Marsh; Secretary, Department of Education, Science and Training and
[2007] AATA 1882
•19 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1882
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V 200600896
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY,
DEPARTMENT OF EDUCATION, SCIENCE AND TRAININGApplicant
And
LUCY BRENDA MARSH
Respondent
DECISION
Tribunal Regina Perton Date19 October 2007
PlaceMelbourne
Decision The Tribunal sets aside the decision under review and substitutes a decision that:
· Ms Marsh owes a debt to the Commonwealth of $7,264.30 due to overpayment of youth allowance from 4 November 2004 to 14 November 2005.
· A debt of $4,422.82 due to overpayment of youth allowance from 30 December 2003 to 3 November 2004 is waived on the basis of administrative error.
(sgd) Regina Perton
Member
SOCIAL SECURITY – youth allowance ‑ overpayment ‑ debt to Commonwealth ‑ waiver – whether sole administrative error - whether special circumstances exist – decision set aside
Social Security Act 1991 ss 1223, 1237A, 1237AAD
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
REASONS FOR DECISION
19 October 2007 Regina Perton, Member 1. Lucy Marsh is the partner of an army officer, Lieutenant Robert Bibb. She and her partner started living together in December 2003. At that time, Ms Marsh was a full-time university student at the University of Canberra while Lt Bibb was undertaking academic and military studies at the Australian Defence Force Academy (AFDA). Ms Marsh applied for youth allowance on 24 December 2003. On 8 January 2004, Centrelink, which administers youth allowance for the Department of Education, Science and Training (DEST), informed Ms Marsh that she had been granted youth allowance and rental assistance.
2. Lt. Bibb’s income varied from time to time due to increments and the payment of allowances, both regular and irregular. Due to a number of factors, set out later in these Reasons for Decision, Ms Marsh was overpaid youth allowance. Centrelink informed Ms Marsh in November 2005 that she owed a debt to the Commonwealth of $11,687.12.
3. Ms Marsh maintains that she provided timely and correct information concerning her partner’s earnings to Centrelink. She asserts that the debt has arisen as the result of administrative error on the part of Government agencies, particularly Centrelink and the Department of Defence. The Social Security Appeals Tribunal (SSAT) agreed. On 21 August 2006, the SSAT determined that the entire debt should be waived as it arose as the result of administrative error on the part of Centrelink.
4. Centrelink accepts that part of the debt, $4,422.82 in overpayments from 30 December 2003 to 3 November 2004, was solely attributable to administrative error and should be waived. However, Centrelink contends that the overpayment from 4 November 2004 to 14 November 2005 ($7,264.30) did not arise solely due to administrative error on the part of the Commonwealth. Centrelink seeks a recovery of the debt accumulated during the latter period.
5. The issues for the Tribunal are:
·Does Ms Marsh owe a debt to the Commonwealth of $11,687.12?
·Should all or part of the debt be waived on the ground that it arose as the result of administrative error by Commonwealth agencies?
·Should the debt be waived due to special circumstances?
Does Ms Marsh have a debt to the Commonwealth?
6. When a person qualifies for a social security benefit, the actual amount received depends on the other income and assets of the person and their partner.
7. The overpayments arose partly because of error on the part of Centrelink and partly because the amount of income received by Ms Marsh’s partner was higher than that recorded by Centrelink. The Tribunal is satisfied that the under-reporting of her partner’s income was not a deliberate action on the part of Ms Marsh. However, regardless of the circumstances that led to the overpayments, the amount overpaid is a debt owed to the Commonwealth pursuant to s 1223(1) of the Social Security Act 1991 (the Act).
8. Centrelink’s calculations of the debt are complex. The formula is based on each fortnight’s actual payments of youth allowance, the income of the recipient and her partner and the notional entitlement based on that income. Centrelink has provided records that indicate that between 30 December 2003 and 14 November 2005, Ms Marsh was paid $8,415.92 in youth allowance and $4,142.65 in rental assistance. Centrelink has stated that, based on the evidence it now has in relation to Lt Bibb’s income during that period, Ms Marsh was only entitled to $871.45.
