Mills and Secretary, Department of Education, Employment and Workplace Relations

[2007] AATA 2104

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2104

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/2851

GENERAL ADMINISTRATIVE DIVISION			)
Re	KEITH MILLS

Applicant

and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT and WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date24 December 2007 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

………[Sgd]……………………  

RG Kenny

Member

CATCHWORDS

SOCIAL SECURITY – method of calculating disability support pension – overpayment constituting a debt due to the Commonwealth - debt not due solely to Commonwealth error – no special circumstances – no grounds to waive debt – decision affirmed

Social Security Act 1991 (Cth) ss 1064, 1223, 1237A, 1237AAD

The Social Security (Administration) Act 1999 (Cth) s 68

Director‑General of Social Services v Hangan (1982) 70 FLR 212
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

24 December 2007     Mr RG Kenny, Member

Application

1.      Keith Mills was in receipt of the disability support pension, as provided for in the Social Security Act 1991 (the Act), from 16 June 2003 until 11 December 2006 (the overpayment period).  On 19 February 2007, a Centrelink delegate determined that Mr Mills had been overpaid in the amount of $5,101.17 during that period.  On 17 April 2007 and 5 June 2007, respectively, an authorized review officer with Centrelink and the Social Security Appeals Tribunal affirmed that decision.  Mr Mills now seeks further review by the Administrative Appeals Tribunal.

Applicant’s Case

2. During the overpayment period, Mr Mills’ wife was in employment and the level of Mr Mills’ pension was dependent upon her income. He was sent numerous letters by Centrelink throughout the overpayment period. These advised him of the amount of pension he was being paid and also the level of income upon which this was calculated. The letters required him to advise Centrelink, within 14 days, of various matters including any changes in the level of income on which his pension calculations were made. These letters constitute notices under s 68(2) of The Social Security (Administration) Act 1999 (the Administration Act) and they created an obligation on Mr Mills to provide the requested information in the stated time-frame. Mr Mills conceded that he received those letters and that he had not provided accurate details of his wife’s income during the overpayment period. He also conceded that he had received overpayments of disability support pension and had incurred a debt which was due to the Commonwealth.

3.      Mr Mills’ contended that the amount of the overpayment was much less than that alleged by the respondent because the relevant formula in the Act for calculating payments had been incorrectly applied.  In particular, he submitted that the amount of income which was to be disregarded in applying that formula should have been $228 per fortnight rather than one-half of that which was utilised by the respondent. 

Calculation of Debt

4.      I am satisfied that Mr Mills was overpaid disability support pension and that, in  accordance with s 1223(1) of the Act, he has a debt due by him to the Commonwealth.  Evidence was given by Terry Rayner who is engaged with Centrelink in data matching and in checking the correctness of social security payments of people in Mr Mills’ circumstances.  He has investigated overpayment matters for at least 20 years and has been employed by the respondent for some 30 years.  He checked the calculations in Mr Mills’ case and found them to be accurate in their conclusion that there was an overpayment to him of $5,101.17.  He was of the opinion that, in applying the amount of income which was to be disregarded in applying that formula in s 1064 of the Act, the fortnightly amount of $114 was correctly relied upon rather than $228.

5.      Pursuant to s 1064(1) of the Act, the formula for calculating disability support pension is set out in the rate calculator at the end of that section.  Members of a couple are treated as pooling their income and sharing them on a 50/50 basis: see ss 1064-A2 and 1064-E2 of the Act.  Accordingly, for the purposes of calculating his disability support pension, Mr Mills’ “ordinary income” is one half of that earned by his wife.  The Method Statement in s 1064-E1 of the Act requires Mr Mills’ “ordinary income free area” to be calculated.  This is drawn from Table E-1 of the Act.  Mr Mills is in category 2 and his ordinary income free area is in column 3.  This is $114 per fortnight.  The table reads:

TABLE E-1 ORDINARY INCOME FREE AREA
Column 1   Item	Column 2   Category of person	Column 3  Basic free area per year	Column 4  Basic free area per fortnight	Column 5  Additional free area per year	Column 6 Additional free area per fortnight
1.	Not member of a couple	$3,328	$128	$639.60	$24.60
2.	Partnered (partner getting neither pension nor benefit)	$2,964	$114	$639.60	$24.60
3.	Partnered (partner getting benefit)	$2,964	$114	$639.60	$24.60
4.	Partnered (partner getting pension)	$2,964	$114	$319.80	$12.30

