Orenshaw and Secretary, Department of Family and Community Servic E

[2003] AATA 300

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 300

ADMINISTRATIVE APPEALS TRIBUNAL      )   
  )    No Q2002/765; Q2002/918

GENERAL ADMINISTRATIVE DIVISION        )

Re CHRISTINE ORENSHAW

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr R G Kenny, Member

Date1 April 2003

PlaceBrisbane

Decision The Tribunal affirms the decisions under review.

.............…..(Sgd)............…….

R G Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – overpayment of family tax benefit – overpayments of parenting payment – debts due to Commonwealth – variation of decision after determination by Social Security Appeals Tribunal – write off of debts – waiver of debt – special circumstances

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 95, 101
Family Assistance Tolerance (Transition) Act 2001

Social Security Act 1991 ss 1223, 1236, 1237AAD

Beadle v Director-General of Social Security (1985) 7 ALD 670
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Re Beadle and Director-General of Social Security (1984) 1 AAR 362

REASONS FOR DECISION

1 April 2003 Mr R G Kenny, Member     

Application

1.      On 30 August 2001, a delegate of Centrelink on behalf of the Secretary, Department of Family and Community Services (the respondent) determined that Christine Orenshaw (the applicant) had been overpaid an amount of $853.11 by way of parenting payment under the Social Security Act 1991 (the SS Act) and that this was a debt due by her to the Commonwealth. That decision was varied by an authorised review officer on 16 October 2001 who increased the debt to $968.40. On 26 July 2002, the Social Security Appeals Tribunal affirmed that decision and, on 3 September 2002, the applicant lodged an application for review of the decision by the Administrative Appeals Tribunal (the Tribunal).

2.      On 25 February 2002, a delegate of Centrelink on behalf of the respondent determined that the applicant had also been overpaid an amount of $4080.21 by way of family tax benefit which was payable under the A New Tax System (Family Assistance) Act 1999 (the FA Act) and the A New Tax System (Family Assistance) (Administration) Act 1999 (the FAA Act). By applying the waiver power under the Family Assistance Tolerance (Transition) Act 2001 (the Transition Act), the debt was reduced by $1000 to $3080.21.  On 20 March 2002, that decision was affirmed by an authorised review officer and, on 26 July 2002, the Social Security Appeals Tribunal affirmed that decision.  The applicant also lodged an application for review of that decision by the Tribunal on 3 September 2002.

3.      The respondent was represented by Ms H Wallis–Dunn.  The applicant attended the hearing accompanied by her husband, Raymond Orenshaw.  She was not represented.  In evidence were the following:

§exhibit 1        T documents for Q2002/918 (T1–T36);

§exhibit 2        T documents for Q2002/765 (T1–T29);

§exhibit 3        a bundle of documents relating to calculation of the applicant’s family tax benefit;

§exhibit 4        a notice, dated 8 November 2002, to the applicant advising of an overpayment of family tax benefit;

§exhibit 5        a statement from the applicant.

Issues and Legislation

4.      The applicant was paid parenting payment and family tax benefit during the financial year 2000/2001, the former being paid at a level based on her fortnightly earnings and the latter being paid on the basis of estimates of annual income.  The payments were in respect of her four children.  The overpayments were raised because information which the applicant provided was not accurate although it is not the case that this was alleged to have been done deliberately by her.  In the result, the payments were calculated on the basis of that information and the applicant was paid amounts greater than those to which she was entitled.  For parenting payment, this was $968.40 and this has now been recovered by the respondent.  For family tax benefit, as noted above, the initial decision raised a debt of $3080.21 with $1000 of this being waived under the Transition Act.

5.      After being affirmed by the Social Security Appeals Tribunal, the family tax benefit debt was increased by the respondent in a variation of the decision. On 13 August 2002, the applicant was advised by Centrelink that a higher sum was owed as a family tax benefit debt than the amount dealt with by the Social Security Appeals Tribunal (see T31/133).  The new debt total was given as $4594.13 and, after waiver of $1000 and credit for repayments of $121.96, the applicant was said to have an outstanding debt of $3472.17.  Then, on 19 September 2002, the total family tax benefit debt was again amended through a further variation of the decision.  This time the amount of the debt was declared to be $4496.35 with $1000 of that to be waived under the Transition Act leaving an outstanding amount of $3496.35 (see T34/137).  The applicant was notified of this decision by notice dated 20 September 2002 (see T35/138).

6. The debt in relation to parenting payment was raised under sub-section 1223(1) of the SS Act which reads:

“Debts arising from lack of qualification, overpayment etc.

