Masling and Department of Family and Community Services - [2000] AATA 662

DECISION AND REASONS FOR DECISION [2000] AATA 662

ADMINISTRATIVE APPEALS TRIBUNAL )

) No A2000/24

GENERAL ADMINISTRATIVE DIVISION       )
           Re      RONALD MASLING
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Senior Member J.A. Kiosoglous MBE Air Marshal I.B. Gration AO AFC (Member)

Date4 August 2000
PlaceCanberra

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.
  (Signed)
  J.A. KIOSOGLOUS
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Family Payment – use of estimates – failure to notify of employment – administrative error – corroboration required given nature of allegations raised – special circumstances
Social Security Act 1991
Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

4 August 2000 Senior Member J.A. Kiosoglous MBE Air Marshal I.B. Gration AO AFC (Member)

This is an application by Mr Ronald Masling (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 4 November 1999 (T2) which varied a decision of an authorised review officer (ARO) of the respondent dated 28 September 1999 (T39) which had varied decisions of delegates of the respondent dated 29 July 1998 (T24) and 23 March 1999 (T60) raising debts of Family Allowance/Payment for the periods 4 July 1996 to 20 November 1997 (the first debt) and 4 December 1997 to 5 November 1998 (the second debt) respectively.
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T60), together with four exhibits, lodged by the respondent (Exhibits R1-R4). In addition, the Tribunal heard evidence from the applicant, who represented himself and appeared by telephone. Ms H. Schuster, a departmental advocate, represented the respondent.
The respondent conceding a portion of the first debt, the issues before the Tribunal are whether or not there are debts of Family Allowance for the period 1 October 1996 to 20 November 1997 in the amount of $6,058.50 and Family Payment for the period 4 December 1997 to 5 November 1998 in the amount of $4,398.40. The Tribunal notes that "Family Allowance" became "Family Payment" from 1 April 1998; however, it will refer to "Family Payment" in respect of the second debt for the sake of convenience. The Tribunal also notes that the applicant conceded the existence of the debts, but was seeking waiver of both debts because of sole administrative error. Accordingly, the Tribunal will largely limit itself to the issue of waiver.
history of the application
The applicant was in receipt of Family Allowance and subsequently Family Payment in respect of his three children.
first debt
In June 1996 the applicant notified the respondent of a reconciliation with his wife, a 1994/95 combined taxable income of $20,000, an estimated 1995/96 combined income of $32,257 and an estimated 1996/97 combined income of $24,257 (T5-7). The applicant was paid from 21 June 1996 on the basis of the 1995/96 estimate, and from 8 July 1996 on the basis of the 1996/97 estimate. The respondent has conceded that it was in error in paying the applicant Family Allowance on the basis of the 1996/97 figure up until 1 October 1996.
On 1 October 1996 the applicant signed an employment declaration form at Molonglo Traders (reference to which appears at T33).
On 22 November 1996 the applicant lodged the annual Family Allowance review form (T12) in which he stated (inter alia) that his occupation was "home duties", their combined 1995/96 taxable income was $31,800 and their 1996/97 estimated income was "Nil" for himself and "$24,000" for his wife.
The applicant was paid on the basis of the $24,257 estimate up until 2 January 1997, from which time the estimate of $24,000 was used.
The applicant received notices dated 8 July 1996 (T10), 22 November 1996 (T13), 28 November 1996 (T14), 25 December 1996 (T15), 8 March 1997 (T16), and 21 March 1997 (T17) all of which advised of the respective income amounts being used to calculate the rate, and also contained the standard notification requirements. Such requirements included (inter alia):
"…
You must tell us if you or your partner:
Start work or recommence work, change jobs, or start self employment or;
…"

