Mortimer and Secretary, Department of Family and Community Services
[2004] AATA 1216
•19 November 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1216
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V2004/340
GENERAL ADMINISTRATIVE DIVISION ) Re STEPHANIE MORTIMER Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Senior Member Joan Dwyer Date19 November 2004
PlaceMelbourne
Decision
The decision under review is varied to provide that any debt attributable to Ms Mortimer’s employment between 6 January 2003 and 5 July 2003 is waived.
[sgd] Joan Dwyer
Senior Member
SOCIAL SECURITY – overpayment of disability support pension – whether applicant disqualified from receiving disability support pension – whether applicant had a continuing inability to work – meaning of “work” – insufficient evidence and submissions on which to decide whether applicant had a continuing inability to work – finding that any debt should be waived – whether error solely due to administrative error – applicant’s small error deprived of any continuing effect by agency ignoring query as to whether she could keep her benefits – any debt due to taking her after tax income as gross solely due to administrative error – decision under review varied.
LEGISLATIVE AMENDMENT – suggestion that amendment may be required to qualification criteria in s 94 Social Security Act 1991.
Social Security Act 1991, s 94.
Social Security (Administration) Act 1999, s 179.
Gerhardt and Gerhardt v Department of Employment, Education and Training QG 80 of 1996
McDonald v Director-General of Social Security (1984) 6 ALD 6
REASONS FOR DECISION
19 November 2004
Senior Member Joan Dwyer
1. This is an application under s 179 of the Social Security (Administration) Act 1999 (“the Administration Act”) for review of a decision of the Social Security Appeals Tribunal (“the SSAT”) made on 17 February 2004. The SSAT varied a decision made by a Centrelink officer on 22 October 2003 to raise a debt of $2,447.26 in respect of the Disability Support Pension (“DSP”) paid to Ms Mortimer, during the period 6 January 2003 to 15 July 2003, on the ground that Ms Mortimer had ceased to be qualified for DSP during that period, as she was working. The decision was affirmed by an Authorised Review Officer (“ARO”) on 22 January 2004.
2. Ms Mortimer appealed to the SSAT. On 17 February 2004, the SSAT decided that Ms Mortimer was not qualified for DSP during the relevant period, as she was working at least “30 hours per week”, but that the debt in respect of the period 30 March 2003 to 15 July 2003 should be waived. The SSAT decided that the payments after 30 March 2003 should be waived because they were solely due to administrative error by Centrelink, in not acting on a letter from Ms Mortimer dated 30 March 2003, which advised that she was working “8.30am to 6.30pm 6 days a week” (T17, p37).
3. Ms Mortimer appeared and gave evidence. Ms Paul, an advocate with Centrelink, appeared for the Secretary. The Tribunal had before it the documents (“the T Docs”) lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) and the exhibits tendered during the hearing. At the conclusion of the hearing, Ms Paul was given leave to lodge a further submission as to whether Ms Mortimer’s work as a real estate sub-agent was “work for at least 30 hours per week at award wages or above” as referred to in sub-paragraph (a) of the definition of “work” in s 94(5) of the Social Security Act 1991 (“the Act”). The Respondent’s Further Submissions, together with a copy of the Property and Business Services Industry Sector Minimum Wage Order-Victoria-1997 (“the Wage Order”) were received by the Tribunal and forwarded to Ms Mortimer on or about 16 July 2002. The Wage Order was marked as exhibit R1 and Ms Mortimer was invited to make further submissions in response to that material. She made a further submission, a copy of which was forwarded to the respondent.
4. Ms Paul informed the Tribunal that Centrelink accepted the SSAT decision of 17 February 2004 and sought to recover only the debt raised in respect of the period 1 January 2003 to 30 March 2003.
5. The issues for determination by the Tribunal are whether Ms Mortimer was disqualified for DSP for the period 6 January 2003 to 30 March 2003, because of the hours she worked and, if so, whether there is a debt owed to the Commonwealth in respect of that period, and whether any debt should be waived.
was ms mortimer disqualified for dsp during the relevant period?
legislative qualification for disability support pension
6. The qualification criteria for DSP are set out in s 94 of the Social Security Act 1991 (“the Act”). That section, so far as relevant, provides:
(1) A person is qualified for disability support pension if:
(a) the person has a physical, intellectual or psychiatric impairment; and
(b)the person’s impairment is of 20 points or more under the Impairment Tables; and
(c) one of the following applies:
(i) the person has a continuing inability to work;
…
(2)A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:
(a)the impairment is of itself sufficient to prevent the person from doing any work within the next 2 years; and
(b) either:
(i)the impairment is of itself sufficient to prevent the person from undertaking educational or vocational training or on the job training during the next two years; or
(ii)if the impairment does not prevent the person from undertaking educational or vocational training or on the job training – such training is unlikely (because of the impairment) to enable the person to do any work with the next two years.”
