Palomaki and Secretary, Department of Family and Community Services
[2004] AATA 1194
•11 November 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1194
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/213
GENERAL ADMINISTRATIVE DIVISION )
Re MATTI PALOMAKI Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr EK Christie, Member Date11 November 2004
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and in substitution therefore decides:
(i) to waive the overpayments received over the period 19 December 2000 to 13 August 2001;
(ii) that the overpayments received over the period 14 August 2001 to 10 February 2003 remains a debt that may be recovered by the Commonwealth; and(iii) the recovery of the residual balance of the overpayments is to not exceed $10 per fortnight.
The Tribunal’s decision is to take effect from the date of the hearing. This decision means Mr. Palomaki’s application for review is partly successful.
(Signed) MEMBER
CATCHWORDS
SOCIAL SECURITY - benefits and entitlements - disability support pension - marriage-like relationship - bereavement allowance - overpayment - waiver for administrative error - waiver for special circumstances - write-off
Social Security Act 1991 ss 4(3), 1236, 1237A, 1237AAD
Prince v Secretary, Department of Education, Employment and Youth Affairs [1997-98] 50 ALD 186
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277
Re Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re L and Secretary, Department of Social Security (1995) 21 AAR 412
Director-General of Social Services v Hales (1983) 47 ALR 281
Re Waller and Secretary, Department of Social Security (1985) 8 ALD 26
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60REASONS FOR DECISION
Dr EK Christie, Member 1. This is an application by Matti Palomaki to review a decision of the Social Security Appeals Tribunal (“the SSAT”) made on 8 March 2004 in which the SSAT decided to recover a debt of $3,984.30 of Disability Support Pension (“DSP”) payments accrued over the period 19 December 2000 to 10 February 2003 (‘the relevant period”).
2. In arriving at this decision the SSAT concluded:
“20.The circumstances in which a person is considered to be a member of a couple are set out in section 4(2) and (3) of the Act. Mr Palomaki and Ms Payne were not married. However according to Mr Palomaki from about December 2000 they lived together in his unit as man and wife, sharing expenses, having a social life together. The relationship was a sexual one and they shared the same bed. The relationship would have continued but for Ms Payne’s death and the parties relied on each other for companionship and support. In those circumstances the Tribunal agrees that Mr Palomaki and Ms Payne were members of a couple from December 2000 until February 2003.” (T2, Folio 9)
and
“24.The debts in this case were not caused solely by administrative error on the part of the Commonwealth. They were primarily caused by the failure of Mr Palomaki to notify Centrelink of his living as a member of a couple with Ms Payne. Special circumstances in the context of section 1237AAD are circumstances that are uncommon unusual or exceptional. In Mr Palomaki’s case there are no circumstances with [sic] can be said to be so uncommon, unusual or exceptional as to enable the debt to be waived under this section either.” (T2, Folio 10)
3. The Tribunal notes that the SSAT decision refers to the fact that Mr Palomaki could not “come to the [SSAT] hearing because he had no more than 35 cents in his possession” (T2, Folio 10). However, notwithstanding this statement, the SSAT did not pursue the question of write-off of the overpayments.
4. At the hearing Mr Palomaki represented himself. The respondent was represented by Ms H Wallis-Dunn, a Departmental Advocate. Mr Palomaki gave evidence on his own behalf. The respondent called no witnesses.
5. At the hearing the Tribunal had in evidence before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) (Exhibit 1) and the various documents lodged by the parties.
Tribunal’s Inquisitorial Powers
6. At the conclusion of the hearing, the Tribunal exerted its inquisitorial powers and required a Statement of Financial Circumstances to be completed by Mr Palomaki in order to consider whether there was any basis to write-off any overpayments. The parties were invited to make supplementary submissions in this regard after the document had been filed.
Facts
7. The general facts were not in dispute and may be stated briefly. Mr Palomaki is now aged 52 and has received DSP since February 1991 for injuries received in a motor vehicle accident.
8. On the basis of the evidence before it, the SSAT made the following findings of fact:
“[a] Ms [Debra] Payne commenced living with Mr Palomaki at his Housing Queensland unit in about December 2000.
