Lyster; Department of Family and Community Services
[2000] AATA 380
•18 May 2000
DECISION AND REASONS FOR DECISION [2000] AATA 380
ADMINISTRATIVE APPEALS TRIBUNAL)
Nº V99/1221
GENERAL ADMINISTRATIVE DIVISION)
Re: SECRETARY TO THE DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Applicant
And: SANDRA MAY LYSTER
Respondent
DECISION
Tribunal: Mrs H.E. Hallowes, Senior Member
Date: 18 May 2000
Place: Melbourne
Decision: The decision of the Social Security Appeals Tribunal dated 20 September 1999 is set aside and the matter is remitted to the Secretary with directions that: (a) the recipient, Ms Lyster, was paid $1503.60 family allowance between 2 January 1997 and 3 June 1999 to which she was not entitled and the amount is a debt due to the Commonwealth; and (b) the debt be waived as the Tribunal is satisfied that Ms Lyster did not knowingly make a false statement or fail to comply with the provisions of the Social Security Act 1991 and there are special circumstances that make it desirable to waive the debt.
(sgd) Elspeth Hallowes
Senior Member
SOCIAL SECURITY — family allowance — whether family allowance child — whether instalments paid to recipient or paid to someone else — amount paid to bank account nominated by claimant — whether maintained by claimant as recipient alone or jointly with another person — whether debt to Commonwealth — whether administrative error — whether special circumstances
WORDS AND PHRASES — recipient
Administrative Appeals Tribunal Act 1975 ss.35, 37
Social Security Act 1991 ss.5, 6, 23, 831, 838, 862, 863, 865, 866, 872, 873, 1223, 1224,
1237A, 1237AAD
Social Security (Administrative) Act 1999
Social Security (Administration and International Agreements) (Consequential Amendments) Act 1999
Data matching Program (Assistance and Tax) Act 1990
REASONS FOR DECISION
18 May 2000 Mrs H. E. Hallowes, Senior Member
The Tribunal notes that relevant provisions with respect to its jurisdiction have changed under the Social Security (Administrative) Act 1999 and the Social Security (Administration and International Agreements) (Consequential Amendments) Act 1999.
On 28 October 1999 the Secretary to the Department of Family and Community Services ("the Secretary") lodged an application for review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 20 September 1999 which set aside a decision of a delegate of the Secretary which had been affirmed by an authorised review officer ("ARO"). The delegate determined that Ms Lyster owed a debt of $1503.60 to the Commonwealth with respect to family allowance paid to her during the period 2 January 1997 to 3 June 1999. The SSAT found that Ms Lyster did not have a family allowance debt as she was not the "recipient" of family allowance, family allowance being paid into a bank account in the name of, and controlled by, Ms Lyster's son Mitchell and thus an amount had not been paid to Ms Lyster by way of a social security payment and no debt to the Commonwealth arose under sections 1223 or 1224 of the Social Security Act 1991 ("the Act"), which provide, so far as relevant:
1223(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:
(a)the recipient was not qualified for the social security payment when it was granted; or
(b)the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.
. . .1223(5) If:
(a)an amount (the "received amount") has been paid to a person by way of social security payment on or after 1 October 1997; and
(b)because the received amount had not been correctly calculated using the relevant rate calculator, or for any other reason, the received amount is greater than the amount (the "correct amount") of social security payment that should have been paid to the person under this Act;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
. . .1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of this Act or the 1947 Act;
(c)(Omitted)
the amount so paid is a debt due by the recipient to the Commonwealth.
Note: if the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).In lodging an application for review of the decision of the SSAT the Secretary contended that Ms Lyster had knowingly failed to comply with sections 872 and 873 the Act. Those sections provide, so far as relevant:
872(1) The Secretary may give a recipient of family allowance a notice that requires the recipient to inform the Department if:
(a)a specified event or change of circumstances occurs; or
(b)the recipient becomes aware that a specified event or change of circumstances is likely to occur.
. . .
873(1) The Secretary may give a recipient of family allowance a notice that requires the recipient to give the Department a statement about a matter that might affect the payment of the family allowance to the recipient."
