Mueller and Secretary, Department of Family and Community Services

[2004] AATA 971

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 971

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No Q2003/943

GENERAL ADMINISTRATIVE DIVISION		)
Re		DEBORAH MUELLER (previously DEBORAH SUNSHINE)

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms MJ Carstairs, Member

Date17 September 2004

PlaceBrisbane

Decision The Tribunal sets aside the decision under review and substitutes the decision that the applicant’s debt of disability support pension for the period 21 June 2001 to 1 October 2001 is $1119.99.  The Tribunal waives the part of the debt arising after 21 September 2001 and remits the matter to the respondent for re-calculation of the debt.

..................(Sgd)..................

MJ Carstairs
  Member

CATCHWORDS

SOCIAL SECURITY – overpayment - whether applicant owes a debt to Commonwealth - whether debt should be waived - special circumstances – administrative error

Social Security Act 1991 ss 1223, 1237A, 1237AAD

Re Secretary, Department of Social Security and Prince (1990) 22 ALD 503
Re Beadle and Director‑General of Social Security (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1996) 40 ALD 541)
Director‑General of Social Services v Hales (1983) 47 ALR 281.

REASONS FOR DECISION

17 September 2004  Ms MJ Carstairs, Member

1.      This is an application by Deborah Mueller (the applicant) for review of a decision made by the Social Security Appeals Tribunal (the SSAT) on 1 October 2003.  The SSAT set aside a decision made by a Centrelink review officer as delegate of the Secretary to the Department of Family and Community Services (the respondent), and reinstated an earlier decision made by a Centrelink delegate that the applicant owed $1890.39.  This amount was said to be overpaid to the applicant as disability support pension during the period 21 June 2001 to 1 October 2001 (the relevant period). 

2. At the hearing the applicant represented herself. Mr J Howard, an advocate with Centrelink, represented the respondent. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act1975 numbered T1–T26, as well as exhibits marked A1–A4 for the applicant and R1–R7 for the respondent. The respondent, at the Tribunal’s request, filed further submissions and evidence on 22 April 2004, 6 May 2004, 22 June 2004 and 23 July 2004.

BACKGROUND

3.      The applicant is aged thirty-eight and was paid disability support pension from about July 2000.  She was recovering from a workplace injury and commenced legal action for compensation.  In June 2001, she obtained employment at Katies, part of the Millers chain of women’s clothing stores.  She commenced work at Katies before the settlement of her compensation claim in about October 2001. As a result of the settlement, the applicant was required to pay back some of the disability support pension which she had been receiving since 2000, including some that related to part of the relevant period.

4.      In early August 2001 (T4), a data match took place between records held by the Australian Taxation Office (the ATO) and Centrelink records, which revealed that the applicant had completed employment declaration forms for taxation purposes when she commenced work at Katies. During the relevant period however, Centrelink was not taking account of the applicant’s earnings at Katies when working out the amount of disability support pension she should be paid.

5.      A debt was not raised against her until 1 February 2003 (T8) when the applicant was sent a notice requiring her to repay $1890.39.  It seems that one reason for the delay in sending the debt notice was that the applicant had moved interstate. 

6.      The applicant sought review of the decision.  In the course of the review process, the debt has been calculated as three different amounts.  When she first requested review it was reduced to $652.  When she sought further review, it was increased to $1119.99.  The SSAT reinstated the originally calculated amount of $1890.39. 

7.      The applicant applied to this Tribunal on 6 November 2003.  The issues for the Tribunal are whether there is a debt, its amount, and whether it should be recovered.