[b]Mr Palomaki and Ms Payne shared the rent and other living expenses.
[c]They had a sexual relationship.
[d]They went on social outing[s] together.
[e]They intended to continue to live together and relied on each other for companionship and support.” (T2, Folio 8)
9. Ms Payne passed away on 15 February 2003. Mr Palomaki received a payment of bereavement allowance of about $1,950 in November 2003.
10. Mr Palomaki received payments of DSP, at the single rate, over the period 19 December 2000 to 10 February 2003 (“the relevant period”).
11. Overpayments have been recovered at the rate of $67.40/fn which has been reduced over time to $40/fn to $30/fn to $20/fn. The balance, at the date of the hearing, was $3140.50.
Preliminary Issue for the Tribunal to Decide
12. The respondent sought a declaration at the commencement of the hearing whether Mr Palomaki was in a marriage-like relationship over the “relevant period”.
13. The Tribunal sought a response from Mr Palomaki to the findings of fact made by the SSAT (see paragraph 8 of this decision). Mr Palomaki agreed with all these findings. With respect to finding [b], Mr Palomaki stated “that they both paid their share”.
14. Mr Palomaki was then referred to the following “Discussion of Evidence” contained in the SSAT decision:
“10.Mr Palomaki is adamant that he and Ms Payne were living in a defacto relationship. After she moved in with him they shared a bed and the relationship was, according to Mr Palomaki’s evidence, a full marriage like relationship. They shared their expenses, socialised together, had a sexual relationship, they depended on each other for companionship and support and the relationship would have continued had Ms Payne not unfortunately passed away. Mr Palomaki certainly considered them to be members of a couple and still does so strongly.” (T2, Folio 7)
15. Mr Palomaki agreed with the material contained in every sentence of the SSAT statement. Accordingly, the Tribunal considered his responses with respect to the statutory criteria for a “marriage-like relationship” contained in subsection 4(3) of the Social Security Act 1991 (“the Act”):
“Member of a couple—criteria for forming opinion about relationship
4.(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to each other; and
(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i) the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage-like relationship.” [Tribunal emphasis]
16. On considering the conclusions made by the SSAT, together with Mr Palomaki’s responses to these conclusions against the statutory criteria at the hearing before the Tribunal, the Tribunal made a declaration that Mr Palomaki was in a marriage-like relationship over the period 19 December 2000 to 10 February 2003. This meant he was not entitled for payment of DSP at the single rate. However, he was entitled to the bereavement allowance.
Issues for the Tribunal to Decide
17. The only issues for the Tribunal to decide were whether the overpayments of DSP received over the period 19 December 2000 to 10 February 2003 could be:
(a)waived under the “administrative error” provisions of the Act (section 1237A); or
(b)waived under the “special circumstances” provisions of the Act (section 1237AAD); or
(c)“written off” under section 1236 of the Act.
Statutory Requirements and Case Law
18. Section 1237 of the Social Security Act 1991 provides for circumstances where a debt due by a recipient of social security to the Commonwealth may be waived, either in part or in full. These circumstances arise if the overpayment arose from “administrative error” or whether there were “special circumstances” that led to the overpayment.
19. Section 1237A provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “administrative error”:
“SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
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).” [Tribunal emphasis].
20. For this section of the Act to apply to Mr Palomaki’s factual situation, Mr Palomaki must not have contributed, in any way, to the administrative error that led to the overpayment. In addition, Mr Palomaki must have received his overpayments of social security entitlements in “good faith”. Both these requirements must be satisfied for Mr Palomaki to succeed under the “administrative error” provisions of the Act.
21. The legal meaning of “good faith” was considered by the Federal Court in Prince v Secretary, Department of Education, Employment and Youth Affairs [1997-98] 50 ALD 186. In this case, Finn J stated:
“…if that person knows or has reason to know that he or she is not entitled to a payment received - i.e. is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith…the [legislation] does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise”.
22. Section 1237AAD provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:
“1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
“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 1947 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.” [Tribunal emphasis].
