Moore and Department of Family and Community Services
[2000] AATA 441
•15 May 2000
DECISION AND REASONS FOR DECISION [2000] AATA 441
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q1999/1355
GENERAL ADMINISTRATIVE DIVISION )
Re BRYAN VINCENT MOORE
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr E K Christie, Member
Date15 May 2000
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
............(Signed)..................................
DR E K CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY – Overpayment of Newstart Allowance – whether overpayment may be waived because of "administrative error" or "special circumstances" – whether overpayment may be "written off"
Social Security Act 1991: ss1236, 1237A(1), 1237AAD
Re Beadle v Director-General of Social Security(1984) 6 ALD 1
Re Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Department of Education, Employment, Training and Youth Affairs v Prince (1998) 152 ALR 127
ORAL REASONS FOR DECISION
15 May 2000 Dr E K Christie, Member
This is an application by Bryan Vincent Moore to review a decision of the Social Security Appeals Tribunal ("the SSAT") made on 26 November 1999 to recover Newstart allowance ("NSA") overpayments made to him for the fortnights ending 2 April 1999, 30 April 1999 and 14 May 1999. The amount of these overpayments was $1107.26 (T10, Folio 42).
The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the 'T' documents) and the following exhibits:
Exhibit 2 – Attachments to Statement of Facts and Contentions, Documents [A-H], 10 May 2000
Exhibit 3 – Bundle of Centrelink file notes and letters to Mr. Moore.
The applicant, Mr. Bryan Moore, represented himself. Ms. J. Dwyer, a Departmental Advocate, represented the respondent.
FACTS
Mr. Moore acknowledged the following findings of fact made by the SSAT (T2 Folio 7):
(i)"Mr. Moore was in receipt of Newstart allowance during the period 8 February 1999 to 14 May 1999
(ii)Mr. Moore commenced part-time work with the Leukaemia Foundation on 8 February 1999.
(iii)Mr. Moore completed fortnightly Application for Newstart Allowance Forms on 19 February and 2 April 1999 in which he correctly declared his earnings for the relevant periods.
(iv)The payment of Newstart Allowance made to Mr. Moore on 2 April 1999 was a prepayment made to him for the Easter period.
(v)Mr. Moore commenced full-time work on 12 April 1999 of which he did not advise Centrelink."
The overpayments are currently being recovered with instalments of $20.00 per fortnight.
ISSUES BEFORE THE TRIBUNAL
The issues before the Tribunal were whether the NSA overpayments received:
could be waived in, part or in full, because of 'administrative error' or 'special circumstances'; or, alternatively,
could be 'written off'.
CONTENTIONS AND SUBMISSIONS OF THE PARTIES
Mr. Moore stated that he had done everything possible to correctly declare his income, for all fortnights, by submitting the appropriate form to Centrelink. Moreover, he had sought the assistance of a Centrelink staffer each time that he completed the form in order to avoid the chances of making a mistake.
Mr. Moore said that he had received a letter from Centrelink, before February 1999, advising him of 12 week automatic payments for NSA; a copy of this letter could not be located. However, subsequent advice he received from Centrelink was to ignore the 12 week automatic payment form and to continue completing the fortnightly form - which he did.
Mr. Moore said that he did lodge a form for the Easter period [fortnight ending 2 April 1999] as this was consistent with his practice to complete fortnightly forms. As a result he thought he was entitled to the amount of entitlement paid to him.
Mr. Moore stated that because of the uncertainty associated with the time he would commence full time work with the Leukaemia Foundation, he did not advise Centrelink until 16 April 1999. Beyond this time, he did not complete any further fortnightly forms. He had assumed that payments would not be made if he did not submit any further forms. He had based this assumption on the following statement entered on the Application Form for Newstart Allowance (T4): "Payment will stop if this form is returned late" (Folio 28). However, he had made no direct query with Centrelink staff about his assumption.
Mr. Moore concluded by saying that it was not his fault the overpayments had occurred. He had done as much as possible to keep Centrelink aware of his income situation. In addition, he had acted on Centrelink advice and so ignored the 12 week automatic payment form for NSA.
Mr. Moore stated that he now worked with the Disabled Association and was employed for up to 30 hours per week. He was still looking for permanent work but had taken this job, because after experiencing a long period of unemployment, he felt it best to have a job. He received $12 - $12.50 per hour payment. His expenditure at present was $120 per week for rent and board, with only a few small debts of $100 - $200. He had very little savings. He described his financial situation as 'difficult'.
Ms. J. Dwyer, the Departmental Advocate, stated that Centrelink records, with respect to the fortnightly form used to determine Mr. Moore's NSA entitlements, for the fortnight ending 2 April 1999, had been reviewed and processed on the computer system on 1 April 1999 (Exhibit 2, Attachment 'D'). However, there was no record of income he had earned on this form. In addition, she referred to the letter informing Mr. Moore that his lodgement of payment forms had changed to a 12 weekly arrangement (Exhibit 2 Attachments 'B' and 'F' (6 April 1999).
A Centrelink notification notice was sent to Mr. Moore on 6 April 1999 (Exhibit 2, Attachment 'F') which set out his social security rights. The notice specified certain events which Mr. Moore would need to notify Centrelink as they might affect the amount of his NSA entitlement eg. commencement of full-time work; and the amount of income earned in relation to the threshold stated on the notification. However, Mr. Moore did not advise Centrelink of his change to full-time work when he commenced on 12 April 1999.
