Pereira and Secretary Department of Employment and Workplace Relations
[2007] AATA 1821
•2 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1821
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2006/1461
GENERAL ADMINISTRATIVE DIVISION ) Re VALEILA PEREIRA Applicant
And
SECRETARY DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms G Ettinger, Senior Member Date2 October 2007
PlaceCoffs Harbour
Decision The decision of the Social Security Appeals Tribunal is varied to reflect my findings that that part of the debt of PPS which Ms Pereira incurred relating to the period 4 March 2004 to 7 February 2005 is waived. The matter is remitted to the Respondent for calculation and repayment of the remaining part of the debt as appropriate.
.................[sgd].............................
Ms G Ettinger
Senior Member
CATCHWORDS –
Parenting Payment debt – whether it should be recovered – write-off not applicable – sole administrative error considered - whether special circumstances – sole administrative error to waive a part of the debt found - decision of SSAT varied.
Social Security Act 1991 - ss 1068A, 1223(1), 1236(1), 1237(1) & 1237AAD
Social Security (Administration) Act 1999 s 68(2)
Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Beadle and Director‑General of Social Security (1985) 7 ALD 670
Re Groves v Secretary Department of Family and Community Services (2005) 82 ALD 675
Secretary, Department of Family and Community Services v Sekhon (2003) 73 ALD 41
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
REASONS FOR DECISION
2 October 2007 Ms G Ettinger, Senior Member BACKGROUND
1. Ms Valeila Pereira has been the recipient of Parenting Payment Single (“PPS”) since 2003 in respect of her son, now 12 years old. She has also earned income from part-time paid employment such as cleaning and berry picking over the years. Ms Pereira told me that she knows, and has always known, that she has to report all earnings to Centrelink on a regular basis, and indeed the records indicate that she regularly reported income from her paid employment. It is on this basis that her benefits are adjusted by Centrelink from time to time. Ms Pereira also told me that she reads correspondence from Centrelink, but does not always understand it well.
2. What occurred in relation to Ms Pereira is that through a series of administrative errors, and omission by her to report a one-off bonus payment, (which she said she did not know she was going to receive), she has incurred an overpayment of PPS, now recalculated to be $2,019.59 for the period 9 September 2003 to 30 May 2005.
3. Ms Pereira was unsuccessful in her appeal to have the debt waived by the Social Security Appeals Tribunal (“the SSAT”), and has now applied to this Tribunal for a review of the Secretary’s decision, and that of the SSAT. I had a number of documents before me which were not available to the SSAT.
4. I am satisfied that sole administrative error applies to a part of the debt, and that liability for that part of the debt must accordingly be waived pursuant to section 1237A of the Social Security Act 1991 (“the Act”). In the alternative, Centrelink’s administrative errors may be held to constitute “special circumstances” in order for me to exercise the discretion to waive that part of the debt.
5. Accordingly I varied the decision of the SSAT, and I now remit the matter to the Respondent for recalculation and recovery of the debt in the terms of my decision. My reasons follow.
ISSUES TO BE DECIDED
6. The issues I had to decide were:
· Whether Ms Pereira has incurred a PPS debt of $2,019.59 as raised by the Secretary for the period 9 September 2003 to 30 May 2005;
· Whether any of the following conditions exist in order for me deal with the debt:
(a)Write-off (section 1236(1));
(b)Waiver due to sole administrative error of all or part of the debt (section 1237A);
(c)Waiver as a result of “special circumstances” of all or part of the debt (section 1237AAD).
LEGISLATIVE CONTEXT
7. The relevant legislation is the Social Security Act 1991, in particular, sections 1068A, 1223(1), 1237A(1), 1236(1) and 1237AAD.
8. Section 1068A applies to calculate PPS.
9. Section 1223(1) of the Act provides that if a person who obtains the benefit of a payment was not entitled for any reason to obtain that benefit, then 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.
10. Section 1237A of the Act mandates waiver of a debt or proportion of a debt arising of out sole administrative error provided the person received the payment in good faith.
11. Section 1236 of the Act deals with write-off which I find does not apply in the matter I have to decide.
12. Section 1237AAD deals with waiver of Ms Pereira’s debt if “special circumstances” are held to apply. In order for me to consider the application of the “special circumstances” discretion, I would first have to find that the PPS debt did not result wholly or partly from Ms Pereira or another person knowingly making a false statement or a false representation.
