Mohamed and Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2002] AATA 210

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/1167

GENERAL ADMINISTRATIVE DIVISION         )
           Re      Essam MOHAMED
  Applicant
           And    Secretary, Department of Family and Community Services
  Respondent

DECISION

Tribunal       Ms N Isenberg, Member
Date               3 April 2002
Place            Sydney
Decision      The Administrative Appeals Tribunal affirms the decision under review insofar as it imposed a preclusion period from 30 October 1998 to 12 August 2004. As to the debt of $4,958.92 for Newstart Allowance, the Administrative Appeals Tribunal sets aside the decision under review and in substitution therefor waives the whole debt pursuant to section 1237A of the Social Security Act 1991.

[SGD] Ms N Isenberg
Member
CATCHWORDS
Social Security - lump sum preclusion period - compensation settlement - whether special circumstances exist
Social Security – debt – whether 'solely' Department's administrative error
LEGISLATION
Social Security Act 1991 – sections 17, 1165, 1166, 1184(1), 1223, 1224 and 1237A
CASE LAW
Beadle and Director-General of Social Security (1985) 7 ALD 670
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Green and Secretary, Department of Social Security (1990) 21 ALD 772
Re SDSS and Hill (1995) 2(1) SSR 9
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Gerhardt and Department of Employment, Education and Training (AAT 10941,17 May 1996)
Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787
Secretary to the Department of Family & Community Services v Allan [2001] FCA 1160
Re Beadle and Director-General of Social Security (1984) 6 ALD
Director-General of Social Services v Hales (1983) 47 ALR 281
Secretary, Department of Social Security v a'Beckett (1990) 21 ALD 79

REASONS FOR DECISION

3 April 2002 Ms N Isenberg, Member
BACKGROUND

The decision under review before the Administrative Appeals Tribunal ("the Tribunal") was the decision of the Respondent, the Secretary, Department of Family and Community Services ("the Department") dated 8 December 2000 to raise a debt of $4,958.92 for the payment of Newstart Allowance between 11 February 2000 and 17 November 2000 and to impose a preclusion period from 30 October 1998 to 12 August 2001. The original decision was affirmed by the Authorised Review Officer on 26 April 2001.
The Social Security Appeals Tribunal ("the SSAT") on 6 July 2001 (T2), affirmed the decision under review in relation to the preclusion period and set aside the part of the decision to recover the debt of $4,958.92 and in substitution therefor determined to write off the debt until such time as Mr Essam Mohamed ("the Applicant") next received a social security payment.
ISSUES BEFORE THE TRIBUNAL
The issues before the Tribunal are:

whether the preclusion period has been correctly imposed on the Applicant; and if so
whether the Applicant owes a debt to the Commonwealth in the amount of $4,958.92; and if so
whether there are special circumstances which warrant the exercise of the discretion contained in section 1184 of the Social Security Act 1991 to disregard all or part of the Applicant's compensation payment; and if not
whether there are grounds for the debt to be waived pursuant to section 1237A of the Social Security Act 1991.

APPEARANCES

At the hearing the Applicant appeared without representation and the Respondent was represented by Ms Susan Fahey, an advocate from the Advocacy and Administrative Law Team at Centrelink.

EVIDENCE BEFORE THE TRIBUNAL

The following documentary evidence was before the Tribunal:
Exhibit No     Description Date
R1      Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
R2      Respondent's Statement of Facts and Contentions     6 February 2002
R3      Statement of Michael Tinker         11 March 2002
R4      Statement of Karen Stone 20 February 2002

LEGISLATION

The relevant legislation to be considered in this application is the Social Security Act 1991 ("the Act) and in particular:
Section 1184 of the Act which reads:
"1184.(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been ma
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case."

Section 1223 (5) the Act states:-

"1223.(5) If:
(a) an amount (the received amount) has been paid to a person by way of social security payment on or after 1 October 1997 or by way of fares allowance; and
(b) because the received amount had not been correctly calculated using the relevant rate calculator or other provision for calculating the amount, or for any other reason, the received amount is greater than the amount (the correct amount) of social security payment or fares allowance that should have been paid to the person;

the difference between the received amount and the correct amount is a debt due to the Commonwealth."

Section 1237A of the Act states:

"1237A(1) Subject to subsection (1A), 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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor)."