7.The term “work” is defined in section 94(5) as follows:
94(5) In this section:
….
work means work:
(a) that is for at least 30 hours per week at award wages or above; and
(b)that exists in Australia, even if not within the person’s locally accessible labour market.
the evidence
8. Ms Mortimer has been in receipt of DSP while working part-time since 1994. It is not in dispute that she has a number of serious medical conditions, both physical and mental, which, from December 2003, made it impossible for her to continue with her work as a trained nurse. Prior to that, she worked as a nurse part-time, while receiving part DSP, until she realised that she could not continue nursing at all
9. Ms Mortimer, in her evidence, said that, in order to find work within her physical limitations, she completed a three month real estate sub-agent course, at her own expense. She then sought work from a number of real estate agents. She tried unsuccessfully to find part time work, but found that real estate agents were not prepared to offer her work unless she agreed to work full-time. She commenced work with LJ Hooker in Boronia on January 2003 and left in July 2003, as she was “not getting anywhere”, and had aggravated a number of her health problems, and required surgery for a painful bowel condition.
10. Ms Mortimer explained that at LJ Hooker she was paid a retainer, which was described to her as a loan, which would have to be repaid from any commission that she earned, but was not repayable if she left LJ Hooker.
11. Ms Mortimer said that a franchise fee of 9% was deducted from the commission she earned, and that she also had to pay $100 per month for stationery and other sundries. In her letters to Centrelink of 12 June 2002 (sic) (T3, p13) and 25 June 2003 (T33, p66) she wrote that the levy to cover office expenses was $50.00 per week. This discrepancy was not explored at the hearing. Ms Mortimer explained that there were also other deductions from her commission. Sometimes the buyer of the property was given a “gift”, such as frequent flyer points, as an incentive to commit to the purchase. If this happened, the cost of the gift, of $80.00 to $100.00 per sale, was taken out of her commission. In the six months she worked in real estate, she never earned enough commission to cover her retainer.
12. In order to receive a petrol allowance Ms Mortimer said that she had to earn over $16,000 in commission for the agency for that month. If she earned less the following month, she did not receive a petrol allowance. She did not receive a telephone allowance, although a mobile phone was essential for her work.
13. Ms Mortimer said that she received $332.00 retainer each week after tax. Her letter of 13 January 2003 (T12, p28) gave the figure as $353.00 per week after tax. Once again the discrepancy was not referred to at the hearing. From her retainer, Ms Mortimer had to pay for her work-related expenses such as phone and petrol, when an allowance was not paid to her, and for take away food due to the long hours that she worked, as well as her usual living expenses. In her letter to Centrelink of 13 March 2004 (T1, p1), she wrote that her accountant told her that she had made no money at all from her work with LJ Hooker.
14. Ms Mortimer said that she worked 13 hours a day, six days a week for LJ Hooker, but that she was not fit to work those hours. She said that she “cracked up” on 13 June 2003 due to the stress of her real estate agency work, and because she had problems with other staff. Her letters to Centrelink, while she was working frequently refer to the health problems the employment was causing her:
T15 29 January 2003
I am paying for my leaflets to be dropped because of my leg problems, and I can not see my way clear to making a go of this job which I am enjoying despite the 13 hour days.
I have been paid for two of my three weeks and I wanted to let you know. I do not know what the future holds because of problems that I am unable to do anything about.
T17 30 March 2003
My leg is getting better although still sore. I have now developed a bowel problem because I did not have time to eat and drink and I now need bowel surgery. I will tell my boss that he does not need to pay me sick pay. He will be very distressed if he has to pay sick pay.
T22 6 May 2003
I am very stressed. The other men dictate to me and one young man came into the office wagging his finger at me and telling me I should do this and so on. I got very distressed and responded. The boss got a shock. I am very loud when upset or happy.
It has happened several times since and the boss intervenes and makes the men leave the officer saying “leave her alone, you know she is highly strung”. I am very thankful and to a certain extent this has sorted the problem. …
I am going to hospital for major bowel surgery and will be out of action for 4 weeks. I have no sick leave and only 7 days a year not cumulative. I will get Clem Smith, the surgeon, to write you a letter stating that I will be off work for four weeks. I hope Centrelink can pay me a full pension during this time.
T27 16 May 2003
I enclose my ultrasound of my leg and my GP said I would have to go to hospital and back on Warfarin. He gave me a letter. I have not gone because of my job. He said the ultrasound 4 years ago did not show this clot! I saw him today for my driving report and he said I should be anticoagulated and be on warfarin. I will not go into hospital for this but I need bowel surgery urgently and my shunt is blocked. I must have some provision while I am in hospital! I may be able to be anticoagulated at the same time as I am having an AV shunt put in to access my veins for the drips I will need.
