Manton; Secretary, Department of Social Services and (Social services second review)

[2024] AATA 593

Manton; Secretary, Department of Social Services and (Social services second review) [2024] AATA 593 (3 April 2024)

Division:GENERAL DIVISION

File Number:          2024/1106

Re:Secretary, Department of Social Services

APPLICANT

AndMr Jake Manton

RESPONDENT

DECISION

Tribunal:Senior Member K. Parker

Date:3 April 2024

Place:Melbourne

The Tribunal ORDERS that the operation and implementation of the decision under review is stayed until the decision of the General Division of the Administrative Appeals Tribunal  on this application for review is made and takes effect, or until further order of the Tribunal.

...............[SGD]................

Senior Member K. Parker

Catchwords

PRACTICE AND PROCEDURE – stay application – decision under review relates to debt raised against the Respondent arising from overpayment of youth allowance under the Social Security Act 1991 (Cth) – decision under review set aside and remitted to the Applicant for reconsideration – Respondent seeks review of decision under review and challenges approach directed by the Social Services & Child Support Division of the Tribunal by which to recalculate the debt – complex legal issues arising  – cohort of similar applications – one application from cohort will be heard as a ‘test application’ before three members of the General Division of the Tribunal  – Respondent has partially repaid the debt – Applicant concerned about returning the partial payment to the Respondent in the event this amount will need to be recovered at a later time – Applicant undertook not to seek recovery in the interim from the Respondent of the remaining portion of the debt – Respondent keen to have these issues finally resolved and has experienced distress as a result of debt collection activities relating to the debt – request for the stay opposed by the Respondent – Tribunal satisfied that the balance of convenience weighs in favour of the Applicant – stay order granted.

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)

Social Security Act 1991 (Cth)

REASONS FOR DECISION

Senior Member K. Parker

3 April 2024

1. The Applicant, Secretary, Department of Social Services (‘Secretary’), lodged an application for review (‘Application’) with the General Division of the Administrative Appeals Tribunal (‘AAT2’) on 20 February 2024 about a decision relating to a youth allowance overpayment debt raised against the Respondent, Mr Jake Manton.

2. The Secretary seeks review of a decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal made on 18 January 2024 (‘AAT1 Decision’). The AAT1 set aside an earlier decision made by a delegate of the Secretary, raising a debt against Mr Manton for the overpayment of youth allowance to him under the Social Security Act 1991 (Cth). The AAT1 remitted the matter to the Secretary for reconsideration, with a direction that Mr Manton’s youth allowance debt be reconsidered (that is, recalculated) having regard to an approach that was described in paragraphs [64] to [68] of the AAT1’s Reasons for Decision dated 18 January 2024.

3. In paragraphs [64] to [68] of AAT1’s Reasons for Decision, the AAT1 Member stated that an attempt should be made by the Secretary to obtain the best available evidence to use when calculating the overpayment debt. The AAT1 noted in its decision that information on Mr Manton’s pay advice slips from his employer had been relied upon, however, they did not include a daily breakdown of Mr Manton’s earnings. Instead, it appeared to the AAT1 that Centrelink (as it was known then) had used “apportioned earnings” when calculating the debt. The AAT1 concluded that an attempt should be made to obtain information about the daily earnings of Mr Manton (or if that is not available, evidence from Mr Manton about the days he had typically worked during the relevant period), in order that it “can be confidently stated that the best available evidence was being used” to calculate Mr Manton’s debt.

4. By lodging the Application, the Secretary now seeks review of the AAT1 decision by the AAT2. The Respondent also seeks from the Tribunal, an order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’) staying the operation of the AAT1 Decision, until the final determination of the Application (‘Stay Order’).

5. Mr Manton opposes the making of a Stay Order. Consequently, this matter was listed for an interlocutory hearing which took place on 28 March 2024. Mr Manton was self-represented. The Respondent was represented by Mr Matthew Sheedy of Sparke Helmore Lawyers.

6. The Respondent contended, in the “Request for Stay Order” form dated 20 February 2024, as follows:

   The Secretary contends that it is appropriate to make an order staying the operation of the AAT1’s decision for the following reasons.

   Consequences for the respondent

   The Secretary contends that, as a consequence of the AAT1’s construction of s 1067G-H23 of the Social Security Act 1991 (Act), there is a realistic possibility that the Secretary will be unable to calculate the respondent’s debt in a manner which is consistent with his view of the law. In summary, that is because:

   ·the Secretary’s current position is that in the circumstances of this case, the apportionment of employment income across multiple instalment periods determined under s 43(1) of the Social Security (Administration) Act (Administration Act) is not permissible (despite the AAT1’s reasoning to the contrary);

   ·if the AAT1’s decision is implemented, the Secretary may not be able to obtain evidence that would allow for calculation of the respondent’s debt based on when he earned employment income;

   ·the Secretary’s position is that in those circumstances, it would be open for him to calculate the respondent’s debt based on when he received employment income. However, the AAT1 found that approach to be unlawful; and

   ·therefore, there is a strong possibility that the Secretary will need to make a decision that the respondent owes no debt.

   As of the date of the Secretary’s application to the Tribunal, the respondent has repaid $652.45 towards his debt. If implementation of the AAT1’s decision results in a decision that the applicant has no debt, then the amounts he has repaid will need to be refunded to him.

   However, if the Secretary is then successful in this appeal and the respondent is found to owe a debt, the respondent would be required to repay the amount refunded to him.

   Consequences for the Secretary

   The implementation of the AAT1 decision would likely involve the Secretary having to make a decision that involves a calculation of the debt which he considers to be contrary to the law, and which would be inconsistent with the Secretary’s general practice and policy. If the Secretary is successful on second review, this decision-making would have to be reversed.

