Papas and Secretary, Department of Social Services (Social services second review)

Papas and Secretary, Department of Social Services (Social services second review) [2017] AATA 639 (8 May 2017)
Division:GENERAL DIVISION
File Number(s): 2015/5953
Re:Con Papas
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member A Poljak
Date:8 May 2017
Place:Sydney

The decision under review is affirmed.
...........................[sgd].............................................
Senior Member A Poljak
CATCHWORDS
SOCIAL SECURITY – carer payment – overpayments – debt recovery – basis to write off or waive debt – special circumstances – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 17, 1060, 1164, 1161, 1173
CASES
Beadle and Director-General of Social Security [1984] AATA 176
REASONS FOR DECISION
Senior Member A Poljak
8 May 2017
INTRODUCTION

The applicant, Mr Papas, has been in receipt of a Carer Payment (“CP”) since 18 December 2012. He has also received periodic compensation payments from QBE (his former worker’s compensation insurer) since February 2012. Throughout the period 13 January 2013 to 25 February 2015 (“the relevant period”), Mr Papas was receiving periodic workers compensation payments at a rate of $277 per week, increasing to $758.80 per week from 8 February 2014.
On 23 March 2015, the Department of Human Services (“Centrelink”) decided that Mr Papas was not entitled to $38,654.36 in payment of CP that had been paid to him in the relevant period and that this amount was a debt that had to be repaid. The decision was affirmed by an Authorised Review Officer (“ARO”) of Centrelink on 5 June 2015.
On 12 October 2015, the Social Services and Child Support Division of the Administrative Appeals Tribunal (“SSCSD”) set aside the decision of the ARO and directed:
(a)there is a debt against the applicant of $38,654.36 for the relevant period;
(b)recovery is to be waived of that part of the debt relating to payments in the following periods:
(i)13 January 2013 to 14 February 2013;
(ii)28 October 2014 to 13 February 2015.
(c)The balance of the debt is to be recovered.
The applicant seeks review of this decision.
Accordingly, the issues to be considered in these proceedings are:
(a)whether the applicant was paid CP at a higher rate than what he was entitled to during the relevant period;
(b)and if so, whether overpayment of CP received by the applicant during the relevant period is a legally recoverable debt; and
(c)if so, whether all or part of the debt should be waived or written off for a period.
RELEVANT LEGISLATIVE PROVISIONS
The rate of CP payable to a suitably qualified person is calculated under section 1064 of the Social Security Act 1991 (Cth) (“the Act”).
Section 17 of the Act provides that CP is a compensation affected payment.
The term compensation is defined in section 17 as follows:
(2)Subject to subsection (2B), for the purposes of this Act, compensation means:
(a)a payment of damages; or
(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d)any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
Part 3.14 of the Act includes provisions that deal with compensation payments. Section 1160 outlines the general effect of the Part and provides:
(1)This Part operates in certain specified circumstances to do one or more of the following:
(a)reduce a person’s compensation affected payment;
(b)render a person’s compensation affected payment not payable;
(c)require the repayment of some or all of a person’s compensation affected payment;
because of the receipt of compensation by the person or the person’s partner.
(2)This Part applies whether or not there is any connection between the circumstances that give rise to the person’s qualification for the compensation affected payment and the circumstances that give rise to the receipt of compensation by the person or the person’s partner.
Section 1161 provides that the Part applies to:
(2)Subject to subsections (2) to (7), payments of a compensation affected payment are affected under this Part if:
…
(b)in the case of any other kind of compensation affected payment, the compensation was received on or after 1 May 1987 and the claim for the compensation affected payment was made on or after 1 May 1987.
…
(3)This Part applies to carer payment if:
(a)the compensation was received on or after 1 January 1993; and
(b)the claim for the carer payment was made on or after 1 January 1993.
Section 1173 of the Act sets out the effect of periodic compensation payments on the rate of a person’s compensation affected payment as follows:
(1)If:
(a)a person receives periodic compensation payments; and
(b)the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c)the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person’s compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
(2)The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
(3)The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
(4)If:
(a)a person receives periodic compensation payments; and
(b)at the time of the event that gave rise to the entitlement of the person to compensation, the person was qualified for, and was receiving, a compensation affected payment; and
(c)the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the periodic compensation payments are to be treated as ordinary income of the person for the purposes of this Act.
BACKGROUND
On 18 December 2012, Mr Papas contacted Centrelink about his intention to claim CP. He provided pay slips for the period 28 October 2012 to 3 November 2012 and 4 November 2012 to 2 November 2012, recording a workers compensation amount of $277 per week respectively.
On 1 February 2013, Centrelink sent a notice to Mr Papas and his legal representatives, advising that any compensation payment may affect current or future payments. A compensation preliminary notice was sent to QBE Workers Compensation on 1 February 2013.