With all my medicine I have to take, I can not afford, on such a low wage, to lose the part pension.
T3 12 June 2002 (sic – 2003)
I am writing to let you know that our boss installed a new heating and cooling system. The heat is turned up so high I am having trouble with my left arm and hand and I have to leave the office because the hand gets so swollen in the heat I am unable to bend the fingers.
I ask all the time to have the heat turned down and the boss refuses. He lives on coffee, alcohol and smokes and is thin and feels the cold. I just have to suffer. I am now having difficulty sleeping as the arm is so swollen I am unable to sleep at night because I have the “pins and needles”.
…
I saw the surgeon on Tuesday night and he has had to organise for the anaesthetist to come and see me at home because of the shunt problem. All will be done at the same time under the same anaesthetic.
I will let you know when I go into hospital after I see the anaesthetist.
T32 20 June 2003
I am writing to let you know that I have given notice to take effect from the 7-7-03.
I am not getting the same work on a part time basis and my hands are too bad to continue in the heated environment.
I am not able to get nitrbid for my hands and feet as the government will no longer allow it to be prescribed. It is apparently too dangerous although I have been using it for years with no ill effects. Being a nurse I know to use gloves and how to apply! But the ruddy government once again know what is best for me!!!! I will try not to go on. They have ruined my whole life and my sisters.
T33 25 June 2003
You will be aware I am not receiving a full disability pension and that in January I developed a 9cm clot in my left leg and have put off having anti coagulation with the resultant risk of losing my life in favour of working. In fact I would be happy to die so it’s not a problem. …
I am now working part time. The job is very stressful and I have had to increase my medication three times and in fact can’t cope at work. The part time work has seen my sales fall dramatically. My petrol allowance has been taken off me (I only had it for two months) and I have no mobile phone allowance and am forced to have one for work.
15. Those letters suggest that Ms Mortimer may have had a continuing inability to do the work she was attempting to do, while she was employed by L J Hooker. However that matter was not raised during the hearing and there was no medical evidence at the hearing. On 20 June 2003, Ms Mortimer advised Centrelink that she had given notice to take effect on 7 July (T32), and on 25 June she confirmed that her last day would be 7 July 2003.
16. The matter proceeded at the hearing mainly on the assumption that DSP paid to Ms Mortimer during the relevant period should not have been paid to her, and that therefore the question was whether the whole debt should be waived, rather than only the part of the debt in respect of the period after 30 March 2003, as decided by the SSAT. However I expressed some doubt as to whether Ms Mortimer was in fact disqualified for DSP because of her employment by LJ Hooker. The matter which concerned me was that there was no material before me on which I could find, applying the definitions and other provisions of the Act, that Ms Mortimer’s work as a real estate sub-agent for at least 30 hours a week established that she did not have a “continuing inability to work” as required by sub-paragraph 94(1)(c)(i) of the Act.
17. The term “continuing inability to work” must be interpreted as provided for in ss 94(2) and 94(5) of the Act. Unfortunately, the material before me on the question whether her impairments prevented Ms Mortimer working for “at least 30 hours a week at award wages or above” is incomplete and unsatisfactory.
18. Shortly prior to the hearing I had arranged for a message to be sent to the parties alerting them to the fact that the Tribunal would require evidence as to the meaning of the term “award wages”, and suggesting that evidence as to the basic wage could be relevant to the issue. At the hearing, I produced and took into evidence as Tribunal Exhibit 1, a page from the ACTU internet site which stated that the minimum adult wage as at May 2004 was $467.40, which was the first time the minimum wage had broken through the ceiling of $12.00 an hour. The exhibit did not give the minimum adult award wage prior to May 2004.
19. After the hearing, by leave, Ms Paul lodged a submission dated 15 July 2004 with a Wage Order (R1) showing that the minimum adult wage for a “person engaged in work as a real estate agent” (Classification 6.6.2) from 29 April 1997 to 28 November 1997 was $10.54 per hour. Ms Paul, in her further submission of 15 July 2004 wrote in paragraphs 5 – 8:
5. Real Estate Agents are covered under a minimum wage order pursuant to section 501 of the Workplace Relations Act 1996. This is known as the Property and Business Services Industry Sector Minimum Wage Order made in Victoria in 1997. (see attachment).
6. According to this wage order a minimum wage is calculated on a set hourly rate based on a working week of up to thirty-eight hours.
7. According to section 6 of this order, persons engaged in work as a real estate agent are set a minimum hourly rate under classification level 3 of the order.
8. The Real Estate Institute of Victoria have advised me that these rates are adjusted in August of each year and the current minimum hourly rate set for Real Estate Agents, is $11.80. The rate for the previous year starting 1 August 2002 was $11.35 per hour.
