Monni and Secretary, Department of Employment and Workplace Relations and Anor
[2007] AATA 1574
•23 July 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1574
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q200600920
GENERAL ADMINISTRATIVE DIVISION ) Re ANTONIO MONNI Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
First Respondent
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Second Respondent
DECISION
Tribunal Dr KS Levy RFD, Senior Member Date23 July 2007
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
..............[SGD]................................
Dr KS Levy, Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – age pension – applicant also received pensions from the Italian, Dutch and German governments – applicant did not report changes in his wife’s income to Centrelink within 14 days of the change – debt due to Commonwealth – debt cannot be written off or waived – no special circumstances – decision affirmed
Administrative Appeals Tribunal Act 1975 (Cth) s 37
Social Security Act 1991 (Cth) ss 1223, 1224, 1236, 1237A, 1237AADSekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Groth v Secretary, Department of Social Security (1995) 40 ALD 541REASONS FOR DECISION
23 July 2007 Senior Member KS Levy, RFD Introduction
1. Mr Monni is in receipt of a number of foreign pensions and is also in receipt of an Australian pension. He was first entitled to disability support pension from 1997 until 2002 when he became eligible for age pension. Since gaining eligibility for age pension, he has also been eligible for pension from three European countries. His wife also works full time.
2. A debt in respect of the disability support pension is said to arise because of an omission in fully disclosing all of Mrs Monni’s earnings. As a result, Centrelink claims that he was overpaid disability support pension. In respect of the period of age pension, Mr Monni was also in receipt of pensions from the Italian, Dutch and German Governments. While there is a co-operative arrangement between Australia and the Pension Agencies in those Governments, and deductions have since been made for overpayments in respect of the Australian age pension, Centrelink claims that lack of timely advice resulted in a debt due in respect of age pension also.
3. Centrelink determined that two debts were owing to the Commonwealth in respect of overpayments of disability support pension and age pension respectively. This decision was made on 18 April 2006 and was reviewed by the original decision maker on 29 May 2006 and affirmed. It was subsequently reviewed by an Authorised Review Officer on 17 July 2006, and affirmed. The Social Security Appeals Tribunal again considered the matter and determined on 25 August 2006 that the original decision should be affirmed.
4. The applicant now seeks review by this Tribunal through his application dated 27 December 2006.
5. The applicant represented himself but had the assistance of an interpreter, Ms Anita Morier. The respondent was represented by its Advocate, Mr Bob Hamilton.
Issues
6.The issues for determination by the Tribunal are:
(i) whether there is a disability support pension debt of $4,158.18 due for the period 17 April 1997 to 4 April 2002?
(ii)whether there is an age pension debt of $1,805.02 due for the period 5 April 2002 to 1 November 2005?
(iii)whether Mrs Monni’s earnings and subsequent changes in earnings were reported within 14 days of each change as required by the obligations placed on Mr Monni?
(iv)whether debts can justifiably be written off or waived, because of sole administrative error of the Commonwealth or because of “special circumstances”?
Evidence
7.The following evidence was placed before the Tribunal:
Exhibit 1 Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
Exhibit 2A statement of the outstanding debt as at the date of the hearing, 13 June 2007
Exhibit 3Letter dated 23 March 2007 from the applicant to the respondent’s advocate
Exhibit 4Invoice dated 22 April 2005 from Centrelink to Mr Monni (relating to the deduction of debt from German Pension Agency) (folio 86).
8. The applicant’s evidence was that he had, at all times, endeavoured to comply with the requirements of Centrelink. However, he argued that many requests in relation to his case were made to Centrelink and remained unanswered. He suggested Centrelink had made several errors. He emphasised that there was no attempt to commit fraud and that in all the circumstances, his debts to Centrelink should be waived.
9. The applicant referred the Tribunal to the deduction of amounts from his German pension in reduction of his debts. He referred particularly to an amount of €229.14 (folio 53) and an amount of €88.60 from his German pension (folio 86). The Tribunal was also referred to an invoice issued by Centrelink on 22 April 2005 seeking payment of an amount of AUD$152.47. However, this equates to the amount of €88.60 referred to in folio 86 and which was paid on 27 July 2004.
10. The Tribunal was also referred to folio 106, which contains a statement from Inas (the Italian Pension Office in Brisbane) and showing an amount of arrears purporting to Centrelink. This was faxed to the Centrelink Office in Hobart on 11 May 2005.
