9, pp. 96-100 and 127-131.

    [13] See Exhibit 1, T-document 9, pp. 92-95.

    [14] See Exhibit 1, T-document 5, pp. 47-50.

    [15] See Exhibit 1, T-document 6, pp. 51-54.

    [16] See Exhibit 1, T-document 10, pp. 210 and 212.

19. Also in evidence were copies of Centrelink notices, dated 19 May 2008, 21 May 2008, 20 January 2009, 3 February 2009 and 3 March 2009 to Ms Cooley requiring her to advise of income levels.[17] A notice was sent to Ms Cooley on 25 January 2007 advising that FTB was granted from 3 January 2007. On 28 May 2007, 8 November 2007, 17 June 2008, 2 September 2008 and 31 March 2009, notices were sent to Ms Cooley requesting information on a range of matters including whether her child had ceased living with her.[18]

    [17] See Exhibit 1, T-document 11, pp. 242, 243, 331, 335 and 345.

    [18] See Exhibit 1, T-document 16, pp. 430, 449, 461, 469-470 and 498.

    Tina Hooton

20. Ms Hooton completed a statement on 23 October 2012 and gave evidence. She has known Ms Cooley for some 22 years and confirmed that Ms Cooley stayed with her when she came to Brisbane in 2006 until April 2007. She recalled that, while Ms Cooley was staying with her, she regularly made telephone contact with Centrelink from the home phone during which she reported her income levels and any other changes to her circumstances. She recalled that Ms Cooley advised Centrelink that her son was to remain in Tasmania until she got work. She said that Ms Cooley would advise Centrelink of her income every fortnight and then take her pay slips into a Centrelink office.

    CONSIDERATION

    Overpayment and Debt

21. Ms Cooley was paid FTB from 3 January 2007 until 16 September 2009 and NSA from 22 August 2008 until 26 August 2009 on the basis that her son was living with her. Centrelink has calculated that, in those respective periods, she was overpaid FTB amounts of $2,188.61, $4,498.14, $4,833.91 and $893.88 as well as an NSA amount of $899.90. Centrelink has also calculated that Ms Cooley was overpaid NSA amounts of $1,330.77 and $536.62[19] in the periods from 9 April 2008 to 20 May 2008 and from 7 January 2009 to 17 March 2009 because she did not provide accurate information about her earnings. Records of the Centrelink calculations were in evidence and I am satisfied that they correctly represent the amounts paid to Ms Cooley and what her entitlements were. Ms Cooley was sent notices under the SS Administration Act and the FA Administration Act obliging her to provide correct information about her son’s living arrangements and her income[20] and I am satisfied that Ms Cooley failed to comply with those obligations. As a result, she was not entitled to the amounts listed above and these comprise overpayments to her.[21] Where the recipient was paid an amount to which she was not entitled, debts to the Commonwealth arise under s 1223(1) of the SS Act and s 71(1) of the FA Administration Act.

    [19] See footnote 1 above.

    [20]. See ss 68(2) and 100(1) of the SS Administration Act and s 25 of the FA Administration Act.

    [21] See footnote 1 above.

    Writing-off Debt

22. An NSA debt and an FTB debt may be written off under s 1236 of the SS Act and s 95 of the FA Administration Act, respectively. This is the case if:

    ·the debt is irrecoverable at law;

    ·the debtor has no capacity to repay the debt; the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

    ·it is not cost effective for the Commonwealth to take action to recover the debt.

    Those factors are not met in this case. In particular, I am satisfied that Ms Cooley does not lack capacity to repay the debt on a continuing, albeit long term, basis. In that situation, the debts should not be written off.