The Secretary also contended that the discretion under section 1237AAD should not be exercised in Ms Lyster's favour. Section 1237AAD provides:
1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or 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.
Note: Section 1236 allows the Secretary to write off the debt on behalf of the Commonwealth.
The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") ("the documents"). The Secretary was represented at the hearing by Ms P. D'Cunha of Centrelink, the respondent was represented by Mr M. Cahill of counsel. Ms D'Cunha provided the Tribunal with a number of additional documents from the applicant's departmental records.
In many respects the facts in this matter are not in dispute. Ms Lyster had been paid monies under the Act over a number of years variously known as "child endowment", "family payment" and "family allowance" in respect of her daughter Rachel and her son Mitchell who was born on 21 February 1983. For convenience, the Tribunal will refer to the payments received by Ms Lyster as family allowance. The documents include a claim form for family allowance signed by Ms Lyster and her then partner, Mr Lyster, Mitchell's father, on 21 April 1995 (T3). The third question on the form asked Ms Lyster to identify the account into which she wanted her family allowance paid advising: "(The account must be held in your name or jointly with another person. It cannot be in a child's name unless you are the signatory or trustee.)". Either Ms Lyster or a bank officer inserted the following details into the relevant boxes:
. . .
Mitchell Lyster
Mother can also sign (Mrs. S. Lyster Trustee)
. . .
Ms Lyster advised on the form that Mitchell was below the age of 16 years and that he was still in her care living at home at Inverleigh. She signed a declaration that the information she provided on the form was correct.
By letter dated 1 May 1995 from a delegate of the Secretary, Ms Lyster was advised that her family allowance would be sent to the bank account she had nominated on the form she signed on 29 April 1995. By letter 21 February 1996 (T6), Ms Lyster was advised that she would be paid $22.70 family allowance in respect of Mitchell every second Thursday. The letter further advised that under sections 872, 873 and 873(a) of the Act she must tell the Department within 14 days if, so far as relevant to her, one of her dependants stopped living with her or if she changed her address. The documents include a copy of a further letter dated 26 November 1996 (T7) which was about her family allowance for 1997, setting out the income she and her partner could get before it affected her family allowance. She was again advised that she must tell the Department within 14 days if her dependant stopped living with her or if she changed her address. Further similar letters were issued to Ms Lyster at the same address on 28 November 1997 (T9) and 7 December 1998 (T10), and by letter 12 February 1999, Ms Lyster was advised that she would now be paid $23.70 each fortnight with respect to Mitchell.
It was not until 7 April 1999 when Centrelink's records with respect to Ms Lyster were compared with records held by the Commissioner of Taxation under the Data matching Program (Assistance and Tax) Act 1990 that the Secretary became aware that Ms Lyster was in receipt of an income (T12). Centrelink became responsible for a range of the Department's functions on 1 July 1997. Ms Lyster was still recorded in Centrelink records as residing with Mr Lyster in what had been the matrimonial home at Inverleigh.
Amongst the documents is a statement made by Ms Lyster on 18 June 1999 that she had moved out of the matrimonial home on 23 December 1996 and that Mitchell stayed with his father at Inverleigh (T14). She provided another address to Centrelink.
At the hearing the Tribunal noted that Ms Lyster's and Mr Lyster's tax file numbers were not omitted from the documents provided to the Tribunal by the Secretary and the Tribunal made an Order under subsection 35(2) of the AAT Act that reference to the tax file numbers be deleted and that the numbers not be disclosed.
In giving oral evidence to the Tribunal Ms Lyster said that she is also known by her maiden name and that she has now moved to another address. She left Inverleigh on 2 January 1997. When asked whether she recognised the handwriting in the answer box to question 3 on the form she signed on 21 April 1995 (see paragraph 5 above) she replied:
I'm not sure whether it was mine there. It could be mine, but some of it there doesn't look – well, I can't quite remember when we actually did that, but I do remember in the bank, the girl in the bank actually did it, and I know she was writing things on it as well, and I – the mother can sign as well, I don't know whether I actually wrote that.