The applicant ceased working for Molonglo Traders in January 1997. On or about 21 June 1997 the applicant worked for Cooktown Museum for one day (T18).
The actual combined taxable income of the applicant and his wife for 1996/97 was $35,048 (T49/214 and T55/259). Accordingly, the respondent raised a debt for the period 4 July 1996 to 20 November 1997 on the basis that the actual combined income was more than 110% of either estimate of $24,257 or $24,000. This decision was varied upon review by the SSAT who waived the portion of the debt subsequent to 4 July 1996 on the basis that the applicant had not requested his estimate be used. Closure of this period would occur on the occurrence of a notifiable event. Based on the employment declaration signed on 1 October 1996 (reference to which appears at T33) the SSAT determined that the commencement of employment with Molonglo Traders was such an event and concluded that the recoverable debt should commence from 1 October 1996.
second debt
The applicant completed an annual review form on 4 December 1997 (T19) in which he declared a 1996/97 actual combined income of $30,370, which, the Tribunal notes appears at odds with the actual assessment of the Australian Tax Office (T49/214 and T55/259). He also provided an estimated 1997/98 income of "0" for himself and "$24,650" for his wife. He described his occupation at question two therein as "home duties".
The applicant was paid from 1 January 1998 on the basis of the $24,650 estimate (T21). Their actual combined taxable income for 1997/98, as declared to the Australian Taxation Office, was $33,796 (T50/219 and T56/268), being substantially in excess of the estimates.
The applicant signed an employment declaration form at Woolworths on 2 December 1997 (T52/228). The applicant ceased working for Woolworths on or about 29 January 1998 (T33).
The applicant signed an employment declaration form at Manpower Services on 2 March 1998 (T52/227) and notified the respondent of his commencement of work with Tip Top Bakeries (through the agency of Manpower Services) on 18 March 1998 (T58/283). The applicant commenced work with Tip Top Bakeries on or about 1 April 1998.
The applicant provided a revised estimate for 1998/99 of a combined amount of $28,204 on 10 November 1998, and he was paid pursuant to this figure as from that date.
The respondent raised a debt for the period 4 December 1997 to 5 November 1998 on the basis that the actual income for 1997/98 was considerably more than the estimate of $24,650 on which his payments had been based. This decision has been affirmed upon review.
applicant's evidence and submissions
The applicant contended that the debts arose as a result of sole administrative error. He told the Tribunal that he notified the respondent at all times when he was working and when his income would increase. He stated that he completed replacement annual review forms on 22 November 1996 (T12) and 4 December 1997 (T19) as the respondent had lost the forms he had completed in or about October of each year. He stated that he was told by departmental officers to complete such replacement forms as if it were October of each year. This was why he put his occupation as "home duties" on each form, because that was what he was doing in October in each case. He offered a similar explanation for the declaration of "nil" income for himself on each annual review form.
He told the Tribunal that he made the Department aware on each occasion that he had commenced, or would be commencing work. He further stated that, although he had signed employment declarations on certain dates with each employer, he did not in fact start work until some time after signing such declarations. In the case of Molonglo Traders, he believed that he started work on or about late October or early November 1996, and not on 1 October 1996, the date the employment declaration was signed (T33). He did not dispute that he signed the employment declaration on 1 October 1996. He also stated that he was told by a departmental officer not to put down that he had commenced work at Molonglo Traders on the annual review form dated 22 November 1996.
He considered that the estimate for 1996/97 should not have been used because he had provided the 1995/96 tax returns.
The applicant stated that he was unaware of any problem, or of the existence of any debt, because he assumed that the Department had adjusted his payments to accurately reflect the figures he had disclosed. In fact his payments had reduced because of a reduction in Parenting Allowance in order to recover a debt.
He told the Tribunal that he made the Department aware on 4 December 1997 that he had commenced employment at Woolworths. He later stated during cross-examination that he started work at Woolworths some time later in December 1997, well after signing the employment declaration at the beginning of the month. He further stated that he had rung the respondent to inform them when he stopped working at Woolworths.
He stated that he signed the employment declaration for Manpower Services on 2 March 1998 but did not start work with Tip Top Bakeries until 1 April 1998, by which time he had already notified the respondent that he would be doing such work.
He submitted that he was advised by the respondent's officers to fill in the annual review forms in the manner in which he did, and that it was this erroneous advice that had resulted in the overpayments. He contended that he had been poorly advised by Centrelink staff. He further submitted that he had received the monies in good faith, because he had been unaware of any problem, or the fact that a debt had been raised. He conceded that he should have read the notices he received more carefully than he did.
respondent's submissions
Ms Schuster submitted, on behalf of the respondent, that the applicant's story is inconceivable, as it does not make sense that departmental officers would advise him to fill in annual review forms in the manner contended, when the main purpose of such forms is to ensure that the information is as accurate as possible in order to determine the rate for the following calendar year.
She further submitted that the applicant had failed to notify of the commencement of any work except for Manpower Services in March 1998, and that there is no departmental error in this case, aside from that already conceded, as the respondent had acted correctly on the information given by the applicant notwithstanding the applicant's claims of lost documentation, failure to record oral advice and wilful subversion of the family allowance system by Centrelink employees.
