MARK TRYON and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2010] AATA 194

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 194

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/5641

GENERAL ADMINISTRATIVE  DIVISION		)
Re		MARK TRYON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr R G Kenny, Senior Member

Date23 March 2010

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

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

Senior Member

CATCHWORDS

SOCIAL SECURITY – Benefits and entitlements – Disability support pension – Failure to give notification of changes in income – Overpayment of disability support pension - Debt due to the Commonwealth – No basis for writing off debt – No basis for waiver of debt – Decision affirmed

Social Security Act 1991 (Cth), ss 23, 1064, 1223, 1236, 1237A, 1237AAD
Social Security Act (Administration) 1999 (Cth), s 68

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

REASONS FOR DECISION

23 March 2010 Mr R G Kenny, Senior Member    

BACKGROUND

1.      

For periods from 2004 to 2009, Mark Tryon was in receipt of the disability support pension in accordance with the terms of the Social Security Act 1991

(Cth) (“the Act”).  On 18 August 2009, a Centrelink officer determined that he had been overpaid in the amount of $5,155.18 which was a debt owed by him to the Commonwealth.  On 28 September 2009, an authorised review officer with Centrelink varied the decision by increasing the amount of the overpayment and the debt to $6,401.98.  The debt was in respect of two separate periods: 30 June 2004 until 2 May 2006 (“the first overpayment period”) in the amount of $4,607.77; and 17 September 2007 to 13 August 2009 (“the second overpayment period”) in the amount of $1,794.21.  The Social Security Appeals Tribunal affirmed the decision on 9 November 2009. 

2.      It is common ground that, at all material times, Mr Tryon was qualified for the disability support pension and that the rate of his payments was dependent on the combined income of Mr Tryon and his wife.  Throughout the overpayment periods, Mrs Tryon was in employment.  Mr Tryon was employed for short periods in the overpayment periods and in the intervening period.  Mr Tryon’s pension payments were calculated on the basis of fortnightly amounts which did not always accurately reflect the actual income he and his wife earned.  This meant that, for some fortnights, he was overpaid and for others he was underpaid his correct entitlement.  The net result, in the decision under review, was the overpayment of $6,401.98.

CONTENTIONS AND ISSUES

3.      Phil Nolan, for the respondent, submitted that, throughout the two overpayment periods, Mr Tryon had not responded to notices sent to him periodically by Centrelink in which he was required to advise when his and his wife’s fortnightly income exceeded the respective threshold amounts referred to in the notices; that this resulted in his disability support pension being calculated on incorrect income figures; that this resulted in the overpayment which is a debt due to the Commonwealth; and that there was no basis for either writing off or waiving the debt.

4.      Mr Tryon submitted that Centrelink had been kept informed of his and his wife’s earnings and that this was done, in the main, by ensuring that their annual taxation records were provided to Centrelink; that Centrelink made many mistakes in calculating his overpayment with the result that he was unable to accept the accuracy of the final calculation; that his financial situation is such that he is unable to repay any debt; and that his family situation was one which would justify waiving any debt due to special circumstances. 

5.      The issues for determination are: whether, in the overpayment periods, Mr Tryon was overpaid an amount of disability support pension; what the amount of any such overpayment is; whether any such amount is a debt owed by Mr Tryon to the Commonwealth; and whether any such debt should be written off or waived.

EVIDENCE

Mr Tryon

6.      Mr Tryon gave the following evidence.  He had always been aware that the amount of the disability support pension payment was dependent on his and his wife’s combined income.  He read the letters he received from Centrelink and knew that he was to keep Centrelink informed of any changes in income levels if he was aware of them.  His practice was to ask his wife whether her income had changed and to tell her to advise Centrelink in the event that it had.  There were occasions when he reported fortnightly amounts to Centrelink but he did not do this on a regular basis or in accordance with the 14 day time-frames.  He ensured that Centrelink knew his annual income as he believed that, by doing so, any overpayment would not extend beyond 12 months.

7.      Mr Tryon has not worked since November 2009 but is not receiving any social security payments.  This is because he no longer wants to be involved with Centrelink due to the problems he has had in his dealings with Centrelink. 