Ms. Dwyer submitted that the overpayment received for the fortnight ending 2 April 1999 could not be waived because of 'administrative error' or 'special circumstances' as:
Mr. Moore had not notified Centrelink of any change in his circumstances i.e. the amount of income earned; and
Mr. Moore had not received the NSA payment in "good faith". By reference to the "Overpayment Calculation" (T10, Folio 42), Ms. Dwyer contended that it could not be said that Mr. Moore believed he was entitled to the NSA received in this fortnightly period ($376.30) because, in the previous fortnightly period, he had earned almost the same amount of income ($625) but had received a 'nil' NSA entitlement.
As a consequence, Mr. Moore had contributed to the "administrative error".
Ms. Dwyer submitted that the overpayments received for the fortnightly period ending 30 April 1999 and 14 May 1999 could not be waived because of 'administrative error' or 'special circumstances' as:
Mr. Moore had failed to meet his social security obligations by failing to advise Centrelink that he had commenced full-time work on 12 April 1999 (see Exhibit 2, Attachment 'F'). As a result, Mr. Moore had contributed to the 'administrative error' and so had received an overpayment of NSA.
Finally, Ms. Dwyer concluded that there was nothing in the facts of Mr. Moore's case to suggest that there was something 'unusual', 'uncommon' or 'exceptional' to justify the description of 'special circumstances' and so waive whole or part of the debt arising from overpayments for the three fortnightly periods.
CONSIDERATION OF THE ISSUES
The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times. The relevant legislation is the Social Security Act 1991 ("the Act").
The first question to be considered relates to the credibility of Mr. Moore and the veracity of his account as to his dealings with Centrelink. I accept Mr. Moore acted honestly in all his dealings with Centrelink and his account to be consistent over time.
Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived.
"SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
1237A(1) Administrative error 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).
SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
1237AAD The Secretary may waiver 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
Section 1236 of the Act provides for circumstances where a debt due to the Commonwealth may be written off:
"SECTION 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
1236(1C) for the purposes of paragraph (1A)(b), if a debt is recoverable by means of deductions from a person's social security payment, the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship."
With respect to waiver on the basis of administrative error, the Tribunal finds that there is no basis to waive the debt because there has been an administrative error solely made by the Commonwealth.
The Tribunal finds that for the overpayments received for the fortnightly periods ending 2 April 1999, 30 April 1999 and 14 May 1999, Mr. Moore has contributed, in part, to the administrative error in that:
He had failed to notify Centrelink of changes in his income details for the period ending 2 April 1999 so that Centrelink based their NSA payments on an incorrect figure for earnings. In addition, Mr. Moore's evidence before the Tribunal was that he knew the amount of his NSA entitlement depended on the amount of income he earned. Therefore, the receipt of the NSA payment over this fortnightly period could not be said to have been received in "good faith" as Mr. Moore should have had reason to know he was not entitled to the payment received (see paragraph 13). In Department of Education, Employment, Training and Youth Affairs v Prince (1998) 152 ALR 127, Finn J stated in relation to the meaning of "good faith":
"Its [good faith] concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith."
With respect to the overpayments received for the fortnightly periods ending 30 April 1999 and 14 May 1999, Mr. Moore contributed to the administrative error by failing to advise Centrelink of changes in his circumstances which affected his NSA entitlement i.e. a change to full-time employment and the amount of income earned (see paragraph 14).
The next question for the Tribunal to decide is whether the debt should be waived because of the 'special circumstances' provisions of the Act.
The leading case is Re Beadle v Director-General of Social Security(1984 ALD 1) where the Tribunal acknowledged that the phrase 'special circumstances' is "incapable of precise or exhaustive definition", but nevertheless, said that the circumstances "must have a particular quality of unusualness that permits them to be described as special" (at 3) and:
"The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional."
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on 'special circumstances' and s 1184 of the 1991 Act) at 545, Keifel J, after referring to the Federal Court's decision in Beadle, observed that 'special circumstances':
"….would require something to distinguish Mr. Groth'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 unjust had occurred that there must be some feature out of the ordinary."
The Tribunal concludes that all three fortnightly overpayments received by Mr. Moore were not something that was unintended by the legislation. Nor is the effect on Mr. Moore different from any other social security recipient who continues to receive social security entitlements but has failed to notify Centrelink of changes in circumstances, such as full-time employment or the amount of income earned. The need to notify Centrelink is especially important if the change in circumstances would affect the amount of the social security entitlement. Whilst this conclusion may seem harsh, it would be fairer to say the outcome is unfortunate. The outcome is dependent on the legislation, but the legislation provides the Tribunal no discretion from which to depart. The Tribunal makes the observation that Mr. Moore's case, unfortunately, is not the first case before this Tribunal where similar problems with overpayments have occurred.
The final question for the Tribunal to decide is whether the debt should be written off. Based on Mr. Moore's evidence (paragraph 11) the Tribunal concludes that there is no evidence of 'severe financial hardship', in Mr. Moore's financial circumstances, which would justify writing off the debt.
Based on all of the above reasons, the Tribunal decides to affirm the decision under review. This means that NSA payments of $1,107.36 received by Mr. Moore remain as a debt due to the Commonwealth which is to be recovered.
I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member
Signed: .....................................................................................
B. Hitchcock, SecretaryDate/s of Hearing 15 May 2000
Date of Decision 15 May 2000
Applicant Mr. Moore, himself
Respondent Ms. Dwyer, Departmental Advocate
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