13. Pursuant to section 68(2) of the Social Security (Administration) Act 1999, the Secretary may require a person to whom a benefit is paid to inform his Department of specified events or change of circumstances, or of other matters which may affect the benefit paid to that person. On at least two occasions during the relevant period, Centrelink sent Ms Pereira correspondence asking her to respond informing Centrelink of any changes in her circumstances.
MS PEREIRA’S WORK, AND WHETHER SHE HAS INCURRED A PPS DEBT OF $2,019.59 FOR THE PERIOD 9 SEPTEMBER 2003 TO 30 MAY 2005
14. Ms Pereira who was receiving PPS, also derived income from paid employment and/or training for the relevant period 9 September 2003 to 30 May 2005 which has emanated from:
· Working as a cleaner for the Church of Jesus Christ of the Latter Day Saints (“the Church”) from approximately 4 November 2002 until 27 May 2005 (T27); receiving a one-off bonus payment from the Church of $404 on 15 March 2005 which she admits she did not report to Centrelink (T29/96);
· Training for work as a carer at the Paraplegic and Quadriplegic Association from 17 January 2004 to 20 February 2004, for which she received payment, (T32);
· Casual work at the Aanuka Resort in October 2004 (T10);
· Work for Blueberry Farms of Australia from 29 November 2004 to 4 January 2005 (T12, T31);
15. Ms Pereira also spoke at the hearing of having taken in boarders, and of her son’s paper run. Neither of those are of concern in this matter as they post date the debt period.
Work as a cleaner for the Church from 4 November 2002 until 27 May 2005
16. Ms Pereira’s fortnightly wages from the Church were initially approximately $220.69 (T27), and from mid-September 2003, were increased to $228.77 (T29/87). I accept from her evidence and the documentation before me that the Applicant regularly reported her earnings to Centrelink as she was required to do. The Church was Ms Pereira’s major source of employment and income during the relevant period 9 September 2003 to 30 May 2005.
17. A computer record of Centrelink of 8 December 2003 refers to Ms Pereira notifying Centrelink of fortnightly earnings on 25 September 2003, and records “updating” the amount to $220.68 per fortnight (T5). That was clearly incorrect as the records show that Ms Pereira had previously been reporting wages of $220.69, and had reported the increase to $228.77 on 30 September 2003 (T29/87). The wages from the Church increased to $239.92 on 26 October 2004 (T29/94).
18. Notwithstanding Ms Pereira reporting earnings as they occurred, as she was required to do, on 9 January 2004, Centrelink sent her a letter telling her her fortnightly earnings were $220.68, and her annual income, $0.15 (T6/36). This occurred again on 12 January 2004 (T7/39).
19. On 4 March 2004, Ms Pereira reported her earnings from a period spent training with the Paraplegic and Quadriplegic Association. She also reported that she had ceased work (with the Paraplegic and Quadriplegic Association).An administrative error occurred at Centrelink in which her income from the Church was coded off.
20. I am satisfied that this occurred because of administrative error which was acknowledged by the Authorised Review Officer as follows:
“An administrative error occurred on 8 March 2004 when income from this source (the Church), was deleted in error. You received a notice dated 8 March 2004 giving your annual income as $0.18. At this time your rate of payment increased by some $42.00.” T44/165
21. The Church also paid Ms Pereira a one-off bonus of $404 on 15 March 2005 which she admits she did not report to Centrelink (T29/96 & Exhibit A2). The Applicant explained in her evidence that the amount was shown on a line underneath the usual line on which income was recorded, and that accordingly she missed it. That payment must however be accounted for in terms of her PPS debt.
22. Ms Pereira ceased working for the Church on 27 May 2005, (T27), and advised Centrelink who recorded on 30 May 2005:
“Customer contacted COFFS HARBOUR on 30 May 2005 regarding General Enquiry for Parenting Payment Single. Information was obtained via Interview using Personal - in Office ...no longer working – eans coded annual” (T24).
Training for work as a carer at the Paraplegic and Quadriplegic Association 17 January 2004 to 20 February 2004
23. Ms Pereira told me that she did training to be a carer for the Paraplegic and Quadriplegic Association, but decided not to work for the Association because the hours did not suit her commitments. She reported the earnings of $326.61 to Centrelink on 4 March 2004, lodged payslips for verification, and informed Centrelink about that. What occurred then was that Centrelink interpreted that information as the Applicant having ceased work altogether, and on 8 March 2004, Centrelink sent Ms Pereira a letter telling her that her annual income was $0.18. (T7/40). This meant that her income from the Church, which she was reporting regularly, was not coded as income. Accordingly Ms Pereira’s PPS increased by approximately $42 per fortnight.
