Martin; Secretary, Department of Family and Community Services

[2004] AATA 569

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 569

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1575
  )          No N2003/2011

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And ERROL JOHN MARTIN and MARGARET ALISON MARTIN

Respondent

DECISION

Tribunal Michael Sassella, Senior Member

Date3 June 2004

PlaceSydney

Decision The decision under review is affirmed.

[sgd] M J Sassella

Senior Member

CATCHWORDS

SOCIAL SECURITY – Disability Support Pension – Newstart Allowance – overpayments – failure to notify earnings income – debts recoverable – write off not available – waiver because of error not available – waiver because of special circumstances not available

SOCIAL SECURITY – Disability Support Pension – pensioner works as casual teacher – pensioner paid on basis of working full-time – actual work hours less than 30 hours a week – pensioner still has continuing inability to work   

Social Security Act 1991 s 94(1), (2), (5), 1223(1), 1224(1), 1236, 1237A(1), 1237AAD

Social Security (Administration) Act 1999 s 5

Acts Interpretation Act 1901 ss 28A, 29

Re Secretary, Department of Social Security and Dossis (1990) 21 ALD 628

Re O’Connell and Secretary, Department of Social Security (1991) 23 ALD 408

Re Jones and Secretary, Department of Family and Community Services [2003] AATA 62

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

3 June 2004 Michael Sassella, Senior Member           

RESULT

The decision of the SSAT is affirmed.  Both Mr and Mrs Martin owe debts to the Commonwealth.  Those debts are to be recovered.  However, the quantum of debt owed by Mr Martin is less than the applicant has demanded.  The matter is to be sent back to Centrelink for recalculation of Mr Martin’s debt in accordance with the direction that Mr Martin did not lose qualification for DSP through his work at Gunnedah High School.

BACKGROUND

1.      Errol John Martin (“respondent”), born 2 September 1943, was granted a Disability Support Pension (“DSP”) with effect from 6 February 1997.  His wife, Margaret Alison Martin (“respondent”), born 12 October 1946, was granted a Newstart Allowance (“NSA”) with effect from 5 December 1997.  As of 13 September 2002 Mr Martin’s DSP was suspended by a subdelegate of the Secretary, Department of Family and Community Services (“the applicant”, “the Secretary”) on the ground that the earnings of Mr and Mrs Martin exceeded the allowed limit.  Mrs Martin’s NSA was cancelled on 17 September 1999 because of sustained earnings precluding her from payment.  On 20 November 2002 a delegate decided that Mr Martin had been overpaid $28,299.59 and Mrs Martin had been overpaid $1,445.99.  A Centrelink authorised review officer (“ARO”) reviewed these decisions at the request of Mr and Mrs Martin.  As a result the amounts of the debts were altered.  Mr Martin was said to owe $44,236.24 and Mrs Martin $1,321.69. 

2.      The Martins appealed to the Social Security Appeals Tribunal (“SSAT”) which decided on 9 September 2003 that Mr Martin’s recoverable debt was less than the $44,236.24 claimed by Centrelink and made no change regarding Mrs Martin’s debt.  Waiver of the debts was considered but the debts were not waived.  The Secretary appealed the SSAT’s decision to the Administrative Appeals Tribunal (“the tribunal”) on 7 October 2003.

3.      By the time of the tribunal hearing Mrs Martin still owed only $83.69. 

ISSUES

4.      To understand the issues it is necessary to consider a number of facts.  Some of these facts come from the sworn oral evidence of Mr Martin at the hearing.  Some are from the T documents, including the SSAT decision.  Some are based on submissions by Mr G Lozynsky, advocate for the Secretary.

5.      On 26 March 1997 a delegate of the Secretary sent Mr Martin a letter notifying him of the grant of DSP and identifying the rate and the income items taken into account in setting the rate.  Mr Martin told the tribunal he received this letter.  The income items did not mention earnings from part-time teaching done by Mr Martin.  A section, “WHAT YOU MUST TELL US” explained that Mr Martin had to tell the office within 14 days if, among other things, his income as shown was incorrect, if his income increased or if he or Mrs Martin started or recommenced work.  At that time Mr Martin was also a partner in a newsagency business, however he soon got out of that.