23. For this section of the Act to apply to Mr Palomaki’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mr Palomaki must not have “knowingly” made a false statement or false representation or failed to have complied with a provision of the Social Security Act. Both these requirements must be satisfied for Mr Palomaki to succeed under the “special circumstances” provisions of the Social Security Act.
24. The meaning of the term “knowingly” has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 where Deputy President Forgie stated (at 445):
“There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act of or omission.”
25. The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”. In that case the Tribunal said (at 3):
“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”
26. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
27. In Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277, a case that also referred to the Federal Court’s decision in Beadle, French J held that “special circumstances” is where there is “something unusual or different to take the matter the subject of the discretion out of the ordinary … [But] that does not require the case be extremely unusual, uncommon or exceptional”.
28. The Tribunal agrees with the following observations of Senior Member Handley in Re Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543, with respect to advice given to social security recipients by Departmental officers:
“Any failure to regard the seriousness of the consequences of the giving of wrong advice as not being a circumstance special to the person or persons who have suffered as a result of that advice would be cruel. Citizens are entitled to act upon the advice given to them by representatives of government through its departments and agencies. Citizens also are entitled to have confidence in the advice that they are given by persons in authority and who represent government departments and agencies. Citizens should be entitled to expect nothing less.”
and
“The responsibility for efficient and effective administration of departmental practice and policy must carry with it a responsibility for any error or mistake which is made by the departmental officers alone. The presence of the debt in the circumstances of this case is a circumstance undoubtedly special. That the department would seek to enforce it and recover it only reinforces the circumstances being special.”
29. Section 1236(1) of the Act sets out the requirements for a debt due to the Commonwealth to be written off:
“1236 Secretary may write off debt
1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.”
30. A former President of the Tribunal, Mathews J, has commented on the write-off provisions of the Act in Re L and Secretary, Department of Social Security (1995) 21 AAR 412, and observed that the financial circumstances of the debtor and the prospect of the recovery of the debt will necessarily be the primary considerations in deciding whether to write off a debt. Mathews J summarised the position as follows (at 428):
“In summary, I consider that matters relating to the personal financial hardship of the individual are always relevant in any decision as to write off under s 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation? If an affirmative answer is reached to this question, then it would be appropriate to defer recovery in the manner contemplated by s 1236(1).”
31. In considering its discretion for write-off under the Act, the Tribunal has also had regard to a number of factors referred to by the Federal Court in Director-General of Social Services v Hales (1983) 47 ALR 281. These factors were summarised by Senior Member Dwyer in Re Waller and Secretary, Department of Social Security (1985) 8 ALD 26 at 42 as follows:
(a)the fact that the applicant has received public moneys to which he was not entitled;
(b)the way in which the overpayment arose, whether as a result of innocent mistake or fraud;
(c)the financial circumstances of the applicant;
(d)the prospect of recovery;
(e)whether a compromise is offered;
(f)whether recovery should be delayed if there is a prospect that the circumstances of the person who received the overpayment may improve; and
(g) compassionate considerations and the fact that the Act is social welfare legislation and any financial hardship which may result from any action for recovery.
Examination of the Evidence
§ Oral Evidence of Matti Palomaki
32. Mr Palomaki stated that he had informed Centrelink that he and Ms Payne had moved into a de facto relationship from the outset in late 2000. For purposes of determining the amount of rent of the unit he lived in, Housing Queensland had required an “Income Statement”. Mr Palomaki advised Housing Queensland that Ms Payne was moving in with him. On the same day be obtained the Income Statement, both he and Ms Payne had personally informed Centrelink, at Southport, about their de facto relationship. Mr Palomaki said that he was “absolutely sure” that he had told Centrelink about their de facto relationship because Centrelink had asked him why he required an Income Statement. In reply to this Centrelink query, Mr Palomaki had said that the Income Statement was required because he was now in a de facto relationship.
33. Mr Palomaki refused to accept any suggestion that he had not told Centrelink about his de facto relationship at this time – or that he had only told Housing Queensland about this relationship.
34. Mr Palomaki stated that at the time he obtained the Income Statement for Housing Queensland, he had not been told by Centrelink that being in a marriage-like relationship would affect the amount of his social security entitlements. Mr Palomaki stated that he was unaware of a difference in entitlements for single and married people and that he had never queried this point. Instead, he had relied on Centrelink “getting it right”.