11. The respondent’s advocate, Mr Hamilton, informed the Tribunal that Mr Monni was entitled to a Dutch, German and Italian pension. He also is in receipt of an Australian pension. The amount of Australian pension is adjusted having regard to amounts of foreign pension received. However, during the period of the age pension debt, while Mr Monni was in receipt of some foreign pension amounts, he also became entitled to a German pension from January 2003. The German pension entitlements, effective from 1 January 2003 were paid in arrears from that date until 30 June 2004 (folio 108). There was also the report of an amount of pension from the German pension office for a period 1 May 2002 until 30 April 2004 (folio 107). One of those amounts (€505.08) clearly has had a deduction of €229.14 made from the amount paid by the German pension office and remitted to Centrelink. The balance of €275.94 was paid to Mr Monni (folio 111). There is cross-reference to some of these amounts being directly credited to Mr Monni’s bank account (see for example folio 110 and 112). This demonstrates the timing differences in entitlement and payment of foreign pension, the consequential difficulty in assessing accurately the Australian pension entitlements and the recovery of part of the Australian pension from foreign pension schemes.
12. In respect of whether Mr Monni’s questions have been answered by Centrelink, the respondent’s advocate directed the Tribunal’s attention to letters provided by Centrelink to Mr Monni dated 18 May 2005 (folio 114) and 30 May 2005 (folios 116-117). This correspondence is clearly an explanation to Mr Monni of amounts provided to Centrelink taking account of foreign pensions he received. However, whether there were other questions that were raised with Centrelink and which remained unanswered, I am unable to assess due to a lack of specific detail being provided to the Tribunal.
13. Certainly one issue of complaint by Mr Monni was that the exchange rate used by Centrelink was incorrect and therefore resulted in a higher level of deduction than might otherwise have been the case. Mr Monni’s interpreter informed the Tribunal that there is a general practice of refunding an amount to recipients of overseas pensions where the exchange rate is in excess of some threshold. Specific evidence of amounts was not provided but the principle outlined was not disputed by Mr Hamilton.
14. Mr Monni’s main complaint (and the main source of the current debt) relates to his wife’s earnings and the effects on his entitlement to Australian pension. He maintained the position that he had declared his wife’s earnings regularly and therefore the debt should be waived. However, the Tribunal noted that Mr Monni provided advice of Mrs Monni’s income on 4 October 1996 and then on 18 July 2000 and 11 July 2001. It was put to the Tribunal by the respondent that Mrs Monni had been an excellent worker and regularly did overtime. Her earnings were regularly in excess of the estimates provided to Centrelink, and as these were not advised to Centrelink within 14 days of receipt of the increased amounts, Centrelink was not in a position to adjust Mr Monni’s pension entitlements at the appropriate time. As a consequence, the respondent argued that Mr Monni’s pension amounts were higher than that to which he was otherwise entitled. A summary of Mrs Monni’s earnings from 27 June 1996 through to 2 November 2005 were provided to the Tribunal (T58, folios 151-155). A summary of the relevant financial years of actual amounts earned compared with the amounts declared were also provided to the Tribunal (T59, folio 156).
Findings of Fact
15.The Tribunal makes the following findings of fact:
(i)Mr Monni was regarded as a witness of truth.
(ii)Mrs Monni was a very diligent worker and regularly worked overtime (thus affecting Mr Monni’s entitlement to an Australian pension).
(iii)Mrs Monni’s earnings were not reported within 14 days as required by various notices provided to the applicant by Centrelink.
(iv)After taking account of deductions from Mr Monni’s overseas pensions, there was a debt of $1,814.05 in respect of age pension. This has now been fully paid.
(v)As a result of deductions of Mr Monni’s pension entitlements, the amount of overpayment for disability support pension for the period 17 April 1997 to 4 April 2002 has now been reduced to $3,926.87 (Exhibit 2).
Consideration
16. I have carefully considered the evidence presented by the applicant and the respondent, both the documentary evidence and oral testimony, and the applicable statutory and case law.
17. Based on the evidence presented, I find that the debts raised by Centrelink, and reviewed and reassessed by the Authorised Review Officer, that those amounts were debts due to the Commonwealth. While this is so as a matter of fact, it is authorised by s 1224(1) of the Social Security Act 1991 (“the Act”), for the period 17 April 1997 to 1 October 1997; and by virtue of s 1223(5) of the Act, in respect of the period 1 October 1997 to 30 June 2001; and the balance of the amount is an authorised debt due to the Commonwealth by virtue of s 1223(1) of the Act for the period 1 July 2001 to 4 April 2002. The age pension debt also arose under s 1223(1).
18.I therefore find answers to the issues posed to the Tribunal as follows:
(i) Whether there is a disability support pension debt of $4,158.18 due for the period 17 April 1997 to 4 April 2002?