6.      Mr Martin told me that he telephoned the office soon after this to explain that he would be receiving earnings from casual, part-time employment as a high school teacher.  Computerised file notes at page 342 of the T documents corroborate this.  Those notes refer to phone conversations on 7 and 16 April 1997.  The discussion addressed notification of Mr Martin’s earnings.  Mr Martin told the office he thought his casual earnings would be picked up from the income tax return copies he had provided prior to grant.  Mr Martin also told me that he left these conversations thinking that his casual earnings would be picked up in future from his tax documents and that fortnightly reporting was not required.  The file notes at page 342 do not include anything to this effect.  Mr Martin nevertheless made fortnightly reports for some time.  He may have been referring to a number of oral reports recorded on page 342.  He also explained that he reported his earnings on his wife’s fortnightly NSA report forms from late in 1997. 

7.      A number of letters repeating Mr Martin’s notification obligations were sent to him on 16 April 1997, 6 January 1998, 14 January 1998, 11 March 1998 and 22 December 1999.  Mr Martin’s evidence was that he did not receive these letters.  A letter dated 17 September 1998 was received but was apparently incomplete and did not include the notification obligations.  The copy of that letter at page 288 of the T documents corroborates Mr Martin’s evidence.  Mr Martin told me that a number of people in his vicinity experienced problems receiving mail in 1997.

8. I pause at this point to refer to several statutory provisions on the giving of notice to social security recipients. Section 5 of the Social Security (Administration) Act 1999 (“the Administration Act”)[1] provides:

[1] of giving notice

5.(1) If a provision of the social security law requires that a written notice be given to a person, it is sufficient compliance with that provision if the notice is given in a manner approved by the Secretary.

(2) Nothing in subsection (1) prevents a notice being given in accordance with section 28A of the Acts Interpretation Act 1901.

Section 28A of the Acts Interpretation Act 1901[2] provides:

[2] of documents

28A.(1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression "serve", "give" or "send" or any other expression is used, then, unless the contrary intention appears, the document may be served:

(a) on a natural person:

(i) by delivering it to the person personally; or

(ii) by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or

(b) on a body corporate—by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate.

(2) Nothing in subsection (1):

(a) affects the operation of any other law of the Commonwealth, or any law of a State or Territory, that authorizes the service of a document otherwise than as provided in that subsection; or

(b) affects the power of a court to authorize service of a document otherwise than as provided in that subsection.

Section 29 of the Acts Interpretation Act is also applicable:

Meaning of service by post

29. (1) Where an Act authorizes or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.

(2) This section does not affect the operation of section 160 of the Evidence Act 1995.

9.      It is well accepted in social security law that a notice from Centrelink is taken to have been given to a person, or to have been delivered, if it has been sent through the post in a properly addressed, post prepaid envelope.  Examples of cases where these principles have applied are Re Secretary, Department of Social Security and Dossis (1990) 21 ALD 628, 630 and Re O’Connell and Secretary, Department of Social Security (1991) 23 ALD 408, 414. Mr Martin confirmed for me that the letters, copies of which appeared in the T documents, were correctly addressed. This means that Mr Martin was fixed with notice of his obligations to report his and Mrs Martin’s income changes to Centrelink as they occurred. In any event, he agreed he had received the first letter which set out these requirements.

10. A substantial part of the Secretary’s case is that at a certain point during the period when Mr Martin received DSP he was able to work as a casual teacher for at least 30 hours a week. The qualification criteria, as relevant in this case, for DSP appear in s 94 of the Social Security Act 1991 (“the SSA”)[3]:

[3] for disability support pension—continuing inability to work

94.(1) A person is qualified for disability support pension if:

(a)       the person has a physical, intellectual or psychiatric impairment; and

(b)       the person's impairment is of 20 points or more under the Impairment Tables; and

(c)       one of the following applies:

(i)        the person has a continuing inability to work;

…

(d)       the person has turned 16; and

(e)       the person either:

(i)        is an Australian resident at the time when the person first satisfies paragraph (c); or

…

Meaning of continuing inability

(2) A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:

(a)       the impairment is of itself sufficient to prevent the person from doing any work within the next 2 years; and

(b)       either:

(i)        the impairment is of itself sufficient to prevent the person from undertaking educational or vocational training or on-the-job training during the next 2 years; or

(ii)       if the impairment does not prevent the person from undertaking educational or vocational training or on-the-job training—such training is unlikely (because of the impairment) to enable the person to do any work within the next 2 years.