EVIDENCE OF THE APPLICANT

The applicant gave evidence that he had been injured at work in 1990. His compensation claim had been settled in October 1998 and he had received a net amount of $185,000. He told the Tribunal that his solicitor had informed him that he could not obtain benefits from Centrelink "for a while". In February 2000 he went to Centrelink looking for work. At Centrelink the Applicant was interviewed by an officer by the name of 'Karen' who took his details and asked him some questions, which he answered. Subsequently, the Applicant was granted Newstart Allowance.

The Applicant told the Tribunal that for the eight years between the time of his injury and the settlement he had received benefits of only $174 per week. He had to borrow money from family and friends to pay the mortgage during that time. After he received the settlement moneys he repaid about $30,000 immediately to repay the debts he owed to his family and friends. The Applicant said that he put the balance of the compensation moneys into a savings access account with the ANZ bank.
The Applicant told the Tribunal that he had been unable to afford repairs to his house since he stopped work in 1990 and it was in a very poor condition. He said he undertook alterations to the house because "it was the last money I would have and so it was the only chance to do (sic) any problems with the house". The gutters and windows were repaired and the carpets on the floor were replaced with tiles. The bathroom and kitchen were beyond repair and were replaced. In all, the renovations cost about $50,000 to $55,000. He and his wife had been in their home since 1983 and it was old when they bought it and not in the best condition. Up until the time of the accident, other than some minor repairs, the only improvement that had been made was the erection of a pergola in the backyard.
With the settlement moneys he also had bought a car for his daughter costing about $10,000, as she was at university at Penrith and had been getting home very late. The Applicant told the Tribunal that he also needed to buy his daughter a computer ($5,000) and a video camera ($3,000) because she was studying graphic design.
The Applicant told the Tribunal that his wife needed to go overseas because her mother was seriously ill. Their daughter accompanied Mrs Mohamed on the overseas trip. While his wife and his daughter were overseas, his father-in-law died and his wife paid for the funeral. The overseas trip lasted about 8 weeks and cost the Applicant about $10,000 to $12,000.
The Applicant also went to visit his family overseas because he had not seen them for about 16 years. He was away for three months and the cost of that trip was approximately $9,000.
Since about 1992 or 1993 his wife has been in receipt of a superannuation income of about $630 per fortnight. Their daughter is still at university and there are no other children living at home. Currently he has $866 in the bank and he is still looking for a job. His wife has recently gone overseas again because her brother is undergoing major surgery. The Applicant told the Tribunal that he does not know when his wife will return. Both he and his wife contributed to the cost of the trip and he told the Tribunal that his contribution had used up the last of his money.
In cross-examination, the Applicant was asked whether he had told the SSAT that he had had to repay loans. It was brought to the Applicant's attention that in the SSAT's decision there was no mention of his borrowings. He answered that he thought he had told the SSAT because it was the fact.
The Applicant was asked about the state of repair of the bathroom and kitchen which had been replaced. He said that the bath was leaking, the tiles were old and falling off, the floor became soaked and the water got into the carpet. As to the kitchen, he said it was really old and that the stove was hardly working and could only be used with difficulty. He said "after we got the money why should we suffer with the kitchen and bathroom like that?"
The Applicant told the Tribunal that the windows in his house were of old timber and had been replaced because they were in bad shape. The house is located near Stoney Creek Road and there was very bad traffic noise. Shutters were attached in order to cut down the noise and for security purposes. The Applicant decided that as the windows had to be replaced, he preferred to replace the windows at the same time as the shutters were attached.
The Applicant told the Tribunal that the renovations to his house were completed in 1999 or 2000, before he claimed for Newstart Allowance.
The purchases of the car and the computer for his daughter were made in 1999. The trip to see his family was from January to April 1999 and most of the $9000 spent on that trip was for living expenses and presents. The Applicant estimated that the presents such as clothes, watches and wallets probably totalled no more than $1000.