20.There are various problems with the submissions in those paragraphs.
21. One problem is that, on the evidence before the Tribunal (T36, p71-72), Ms Mortimer was paid less than $11.35 per hour, which Ms Paul asserted in paragraph 8 of her further submissions, was the minimum hourly rate under the relevant wage order, as at January 2003. LJ Hooker advised that Ms Mortimer was working 40 hours a week for $430.00 gross per week (T36, p71&72). A Centrelink officer calculated that to be $10.75 per hour (T56, p128) for 40 hours a week.
22. Ms Mortimer, in her response to the further submissions of the respondent, stated that she was paid below the rate provided in the Wage Order. She wrote:
I was not in receipt of the full retainer set under the REIV schedule and mentioned in the attached wage order form the Centrelink solicitor. That LJ Hooker paid me under the set retainer. I was not on a wage that I was on a repayable retainer.
23. I am not persuaded by Ms Paul’s submission that it was not relevant whether Ms Mortimer was paid at award wages or above, or even below award wages, during the relevant period. She submitted at paragraphs 13 – 17:
13. If Ms Mortimer was paid less than the award this would constitute a contravention of the Workplace Relations Act 1996 and she has rights of appeal which she can find out about through Wageline. The retainer in Ms Mortimer’s case should have been calculated at $11.35 x 38 hours per week.
14. The respondent submits that Ms Mortimer’s employment with LJ Hooker satisfies the definition of work under section 94(5) of The Act as it does fall under an award, and therefore Ms Mortimer was not entitled to receive Disability Support Pension during the period of her employment with LJ Hooker.
15. If the Tribunal find that Ms Mortimer was paid less than award wages, this still does not contradict the fact that Ms Mortimer was employed for 30 hours or more for wages paid under an applicable industrial award for work under open competitive market price conditions. (see reference 1.1.A.371 the guide to the Act)
16. The question for the tribunal is not whether Ms Mortimer was paid award wages but whether she was able to do work for at least 30 hours per week at award wages.
17. The respondent contends that as Ms Mortimer did undertake and sustain work of at least 40 hours per week for a continuous period of 6 months, and the work satisfies the definition of work contained at s 94(5) of The Act, Ms Mortimer does not qualify for Disability Support under section 94(1) of The Act, during the period in question.
24. I consider that the Act clearly indicates that “work” for the requisite hours at less than award wages is not relevant to establishing whether or not a person has “a continuing inability to work”. In paragraph 13 quoted above, Ms Paul suggested that the award wages should be calculated on the basis of a 38 hour week. I assume this was in reliance on clause 5.1.3 of the Wage Order, which states:
The hourly rates shown below are based on a working week of up to 38 hours.
25. There was no evidence as to how this was to be reconciled with the fact that the employer stated that Ms Mortimer worked 40 hours a week, which brought her hourly rate below the award, or with the deductions which, on her evidence, were made from her retainer for office expenses, and the expenses Ms Mortimer had to pay related to her employment, such as mobile phone charges and petrol expenses.
26. Ms Mortimer had been receiving a part DSP since 1994, while working part-time as a nurse. It is only if the evidence establishes that from the time she started working in real estate, she no longer had a “continuing inability to work” that I could find that she ceased to be qualified for DSP when she started work on 6 January 2003. The term “continuing inability to work because of an impairment” is defined in s 94(2) of the Act as requiring that the impairment be sufficient to prevent the person doing “any work” within the next 2 years. “Work” is then defined, as set out in paragraph 7 above, as meaning “work: that is for at least 30 hours per week at award wages or above”. It would only be if I were satisfied that Ms Mortimer’s impairments did not prevent her from working “for at least 30 hours per week at award wages or above”, that I would find that she ceased to be qualified for DSP from 6 January 2003.
27. The evidence does not establish that Ms Mortimer was at any stage working “at award wages or above”. The Full Court of the Federal Court In McDonald v Director-General of Social Security (1984) 6 ALD 6 discussed the concept of an onus of proof in matters before this Tribunal. Woodward J said at 11:
If the AAT finds itself in a state of uncertainty after considering all the available material, unable to decide a question of fact either way on the balance of probabilities, it will be necessary for it to analyse carefully the decision it is reviewing. If, for example, it is a decision whether or not to cancel a pension in the light of changed circumstances, then it has failed to achieve the statutory requirement of reaching a state of mind that the pension should be cancelled. If, on the other hand, it is a decision, to be made in the light of fresh evidence, whether or not the pension should ever have been granted in the first place, then it has failed to be satisfied that the person ever was permanently incapacitated for work.