She went on to say that both her children had opened bank accounts through their local school and when Mitchell moved to a secondary school in 1995 he needed access to a bank account. She was aware that her name had to be on the account as well. She was not aware that anything was wrong with respect to her entitlement to family allowance until May or June 1999 when she was advised that family allowance had stopped and she contacted Centrelink and provided it with documentation with respect to her separation.
By letter dated 21 June 1999, Mitchell's father advised Centrelink, amongst other things, that:
. . .
A number of years ago Sandra and I decided that the F.A payment would go into Mitchell's own bank account, primarily as his "pocket money". This has remained unchanged with Mitchell being the sole recipient. (Bank Statement attached)
My understanding of the situation is that had I claimed the "F.A" in January 1997, and not Sandra, then the same amount would have gone into the same account.
Needless to say, between Sandra and I there has only been one applicant for the "F.A." on behalf of Mitchell and no duplication, and certainly no intent to rort the system.Sandra had inadvertently continued to be the claimant instead of myself, but as the entitlement has continued to be passed on, then I request that you take no further action in this matter.
. . .
Bank statements disclose that the account was held in Mitchell's name. His address is recorded as Inverleigh.
By letter dated 21 June 1999 Ms Lyster was advised that, as Mitchell had ceased to be dependent on her from the date she moved out of the family home, she was no longer entitled to be paid family allowance and that she owed a debt of $1503.60 family allowance paid to her between 2 January 1997 and 3 June 1999 (T20) to the Commonwealth. On 28 July 1999 an ARO advised Ms Lyster that the decision of the delegate was correct. Attention was drawn to relevant sections of the Act including subsections 5(2), 831(1) and 838(1), which provides:
5(2) Subject to subsections (3) and (6) to (8), a young person who has not turned 16 is a dependent child of another person (in this subsection called the adult) if:
(a)the adult is legally responsible (whether alone or jointly with another person) for the day-to-day care, welfare and development of the young person, and the young person is in the adult's care; or
(b)the young person:
(i)is not a dependent child of someone else under paragraph (a); and
(ii)is wholly or substantially in the adult's care.
Subsections 5(3), (6) and (8) are not relevant to this application.
831(1) Subject to sections 832 to 836, each dependent child of a person is also an FA child of that person.
Note: for "dependent child" see subsections 5(2) to (9).
Sections 832 to 836 are not relevant.
838(1) A person is qualified for family allowance if:
(a)the person has a least one FA child; and
(b). . .
. . .
The ARO also considered subsections 1223(1) and (5) of the Act, section 1224 and section 1237.
Ms Lyster told the Tribunal that when she left Inverleigh it was up to Mitchell where he stayed. He moved freely between her home and that of his father and he stayed with her regularly overnight which she estimated as one or two nights a fortnight, although she conceded that Mitchell remained under his father's care for a lot of the time and most of Mitchell's clothes were kept at Inverleigh. She paid maintenance to Mr Lyster for the children's upkeep. Decisions about Mitchell, for example with respect to his health, were made jointly. She regrets that she did not read the correspondence from Centrelink carefully and that she failed to notify it of her change of address. She has not been in receipt of any other payments under the Act. She understood that family allowance was for the support of the child and this is what had happened in Mitchell's case.
The Tribunal accepts that it was an innocent oversight by Ms Lyster when she failed to advise Centrelink of the change in her circumstances. She had little recall about the letter from the Department acknowledging her instructions with respect to the account into which family allowance would be paid. In response to questions asked by Ms D'Cunha, Ms Lyster said that she had not heard of trust accounts and that she had signed relevant documents in good faith. She understood that the relevant bank account had to have her name on it but that she could not withdraw money. The account, when established during Mitchell's primary school years, had been a passbook account but when he went to secondary school the type of account was changed so that he could access it through an access card. It was her assumption that she could not withdraw money from the account.
Although he did not press the contention, Mr Cahill put to the Tribunal that Ms Lyster could be found to be qualified for family allowance under subsection 838(1) of the Act in that she had a family allowance child being the "dependent child" Mitchell as she may satisfy subsection 5(2) of the Act (see paragraph 12 above). In light of the evidence before it the Tribunal cannot accept that submission. The Tribunal is satisfied that day-to-day care of Mitchell was legally the responsibility of Mitchell's father after Ms Lyster left Inverleigh. The documents point to Mitchell remaining in the care of his father and, although he spends some time with his mother and she is involved in decisions made with respect to him, it is Mr Lyster who satisfied the provision of the Act during the relevant period. The Tribunal understands that Mr Lyster is now being paid family allowance with respect to Mitchell.
