Moore and Secretary, Department of Family and Community Services

[2000] AATA 170

DECISION AND REASONS FOR DECISION [2000] AATA 170

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No   N1999/1037

GENERAL ADMINISTRATIVE  DIVISION       )          

Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        

Applicant

And    DEBORAH  MOORE        

Respondent

DECISION

Tribunal       Senior Member M D Allen 

Date6 March 2000

PlaceSydney

Decision      The decision under review is set aside and in lieu thereof the Tribunal substitutes its decision, namely:  THAT the Respondent, Deborah Moore, owes to the Commonwealth of Australia a debt in the sum of $3,468.75.           

(Sgd)  M D ALLEN
  ..............................................
  Senior Member
CATCHWORDS
SOCIAL SECURITY - Family Allowance – overpayment and debt due to the Commonwealth – income estimates.  Secretary's power to obtain and have regard to information provided by a benefit recipient.  Waiver of debt.  Whether debt should be waived due to administrative error. 

Social Security Act 1991 - subs885(1), s1069-H21 and s1069-H15

Re Secretary, Department of Family and Community Services and Delia [1999] AATA 799

REASONS FOR DECISION

6 March 2000          Senior Member M D Allen             

1. By application made 9 July 1999 the Secretary of the Department of Family and Community Services sought review of a decision by a Social Security Appeals Tribunal made 15 June 1999, waiving a debt due to the Commonwealth by the Respondent.

2. By agreement between the parties the matter came before me to be determined "on the papers". That is to say there was no representation by or on behalf of either party. At that review I had before me the documents prepared for the Tribunal pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) and a written submission on behalf of the Applicant. I must state that I regard this procedure as unsatisfactory as it does not enable me to directly address issues which may be of concern to the Respondent but not directly expressed in the reasons for decision of the Social Security Appeals Tribunal (the SSAT) or correspondence from the Respondent. Subsection 34(3) of the AAT Act specifically provides that as the Member hearing and determining this matter I cannot, without the consent of the parties, take cognisance of anything said or done at a conference between the parties and a Conference Registrar or Member of the Tribunal.

3. Before the SSAT, the Applicant's case was this, namely (T2 p6):

   "… on 1 October 1996, Mrs Moore estimated that the combined taxable income of her and her partner would be $27,500 for the 1996/97 tax year.  The rate of her family payment was worked out using this estimate from 26 September 1996 until 23 October 1997.  Mrs Moore's actual combined taxable income for the 1996/97 tax year was $33,720 and that income was more than 110% of the estimated income for that year.  Whilst Mrs Moore's family payment was worked out using her estimate, she was paid $3,468.75 more than she would have been if it had been worked out using her actual income.  The review officer stated that from 26 September 1996 until 23 October 1997 Mrs Moore was paid family payment based on an estimate of taxable income that was not within 10% of what her taxable income really was.  Hence her family payment had to be worked out again under section 885 of the Act using her actual income.  The extra amount paid to her was a debt under section 1223 of the Act."

1. After hearing from the Respondent, the SSAT made the following findings of fact, namely (T2 p7,9):

   "21.It is not in dispute that on 1 October 1996 Mrs Moore estimated that for the 1996/97 financial year her and her husband's combined taxable income would be $27,500.

   22.It is not in dispute that her rate of family payment was worked out using the estimate during the period 26 September 1996 to 23 October 1997.

   23.It is not in dispute that their actual combined taxable income for the 1996/97 tax year was $33,720.

   24.The tribunal finds that the form lodged by Mrs Moore on 1 October 1996 did not contain a question asking her whether she wanted her estimate to be used to work out her family payment rate.

   25.Mrs Moore's husband commenced permanent work towards the end of December 1996.

   26.The tribunal was not satisfied that Mrs Moore notified Centrelink when her husband obtained permanent work in December 1996.

   27.The tribunal accepted that Mrs Moore's combined income for 1995/96 was $32,501.  The tribunal also noted that Mrs Moore's file shows that her combined incomes for 1994/95 and 1997/98 were $43,540 and $46,179 respectively.

   28.Mrs Moore's and her husband's tax notices of assessment for the 1996/97 tax year were issued by the Australian Taxation Office to their accountants on 14 November 1997.  Mrs Moore notified Centrelink of her combined 1996/97 income in a review form lodged on 5 November 1997.