1223(1) Subject to this section, if:

(a)       a social security payment is made; and

(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

7. The relevant matters relating to writing off and waiver of the parenting payment debt arise under and sections 1236 and 1237AAD of the SS Act, respectively, which read:

“Secretary may write off debt

1236(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a) the debt is irrecoverable at law; or

(b) the debtor has no capacity to repay the debt; or

(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d) it is not cost effective for the Commonwealth to take action to recover the debt.

1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be  irrecoverable at law if, and only if:

(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1236(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a) deductions from the debtor's social security payment; or

(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c) setting off under section 84A of that Act;

the debtor is taken to have a capacity to repay the debt unless  recovery by those means would result in the debtor being in severe financial hardship.

1236(2)    A decision made under subsection (1) takes effect:

(a) if no day is specified in the decision-on the day on which the decision is made; or

(b) if a day is specified in the decision-on the day so specified (whether that day is before, after or on the day on which the decision is made).

Waiver in special circumstances

1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i)making a false statement or false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 7947 Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.”

8. The debt in relation to family tax benefit was raised under sub-section 71(1) of the FAA Act which reads:

“71(1) If:

(a) an amount has been paid to a person by way of family tax benefit,  maternity allowance or maternity immunisation allowance (the assistance) in respect of a period or event; and

(b)the person was not entitled to the assistance in respect of that period or event;

the amount so paid is a debt due to the Commonwealth by the person.”

9. The matters relating to waiver of the family tax benefit debt arise under the Transition Act, to a maximum of $1000, and it is conceded by the respondent that the applicant gets the benefit available under that Act. Matters relating to waiver and write off also arise under the FAA Act and the relevant provisions read:

“Secretary may write off debt

95(1)Subject to subsection (2), the Secretary may, on behalf of the  Commonwealth, decide to write off a debt, for a  stated period or otherwise.

95(2) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a) the debt is irrecoverable at law; or

(b)the debtor has no capacity to repay the debt; or

(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the  debtor; or

(d) it is not cost effective for the Commonwealth to take action to recover the debt.

95(3)For the purposes of paragraph (2)(a), a debt is taken to be irrecoverable at law if, and only if:

(a) the debt cannot be recovered by means of:

(i) deductions under section 84; or

(iaa) deductions under section 1231 of the Social Security Act 1991; or

(ia) setting off under section 84A arrears of family assistance; or

(ii) application of an income tax refund under section 87; or

(iia) setting off under section 87A against advances; or

(iii) legal proceedings under section 88; or

(iv) garnishee notice under section 89;

because the relevant time limit for recovery action under that section has elapsed; or

(b) there is no proof of the debt capable of sustaining legal  proceedings for its recovery; or

(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d) the debtor has died leaving no estate or insufficient funds in the  debtor's estate to repay the debt.

95(4)For the purposes of paragraph (2)(b), if a debt is recoverable by means of:

(a) deductions under section 84; or

(aa) deductions under section 1231 of the Social Security Act 1991; or

(b) setting off under section 84A arrears of family assistance; or

(c) application of an income tax refund under section 87; or

(d) setting off under section 87A against advances;

the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.

95(5)       A decision made under subsection (1) takes effect:

(a) if no day is specified in the decision-on the day on which the decision is made; or

(b) if a day is specified in the decision-on the day so specified (whether that day is before, after or on the day on which the decision is made).

95(6) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.

…

Waiver in special circumstances

101 The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of the family assistance law; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.”

10. The family tax benefit debt has, as noted above, been increased since the decision was made by the Social Security Appeals Tribunal. In that regard, sub-section 143(1) of the FAA Act reads:

“Variation of decision under section 142 before AAT review completed

143(1) If an officer varies a decision after an application has been made under section 142 to the AAT for review of that decision but before the determination of the application, the application is to be treated as if:

(a) the decision as varied had been affirmed by the SSAT; and

(b) the application were an application for review of the decision as varied.”

11.     The issues for determination are whether there are parenting payment and/or family tax benefit debts owed by the applicant to the Commonwealth, what the amount of any such debt is and whether any such debt is to be written off or waived.

Applicant’s Evidence

12.     The applicant gave the following evidence.

13.     During the period under consideration, she had been under considerable stress due to a range of factors.  One of these related to her family situation.  She was divorced and had remarried.  She had four children who lived with her and her new husband, Mr Ray Orenshaw.  He had three children, one of whom lived with them as well.  Mr Orenshaw’s other children would visit on school holidays meaning that there were seven children there at those times.  This led to much tension between the children. The family was also under significant financial pressure.  She did not have a full-time job but worked as much as she could on a casual basis occupying herself in four separate forms of work although, because of the nature of the work, it was not available to her during school holidays.  She would work for up to 60 hours per week. Mr Orenshaw was in full-time study at University for much of the period.  Also, the applicant and Mr Orenshaw had purchased a home during the period.  From time to time, the applicant’s children would stay with their father.  She tried to keep Centrelink informed of her income details and the changing family arrangements with the children but was not aware that she had to report each occasion that the children went to the father’s home because she knew that Centrelink had the details of the court order which determined the custody arrangements that were in place.