8.      Mr Tryon and his wife own their own home which is partly renovated.  He is a carpenter and spends his time working on the house but has difficulty because of his health concerns.  In his evidence, he estimated its value at $500,000 and the mortgage debt at approximately $170,000.  He would require some $50,000 to complete the renovations at which stage it may be sold.  They have two vehicles valued at approximately $7,000 and $3,000, respectively.  They have two children, a son and a daughter.  His son and girlfriend, along with her child, currently share the house with them and pay $50 per week rent.  Mr and Mrs Tryon have no savings and have accumulated a credit card debt of more than $6,000, largely since Mr Tryon ceased work.  They are unable to make ends meet on his wife’s fortnightly income and this has resulted in the increasing amount of their credit card debt.  He believes that he will need to borrow money against the house to cope financially. 

9.      Until November 2009, Centrelink was recovering monies through deductions from Mr Tryon’s pension but, as he no longer receives a pension, this has ceased.  He has been served with a letter of demand in relation to the overpayment debt in the amount of $4,900.  He suffers from hearing and vision problems and cannot afford a suitable hearing aid or updated spectacles.  He also has numbness in his arms, elbow pain, sinus problems, and orthopaedic problems in his knees, feet, neck and back which cause considerable pain.  His wife suffers from depression.

Stephen Boulter   

10.     Stephen Boulter has worked for Centrelink since 1992 and has been involved with overpayments and debt recovery since 2000.  He has a business degree with a major in accountancy.  He was not involved in the initial calculations of Mr Tryon’s debt and agreed that Centrelink officers sometimes make errors in calculating overpayments.  He conceded that different results had been achieved in Mr Tryon’s case on successive calculations.  The officer who made the first calculation fell into error because he based the overpayment on Mrs Tryon’s income alone.  This was remedied by the authorised review officer who increased the amount of the debt after factoring in Mr Tryon’s earnings.  Mr Boulter conducted subsequent checks on the calculations using alternative means involving both manual and non-manual entering of the fortnightly earnings of both Mr and Mrs Tryon.  These yielded the same result but differed from the decision under review.  However, the difference in the calculations was an additional 60 cents.  He believed that the small difference may have been due to variations in the rounding of input figures.  Other than for that small difference, the recent calculations yielded the same result as achieved by the authorised review officer.  His opinion was that the debt raised against Mr Tryon had been correctly calculated.

Other evidence

11.     In evidence was a Financial Information Form completed by Mr Tryon on 28 January 2010[1].  It lists Mrs Tryon’s current income at $1,820.10 per fortnight, household expenses at approximately $840 per fortnight, general expenses at approximately $1040 per fortnight and transport expenses at approximately $172 per fortnight.  It also lists Mr and Mrs Tryon’s house and cars at values consistent with those given by Mr Tryon in his evidence.

[1] See Exhibit 6.

12.     Mr Tryon’s disability support pension was cancelled between the two overpayment periods and then a new claim made in September 2007 was accepted.  In evidence was a letter, dated 17 September 2007 which advised him of the reinstated disability support pension payment[2].  It included a requirement for Mr Tryon to advise Centrelink, within 14 days, of a range of matters including any change in his wife’s income.

[2] See T7/39.

13.     In evidence were copies of letters sent to Mr Tryon by Centrelink on 24 May 2004[3], 21 September 2004[4], 21 April 2005[5], 17 November 2005[6], 29 November 2006[7] and 28 December 2007[8].  In each letter, Centrelink advised the fortnightly income on which his disability support pension was calculated.  In each letter, Centrelink requested Mr Tryon to advise, within 14 days, of a range of things including if there had been a change in the stated income amount.  Also in evidence was a letter, dated 4 December 2008, detailing amounts of disability support pension paid to Mr Tryon and the income on which his pension was calculated from 10 October 2009 until 4 December 2008 and from 12 September 2008 until 9 October 2008[9].  This letter also required Mr Tryon to notify Centrelink if the circumstances declared in the letter had changed.

[3] See T5/34.

[4] See Exhibit 2.

[5] See Exhibit 3.

[6] See Exhibit 5.

[7] See T6/36.

[8] See T8/41.

[9] See T12

14.     In another letter, dated 25 October 2005, Centrelink set out a series of questions in relation to Mr Tryon’s employment.  His responses, dated 4 November 2005, included advice that he had worked for Trendwest and Richards Steel[10]. 

[10] See Exhibit 4.

15.     The material in evidence also included copies of Employment Declarations from Mr and Mrs Tryon’s employers[11], summaries of their earnings[12], Mr Tryon’s taxation documentation[13] and Centrelink’s debt calculation records[14].