9. There is no evidence before the Tribunal to suggest that Centrelink’s calculations of the amount overpaid are incorrect. Ms Marsh did not dispute the calculations, pointing out that she is not in a position to do so. The Tribunal is satisfied that Ms Marsh was overpaid youth allowance and ancillary benefits totalling $11,687.12 and has therefore incurred a debt to the Commonwealth in that amount.
Should the debt be waived due to Commonwealth error?
10. Section 1237A of the Act provides for waiver of a debt arising solely from administrative error:
1237A(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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
1237A(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.
11. Centrelink has conceded that part of the debt arose solely as the result of administrative error on its part. Ms Marsh’s solicitor has also undertaken a detailed analysis of the information she provided to Centrelink during that period. The Tribunal is satisfied that Ms Marsh received the payments in good faith. The Tribunal is satisfied that the debt of $4,422.82, as a result of overpayments from 30 December 2003 to 3 November 2004, should be waived due to its having arisen solely due to Centrelink’s administrative error.
12. The debt arising as a result of overpayments from 4 November 2004 to 14 November 2005 (the relevant period) is therefore being separately considered. In looking at whether the errors arose due to Commonwealth administrative error, the parties and the Tribunal concur that administrative errors by Commonwealth agencies other than Centrelink are covered by this provision. Hence, if the debt arose due solely to administrative errors by the Department of Defence (Defence) and Centrelink, Ms Marsh would be entitled to waiver.
13. Lt Bibb provided written and oral evidence. In a statutory declaration dated 16 February 2006, Lt Bibb indicated that while he was a full-time student at AFDA, between 2002 and 2004, he was only advised of annual pay increases. Pay slips were not provided to the students. If students wanted a pay slip, they had to visit the pay cell. He stated that Ms Marsh was totally reliant upon the information he provided her from the date of her original application for youth allowance until payments ceased. He stated that Ms Marsh had not seen any of his Salary Variation Advice forms (SVAs) during the relevant period. The SVAs were sent to his Duntroon Barracks address from January 2005 to December 2005 rather than to their residential address. He said that he and Ms Marsh kept their finances separate until September 2005 when they decided to open a joint bank account. Lt Bibb indicated that if he had known at the time that his receipt of allowances and pay increases would affect Ms Marsh, he would have provided her with all his income details regularly. He stressed that he did not know that he was required to do so. Lt Bibb stated that he could not recall Centrelink informing him of his obligation to inform Ms Marsh of his pay changes. He stated that he was under the impression that it was totally Lucy’s business between her and Centrelink.
14. Lt Bibb provided a further statutory declaration dated 16 August 2006. He stated that when he and Ms Marsh first started living together in December 2003, they rented in the private sector. In late December 2004, he and Ms Marsh were allocated an army residence. Notwithstanding that he was sharing accommodation away from AFDA, Lt Bibb’s official address for Defence-related matters remained the AFDA where his correspondence, and that of other students, was delivered via a shared pigeon hole. The Department of Defence delivered SVAs and other pay advice via that pigeon hole. Lt Bibb stated that the SVAs were infrequent and provided details in Defence Department Codes and mysterious formulae. Lt Bibb stated that it was rare to receive an SVA on the date of its issue. They often arrived in batches due to delayed mail or relocations of officer cadets. Lt Bibb stated that he was eligible for a range of allowances and his fortnightly pay often varied; although not by a huge amount.
15. In a third statutory declaration dated 26 February 2007 Lt Bibb stated that he did not intentionally ignore his pay increases. He indicated that he did not realise that his income had increased between late 2004 and May 2005. He stated that he was concentrating on his tertiary studies and army training and had not focused on the monetary aspect in the early stages of his Defence career. He stated that it was not until 2006 that on-line notification and access for AFDA students to their SVAs has been available. Lt Bibb stated that sometimes entitlements were paid months after they accrued. He provided details of the hectic schedule he followed during the period in which the debt accrued. He asked that the Tribunal accept his bona-fides and those of Ms Marsh, in that they had not deliberately failed to inform Centrelink of changes in income.
