Miskle and Secretary Department of Family and Community Services
[2005] AATA 995
•10 October 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 995
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/185
GENERAL ADMINISTRATIVE DIVISION ) Re Judy Miskle Applicant
And
Secretary Department of Family & Community Services
Respondent
DECISION
Tribunal Mr M Griffin Date10 October 2005
PlaceSydney
Decision The decision under review is affirmed.
[sgd] Mr M Griffin
Member
CATCHWORDS
SOCIAL SECURITY – family tax benefit – waiver of debt – sole administrative error – did not receive payments in good faith – special circumstances – decision affirmed.
LEGISLATION
A New Tax System (Family Assistance) (Administration) Act 1999, ss 95, 97, 101
CASE LAW
Beadle v Director General of Social Security (1984) 6 ALD 1
Dranichnikov and Centrelink [2003] FCAFC 133
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Jazazievska v The Secretary, Department of Family and Community Services [2000] FCA 1484
Secretary Department of Education Employment Training and Youth Affairs v Prince (1997) 132 ALR 127
REASONS FOR DECISION
10 October 2005 Mr M Griffin Summary
1. Mrs Miskle seeks review of a decision of the Social Security Appeals Tribunal (“SSAT”), which decided to affirm a Centrelink decision to raise three debts for overpayment of Family Tax Benefit (“FTB”) paid to Mrs Miskle. The debts are as follows:
(a)$3,169.43 for the period 1 July 2000 to 30 June 2001;
(b)$3,274.12 for the period 1 July 2001 to 30 June 2002; and
(c)$3,693.10 for the period 1 July 2002 to 30 June 2003.
2. Centrelink based the decision to raise and recover the overpayments of FTB on three reasons. Firstly, Mrs Miskle underestimated her income for the 2000-2001 and 2001-2002 tax years. Secondly, she received FTB for her daughter, Kylie, for the period 26 April 2001 to 6 August 2002 when Kylie was no longer a dependant child because she was in receipt of Youth Allowance. Thirdly, in each of the three tax years, Mrs Miskle received FTB for a dependant child named “Arthur”. Arthur is in fact her husband.
Issues
3. The issues for the Tribunal to decide are:
(a)whether Mrs Miskle was overpaid FTB for the years 2000-2001, 2001-2002 and 2002-2003 Family Tax Benefit years; and if so
(b)whether the amount of the overpayments is a debt owed to the Commonwealth; and if so
(c)whether these debts should be recovered.
Evidence
4. Mrs Miskle gave oral evidence to the Tribunal and also provided documentary evidence including a statement of her financial circumstances, which was provided in the week following the hearing.
5. Mrs Miskle did not dispute the amount of the overpayments of FTB. She said that she first noticed extra money in her bank account in June 2004. She said that the bank told her that the excess amount was a one off social security payment and advised her to speak to Centrelink. She said that a Centrelink officer explained to her she was being paid for her husband and her daughter in her maiden name. She said:
“If I had known I would have told them. On the phone I always tell them that I have two children. If my husband received a pay rise I always rang and told Centrelink. I knew I would not be getting paid for my daughter when she turned 16. I know I am at fault for not reading the letters”.
6. Mrs Miskle said that at the time she had not been focusing properly due to the depression she was suffering from and the pain and medication that she was taking.
7. It was put to Mrs Miskle that she had received numerous letters throughout the period advising her that she was receiving FTB for children named Arthur and Kylie. Mrs Miskle said that the depression she was suffering from at the time prevented her from focusing properly on the letters. She said that she looked at the amounts only and did not read the rest of the letters.
8. Mrs Miskle was referred to a Centrelink record of a telephone discussion in August 2002, which appears at T42, pages 96 and 97, in which she discussed her daughter’s Youth Allowance with a Centrelink customer services officer. It was put to her that this conversation should have alerted her to the fact that she was incorrectly receiving FTB for her husband Arthur, as a dependant child. Mrs Miskle said
“I probably did not check the notices properly after that”.
9. In respect of her understated estimates of income, Mrs Miskle said that she had placed question marks in the relevant boxes in the Centrelink application forms which she had submitted. Mrs Miskle said that despite her depression and illness during these years, she did not show any of the Centrelink notices to her husband, despite the fact that it was he who took care of the family’s banking. She said:
“He doesn’t understand the Centrelink side of things”.
