Peter Allen and Secretary, Department of Education, Employment and Workplace Relations Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2012] AATA 912

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/2071
Re	Peter Allen
APPLICANT
And	Secretary, Department of Education, Employment and Workplace Relations Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENTS

DECISION

Tribunal	Regina Perton, Member
Date	21 December 2012
Place	Melbourne

The Tribunal affirms the decisions under review.

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Member

Social Security – debt to Commonwealth due to payment of benefits to which applicant not entitled – use of his bank account by others – benefits paid to applicant’s account due to fraud by another person – whether waiver of debt available – applicant unable to access special circumstances waiver as another person knowingly made false statement or representations

Social Security Act 1991 ss 1223(1), 1236, 1237A, 1237AAD

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

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

REASONS FOR DECISION

Regina Perton, Member

21 December 2012

Mr Peter Allen is seeking to set aside debts that were imposed by Centrelink, which administers social security payments on behalf of the respondents. The debts amount to almost $16,000. They arose as the result of events that occurred a decade or so earlier.
Mr Allen, who is 50 years old, has been receiving disability support pension (DSP) for many years. About 12 years ago, he was sharing a house with two women, one of whom was his then carer, Ms Margaret Duggan, who was paid by Centrelink as such. Mr Allen allowed his carer access to his bank account via his debit card. Not only did she have that access, but she also arranged for her carer payments to go into Mr Allen’s bank account. The carer's sister, Ms Leanne Duggan, who suffered from a psychiatric illness, came to live with the carer and Mr Allen after her release from prison.
The carer’s sister died on 25 December 2000. No one notified Centrelink of her death in the subsequent months. The carer's sister had been receiving Newstart Allowance (NSA) at the time of her death but had also applied for DSP. Prior to her death, her NSA was paid into a bank account in her name. After her death, her Centrelink payments were paid into Mr Allen’s account.
About eight weeks after her death, the carer’s sister’s claim for DSP which had been lodged before she died, was refused on the basis that her psychiatric condition had improved since starting medication and should be reviewed in six months. An unsuccessful application for internal review by an authorised review officer of Centrelink (ARO) followed. On 3 April 2001, an application was lodged with the Social Security Appeals Tribunal (SSAT). A hearing took place on 17 May 2001 by telephone at which Ms Leanne Duggan (the deceased) is reported in the SSAT’s decision as speaking to the Tribunal. On 17 May 2001, based on medical reports, including some written after Leanne Duggan’s death, pharmacy receipts (including some in 2001) and medical certificates issued in May 2001, the SSAT made a decision that Leanne Duggan met the medical and work-related criteria for DSP and sent the matter back to Centrelink for assessment of remaining criteria. The late Leanne Duggan’s Centrelink benefit changed from NSA to the more favourable DSP in late May 2001 and was paid into Mr Allen’s bank account for many more months.
In April 2002, Centrelink determined that Margaret Duggan, Mr Allen’s carer and the sister of the deceased, was required to repay a debt of around $16,000 for the moneys paid into Mr Allen’s bank account in Leanne Duggan’s name after her death.
Almost nine years later, in February 2011, an ARO set aside the decision to raise debts against Margaret Duggan. The ARO stated that as the payments to the late Leanne Duggan were not paid into a bank account in Margaret Duggan’s name, she was not the person who benefitted from the payments and therefore she did not have the debt. The ARO asked that a debt be levied against Mr Allen. This was subsequently done.
On 2 March 2011, Centrelink raised debts against Mr Allen with respect to NSA and DSP paid in Leanne Duggan’s name after her death. An ARO and the SSAT subsequently affirmed the decisions to raise the debts. Mr Allen applied for review to this Tribunal on 23 May 2012.
The issues for the Tribunal in this matter are whether Mr Allen has debts to the Commonwealth and, if so, whether he is eligible for a waiver of those debts on the basis of any of the grounds set out in the Social Security Act 1991 (the Act).

