McGinty and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 1107
•11 December 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 1107
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/1381
GENERAL ADMINISTRATIVE DIVISION ) Re RON McGINTY and MARION McGINTY Applicants
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr G L McDonald, Deputy President Date11 December 2008
PlaceMelbourne
Decision 1. The Tribunal affirms the decision in as far as Mr McGinty is liable to pay a debt to the Commonwealth; and
2. The Tribunal varies the decision relating to Mrs McGinty as follows:
(a) for the period 4 July 2001 to 16 July 2002 she is liable to pay a debt to the Commonwealth;
(b) for the period 17 July 2002 to 17 December 2003 the debt to the Commonwealth is waived; and
(c) the debt to the Commonwealth is waived in respect of any portion of the debt arising from the payment of Christmas bonuses to Mr McGinty in the 2001 and 2002 years.
……………………………………..
Deputy President
CATCHWORDS
SOCIAL SECURITY – Social Security Act – overpayment of disability pension – whether applicants notified Centrelink of income – whether debt should be waived – whether there were special circumstances to waive the debt – whether applicants knowingly made false declarations or knowingly failed or omitted to comply with the Act – decision under review varied
Administrative Appeals Tribunal Act 1975 s 37
Social Security Act 1991 ss 1223(1) and 1237AAD
REASONS FOR DECISION
11 December 2008 Mr G L McDonald, Deputy President The Application
1. Mr and Mrs McGinty are applying for the review of a decision of the Social Security Appeals Tribunal (SSAT), which affirmed a decision of a delegate to recover debts of $2,498.58 and $2,538.83 respectively, relating to the overpayment of the rate of their disability support pensions in the period 4 July 2001 to 17 December 2003 (the relevant period).
The Hearing
2. At the hearing Mr and Mrs McGinty were assisted by Mr Mark Robson and gave sworn evidence. Centrelink was represented by Ms Kayren Paul. The Tribunal had before it the documents filed for purposes of satisfying s 37 of the Administrative Appeals Tribunal Act 1975 (T documents).
The Background
3. There are many facts about which there is no dispute between the parties. Mr and Mrs McGinty are married and are, and have been since 1995 in the case of Mr McGinty and 1992 in the case of Mrs McGinty, recipients of disability support pensions. They have been subject to three investigations associated with alleged overpayments of their pensions. The first in 2003 covered the period 1999-2001, the second was instigated in 2006 for the period 2004-2006, and the current matter arose from an investigation commenced in 2006 for the relevant period. Mr and Mrs McGinty received notification of the last mentioned decision from Centrelink in August 2007.
4. It is uncontested that Mr McGinty undertook casual work driving school buses during the relevant period. The work was irregular and non existent during school holidays. Mr McGinty was paid weekly by the bus company on the basis of the number of hours worked. Mrs McGinty did not work during the relevant period.
5. Mr and Mrs McGinty maintained that Mr McGinty rang Centrelink on a Wednesday every fortnight to notify it of the money he had earned during that fortnight. He calculated the amount by reference to the number of hours he had worked. The pension was then adjusted depending on the amount earned.
6. T document T21 records the amount of pension paid to Mr McGinty including adjustments taking into account his notified earnings along with the further adjustments made after Centrelink obtained a record of the amounts paid to him by the bus company. The figures show no adjustments were made to payment of the pension (that is, the full entitlement was paid) from 4 July 2001 to the fortnight ending 16 July 2002. Thereafter from the fortnight commencing 17 July 2007 to the end of the relevant period fortnightly adjustments (if applicable) are reflected in the amounts paid. The same is recorded for the same period in respect of the payment of the pension to Mrs McGinty[1].
[1] T documents, T23, page 293.
7. Centrelink’s computer system records notes of incoming and outgoing telephone contacts by and to pension recipients. Records of those concerning Mr McGinty during the relevant period are set out in T document T7. An entry of 18 July 2002 contains the following:
Customer rang – had been working for warrnambool bus lines for a couple of years but hasn’t had any work from them for a while now. Customer does similar sort of work for Christians buses in Terang. Customer will ring tomorrow with details of wages for last 2 weeks and will ring fortnightly from now on.[2]
[2] T documents, T7, page 187.