Jenkinson J said at 22:
In this case the passage from the reasons for the Tribunal’s decision which Woodward J has quoted implies that it was a requirement of the Social Security Act 1947 that the applicant’s pension be cancelled unless she were found to be permanently incapacitated for work, whereas my conclusion is that it was a requirement of that Act that the pension be cancelled if she were found not to be permanently incapacitated for work. If my conclusion be correct, error of law is demonstrated in the Tribunal’s reasons. The error could not have vitiated the Tribunal’s decision unless the Tribunal was unpersuaded, on a balance of probability, that there was not a permanent incapacity. All that can be discerned from the Tribunal’s reasons is that it was unpersuaded, to the degree suggested by the expression “a settled expectation”, that there was a permanent incapacity. I agree therefore that the appeal should be allowed, that the decision should be set aside, and that the case should be remitted to the Tribunal for determination according to law.
28. In considering this matter I have noticed that the qualification provision of the Act, s 94(1)(c)(i) does not actually specify that the continuing inability to work must be “because of an impairment”. That concept is introduced in the definition provision of s 94(2), as if it is reflecting one of the specified qualifications in s 94(1) of the Act. But s 94(1) does not specify that there must be a connection between the inability to work and the impairment. Perhaps some amendment of the Act may be required.
29. Having regard to the way in which the matter was argued and the material before me, I am unable to determine whether Ms Mortimer was disqualified for DSP for the period 1 January 2003 – 30 March 2003. The question raises complex legal and factual issues which were not pursued at the hearing. As I have concluded, for the reasons set out below, that any debt should be waived, I propose to decide this application on that basis.
waiver
30.Section 1237A(1) and (1A) provide as follows:
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).
1237A(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
31. Ms Mortimer said that any debt must be “attributable solely to an administrative error made by the Commonwealth” because she kept Centrelink informed at all times of the hours she was working and the income she was receiving from that work. Her frequent, chatty letters to Centrelink officers are included in the T documents. Ms Mortimer relied on that correspondence to show that she had complied with her notification obligations under the Act.
32. There are five relevant letters from Ms Mortimer to Centrelink, dated 12 December 2002 (T7, p19), 22 December 2002 (T9, p21), 13 January 2003 (T12, p28-9) and 29 January 2003 (T15, p33). All those communications from Ms Mortimer to Centrelink are addressed to two named Centrelink officers. They are written in a friendly style, as though Ms Mortimer believed that in writing to the named Centrelink officers, she was writing to people who knew her and cared about her and were well acquainted with the circumstances of her life as reported by her in her letters. The notes on the file indicate that to have been the case, for instance, when she wrote about a car accident, an officer telephoned her about her distress following the accident (T10, p23). Ms Mortimer explained to the Tribunal that she had had a very good relationship with her main Centrelink contact for some time.
33. In the first relevant letter, dated 12 December 2002 (T7), Ms Mortimer described difficulties she was having with her part-time nursing job. The letter included the following: “I have had 8 interviews for Real Estate (they won’t take anyone part time) and I have sent 20 resumes…”.
34. On 22 December 2002, Ms Mortimer wrote referring to a telephone call she had had with another named Centrelink officer. She advised that she had resigned [from her nursing position] and had no work (T9, p21). In her letter of 30 December 2002 (T11), Ms Mortimer gave details of her last pay cheque from her part-time nursing position.
35. Ms Mortimer, in her letter of 13 January 2003 (T12), advised Centrelink that she had started work with LJ Hooker the previous Monday, on a retainer of $353.00 per week after tax, but could not be paid until she obtained a police check. After explaining all her financial and medical problems, and stating how much she was enjoying her career change, Ms Mortimer asked in that letter, “Can I keep some of my benefits until I get started?” (T12, p28-9). The Centrelink records (T12, p27) state that Ms Mortimer had advised that she was working for LJ Hooker and earning $353.00. In fact, she had advised that as her after tax earnings.
36. In her letter of 29 January 2003 (T15), Ms Mortimer advised Centrelink that she was working 13 hours per day and receiving a retainer of $804.00 per fortnight. Ms Mortimer’s letter of that date reads in part as follows:
I am paying for my leaflets to be dropped because of my leg problems, and I can not see my way clear to making a go of this job which I am enjoying despite the 13 hour days.
I have been paid for two of my three weeks and I wanted to let you know. I do not know what the future holds because of problems that I am unable to do anything about.
37. In cross-examination, Ms Mortimer said that she was not aware of the relevance of working, “for at least 30 hours per week”, as specified in paragraph (a) of the definition of “work” in s 94(5) of the Act. She said that she had notified Centrelink about her hours of work. She said that, based on the information that she provided from time to time, Centrelink should have known that she was working full time or, if Centrelink was unsure, then somebody from Centrelink should have telephoned her to enquire about her weekly hours of work.
