Michelle Threadgold and Secretary, Department of Education, Employment and Workplace Relations
[2013] AATA 168
[2013] AATA 168
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/4995
Re
Michelle Threadgold
APPLICANT
And
Secretary, Department of Education, Employment and Workplace Relations
RESPONDENT
DECISION
Tribunal Ms A F Cunningham (Senior Member)
Date 27 March 2013 Place Hobart The decision under review is affirmed.
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Ms A F Cunningham (Senior Member)
CATCHWORDS
Social Security - new start allowance - recovery of overpayments -failure to declare full amount of income earned – whether overpayments recoverable - no special circumstances - decision under review affirmed.
LEGISLATION
Social Security Act 1991 (The Act) ss 643, 1223(1), 1223(1)AB, 1236, 1237A, 1237AAD, 1237AAE
Social Security Administration Act 1999 (Administration Act) ss 63 and 68
CASES
Dranichnikov v Centrelink (2003)FCAFC 133
REASONS FOR DECISION
Ms A F Cunningham (Senior Member)
The applicant seeks the review of a decision made by a Centrelink officer to raise and recover a new start allowance (NSA) debt of $6371.56 for the period 1 July 2005 to 1 June 2006 (the debt period). Centrelink's decision to apply a 10% recovery fee of $637.15 was set aside by the Social Security Appeals Tribunal (SSAT) in its decision dated 26 October 2011 which otherwise affirmed Centrelink's decision to recover the debt.
In her Application for Review of Decision the applicant states her reasons for seeking review as "having no idea was accumulating debt or that was under declaring income. Unclear how went wrong also how to correctly declare income."
The applicant represented herself at the appeal hearing and gave oral evidence. Brian Sparkes appeared on behalf of the respondent. The T documents were tendered pursuant to section 37 of the Administrative Appeals Tribunal act 1975.
ISSUES
The issues for the Tribunal to determine are:
1. Whether Ms Threadgold correctly advised Centrelink of her income earned for the debt period;
2. Was Ms Threadgold paid more NSA than she was entitled to receive? and if so,
3. Are the overpayments recoverable?
Mr Sparkes informed the Tribunal that whilst the Secretary contended that the SSAT had erred in removing the recovery fee, the respondent did not seek that this part of the decision be set aside.
EVIDENCE AND BACKGROUND FACTS
The following facts do not appear to be in dispute and the Tribunal finds accordingly:
(i)During the debt period Ms Threadgold was in receipt of NSA and also undertook paid casual employment at the Doherty St Helen’s Resort on the East Coast of Tasmania.
(ii)Ms Threadgold was regularly sent notices by Centrelink advising of her obligation to notify of any changes in her financial circumstances and received a number of Application for Payment Forms which she was required to complete and return to Centrelink.
(iii)Ms Threadgold also received advice from Centrelink as to how her regular NSA payments were calculated which included advice as to the amount of total fortnightly income used in the calculations.
(iv)Ms Threadgold was aware of her obligation to inform Centrelink of her earnings on a fortnightly basis. Ms Threadgold completed the Application of Payment Forms on a regular basis in which she declared income earned for that period.
The total income declared by Ms Threadgold for the debt period was $6357.56 whereas the total income earned by her as recorded in her PAYG payment summary was $14,657 (T4 page 41). It was Ms Threadgold’s evidence that she had difficulty in completing the Centrelink forms because her payslips did not correlate with the periods identified in the Centrelink payment forms . It has her evidence and that she had used a calculator to work out her fortnightly income and endeavoured to complete the forms to the best of her ability. She maintained that she sought assistance at the Service Tas Offices at St Helens but they were unable to assist her.
Under cross-examination Ms Threadgold agreed that she had under- declared her income for the debt period and that the records indicate that she had never over declared her income on any of the Payment Forms. It was put to Ms Threadgold that even if the payment periods did not correlate, if she had accurately declared all of the income earned as shown in her payslips, over the whole of the debt period, the final figures should have matched.
The income earned as shown in Ms Threadgold's payslip for the period 7 December 2005 until 13 December 2005 (a five day period) was gross $325 and net $292. However the amount declared by her for the fortnight as shown at T4 was only $204. Ms Threadgold was unable to explain the discrepancy but maintained that it was not her intention to under- declare her income to Centrelink.
It was Ms Threadgold’s evidence that she was under some emotional stress and dealing with difficult family relationships during the debt period. She was also homeless for a period of time following separation from her partner.
At the time of the hearing Ms Threadgold advised that she was not in receipt of parenting payment and that her only income was family tax benefit from which $15 was being deducted each fortnight in repayment of the Centrelink debt. From her family tax benefit Ms Threadgold was contributing towards rental payments of $250 per fortnight, power telephone and other outstanding accounts. She said that her parenting payment partnered pension had been cancelled when she reconciled with her partner and that she had not lodged a new claim.
