McDonald and Department of Family and Community Services - [2001] AATA 589

DECISION AND REASONS FOR DECISION [2001] AATA 589

ADMINISTRATIVE APPEALS TRIBUNAL)
Nº V00/1016
GENERAL ADMINISTRATIVE DIVISION)

Re: MEGAN McDONALD

Applicant

And:         SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Mr J.T.C. Brassil, am, Member
Date:             27 June 2001
Place:            Melbourne

Decision:The Tribunal decides that the overpayment of $215.85 which was the subject of the reviewable decision should pursuant to ss 1237A(1) of the Social Security Act 1991 be waived on the grounds that it was due solely to administrative error.

(sgd) J.T.C. Brassil, am
Member
SOCIAL SECURITY — Family Allowance - Parenting Payment Partnered — overpayment — recovery —- whether notice can be deemed to be given —- whether information was supplied — administrative error
Social Security Act 1991 ss. 1224 (1), ss 1237A (1)
Acts Interpretation Act 1901 ss 29 (1)

DECISION

27 June 2001 Mr J.T.C. Brassil, am, Member

This is an application for review of a decision made by a delegate of the Secretary on 24 May 2000 to recover an overpayment of Family Allowance (FA) amounting to $215.85 paid to the applicant for the period 1 January 2000 to 26 April 2000. The decision was affirmed by an authorised review officer on 9 June 2000 and by the Social Security Appeals Tribunal (SSAT) on 24 July 2000.
The applicant was present at the hearing on 2 November 2000 and was represented by her husband, Craig McDonald. The respondent was represented by a departmental advocate, Mr David Perdon.
Documents submitted pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 were taken into evidence together with the 1999 Income Tax return for Craig McDonald and the 1999 Income Tax Assessment of the applicant.
Facts
The applicant left her employment with the St George Bank on Christmas Eve 1998 and has not worked since that date.
Her son was born on 4 February 1999 and, before leaving hospital, she made a claim for Family Allowance (FA) but did not know that she may be eligible for Parenting Payment Partnered (PPP). As a result she missed two months of PPP.
Notification of FA payment of $11.85 per fortnight and the one-off Maternity Allowance of $750 was sent on 17 February 1999 (T4). This notice stated the FA was calculated on the estimated combined income of the applicant and her partner of $64,400.00 and instructed the applicant that she must notify if their combined income would be more than $70,840.00. As is practice with such notices the back had printed the usual "YOU MUST TELL US" directions in small print.
Application for PPP at the basic rate was made by the applicant on 15 April 1999 (T5). This required the applicant to give income details about herself only. PPP was granted at $66 per fortnight from 22 April 1999 and this was notified on 16 April 1999 (T6). The notice included a statement that the entitlement had been worked out on an income of $13.77 per fortnight although from the documentation presented and marked T6 there appears no basis for this income level.
She and her husband attended an interview on 14 September 1999 which they understood to be to review the PPP of the applicant. The file note at T7 indicated "Parenting Review in Progress". The notice sent to them (T8) commenced by stating the purpose was "to ensure that Centrelink is providing you with the most appropriate support an officer of Centrelink needs to talk to you about your Parenting Payment". The Centrelink officer who conducted the interview was Brian Conyers who was identified in the papers as "NZP".
They took with them, as requested, documentation of identification and of income and assets of the applicant and her partner including tax returns even though these were only requested from self-employed persons. Their documents were perused and photocopied by Mr Conyers.
A further interview was conducted, apparently in November, by Mr Elias. There is reference to a decision dated 8 November 1999 to waive an overpayment of $1 in the applicant's PPP in T10. The author of this notation is recorded as "ZIS".
A further notification was sent to the applicant on 6 December 1999 (T11) about FA which stated that Centrelink must be notified within 14 days if their combined taxable income in 1998/99 was more than the applicable income limit set out in a table, in their case with one child, $67,134.
The applicant was notified on 24 December 1999 (T12) that FA of $24 per fortnight would be paid in 2000 on the basis that their combined income was less than $67,134.00. It stated therein that "We have no record of your and your partner's 1998/99 income or . . ." and also "You must tell us within 14 days after this letter is given to you if your combined annual income in the 1998/99 financial year will be more than $67,134.00 which is your allowable limit".
The results of a data-match in March 2000 (T13) indicated that the applicant's income for the previous financial year was $15,556 and that of her partner was $54,379, a combined total of $69,935. Centrelink calculated on 28 April 2000 that there had been an over-payment of $215.85. The applicant was notified of the cancellation of her FA on that date (T15).
Legislation
There is no claim that the calculation of combined taxable income was other than in conformity with the provisions of the Social Security Act 1991 ("the Act"). Neither was there a challenge to the right of the Secretary to notify a claimant that he or she must inform the Secretary of specified events or change of circumstances which occur or are likely to occur.
In respect to the raising of a debt the Act provides:
1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth.
The Act does provide for the Secretary to waive the whole or part of the debt as follows:
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.