The Applicant was asked whether he had any investments. He said that he and his wife had invested $60,000 of the settlement money in a growth trust. The Applicant told the Tribunal that two months ago their investment has depreciated to $10,000 and the last of that amount had been withdrawn to pay for his wife's latest overseas trip. The Applicant said that had contributed $5,000 to the cost of the trip. He has superannuation entitlements of about $63,000 but he is unable to access those moneys until he is aged 65 (He is now 62 years old).
His wife has no other investments.
SUBMISSIONS
The Applicant submitted simply that his compensation was to cover damages, past and future economic loss and to make provision for future operations, which, in 1995, were to cost $49,000. He had had to borrow money through the years before he got his compensation payout and then he had to repay those loans.
As to payment of the debt raised by Centrelink, the Applicant said that he had never completed a false statement and that is why, he had gone back to the officer at Centrelink named 'Karen' to ask where he had said that he had not received compensation. He pointed out to the Tribunal that had he sought to mislead Centrelink, he would not, only a matter of months later when completing his application for the mature age pension, have completed the form so as to disclose his compensation payment.
Ms Fahey, the advocate for the Respondent, contended that the preclusion period was correctly calculated pursuant to section 17, 1165 and 1166 of the Social Security Act 1991 and that there are no special circumstances which would allow the exercise of the discretion contained in section 1184 of the Act. The gross compensation payment received by the Applicant was $250,000, of which the compensation component is $125,000 which, applying the formula in section1165(8) of the Act produced a preclusion period of 302 weeks, that is commencing on 30 October 1998 and ending on 12 August 2004.
The Act gives relief to the strict application of the compensation preclusion period, by giving the Secretary a discretion to disregard parts of the compensation payments in 'special circumstances' pursuant to section 1184 of the Act but the Respondent contended that no special circumstances exist in the Applicant's case to warrant the exercise of the discretion.
Ms Fahey referred to Beadle and Director-General of Social Security (1985) 7 ALD 670 where the Full Federal Court commented that the meaning of the phrase "special circumstances" was one which did not to require judicial gloss.
Ms Fahey, in her written submissions, referred to Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 where there was a comprehensive review of the previous authorities and identified factors relevant to the discretion which could be broadly grouped as financial hardship, legislative changes, incorrect legal advice and ill health. She also referred the Tribunal to Re Green and Secretary, Department of Social Security (1990) 21 ALD 772 where the Tribunal listed the factors in general terms.
Ms Fahey contended that the Applicant's circumstances do not warrant the exercise of the discretion conferred by section 1184 of the Act because the Applicant's circumstances are not unusual, uncommon or exceptional. pursuant to section 1184 of the Act.
Ms Fahey further contended that to qualify as "special circumstances", financial hardship must go beyond "straitened" circumstances and be truly exceptional. Although financial hardship may be grounds for finding special circumstances, it is not a prerequisite to special circumstances: Re SDSS and Hill (1995) 2(1) SSR 9. In Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716 it was said that," the financial circumstances must be more than straitened. They must be 'exceptional'."
Ms Fahey contended that the Applicant's financial circumstances, although they may be considered to be difficult, are not more than straitened and as such would not warrant the exercise of the discretion contained in section 1184 of the Act.
Ms Fahey contended that ill health is not a factor which would allow the discretion in section 1184 of the Act to be exercised and the Applicant has been compensated for his ill health.
Ms Fahey submitted there are no other factors which are applicable to the Applicant and which would constitute special circumstances.
Regarding the debt raised due to the payment of Newstart Allowance to the Applicant, the Respondent contended that the Applicant did not advise the Respondent that he had received a lump sum compensation payment when the Applicant claimed Newstart Allowance. Consequently, he was incorrectly paid Newstart Allowance during the preclusion period. The Applicant was entitled to no payments during the period he was paid Newstart Allowance. The Respondent contended that the Newstart Allowance paid to the Applicant is therefore a debt due to the Commonwealth pursuant to section 1224 and/or 1223 (5) of the Act.
