Michael Hart v Secretary, Department of Education, Employment and Workplace Relations

[2009] AATA 903

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 903

ADMINISTRATIVE APPEALS TRIBUNAL      )           No   2009/2632

)          

GENERAL ADMINISTRATIVE DIVISION		)
Re		MICHAEL HART

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr R G Kenny, Senior Member

Date25 November 2009 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

..................[Sgd]....................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits and Allowances – parenting payment – failure to notify correct levels of fortnightly income – rate calculations based on incorrect income levels – no response to Centrelink notices – overpayment of parenting payment – debt due to the Commonwealth – debt not attributable solely to Commonwealth error – no special circumstances to enable debt to be waived – decision under review affirmed. 

Social Security Act 1991 (Cth) ss 1068B, 1223, 1237, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) s 68

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

25 November 2009 Mr R G Kenny, Senior Member    

APPLICATION

1.      From 2006 to 2008, Mr Hart received income support payments in the form of parenting payment under the Social Security Act 1991 (the Act).  On 22 October 2008, a Centrelink officer determined that Mr Hart had been overpaid in respect of parenting payments in the period from 23 May 2006 until 6 October 2008 (the overpayment period) and a debt of $8,292.18 was raised.  The decision was affirmed by an authorised review officer on 4 December 2008.  The Social Security Appeals Tribunal (the SSAT) then reviewed the decision and affirmed it on 8 May 2009. 

ISSUES AND CONTENTIONS FOR DETERMINATION

2.      Parenting payments are calculated in accordance with the combined fortnightly income of a recipient and his/her partner[1].  Mr Hart was not in employment during the overpayment period and, accordingly, his parenting payment was calculated in accordance with Mrs Hart’s income. 

[1] Section 1068B of the Act

3.      Mr Hart said that he did not accept that he had been overpaid or that he owed money to the Commonwealth.  However, that position was not reflected in his evidence or in his submissions.  Rather, his focus was that he had been overpaid because of error on the part of Centrelink and, therefore, he should not be required to pay for Centrelink’s mistakes.  He conceded that Centrelink had not been accurately advised of Mrs Hart’s fortnightly income during the overpayment period.  However, he contended that he and his wife had complied with Centrelink’s requests by providing estimates of annual income and that the level of these estimates should have made Centrelink aware that the rate of parenting payment to him was in excess of his entitlements.  He also submitted that he and his family were in financial hardship and that the debt should be waived.

4.      Mr Black, for the respondent, submitted that Mr Hart was overpaid by $8,292.18 which was a debt due by Mr Hart to the Commonwealth.  He submitted that most of this debt had arisen after 4 December 2006 through a failure to keep Centrelink informed on a fortnightly basis of his wife’s income.  Prior to this, fortnightly income details were provided to Centrelink and parenting payments were adjusted to reflect those income amounts.  He noted that Mrs Hart’s fortnightly income was irregular at that time.  Not all of the information provided to Centrelink was accurate and this resulted in relatively small overpayments and, indeed, some underpayments.  He submitted that, in the period from 23 May 2006 to early December 2006, the overpayment was in the amount of approximately $320.

5.      Mr Black noted that, from early December 2006, there was a change in the way that Centrelink dealt with the calculation of Mr Hart’s parenting payment.  Centrelink advised Mr Hart that income no longer needed to be supplied fortnightly.  This was because of information provided to Centrelink by Mrs Hart on 4 December 2006.  Mr Black referred to a Centrelink file note which recorded information from Mrs Hart that her fortnightly earnings were then “regular” at $956.89.  Mr Black submitted that, from then on, Centrelink used that amount in letters to Mr Hart as the basis for the calculation of his parenting payment.  Mr Black noted that Mrs Hart’s income did not remain constant at $956.89 and that this was the reason for the bulk of the excess payments in the remainder of the overpayment period.

6.      In addition to parenting payment, Mr Hart received payments of family tax benefit (FTB).  Mr Black submitted that the periodic notification of estimates of annual income related to FTB and not to parenting payments.  He submitted that there was fault on the part of Mr Hart in that he failed to answer several formal notices which advised him of the fortnightly basis on which parenting payments were calculated and the amount of Mrs Hart’s fortnightly income on which calculations were based throughout the overpayment period.  He submitted that it was this failure which led to the continuation of incorrect parenting payments and that, accordingly, the resultant overpayment was not due solely to error on the part of the Commonwealth.  He also submitted that there were no special circumstances which would justify waiving the debt.   

7.      The issue for determination is whether Centrelink was correctly notified of Mrs Hart’s income during the overpayment period and, if not, whether Mr Hart was overpaid an amount which is a debt due to the Commonwealth.

EVIDENCE

Mr Hart

8.      In his evidence, Mr Hart said that he took no part in dealing with Centrelink matters because his wife assumed responsibility for those matters.  He did not read letters sent to the household from Centrelink and he believed that his wife did not pay attention to all of the detail contained in them.  In relation to parenting payments, Mr and Mrs Hart both understood that an estimate of annual income was all that Centrelink required and updates of this were provided to Centrelink periodically. 

9.      Mr Hart realised that the level of parenting payment was related to income and that changes in income would impact on the rate of payment he received.  He referred to Centrelink letters dated 28 April 2006[2], 13 July 2006 and 27 September 2006.  In these letters, Mrs Hart’s income is listed as $0 and Mr Hart could not understand where Centrelink would have obtained that information.  He accepted that the Centrelink letters, from early December 2006, advised that parenting payment was calculated on Mrs Hart’s fortnightly income of $956.89.  Mr Hart also accepted that all of the Centrelink letters included a requirement for Centrelink to be notified of any changes that may affect the level of his parenting payments.  He agreed that, on reading the letters at the hearing, the income information and the obligation to notify changes in income were clearly stated.  However, he did not read any of the letters from Centrelink when they were received in the mail and neither he nor his wife complied with the requests made in them.