    Waiver of Debt

23. A debt to the Commonwealth may be waived under s 1237A of the SS Act or s 97 of the FA Administration Act, respectively, because of sole Commonwealth administrative error. I do not accept Ms Cooley’s evidence that she kept Centrelink informed of her son’s whereabouts in Tasmania from 2006 onwards. The exchanges between her and Centrelink in December 2006 and January 2007 have been noted above. In her evidence, she agreed that she signed and lodged the “…Child Claim for Family Assistance…” form with Centrelink on 10 January 2007. That form is unmistakably a claim for FTB and I do not accept Ms Cooley’s assertions that she completed it with information and advice to the contrary from Centrelink officers. In that regard, I have noted the inconsistent accounts given by her in relation to that document. These include her comment about a telephone conversation she had with an authorised review officer on 31 May 2012[22] which she agreed was, in the main, accurate. Therein, she is recorded as denying that she lodged the FTB claim on 10 January 2007 and that any signature thereon was not hers. Her statements to the authorised review officer also were that she tried to stop the FTB payments many times and that she spent all day at the Mitchelton Centrelink office trying to stop the FTB. That evidence is totally inconsistent with the content of her Customer Declaration Forms for Newstart Allowance, dated 11 January 2007 and 29 August 2008, wherein Ms Cooley declared that her son was in her care.

    [22] See Exhibit 1, T-document 10, p. 153.

24. I am also satisfied that Ms Cooley did not provide accurate information about her earnings in the periods from 9 April 2008 to 20 May 2008 and from 7 January 2009 to 17 March 2009. The Centrelink records of income advice from Ms Cooley do not reflect the levels advised by her employers in those periods. On the basis of her unreliability as a credible witness, I do not accept Ms Cooley’s evidence that she always provided correct information about her earnings. I have noted Ms Hooton’s evidence that Ms Cooley regularly contacted Centrelink. However, she was not party to the whole of the conversations between Ms Cooley and whomever Ms Cooley was speaking with. In any event, the failures to provide correct income details arose in 2008 and 2009 whereas Ms Cooley was staying with Ms Hooton from August 2006 until April 2007. Centrelink was not provided with correct income information from 9 April 2008 to 20 May 2008 or from 7 January 2009 to 17 March 2009. It was that incorrect information which led to the overpayments and associated debts in those periods. They did not arise because of sole Commonwealth error and may not be waived on that basis.

1. A debt to the Commonwealth may also be waived under s 1237AAD of the SS Act or s 101 of the FA Administration Act. These provisions apply where there are special circumstances which make it desirable to waive the debt. However, a precondition to such a finding is that the debt did not result wholly or partly from the debtor knowingly making a false statement or a false representation or failing or omitting to comply with a provision of the SS Act, the SS Administration Act or family assistance law.[23] On the basis of my findings about the living arrangements of her son and the level of Ms Cooley’s earnings, I am satisfied that Ms Cooley has knowingly made false statements to Centrelink on those matters. I am also satisfied that she failed to comply with her obligations to provide correct information under the SS Administration Act and the FA Administration Act.

   [23] This includes the FA Act and the FA Administration Act: see s 3 of the FA Administration Act.

2. In any event, I am also satisfied that there are no special circumstances in this matter which would make it desirable to waive any part of Ms Cooley’s debts. In Groth v Secretary, Department of Social Security,[24] Kiefel J observed that special circumstances:

   would require something to distinguish ... [the] ... 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.

   [24] (1995) 40 ALD 541 at 545.

3. Ms Cooley’s evidence was that she has rent-free and expense-free accommodation and living arrangements unless she gains employment during which she then makes some contribution to those costs. She has had health problems in the past and these may return in the future. However, her evidence was that, currently, she is experiencing no such problems. She indicated that her assets include a recently purchased vehicle. I am satisfied that, in Ms Cooley’s circumstances, nothing unfair, unintended or unjust arises and that there is no some feature out of the ordinary such as to make it desirable to waive her NSA or FTB debts.

   DECISION

4. The Tribunal affirms the decisions under review. 

I certify that the preceding 28 (twenty-eight) paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member.

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Associate

Dated 5 December 2012  

Date of hearing	16 November 2012
Applicant	In person
Solicitor for the Respondents	Mr Bob Hamilton