The Respondent was advised by Energy Australia on 29 October 1998 that a compensation payment had been received by the Applicant but at that time there was no record of the Applicant on Centrelink records. It was submitted that it is the practice of insurance companies to advise of compensation moneys without knowing whether the recipient of the compensation is in receipt of an income support payment from Centrelink. A record of the Applicant's details provided by Energy Australia was made on Centrelink's computer system and the customer service officer referred to this advice in his letter of 21 February 2001(T34). The advocate for the Respondent submitted that the information from Energy Australia could have related to 'any Essam Mohamed' and not necessarily the Applicant.
Ms Fahey contended on behalf of the Respondent that if the unsolicited advice from Energy Australia is considered to be an administrative error on the part of Centrelink, it cannot be considered as the sole administrative error. Ms Fahey further contended that the Applicant contributed to the administrative error when he failed to advise of his compensation payment as required when he claimed Newstart Allowance. The debt did not arise soley because of an error on the part of Centrelink.
Ms Fahey said that the customer service officer who interviewed the Applicant asked the compensation question "as it is written on the Newstart claim form". In response to the question the Applicant had answered "no". It was submitted by the Respondent that there was no administrative error on the part of Centrelink which led to the Applicant being overpaid the Newstart Allowance during the preclusion period.
Ms Fahey submitted that the word "sole" should be given its ordinary meaning. In the Concise Oxford dictionary, "sole" is defined as "one and only, exclusive, alone, unaccompanied". This approach was used by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941,17 May 1996), in which the Tribunal stated "There is nothing in sub-section 289(1) which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error."
The decision of Gerhardt (supra) was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787. The Tribunal stated that "solely" in section1237A(1) of the Act should be given its ordinary meaning ("only" or "to the exclusion of all else").
Ms Fahey contended that are no circumstances which allow the waiver of the debt either under the special circumstances or the sole administrative error provisions of the Act. The Respondent contended that there was no sole error on the part of the Respondent which led to the debt being incurred by the Applicant.
In summary, the advocate for the Respondent said that the object and purpose of the legislation is to prevent 'double dipping', unless it would be unjust to enforce the liability for which the legislation otherwise provides. To treat compensation payments in any other manner in this case is to frustrate the object of the legislation in the absence of any circumstances in which it would be reasonable to do so. There is nothing about the Applicant's financial situation which sets him apart from other income support recipients. Enforcement of the liability created by section1184 of the Act would not be unjust, unreasonable or otherwise inappropriate given the circumstances of this case.
In relation to the debt of Newstart Allowance, Ms Fahey contended that it is a legally recoverable debt and that there are no circumstances which warrant the waiver of the Commonwealth's right to recover of the debt.
CONSIDERATION AND FINDINGS
In coming to the correct and preferable decision, the Tribunal took into account all the evidence, submissions, case law and relevant legislation.
One of the objects of Part 3.14 of the Act "Compensation recovery", is to preclude persons who have received compensation for some economic loss (whether lost earnings or lost capacity to earn), from receiving social security benefits in respect of the loss for a period of time. Heerey J in Secretary to the Department of Family & Community Services v Allan [2001] FCA 1160, paragraph 1, explained that the provisions in Part 3.14 deal with:
"... the suspension ("preclusion") of social security benefits where recipients have received compensation for loss of earnings by awards under workers compensation legislation or damages at common law. The basic policy, understandably enough, is that there should not be "double dipping". People should not receive social security payments for loss of earnings where they have received compensation for that same loss of earnings from another source. "