35. Mr Palomaki said that he could not remember receiving the Living Arrangements Details Form sent to him on 13 August 2001. He said that he usually received letters sent by Centrelink as very little mail was not received. He then acknowledged it would be a “fair chance that he would have received this letter [the Living Arrangements Details Form]”. He said that it was his usual practice, when a form was received from Centrelink, to complete the form and to send it to Centrelink.
36. Mr Palomaki was referred to a Centrelink File Note (T10, 13 August 2001) in which he had raised a query about his “partner’s record”. The File Note referred to there being no partner listed for him and that he had never been partnered i.e. according to the main screen. Mr Palomaki stated that he was confused about the meaning of the term “partner” as used by Centrelink. He used the term “de facto” as meaning two people living together under the one roof – whereas his understanding of the meaning of the term “partner” did not necessarily mean a situation where two people lived together e.g. business partners. He said that Centrelink never asked him whether he was in a “de facto” relationship – only whether he had a “partner”. However, he believed these terms to have different meanings.
37. A consequence of this query made by Mr Palomaki to Centrelink, on 13 August 2001, was that a Living Arrangements Details Form was sent by Centrelink for him to complete.
38. Mr Palomaki said that it was his practice to read only the first part of the notification notices that he received from Centrelink. He said that if he saw that there were no changes, such as arrangements, addresses, circumstances, bank account, he would then discard the letter. He said that he had always assumed Centrelink always got it right. In addition he had never checked the rate of DSP entitlements he received as he assumed it to be correct.
39. Mr Palomaki stated that he had a Concession Card with his, and Ms Payne’s, names on it (Exhibit 3). Mr Palomaki said that he could not understand why Centrelink could not get the facts correct, from the outset, that he and Ms Payne were in a marriage-like relationship, given his Concession Card also indicated this to be the case.
40. Mr Palomaki was referred to a visit that he and Ms Payne had made to the Centrelink office at Southport in February 2002, about 12 months before Ms Payne passed away. He acknowledged that the purpose of his visit was to query why Ms Payne received a lower DSP entitlement than his. He said that, at this time, he had again advised the Centrelink office at Southport that they were both in a de facto relationship.
41. Mr Palomaki then referred to a further inquiry about bereavement allowance after Ms Payne had passed away. He said that the Centrelink Southport employee told him that he was entitled to the bereavement allowance as it was accepted by Centrelink that they had been in a marriage-like relationship. However, it was not until after he received the bereavement allowance that he first became aware about overpayments of DSP arising from receiving his entitlements at the single rate.
Submissions and Contentions of the Parties
42. Ms Wallis-Dunn submitted that the respondent was unaware that Mr Palomaki and Ms Payne were in a marriage-like relationship as there was no record on either of the files of both DSP recipients. She submitted that if Centrelink had been advised that Mr Palomaki and Ms Payne had changed their status from single to a de facto relationship, this would be a significant change and that it would be highly unusual for a Centrelink employee not to make a note of it. Accordingly, she submitted that Mr Palomaki had not notified Centrelink about his relationship with Ms Payne at the time it commenced in 2000.
43. Ms Wallis-Dunn submitted that Mr Palomaki had a number of opportunities, over time, e.g. 13 August 2001 and 5 November 2001, to advise Centrelink of the nature of his relationship with Ms Payne. However, the absence of any marriage-like relationship on Centrelink records indicated that at no stage had Mr Palomaki raised such a query. She contended that, based on the number of occasions Mr Palomaki had claimed he had advised Centrelink, it would have been unusual for there to have been no reference of their relationship on Centrelink records.
44. Ms Wallis-Dunn submitted that the overpayments could not be waived because of “administrative error” because Mr Palomaki had contributed to the error. He had never queried whether he received the correct entitlement – and had only assumed it to be correct. He had never raised any query as to the amount being correct – notwithstanding he had opportunity to do so.
45. In addition, she submitted that it was relevant that his practice was to only read the top part of notification notices and not the whole document. Ms Wallis-Dunn contended that Mr Palomaki had exercised “wilful blindness” towards meeting his obligations as a social security recipient.
