Patray and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 130

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 130

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/3510

GENERAL ADMINISTRATIVE   DIVISION		)
Re		JEANNIE PATRAY

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr C. Ermert, Member

Date20 February 2008

PlaceMelbourne

Decision The Tribunal affirms the decision under review.  

(sgd) Mr C. Ermert

Member

SOCIAL SECURITY – family tax benefits – Department of Human Services removal of children from custody of adult – no advice of children leaving care – FTB debt to Commonwealth - recovery of debt – legally responsible for the day-to-day care, welfare and development of the young person – in the adult’s care – removal of children without consent of adult – provisions for non-recovery of debt to Commonwealth – whether special circumstances

Administrative Appeals Tribunal Act 1975

A New Tax System (Family Assistance) Act 1999

A New Tax System (Family Assistance) (Administration) Act 1999

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Dranichnikov v Centrelink (2003) 75 ALD 134

Groth v Department of SocialSecurity (1995) 40 ALD 541

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Director-General of Social Services v Hales (1983) 47 ALR 281

REASONS FOR DECISION

20 February 2008 Mr C. Ermert, Member       

1.      Miss Jeannie Patray was in receipt of family tax benefit (FTB) for her two children, Jason (born 21 November 1992), and Coral (born 28 September 1995).  On 8 August 2006 the Department of Human Services (DHS) removed Jason from Miss Patray’s care, and the DHS removed Coral from her care on 1 September 2006.  The children have not been returned to Miss Patray’s care.  Although Miss Patray had been sent letters telling her that she must advise the Family Assistance Office (FAO) if an FTB child stopped living with her, Miss Patray did not provide such advice and FTB continued to be paid. 

2.      On 22 September 2006 Centrelink, the service delivery agent for the respondent, was advised by the Child Support Agency (CSA) of the removal of the children from the care of Miss Patray.  Centrelink first reduced the rate of FTB to the base rate while there was dispute over the custody of the children.  Then, on 23 November 2006 Centrelink made a decision to cancel the payment of FTB.  Centrelink decided that Miss Patray had been paid $1,449.11 in FTB between 8 August and 21 November 2006 to which she had no entitlement.  Centrelink raised a debt of $1,449.11 and advised Miss Patray of the debt on 25 January 2007.

3.      The decisions of Centrelink to reduce the rate of FTB, to cancel the FTB and to raise and recover the debt were reviewed in turn by a Centrelink Authorised Review Officer and the Social Security Appeals Tribunal (SSAT).  The SSAT affirmed the three decisions on 25 June 2007.  This matter is an application to review the SSAT decision.

4. The parties consented to the review being determined without a hearing. Therefore, pursuant to s 34J of the Administrative Appeals Tribunal Act 1975, I proceeded to review the decision by considering the documents or other material lodged with or provided to the Tribunal without holding a hearing. I had before me the documents lodged by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T‑documents).  I accepted into evidence a copy of a facsimile message sent by Miss Patray to the Tribunal dated 10 December 2007, and I also had a copy of the respondent’s statement of facts and contentions dated 30 October 2007.

The Issues

5. To qualify for FTB section 21 of A New Tax System (Family Assistance) Act1999 (the Act) requires a person to have at least one FTB child.  Section 22 of the Act provides that an FTB child must be in the adult’s care.  In this case it is not in dispute that DHS took custody of Jason on 8 August 2006 and Coral on 1 September 2006 and hence the children were not in the care of Miss Patray from those dates.  There appears to be no dispute that FTB should have been reduced when Jason left Miss Patray’s care and cancelled when Coral left her care.

6.      Section 23 of the Act contemplates the ongoing payment of FTB for a period of up to 14 weeks when an event occurs in relation to the child without the adult’s consent.  This event must prevent the child being in the adult’s care and the adult must be taking reasonable steps to have the child again in the adult’s care.  In her facsimile dated 10 December 2007, Miss Patray says:

The money I received from Centrelink after my children were removed from my care, I received in good faith as I seeked (sic) solicitors for help in getting children back home from Child Protection as my children never wanted to leave. They were forced.

I accept this as raising an issue in respect of the application of section 23 of the Act. 

7. In regard to the debt, sections 70 and 71 of A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act) set out the provisions for debts to the Commonwealth arising from the payment of benefits to which the recipient is not entitled. Sections 95 to 101 of the same Act set out the provisions for the non-recovery of debts to the Commonwealth. In her application (T1), Miss Patray makes a number of points about the actions of the DHS which are not issues for this Tribunal. Relevantly to this matter, however, Miss Patray says:

It is not fair that you want me to pay back … if you take this silly debt off me that’s a start.

I accept this as an application for the non-recovery of the debt.

8.Thus the issues to be determined in this matter are:

oWhether the provisions of section 23 of the Act for the ongoing payment of FTB apply in this case; and

oWhether any of the provisions of the Administration Act apply for the non-recovery of the debt to the Commonwealth.