Centrelink sent Mr Papas a notice on 14 February 2013, with an annual income recorded as $2.52. On 24 October 2013, Centrelink sent Mr Papas a notice which stated that his annual income was recorded as $2.10.
On 12 December 2013, 12 February 2015 and 13 February 2015, an Income Statement was issued to Mr Papas advising that his annual income was recorded as $1.68.
On 13 February 2014 and 11 September 2014, Centrelink sent Mr Papas a notice which stated that his annual income was recorded as $1.68.
On 26 February 2015, Centrelink sent QBE a Request for Compensation form. QBE confirmed that Mr Papas was in receipt of periodic compensation since 20 February 2012. QBE records show that Mr Papas received weekly compensation payments of $277 increasing to $778.32 during the debt period. Since these figures were not known to Centrelink, it follows that Mr Papas received more CP than he was entitled to receive during the relevant period.
DEBT ARISING
Section 1223 of the Act provides that when a person obtains the benefit of a payment that the person was not entitled to for any reason, the amount of the overpayment is a debt due to the Commonwealth.
Mr Papas does not dispute the value of the debt arising or the accuracy in which it was calculated.
Based on the calculations provided by the Department I am satisfied that the amount of the overpayment received by Mr Papas in respect of the period 13 January 2013 to 25 February 2015 was $38,654.36. He owes this amount to the Commonwealth.
CAN THE DEBT BE WRITTEN OFF?
Subsection 1236 of the Act provides, in part:
(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.
(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.
There is no evidence before me to suggest that any of the conditions set out in s 1236(1A) are met.
It follows, that I am not satisfied that the debt should be written off.
WAIVER OF DEBT ARISING
Administrative Error
Section 1237A of the Act identifies the circumstances in which the Secretary may waive the right to recover all or part of a debt on the basis of an Administrative error. It provides:
(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. (Emphasis added)
At the time of claim Mr Papas advised Centrelink of periodic compensation payments in the amount of $277 per week. These weekly compensation payments were not recorded by Centrelink in error.
Centrelink issued Mr Papas with a notice on 14 February 2013, informing him that his CP was calculated on the basis that his annual income was $2.52. On 28 October 2014, Mr Papas contacted Centrelink and advised that he was receiving compensation payments in the amount of $778.32 per week from QBE. The increase in weekly compensation payments occurred with effect from 8 February 2014. These payments were not recorded in error.
On 13 February 2014, Centrelink notified Mr Papas that his CP was calculated on the basis that his annual income was $1.68. Mr Papas did not contact Centrelink to correct this amount even though he was still in receipt of weekly compensation payments.
On 11 September 2014, Centrelink notified Mr Papas again that his CP was calculated on the basis that his annual income was $1.68. Again Mr Papas did not contact Centrelink to correct this amount despite continuing to receive weekly compensation payments.
Mr Papas’ failure to contact Centrelink and advise of the error in his annual income as recorded in the notices dated 13 February 2014 and 11 September 2014, was an error on his part, so therefore, the overpayments that occurred as a result were not caused solely by administrative error by Centrelink and therefore cannot be waived pursuant to section 1237(1) of the Act.
The Secretary concedes that the part of the debt arising in the period 13 January 2013 to 14 February 2013 and 28 October 2014 to 13 February 2015 should be waived due to sole administrative error. The Secretary correctly contends that the remainder of Mr Papas’ debt, in the amount of $30,587.87, is an amount owed to the Commonwealth and must be repaid.
Special Circumstances
Subsection 1237AAD of the Act provides:
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 this Act, the Administration 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.
Special circumstances are not defined in the Act however the Tribunal has provided some guidance by the decision of Beadle and Director-General of Social Security [1984] AATA 176 at [12]:
An expression such as “special circumstances” is, by its very nature, incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances of 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. (Emphasis added)
Mr Papas advised that he provides care for his elderly father and his now 14-year-old daughter. It is accepted by the Secretary that Mr Papas suffers from lower back pain, a rotator cuff injury of his right shoulder and depression. He has no medical expenses relating to these conditions as they are covered by QBE.
There is no evidence before me of any financial hardship occasioned by the debt. I understand Mr Papas continues to receive $778.32 per week in compensation payments.
There is nothing which takes Mr Papas’ situation out of the ‘usual or ordinary case’. I am therefore not satisfied that there are special circumstances warranting waiver of all or part of the debt.
CONCLUSION
For the reasons given above, the decision under review is affirmed.

I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak.

...................................[sgd].....................................
Associate
Dated: 8 May 2017

Date(s) of hearing: 1 February 2017

Applicant: In person

Solicitor for the Respondent: Biljana Salaji, Department of Human Services

[2017] AATA 639

8 May 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Remedies

Procedural Fairness

Date(s) of hearing:	1 February 2017
Applicant:	In person
Solicitor for the Respondent:	Biljana Salaji, Department of Human Services