Ss 1237A(1) prohibits waiving of the debt if it is raised within six weeks of the beginning of the overpayment which is clearly not the situation this Tribunal is considering.

The Acts Interpretation Act 1901 ("the AIA") deals with the giving of notice by post in the following manner:
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 deem 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.

Issues before the Tribunal

The primary issues to be considered by the Tribunal are, firstly, whether the applicant did receive the letters of 6 December 1999 and 24 December 1999 and, secondly, whether the applicant did notify the change in combined taxable income level at the PPP interview with Mr Conyers so as to satisfy the notification requirements placed upon her pursuant to the Act by the letters of 6 December 1999 and 24 December 1999.
It may then be necessary to consider whether there has been an administrative error and whether that solely caused the overpayment.
Evidence
Mr Craig McDonald, representing the applicant, gave evidence at the insistence of the departmental advocate and was available for cross-examination.
Mr McDonald stated he had attended the two interviews at Centrelink with his wife, that with Conyers in September and the check interview with Elias in November. He tendered copies of his taxation return for 1999 (exhibit A1) and his wife's Notice of Assessment for 1999 (exhibit A2) which he had produced at both interviews. He said he had taken his own Notice of Assessment to the interviews but did not have it at this hearing. He said his taxable income was the same on his return and in his assessment.
He stated that the letters of 6 December 1999 and 24 December 1999 had not been received by the applicant. He stated he could only recall one prior case other than these of non-receipt of postal articles. He was of the view that the letters may not have been sent. All the other letters, including the one notifying the stopping of FA payments, had been received.
However he said that since the stopping of payments a letter promised by Ms Pamela Payjak from the Ferntree Gully office in May 2000 about requesting a review of the decision was never received.
In any case the information demanded in those missing letters had already been tendered to Centrelink at the interviews and therefore he was of the view that no response would have been required from the applicant.
He stated that the estimate of future income had proved to be inaccurate but this was because of shift penalties paid to him as a member of the Victoria Police. Workload and shifts to be worked reflect on the needs of the force at any particular time. He had made what he considered was an accurate estimate.
He agreed that he had informed Conyers at the interview that his wife was not working and there was no possibility that their combined taxable income would be above the cut-off notified of $70,840 (T4). He stated he had given Conyers an estimate of his income which was probably between $56,000 and $59,000.
He agreed that the letter requesting attendance at the interview only referred to PPP but he said he understood that when he gave information to a Centrelink officer it would be available in their records for either PPP or FA.
Submissions
Mr McDonald submitted that the two December letters had not been received. They had not previously been on Centrelink payments and did try to respond to all Centrelink requests.
He submitted further that the information requested was already on file at Centrelink so as there was no change then even if the letters had been received he would not have needed to respond.
He submitted that the SSAT had accepted his evidence that the September interview with Conyers had taken place even though Centrelink were not able then to produce any record. The documents had now been produced (T 29) without copies of what had been given to Conyers at the interview.
Further he submitted that if his wife had responded to the letters immediately she would have been requested to give an estimate for the 2000 taxation year which, as he had told Conyers in September, would have been below the cut-off since his wife was not working. Thus if it had been cancelled at the end of 1999 she would have applied and been entitled from the beginning of 2000.
He said it was his submission that the officers at Centrelink had not properly entered the information supplied by his wife and himself which could have avoided what has happened. He described the manner that Centrelink had managed the whole matter as "just terrible" (transcript page 27 at 16). He submitted he had provided at the interviews all that was requested and additional documentation "so that they got a fair indication of what we were earning and what we were entitled to" (transcript page 27 at 14).
He submitted that there had been a breakdown in communication at Centrelink and his wife should not be penalised because of that. He stated that it was only a small amount of money, about $250, but there was a principle to be upheld.
Mr Perdon, on behalf of the respondent, submitted that FA had been assessed and granted following a request by her to use as the basis an estimate of combined taxable income in view of her intention to leave her employment prior to the birth of her baby. She had also applied for and was granted PPP in April 1999.
He submitted that two recipient notification notices (RNN's) had been sent to the applicant on 6 December 1999 and 24 December 1999 which required her to notify whether the combined taxable income of her and her husband exceeded the cut-off of $67,134. She had not responded.
He submitted that even if, as claimed, the RNN's had not been received the operation of the legislation, in particular AIA at ss 29(1), was to provide that a notice is deemed to have been given even it has not been received, it is the giving of notice not the receipt of notice that founds a debt.
In the circumstances he submitted there is a debt and recovery is warranted.
In respect to the claim that the taxation information had already been provided at the September interview with Conyers Mr Perdon submitted that this was a PPP interview and not about FA and the applicant has not contested this.
Further, PPP was not affected by the combined taxable income, that was only considered for FA. Conyers would not be required to collect that information at a PPP interview and the applicant would have known this. He said that although the documentation of that interview had now been located (T29) there was no documentary or computer evidence that the 1999 taxation information had been lodged.
