McDonald and Secretary, Department of Family and Community Services
[2004] AATA 668
•29 June 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 668
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/22
GENERAL ADMINISTRATIVE DIVISION )
Re LIONEL McDONALD Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Mr O Rinaudo, Member Date29 June 2004
PlaceBrisbane
Decision The Tribunal affirms the decision under review. ....................[Sgd].......................
O Rinaudo
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – overpayment – partner allowance – failure to advise department of wife’s earnings from compensation benefits – earnings disclosed as income from employer and not insurer – incorrect amounts advised – overpayment properly raised – no basis for waiver of debt – no special circumstances – no administrative error
Social Security Act 1991 ss 17, 1173, 1174, 1184K, 1223(1), 1237A(1), 1237AAD
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security v Funnell (1991) 30 FCR 56
Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Ellis (1997) 46 ALD 1REASONS FOR DECISION
29 June 2004 Mr O Rinaudo, Member Decision Under Review
1. The applicant seeks review of a decision made by Centrelink on 17 September 2003 to reduce his rate of pension and raise a debt in the amount of $1,338.88 in respect of payments of partner allowance made to him between 21 March 2003 and 24 July 2003. This decision was affirmed by an Authorised Review Officer on 12 November 2003 and by the Social Security Appeals Tribunal on 11 December 2003.
Hearing
2. This matter was heard by the Tribunal on 14 May 2004 at Toowoomba. Mr McDonald represented himself at the hearing, and Ms J Dwyer represented the respondent. Mr McDonald made submissions at the hearing as did Ms Dwyer. The “T” Documents were the only documents tendered.
Issues
3. The issues for the Tribunal in this case are:
(i)whether Centrelink was correct in reducing Mr McDonald’s rate of partner allowance;
(ii)whether Mr McDonald was paid in excess of his entitlements; and, if so
(iii)whether there is a debt; and, if so
(iv)should the debt be recovered?
The Applicant’s Case
4. Mrs McDonald was injured at work on 15 December 2001 and claimed WorkCover. Mrs McDonald was granted compensation from 21 March 2003 at a rate of $330 per week. At this time Mr McDonald was in receipt of partner allowance and was sent notices which advised him to notify Centrelink about his or his wife’s earnings, in particular any earnings from employment or compensation payments.
5. During the overpayment period, Mr McDonald declared his wife’s earnings as income of $600 per fortnight from employment instead of $330 per week in compensation benefits. The applicant notified Centrelink that Mrs McDonald ceased receiving compensation on 30 March 2004. Mr McDonald stated he had notified Centrelink that his wife was receiving compensation benefits on 26 June 2003, although the Centrelink records indicate they were notified on 23 July 2003.
6. Mr McDonald stated that when his wife started on WorkCover he simply regarded that as wage replacement. He thought that the requirement to notify of any compensation benefits received was a reference to a lump sum compensation payment. Mrs McDonald never received any lump sum. All she received was WorkCover benefits in lieu of earned wages. Mr McDonald stated he notified Centrelink that his wife was in receipt of WorkCover benefits on 26 June 2003. However, this does not accord with the material contained in the “T” Documents, which indicate that Centrelink was advised on 23 July 2003. When this was submitted by Ms Dwyer, Mr McDonald stated he was certain it had been on 26 June 2003 that he had notified Centrelink of the compensation issue.
7. Mr McDonald also stated he did not accept the calculation of the overpayment as the forms contained in the “T” Documents were not all the forms he had submitted, and as a result he thought that the debt was excessive. Mr McDonald said he was currently not working and that his wife was on newstart allowance.
8. Under the relevant legislation, income from employment and income from compensation benefits are treated differently when calculating of the rate of pension payable to a social security recipient. Mr McDonald stated he regarded the treatment of compensation differently as “double-dipping” and believed it was wrong.
The Respondent’s Case
9. Ms Dwyer contended that the calculation of the debt did not appear to be in issue. Whilst Ms Dwyer acknowledged that the provisions appeared to be unfair the calculation had been done in accordance with the legislation which had been applied the way it should be.
10. Ms Dwyer submitted that the real issue in this case was whether there were any special circumstances pursuant to section 1184K(1) and 1184K(2) of the Social Security Act 1991 (“the Act’). Ms Dwyer contended that there were no special circumstances in this case which would warrant the debt being waived or reduced. Withholdings were being recovered at the rate of $20 per fortnight which was subject to negotiation.
Consideration
11. The legislation relevant to this application is contained in the Social Security Act 1991 (“the Act”) and in particular sections 1173, 1174, 1184K, 1223(1), 1237A(1) and 1237AAD.