1. Subsection 885(1) of the Social Security Act 1991 (as amended) reads:

   885(1)    If:

   (a)   in working out the rate of family payment payable to a person, regard is had to the person's income for a tax year; and

   (b)   the income to which regard was had consisted of an amount estimated by the person; and

   (c)   the person's income for that tax year is more than 110% of the amount of the income on which the determination of the rate of family payment was based;

   the person's rate of family payment is to be recalculated on the basis of that income."

1. The SSAT was satisfied that the Respondent did have a debt to the Commonwealth in the sum of $3,468.75 and that decision has not been disputed in these proceedings.  The SSAT, however, decided to waive that debt.  Its reasons for deciding to waive the debt are at paragraphs 44 and 45 of its reasons for decision, namely (T2 p13):

   "44.The tribunal was not satisfied that Mrs Moore requested that her estimate be used to work out her family payment rate.  She provided an estimate only because the review form directed her to do so.  There was no question on the form asking whether she wished Centrelink to use her estimate to work out her rate.

   45.In the absence of a request, Centrelink was in error in using the estimate and the overpayment from 26 September 1996 to 19 December 1996, was solely due to that error because the base year income should have been used.  The tribunal considered that that part of the debt was received by Mrs Moore in good faith because she had provided Centrelink with the information requested and had no reason to believe she was not entitled to the payment she received.  Thus, recovery of the debt for that period must be waived."

1. Section 1069-H21 of the Social Security Act, so far as it applied to the period 26 September 1996 to December 1996, read:

   "If:

   (a)   family allowance:

   (i)is not payable to a person because of this Module; or

   (ii)is payable at a reduced rate because of this Module; and

   (b)   the person gives the Secretary an estimate of the person's income for a tax year; and

   (c)   the person requests the Secretary to make a determination under this point; and

   (d)   the person agrees that the person's rate of family allowance for that tax year is to be recalculated if the person's actual income for that tax year exceeds 110% of the amount estimated by the person;

   the Secretary must determine that the appropriate tax year, for the purpose of applying this Module to the person on or after the day on which the request is made, is the tax year in which the request is made."

So far as the Respondent's 1996/97 tax year was concerned, section 1069-H15 applied but again it also refers to a request to be made by the Applicant for the benefit.  It can be seen that the SSAT based its decision to waive payments upon the reference in the particular sections to a "request".

1. The reasoning upon which the SSAT relied, in order to make its decision to waive repayment of the debt, cannot stand given the decision of Deputy President Burns in Re Secretary, Department of Family and Community Services and Delia [1999] AATA 799.

2. Deputy President Burns in Delia supra had before him a similar factual situation to the Respondent's. The learned Deputy President held that, notwithstanding the provisions of ss1069-H20, 1069-H21 and1069-H22 of the Social Security Act 1991, the Secretary of the Department of Family and Community Services has broad powers under the Social Security Act for the obtaining of benefit information from benefit recipients including income details, and that the Secretary has the power to recalculate the rate of Family Allowance under s885 of the Social Security Act irrespective of whether or not there has been a "request" by the recipient or a notifiable event.

3. At paragraph 27 of his reasons for decision Deputy President Burns stated:

   "At the end of the day however, whether or not it would be described as a request is immaterial, given the Tribunal's view as to the Secretary's very broad powers to obtain and utilise information for the purposes of ensuring that persons are, on the material available to the Secretary at the relevant time, being paid their correct entitlements in accordance with the Act.  …"

1. As I consider the decision of Deputy President Burns and its reasoning to be correct, the basis upon which the SSAT made its decision was misconceived and, as I can see no other bases in the material presented to me upon which I would be justified in determining that the debt be waived, I set aside the decision under review and substitute in lieu thereof the Tribunal's decision, namely that the Respondent is indebted to the Commonwealth of Australia in the sum of $3,468.75.  How the Applicant proceeds to recover that debt is a matter between the Applicant and the Respondent.

   I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of:

   Senior Member M D Allen

   Signed:          Ivanka Mamic           .....................................................................................
     Associate

   Date/s of Hearing  1 March 2000
   Date of Decision  6 March 2000

This matter was dealt with "on the papers".