He pointed out that apart from the information shown on the PPP interview documentation (T 29) the applicant had not provided, as requested, "proof of any wages or salary income" but claimed to have submitted taxation information that was not requested. He pointed out that the form clearly states that for the basic rate of FA only customer details not partner details are required. What is being suggested, he submitted, is that "in effect Mr Conyers has gone above and beyond the call of duty in recording those details" (transcript page 26 at 9).
He submitted in respect of the taxation information that "Unfortunately there is no record . . . on the computer or on the review form and nothing was copied and attached to the review form" (transcript page 26 at 14).
He agreed that if the applicant had responded to the December RNN's and applied for FA to be assessed on an estimate for 2000 then it would have been restored at the present rate at once or, at most, within two weeks (see para 31 supra)
It was his submission that the applicant had been notified, through the December RNN's. As there was no response the applicant's FA had been continued until April 2000 when the 1999 combined taxable income was beyond the cut-off and the applicant was no longer eligible. The applicant could have had her FA assessed on an estimate (and later did so) but only if she requested that alternative. Until she made that request, during the period of over-payment now considered, she was not entitled to FA.
He submitted that the applicant was put on notice that 1999 taxation information had not been notified in that this was a specific statement in the RNN's. In the circumstances the applicant was not justified in claiming that Centrelink had been informed previously.
He also submitted that there had been no administrative error causing the over-payment and to recover by deductions over a period would not seriously affect the applicant.
Consideration of the Issues
Clearly the over-payment alleged is not a large amount and it has been agreed that if there had been prompt response to the December RNN's followed by a request made for FA to be assessed on an estimate then the applicant would probably have been paid this amount in the period under consideration quite legitimately.
But the Tribunal is not being asked to determine whether the "public purse" should or should not have been relieved of $215.85. The Tribunal is asked to determine whether there has been an overpayment of FA for the specific period and, consequently, whether a recoverable debt has been raised pursuant to the Act. If the Tribunal determines there is a recoverable debt it must further determine the cause and whether is should be waived on the basis of administrative error.
The first issue to be considered is whether the applicant had freely provided full taxation information to Centrelink in September 1999. The SSAT believed the applicant despite the unavailability of the documentation that was made available to this Tribunal. Mr McDonald is a very creditable witness and, despite the submission on behalf of the respondent that there is no record of receipt of the taxation information, this Tribunal accepts that the exhibits A1 and A2 were, along with other documents, supplied to a Centrelink officer on 14 September 1999.
What happened to this taxation information, critical to assessment of FA for the year 2000, can only be subject of conjecture. Would a responsible Centrelink officer take this material, photocopy it and then not place it on the appropriate Centrelink records?
The officer, Conyers, was not produced at the hearing even though Centrelink must have known from the SSAT hearing that what happened at that interview was a matter of concern. The review report was found without the documentation and added to the T documents but the officer who could possibly recall what had happened to the taxation information was not presented.
The Tribunal asked the whereabouts of officer Conyers and enquired whether he could give telephone evidence only to be told that "we have made no arrangements" (transcript page 19 at 31).
It can only be presumed that Conyers would have been aware the taxation information provided would not be relevant to PPP but would be to any consideration of FA. Can it presumed then that a responsible officer would have attached such information not to the PPP review documentation but with the documents or computer file relating to the applicant's FA? It appears, however, from the submissions that it was not added to the FA file as the December RNN's indicated there had been no update recorded in relation to 1999 taxable income.
In seeking to find what may have happened the Tribunal has been regrettably frustrated by the non-presentation of officer Conyers who is, apparently, the only person who could shed light on where the taxation information was placed, if anywhere.
The applicant's submission is that even if the December RNN's had been received there was no obligation to respond as all the relevant taxation information had been provided months before. The respondent's submission is that the applicant was put on notice that Centrelink did not have the information by the wording of the December RNN's which were specific about that.
The Tribunal finds it difficult to accept that the applicant could have been put on notice by RNN's which may have not been received by the applicant. It is necessary therefore to consider whether the receipt of these notices can be deemed, pursuant to the AIA.
Subsection 29 (1) of the AIA places the onus on the recipient to prove non-receipt of a notice that has been properly addressed, prepayed and posted otherwise it is deemed to have been delivered in the ordinary course of post. In this case the respondent relied on this subsection. However there was no evidence presented in relation to the prior onus of the government agency to show the RNN's had been properly addressed, prepayed and posted.
Therefore the Tribunal finds that the respondent cannot rely on ss 29(1) of the AIA without production of evidentiary material to satisfy the prior onus.
The Tribunal finds that the notices cannot therefore be deemed to have been delivered. It follows that the applicant could not have responded to the RNN's claimed to have been sent in December 1999.
However in the event that the respondent could rely on ss 29(1) of the AIA the applicant, alternatively, relies upon her submission that the relevant taxation information was provided to Centrelink in September 1999 and this has been accepted by the Tribunal.