EVIDENCE

8.      The applicant said that when she saw the position advertised in a Katies shop window she telephoned her solicitor to check whether accepting employment would create problems for her compensation claim.  He assured her that it would not.  However she said he told her that she should let Centrelink know.  She said that when she was successful in obtaining the position at Katies, she telephoned Centrelink and told them about it (the first telephone call).  She said she was told by a Centrelink officer in the course of the telephone call that she should telephone Centrelink to report her earnings.  She said she was told also that there was a cut-off amount where her earnings would prevent her receiving disability support pension although she was not told of the exact amount.  Several times in the course of her oral evidence and in documents the applicant reiterated that she was careful to keep Centrelink advised about her earnings because she was mindful that she would have to repay Centrelink when she received her compensation.  In her evidence to the SSAT, the applicant said that in the first telephone call to Centrelink she did not specify her earnings as she did not know her working hours.

9.      The applicant said that she would telephone Centrelink each Friday, when she obtained the following week’s roster, to notify them of her earnings. She said that her partner, Michael Mueller, was present when she made some of the telephone calls, and he had given evidence at the SSAT hearing that he had overheard some of these  calls.

10.    The applicant said that she had not received two letters sent by Centrelink, copies of which were attached to the respondent’s statement of facts and contentions (exhibit R2). She said that there had been a problem with delivery of her mail in 2001 when she was living in emergency housing where mail regularly went astray.  The first letter, dated 14 May 2001, stated that the amount of income that Centrelink was using to calculate her disability support pension was $0.70 and required her to advise Centrelink if income …increases. The second letter, dated 31 July 2001 (exhibit R3), set out that the amount of income used to assess her rate of pension was $0.60 but did not include obligations to advise of changes to income. 

11.    The applicant said that she did not receive a letter dated 31 August 2001 (exhibit R4) which stated that Centrelink had obtained information from the ATO that she had signed an Employment Declaration Form and that her disability support pension payments would be suspended if she did not provide information about her earnings to Centrelink by 20 September 2001. The applicant said that she telephoned Centrelink when her payments were suspended. The Centrelink computer record of the telephone call on 8 October 2001 (exhibit R1) noted:

Customer rang to restore payments …suspended because customer failed to reply to q 135 letter…customer states that she never recd q 135 letter.

It seems that exhibit R4 was the q135 letter referred to in this note

12.    The applicant said she received a letter dated 21 September 2001 (exhibit A3) which stated that your disability support pension has been suspended because we did not receive a reply to the letter we sent you.  This letter seems to have been sent to give her until 12 October 2001 to respond despite the first deadline being missed.  On 12 October 2001, the applicant telephoned Centrelink to advise that she would commence full-time work at Canberra Motor Village on 15 October 2001.

13.    The applicant said that because she was notifying her wages in the relevant period, she assumed that she was receiving the correct amount of disability support pension.

14.    The print-out for the applicant from the Customer Record Access Monitor Report (CRAM Report) (exhibit R5), which is a system which records when Centrelink officers access a recipient’s computerised data, showed her records being accessed by Centrelink officers in the relevant period on 8 July 2001, 17, 28, 29, 30 and 31 August 2001, 11, 20 and 21 September 2001, and 8 and 12 October 2001.

15.    The Tribunal requested further information about the computer access made to the EANS screen (a screen that relates to earnings) in the applicant’s Centrelink records on 17 August 2001. In an e-mail dated 22 July 2004 (exhibit R7), the Centrelink officer who had accessed the record on 17 August 2001 stated that this occurred when he was undertaking training in the Centrelink pensions system.  He said that he could not explain why her record was accessed although he suggested that it might have occurred automatically in the course of using a script, which is a semi-automated function that will cause the computer to scroll through screens, pausing at a screen but then moving on if the screen is not needed.

16.    The applicant said that she now earns about $900 per fortnight and is able to cover her outgoings from her salary.  The overpayment is being recovered at $20 per week and she has repaid about $300.  She said that if the debt had been raised in 2001, she would have repaid it, but was disadvantaged by the raising of the debt nearly two years after the event. She said that she tried to obtain her telephone records from Telstra but was told that the records were no longer available. In medical reports dated 8 and 22 January 2004 (exhibit A1), Dr K Lim, cardiologist, stated that the applicant suffers from tachycardia, the symptoms of which are palpitations, shortness of breath, and tingling down the left arm.  The applicant said that the issue of the debt and the tone of letters she has received from Centrelink have caused her stress and have exacerbated her heart condition. 