24. On 9 January 2004 Centrelink informed Ms Pereira that they had recorded her fortnightly earnings as $220.68 (when in fact they were $228), and that her annual income was $0.15 (T6), and similarly on 12 January 2004 (T7). Centrelink also sent Ms Pereira further letters informing her her annual income was $0.18:
· T11/48 dated 10 January 2005
· T19/58 dated 28 April 2005
· T19/59 dated 2 May 2005
Work at the Aanuka Resort in 2004
25. Ms Pereira earned $145.62 from casual work at the Resort in late 2004 which Centrelink’s record at T10, shows was reported by Ms Pereira on 30 September 2004. The record also indicates that the Applicant reported she would not be working at the Resort further.
Work for Blueberry Farms of Australia from 29 November 2004 to 4 January 2005
26. Ms Pereira reported income from blueberry picking of $595.95 and $60.28 (T12). A Group Certificate issued by the employer indicated earnings of $1,449. (T31). Ms Pereira told me that the last day she worked was 29 or 31 December 2004. She said that she dislocated her shoulder on 1 January 2005, and was at home in great pain, so asked her friend to report the earnings to Centrelink. The Applicant said that she did not check whether this had been done. I was satisfied from the records that the friend reported the earnings but outside the statutory period.
27. I accepted that Centrelink erroneously coded the three payments from Blueberry Farms as one-off earnings, and accordingly those earnings did not result in Ms Pereira’s payments being adjusted. It seems Ms Pereira did not notice and took no action, neither did she inquire of Centrelink how the payments were recorded. Further she did not ask her friend when she had reported the final, third payment from Blueberry Farms on her behalf. Accordingly any error in these transactions cannot be held to be due to sole administrative error.
WHY DID MS PEREIRA INCUR A PPS DEBT
28. I am mindful that to qualify for PPS Ms Pereira must have had at least one Parenting Payment child as defined in sections 500D & 5(2) – (9) of the Act in her care. A PP child of a person is a child who has not turned sixteen, and is a dependent child of the person. Section 1068A of the Act applies to calculate PPS. Ms Pereira is in receipt of PPS which she receives for her son, and was qualified to do so at the relevant time. However if she obtained PPS to which she was not entitled, then she has incurred a debt pursuant section 1223(1) of the Act.
29. Section 1223(1) of the Act follows as relevant.
“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.”
30. In considering why Ms Pereira has incurred a PPS debt, I have noted that the history of the recording of events in this case indicates there was administrative error made on several occasions. In that regard, I accepted Mr Vincent’s submissions characterising Ms Pereira as a person who took her reporting duties seriously.
31. Mr Vincent submitted for example that Ms Pereira’s reporting of her casual employment at Aanuka Resort in September 2004 was consistent with her usual conduct, and that even with an injured shoulder at the time of the Blueberry Farms employment in early January 2005, she had asked her friend to report her income from that work to Centrelink.
32. He also indicated that the Respondent’s records were defective and incomplete, and tendered Exhibits A1 and A3 which were documents otherwise not available, and which recorded Ms Pereira’s earnings as reported to Centrelink. Mr Vincent submitted that it was not the Applicant’s responsibility to be suspicious that records (for example those which showed her annual income as $0.15 or $0.18), might be inaccurate. He said that she reported all her earnings, and that was what she had to do.
33. Mr Vincent submitted that the only income Ms Pereira did not report to Centrelink was the bonus payment of $404 from the Church and one payment from Blueberry Farms. As to the bonus, I noted Ms Pereira’s evidence that she was not expecting to receive a bonus, and accordingly did not look out for it. Her evidence was also that the line showing the payment was below the usual place where she looked on the relevant document, and that she accordingly missed it (Exhibit A2).
34. Mr Johnson submitted that although this was “not Centrelink’s finest moment”, the debt did not arise due to sole administrative error, and that Ms Pereira should have noticed that the amounts shown in the Centrelink letters to her were wrong at various times. He submitted that she should have queried those.