In so doing she implies that she should then have been notified that FA would be discontinued in 2000 unless she again applied for an estimate because of her particular circumstances. It is agreed that if this sequence had been in train then she would have been entitled to FA and paid in the year 2000 on the estimate.
But this did not happen hence the Tribunal finds that as the applicant did not make an application to have her 2000 FA assessed on an estimate until May 2000, for the reasons outlined, she was technically ineligible from 1 January 2000 to 26 April 2000.
The Tribunal must now consider the matter of potential administrative error and its causal relationship to the over-payment.
As already considered no firm determination can be made about the whereabouts of the taxation information except that it did not appear on the applicant's FA documents or computer file as could be expected. What would not be expected, and could not be accepted, is that the confidential taxation information would be taken from the applicant and not dealt with responsibly. However this is the only inference available to the Tribunal in the absence of any evidence from officer Conyers.
In all the circumstances the Tribunal finds that there has been an administrative error in that the taxation information provided by the applicant and her husband was not recorded in a proper fashion as should be the expectation of the providers. Further the Tribunal finds that this error is solely responsible for any overpayment alleged in respect to the FA being paid to the applicant.
Conclusion
The Tribunal decides that there has been an overpayment of Family Allowance to the applicant during the period 1 January 2000 to 26 April 2000 but in view of such overpayment being solely due to administrative error the Tribunal decides that pursuant to ss 1237A(1) of the Act the whole amount of $215.85 be waived.
It is the view of the Tribunal that the applicant should be paid FA at the applicable rate from 27 April 2000 if this has not been already effected.
I certify that the sixty-six [66] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr J.T.C. Brassil, am, Member
(sgd)       Catherine Thomas
              Personal Assistant
Date of Hearing:  02.11.00
Date of Decision:  27.06.00
Solicitor for the Applicant:           NIL — Mr C. McDonald, Applicant's Husband
Solicitor for the Respondent        Mr D. Perdon, Departmental Advocate