16. In oral evidence, Lt Bibb expanded on the methods of delivery of mail while he was at AFDA as well as on the range of allowances paid. He reiterated that SVAs were received at random times. He said that if you expected something to be paid, you could go down to the pay cell and find out about it but that usually it was a larger deposit in the bank account that alerted a person to extra pay. He said that, for example, if they went into the bush, an allowance was paid; but neither he nor others generally looked to see if the correct amount was paid. There were also deductions for expenses such as dry cleaning of uniforms. Lt Bibb said that he had not visited the pay cell very often as he was too busy to go down each fortnight and furthermore, that there was usually not an increase each fortnight. He reiterated that his focus was on his studies, not on what he was being paid. He confirmed that Ms Marsh had not seen the SVAs sent to his AFDA address during 2005 nor could he recall any specific conversation about his pay during that year. He said that he had not asked for his payslips or variation advices to be sent to his residential address as it was easier to have them sent to his AFDA address with all other Defence-related correspondence. Asked if he had thought to provide Ms Marsh with the SVAs, he stated that he had not done so as the documents were hard enough for someone within the defence force to understand and would have been even more so for Ms Marsh who was not in the defence force.
17. Lt Bibb could not recall whether he had received an SVA effective from November 2004. It was in the middle of the examinations and he would not have thought about going down to the pay cell at that time. He said that he was aware of the need to keep Ms Marsh informed of increases but the variation had been minor and he had not thought to check if there had been an increase in each pay. Lt Bibb could not recall if he had received advice of another pay increase in June 2005. He said that he only became aware of the increase as a result of a request under the Freedom of Information Act 1982 sought as a result of the Centrelink debt being imposed. Lt Bibb said that he did not check his bank statements regularly to check on changes in pay. He indicated that he did not realise that minor variations in pay due to allowances had to be reported to Centrelink.
18. Lt Bibb said that he had not read the contents of Centrelink letters addressed to Ms Marsh which stated that any changes in income of the recipient’s partner had to be reported within 14 days. He said that he had generally been aware that Ms Marsh’s youth allowance was dependent on both his income and hers from the beginning. He said that they had attended Centrelink offices on several occasions to advise the agency of their income, particularly at the start of the year.
19. Ms Marsh provided written and oral evidence. On 15 January 2006, following a review by the original decision maker who affirmed the earlier decision, she provided a comprehensive submission requesting review by an authorised review officer (ARO) of Centrelink. Ms Marsh stated that she had notified Centrelink whenever she was aware of changes in her partner’s income. She stated that she had not advised Centrelink of her partner’s pay increase on 4 November 2004 or 2 June 2005 because Lt. Bibb had not advised her of them and she did not, at that time, have access to his bank accounts or pay slips. They did not have a joint bank account at that time. Ms Marsh indicated that she contacted Centrelink on 20 December 2004 to update accommodation details and on 15 September 2005 to provide a change of payment details, namely a newly opened joint account. The contents of the other statutory declarations describe more fully some of the matters raised in oral evidence as well as a recounting of how Ms Marsh felt as a result of the debt imposed and the circumstances in which it arose.
20. In oral evidence, Ms Marsh confirmed that she had signed a declaration on the claim for youth allowance on 24 December 2003 agreeing to notify Centrelink within 14 days of a change to the information provided in the application form. She acknowledged that she understood that she was required to inform Centrelink of any increases in her or her partner’s pay. She expressed the opinion that her partner was generally aware of that need. Ms Marsh could not recall specifically showing her partner the correspondence she received from Centrelink with the reminder note concerning the need to provide changed income information within 14 days. She confirmed that she had only become aware of his salary variations after the debt was raised. She said that she had not expected any salary increases so did not ask him about it, given how busy they both were.
21. Ms Marsh’s solicitor conceded, in his submission dated 13 June 2007, that Ms Marsh twice failed to advise Centrelink of changes in Lt. Bibb’s income. On 4 November 2004, he received a $16 per week increase plus a Trainee Dependent Allowance (TDA) of $6.00. Centrelink was not advised of that increase; nor of a $45 increase and reduction of TDA on 2 June 2005.