THE DEBT TO THE COMMONWEALTH

Section 1223(1) of the Act states:
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.
Centrelink has provided evidence in the form of bank statements and other documents that show that Leanne Duggan’s NSA and DSP payments after her death were paid into a Westpac bank account in Mr Allen’s name. The bank’s records show that there is only one signatory to that account, namely Mr Allen.
There were regular withdrawals from Mr Allen’s account following the payment of Leanne Duggan’s pension. These were cash withdrawals from automatic teller machines (ATMs) located at banks and retail outlets in the general area in which Mr Allen lived. The withdrawals, which were usually at an ATM at a bank different to Mr Allen’s, were often preceded by a balance enquiry (for which Mr Allen was charged a fee as they were not at his own bank). There were also some EFTPOS payments in stores, generally for small amounts.
Mr Allen, in his oral and written evidence, indicated that he had given Margaret Duggan his debit card allowing her to manage his finances. He informed her of his pin number. He said he was not fit enough during the period of the wrongfully received payments to do his own banking. He trusted Margaret to do the right thing. He said that she managed the household, buying the necessary food. He did not check bank records or the like.
In July 2001 Mr Allen asked Centrelink to pay his pension into a new account he had just opened at the Bendigo Bank so he was not really using his Westpac account although it remained open. He said that he changed to the Bendigo Bank because they paid a better interest rate and did not charge transaction fees. Hence from June 2001 his payments were not going into the Westpac account although those of Margaret Duggan and the late Leanne Duggan still were.
Mr Allen said that he did not have any involvement in fraudulently obtaining Leanne Duggan’s payments. He pointed out that it was a female who saw the doctors who provided reports in 2001 whom they mistakenly thought was Leanne Duggan. He said that it was obviously a female who attended the telephone hearing of the SSAT that resulted in Leanne Duggan qualifying for DSP after her death. Obviously the person who represented herself as Leanne Duggan knew she was dead and chose to assume her identity and fraudulently accept the payments rather than advise Centrelink of the death. The Tribunal does not have the documents concerning the deception but the evidence clearly points in a particular direction.
Margaret Duggan, who was not available to give oral evidence, provided a statutory declaration dated 22 September 2012 in which she stated:
…Peter Allen…did not recieve [sic] any money or benefit from payment’s made to Leanne Duggan before or after her death in any way as Peter’s brother took the keycard from me and took any money that was in Peter’s account, I was Peter’s carer. Peter’s brother’s name is Ross or Ken Allen. He gave Peter and myself about three hundred Dollars a fortnight.
Mr Allen mentioned to the Tribunal that his brother may well have been involved in the situation but could not be sure. He pointed out how ill he was during the period of the debt, both psychiatrically and physically. The Tribunal has no way of knowing what, if any, control Mr Allen’s brother had of him or of Margaret Duggan.
However, regardless of Mr Allen’s degree of involvement in the deception, whether he was an innocent party to the deception, aware but disapproving of it or an integral part of it, the provisions of s 1223(1) catch him. Leanne Duggan’s payments went into an account that was solely in his name. He was the only signatory. He chose to allow others to access and manage the account. Mr Allen gave evidence that it was Margaret Duggan who paid his expenses, did the shopping, went to the bank and the like. By having additional moneys available he was also benefitting. It may well be that he had sound reasons for allowing her to access and control his account to the degree that she did. Nonetheless, it was his choice to allow her to do so and not to monitor its use.
Section 1223(1) allows for a debt to be raised whenever someone receives a social security payment that they are not entitled to. Centrelink submitted that the Explanatory Memorandum that accompanied the introduction of s 1223(1) makes it clear that the debt arises no matter what the circumstances were that resulted in the payment:
Subsection 1223(1) provides that where a social security payment is made and the benefit of the payment is obtained by a person other than the person who is entitled to obtain the benefit of that payment, the amount is a debt due to the Commonwealth by the person who obtained the benefit of the payment. The debt is taken to arise when the person obtains the benefit of the payment.
The term, “obtains the benefit of the payment”, should not be read as introducing a requirement for a person to have actually received some tangible benefit before a debt can be taken to have arisen. Nor should it be read as introducing an obligation on Centrelink to enquire into whether the payment has been disposed of or the purpose for which the payment was used. The plain English meaning of the term is intended and the phrase is to be distinguished from the phrase “obtains a benefit from the payment”. It would be undesirable (and perhaps even impossible) to attempt to list the circumstances in which a person should be considered to have obtained the benefit of the social security payment. However, in broad terms, where a social security payment is made and the person’s wealth is directly increased as a result, the person has obtained the benefit of that payment. The purpose for which the payment, or any part of the payment, is subsequently used is irrelevant. It is also of no significance that the person who has obtained the benefit of the payment has not requested that the benefit be conferred. The perspective of the recipient is not a relevant consideration in determining the question of whether the benefit has been obtained.
In the present circumstances, Mr Allen received payments into an account in his name to which he was not entitled. The Tribunal finds that Mr Allen has a debt to the Commonwealth for those moneys paid into his account in Leanne Duggan's name after her death.
There is no dispute as to the amounts that were wrongly credited to Mr Allen's account. The Tribunal finds that Mr Allen has a debt of $4,430.71 in relation to NSA payments made in Leanne Duggan’s name for the period 27 December 2000 to 29 May 2001 and $11,576.98 for the period 30 may 2001 to 16 April 2002.