14.     She was constantly in receipt of material from Centrelink in which information was given and details required and she was confused by the differences in the information arrangements required for parenting payment and family tax benefit.  She would attend the Centrelink office and frequently be advised that she was in the incorrect queue for the payment type about which she was giving or seeking information.  She found it frustrating that the office would not have her details on her file and, on one occasion, attended the office at a pre-arranged appointment time, only to find that no-one was aware of it when she arrived.  She said that she was always having “to go over” her details again.

15.     In September or October 2001, Mr Orenshaw had become ill with a heart murmur but this had now settled and she thought that his condition was due to stress.  This also affected her to a point where she was seeing her doctor and, by March or April 2002, was commenced on a course of the anti-depressant Zoloft  which she is still taking.  She and Mr Orenshaw had separated for a short period early in 2002 and, again, she believed that it was because of the stress that they were under.

16.     She is currently employed at the local state high school for approximately 25 hours per week and is paid an average of $625 per week.  Out of this, she is making repayments of her family tax benefit debt and has repaid the parenting payment debt.  The financial burden has eased in comparison to what it had been because there are now fewer children at home.  Her eldest daughter left to attend University in Brisbane in 2001 and returns to the home on weekends.  One of her sons has gone to live with his father.  Also, she and Mr Orenshaw have been able to consolidate the various debts that had accrued on credit cards by taking a larger mortgage out on their home.

Ray Orenshaw’s evidence

17.     Mr Orenshaw said that he and the applicant had operated under much stress during 2000/2001 and that this was the cause of the heart problem he experienced in September 2001.  He said that the problem had now been overcome and that he no longer had any symptoms. He said that he believed that the depression of the applicant was contributed to by those stressors and by the constant harassment she received firm Centrelink.

18.     Mr Orenshaw said that he had recently commenced a part-time position which involved marketing “wellness products” and he said that he would be working on a commission basis but was not able to give an indication of his likely earnings.  He said that he had earned no income to date.

19.     Mr Orenshaw was critical of Centrelink for not having particular arrangements in place for blended families like those of him and the applicant.  In his case, he had a larger family to cope with and also had to visit his other children periodically.  This involved him in a round trip of 1200 kilometres.

Applicant’s Case

20.     The applicant said that she had always attempted to provide the correct information about income and child arrangements to Centrelink but conceded hat this may not always have occurred and that this was what led to the overpayments. She said that she was not in a position where she could take issue with the method by which the debts had been calculated.  However, she submitted that there had never been any lack of good faith on her part and that her dealings with Centrelink were always honest.  She submitted that the income details required by Centrelink were confusing because of the different calculation techniques for parenting payment and family tax benefit.  In relation to the children, she submitted that the knowledge of the court-ordered custody arrangements that Centrelink had should have meant that she was not required to provide detailed movements of the children.

21.     The applicant was also critical of the way in which, whenever she has raised the issue of her overpayments with Centrelink, a further decision has been made to increase the level of her indebtedness.

Respondent’s Case

22. Ms Wallis–Dunn submitted that the amounts of the debts under consideration were $968.40 for parenting payment and $4496.35 for family tax benefit. In relation to the latter debt, she relied on sub-section 143(1) of the FAA Act and said that the basis for the increase in the debt was further information about the sharing of custody of the children between the applicant and the children’s father. She referred to an absence of challenge to the amounts of the debts and to notices that had been forwarded to the applicant requiring specific information about income and child sharing arrangements. She submitted that the matter for consideration was whether they could be written off or waived.

23. She submitted that the terms of section 1236 of the SS Act and section 95 of the FAA Act had not been met in respect of the debts being written off. For parenting payment, the debt had been repaid and, for family tax benefit, the applicant was making repayments through withholding from her present entitlements.

24.     For waiver of the debts, Ms Wallis–Dunn conceded that $1000 of the family tax benefit debt should be waived under the Transition Act but that the circumstances of the applicant were not exceptional, extraordinary or unusual such as to enable any other waiver to be entertained.

25.     Whilst conceding that the applicant had a difficult time during the period in question because of her family and employment arrangements, Ms Wallis–Dunn submitted that being part of a composite family and dealing with associated tension is not all exceptional, extraordinary or unusual in Australia today and that the difficulties faced by the applicant were not greater than those experienced by many Australian families.  She submitted that this was also the case for the obligation of Mr Orenshaw to travel a distance to visit his two children that did not live with him and the applicant.