10. I asked Mrs Miskle about her health and her family’s health. Mrs Miskle said that she suffers from a condition of the spine which will deteriorate over time. She also has hypertension and “enlargement of the heart” from stress. She said that she had suffered depression during the relevant periods, which had included periods of hospitalisation. She was in hospital in November 2000 for around 10 days and readmitted for a further week in late November/early December 2000. She said that there had been further periods of hospitalisation from one to two weeks in 2001 but nothing since 2001. She said that she had been off the anti depressant medication since about May 2001. She said that both of her sons, who are aged 10 and 13, are asthmatics. However, this does not prevent them from participating in normal activities and indeed one of the boys is a very talented tennis player. Mrs Miskle said that her son had been attending special tennis coaching, having been identified as a talented tennis player. However she and her husband were unable to continue to afford the payment of that special tennis coaching. There are no other significant health matters affecting the family. Mrs Miskle has continuing pharmaceutical expenses for her pain killers. She takes Digesics at a cost of about $20 per fortnight and there is the cost of the asthma treatments for her children.
11. As to the family’s financial circumstances, Mr Miskle is in full-time employment and receives a salary in excess of $50,000 per annum. Mrs Miskle receives the Disability Support Pension and Family Payments. The family live in their own home, which is valued at approximately $210,000 and for which they have a mortgage of $150,000. They also have a loan from Westpac in the amount of $11,000 for Bankcard payout. They own their own car and her husband has a company car. Mrs Miskle’s daughter Kylie no longer lives with her. The family statement of financial circumstances reflects the typical circumstances of a family of four with a mortgage, some pharmaceutical expenses and household expenses. Mrs Miskle receives some $377.80 per fortnight in social security payments after withholdings for the debts in question. Mrs Miskle’s husband receives approximately $2,000 per fortnight gross salary.
Consideration of the Issues
12. The legislation relevant to this review is found in sections 95, 97 and 101 of the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Act”). Section 95 provides for writing off of a debt if certain strict conditions are met, such as the debtor’s whereabouts being unknown or incapacity to repay the debt. None of those criteria are satisfied in Mrs Miskle’s case. Therefore a write off of the debt is not allowed.
Sole Administrative Error
13. Section 97 of the Act provides for waiver of the debt arising from error in certain circumstances. It is concerned with a debt that is attributable solely to an administrative error made by the Commonwealth. The section also requires that the debtor received the payment in good faith. In certain circumstances there is a requirement that the person would suffer severe financial hardship if the debt were not waived.
14. The evidence presented, is that between July 2000 and June 2003, Mrs Miskle received 14 letters from Centrelink which advised she was receiving FTB for her husband Arthur, as a dependant child. Four of these letters, sent between June 2001 and January 2002, also stated that Mrs Miskle was receiving FTB for Kylie at a time that Kylie was also in receipt of Youth Allowance and therefore no longer an eligible FTB child of Mrs Miskle. In respect of these numerous letters, Mrs Miskle said variously, that she read only the amounts of the payment, that she did not read the rest of the letters, that she was not properly focused, that she was depressed and not concentrating properly.
15. Clearly, there were administrative errors made somewhere in Centrelink which incorrectly registered Mrs Miskle’s daughter Kylie under her maiden name and also registered Mrs Miskle’s husband, Arthur, as a dependant child. However, had Mrs Miskle done more than simply read the amounts of the payments in these letters and had she paid attention to the fact that her husband Arthur and her daughter Kylie were incorrectly included for FTB payment purposes, then the error could have been rectified much earlier. It follows that Mrs Miskle’s failure to fully read the letters and to focus on their content contributed to the overpayment and thus the error is not solely on the part of the Centrelink.
“In Good Faith”
16. In order for the debt to be waived under section 97, the payment must have been received “in good faith”. The Federal Court has stated that the payment cannot be said to be received in good faith where the recipient knows or has reason to know that he or she is not entitled to the payments received (Secretary Department of Education Employment Training and Youth Affairs v Prince (1997) 132 ALR 127), or where the person turns a blind eye to circumstances which raise doubt as to the entitlement of a person to receive payments and the person has failed to make reasonable enquiries where such doubt exists (Jazazievska v The Secretary, Department of Family and Community Services [2000] FCA 1484).