SHOULD THE DEBT BE WAIVED OR WRITTEN OFF?

Section 1237A of the Act provides for the possibility of waiving a debt where it is attributable solely to administrative error made by the Commonwealth. This debt has not arisen due to Centrelink’s error but rather because of a fraud. It may well not have been due to any direct action on Mr Allen’s part apart from his allowing use of his account and pin number by others. Centrelink eventually discovered that it had been duped into paying benefits to someone who had died due to an impersonation of the deceased. But that does not mean that the debt has arisen due entirely to errors on its part, as is required under s 1237A.
Section 1236 of the Act provides for a write off of the debt under certain circumstances. Mr Allen is still receiving DSP. Hence the debt is not irrecoverable at law. Therefore, there are no grounds to write off the debt.
Section 1237AAD of the Act provides for waiver of the debt 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;…
The term special circumstances has been considered in many Federal Court and Tribunal cases. In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 Branson J stated (at paragraph 26) that the circumstances of a particular case must give rise to hardship or unfairness sufficient to justify departure from the general rule. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 Besanko J stated, in respect of special circumstances (at paragraph 33):
… I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances… It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case…there must be something that distinguishes the case from the ordinary or usual case ….
Mr Allen advised the Tribunal orally and in writing of the financial difficulties he faces. His expenses include $180 in medication a month. He also has to take taxis to most places as he is not allowed to drive. The Tribunal accepts he is in difficult financial circumstances. However s 1237AAD requires the Tribunal to consider matters other than financial hardship alone.
For the Tribunal to be able to decide that someone’s circumstances constitute special circumstances, it must also consider whether he meets s 1237AAD(a) as well as s 1237AAD(b). On the evidence before it, the Tribunal would have been prepared to make a finding that Mr Allen did not accrue the debt as the result of personally making a false statement or representation. However, the debt arose because another person knowingly made false statements and representations about Leanne Duggan. That person’s deliberate actions included applying for reviews of decisions following the refusal of Leanne Duggan’s application for DSP, impersonating her in an SSAT hearing and when consulting doctors who provided the reports to the SSAT which resulted in the SSAT’s findings in her favour, and subsequently Centrelink paying benefits to someone who was already dead. The Tribunal finds that the debt arose because of another person knowingly making false statements or representations.
As Mr Allen does not meet s 1237AAD(a), the Tribunal is unable to find that there are special circumstances notwithstanding that it may well have found that he meets s 1237AAD(b) given the most unusual set of circumstances in this matter.

DECISION

The Tribunal affirms the decisions under review.

I certify that the preceding 28 (twenty -eight) paragraphs are a true copy of the reasons for the decision herein of Regina Perton, Member.

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Administrative Assistant - Legal

Dated 21 December 2012

Date of hearing	15 October 2012
Applicant	Self-represented by telephone
Advocate for the Respondent	Mr A Carson
Solicitors for the Respondent	Legal Services Division, Department of Human Services

[2012] AATA 912

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Administrative Error

Social Security Act

Fraud

Special Circumstances