38. I find that Ms Mortimer was aware that if she was working full-time, that could affect her qualification for DSP. That is why she asked in her letter of 13 January 2003 if she, “could keep some of my benefits until I get started”.
39. Ms Mortimer agreed that she had received correspondence from Centrelink, such as T13, p30, which on the reverse of a letter dated 14 January 2003, told her that she was obliged to advise Centrelink if she started to work more than 30 hours per week. But she said that she had by her letter of 29 January 2003 advised Centrelink that she was working 13 hours per day, and receiving a retainer of $804.00 per fortnight. Further, she had advised Centrelink on 12 December 2002 that real estate agents would not take anyone part-time (T7, p19) and had advised on 13 January 2003 that she had started work on trial at LJ Hooker the previous Monday on a retainer of $353.00 per week. It was clear from other passages in that letter that the work was in real estate.
consideration of issues
40. Ms Mortimer submitted that she had complied with all the Centrelink requirements. She had at all times kept Centrelink fully informed as to her work status and earnings. She submitted that if there were any overpayment, it was solely due to administrative error, either in not reading her correspondence carefully, or if there was any ambiguity in the letters, in not telephoning her to clarify her hours of work, following her letters of 12 December 2002 and 13 and 29 January 2003.
41. Ms Paul submitted that Ms Mortimer’s letters of 13 and 29 January 2003 did not precisely specify how many hours per week she was working, therefore, the overpayment was not solely due to administrative error by Centrelink.
42. The respondent has at all times admitted that there was administrative error in this matter. The ARO, in her decision of 22 January 2004 (T56, pp125-130), wrote at p129:
There was administrative error for 3 reasons: you were not asked the hours you worked when you advised you started work; your net wages were taken into account without question; and when you did advise your hours it was overlooked. However, the debt was not solely due to administrative error as you did not advise your hours of work or your gross wages as requested within 14 days. A proportion of the debt was attributable to the advice on 12 June 2003 which indicated you had stopped work then when, in fact, you were employed until 5 July 2003.
43. As the overpayment during the later part of the contested period has been waived, it is not strictly relevant, but it should be acknowledged that Ms Mortimer did not mislead Centrelink as to her date of ceasing work in her letter of 12 June 2003(T3). I consider it was clear from the letter of 12 June 2003 (T3, p13) that Ms Mortimer was still working, although she would be leaving soon. She wrote:
I am waiting for a date for my surgery and I will be leaving.
I WILL NOT BE WORKING AGAIN BECAUSE I HAVE TOO MANY PROBLEMS…
I will let you know when I go into hospital after I see the anaesthetist.
44. The more important issue in this matter is whether it was correct that, as well as administrative error by Centrelink, there was also error by Ms Mortimer in failing to advise her hours of work until 30 March 2003. Prior to that letter, she advised in writing as follows:
T7, p1912 December 2002
I have had 8 interviews for Real Estate (they won’t take anyone part-time) and I have sent 20 resumes.
T12, p2813 January 2003
I started work on trial at LJ Hooker in Boronia last Monday…
This means effectively I am on a retainer of $353 per week after tax and I have spent about $60 last week on petrol…
Can I keep some of my benefits until I get started?
T15, p3329 January 2003
I was paid $722 last Thursday for two weeks work. This is a retainer. The before tax amount is $804.00 per fortnight…
I am paying for my leaflets to be dropped because of my leg problems and I cannot see my way clear to making a go of this job which I am enjoying despite the 13 hour days.
I have been paid for two of my three weeks and I wanted to let you know…
T17, p3730 March 2003
I suspect I will not be in this job for long. The hours are incredible 8.30am to 6.30pm 6 days a week.
45. The SSAT accepted that the letter dated 30 March 2003 (T17) clearly notified Ms Mortimer’s hours of work. That is the basis on which it decided that any debt in respect of the period after 30 March 2003 should be waived as solely due to administrative error. Ms Paul did not contest that decision.
46. However, I find, as pointed out during the hearing, that when attention is paid to the letters of 12 December 2002(T7) and 13 January 2003(T12), it is apparent that Ms Mortimer had kept Centrelink fully informed in regard to her employment even earlier:
On 12 December 2002, she wrote that she had had 8 interviews for positions in real estate and there were no part-time positions in real estate;
On 13 January 2003, she advised that she had found a position in real estate and started work on 6 January 2003 and was earning $353 net per week. She had asked whether she could still keep some of her benefits while she “got started”;
On 29 January 2003, she provided her gross and net earnings, and stated that she had been paid for “two weeks work” and was working 13 hour days.
