MAITLAND-GREENE and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2010] AATA 686

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 686

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/3881

GENERAL ADMINISTRATIVE  DIVISION		)
Re		PAULA MAITLAND-GREENE

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date9 September 2010

PlaceBrisbane

Decision The Tribunal sets aside the decision under review and remits the matter to the Secretary to decide the matter in accordance with these reasons.

..............[Sgd]................................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Parenting payment – Whether applicant was overpaid parenting payment in the debt period – If so, should the debt be set aside or waived – Applicant did not declare correct amounts of income – Amount of overpayment held to be a debt due to the Commonwealth – Debt may be written off if debtor has no ability to repay it – Insufficient evidence to determine whether applicant is in severe financial hardship – Decision set aside and remitted to Secretary to determine whether applicant’s circumstances amount to severe financial hardship.

Social Security Act 1991 (Cth) ss 500I, 1068B, 1223, 1236, 1237AAD

Social Security (Administration) Act 1999 (Cth)

REASONS FOR DECISION

9 September 2010 Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      This application concerns the entitlement of Ms Paula Maitland-Greene (the applicant) to parenting payment in relation to the period 19 June 2004 to 14 August 2006 (the debt period).  During the debt period, the combined income levels of the applicant and her partner did not entitle her to be paid parenting payment.  I have to determine whether a debt which represents the overpayment of parenting payment to the applicant should be written off or waived.

HISTORY OF THE MATTER

2.      On 7 May 2004, the applicant, who had previously been granted Newstart benefit, provided Centrelink with estimates of taxable income for both herself and her partner.  This was done for the purposes of a claim for family tax benefit and maternity allowance.  The applicant then estimated that her partner would have a taxable income of $35,000 in the 2003/2004 financial year.  For that same period, the applicant estimated that her own taxable income would be $14,000.

3.      On 18 June 2004, the applicant was notified of the requirement to report both her own income and that of her partner for the fortnight 19 June 2004 to 2 July 2004.

4.      On 22 June 2004, the applicant was granted parenting payment: this claim was granted with effect from her claim for that benefit on 26 May 2004.  Also, on 22 June 2004 the applicant was notified of the continuing requirement to report both her own income and the income of her partner on a fortnightly basis.

5.      This application concerns the entitlement of the applicant to parenting payment for the debt period.  The applicant contacted Centrelink each fortnight during the debt period to report the earnings of herself and her partner[1].  During the hearing of the application, recordings of the applicant calling Centrelink were replayed.

[1] T7/67-71; T10/87-88; T22.

6.      The applicant reported earnings for herself in relation to the debt period of $9,223.74.  The applicant’s actual earnings during that period were $10,165.52[2].  The applicant reported earnings for her partner in relation to the debt period of $36,414.14.  The actual earnings of the applicant’s partner during that period were $80,918.08[3].

[2] T7/67-69.

[3] T7/70-71.

PRIOR DECISIONS

7.      On 4 December 2006, Centrelink decided that the applicant had been overpaid parenting payment in the amount of $15,531.79 and that the resulting debt was to be recovered[4].  On 5 December 2006, Centrelink notified the applicant of the debt[5].

[4] T8/80-83.

[5] T9/84.

8.      On 8 March 2007, the applicant requested review of the decision to raise and recover the debt[6].  On 15 March 2007, the Original Decision Maker affirmed the decision[7].

[6] T17/102.

[7] T17/102.

9.      On 2 April 2009, a review was requested on behalf of the applicant[8].  On 17 April 2009, the Original Decision Maker again affirmed the decision[9].

[8] T10/85.

[9] T12/90.

10.     The applicant sought further review of the decision on 29 April 2009 and an Authorised Review Officer reviewed and affirmed the decision to raise and recover the debt[10].

[10] T13/91.

11.     The applicant lodged an appeal at the Social Security Appeals Tribunal (SSAT) on 25 May 2009[11].  On 22 July 2009, the SSAT affirmed the decision under review.

[11] T16/96-97.

ISSUES FOR CONSIDERATION

12.     The first issue for consideration is whether the applicant was overpaid parenting payment in excess of her entitlement in relation to the debt period.   There is no issue relating to the amount of the excess payment.  The main issue for consideration is whether any part of the resulting debt should be set aside or waived.

RELEVANT LEGISLATION

13.     The legislation that is relevant to the determination of this application is the Social Security Act 1991 (Cth) (the Act) and the Social Security (Administration) Act 1999 (Cth) (the Administration Act). In these reasons I will refer to a number of provisions from these enactments that I have considered relevant to the determination of this application.