…

(5) In this section:

"educational or vocational training" does not include a program designed specifically for people with physical, intellectual or psychiatric impairments;

“on-the-job training” does not include a program designed specifically for people with physical, intellectual or psychiatric impairments;

"work" means work:

(a)       that is for at least 30 hours per week at award wages or above; and

(b)       that exists in Australia, even if not within the person's locally accessible labour market.

…

11. What s 94 means is that, if Mr Martin was able to work for 30 or more hours a week then he would no longer have a “continuing inability to work”, a fundamental requirement in one seeking to qualify for a DSP. In social security debt recovery terms such a situation would mean that Mr Martin had no entitlement to any DSP payments received after he no longer had a continuing inability to work. This would mean a higher overpayment. In other circumstances, where a social security recipient has not lost his or qualification for payment but has incurred an overpayment by, for example, failure to notify increased income, the overpayment is lower because the recipient still has the advantage of the free area of income.

12.     It was agreed between the parties at the hearing that Mr Martin had never been told that he must inform Centrelink if he found he could work for at least 30 hours a week.  Mr Lozynsky told me that Centrelink’s notices have now been revised to remedy this defect. 

13.     Mr Martin explained that he and Mrs Martin tried assiduously to notify, through Mrs Martin’s NSA forms, their fortnightly income position.  This, he said, was not easy as the payment cycles for NSA did not match the payment cycles for their earned income.  I took it that they tried to apply a daily rate of income for days worked in a NSA fortnight and they reported a total derived from that.  This still resulted in an underdeclaration of total income, hence Mrs Martin’s debt.  It appears also that they provided documents to Centrelink’s Gunnedah office and that these were faxed to Centrelink at Tamworth where assessment work was carried out.  Mr Martin told me that his information was that Gunnedah Centrelink failed to fax the reverse side of the NSA form to Tamworth, thus omitting information regarding Mr Martin’s income.

14.     At this point I wish to record that I was impressed by Mr and Mrs Martin.  They seemed to me to be trying to be full and frank, and reasonable as possible, in giving their evidence. 

15.     The issues as I see them are:

(a)Are there DSP and NSA debts due to the Commonwealth?

(b)If the answer to (a) is yes, what is the correct quantum of any debt?

(c)If the answer to (a) is yes, can the debts be waived because of administrative error by Centrelink and the Martins’ receipt of the money in good faith?

(d)If the answer to (c) is no, can the debt be waived because of special circumstances?

FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS

Are there DSP and NSA debts due to the Commonwealth?

16.     I agree with the SSAT that Mr and Mrs Martin do owe social security debts to the Commonwealth.  The SSAT noted that Centrelink had not provided copies of any of Mrs Martin’s NSA fortnightly forms, presumably because they were no longer available.  The same situation applied at this tribunal.  As the SSAT said, when NSA fortnightly forms are lodged at Centrelink any income declared is entered on the computer.  As the ARO pointed out, Centrelink’s records of the declared amounts of Mr Martin’s earnings sometimes varied markedly from his earnings as reported to Centrelink later by his employer.  The SSAT thought this might reflect error on the part of any or all of Mr Martin (in reporting), his employer (in reporting) and Centrelink (in recording).  The SSAT, not unreasonably, doubted that the error here was with Centrelink or the employer.  It was thought more likely that Mr Martin had underdeclared his income than that the employer or Centrelink had got it wrong.

17.     There is a patchwork of legislation applying here because of the extended period of Mr Martin’s debt. 

18. Before 1 July 2001 s 1224(1) of the SSA provided that, if an amount had been paid to a recipient by way of a social security payment and the amount was paid because the recipient or another person made a false statement or false representation, or failed or omitted to comply with a provision of the SSA, the amount so paid was a debt due by the recipient to the Commonwealth.