   The administrative burden of these steps is a prejudice to the Secretary.

   Further to the above, if the AAT1 decision is implemented but then the Secretary is successful in the appeal, this may result in the Secretary being required to re-recover monies owed to the Commonwealth that he in fact had already recovered. There is a possibility that the Secretary will not be able to recover the amount again.

   Public interest

   The Secretary contends that there is significant public interest in the efficient and effective recovery of public money owed to the Commonwealth. For the reasons set out above, if the AAT1’s decision was not stayed there is a possibility that the Secretary will be unable to recover the amounts that the respondent has previously repaid. In any event, the Secretary may have to expend significant additional public resources to re-recover amounts repaid to the respondent as a result of the AAT1’s decision.

7. At the interlocutory hearing, Mr Sheedy informed the Tribunal that there had been a number of other matters very similar to Mr Manton’s, where the AAT1 decisions involved the same legal issues which have, collectively, been the subject of review applications to the AAT2. Mr Sheedy indicated those cases are not linked formally. He said one of the other similar applications will proceed to a substantive hearing as a “test case”. Mr Sheedy explained there are some complex legal issues to be determined as part of this process as evident from the reasoning in the AAT1’s Reasons for Decision. He informed the Tribunal that the “test case” will be heard by the AAT2 constituted by three members of the Tribunal.

8. Mr Sheedy requested that the Tribunal hold Mr Manton’s application be in abeyance until the “test” application under review referred to above is finalised. The Tribunal indicated to the parties that it was not going to make such a direction as the matter involving Mr Manton’s debt had come before it to deal with the Secretary’s request for a stay only, following which, this Application would proceed in the usual manner. The Tribunal did not consider that Mr Manton had been provided with adequate notice of the Secretary’s request to hold this Application in abeyance and on this basis, considered it inappropriate to deal with this request at the interlocutory hearing on 28 March 2024. Mr Sheedy, on behalf of the Applicant, is at liberty to reagitate this request at a later point in time.

9. At the interlocutory hearing, Mr Sheedy submitted that it is appropriate for the Tribunal to issue the Stay Order because it will maintain the status quo in this matter until the legal issues surrounding the calculation of Mr Manton’s debt are resolved by the AAT2. Mr Sheedy confirmed that the Secretary does not intend to recover the youth allowance overpayment debt from Mr Manton in the interim, that is, until these proceedings have been finalised.

10. At the interlocutory hearing, Mr Manton explained that his understanding when he opposed the Secretary’s request for a Stay Order, was that Services Australia were going to seek to recover the remaining youth allowance overpayment debt from him. Mr Manton regarded himself as having been caught up in the Robodebt situation, and that he does not want to owe any more money to Services Australia (hence, his action to commence repaying the debt). Mr Manton was of the view that his debt “should be wiped”. Mr Manton described the conduct of the Applicant’s debt collector. He said that they would call him by telephone up to five times per day which had caused him distress. He indicated that he wanted this matter “over with” and he asked for it to be “resolved fairly and accurately”. It was evident that this whole situation has had an adverse personal impact upon Mr Manton.

11. By conducting the interlocutory hearing and reading the documents lodged in this application by both parties, in accordance with section 41(4)(a) of the AAT Act, the Tribunal is satisfied that Mr Manton has been given a reasonable opportunity to make submissions in relation the Secretary’s request for a Stay Order. The Tribunal has taken into account the interests of Mr Manton, the Secretary, and any other persons who may be affected by the review of the AAT1’s decision.

12. The Tribunal appreciates that Mr Manton would like this matter to be finalised so he can move on from the adverse experience he has described to the Tribunal in relation to this debt. However, the Secretary has undertaken to the Tribunal that until this matter is finalised that there is no intention to seek recovery of the remaining debt from Mr Manton. Mr Manton has partially paid this debt. The effect of the Stay Order, if made by the Tribunal, would be that Mr Manton would not be reimbursed this partial repayment until the AAT2 has finalised the Application. If the Application is finalised in Mr Manton’s favour, he will be paid back this partial repayment at the end. If it is not finalised in Mr Manton’s favour, the Secretary will retain this amount and Mr Manton will only need to pay the remainder of the debt.

13. The Tribunal accepts the Secretary’s contention that if the partial repayment is given back to Mr Manton now, and the Application is decided in favour of the Secretary’s position, it may become problematic to recover this later on from Mr Manton if he cannot at that time afford to pay back this amount. Mr Manton said that he had been employed on a contract for the last 12 months, that 28 March 2024 was his last day, and that he would then be out of employment for an unknown period of time.

14. On the other hand, the Tribunal acknowledges that Mr Manton would benefit from having access to the partial repayments he has made against this debt if they were reimbursed to him by the Applicant at the present time.

15. While there are factors weighing for and against the granting of the stay, the Tribunal is satisfied that the balance of convenience weighs slightly more in favour of the Secretary and that it is appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review to issue the Stay Order as requested by the Secretary. The undertaking by the Secretary not to recover the remaining portion of the debt from Mr Manton until this Application is finalised will effectively maintain the status quo completely until this Application is finalised.

16. Accordingly, and pursuant to section 41(2) of the AAT Act, the Tribunal ORDERS that:

    (a)the operation and implementation of the AAT1 decision is stayed until the decision of the Tribunal on the application for review by the AAT2 comes into operation, or until further order of the Tribunal (‘Stay Order’); and

    (b)either party may apply to the Tribunal at any time to revoke or vary the Stay Order.

I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member K. Parker

...........[SGD]...........

Associate

Dated: 3 April 2024

Date of Hearing:	28 March 2024
Solicitors for the Applicant:	Mr Matthew Sheedy, Sparke Helmore Lawyers
Respondent:	Self-represented