35. I am mindful that Centrelink made an administrative error when after Ms Pereira reported earnings and cessation of employment at the Paraplegic and Quadriplegic Association on 4 March 2004, Centrelink, on 8 March 2004 (as described above), coded Ms Pereira off the system. In fact she was at that time still working for the Church and reporting her earnings from that employment.
36. Another administrative error occurred after Ms Pereira reported earnings from the Church in September 2003 when Centrelink incorrectly coded her income in December 2003. In that regard I noted at T9/86 (the Church’s record), that Ms Pereira’s fortnightly income from the Church was shown as $220.69 in August 2003, and that by September 2003, it was increased to $228.77. However in a letter of Centrelink of 9 January 2004, Ms Pereira’s fortnightly income was shown (incorrectly) as $220.68 and her annual income as $0.15 (also clearly incorrect).
37. An administrative error occurred again in relation to her income from the Blueberry Farms, which Centrelink coded as three individual earnings, resulting in no adjustment of Ms Pereira’s PPS.
38. Ms Pereira contributed to a part of the debt which was raised in that she failed to report the $404 bonus from the Church which she received on 15 March 2005. I am satisfied that that is separate form the regular earnings which Ms Pereira regularly reported, and outside the period in which I have further on in these Reasons for Decision considered there was sole administrative error.
39. The final earnings from Blueberry Farms where the Applicant last worked on 31 December 2004, were reported outside the statutory 14 day period via a friend. I noted that Ms Pereira had asked a friend to do it for her after injuring her shoulder on 1 January 2005.
40. I am mindful that section 1223(1) of the Act states that if a social security payment is made, and the person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit, then 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.
41. I was satisfied from the evidence that Ms Pereira’s PPS debt was correctly raised pursuant to section 1223(1) of the Act because of administrative error which occurred on several counts, and because Ms Pereira’s earnings had not been correctly reported ($404 from the Church). Accordingly I have to consider the following situations.
(a)Write-off (section 1236(1));
(b)Waiver due to sole administrative error of all or part of the debt (section 1237A);
(c)Waiver as a result of special circumstances of all or part of the debt (section 1237AAD).
Write-off (section 1236(1))
42. Section 1236(1) deals with write-off of a debt.
“s 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.”
43. I have considered the requirements of this section of the Act, and am satisfied that it has no application in Ms Pereira’s case. Her debt can be recovered by withholdings from her benefits or earnings if she is working. Clearly that will not be easy for Ms Pereira. However, the debt is not irrecoverable at law and the debtor’s whereabouts are known.
Waiver due to sole administrative error of all or part of the debt (section 1237A)
44. Section 1237A of the Act deals with waiver of a debt. It is mandatory to waive the debt if it resulted solely due to administrative error of the Commonwealth, and the person received the payments in good faith. As relevant the section follows:
“- SECT 1237A
Waiver of debt arising from error
Administrative 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).”
45. I have noted in the paragraphs above, that due to Centrelink’s administrative error, Ms Pereira’s annual income was shown as $0.15 or $0.18 on several occasions when she had reported fortnightly earnings.
46. On 9 January 2004 Centrelink informed Ms Pereira that they had recorded her fortnightly earnings as $220.68 (when in fact they were $228), and that her annual income was $0.15 (T6), and similarly on 12 January 2004 (T7).
47. Centrelink also sent Ms Pereira further letters informing her that her annual income was $0.18 when in fact she had been reporting earnings:
· T7/40 dated 8 March 2004
· T11/48 dated 10 January 2005
· T19/58 dated 28 April 2005
· T19/59 dated 2 May 2005
48. The administrative errors resulted in Ms Pereira’s PPS being paid at a rate higher than that to which she was entitled, and accordingly have now resulted in her having a debt to the Commonwealth. Mr Johnson submitted that although this was “not Centrelink’s finest moment”, the debt did not arise due to sole administrative error, and that Ms Pereira should have noticed that the amounts shown in the Centrelink letters to her were wrong at various times. He submitted that she should have queried those. He referred to the case of Secretary, Department of Family and Community Services v Sekhon (2003) 73 ALD 41 where at paragraph 41, the Court stated that:
“It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes.”
49. Mr Johnson also submitted that Ms Pereira’s reporting of ceasing work contributed to Centrelink’s error in coding off her earnings completely in March 2004. He submitted that Ms Pereira had a role in ensuring that the correct message was communicated to Centrelink, and that she should have clarified the fact she was still receiving income from the Church. He submitted she had participated in the misunderstanding by not querying the various statements she received which showed incorrect annual income for her.