46. Ms Wallis-Dunn submitted that the debt could not be waived because of “special circumstances”. She acknowledged that no false statements had been made by Mr Palomaki. However, there was nothing “unusual”, “uncommon” or “exceptional” in the facts to justify the description of “special circumstances”.
47. In addition, she submitted that Mr Palomaki had failed to comply with a provision of the Act. She contended that a certain amount of “wilful blindness” on the part of Mr Palomaki may result in him “knowingly” contravening his obligations as a social security recipient.
48. Mr Palomaki stated that he now accepts he has received an overpayment of DSP. However, it was his view that Centrelink had made the mistake with respect to his de facto relationship with Ms Payne.
49. It was also his contention that he should not have to repay the debt as it was not his fault. He conceded that he did not deny reasons the overpayment arose but he had informed Centrelink of his de facto relationship at the time it commenced. Therefore, he submitted that he should not have to pay for Centrelink mistakes as he was not responsible for their errors.
50. Mr Palomaki expressed concerns at understanding how Centrelink calculated his entitlements. He stated that he had always proceeded on the basis that Centrelink got it right. He also found it confusing as to the meaning of “partner” as used by Centrelink. “Partner” to him had an entirely different meaning to “de facto”.
51. Mr Palomaki concluded with the submission that Centrelink now sought to have a “little person” pay for their mistakes.
Consideration of the Issues
52. The question for determination of the Tribunal when conducting an application for review is whether the decision under review was the correct (i.e. when there is only one decision) or preferable one (i.e. when a range of decisions is available) on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60) [Full Federal Court].
53. The legislation is the only basis for the review of this administrative decision dealing with overpayments of social security entitlements. Administrative decision-makers are not permitted to depart from the law. The Tribunal must make its decision on the merits of the case – but in accordance with the legal requirements imposed by the Act, together with the relevant legal principles that arise from decisions made by our Courts.
54. The Tribunal first considers the information contained in the two relevant notification notices, that would have been available for Mr Palomaki to review with respect to changes in arrangements, addresses, circumstances and bank account. That is, by comparing (a) the notification notice sent to him immediately before the date he commenced his de facto relationship with Ms Payne (T6, 17 July 2000) and (b) the notification sent to him after the time he has stated he told Centrelink (and Housing Queensland) that he was in a de facto relationship with Ms Payne (T8, 23 November 2000).
55. The first notification notice (T6) contains the following information at the top of the letter (at Folio 26):
“Your Disability Support Pension ><TOPIC>
Immediate payment ><#DATES= 04/07/2000 – 17/07/2000 ><#AMOUNT = 313.50
><IMMPAY>
Regular payment ><#DATES = from payday 18/07/2000 ><ONPAY>
Disability Support Pension ><#AMOUNT = $386.90 ><ONPAYLIN>
Plus Pharmaceutical Allowance ><#AMOUNT = + $5.60 ><ONPAYLIN>
Less QLD Government Rent Payment ><#AMOUNT = - $79.00 ><ONPAYLIN>
Total ><#AMOUNT = $313.50 ><ONPAYTOT>
INFORMATION USED FOR CALCULATING YOUR REGULAR PAYMENT ><PAYCALC>
Annual Income ><#AMOUNT = $0.03 ><PAYCALLN>
IMPORTANT INFORMATION ><WRITEARR>
You should advise Qld Dept of Housing & Local Government that you have changed the deduction amount.”
56. The second notification notice (T8, 23 November 2000 at Folio 29) contains the following information:
“Your Disability Support Pension ><TOPIC>
Regular payment ><#DATES = from payday 06/12/2000 ><ONPAY>
Disability Support Pension ><# AMOUNT = #394.10 ><ONPAYLIN>
Plus Pharmaceutical Allowance ><#AMOUNT = + $5.60 ><ONPAYLIN>
Less QLD Government Rent Payment ><#AMOUNT = - $131.00 ><ONPAYLIN>
Total ><#AMOUNT = $268.70 ><ONPAYTOT>
INFORMATION USED FOR CALCULATING YOUR REGULAR PAYMENT ><PAYCALC>
Annual Income ><#AMOUNT = $0.03 ><PAYCALLN>
IMPORTANT INFORMATION ><WRITEARR>
Qld Dept of Housing & Local Government has asked us to change the amount of government rental payments we are taking out of your Disability Support Pension.”