discussion and findings
Whilst the applicant is not disputing the existence of the debt in this case, it is appropriate that the Tribunal make some comment in that regard. Family Allowance and Family Payment has given rise to substantial litigation over the last couple of years, and the use of estimates has been particularly contentious. In some cases, this Tribunal has considered that in the absence of a request, the use of such an estimate is in error. The SSAT in this case considered that to be the case in respect of the period prior to 1 October 1996. This Tribunal does not seek to disturb that finding, and nor does the respondent.
One issue as to the existence of the debts, arising from the applicant's evidence, is the commencement date of the first debt. The notifiable event arose when he commenced work. The date of commencement of the debt is therefore the date when he actually started working at Molonglo Traders. The applicant's evidence was somewhat vague in this regard however, and he could not provide the Tribunal with an accurate indication of his actual starting date. On this basis, the Tribunal is not prepared to disturb the finding that the date from which the notifiable event is taken to have occurred should be 1 October 1996, the date upon which the employment declaration was signed (T33).
The Tribunal is satisfied and so finds, having considered the matter itself and on the basis of the applicant's concession of the existence of the debts, that the debts were correctly raised by the respondent.
In regards to waiver, the applicant centred his submissions on section 1237A of the Social Security Act 1991 (the Act), which relates to sole administrative error. The first requirement that must be met in order for the Tribunal to waive pursuant to this section, is that the debts arise solely as a result of administrative error. The administrative error in this case is said to be the erroneous (or poor) advice the applicant received (inter alia) in respect of the annual review forms.
In relation to the "sole" aspect of the legislative test, The Tribunal notes that there is no record in any of the documents before it that the applicant notified the respondent of his commencement of work at Molonglo Traders, nor Cooktown Museum, nor Woolworths.
The main purpose of the annual review form is to ensure correct entitlement for the coming year. It makes no sense that a departmental officer would, in these circumstances, tell a recipient to fill out such a form retrospectively. There could be no purpose (other than malfeasance) derived from including details as they stood two months prior to the completion of the form, when as at the time of completion, different circumstances were known to exist. It is not as if the applicant would have become entitled to any arrears as a result of such a retrospective action. It is not a convincing argument that two years in a row, departmental officers would "turn a blind eye" to the applicant's apparent notification of employment at the time of completing the annual review form, when clearly this would have an effect upon the rate of Family Allowance/Payment he would be entitled to receive. Given that it makes little or no sense that such advice would be given at all, the Tribunal is not prepared to accept that such unlikely advice would be given two years in succession.
Had the respondent been aware of the applicant's employment, it would have resulted in steps being taken to ensure that he continued to receive the correct payment. The Tribunal is not satisfied that the respondent is solely to blame for the fact that they remained unaware of his employment. There is no corroborative evidence to support the applicant's contention that he did in fact notify the respondent of his employment. Moreover, although the applicant presented his evidence in a plausible manner, given that the nature of the departmental error being relied upon by the applicant is illogical, the Tribunal is not prepared to accept, in the absence of any corroboration that the applicant did notify the respondent on all occasions that he was working.
Even if the applicant's evidence as to the annual review forms is accepted, the fact remains that he continued to receive payment basis confirmation notification subsequent to the filing of each annual review form, confirming the basis upon which he was being paid and alerting him to the need to inform the respondent if he were working. The Tribunal is not satisfied that he complied with such obligations.
It is clearly apparent that the failure to notify of employment was a contributing factor to both debts. For the reasons given, the Tribunal does not consider that it was solely the respondent's fault that it did not know of the applicant's employment. The applicant must share responsibility for the failure to notify in this case. Accordingly, the Tribunal finds that section 1237A is not applicable in this case, as there is no sole administrative error that is responsible for the debt.
In respect of section 1237AAD of the Act, the phrase "special circumstances" has been considered in many previous Tribunal cases, and the Tribunal finds it unnecessary to discuss its meaning at length in the present matter. The Tribunal adopts the meaning given to the phrase in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and followed in many subsequent cases.
There are no circumstances in this case which fall into the category "special circumstances". Whilst there may have been some departmental error, the applicant was clearly partly responsible for the debts by his inattention to his obligations. There is no demonstrable financial hardship, and in the absence of any other exceptional or unusual circumstances, the Tribunal finds that section 1237AAD of the Act is not applicable in this case.
decision
For the reasons given, and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.
I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A. Kiosoglous MBE and Air Marshal I.B. Gration AO AFC (Member)
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  11 July 2000
Date of Decision  4 August 2000
Counsel for the Applicant        In person
Solicitor for the Applicant         -
Counsel for the Respondent    Ms H. Schuster
Solicitor for the Respondent    Centrelink