47. Ms Mortimer’s notification obligation was set out in a letters to her dated 23 December 2003 (T10, p24) and 14 January 2003 (T13, p30). The obligation is as follows:
WHAT YOU MUST TELL US
You must tell us within 14 days (28 days if residing outside Australia) if any of these things happen, or may happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices. This is an information notice given under the Social security law.
Income
(Income means your gross income before payment of any tax, or if self employed, your net profits after allowable deductions).
if you start work for 30 hours per week or more
if your income, not including financial investments or maintenance, increases;
if you start work or recommence work;
…
48. Ms Paul submitted that I should not find that Ms Mortimer’s debt was “attributable solely to administrative error”, as she did not strictly comply with the obligation to notify “if you start work for 30 hours or more”. Ms Mortimer advised that she had started work, but not the hours she was working.
49. On the other hand, Ms Mortimer’s advice on 13 January 2003 (T12p28) could be taken to comply with her obligation. She had started work the previous week for 30 hours or more and, in compliance with her obligation, she advised Centrelink that she had started work. But in fact she did considerably better than that. She had already advised Centrelink, on 12 December 2002, that there were no part-time positions in real estate. Bearing that earlier advice in mind, her advice that she had started work in real estate should have been construed as advice that she was working full-time. But she gave two further indications in her letter that the work was full-time. The income level of “$353.00 per week after tax” is high enough, for someone just starting in a new field, to at least raise a question as to whether the work was full-time. The request by Ms Mortimer that she be allowed to keep some of her benefits until she got started, also indicates that Ms Mortimer was aware that her level of work could mean that she was no longer qualified for DSP.
50. Ms Paul submitted that the letter of 12 December 2002 should be disregarded as Ms Mortimer had not yet started work for 30 hours or more. She submitted that a prior notification was not relevant, and that Ms Mortimer should have advised in her letter of 13 January 2003 that she had started full-time work at LJ Hooker the previous Monday, or that she was working there “30 hours or more per week”.
51. I understand that bearing in mind the number of letters received by Centrelink officers, and the fact that most information is recorded on computer screen, a prior advice as to available hours in a field does create a difficulty for Centrelink officers. Until work actually starts, the hours available in a field of potential employment are not relevant. However, looking at the matter from Ms Mortimer’s perspective, I can also understand how she believed that she had fully complied with her notification obligations.
52. Ms Paul relied on the Federal Court decision of Gerhardt and Gerhardt v Department of Employment, Education and Training QG 80 of 1996. In that matter, Mr and Ms Gerhardt were brother and sister. They both received Austudy payments. Their father worked overseas and earned $82,523 income per annum, which was exempt overseas income for Australian taxation purposes. Their mother completed the income section of the application forms for Austudy, but did not declare the income earned overseas, even though the application form stated that if income was earned overseas a statutory declaration was to be provided, showing the total amount earned, less any deductions for taxation paid overseas. However, an Australian income tax assessment form was attached to the Austudy application forms. It did show that Mr Gerhardt had earned “$82,523 exempt foreign salary”.
53. That income tax assessment had apparently been overlooked when Austudy entitlements were calculated. The overseas income was only identified as a result of a data-matching exercise with the Australian Taxation Office. At that stage Austudy payments ceased and overpayments were raised.
54. Ryan J found that there had been errors made by Mrs Gerhardt in filling in the application forms for her son’s and daughter’s Austudy payments. She had failed to refer to the overseas income earned by her husband, and had failed to lodge a statutory declaration about that income, as required in the instructions for completion of the form. His Honour found that there was error on the part of the Commonwealth in overlooking the figure for overseas income which was shown in the taxation assessment included with the Austudy applications. His Honour continued:
Does this error by the respondent, as the applicants claim, operate so as to deprive the error by Mrs Gerhardt of continuing effect? If the assessing officer had been made aware of the overseas income and had chosen to ignore it, then any omission by Mrs Gerhardt in not attaching a statutory declaration would surely have been overtaken by the error of the assessing officer. The assessing officer’s administrative error would then have been the sole cause of the overpayment to the two applicants. However, the findings of fact in this case are that the assessing officer, rather than being aware of the figures in the notice of assessment and choosing to disregard them, had simply overlooked those figures.
It should be noted that the notice of assessment is not a statutory decision declaration as required in the guide. Still less was it a separate documentary notice of the existence of earned overseas income. Here the reference to overseas income was simply overlooked in a document because it appeared in a document supplied for another purpose and not specifically designed to draw the assessing officer’s attention to its existence. To this extent the error of Mrs Gerhardt, in not attaching the required documentation, was still operative. Thus, the administrative error of the respondent cannot be said to have been the sole error, and it follows that, in accordance with s 289(2) of the Student and Youth Assistance Act 1973, there was no requirement on the respondent to waive the debt incurred by the two applicants.