The note suggests that Mr McGinty had not previously notified his earnings but would do so on a fortnightly basis “…from now on”. The note along with the fact that there are no recorded adjustments and no record of any notifications of earnings made prior to 18 July 2002 leaves the Tribunal satisfied that no notifications were made in that period.
8. T document T18 is a notification supplied by the bus company for which Mr McGinty worked setting out the payment of earnings to him. It records him as receiving income for the period 4 July 2001 to 16 July 2002. While Mr McGinty and Mr Robson queried whether the employer’s record may contain inaccuracies, not any specific errors were demonstrated. The Tribunal accepts the accuracy of the figures provided by the employer. It follows that the Tribunal is satisfied that Mr McGinty was earning money but not declaring it to Centrelink and as the result for the period 4 July 2001 to 16 July 2002 overpayments of the pension were made to both Mr and Mrs McGinty. The total overpayments identified by Centrelink for that period are amounts paid to recipients who were not entitled to receive the payments and are debts owed by Mr and Mrs McGinty to the Commonwealth (s 1223(1) of the Social Security Act 1991 (the Act)).
9. In the period 17 July 2002 to the end of the relevant period deductions are made from the amount of pension paid to Mr and Mrs McGinty as the result of Mr McGinty notifying Centrelink of the earnings he anticipated being paid.[3] Since he was paid weekly by the bus company he would have an accurate figure for each first week out of every fortnight but not necessarily for the second week. Mr McGinty explained he kept diaries in which he recorded the hours he worked. He utilised what he recorded to calculate his anticipated earning. Sometimes he received more and sometimes less than the amounts he calculated. But save for two payments, to which the Tribunal will return, the Tribunal is satisfied that Mr McGinty did his best to notify Centrelink of his anticipated earnings, so that the pension payments could be adjusted.
[3] T documents, T21.
10. Despite Mr McGinty’s best efforts, the anticipated earnings transpired to be inaccurate. Thus, in 23 out of the 38 fortnights between 17 July 2002 and 17 December 2003 Mr McGinty is recorded as underestimating his income and in the balance of the fortnightly periods he is recorded as overestimating his income. The same over and under estimations effect Mrs McGinty’s pension payments in the same way[4]. The underestimation of income received has resulted in a greater overpayment of the pension amounts than the overestimation resulted in the underpayment of the pensions. The amounts of overpayment made to Mr and Mrs McGinty for the period 17 July 2002 to 17 December 2003 are properly identified by Centrelink as amounts paid to recipients who were not entitled to the payment and are therefore debts owing to the Commonwealth[5].
[4] T documents, T25.
[5] s 1223(1) of the Act.
11. Section 1237AAD of the Act provides a discretion to waive the recovery for all or part of any debt owed subject to there being no knowingly made false declaration or failure or omission to comply with the provisions of the Act where “…there are special circumstances (other than financial hardship alone) that make it desirable to waive” the debt and where it is more appropriate to waive rather then write off all or part of the debt. Mr Robson submitted that special circumstances existed in this case and that that part of the debt attributed to Mrs McGinty at least should be waived. The Tribunal has decided to consider whether the circumstances of each of Mr and Mrs McGinty are ‘special.’
12. The SSAT considered the circumstances of Mr and Mrs McGinty as a couple[6]. The Tribunal is of the opinion that if there are different facts relating to the couple and their circumstances should be considered separately. In the instant case the Tribunal is satisfied that their circumstances differ for the period 17 July 2002 to 17 December 2003 but not for the period 4 July 2001 to 16 July 2002. While Mr McGinty claimed to have received some of the letters sent to him from Centrelink during this period the Tribunal is satisfied from the documents contained in T document T4 that Mr McGinty and Mrs McGinty were notified prior to January 2001 that Centrelink required them to notify it of any income earned. For the reasons stated earlier in this decision that did not happen for the period 4 July 2001 to 16 July 2002.
[6] T documents, T2, page 14, paragraph 27.
13. As set out in paragraph 7 herein for the period 4 July 2001 to 16 July 2002 the Tribunal concluded that no deductions were made from the full amount of the pensions paid to Mr and Mrs McGinty and that Mr McGinty failed to notify Centrelink that he was undertaking work. Since both Mr and Mrs McGinty had received notification of the need to report any income earned and no report was made then the Tribunal is satisfied that there are no special circumstances warranting the waiver of the debt.