57. Review of this information on both notification notices indicates a slight difference in DSP entitlements payable ($386.90 compared with $394.10) and an increase in government rental payments from $79 to $131. The increase in rental payments confirms Mr Palomaki’s evidence that he provided Housing Queensland with information to indicate that he was in a de facto relationship. The notification notice acknowledges that Qld Dept of Housing and Local Government had sought an increase in rental payments to be taken out of Mr Palomaki’s DSP.
58. However, the information on both notification notices – or any other information contained on either notice – does not indicate that DSP was being paid to Mr Palomaki at the single rate or couple rate – or state that his DSP entitlement had changed from the single rate to the married rate.
59. The first issue for the Tribunal to consider is whether the overpayments could be waived under the “administrative error” provisions of the Act.
60. The Tribunal finds that Mr Palomaki has contributed to the administrative error that led to the overpayments for failing to raise a query as to why his DSP entitlements had not changed when he informed Centrelink (and Housing Queensland) that he had entered into a de facto relationship. That is, for not raising a query by reading the top of the letters sent to him on 17 July 2000 (T6) and 23 November 2000 (T8) which show very little change in his DSP entitlement at a time when his rental payments had increased because he was in a de facto relationship. (Tribunal emphasis).
61. Consequently, the overpayments of DSP cannot be waived because of administrative error.
62. The Tribunal accepts Mr Palomaki’s evidence that he informed Centrelink’s Southport office, in late 2000, that he and Ms Payne had commenced a defacto relationship. His oral evidence that he informed Centrelink at this time is corroborated by the Centrelink “Income and Assets Statement” he obtained from Centrelink for Housing Queensland, in order to vary his rental payment [see paragraph 56] from the single rate to a couple rate. Furthermore, Mr Palomaki held a concession card which listed both he and Ms Payne on the same card (see paragraph 39).
63. Mr Palomaki’s oral evidence was that he only read the first part of the certification notice and if there were no changes, such as arrangements, addresses, circumstances, bank accounts, he would discard the letter, as he had always assumed Centrelink got it right. However, a review of the following two notification notices:
i.T6 17 August 2000 – before the defacto relationship commenced: and
ii.T8 23 November 2000 – immediately after the de facto relationship commenced
contained no information in the top part (or the entire document) to indicate to Mr Palomaki that his DSP payments had changed from the single rate to the “married” rate [but see paragraphs 55 and 56]. Consequently, there was no information in the notification notice that would trigger off a query by Mr Palomaki to Centrelink to clarify or check whether Centrelink had recorded that his Social Security status had changed from the single to the “married (couple)” rate.
64. Notwithstanding Mr Palomaki informed Centrelink of his changed status, this information was not acted upon immediately. It was not until 13 August 2001 (T10) that Centrelink sought information about Mr Palomaki’s domestic circumstances, by requesting him to complete a “Living Arrangements Details Form”.
65. Applying the legal authorities, the Tribunal finds that based on its conclusions in paragraphs 62-64, there were “special circumstances” in this case that were “unusual” or “uncommon” (See Beadle’s case). That is, this omission of Centrelink to record the commencement of the de facto relationship would be an “unusual” or “uncommon” event – notwithstanding there is no requirement for the case to be “extremely unusual or uncommon” (Boscolo’s case). The Tribunal concludes that the outcome in these circumstances is “something unfair or unintended” (See Groth’s case). Moreover, Mr Palomaki would be entitled to have confidence in the advice that was given by persons who represent government departments (McAvoy’s case).
66. The Tribunal further concludes that Mr Palomaki could not “knowingly” have failed to comply with a provision of the Act as he would not have had “actual knowledge” that he failed to comply with a provision of the Act (Callaghan’s case). The Tribunal’s earlier conclusions in relation to its analysis of facts with respect to “special circumstances” makes this quite clear.