CONSIDERATION

[11] See T14/83, T15/88, T16/104, T18/197. T27, T31/327-330, T32/336-339,T33, T34

[12] See T14-T19, T31/331-333, T32/340-342, T33/347

[13] SeeT14

[14] SeeT20-T23. T29, T30, T35, T36

Overpayment and debt

16.     The disability support pension is calculated in accordance with the rate calculator at the end of s 1064 of the Act and this requires the income of both Mrs Tryon and her partner to be taken into account.  I have examined Mr and Mrs Tryon’s income records for the overpayment periods.  I have also examined the Centrelink calculation records and I accept the evidence of Mr Boulter that these accurately reflect that Mr Tryon was paid $6,401.98 in excess of his entitlement.  Disability support pension is a social security pension and a social security payment[15].  Where a person in receipt of a social security payment obtains a benefit to which he was not entitled, the overpayment is a debt due to the Commonwealth[16].  Accordingly, I am satisfied that the overpayment of $6,401.98 is a debt due by Mr Tryon to the Commonwealth.

[15] See s23 of the Act.

[16] See s1223 of the Act.

Writing off the debt

17.     Provision is made for a debt to be written off under s1236 of the Act.  This is the case if the debt is irrecoverable at law; or the debtor has no capacity to repay the debt; or 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.  The only component of that provision of potential relevance in this matter is that relating to lack of capacity to repay the debt.  Mr Tryon was repaying the debt to the respondent through deductions from his disability support pension payments.  As I understand it, this ceased when his disability support pension payment ceased after he decided to sever his reliance on social security benefits which may be available to him under the Act.  In that situation, I am satisfied that Mr Tryon should not be given the benefit of having his debt written off.

Waiver of debt:  s 1237A of the Act

18.A debt may be waived under s1237A of the Act, which reads:

1237A Administrative error

(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

(1A)     Subsection (1) only applies if:

(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

19.     The first element to be satisfied under s 1237A(1) of the Act is that the debt must be attributable solely to an administrative error made by the Commonwealth.

20. Under s 68(2) of the Social Security Administration Act 1999 (the Administration Act), Centrelink may give a person receiving the disability support pension a notice in writing that requires the recipient to provide information in respect of a range of matters including income details. I am satisfied that the letters sent to Mr Tryon, noted above[17], constitute notices under that provision requiring him to provide information, within 14 days, about differences between the fortnightly income he and his wife received and the amounts nominated in the respective notices.  I am satisfied that the income details noted above[18] for Mr and Mrs Tryon were not the same as identified by Centrelink in the notices.  Mr Tryon mistakenly believed that notification of annual income meant that Centrelink would have the relevant information.  However, the notices specifically required advice of fortnightly differences in income and for that to be provided within a 14 day time-frame.  I am satisfied that these differences were not reported to Centrelink within the 14 day time-frame required in the notices and that this failure to advise Centrelink played a substantial role in his being overpaid.  This means that the debt can not be attributable solely to an administrative error made by the Commonwealth.  It follows that the debt may not be waived under s 1237A of the Act.

[17] See paragraphs 12 and 13.

[18] See documents referred to in footnotes 11 to 13.

Waiver of debt:  s 1237AAD of the Act

21.     A debt may also be waived under s 1237AAD of the Act which reads:

s1237AAD Waiver in special circumstances

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 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.

22. I have determined that Mr Tryon’s debt arose because of his failure to comply with s 68 of the Administration Act. However, I am satisfied that this was not knowingly done by him.

23.     The Act provides no guidance as to the meaning of the term “special circumstances” in s 1237AAD of the Act.  In Groth v Secretary, Department of Social Security[19], Kieifel 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.

[19] (1995) 40 ALD 541at 545.

24.     Mr Tryon said that his wife suffers from depression.  However, I am satisfied that this is managed as she maintains full-time employment.  Mr Tryon identified his own health-related concerns.  However, he is a qualified carpenter and, despite those problems, he is continuing in the role of completing the renovations on the house that he and his wife own, subject to their mortgage obligations.  Their financial situation is a difficult one.  However, they have substantial equity in their house and Mr Tryon indicated that he may need to rearrange their financial affairs in relation to the house with their lending institution.  I am satisfied that Mr Tryon’s situation is not one which falls below the standard applicable to the usual or ordinary case of a social security recipient.  It is significant, in relation to special circumstances, that Mr Tryon has made a conscious decision not to seek further social security benefits which may be available to him under the Act.   I am satisfied that there are no special circumstances such that the debt may be waived under s 1237AAD of the Act.

DECISION

25.     The decision under review is affirmed

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member

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

Date/s of Hearing  16 March 2010
Date of Decision  23 March 2010
Applicant was self-represented
Solicitor for the Respondent     Mr Phil Nolan, Sparke Helmore Lawyers