55. I understand that Ms Mortimer, in her letter of 13 January 2003, did not consider it necessary to advise that the job she had started the preceding week was full-time or over 30 hours a week, because she had advised one month earlier that she had learnt that there were no part-time positions in real estate. But I consider that she made an error in omitting that information from her letter of 13 January 2003. The letter of 12 December 2002 was not advice that Ms Mortimer had started work for at least 30 hours per week, although it gave information from which that could have been deduced.
56. I find that Ms Mortimer had reason to believe that the Centrelink officer reading her letter of 13 January 2003 would have been aware, from her earlier letter, that the position was full-time. As I have said, she wrote her letters to one named Centrelink officer, or when she was absent, to another named officer. It was recognised within Centrelink that Ms Mortimer and the named officer had a good working relationship. There is a note on file (T61p158) showing that follow up action on a matter was to wait until the officer had returned from leave and could telephone Ms Mortimer. I consider that Ms Mortimer’s error was very small.
57. I also find that Ms Mortimer’s error in not using a form of words which would clearly advise any Centrelink officer reading her letter, that her employment was for more than 30 hours a week was of quite a different order to the error made by Mrs Gerhardt. Ms Mortimer did not fail to fill in any section of a form or to provide a statutory declaration which was required. All she did was assume that an officer reading her letter of 13 January 2003 would be familiar with what she had written about hours of work in real estate in her letter of 12 December 2002.
58. However, s 1237A does not look to the reasonableness of an error or to a comparison of the significance of errors. A debt may only be waived under s 1237A of the Act if it is “attributable solely to an administrative error made by the Commonwealth”, and if the debtor received the payments made in good faith.
59. There is no question here about the fact that Ms Mortimer received her payments in good faith. She had advised the date she started work within the specified 14 days, and had provided her net earnings and advised that they were after tax. She had asked whether she was able to keep her benefits for a time. When they continued to be paid, she believed that she was entitled to what was paid to her.
60. However, I consider that this matter is distinguishable from Gerhardt, because in this case there was action on the part of Centrelink which “deprived the error by [Ms Mortimer] of continuing effect”. Centrelink did not respond to Ms Mortimer’s question in her letter of 13 January 2003, “Can I keep some of my benefits until I get started?” If the Centrelink officer who read Ms Mortimer’s letter had responded to her question with a letter or telephone call, the issue of the hours Ms Mortimer was working would have been clarified. She would have immediately advised that she was working for 40, or even more, hours a week and Centrelink would have had the required information. From the point when Ms Mortimer’s question was ignored, the Centrelink officer’s administrative error became the sole cause of any overpayment attributable to Ms Mortimer failing to notify her hours of work.
61. This matter is distinguishable from Gerhardt in that the question whether Ms Mortimer could keep some of her benefits until she got started was an essential part of her letter sent to comply with her notification obligation. It was not overlooked because it was in a document supplied for another purpose. It was part of the notification as to commencement of work which Ms Mortimer was obliged to provide. Ms Mortimer feared that she might lose her benefits because of her working hours, and she asked for information on that issue. If contact had been made with her, there would have been no overpayment due to lack of information about hours of work.
62. As no contact was made, but Ms Mortimer continued to be paid part DSP, she believed she was entitled to those payments. If she had been telephoned in response to her question, not only would Centrelink have been informed as to the actual hours of work, but also Ms Mortimer would have been told that she would probably lose her part DSP if she continued working her current hours. She would then have been able to make an informed decision as to whether or not to continue with her attempt to make a career in real estate.
63. I find that, because Ms Mortimer’s question, in her letter of 13 January 2004, was ignored, any debt which may have arisen because of the hours she worked for LJ Hooker was solely attributable to administrative error. I have also found that Ms Mortimer received the payments in good faith. Therefore s 1237A(1) of the Act provides that the Secretary must waive the right to recover that debt.
If a debt had been raised on the basis that Ms Mortimer was entitled to part DSP, but that she had been overpaid because Centrelink had treated the figure she advised as gross earnings, that debt would also have been attributable solely to administrative error by the Commonwealth. Ms Mortimer clearly advised in her letter of 13 January 2003 that the figure she gave of $353.00 was her weekly earnings “after tax”. If Centrelink treated that as a gross figure, as the ARO states (T56, p129) that was clearly Centrelink’s error. Not only were the net figures taken into account “without question”, they were also taken into account after Centrelink had been advised on 13 January 2004, that they were “after tax” figures.
64. The decision under review will be varied to provide that any debt attributable to Ms Mortimer’s employment between 6 January 2003 and 5 July 2003 is waived.
I certify that the 65 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Joan Dwyer
Signed: Josephine McKay
AssociateDate/s of Hearing 24 June 2004
Date of Decision 19 November 2004
Representative of Applicant Self
Representative of Respondent Ms K Paul
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