67. Accordingly, the Tribunal finds that there are grounds for a partial waiver of the overpayment. That is, from 19 December 2000 to 13 August 2001. However, beyond this period, a failure by Mr Palomaki to complete the “Living Arrangements Details Form” led to the situation where the overpayments continued. Consequently, the waiver provisions for “special circumstances” do not extend beyond this date, 13 August 2001.
68. The next issue for the Tribunal to decide is whether there is a basis for the “write-off” provisions of the Act to be applied. One significant element for the Tribunal to consider is Mr Palomaki’s financial circumstances. At the end of the hearing (10 September 2004) the Tribunal requested Mr Palomaki provide a completed “Statement of Financial Circumstances”. A Telephone Directions Hearing was held on 14 October 2004 as Mr Palomaki had not completed all the necessary expenses listed on the form. The completed Statement of Financial Circumstances was received on 18 October 2004. The following Income and Expenses were stated by Mr Palomaki and presented on a fortnightly basis:
I Income
Disability Support Pension $354 $354 (Total)
II Expenses
Rent $ 96
Funeral Insurance $ 9
Optus Phone $ 36 (based on actual monthly bill)
Energex $ 24 (based on actual monthly bill)
Internet $ 13
Groceries $ 75
Meals on Wheels $ 15
Medical $ 2
Dental -
Chemist -
Tools/Books -
Clothing $ 10 (“second hand” clothes only)
Sport -
Casual Clothing -
Shoes $ 5
Entertainment -
Taxi $16 (September costs)
Recovery of Overpayment $20
Cigarettes ($17) Beer ($7) $24 (“If I am lucky”)
$345 TOTAL
69. Supplementary submissions in relation to the issue of write-off were received from the Respondent on 29 October 2004. Ms. Wallis-Dunn contended that Mr Palomaki had a capacity to repay the debt based on an assessment of income and expenditure. Furthermore, it was her contention that Mr Palomaki would not be in severe financial hardship if the withholdings of $20 per fortnight continued.
70. The Tribunal has applied the reasoning in Re Waller and makes the following findings:
i.Mr Palomaki received overpayment of public moneys for which he was not entitled;
ii.The overpayment to Mr Palomaki arose by an innocent mistake;
iii.In the present case, Mr Palomaki’s financial circumstances are not desperate but nor can it be described as comfortable. Mr Palomaki’s bank balance fluctuates from less than $20 to around $70 each month. He relies on “food aid” parcels at times. He has to borrow from friends, at various times, amounts varying from $20 to $60. He has no cash reserves for unforeseen expenses eg repairs to wheel bearings to his wheelchair. He cannot afford to pay the labour for such repairs or maintenance and must do the work himself.
iv.Mr Palomaki is on the DSP and so has no employment potential in the immediate future. The prospects of recovery of the overpayment of the residual balance are limited. There are no prospects that the medical condition and financial circumstances of Mr Palomaki may improve.
71. Based on these findings, together with the following observations on the requirements for recovery of overpayments made in Re Waller; “compassionate considerations and the fact that the Act is social welfare legislation and any financial hardship which may result from any action for recovery”, the Tribunal concludes that there is a basis for recovery of the residual balance of the overpayments. However, the rate of recovery of payments must not exceed $10 per fortnight – unless Mr Palomaki’s financial circumstances improve significantly in the future. Accordingly, the residual balance of overpayments cannot be written off.
72. For all of the above reasons the Tribunal decides:
i.To waive the overpayments received over the period 18 December 2000 to 13 August 2001;
ii.That the overpayments received over the period 14 August 2001 to 10 February 2003 reduces a debt that may be recovered by the Commonwealth; and
iii.The recovery of the residual balance of the overpayments is to not exceed $10 per fortnight.
The Tribunal’s decision is to take effect from the date of the hearing. This decision means Mr Palomaki’s application for review is partly successful.
I certify that the 72 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: .....................................................................................
B. Hitchcock, Personal AsstDate of Hearing 10 September 2004 (Southport)
Date of Decision 11 November 2004 (Brisbane)
The Applicant appeared in person
For the Respondent Ms H Wallis-Dunn, Departmental Advocate
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