At a resumed hearing the Tribunal was informed that Ms Threadgold had been granted parenting payment partnered following the lodgement of a new claim with effect December 2012. She is now in receipt of $444.70 net per fortnight in addition to the family tax benefit making a total income of $574.44 per fortnight. As Ms Threadgold's partner is also in receipt of parenting payment their total income is $1032.14 per fortnight from which $15 per fortnight is currently being deducted in repayment of the Centrelink debt.
CONTENTIONS
It was contended on behalf of the respondent that as a consequence of the applicant under declaring her income, she had been overpaid NSA in the sum of $6357.56 to which she was not entitled. The overpayment is a debt due to the Commonwealth and there are no circumstances which justify a waiver of the debt.
It was Ms Threadgold's contention that she was not aware that she was under declaring her income and that she had done her best to provide Centrelink with the required information regarding her earnings.
LEGISLATION
The relevant law is contained in the Social Security Act 1991 (The Act) and the Social Security (Administration) act 1999 (Administration Act).
There was no question that Ms Threadgold was qualified to receive NSA during the debt period. The rate of payment of NSA is subject to an income test. Income is defined in section 8 of the Act and includes income amount earned or received for the person’s own use or benefit.
Section 643 of the Act states that a person's NSA rate is to be worked out using the benefit rate calculator B at the end of section 1068. The amount of NSA paid on a fortnightly basis is dependent upon the amount of ordinary income earned by a person.
Section 1223 (1) provides that an amount of payment to which a person was not entitled for any reason is a debt owed to the Commonwealth. Section 1223 (1 AB) sets out the circumstances under which a person is taken not to have been entitled to obtain the benefit and includes in subsection (d) "the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation".
Section 1236 provides for write-off of a debt where the debt is either irrecoverable at law, or the debtor has no capacity to repay the debt, or the debtor's whereabouts are unknown, or it is not cost-effective for the Commonwealth to take action to recover the debt.
Section 1237A provides for a waiver of debts which is attributable solely to an administrative error if the debtor received the payments in good faith.
Section 1237AAD provides for the waiver of debts in special circumstances and provides as follows:
“Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)The debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b)There are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)It is more appropriate to waive than to write off the debt or part of the debt.
Note 1:Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2:This section has effect subject to section 1237AAE in relation to an assurance of support debt.”
Sections 63 and 68 of the Administration Act provide the power to the Secretary to require a person to notify matters that might affect their social security payment.
DISCUSSION AND FINDINGS
There is no dispute and the Tribunal finds that Ms Threadgold was overpaid NSA on account of her failing to declare the full amount of income earned by her during the debt period. This was in contravention of the requirements of the Administration Act which required her to notify the amount of income earned.
In accordance with the provisions of the Act, namely section 1223 (1), the amount of overpayment is a debt due to the Commonwealth. The question remains as to whether the debt, which the Tribunal accepts is correctly calculated at $6371.56, can be written off or waived under any of the provisions referred to above.
The Tribunal finds that it is not appropriate to write off the debt under section 1236 (1) (A). Given the evidence that Ms Threadgold is currently in receipt of parenting payment partnered in addition to family tax benefit in the sums referred to above, the Tribunal does not accept that she has no capacity to repay the debt which is currently being repaid at the rate of $15 each fortnight. The Tribunal considers that none of the other factors referred to in this section apply in the circumstances.
Nor does the Tribunal consider that waiver of the debt is appropriate pursuant to section 1237A (1) because no portion of the debt was attributable solely to administrative error. In this case the sole reason for the overpayment was because the applicant did not correctly declare her earned income.
The final consideration is whether the debt should be waived pursuant to section 1237 AAD of the Act. The provisions in this section are conjunctive in that the Tribunal must be satisfied that the debt did not arise wholly or partly from the person making a false statement or failing or omitting to comply with a provision of the Act or the Administration Act and there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt and it is more appropriate to waive the debt than to write it off.
The term "special circumstances" has been considered on numerous occasions by both the AAT and the Federal Court and generally accepted as circumstances that are different from the usual cases such that they take the case out of the ordinary (Dranichnikov v Centrelink (2003) FCAFC 133.
Although Mr Sparkes advised that the Secretary did not strongly contend that the debt arose from the applicant knowingly making a false statement or representation, Mr Sparkes submitted that the circumstances of this case did not have the quality of being special. The Tribunal agrees, for the circumstances that gave rise to the debt in this case were that Ms Threadgold failed to declare the correct amount of her income on a fortnightly basis. Further, the under declaration was a substantial amount over the debt period of 11 months and should in the Tribunal's view, have been obvious to Ms Threadgold from time to time during this period. For these reasons the Tribunal finds that the circumstances in this case are not sufficiently special to justify a waiver pursuant to section 1237 AAD of the Act.
For the reasons outlined above the Tribunal affirms the decision under review.
For the reasons outlined above the Tribunal affirms the decision under review. I certify that the preceding 29 (twenty nine) paragraphs are a true copy of the reasons for the decision herein of ........................................................................
Administrative Assistant
Dated
Date(s) of hearing 17 December 2012 and 12 February 2013 Applicant In person Solicitors for the Respondent Mr B Sparkes, Program Litigation and Review Branch
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