12. The Tribunal is satisfied that, pursuant to the provisions of sections 17(1) and 17(2) of the Act, Mrs McDonald was paid compensation for the purposes of that section.
13. Pursuant to section 1173, any entitlement which Mrs McDonald may have had to social security payment would be “reduced by the amount of her daily rate of periodic compensation”, that is, there would be a dollar for dollar reduction in her entitlement. Mrs McDonald’s compensation payment was in excess of the maximum rate of newstart allowance. On that basis Mrs McDonald, had she applied for newstart allowance (incapacitated), which she would have been entitled to given her injury and inability to work, her rate of payment would be nil given the amount of her compensation payment.
14. Section 1174(1) deals with the effect of period compensation payments on a partner’s rate of social security payment. In this case Mr McDonald was receiving partner allowance. Mr McDonald satisfies all of the subsections (a) to (e) of this section. The Tribunal adopts the finding of the Social Security Appeals Tribunal that
“…under section 1174(1) the amount by which the periodic compensation payments exceeded the total amount of newstart allowance (incapacitated) that Mrs McDonald would have been most likely qualified for, must be treated as ordinary income for the purpose of calculating how much partner allowance could be paid to Mr McDonald. When this calculation was made it revealed that Mr McDonald should have been paid at a reduced rate and that he had been paid $1,338.88 more than he was entitled to.”
15. The Tribunal is satisfied that the calculation of overpayment is correct.
16. Section 1223 of the Act provides that the amount overpaid to Mr McDonald becomes a debt due to the Commonwealth. Accordingly, the overpayment of $1,338.88 paid to Mr McDonald is a debt under that section. That debt may be recovered by the Commonwealth unless there is some basis for waiving the right to recover the debt.
17. Sections 1237A(1), 1237AAD and 1184K provide for the waiver of debts in certain circumstances. Section 1237A(1) relates to debts that have arisen solely as a result of an administrative error by the Commonwealth. Sections 1237AAD and 1184K apply to cases where there are “special circumstances”.
18. Under section 1184K, the Tribunal has the power to treat part or all of the compensation monies received by Mrs McDonald as having not been made, if there are “special circumstances” in the case which warrant the exercise of that discretion. Under section 1237AAD, the Tribunal can waive the recovery of a debt due to the Commonwealth where a social security recipient did not knowingly fail to comply with a provision of the Act or their obligations under the Act, and where there are “special circumstances” that warrant the debt being waived.
19. The term “special circumstances” has been considered on many occasions: see Re Beadle and Director-General of Social Security (1984) 6 ALD 1; Secretary, Department of Social Security v Funnell (1991) 30 FCR 56 and Kertland v Secretary, Department of Family and Community Services (1999) 95 FCR 64. Special circumstances are generally regarded as being circumstances that are unusual, uncommon or exceptional. The threshold for establishing “special circumstances” is difficult to cross: see Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J and Secretary, Department of Social Security v Ellis (1997) 46 ALD 1 at 5 per Carr J.
20. Whilst the Tribunal is satisfied that the McDonald’s financial circumstances are straitened, on balance the Tribunal does not consider that the circumstances are so unusual, uncommon or exceptional so as to warrant the exercise of the discretion to waive recovery of the debt pursuant to section 1237AAD, nor to treat any part of the compensation moneys received by Mrs McDonald as not having been made pursuant to section 1184K of the Act.
21. Section 1237A(1) of the Act deals with issues of waiver where a debt has arisen solely as a result of an administrative error by the Commonwealth. In this case, Mr McDonald had stated that he had notified Centrelink on 26 June 2003 that his wife was in receipt of WorkCover. The evidence from Centrelink (as set out in T6/32) is that Mr McDonald notified Centrelink on 23 July 2003. There is a computer record noting this.
22. There is simply no evidence to support Mr McDonald’s contention. On balance, the Tribunal is satisfied that Centrelink was advised on 23 July 2003 that Mrs McDonald was receiving compensation. Accordingly, it cannot be said that in this case there was any administrative error which was solely caused by the Commonwealth which led to the debt arising. Accordingly, the debt cannot be waived under this section.
23. Accordingly, the Tribunal is satisfied that there is no basis upon which to exercise its discretion to waive the Commonwealth’s right to recover the overpayment of partner allowance made to Mr McDonald during the period 21 March 2003 and 24 July 2003.
Decision
24. The Tribunal affirms the decision under review.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed: Sarah Oliver
AssociateDate of Hearing 14 May 2004 (Toowoomba)
Date of Decision 29 June 2004The Applicant appeared in person
For the Respondent Ms J Dwyer, Departmental Advocate
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