Effect of Section 23 of the Act

9.      As I said above, section 23 of the Act provides for the ongoing payment of FTB for a period of up to 14 weeks if an event occurs in relation to an FTB child of an adult, without that adult’s consent, that prevents the child being in the adult’s care; and the adult takes reasonable steps to have the child again in its care.  In this case it is clear that Jason and Coral, who were FTB children of Miss Patray up to the time of their removal by DHS, were taken from Miss Patray’s custody without her consent.  Miss Patray gave evidence at the hearing before the SSAT that she had fought hard in court to keep her children.  This evidence was not contested and I accept that Miss Patray took reasonable steps to have the children returned to her care.

10.     The respondent’s submissions on this issue are that the relevant departmental policy guidelines should apply.  The guidelines state that section 23 is only intended to apply in circumstances where a child is removed from the principal carer’s care without any legal authority (Respondent’s Statements of Facts and Contentions, Attachment C).  I note, however, that the references to the Act in the policy guidelines do not clearly trace the reasoning that arrives at the stated conclusion.Also, departmental policy guidelines are not necessarily binding on the Tribunal. 

11.     I turn to the provisions of section 22 of the Act which relevantly state that an individual is an FTB child of the adult if:

oThe individual is aged under 18; and

oThe adult is legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the individual; and

oThe individual is in the adult’s care.

12.     When DHS enacted a legal order to remove each of the children from her care Miss Patray ceased to be legally responsible for the children’s day-to-day care, welfare and development.  As a consequence, the children ceased being FTB children of Miss Patray at the respective dates of the enactment of the removal orders.  Section 23 of the Act only applies if the child is an FTB child.  If a child has ceased to be an FTB child through the action of a legal order the provisions of Section 23 cannot apply.  In the present case, each of the children was the subject of a legal order enacted by DHS and ceased being an FTB child at the point of the enactment of the legal order.  As a consequence, I find that the provisions of section 23 do not apply to this case. 

Non-recovery of the debt

13. Section 71(2) of the Administration Act provides that where a person has been paid more than the benefit to which they are entitled, the excess amount is a debt due to the Commonwealth. I have found above that the provisions of section 23 of the Act do not apply in this case. This was the only issue that would affect the existence of the debt. There is also no dispute about the calculations involved in arriving at the amount of the debt. Therefore, I am satisfied that the overpayment has been correctly calculated by the Authorised Review Officer and that Miss Patray owes a debt of $1,449.11 to the Commonwealth.

14. An overpayment of FTB need not be recovered as a debt in certain circumstances. Section 95 of the Administration Act provides that the Secretary may write off a debt if the debt is irrecoverable at law or the debtor has no capacity to repay the debt. The debt is only irrecoverable at law if the debt cannot be recovered by a number of means including deductions from benefits being paid. Where a debt is recoverable by means of deductions, the person is taken to have the capacity to repay the debt, provided the deductions would not cause the person severe financial hardship. In this case the evidence produced at the SSAT hearing indicated that $15 per fortnight is already being deducted from Miss Patray’s pension payments and that her excess of income over expenditure is approximately $122.00 per fortnight. This evidence was not disputed. Accordingly, I find that the debt is recoverable through deductions from Miss Patray’s benefits and that the deductions would not cause her severe financial hardship. As a consequence, I find that the debt is not irrecoverable at law and the Secretary may not write off the debt under the provisions of section 95.

15. Section 96 of the Administration Act provides that the Secretary may waive the Commonwealth’s right to recover the debt in certain circumstances. Section 97 provides for the waiver of a debt or part of a debt that is attributable solely to an administrative error of the Commonwealth. In this case the debt arose as a result of Miss Patray’s failure to notify the Family Assistance Office when her children were removed by DHS and ceased to be in her care. This failure constitutes a contributory cause of the debt. Hence it cannot be said that the debt is attributable solely to an administrative error of the Commonwealth, and I find accordingly. Therefore, the provisions of section 97 do not apply to this case.

16. Sections 98, 99 and 100 of the Administration Act are not relevant in this case. Section 101 provides that the Secretary may waive the right to recover the debt where all of a number of conditions are met. One of those conditions is that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.  In her evidence to the SSAT Miss Patray stated that she continues to suffer from psychological problems and needs to get medicine from her doctor to help her stay calm.  She told that tribunal that the FTB debt will cause her even more stress, and that she is suicidal and will need to get help from her doctor and from Lifeline.  Miss Patray told the SSAT that she takes tablets to calm herself and reduce emotional distress.  Miss Patray provided a letter dated 1 March 2007 from her general practitioner, Dr Perry to the SSAT.  Dr Perry certifies that Miss Patray:

… is suffering from depression and anxiety worse since the removal of her children into foster care.  The resulting upset to her mood affected her ability to cope with routine tasks … (T27, p68).

17.     In the respondent’s Statement of Facts and Contentions dated 30 October 2007 the respondent accepted that:

Miss Patray has health problems and the placing of her children in foster care has caused stress.  However Miss Patray’s circumstances cannot be seen as distinguishing her case from similar cases as is the test set out in Full Federal Court decision of Dranichnikov [Drachnikov v Centrelink (2003) 75 ALD 134] (para 66):

To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as “special reasons” has (sic) tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.