19. Section 1223(1) of the SSA as it then was may also have applied. This provided that, if an amount had been paid to a person by way of social security payment on or after 1 October 1997 and the recipient was not qualified for the social security payment, the amount so paid was a debt due to the Commonwealth. If the Secretary is correct and Mr Martin lost his qualification for DSP by working for at least 30 hours a week then s 1223(1) as it was before July 2001 makes any later DSP payment a debt due to the Commonwealth. The Secretary saw the 30 hours a week work as commencing on 18 October 1997, ie after 1 October 1997.

20. For payments made on or after 1 July 2001 the current form of s 1223(1) applies. This simply creates a debt where a social security payment is made to a person who was not entitled for any reason to obtain the benefit of that payment. The debts in question, in as much as they reflect payments made on or after 1 July 2001, have been validly noted and raised.

What is the correct quantum of any debt?

21.     This is where the Secretary and the SSAT parted company.  The SSAT doubted Centrelink’s calculation because it was not agreeable to recovering all the DSP received by Mr Martin after he first worked an alleged 30-hour week.  The SSAT took account of the fact that Mr Martin was not working for 30 hours when he first received the DSP and that Centrelink did not tell him that he had to inform Centrelink if he commenced working for at least 30 hours a week.  The SSAT noted that Centrelink was aware in March 1999 that Mr Martin had done some full-time work but it did not review his entitlement as a result of that realisation.  As the SSAT put it, “Instead, his payments continued for another three and a half years”.  The SSAT considered that the debt accruing from 17 October 1997 to 12 September 2002 should be calculated by accepting that Mr Martin remained qualified for DSP and by assessing his entitlement using the normal income test. 

22.     Mr Martin told me at the hearing that, even when engaged in full-time casual teaching at Gunnedah High School, his actual work hours were less than 30 hours a week.  If this is correct then there has been no loss of qualification for DSP, although there could still be an overpayment.

23.     With the agreement of the parties the tribunal contacted Mr B Jeffery, principal of Gunnedah High School.  On 30 April 2004 Mr Jeffery advised that when Mr Martin works five days in a week as a casual teacher he is expected to do only 18 hours a week of face-to-face teaching.  He has no planning or marking duties.  He is expected to attend no meetings.  Any playground duty would be unusual and would at the most amount to 40 minutes in a week.  Mr Jeffery said that, as Mr Martin is trained only as a primary teacher, it is difficult to utilise him in a large time block as he cannot take some subjects, eg science, for extended periods.

24.     Some documents before the tribunal suggested that Mr Martin worked seven hours a day five days a week in certain periods with a status of “temporary full-time”.  Mr Jeffery was unsure of the meaning of “full-time” in these documents but surmised that the 35 hours reflected the school’s actual hours of opening over a week, ie from 9.00 am to 3.30 pm five days a week. 

25.     Mr Lozynsky responded to this material on 10 May 2004.  He reasoned from pay records and a figure for remuneration per hour that Mr Martin must at certain times have been working at least six hours a day. 

26.     Mr Jeffery provided a further explanation on 17 May 2004.  He said that when a casual teacher is engaged for a day there is an expectation that he or she might be required to teach or supervise at any time during the school day which, at Gunnedah High School, is 8.30 am to 3.55 pm.  A normal load for a teacher is 28 periods of 40 minutes a week (ie 18.7 hours).  At Gunnedah they have one-hour classes and a teacher teaches 18 of these a week. 

27.     The position appears to be that a full-time teacher will teach for 18 hours a week and is expected to be available for additional hours.  The variant of this that has applied when Mr Martin has taught on a full-time basis is that he is expected to teach his 18 hours, that he might do a certain amount of additional work such as yard duty, but that his student contact hours augmented by any odd miscellaneous additional function would not involve him in actual physical or intellectual work for as much as 30 hours a week.  Mr Jeffery provided extracts of the NSW Teachers Award.  This shows that, for part-time teachers, they can be paid for hours not actually worked.  Clause 28.5 provides that, where a casual school teacher reports to a school for duty on any day on the basis of a request by an authorised officer and is then advised that his or her services are not required, the casual school teacher is entitled to receive payment for one half of one day’s pay at the appropriate rate. 