CONSIDERATION OF THE ISSUES

17. Part 5.2 of the Social Security Act 1991 (the Act) deals with overpayments and debt recovery. There were legislative changes to this part of the Act on 1 July 2001, however both before and after that date s1223(1) of the Act, which applies in this matter, has provided that amounts may be recovered as debts where the amount the person has been paid was not payable to them.

18. Part 5.2 deals with waiver of debts or parts thereof in a limited range of circumstances. Section 1237A of the Act provides for waiver, if, amongst other requirements, the debt has arisen solely as a result of administrative error. Section 1237AAD of the Act provides for waiver if there are special circumstances.

19.     Mr Howard submitted that the SSAT incorrectly calculated the debt as  $1890.39.  He said that the authorised review officer correctly calculated the debt as $1119.99 and this figure was supported by Centrelink compensation specialists who carried out a check of all calculations and confirmed that a $770.40 compensation charge must be deducted from the debt (material filed with the Tribunal on 22 April 2004). The Tribunal agreed with Mr Howard’s submission that ignoring the fact that a  compensation charge of $770.40 had been recovered for the relevant period would result in double recovery from the applicant.

20. The Tribunal was satisfied that the amount of the overpayment was $1119. 99 and so varies that part of the SSAT’s decision. The Tribunal was satisfied that the overpayment was a debt because s1223 of the Act both before and after 1 July 2001 applied to make the amount of disability support pension that the applicant received in the relevant period not payable to her, because it did not take into account her salary from Katies.

21.    Mr Howard submitted that the Tribunal should not accept that the applicant told Centrelink when she commenced employment at Katies and should not accept that she telephoned Centrelink weekly to notify her income.  He said that had she done so, Centrelink computer records (which should be accepted as accurate and reliable) would show this.  He referred  to the evidence that the Centrelink officer had accessed the applicant’s record while processing information for other reasons on 17 August 2001, and submitted that the CRAM report did not support the applicant’s version of events.

22.     Mr Howard submitted the debt was recoverable; there were no special circumstances to waive it; and the applicant had an ability to repay.  The applicant submitted, on the other hand, that she had complied with her obligations by notifying Centrelink and that she was disadvantaged by not being told until 2003 about a debt, raised in August 2001.  She referred to a number of administrative errors that have occurred in her case, many of which did not meet the description of errors that gave rise to the debt.

23.    The discretion available to waive the whole or part of a debt for special circumstances is a limited one. The circumstances must be unusual, uncommon or exceptional (Re Beadle and Director‑General of Social Security (1984) 6 ALD 1, Groth v Secretary, Department of Social Security (1996) 40 ALD 541). The Tribunal must balance the several factors that arise, including the fact that a person has received public moneys to which he or she was not entitled; the circumstances in which the debt arose; and the prospects of recovery of the debt in the context of the applicant's overall financial circumstances: Director‑General of Social Services vHales (1983) 47 ALR 281.

24. The Tribunal is satisfied that the overall circumstances in this case are not unusual, uncommon or exceptional such as to warrant the exercise of the discretion under s1237AAD of the Act. The Tribunal accepts that the applicant has been disadvantaged by the delay that occurred between 2001 and 2003 when she learned that she had a debt. The Tribunal also takes into account her health issues, but these do not outweigh other matters that must be considered, particularly the public interest in the recovery of overpaid moneys. The applicant acknowledges that she has a capacity to repay the debt at a reasonable rate.

25. Section 1237A provides for waiver if the debt is caused solely by administrative error by the Commonwealth. The Tribunal accepts that the applicant did her best to recall events that occurred some time ago. The Tribunal accepted the applicant’s evidence that she telephoned Centrelink when she obtained employment at Katies, after having discussed with her solicitor whether she should take up employment in view of her pending compensation settlement. Her detailed evidence about telephoning the Centrelink 1300 number and the Queanbeyan Centrelink direct telephone number alternately was plausible.