Both sections 1223 and 1224 of the Act refer to a "recipient". Mr Cahill put to the Tribunal that it was Mitchell who was the "recipient" of a social security payment rather than Ms Lyster and that no debt could be raised against her under sections 1223 or 1224. Alternatively Mr Cahill submitted that, if the Tribunal found that Ms Lyster was the "recipient" of family allowance under the Act the Tribunal should exercise its discretion under section 1237AAD of the Act as Ms Lyster did not knowingly make a false statement or knowingly fail to comply with a provision of the Act. He put to the Tribunal that there are special circumstances in her case as the technical application of the Act to Mitchell's parents would mean that Mitchell would be deprived of the benefit of family allowance to which his father would have been entitled during the relevant period if not his mother. In the alternative, Mr Cahill contended that the Tribunal could find that administrative error gave rise to the debt because Centrelink paid monies into a bank account recording Ms Lyster as the trustee of the account whereas there was no such bank account, the account into which the monies were paid being in Mitchell's name. Subsection 1237A(1) of the Act provides that the Secretary must waive the right to recover a debt attributable solely to administrative error made by the Commonwealth if the debtor receives the payment in good faith.
The Tribunal finds that Ms Lyster was the "recipient" of family allowance in respect of Mitchell during the relevant period, 2 January 1997 to 3 June 1999. Section 6 of the Act provides family allowance definitions, including "recipient" in relation to family allowance which means "a person to whom, or an approved care organisation to which, family allowance is being paid". Section 23(1) provides the meaning of "receive" and "recipient notification notices" with respect to family allowance under section 873. Section 23 defines social security benefits, social entitlement, social security payment and social security pension. A family allowance is a social security payment. "Receive" has the meaning given by subsections 23(2), (3), (4), (4AAA), (4AA) and (4AB). Subsection 23(4AA) provides:
23(4AA) For the purposes of this Act, a person is taken to be receiving a payment (other than a social security pension or a social security benefit) until the latest day on which the payment is payable to the person even if the last instalment of the payment is not paid until a later day.
Subsections 23(3) and (4) provide for the receipt of social security pension and social security benefit. Surprisingly, subsection 23(4AA) does not insert the words "social security" before the word "payment".
Family allowance is provided for under Part 2.17 of the Act, sections 831 to 900. The Tribunal has already referred to qualification for family allowance (paragraph 12 above) and found that Ms Lyster was not qualified for family allowance during the relevant period. Sections 862 and 863(1), which fall within Division 6, provide for the payment of family allowance:
862Family allowance becomes payable to a recipient on the first day on which:
(a) the recipient is qualified for the allowance; and
(b)no provision of this Act makes family allowance not payable to the recipient.
Note 1: for qualification see sections 838 and 839.
Note 2: for the circumstances when family allowance is not payable see section 841.
Note 3: for "recipient" see section 6.863(1) Subject to section 864, a full instalment of family allowance is payable to a recipient on each family allowance payday on which:
(a) the recipient is qualified for family allowance; and
(c)family allowance is payable to the recipient.
863(2) . . .
Sections 865 and 866 of the Act provide:
865(1) Subject to subsection (3), a recipient's section 863 instalments and section 864A advances are to be paid to that recipient.
865(2) The Secretary may direct that the whole or a part of a recipient's section 863 instalments and section 864A advances are to be paid to someone else on behalf of the recipient.
865(3) If the Secretary makes a direction under subsection (2), the section 863 instalments and section 864A advances are to be paid in accordance with the direction.
866(1) An amount that is to be paid to a recipient under section 865 is to be paid in the manner set out in this section.
866(2) Subject to this section, the amount is to be paid to the credit of a bank account, credit union account or building society account nominated and maintained by the recipient.