OVERPAYMENT OF DEBT

14.     During the debt period, the applicant was paid parenting payment at a rate calculated on the basis of the fortnightly declarations of her and her partner’s income.  There is no issue that the applicant did not correctly declare the amount of income earned by her or her partner.  The tenor of the evidence of the applicant was that her partner was secretive and did not disclose the correct amount of his income even though he appears to have had some managerial responsibilities in working for a transport company.

15.     I accept the evidence of the applicant that she was unaware of the true extent of the income earned by her partner.  The applicant, in her statement, remarks that she did not know that her partner “earned more than he had declared to either myself or to Centrelink”.  However, the reports of income were made by the applicant and not by her partner.  The applicant, in her evidence before me, stated that an examination of the home computer conducted after he left the matrimonial home revealed that her partner spent money over the internet in on-line gambling and adult sites.

16. I am satisfied that when the actual earnings of the applicant and her partner, received during the debt period, are taken into account, the correct rate of parenting payment in each fortnight of the debt period was nil. The rate of parenting payment that a person is entitled to receive at any given time is calculated in accordance with the rate calculator at s 1068B of the Act. Under s 1068B-D1 of the Act, a person’s entitlement is to be reduced on the basis of the applicant’s income and/or on the basis of the income of the person’s partner. Under s 500I of the Act, parenting payment is not payable where a person’s rate would be nil. In view of the fact that the parenting payment that had been paid was not payable, it was appropriate to cancel this payment with effect from 19 June 2004.

17. The amount of any overpayment of parenting payment is a debt due to the Commonwealth. This is as a consequence of the operation of s 1223 (1) of the Act which provides, subject to the section, that if a social security payment is made; and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit; the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

18. I am satisfied that the applicant has been overpaid parenting payment in the sum of $15,531.79 for the debt period, this being the amount of benefit paid during that period to which the applicant was not entitled. This amount is a debt due to the Commonwealth pursuant to subsection 1223(1) of the Act.

DEBT WRITTEN OFF

19. The Secretary may, under s 1236(1) of the Act on behalf of the Commonwealth, write off a debt for a stated period or otherwise. The exercise by the Secretary of this power under s 1236(1) is subject to s 1236(1A) of the Act. There are various grounds in s 1236(1A) which enable the Secretary to write off a debt. I do not think that there is any basis for me to find that the debt is irrecoverable at law: s 1236(1A)(a), s 1236(1B).

20. The Secretary may write off the debt if the debtor has no capacity to repay the debt: s 1236(1A)(b). As the applicant is paying off the debt by deductions from her present social security payment, the debtor is taken to have capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship: s 1236(1C). The applicant in her evidence has stated that she has no ability to repay the debt other than by way of deductions from the benefits currently provided to her by the Commonwealth. She has stated that any deductions from her benefits result in an increased financial burden on her and increases the hardship that she faces in properly providing for her children.

21.     Centrelink has been responsive in modifying the amount of the deductions but the tenor of the evidence adduced by the applicant is that she is in a very difficult financial position.  To her credit, the applicant has stated that she is exploring the possibility of undertaking some training in car mechanics so that she can work on raceways.  This is a commendable attitude on her part to qualify herself for a position which could mean that she would not be dependent on the taxpayer for her support.  She is also in a relationship with a new partner who is still establishing himself in a business; her partner is taking whatever work is available to support his family.

22.     Having regard to the evidence of the applicant that the mechanics course will be completed within three years, I consider that it is appropriate to remit this matter to the Secretary to enable the Secretary to determine whether the debt should be written off for three years if the circumstances of the applicant can be regarded as being severe financial hardship.  There is no up-to-date information before me which discloses the current level of financial expenditure of the applicant.  I am also unaware of the income of her new partner.

SPECIAL CIRCUMSTANCES

23. Section 1237AAD of the Act provides that the Secretary may waive the right to recover all or part of a debt on the grounds of special circumstances. I am not satisfied that the evidence discloses special circumstances within the meaning of s 1237AAD of the Act.

DECISION    

24.     I set aside the decision under review and remit the matter to the Secretary to decide the matter in accordance with these reasons.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: .......................[Sgd]......................................................
              Kate Slack, Research Associate

Date/s of Hearing  28 July 2010
Date of Decision  9 September 2010
Counsel for the Applicant         P.W. Lithgow
Solicitor for the Applicant          E.J. Maitland
Solicitor for the Respondent     Rick McQuinlan