50. Mr Vincent argued on behalf of Ms Pereira that apart from the non-disclosure of the $404 bonus from the Church, and an amount from Blueberry Farms, she had declared all her income on a regular basis.
51. Mr Vincent submitted that the major error occurred in March 2004. Ms Pereira reported her earnings on 4 March 2004, and by 8 March 2004 she had received notification from Centrelink showing her annual income as $0.18 (T6).
52. He argued that T8 indicated that on 4 March 2004, Ms Pereira reported the exact amount of earnings, being $326.61, whereas previously the Respondent had submitted that the amount was discovered only on a data matching exercise (T26). He said that the error was Centrelink’s in treating Ms Pereira’s report of cessation of work at the Paraplegic and Quadriplegic Association as cessation of all other work, and hence cessation of earnings. Mr Vincent submitted that by September 2003, Ms Pereira had been working for the Church for almost a year, and that her wages had gone from $220 to $228 per fortnight by 30 September 2003. He submitted that once again, the incorrect coding of the amount of earnings was sole administrative error of the Commonwealth.
Good Faith
53. In considering whether sole administrative error exists in order that the debt must be waived either in part or in full, I noted Ms Pereira’s evidence which was that she had received the increase in payments of PPS in good faith, and did not query them. She said that the amounts she received from Centrelink varied from time to time, and that she did not query them as she assumed that whatever Centrelink told her was correct. Ms Pereira also said that it was difficult to work things out because direct debit payments were being taken out of her account. I ascertained that at the time this amounted to only two payments, being rent and electricity, although at the time of the hearing she had five payments on direct debit. Ms Pereira also said that she made all her payments from the one account, and only spent whatever she had.
54. The leading case on the issue of good faith is Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127. Mr Vincent argued that good faith goes to the state of mind of the person, and that good faith did not extend to Ms Pereira querying Centrelink why it had reported her annual income as one figure or another. Good faith does not extend, he submitted, to the Applicant having to notice whether what was recorded by Centrelink was correct or not. He emphasised that Ms Pereira’s evidence was that she had not noticed anything wrong, and that only one of the letters from Centrelink (T9, dated 8 March 2004), had asked her for information regarding any changes in status, income or other personal details. I was mindful that there were two letters during the relevant period, and that Ms Pereira was also asked for information in a letter of Centrelink of 9 January 2003. I accepted Ms Pereira’s evidence that she felt she had reported everything because she always reported her earnings, and that she did not notice anything strange about the statements which showed her annual income as $0.15 or $0.18.
55. Mr Vincent referred to the case of Re Groves v Secretary Department of Family and Community Services (2005) 82 ALD 675 which the Respondent submitted was a case where the Tribunal held that the Applicant’s failure to carefully read the fortnightly notifications meant that the debt which arose was principally attributable to his failure to provide information. Mr Vincent’s comment was that the reference to the case was misleading. He referred me to paragraph 39 of the case. I was mindful that this was indeed a case where the Applicant’s failure to carefully read the fortnightly notifications meant that the debt which arose was principally attributable to his failure to provide information.
56. Senior Member Allen stated as follows in Groves:
“For the purposes of s 1237A(1), I am prepared to assume (although I make no finding) that the change to the format of the notification letters could constitute an administrative error on the part of Centrelink to the extent that the insertion of the paragraph relating to people overseas might, in some circumstances, mislead a recipient. However, as Wilcox J emphasised in Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76 at [41] the significance of the word “solely” in that section must not be overlooked. “It is not enough that, in the absence of administrative error, the debt would not have arisen, administrative error must be the sole cause, not merely one of multiple causes.
In the present case I am satisfied on the evidence that the applicant did not in fact read all of the notices that he received from Centrelink and that the evidence that he gave to the SSAT is an accurate reflection of his approach to them. I am satisfied that the applicant knew from the application forms that he completed that his assets situation was relevant to his ongoing entitlement to PP and the amount of such benefits that he would receive. His failure to provide Centrelink with the information needed concerning the changes to his assets situation was primarily due to his failure to read and understand the notification requirements to which he was subject. His failure to read carefully the fortnightly notifications meant that, even if the change in format of the notices constituted an administrative error, the debt was principally attributable to his failure to provide information. It cannot be said that the debt is solely attributable to administrative error on the part of Centrelink.”