866(3) The account may be an account that is maintained by the recipient either alone or jointly or in common with another person or organisation.
The Tribunal finds that Ms Lyster was not a trustee of the bank account opened in Mitchell's name or, at least, she was not a trustee during the relevant period. She was a signatory to the account but by the relevant period Mitchell had been issued with an access card and Ms Lyster no longer had access to the account. However the Secretary, in determining the claim and giving directions with respect to payment under the legislation, had been advised that she was a trustee and signatory to the account. Applying the Act to those circumstances, the Tribunal finds that where the Act refers to "recipient" it is referring to the person who is both qualified and to whom a social security payment is payable (section 41 of the Act). Ms Lyster claimed family allowance in respect of Mitchell. The Secretary decided she was qualified for family allowance. Acting on advice given by Ms Lyster, there was nothing under the Act making the social security payment not payable to her. Instalments of family allowance were therefore payable to the recipient qualified for family allowance (see subsection 863(1)). Mitchell was not "the recipient of family allowance". He was not qualified for family allowance. Ms Lyster is taken to be receiving the payment (subsection 23(4AA). Acting under advice received from Ms Lyster, the Secretary paid instalments of family allowance into a bank account nominated by Ms Lyster and, as he understood it, maintained by her as the recipient of family allowance albeit held jointly or in common with another person. Alternatively, the Secretary may have acted under subsection 865(2) of the Act. The Act provides income maintenance by way of social security pensions and benefits. Relevant parts of the Act provide for instalments to be paid to bank accounts of recipients or nominees and obligations are placed on recipients of pensions and benefits similar to those obligations placed on recipients of family allowance (see for example Part 2.2 Division 6 of the Act). The word "recipient" is used throughout the Act and should be consistently applied as being the person who is qualified for a social security payment and to whom that payment is payable.
The Tribunal rejects the contentions of Mr Cahill that Ms Lyster was not the recipient of a social security payment. The relevant period commenced before 1 October 1997. The Tribunal therefore finds that an amount has been paid to Ms Lyster by way of a social security payment because she omitted to comply with sections 872 and 873 of the Act and the amount paid to her is a debt due to the Commonwealth under section 1224.
In light of the information provided by Ms Lyster to the Secretary the Tribunal finds that the debt is not solely due to administrative error under section 1237A of the Act. Rather, it arose because Ms Lyster failed to advise the Secretary with respect to a change in her circumstances. She requested that her family allowance be paid into a bank account she led the Secretary to believe was maintained by her. The Tribunal has no power to waive the debt under section 1237A. Ms Lyster contributed to the error.
Turning to section 1237AAD, the Tribunal is satisfied that the debt did not arise as a result of Ms Lyster "knowingly" making a statement or failing to comply with a provision of the Act. It arose due to her inadvertent error in failing to notify the Secretary of the change in her circumstances. The Tribunal finds on the balance of probabilities that she went along with the suggestion by a bank officer with respect to changing the bank account into which family allowance was paid when Mitchell was given card access. Ms Lyster did not turn her mind to her obligation to advise the Secretary when she changed her address or changes were made to the bank account such that she no longer was a signatory to it. The circumstances of this matter are unusual and in that respect special. The monies were used by Mitchell to assist him with his secondary schooling and Mr Lyster would have been entitled to payment of family allowance if the correct circumstances had been known by the Secretary. The Act does not provide for arrears of family allowance to be paid to Mr Lyster if Ms Lyster is required to pay back her debt to the Commonwealth. The Tribunal has therefore decided that the debt should be waived under section 1237AAD.
It is for these reasons that the decision under review will be set aside and the matter remitted to the Secretary with directions with respect to the debt and the waiver of it.
I certify that the twenty-three [23] preceding paragraphs are a true copy of the reasons for the decision herein of
Mrs H.E. Hallowes, Senior Member
(sgd) Catherine Thomas
Personal AssistantDate of Hearing: 25.01.2000
Date of Decision: 18.05.2000
Solicitor for the Applicant Ms P. D'Cunha, Officer of Centrelink
Counsel for the Respondent Mr M. Cahill
Solicitor for the Respondent Messrs Whyte Just & Moore
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