26.    The Tribunal accepts her evidence that she had too much at stake with her pending compensation settlement to put this at risk by being dishonest with Centrelink about her employment with Katies. The Tribunal noted that when the applicant changed employment in October 2001 she notified Centrelink promptly.  However the Tribunal does not accept that she telephoned weekly, as it is unlikely that Centrelink, being an organisation which encourages telephone receipt of information and has a comprehensive system for recording telephone contacts and entering computer data, would fail to record telephone contacts on fourteen occasions, as the applicant suggests. The Tribunal makes no findings as to when her telephone calls occurred after the first telephone call.

27.    The applicant said she did not receive the letters dated 14 May 2001 and 31 July 2001, but, under the relevant legislation, properly addressed Centrelink letters are deemed as received.  As a consequence of the deemed service of the letters, the applicant was on notice that she was required to advise Centrelink about her income.  She was aware that there were problems with the receipt of her mail, so she could have taken steps to ensure that her mail reached her. 

28.     The Tribunal accepts the evidence from the CRAM reports that Centrelink had no details of earnings recorded for the applicant in the relevant period. Having accepted that the applicant did telephone to let Centrelink know that she had obtained employment, even though there is no record of this, the Tribunal considered whether this should be taken into account in recovery of the debt. The Tribunal is satisfied that the applicant did not give information about her earnings during the first telephone call, because she did not know the exact amount of the earnings. Thus, Centrelink could not take into account any specific figure of earnings when calculating her rate of disability support pension.

29.    In these circumstances the Tribunal is satisfied that the debt as it accrued after the first telephone call did not result solely from administrative error. The Tribunal accepts that there is some error on the part of the Commonwealth, as her earnings were never recorded as a result of later telephone calls, but the Tribunal is not satisfied that the error was solely that of the Commonwealth, as the applicant did not telephone Centrelink each time she knew the amount of her earnings.

30.    However the Tribunal is satisfied that some part of the debt should be waived on the basis of sole administrative error after 21 September 2001.  The Tribunal is satisfied that from early August 2001 and by the time the notice was sent on 31 August 2001, Centrelink knew that the applicant was working, and sought information from her, giving her until September 2001 to supply the information.  At that time Centrelink had contacted Katies to verify that she was employed. Disability support pension should not have been paid to the applicant until these matters were clarified. A computer screen (T4) recorded that the applicant’s disability support pension was suspended on 21 September 2001 and that her payments were not to be restored unless her employment details were provided.  Centrelink had found through data matching in early August 2001 that the applicant was in employment.  A decision had been made to suspend payments of disability support pension.  The Tribunal was satisfied that from when the decision to suspend payment was made on 21 September 2001 any further payment of disability support pension was the result of sole administrative error. The Tribunal accepts that the applicant received the pension payments after 21 September 2001 in good faith: Re Secretary, Department of Social Security and Prince (1990) 22 ALD 503.

For these reasons, the Tribunal varies the decision of the SSAT by restoring the amount of the debt to the amount calculated by the authorised review officer, and waives the debt between 21 September 2001 and 1 October 2001 on the basis of administrative error.  The total amount to be recovered from the applicant will need to be recalculated taking into account these reasons for decision.

DECISION

31.    The Tribunal sets aside the decision under review and substitutes the decision that the applicant’s debt of disability support pension for the period 21 June 2001 to 1 October 2001 is $1119.99.  The Tribunal waives the part of the debt arising after 21 September 2001 and remits the matter to the respondent for re-calculation of the debt.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Ms MJ Carstairs, Member

Signed:         Sarah Oliver
  Associate

Dates of Hearing  19 April 2004 and 9 August 2004
Date of Decision  17 September 2004

The Applicant appeared in person
For the Respondent                 Mr J Howard, Departmental Advocate