14. However, for the balance of the relevant period it was Mrs McGinty’s evidence that her husband rang Centrelink and notified them of the amount he estimated he would earn based on his estimation of the hours worked. It may have been more secure for him to notify Centrelink upon receipt of his actual wage rather than submitting his own estimation. However that did not occur. The inaccurate estimation which resulted is attributable to Mr McGinty not properly recording his hours or not properly calculating his income. While it was claimed that Mr McGinty did not receive payslips by the post it seems he did receive them when he attended the bus depot. He made no effort to see if the payslips matched the calculation he made as to what he thought he had earned. The Tribunal is satisfied on these facts that Mr McGinty was overpaid in circumstances that should not be considered for waiver because of special circumstances.
15. Mrs McGinty, while aware that Mr McGinty was contacting Centrelink, had no ready means of checking or otherwise the accuracy of Mr McGinty’s submissions. Her circumstances are different from those of Mr McGinty. Mrs McGinty has not had the benefit of a higher education. She is not by her own description good with figures. Mrs McGinty has little cause to question whether figures submitted by Mr McGinty to Centrelink were accurate or not, yet she suffers a reduction in her pension payment because of the resulting underestimation. Her circumstances, not just because of financial hardship alone, are different from those of Mr McGinty.
16. Further the relevant period is dated some years before the notification of the overpayment in circumstances where clearly the respondent because of its earlier investigations could have addressed the issue sooner. The current circumstances of Mr and Mrs McGinty are such that they have had to relinquish their rented house and obtain cheaper accommodation. The notification of a debt incurred nearly between six and four years earlier, when action could have been taken, stands to place older individuals in a position where it is more difficult, because of increasing financial hardship, to find the money necessary to make the repayment. The Tribunal is satisfied that situation arises for Mrs McGinty in the instant case. She suffers from severe asthma and, aside from being unlikely to be able to return to any paid work, is more than likely not able to undertake work. She has no option other than to make any repayment by accepting a reduced pension payment. While the Tribunal appreciates that she had the benefit of the payments, for all of the above reasons the Tribunal is satisfied that her circumstances are so unusual, uncommon or abnormal as to warrant them being considered ‘special’. Standing in the place of the Secretary the Tribunal determines to that that part of the debt accruing for the period commencing on 17 July 2002 and ending on 17 December 2003 in respect of Mrs McGinty should be waived.
17. There are two matters which require addressing. It seems Mr McGinty’s employer paid a Christmas bonus (described in the employer’s records as ‘annual leave’[7]), in circumstances where it would not be expected for a person occupying a casual position. The net amounts for the 2001 and 2002 years were $1032.18 and $1115.32 respectively[8]. Mr McGinty said that the amounts were paid directly into his account and that he was not aware that they had been paid. It was Mr McGinty’s evidence that he received bank statements only every three months and that, in any event, he paid little attention to them. However, the sums are, particularly having regard to his financial circumstances, not insubstantial and given that the payments were made at Christmas time when he was not otherwise working the Tribunal is satisfied that is improbable that he did not note the payments as having been made. In as far as those payments are calculated as a debt owing to the Commonwealth by Mr McGinty he has a liability to repay the sum. In as far as Mrs McGinty is concerned for the reasons earlier stated if part of those sums has been used to calculate a debt by her to the Commonwealth the debt should be waived for the same reasons expressed earlier to the waiver of part of the debt in as far as Mrs McGinty is concerned.
[7] T documents, T12.
[8] T documents, T12, page 205.
18. For the reasons expressed the Tribunal affirms the decision in as far as Mr McGinty is liable to pay a debt to the Commonwealth and varies the decision to waive the debt in as far as Mrs McGinty has liability to pay it for the period 17 July 2002 to 17 December 2003 and in respect of any portion of the debt arising from the payment of Christmas bonuses to Mr McGinty in the 2001 and 2002 years.
I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr G L McDonald, Deputy President
Signed: .....................................................................................
Grace Horzitski Associate
Date of Hearing 24 October 2008
Place of Hearing Warrnambool
Date of Decision 11 December 2008For the Applicant Mr M Robson, Accountant
Sinclair Wilson
Solicitor for the Respondent Ms K Paul, departmental advocate
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