The Tribunal finds, on the basis of the insurer's notice of lump sum compensation payment (T22) that on 29 October 1998 the Applicant was paid a lump sum of $250,000 in settlement of a compensation claim. The payment is "compensation" as defined in section 17(2) of the Act that was "made wholly or partly in respect of lost earnings or lost capacity to earn." The benefit that the Applicant had received in the past is a "compensation affected payment" as defined in section 17(1) of the Act. Accordingly, section 1165(2AA) of the Act is attracted and it provides:
"Person member of a couple—payment received on or after 20 March 1997
1165(2AA) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person is a member of a couple; and
(c) the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period."
In the Applicant's case the preclusion period is from 30 October 1998 to 12 August 2004, a period of 302.8 weeks. The period was determined by an income cut-out amount of $412.70 pursuant to section 17(8) of the Act, the compensation part of the lump sum being $125,000 (pursuant to section 17(3) of the Act) and the application of the formula in section 1165(8) of the Act which reads:
"1165(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:
Compensation part of lump sum
Income cut-out amount
Note 1: For compensation part of lump sum, see section 17.
Note 2: For income cut-out amount, see section 17."
That period may be varied by the Secretary in exercise of the discretion conferred by section 1184(1) of the Act which states:
"1184(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case. "
The nature and scope of the discretion, and in particular the meaning of the expression "in the special circumstances of the case", have been the subject of a number of judicial pronouncements. The Full Federal Court, when examining this expression in the context of section 102 of the Social Security Act1947 in Beadlev Director-General of Social Security (1985) 7 ALD 670, approved the following passage from the Tribunal's decision in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3:
"An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
Having regard to the nature of the Applicant's evidence, it is appropriate to begin by considering whether he is suffering from any financial hardship that would warrant the exercise of the discretion to shorten the preclusion period.
The Applicant received $185,000 from the proceeds of the settlement. Between the time of the accident and settlement he had borrowed from family and friends and immediately upon settlement repaid about $30,000. The balance was then invested.
However he shortly commenced extensive renovations to his home which cost about $50,000 to $55,000– replacing the kitchen and bathroom, installing shutters and replacing windows, gutters and the carpet – as he had been unable to afford repairs to the house since he had stopped work in 1990. He said that he undertook alterations to the house because "it was the last money I would have and so it was the only chance to do (sic) any problems with the house". In the seven or so years he had been in the house prior to his accident the only significant improvement to the house was the erection of a pergola. He said, "after we got the money why should we suffer with the kitchen and bathroom like that?"
With the settlement monies the Applicant also had bought a car, a computer and a video camera for his daughter totalling about $18,000.
The Applicant also financed (at a cost of about $10,000 to $12,000) an 8-week trip overseas for his wife and daughter and paid for his father-in-law's funeral. He also went overseas for three months at a cost of approximately $9000 and contributed $5000 to another trip for his wife.
Since about 1992 or 1993 his wife has been receipt of superannuation income of about $630 per fortnight. Currently he has $866 in the bank and is still looking for a job. He has superannuation entitlements of about $63,000 but he is unable to access those until he is aged 65, in about 2-3 years.
There was no dispute that the Applicant was aware of a preclusion period but did not know the extent of the period time following the initial vague information provided by his solicitor. His evidence in cross-examination was that he made no enquiries as to that period. Following settlement he repaid debts and undertook extensive renovations to his home, made purchases for his daughter and financed overseas trips. It was only then that he went to Centrelink looking for work, presumably as the available funds became depleted.
At present the Applicant has little in the way of cash readily available to him. The Tribunal finds that this is as a result of his expenditure on the renovations, various purchases and overseas trips. By his own admission, having the settlement money was the opportunity to get things done.
As a result the Applicant, has an enhanced unencumbered home, he has a car and he is debt free. Based on his assets, the Applicant is in a reasonable financial position.
There is no evidence before the Tribunal to suggest that his daughter is a financial dependant of the Applicant.
The Tribunal accepts that the Applicant is genuinely concerned about his future financial independence. It is instructive at this point to note the dictum of Sheppard J in Director-General of Social Services v Hales (1983) 47 ALR 281 at 321 that:
"... The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common; they will be impecunious and in straitened circumstances."
The Applicant, however, is not impecunious. His has assets and he has no debts. It cannot, in the Tribunal's view, be said that he is in straitened circumstances. It is not surprising that those who receive compensation for loss of earnings or future earning capacity would prefer not to have to draw on their settlement moneys or damages in order to pay for daily living expenses, but they would be ignoring the object of the legislation " ... to avoid double payments for an inability to exercise an earning capacity" (Secretary, Department of Social Security v a'Beckett (1990) 21 ALD 79 at 88).
Having regard to his current assets and financial position as a whole, the Tribunal does not consider the Applicant to be in financial hardship in that his circumstances are not "unusual, uncommon or exceptional" (Beadle's case). The Tribunal is not satisfied that the need to finance any shortfall in meeting daily expenses by the need to re-mortgage the home, for example, would permit the Applicant's financial circumstances to be described as 'special' under section1184(1) of the Act.