28. There are two interpretations of the definition of “work” in s 94(5) of the SSA that might apply here, with opposite outcomes for Mr Martin. The first is that, in requiring that “work” be work that is for at least 30 hours per week, the work must involve a physical and/or intellectual effort for at least 30 hours a week, with perhaps time out for the usual breaks. The other interpretation is that work taking less than 30 actual hours a week may be regarded as work for at least 30 hours a week if the worker is paid as if the work actually took 30 or more hours a week.

29.     The first interpretation would comply with the policy behind DSP in embodying a principle that a person who can do physical or intellectual work for 30 hours a week is not incapacitated for work.  The second interpretation might reflect a policy based on DSP as an income support payment.  If the person can work, albeit for fewer than 30 hours a week, and receive payment as if he or she had worked 30 or more hours a week, then the DSP is not necessary to provide income support to that person.

30. Of these I favour the first interpretation. I consider it more consonant with the underlying policy of DSP to consider the actual work capacity of the disabled person. The policy rationale for the second interpretation is observed in any event through application of the income test. I could also refer to the SSA as beneficial legislation. The first interpretation is more beneficial to persons with disability and may be said to find a place in beneficial legislation.

31.     I am satisfied from the sworn evidence of Mr Martin, and from Mr Jeffery’s unsworn but disinterested evidence, that Mr Martin has not in fact worked for at least 30 hours a week during any part of the period in question.  This means that I endorse the approach taken by the SSAT in calculating Mr Martin’s debt, although the SSAT accepted that Mr Martin did work for 30 or more hours a week at a certain period.

Can the debts be waived because of administrative error by Centrelink and the Martins’ receipt of the money in good faith?

32. A debt due to the Commonwealth must be waived under s 1237A(1) of the SSA where the debt 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 the debt.

33. If a debt is waived the debtor does not have to repay it. The difficulties here are that the Martins contributed to the error by failing to report accurately the total income received by them on an ongoing basis. There is also mixed evidence regarding receipt in good faith. At one point Mr Martin said that the rate of DSP kept rising and falling and that may have reflected accurate assessment of the effects of the income received. Elsewhere he is quoted as saying that he tried to pursue Centrelink for a time but gave up. Neither debt can be waived under s 1237A(1) of the Act.

34. The Martins’ situation does not attract a write off of the debt. Write off occurs where a decision is made under s 1236 of the SSA not to pursue recovery at this time. A decision-maker can later decide that circumstances justify renewed efforts to recover the debt. Under s 1236(1A) the grounds for write off are that the debt is irrecoverable at law (usually because of a statute of limitations), or the debtor has no capacity to repay (Mr Martin may wish to pursue such an argument with Centrelink – this was not raised before me), the debtor’s whereabouts are unknown or it is not cost effective for the debt to be recovered (this was not suggested to me as applying here).

Can the debt be waived because of special circumstances?

35. Section 1237AAD of the SSA permits the Secretary to waive a debt where there are special circumstances that make it desirable to waive and waiver is more appropriate than write off. It is also necessary that the debt has not arisen wholly or partly because the debtor has knowingly made a false statement or misrepresentation or knowingly failed or omitted to comply with a provision of the SSA. In my view the Martins satisfy s 1237AAD except for the requirement for special circumstances. As tribunal Member Carstairs helpfully summarised in Re Jones and Secretary, Department of Family and Community Services [2003] AATA 62 in paragraph 26, court and tribunal decisions have established that special circumstances are circumstances having a particular quality of unusualness that sets one case apart from the usual. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 this was described as circumstances that are unusual, uncommon or exceptional. There were no such circumstances suggested to me during this matter and I can see none in the documentation.

CONCLUSION

36.     The decision of the SSAT is affirmed.  Both Mr and Mrs Martin owe debts to the Commonwealth.  Those debts are to be recovered.  However, the quantum of debt owed by Mr Martin is less than the Secretary has demanded.  The matter is to be sent back to Centrelink for recalculation of Mr Martin’s debt in accordance with the direction that Mr Martin did not lose qualification for DSP through his work at Gunnedah High School.

DECISION

37.     The decision under review is affirmed.

I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Michael Sassella, Senior Member

Signed:         .....................................................................................
  Associate

Date of hearing  22 April 2004
Date of final submission           17 May 2004
Date of decision  3 June 2004
Advocate for the respondents   Self-represented
Advocate for the applicant        Mr G Lozynsky, Centrelink