57. Mr Vincent also referred me to the case Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553. Referring to Jonauskas, he submitted that notwithstanding the recitation of the correct test by Deputy President Forgie, he considered that the Deputy President had not applied the test for good faith correctly, and had accordingly found against Mr Jonauskas.
58. Mr Vincent submitted that the present was not a case of Ms Pereira turning a blind eye to what was happening. She simply did not know the figures were incorrect. He described the Applicant as blissfully unaware of the situation, and emphasised that she was continuously reporting her income.
59. Mr Vincent argued that Ms Pereira received the payments in good faith, that official documents are hard to comprehend, and that the Applicant knew she was reporting her earnings as she was required to do (T6).
60. Mr Johnson on the other hand, submitted that the test in Prince was good faith, and did not extend to fraud. He submitted however that there were issues of credit in regard to Ms Pereira, and that notwithstanding her denial regarding knowing about the increase in payment, she must have realised when she was paid an extra $42 per fortnight, because that was a substantial difference from her usual benefit.He submitted that she had reason to know, and that by not inquiring of Centrelink about the increased payment, she had turned a blind eye. He also submitted that she had not disclosed her bonus from the Church, and that her evidence regarding not having noticed it on the statement of earnings was not to be believed. He also submitted that her circumstances were not unusual.
61. I accepted Ms Pereira’s evidence that she reported her earnings to Centrelink regularly, and that she had no idea anything was wrong when she received letters indicating her annual income was either $0.15 or $0.18. I am satisfied with her evidence that she simply accepted that whatever Centrelink wrote in its letters was correct, and that because at least two payments were taken directly out of her benefit, she found it hard to work things out. I am satisfied that Ms Pereira did not have actual knowledge, nor that she turned a blind eye to the fact that the records might have been incorrect. I accepted Ms Pereira’s evidence that she spent what she had, and bought petrol when she could.
62. I note that on at least two occasions Centrelink letters requested that Ms Pereira inform Centrelink of any changes to her situation. However I accept Mr Vincent’s submission that good faith did not extend to Ms Pereira querying Centrelink why it had reported annual income as one figure or another when she accepted in her mind that Centrelink figures varied from time to time, and were to be accepted as correct.
63. I am satisfied that Groves can be distinguished when dealing with Ms Pereira’s situation. She did not rely on not understanding the Centrelink letters she received, although she mentioned that they were difficult to comprehend. During the period when I find sole administrative error occurred which was 4 March 2004 to 7 February 2005, Ms Pereira reported all her earnings.
64. Accordingly, I find that sole administrative error caused that part of the overpayment of PPS to Ms Pereira related to the period from 4 March 2004 when she reported earnings, and informed Centrelink she had ceased work (for the Paraplegic and Quadriplegic Association), ending on 7 February 2005 when her income from the Church was recoded onto the system (T39). As noted above, the result of that contact on 4 March 2004, was that Centrelink coded Ms Pereira off, so that her earnings from the Church were not taken into account, and her PPS increased. That does not of course include the amount of $404 bonus, received on 15 March 2005 from the Church, which Ms Pereira neglected to report.
65. I do not accept that that part of the overpayment which related to Centrelink coding each of the three Blueberry Farms earnings separately, and which accordingly did not lead to an adjustment of Ms Pereira’s PPS were sole administrative error. Most importantly, although I acknowledge that she had injured her shoulder, Ms Pereira did not report the final payment within the statutory period and thus contributed to the error.
Waiver of all or part of the debt due to “Special Circumstances” (section 1237AAD)
66. If I am wrong in having characterised Centrelink’s coding error on 4 March 2004 to 7 February 2005 with regard to Ms Pereira’s Church income as sole administrative error, then as part of the consideration of the Applicant’s debt, I can consider whether “special circumstances” exist in order that the discretion pursuant to section 1237AAD may be exercised. I accepted Mr Vincent’s submission that administrative error not falling within section 1237A may be considered in the application of “special circumstances” pursuant to section 1237AAD of the Act. (Sekhon )
67. If I find that the PPS debt did not result wholly or partly from Ms Pereira or another person knowingly making a false statement or a false representation, or failing or omitting to comply with a provision of the Act, then I can consider whether “special circumstances” exist pursuant to section 1237AAD to either waive some or part of the debt. As relevant, the section follows:
“- SECT 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 a 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.”