17. In this case the Respondent contends that Mrs Miskle knew, or had reason to know, that she was not entitled to FTB payments for her husband Arthur. Similarly, the respondent contends that Mrs Miskle knew, or had reason to know, that she was not entitled to FTB payments for Kylie once Kylie started to receive Youth Allowance. As a consequence Mrs Miskle cannot be said to have received the payments in good faith. Further, the Respondent contends that by failing to carefully read the notices sent to her during the overpayment period, Mrs Miskle effectively turned a blind eye to circumstances which raised a doubt as to her entitlement to the social security payments she received.
18. Mrs Miskle said that Centrelink had made errors in its recording of the particulars of her husband and her daughter; that she had made regular telephone contact with Centrelink about changes in her financial circumstances and that she was depressed and unwell during the period and had not focused properly on the letters.
19. Ms Oliver representing the Respondent, referred to the Centrelink decision to waive a portion of the FTB debt of $1,378.91 which related to the July 2001 to August 2002 Youth Allowance payments. This debt was reincorporated into the current debts, apparently without any conscious decision being made to overturn that waivered decision. In the circumstances Ms Oliver accepts that it may be appropriate for the Tribunal to find that the Commonwealth’s right to recover this portion has been waived and should remain so. However, she contends that it is open to the Tribunal to find that this portion of this debt was not properly waived under section 97 and to find that it should be recovered. She further submits that there is an absence of good faith in this case and no evidence to support a finding that Mrs Miskle would suffer severe financial hardship if her debts were to be recovered.
Special Circumstances and Severe Hardship
20. The right to recover debts due to the Commonwealth may also be waived in cases where there are “special circumstances”, pursuant to section 101 of the Act. Whilst the Act does not define “special circumstances”, it has long been accepted that special circumstances are circumstances which are “unusual, uncommon or exceptional” and which make them “markedly different from the usual run of cases” such as to justify the exercise of the discretion (see Beadle v Director General of Social Security (1984) 6 ALD 1). In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court decision in Beadle, observed that special circumstances:
“… would require something to distinguish Mr Growth’s 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 an unjust had occurred that there must be some feature out of the ordinary.”
21. In Dranichnikov and Centrelink [2003] FCAFC 133, the Federal the Court held that the circumstances in which the debt arose were themselves relevant to the special circumstances discretion.
Findings
22. The undisputed evidence is that Mrs Miskle received some 14 letters from Centrelink during the relevant period, advising her that she was being paid FTB for her husband Arthur, as a dependant child, and for her daughter Kylie. Mrs Miskle on her own admission did not read these letters properly. Centrelink was in error with its registration of these details. Mrs Miskle was in error in failing to properly read Centrelink’s letters. It follows that the overpayment was not due solely to administrative error on the part of the Commonwealth. I am satisfied that Mrs Miskle knew or had reason to know that she was not entitled to those particular payments and that she effectively turned a blind eye to circumstances which raised doubt as to her entitlement to receive those payments and has failed to make reasonable enquiries where such a doubt existed. I find therefore, that the payments were not received in good faith.
23. As to financial hardship, Mr Miskle is employed and receives approximately $2,000 per fortnight in salary. Mrs Miskle receives approximately $380 per fortnight in social security payments. Having considered the statement of financial circumstances provided by Mrs Miskle, I am not satisfied that the recovery of these debts would result in severe financial hardship for the family. As to “special circumstances”, there is nothing in the evidence about Mrs Miskle health or the health of her family or the circumstances in which this debt arose to make them “markedly different from the usual run of cases” nor “is there something unfair, unintended or unjust” that has occurred in this particular case to make it “unusual, uncommon or exceptional”. I find that there are no special circumstances to warrant the exercise of the discretion to waive the Commonwealth’s right to recover the overpayment. I find that the decision under review was the correct or preferable one and that the 24 December 2002 decision to waive a debt of $1,378.91 was correctly reincorporated into the current debts. It follows that I find the overpayments to be debts to the Commonwealth which should be recovered.
24. The decision under review is affirmed.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Griffin, Member
Signed: .....................................................................................
Niamh Kinchin AssociateDate of Hearing 2 September 2005
Date of Decision 10 October 2005
Representative for the Applicant Self-represented
Representative for the Respondent Sarah Oliver
0