26.     In relation to the suggestion of harassment by Centrelink, Ms Wallis–Dunn submitted that Centrelink was under an obligation to dispense public monies in accordance with the relevant legislation and this involved a need to obtain information from those who receive income support payments from the Commonwealth.

Consideration

27.    The applicant has not disputed that she has been overpaid both parenting payment and family tax benefit.  She is critical of the way in which successive decisions have been made to increase the level of her indebtedness.  However, I am satisfied that those debts have been calculated in accordance with the income levels of the applicant and Mr Orenshaw throughout the financial year 2000/2001 as well as the shared custody arrangements that existed between the applicant and her former husband.  That includes the most recent increase in the level of the family tax benefit debt to $4496.35.

28. In this case, the decision of the Social Security Appeals Tribunal was made on 26 July 2002 (see T2/3). The application for review of that decision by the Tribunal was lodged on 3 September 2002 and the decision to vary the amount dealt with in the Social Security Appeals Tribunal decision to $4496.35 was made on 19 September 2002 (see T34/137). The applicant was notified of this decision by notice dated 20 September 2002 (see T35/138). This means that the terms of sub-section 143(1) of the FAA Act have been met and the application for review is to be treated as if the decision, as varied, had been affirmed by the Social Security Appeals Tribunal and as if the application were an application for review of the decision as varied. This means that the decision under review relates to the amount of $4496.35.

29. The provisions in respect of writing off the debts or either of them are set out above: see section 1236 of the SS Act and section 95 of the FAA Act. Write off applies if the debt is irrecoverable at law, if the debtor has no capacity to repay the debt, if the debtor's whereabouts are unknown or if it is not cost effective for the Commonwealth to take action to recover the debt. The last two of those requirements do not arise and neither of the first two is met. In particular, in order for a debt to be irrecoverable at law, it must not be able to be recovered by means of deductions. The applicant has repaid the parenting payment debt and is making repayments of her family tax benefit debt by deduction from current family tax benefit payments. Therefore, they are not irrecoverable in accordance with the provisions and she has a capacity to repay the debt. I am satisfied that the write off provisions are not applicable in this case.

30.    The respondent has waived $1000 of the family tax benefit debt under the Transition Act and I am satisfied that is appropriate in the applicant’s case.

31. A debt may also be waived if it was attributable solely to an administrative error made by the Commonwealth. However, that basis for waiver is not raised by the evidence or submissions in this case. The alternative is for the waiver provisions in section 1237AAD of the SS Act and section 101 of the FAA Act to be considered. These provisions are set out above and require that there be special circumstances to justify that action.

32. Neither the SS Act nor the FAA Act provides guidance as to the meaning of the term special circumstances in their respective provisions.  In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Court of the Federal Court, in dealing with the phrase, stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674). There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security (1984) 1 AAR 362) where (at 364) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances must be “unusual, uncommon or exceptional” and must have a “particular quality of unusualness that permits them to be described as special".

33.    In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“would require something to distinguish… [the] 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.”

34.     In this case, the applicant has relied on her family circumstances and employment arrangements as well as the stressful effects of these on her and Mr Orenshaw as bringing her within the ambit of special circumstances.  I am satisfied that there were tensions in the household which flowed from the dynamics associated with the bringing together of children from separate families and with children in the family being separated from siblings and a parent.  However, I accept the correctness of the submission of Ms Wallis–Dunn in that regard and am satisfied that those family circumstances are not at all uncommon in Australia and that the situation in which the applicant found herself, while stressful, was not special in the sense of being unusual, uncommon or exceptional.  I am also satisfied that there were financial concerns during the period but, again, that is not an unusual, uncommon or exceptional thing.  Moreover, since that time, I am satisfied that there has been an improvement in both the family and financial situation of the applicant who now has a smaller household to cope with, who has more regular employment and whose husband has part time work in prospect.

35. I am satisfied that there is nothing in this case that gives it the character of unusualness or unfairness and I am satisfied that there are no special circumstances in the applicant’s case that would justify waiver of the parenting payment debt under section 1137AAD of the SS Act or the waiver of the family tax benefit debt under section 101 of the FAA Act.

Decision

36.     The decision under review is affirmed

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member

Signed:         Sarah Oliver

Associate

Date of Hearing  20 March 2003
Date of Decision  1 April 2003

The Applicant Appeared in Person
Solicitor for the Respondent     Ms H Wallis-Dunn, Departmental Advocate