Molinari and Secretary, Department of Family and Community Services

[2002] AATA 1234

DECISION AND REASONS FOR DECISION [2002] AATA 1234

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/259

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      ANNE MOLINARI  
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Mr B J McCabe, Member  

Date29 November 2002

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.      

(Sgd) B J McCabe
  Member
CATCHWORDS
SOCIAL SECURITY – parenting payments – overpayment – whether debt has been properly raised – whether recovery of debt should be waived – whether special circumstances exist

Social Security Act 1991
Social Security (Administration) Act 1991

REASONS FOR DECISION

29 November 2002 Mr B J McCabe, Member              

Introduction

1. The respondent has raised a debt against the applicant, Mrs Anne Molinari, in respect of an overpayment of parenting payments between 16 February 2000 and 22 May 2001. The applicant says if a debt has arisen, there are special circumstances that justify waiver of the debt.
   The Material Before the Tribunal

2. The Tribunal was provided with the documents required under s 37 of the Administrative Appeals Tribunal Act 1975. It also took evidence from Mrs Molinari at the hearing in Lismore. Mrs Molinari represented herself. The Secretary was represented by Ms Wallis-Dunn.
   The Facts

3. Mrs Molinari is a nurse. She worked during the relevant period at Lismore Base Hospital on a casual basis. She says she did not work full-time because she wanted to spend time with her family. She is a single parent. Her twin children are now aged 17 years. The applicant says she has been in receipt of income support payments from the Commonwealth for up to nine years.

4. On 17 November 1999 – the period immediately before the overpayments began – Mrs Molinari was advised the amount of salary used to calculate her entitlement was $22,216.51 per year.

5. The problem in this case has arisen because Mrs Molinari's entitlement to assistance was re-calculated on her earnings over the Christmas-New Year period in 1999-2000. Mrs Molinari did little work during that period as the hospital's activities wound down over the holiday. As a casual staff member, she was only paid for work she actually performed. When required to inform Centrelink of her earnings in the Parenting Payment review form dated 25 January 2000 (document T5), she truthfully advised she had done little or no work. She attached a Previous Earnings Report from her employer that confirmed she received no pay in the period covered by the report.

6. The respondent wrote to Mrs Molinari at her usual address on 25 February 2000. In that letter, the Secretary confirmed the amount of the entitlement had been calculated on the basis that the amount of income earned over the year was $19.95. As a result, the applicant was entitled to receive payments at the highest rate. The letter – the text of which is reproduced at document T7 - also said the applicant must advise Centrelink within 14 days if any of a number of events occurred, including:

   "…if your income, not including financial investments and maintenance increases…"

1. The letter also confirmed it was a notice under Part 2.10 of the Social Security Act 1991.

2. Mrs Molinari said she did not receive any more letters from Centrelink. (It was ultimately unclear from the evidence whether she received the letter of 25 February 2000). She continued to receive payments and did not advise Centrelink of changes to her income, even though the changes would have caused Centrelink to reassess her entitlement and reduce the payments. Mrs Molinari said she put down the absence of any request from Centrelink for a review to the changes that accompanied the introduction of the Goods and Service Tax.
   The Relevant Law

3. There is no dispute that Mrs Molinari was overpaid because Centrelink did not use accurate information about the applicant's earnings over time to determine her entitlement. That means there is a debt due to the Commonwealth under s 1223 of the Act. Mrs Molinari says that is Centrelink's fault, and the Secretary ought to waive the debt. There is no basis for concluding in this case that the debt should be written off pursuant to s 1236.

4. The power to waive debts is set out in s 1237. The section says the Secretary may only waive the debt in defined circumstances. One of the bases for waiver identified in s 1237 is administrative error. Section 1237A(1) says:

   "…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."

1. Mrs Molinari criticised Centrelink for not being more diligent in asking her for income details if they required them. Ms Wallis-Dunn explained that Centrelink makes an administrative assumption in some cases that a person who is not earning anything will continue to have zero earnings. While this case might lead one to question the wisdom of that assumption, the Tribunal is conscious of the fact that Mrs Molinari was under an obligation to advise Centrelink of changes in her position. The obligation was clearly explained in the letter of 25 February 2000. Even if Mrs Molinari did not receive that letter or any subsequent correspondence, she is deemed to have received it by reason of s 23(12). I do not accept the changes surrounding the introduction of the GST justify failing to contact Centrelink when the applicant was aware she was continuing to receive payments of a means' tested entitlement at the full rate even though she was working regularly.

2. The overpayment was not solely attributable to administrative error on the part of the Commonwealth. If the Commonwealth was in error at all, the error was compounded by Mrs Molinari. She is unable to satisfy s 1237A.

3. The other basis for a waiver is special circumstances. Section 1237AAD provides:

   "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 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."

1. In this case, the applicant failed to provide information to Centrelink as required in the letter of 25 February 2000. That letter was a notice issued under s 506E (now s 68, Social Security (Administration) Act 1999) which permits the Secretary to require the recipient of a parenting payment to provide information. Mrs Molinari cannot satisfy s 1237AAD.
   Conclusion

2. The objection decision under review is affirmed.

   I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

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

   Date of Hearing  4 September 2002 (in Lismore)
   Date of Decision  29 November 2002

   The Applicant Appeared in Person
   Solicitor for the Respondent    Ms H Wallis-Dunn, Departmental Advocate