18.     In considering the meaning of special circumstances I had regard to the judgement of the Federal Court of Australia in the matter of Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 (29 January 2007) in which Besanko J reviewed a number of previous judgements dealing with the meaning of special circumstances and included the following extracts as pertinent to the considerations:

Re Beadle and Director-General of Social Security (1984) 6 ALD 1:

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.

Re Beadle v Director-General of Social Security (1985) 60 ALR 225 in which the Full Court said (at 228):

Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate. For example, where the delay beyond six months was due to the claimant’s being misled by a departmental officer or was due to the negligence of a third party it might be thought the normal six months would be inappropriate; that special circumstances had been shown which warranted a longer period. More difficult would be questions of ignorance, illiteracy, isolation, illness and the like. It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase "special circumstances", although lacking precision, is sufficiently understood in our view not to require judicial gloss.

In Dranichnikov v Centrelink (supra) the Full Court, in considering a similar statutory provision to s 1237AAB said at:

65. …The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words "unusual, uncommon or exceptional" come was not actually affirmed by the Full Court.

…

66. … Other cases which have considered analogous words such as "special reasons" has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.

Secretary, Department of Social Security v Hales (supra) in which French J considered the provisions of s 1237AAD 30 His Honour said at 162:

The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words.

…

31 French J also made the point that the Secretary has a discretion even if the three conditions in s 1237AAD are satisfied. In other words, the Secretary is not obliged to waive the debt even if the three conditions are satisfied

In Ryde v Secretary, Department of Family and Community Services (supra) in which (at 32) Branson J considered the provisions of s 1237AAD and in particular whether the Tribunal in that case had erred in concluding that special circumstances meant circumstances which were ‘unusual, uncommon or exceptional’. Her Honour referred to the first passage from the reasons for judgment of the Full Court in Beadle. Her Honour then said at [25] and [26]:

The Full Court in Beadle did not endorse the view expressed by the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 that circumstances are special only if they are "unusual, uncommon or exceptional".
However, the Tribunal concluded that the applicant’s circumstances "do not differ from those of many income support recipients". In the context in which the Tribunal reached this conclusion, it is to be understood as having made a judgment that neither hardship nor unfairness made it desirable to waive all or part of the applicant’s debt because the applicant’s circumstances were common-place rather than special. While, as French J pointed out in Hales, the evident purpose of s 1237AAD is to enable a flexible response to the wide range of circumstances which could give rise to hardship or unfairness, the statutory requirement for "special circumstances" discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness to which French J referred must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case.’

Groth v Secretary, Department of Social Security (supra):

... 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. ...

Riddell v Secretary, Department of Social Security (supra) (at 38):

Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.

19.      Following the reasoning of these judgements I must consider whether the circumstances of this case are out of the usual or ordinary and if so, consider whether there are circumstances of individual hardship, need, fairness, reasonableness or other relevant issues such as to warrant a departure from the general rule which proscribes waiver in ordinary cases.

20.      In this case the only circumstance submitted by Miss Patray relevant to the issue of special circumstances is her psychological condition.  I accept that the recovery of the debt may cause Miss Patray some hardship in the form of stress, however, the extent of the stress and its affect on Miss Patray’s functioning is unclear.  The report of Dr Perry does not assist the Tribunal in understanding the degree to which Ms Patray’s medical problems impact on her functioning.  It is clear that Miss Patray has managed to raise with the courts her opposition to the removal of her children.  Miss Patray’s application for review covers a number of issues with Centrelink and includes a request for a loan to which she may be entitled.  I am not persuaded that Miss Patray is so affected by stress that she is not capable of functioning to a reasonable extent.  There is no evidence of individual hardship, need, fairness or unreasonableness to the extent that would warrant a departure from the general rule. 

21.      Applying the reasoning from the above authorities, I find that in this case Miss Patray has received public moneys to which she was not lawfully entitled (Hales).  I do not consider that there is sufficient hardship to justify departure from the general rule in this particular case (Ryde).  I cannot find anything unfair, unintended or unjust in connection with the recovery of the debt (Groth), there is no evidence that Miss Patray’s circumstances are unusual, uncommon or exceptional (Beadle) and there is no evidence of issues related to individual hardship, need, fairness or reasonableness (Riddell).  As a consequence I find that there are no special circumstances that apply in this case that make it desirable for the Secretary to waive the right of the Commonwealth to recover the debt. 

22.      I find that there is a debt owing to the Commonwealth as a result of the overpayment of FTB to Miss Patray between 8 August to 21 November 2006.  I am satisfied that no provisions apply in this case to permit the debt not to be recovered.  Accordingly, I affirm the decision of the SSAT dated 25 June 2007.  This means that Miss Patray is not successful in her application.

DECISION

23.      The Tribunal affirms the decision under review.

I certify that the twenty three [23] preceding paragraphs are a true copy of the reasons for the decision herein of Mr C. Ermert, Member

Signed: Lauren Spragg
  Associate

Date of Hearing  19 December 2007
Date of Decision  20 February 2008
Advocate for the Applicant          Self-represented
Advocate for the Respondent       Mr M. Todd, Centrelink Legal Services