No submission was made as to the Applicant's present health and it is noted that he is looking for work. In any event, the Tribunal considered that the Applicant's position was not unusual in that compensation cases, by their very nature, involve applicants with health problems.
The Tribunal turned to consider if there any other factors present that would justify finding special circumstances, and, taking all the evidence into account, found that there were none.
The Tribunal then turned to consider the question of the debt for the Newstart Allowance paid to the Applicant between 11 February 2000 and 17 November 2000, which was during the preclusion period.
The Tribunal is satisfied and so finds that the applicant was paid excess entitlements from 11 February 2000 to 17 November 2000 in the form of Newstart Allowance, and as such the amount paid is a recoverable debt under the provisions of section 1223(5) of the Act.
Having found there was a debt due to the Commonwealth, the Tribunal then turned to consider whether, pursuant to section 1237A of the Act, there are any circumstances in which the recovery of the whole or part of the debt should be waived.
It was conceded by the Respondent that it had received notification of the Applicant's compensation payment from the Applicant's employer on 29 October 1998 and that notification was entered on the Centrelink computer. It had been submitted on behalf of the Respondent that this notification could have related to 'any Essam Mohamed' and not necessarily the Applicant. The Tribunal rejects this interpretation. Much was made by the advocate for the Respondent of the reliability of Centrelink's computer records. The Applicant was cross-examined extensively on his recollection of events because his account of the events at Centrelink was inconsistent with Centrelink's computer records. In the Tribunal's view the Respondent cannot have it both ways – relying on its records for some purposes, but ignoring information held by those records for other purposes. One might observe that even if the Applicant's name was a common one, which it is not in the Tribunal's view, then the Respondent was still on notice that a person by that name had received the compensation payments as notified by the employer. For whatever reason, it would appear that either the Respondent has no cross-checking procedures when a claim for benefit is lodged, or, if it had procedures, chose not to undertake them or neglected to apply the procedures when the Applicant applied for Newstart Allowance.
The advocate for the Respondent submitted that, notwithstanding that Centrelink may have had notice of the Applicant's compensation payment, the Applicant still had an obligation to inform the Centrelink customer service officer about his compensation and that he had not done so. In making this submission the advocate said that the debt could only be waived under section 1237A(1) of the Act if it was attributable solely to an administrative error made by the Commonwealth.
The Tribunal then reviewed the evidence about whether it could be said that there was some other reason that the error was made in paying the Applicant Newstart Allowance so that it was not solely an administrative error by Centrelink.
The Tribunal notes the Applicant's consistent evidence was that during his first detailed discussion with Centrelink he was asked by specifically whether he received weekly payments of compensation and he had said that he did not. The Tribunal prefers the Applicant's account of the recording of his compensation status by Centrelink.
The Tribunal therefore finds that the Applicant had answered the questions asked of him truthfully and that his answers had been recorded as he had answered them. The Tribunal was invited to draw an inference from the 'compensation claimed: no' question and answer on the Centrelink claim form that the Applicant had said words to the effect that he had not received any compensation payment. As the Tribunal pointed out to the advocate for the Respondent, this was not the only interpretation open to the Tribunal. Again, in view of the Applicant's consistent evidence about what he had been asked and his responses, the Tribunal finds that any error recorded in the application was not because of some error by the Applicant. The Tribunal finds that any error recorded in the application was an error by Centrelink through its officers.
Therefore the Tribunal finds that the inappropriate payment of Newstart Allowance to the Applicant was a product of firstly Centrelink's failure to cross reference the Applicant's application with the information it held about his compensation and secondly due to Centrelink's failure to adequately obtain information from the Applicant about his compensation status. The Tribunal therefore finds that the debt is attributable solely to an administrative error made by the Commonwealth.
As to the requirement in the section 1237A(1) of the Act that the Applicant had received the moneys the subject of the debt in good faith, the Applicant's evidence was that his solicitor had not specified the duration of the preclusion period. He attended Centrelink to seek assistance in obtaining a job. The Tribunal finds that the Applicant did not at any time while in receipt of Newstart Allowance, have information as to the duration of his preclusion period, and that he might not be entitled to Newstart Allowance. The Tribunal therefore finds that the Applicant had received Newstart Allowance in good faith.
DECISION
The Administrative Appeals Tribunal affirms the decision under review insofar as it imposed a preclusion period from 30 October 1998 to 12 August 2004.
As to the debt of $4,958.92 for Newstart Allowance, the Administrative Appeals Tribunal sets aside the decision under review and in substitution therefor waives the whole debt pursuant to section 1237A of the Social Security Act 1991.

I certify that the 71 preceding paragraphs are a true copy of the reasons for the decision herein of MS N ISENBERG, MEMBER
Signed:         .....................................................................................
  Associate
Date of Hearing  12 March 2002
Date of Decision  3 April 2002
Representative for the Applicant   Self
Advocate for the Respondent     Ms Susan Fahey

[2002] AATA 210

3 April 2002

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Social Security

Compensation Recovery

Administrative Error

Preclusion Period

Good Faith