6.      The Method Statement in s 1064-E1 of the Act provides that any excess of ordinary income over the ordinary income free area (“ordinary income excess”: see  s 1064-E11 of the Act) is used to reduce the maximum amount of pension payable in accordance with the formula in s 1064-E10 of the Act.  This provides that a person’s reduction for ordinary income is:

ordinary income excess x .4

7.      In the respondent’s calculations, Mr Mills’ ordinary income free area was $114 and the reduction was assessed by the 40% factor in s 1064-E10.  Mr Mills’ contention was that he should have been given the benefit of an ordinary income free area of $228.  This was because the amount of $114 applied to him and also to his wife and should be utilised twice in the calculation.  I do not accept that contention as the concept of an income free area arises only in the context of a person receiving a pension under the Act.  Mrs Mills is not in that position.  Only that pertaining to Mr Mills has relevance and that amount is $114.

8.      All of Mr Mills’ calculations were based upon the ordinary income free area at the level of $228.  This means that his calculations are incorrect.  Also, he did not take into account the pharmaceutical benefit in Module C of s 1064 and did not utilise fortnightly periods which coincided with the fortnightly periods relied upon by Centrelink in making its fortnightly calculations during the overpayment period.  These factors add to the inaccuracy of his calculations.  I am satisfied that the calculations made by Centrelink and verified by Mr Rayner correctly assessed the overpayment to Mr Mills in the amount of $5,101.17 which, as noted above, is a debt to the Commonwealth under s 1223(1) of the Act.

Waiver of Debt

9.      Mr Hamilton submitted that, though there may have been some error by the Commonwealth, Mr Mills had contributed to the overpayment by failing to provide correct information to Centrelink throughout the overpayment period and that, accordingly, waiver for administrative error was not open.  He also submitted that there were no special circumstances which would enable the debt to be waived.

10.     Waiver of a debt due to administrative error by the Commonwealth arises under s 1237A(1) of the Act.  The first element to be satisfied under that provision is that the debt must be attributable solely to administrative error made by the Commonwealth.  A debt will not arise solely through error by the Commonwealth if there has been some contribution to the causing of the debt by the recipient: see Director‑General of Social Services v Hangan (1982) 70 FLR 212 at 215, 225 and 235. I am satisfied that Mr Mills contributed to the overpayment of his disability support pension because of incorrect income information provided by him to Centrelink. Indeed, he conceded that this was the case. Because there was contribution on his part, this means that this was not a case of sole Commonwealth error and the debt can not be waived under s 1237A of the Act.

11.     Waiver of a debt due to special circumstances arises under section 1237AAD of the Act.  It must be the case, amongst the other requirements of the provision, that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.  The Act provides no guidance as to the meaning of the term “special circumstances” in that provision.  In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, the Federal Court observed (at 545) 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.

12.     Mr Mills has health concerns but these are the subject of his grant of his disability support pension. He referred to his financial situation and said that he and his wife were finding it difficult to live on a pension.  However, Mrs Mills is about to resume full-time employment.  They have their own house on which there is an outstanding mortgage of approximately $4,000.00 which requires repayments of $200 per month.  Mr Mills is making repayments of his Centrelink debt at $50 per fortnight and this has reduced the outstanding amount to $ 3,363.97.  I am not satisfied that Mr Mills is living in financial hardship.  In any event, s 1237AAD requires more than financial hardship and, on the material before me, I am satisfied there are no factors, either individually or taken together, in this case that enable it to be characterised as unusual or unfair and I am satisfied that there are no special circumstances in Mr Mill’s case that would justify waiver of the debt under that provision.

Decision

13.      The decision under review is affirmed.

I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:…………………………………………………………….
  Associate

Date/s of Hearing:   3 December 2007
Date of Decision:   24 December 2007
The Applicant was unrepresented
For the Respondent:                 Mr R Hamilton, Departmental Advocate.