19. I find the amount originally raised as a debt was, in fact, a debt due to the Commonwealth by virtue of the statutory provisions of the Social Security Act 1991.I also find that the amount currently due as a debt is the amount of $3,926.87, being the balance presently outstanding.
(ii) Whether there is an age pension debt of $1,805.02 due for the period 5 April 2002 to 1 November 2005?
20. I find that the amount of age pension debt of $1,805.02 for the period 5 April 2002 to 1 November 2005 was a debt due to the Commonwealth. I find, however, that that amount has since been repaid and is not currently outstanding.
(iii) Whether Mrs Monni’s earnings and subsequent changes in earnings were reported within 14 days of each change as required by the obligations placed on Mr Monni?
21. I find Mrs Monni’s earnings were in excess of those which were reported to Centrelink and upon which Mr Monni’s pension amounts were calculated. I also find that the reporting within 14 days of each change to Mrs Monni’s earnings did not occur.
(iv) Whether debts can justifiably be written off or waived, because of sole administrative error of the Commonwealth or because of “special circumstances”?
22. This issue requires the Tribunal to determine whether there is any ground for write off or waiver of any of the above debts (whether already extinguished or not). This can occur if there has been administrative error or if there are special circumstances.
Write off
23. Section 1236 of the Act authorises write-off in certain circumstances. The section provides as follows:
“Sect 1236
Secretary may write off debt
1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in sections 1231, 1232 or 1233 has elapsed; or
(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
1236(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor's social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999 ; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.”
24. I have considered the above provisions which are essentially set out in s 1236(1A), and further expanded in s 1236(1B) and s 1236(1C). I am not satisfied that the debt is irrecoverable at all, or that the debtor cannot repay the debt or that his whereabouts are unknown or that it would not be cost effective for the Commonwealth to take action to recover the debt. These circumstances are tightly defined and quite narrow. There was no evidence to lead me to the conclusion that I would be justified in making a finding in accordance with s 1236 of the Act. I therefore find that write-off would be inappropriate.
Waiver
25.The grounds upon which Mr Monni’s debt could be waived are twofold:
(i) where there has been administrative error; or
(ii)where there are special circumstances.
26. In respect to waiver due to administrative error, the statutory provision authorising such action is contained in s 1237A(1) of the Act. This is set out as follows:
“Sect 1237A
Waiver of debt arising from error
Administrative error
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.”
27. Clearly, this provision applies only where the error can be attributable solely to an administrative error made by the Commonwealth and where the applicant had received the payments in good faith. While the Tribunal can find no dishonest or malicious intent on behalf of the applicant (indeed the Tribunal finds to the contrary), the precondition to that aspect is that the error must demonstrated to be solely due to the Commonwealth’s actions or inactions. (See Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126). In this case, the evidence is that whether because of misunderstanding or otherwise, Mr Monni did not report Mrs Monni’s earnings regularly, and certainly not within 14 days on each occasion that her income changed or exceeded the estimate which was the basis upon which Centrelink calculated his entitlements.
28. I therefore find that there was not sole administrative error on behalf of the Commonwealth and therefore waiver under s 1237A(1) cannot be entertained.
29. In respect of waiver in “special circumstances”, s 1237AAD provides as follows:
“Sect 1237AAD
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 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.”
30. All three subsections of s 1237AAD must be satisfied. Special circumstances are those where it can be demonstrated that the circumstances of the case are unusual or extraordinary. To do so there must be some result which could be regarded as “unfair unintended or unjust” (Groth v Secretary, Department of Social Security(1995) 40 ALD 541. On the face of it, and after considering the factual evidence, there does not seem to me to be an unfair or unjust result on the balance of probabilities. Not only that, but s 1237AAD(a)(ii) cannot be satisfied as there was a failure or an omission by Mr Monni to report his wife’s income as required. Alternatively, it might be argued that the failure to report amounted to a false representation. In any event, s 1237AAD(a) is not satisfied. Likewise, I find there are no “special circumstances” in s 1237AAD(b). Therefore, as at least one of those sub-sections has not been satisfied, it is not appropriate to waive the debt because of “special circumstances”.
31. However, I note that Mr Monni also felt aggrieved about the calculation of the exchange rate used in calculating the amounts which were deducted from his foreign pension. This may be something which should be resolved administratively between Mr Monni and Centrelink staff.
32.I therefore find that the decision under review should be affirmed.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: .....................[SGD]...................................................
F Kamst, Legal Research OfficerDate/s of Hearing 13 June 2007
Date of Decision 23 July 2007
The Applicant was unrepresented
For the Respondent Mr B Hamilton, Departmental Advocate
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