[2] This was before the commencement of the overpayment period.

10.     Also in evidence was an Income and Assets Update form which was lodged at a Centrelink office on 13 April 2007.  Mr Hart said that his wife completed the form although he and his wife had both signed it.  One of the responses in the form is that neither he nor his wife was employed at that time.  He agreed that this was incorrect as his wife was employed throughout the overpayment period.

11.     Mr Hart and his wife live in rented premises with their two youngest children, aged 16 and 6 years, as well as Mr Hart’s two adult daughters and their children.  Mr Hart is prevented from working because of a significant back problem and the effects of diabetes.  The rest of the family is in good health except for his youngest daughter who is being treated for Addison’s disease.  He and his wife have assumed much financial responsibility for the extended family and have difficulty in managing on Mrs Hart’s income and the Centrelink payments.  The debt to Centrelink is being repaid at $5 per fortnight. 

Other evidence

12.     Centrelink documentation in evidence included the file note from 4 December 2006 which recorded that Mrs Hart’s fortnightly income had become regular at $956.89.  Payment records in evidence show that Mr Hart’s parenting payment from 6 December 2006 were stabilised at set amounts, on the basis of the understanding that Mrs Hart’s income was then regular in amount. 

13.     Copies of letters from Centrelink to Mr Hart dated 13 July 2006, 27 September 2006, 7 May 2007, 30 July 2007, 22 October 2007, 14 January 2008, 7 April 2008 and 1 July 2008, were also in evidence.  They are expressed to be information notices under social security law.  The first two of these incorrectly advise that Mrs Hart’s income was $0.  The remaining notices advised Mr Hart that his parenting payment was based on income of $956.89.  All of the letters required him to advise of any changes that happened or were likely to happen including variations in income.  In September 2008, Centrelink conducted a review of Mr Hart’s parenting payment.  In evidence was a copy of a form sent to Mr Hart on 23 September 2008 requesting a wide range of information including his and Mrs Hart’s employment status and income earned in the previous twelve weeks.  There is no record of any responses to the letters or forms from Mr or Mrs Hart.

CONSIDERATION

14. It is not disputed that Mr Hart was eligible for the parenting payment or that the amount paid to him was affected by Mrs Hart’s income. Mr Hart has not disputed that he was overpaid by the amount calculated by Centrelink at $8,292.18. I am satisfied that those calculations have been properly made by Centrelink and that Mr Hart was overpaid in the amount of $8,292.18. In accordance with s 1223(1) of the Act, where a person obtains the benefit of a social security payment, which includes parenting payment, and where the person was not entitled, for any reason, to obtain that benefit, the amount of the payment is a debt due to the Commonwealth. I am satisfied that this provision of the Act is met and that the overpayment of $8,292.18 constitutes a debt owed by Mr Hart to the Commonwealth

Waiver

15. Section 1237 of the Act lists the circumstances in which a debt may be waived. This includes the waiver of a debt arising from error in accordance with s 1237A of the Act which, in so far as relevant, reads:

…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.

16. I accept Mr Black’s submission that the debt did not arise solely through the fault of Centrelink staff. A material contribution to the debt in the period from May 2006 until early December 2006 was the provision to Centrelink of incorrect fortnightly income details by Mr and Mrs Hart. There were errors in the letters, dated 13 July 2006 and 27 September 2006, to Mr Hart. There is some uncertainty about the nature of the information provided to Centrelink on 4 December 2006 concerning the regularity of Mrs Hart’s income thereafter. However, what is certain is that, through the overpayment period, Centrelink sent Mr Hart letters, which constitute formal notices under s 68 of the Social Security Administration Act 1999 (Cth).  These advised Mr Hart of the income amount on which his parenting payment was being calculated and required him to supply certain information, including information related to Mrs Hart’s income.  This was to be done within 14 days.  Centrelink also forwarded, in September 2008, a review form to Mr Hart requesting an update on many matters including his and Mrs Hart’s earnings in the previous twelve weeks.  No response was made by Mr or Mrs Hart to any of those documents.  Indeed, on his evidence, Mr Hart did not read these and Mrs Hart did not read them in detail.

17. Because of the absence of response to correct the record concerning actual income amounts earned by Mrs Hart, as set out in the letters to Mr Hart, Centrelink was not in a position to amend the basis on which Mr Hart’s parenting payment was calculated. I am satisfied that this failure to respond materially contributed to the continuing overpayments and, therefore, to the debt. In that situation, the debt did not arise solely due to error on the part of the Commonwealth and the debt cannot be waived under s 1237A of the Act.

18. I am also satisfied that the debt cannot be waived under s 1237AAD of the Act, which applies only where there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt. In Groth v Secretary, Department of Social Security[3], Kiefel J observed that special circumstances:

would require something to distinguish... [the]… case from others, to take it out of the usual or ordinary case. …It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

[3] (1995) 40 ALD 541 at 545

19. Mr Hart referred to the financial strain that he and his family are under, particularly in light of his need to accommodate his older daughters and their children. The provision does not permit waiver of a debt on that basis alone. He and his youngest daughter have health problems but the remainder of the family are in good health. I am satisfied that there are no factors which would distinguish Mr Hart’s situation from the usual or ordinary case such as to constitute special circumstances. I am satisfied that the debt cannot be waived under s 1237AAD of the Act.

DECISION

20.     The Tribunal affirms the decision under review. 

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member.

Signed:...........................[Sgd].......................................
             Research Associate

Date of Hearing:  6 November 2009 
Date of Decision:   25 November 2009
The Applicant was not represented

For the Respondent:                 Mr M Black, Departmental advocate