68. The phrase "special circumstances" has been the subject of consideration in courts and the AAT many times. A leading case is Re Beadle and Director-General of Social Security (1984) 6 ALD 1 where Toohey J stated:
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 on 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 have a particular quality of unusualness that permits them to be described as special.
69. I am mindful that the financial circumstances of persons on income support are generally difficult, and that Ms Pereira is not an exception. However financial considerations alone do not constitute “special circumstances” pursuant to section 1237AAD of the Act.
70. This approach was approved by the Federal Court on appeal in Re Beadle and Director‑General of Social Security (1985) 7 ALD 670. The Court did note, however, that they would place less emphasis on the dictionary definition of special.
71. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, where there was an overpayment of parenting payment, where administrative error (but not sole administrative error), had occurred, Besanko J held that:
“… I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word exceptional is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if he words ‘ unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case….”
72. I considered Ms Pereira’s situation in relation to whether “special circumstances” applied in her case in order to consider the discretion to waive the debt in part or in full. I am mindful that “special circumstances” cannot be financial circumstances alone. In any case, I did not have before me evidence of financial hardship in the Applicant’s case which I could find would constitute “special circumstances”. I am mindful that the majority of recipients of social security are in straitened circumstances.
73. I accepted that Ms Pereira acknowledged in her evidence that she received correspondence from Centrelink which she read but found hard to understand, and that she knew of her obligations to inform Centrelink of her earnings or changes to her circumstances and was satisfied that she did so. I accepted from Ms Pereira’s evidence and the documentary evidence before me that she reported her earnings on a regular basis. Perhaps only one of two exceptions related to the last of the Blueberry Farms earnings which Ms Pereira had asked her friend to report due to the fact she had injured her shoulder. The friend reported the earnings outside the statutory period, and Ms Pereira did not inquire whether the earnings had been reported.
74. I am mindful that on at least one occasion, Ms Pereira did not report some, earnings, that is the $404 bonus received from the Church in 15 March 2005. On that occasion, (contrary to the Respondent’s submissions that the income was only found on data matching), she reported her fortnightly earnings, but said that she was not expecting a bonus, and the notation about the bonus appeared on a different line of the statement of income, so she simply missed reporting the amount to Centrelink.
75. I noted that the SSAT commented on Ms Pereira suffering ill health. However that was not pressed before me and I do not consider health a “special circumstance” in her case.
76. Ms Pereira’s situation is not as in Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 where it was held that the situation of the Applicant was unusual, and that it would be unjust or unreasonable to require the debts to be repaid.
77. What I am mindful of is that Centrelink made an error in coding Ms Pereira off the system on 4 March 2004, and notwithstanding the Applicant reported earnings regularly, perpetuated that error until she was coded back onto the system on 7 February 2005. I am satisfied that that error of the Commonwealth can be held to be a “special circumstance” in this case.
78. Centrelink also made other errors which have increased the amount of the debt, for example the coding of the Blueberry Farms earnings as individual amounts rather than together. The length of time which elapsed before Centrelink recoded Ms Pereira’s earnings from the Church back onto the system resulted in her having a debt greater than she would otherwise have incurred, and is a “special circumstance” in itself. Her circumstances are sufficiently unusual, uncommon or exceptional as to permit me to find that they have a particular quality of unusualness that permits them to be described as special.
79. Considering the totality of the circumstances, I find that Ms Pereira’s circumstances can be considered to be “special circumstances” in terms of section 1237AAD of the Act. Accordingly I remit that part of the debt associated with coding Ms Pereira off the system on 4 March 2004 until she was coded back on on 7 February 2005. That does not include the $404 bonus which Ms Pereira did not disclose.
DECISION
80. The decision of the Social Security Appeals Tribunal is varied to reflect my findings that that part of the debt of PPS which Ms Pereira incurred relating to the period 4 March 2004 to 7 February 2005 is waived. The matter is remitted to the Respondent for calculation and repayment of the remaining part of the debt as appropriate.
I certify that the 80 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member
Signed: ................[sgd]................................................................
AssociateDate of Hearing 27 August 2007
Date of Decision 2 October 2007
Solicitor for the Applicant Ms F McMullin, LAC
Counsel for the Applicant Mr M Vincent
Solicitor for the Respondent Ms L Gazi, AGS
Counsel for the Respondent Mr G Johnson
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