22. As indicated earlier, for the Tribunal to waive the debt for the relevant period, every single error that resulted in overpayment would have to be made by Centrelink or the Department of Defence. The evidence has revealed some practices on the part of Defence that made it time consuming for persons in Lt Bibb’s position to find out about pay increases in a timely fashion. However, that information was available if requested as was the possibility of checking bank statements. The Tribunal can understand why the issue of the exact amount of pay was not uppermost in the mind of Lt Bibb. However, the overpayments by Centrelink arose partly because of the lack of concern and communication between Lt Bibb and Ms Marsh about his pay. This resulted in a failure, albeit innocently, by Ms Marsh to inform Centrelink of changes in her partner’s income. The Tribunal is satisfied that Ms Marsh acted in good faith and that Lt Bibb’s inaction was the result of carelessness rather than deliberate failure to inform Ms Marsh. Nonetheless, the debt arising out of the overpayment from 4 November 2004 to 17 November 2005 did not arise solely due to administrative error by the Commonwealth. The Tribunal therefore finds that Ms Marsh is not eligible for waiver of the debt for that period on the ground of sole administrative error by the Commonwealth.
Should the Debt be Waived due to Special Circumstances?
23. Section 1237AAD of the Act provides for waiver of the debt 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 a 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.
24. The Tribunal is satisfied that Ms Marsh meets the requirements of s 1237AAD(a) of the Act. The debt for the relevant period arose because of Ms Marsh’s lack of awareness and access to details of her partner’s income. Lt Bibb was somewhat careless in his actions but the Tribunal is satisfied that he did not knowingly fail to comply with the provisions of the Act.
25. The term special circumstances is not defined in the legislation. For the Tribunal to exercise its discretion to determine that Ms Marsh’s situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25). In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases. Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case. There are a multitude of other cases in the Federal Court and the Tribunal which have also considered the meaning of the term.
26. Ms Marsh described the professional, personal and financial challenges she has faced during the relevant period, as well as at present. Lt Bibb is now based in central Queensland as his first posting. Ms Marsh, who graduated from university in 2006, qualifying as a dietician, has so far been unsuccessful in obtaining employment given the location of the base. She has also been attempting unsuccessfully to find appropriate work in Brisbane while her partner remains at his base or on exercises. Ms Marsh’s mother, who lives in Melbourne, has been diagnosed with cancer and underwent surgery and chemotherapy. As a result, Ms Marsh has flown to Melbourne on a regular basis to see her mother, which has resulted in further financial difficulties.
27. The Tribunal accepts that Ms Marsh is presently in difficult circumstances emotionally and financially. However, the Tribunal is not satisfied that the situation that she finds herself is vastly different from other social security recipients who have incurred debts due to an inadvertent failure to inform Centrelink of the changes in their income of themselves or their partners. In the Tribunal’s experience, it is, unfortunately, not unusual for debts to arise in similar circumstances to those which arose in this case. Many social security recipients experience financial and personal difficulties. Centrelink will generally agree to repayment of debts via negotiated instalments where the person who has accrued the debt is in financially straightened circumstances.
28. The Tribunal is not satisfied that the circumstances in this case constitute special circumstances (other than financial hardship alone). Hence, the Tribunal finds that the waiver provisions of s 1237AAD of the Act should not be invoked.
29. The Tribunal finds that Ms Marsh owes a debt to the Commonwealth for the overpayment of youth allowance from 4 November 2004 to 14 November 2005. The debt amounts to $7,264.30.
DECISION
30. The Tribunal sets aside the decision under review and substitutes a decision that:
· Ms Marsh owes a debt to the Commonwealth of $7,264.30 due to overpayment of youth allowance from 4 November 2004 to 14 November 2005.
·A further debt of $4,422.82, due to overpayment of youth allowance from 30 December 2003 to 3 November 2004, is waived on the basis of administrative error.
I certify that the thirty [30] preceding paragraphs are a true copy of the reasons for the decision of:
Signed: (sgd) Lauren Spragg
AssociateDate of hearing: 19 March 2007
Date of final submission: 26 June 2007Date of decision: 19 October 2007
Solicitor for the applicant: Mr P Mentor, Sparke Helmore
Solicitor for the respondent: Mr P Wearne, Taylor, Splatt & Partners
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