Phan; Secretary, Department of Employment and Workplace Relations

[2006] AATA 76

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 76

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/901

GENERAL ADMINISTRATIVE  DIVISION

Re:            SECRETARY,
  DEPARTMENT OF EMPLOYMENT

AND WORKPLACE RELATIONS

Applicant

And:THANH-LONG PHAN

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:2 February 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) Regina Perton

Member

SOCIAL SECURITY – assurance of support –  payments of newstart allowance and parenting payment partnered – failure by Centrelink to contact assurer contrary to legislative provision - waiver of debt by Social Security Appeals Tribunal  ‑ special circumstances  – decision affirmed

Social Security Act 1991 ss 596A, 1227, 1237A(1), 1237AAD

Social Security Legislation Amendment (Newly Arrived Residents Waiting Period and Other

Measures) Act 1997   s 3(1)

Migration Regulations 1994 Division 2.7, reg 2.38

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

Re Beadle and Director-General of Social Security (1985) 7 ALD 670

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

Re Mandlawi and Secretary, Department of Family and Community Services [2005] AATA 236

REASONS FOR DECISION

2 February 2006  Regina Perton, Member

1.      Mr Thanh-Long Phan (the assurer) signed an assurance of support form on  13 February 2002, at the request of a friend of his brother.  The assurance of support  concerned Ms Thi Dot Phan, who was migrating to Australia as the wife of Mr Van Men Nguyen.  The assurance of support was accepted by the Department of Immigration and Multicultural Affairs (DIMIA), the agency then responsible for arranging such matters.  The administration of assurances of support is undertaken by Centrelink, which also administers programs for a number of agencies including the Department of Employment and Workplace Relations (DEWR).

2.      Ms Phan, who is not related to the assurer, arrived in Australia on 9 April 2002 on a spouse visa.  Ms Phan applied for Newstart allowance (NSA) on 7 November 2002.  She was paid NSA from 28 October 2002 to 6 June 2003, the total amount paid being $5387.82.   Ms Phan gave birth to a son on 26 March 2003.  On 6 June 2003, she applied for Parenting Payment (Partnered) (PPP) and was paid PPP from 7 June 2003 to 10 February 2004.   The total amount of PPP received was  $5147.99

3.      On 18 February 2004, 15 March 2004 and 27 April 2004, Centrelink wrote to the assurer at the home address given in the assurance of support form signed in February 2002.   Centrelink informed the assurer he was liable to repay $10,535.81 which Ms Phan had received as benefits.  The assurer did not receive the letters as he had moved. The assurer had sold that home after his contract job as an IT professional terminated and he became unemployed.  Centrelink records indicate the correspondence was returned undelivered. 

4.      On 8 January 2005, through cross-matching of internal Centrelink records, the assurer’s then current address was located.   Centrelink wrote to him on that day advising him about his Centrelink account with an amount owing of $10,459.44.  There was no mention in the letter of the source of the debt.  On 11 January 2005, the assurer rang Centrelink and was informed about how the debt arose.   

5.      On 17 January 2005, the assurer sought reconsideration of the decision to create the debt and enforce the assurance of support.  He provided a chronology of his awareness of the debt and arguments as to why he should not be required to pay back the benefits paid to Ms Phan.  The assurer had recommenced work by then and Centrelink garnisheed his wages prior to a reconsideration of the decision to raise the debt taking place.  On 3 March 2005, an authorised review officer decided that the garnishment was valid. 

6.      On 5 May 2005, solicitors acting for the assurer sought documents relating to the assurance of support and the accumulation of the debt under the Freedom of Information Act 1982.  On 1 June 2005, the solicitors expressed concern about the lack of acknowledgement of the FOI request and the absence of an ARO review of the imposition of the debt.  The ARO decision of 3 March 2005 had only been about the garnishment of the assurer’s wages, rather than whether the debt was payable.  On 7 June 2005, an ARO affirmed the decision that there was a debt, notwithstanding departures from procedure by Centrelink. 

7.      On 1 September 2005, the Social Security Appeals Tribunal (SSAT) waived the assurer’s debt on the basis that there were special circumstances that warranted its waiver.

8.      On 10 October 2005, DEWR, through Centrelink, lodged an application for review with this Tribunal on the basis that there were no special circumstances in this case which warranted waiver of the debt.

9.      For the reasons set out below, the Tribunal agrees with the SSAT that there are special circumstances in this case and that therefore the debt of $10,535.79 should be waived.

IS THERE A DEBT?

10. Legislative provisions dealing with assurances of support lodged prior to July 2004 are contained in s 23 of the Social Security Act 1991 (the Act) and in Division 2.7 of the Migration Regulations 1994. Regulation 2.38 of the Migration Regulations states:

2.38     Liability of person giving assurance of support

(1)      If a person receives support in the form of:

(a)a job search allowance payable under Part 2.11 of the Social Security Act 1991 ; or

(b)a newstart allowance payable under Part 2.12 of that Act; or

(c)a special benefit payable under Part 2.15 of that Act; or

(d)a widow allowance under Part 2.8A of that Act; or

(e)a partner allowance under Part 2.15A of that Act; or

(f)a parenting allowance under Part 2.18 of that Act; or

…

and an assurance of support has effect in respect of the person when he or she receives the support, the person who gave the assurance is liable, subject to this regulation, to pay to the Commonwealth the amount of the support.

(2)      A person is not liable to pay an amount that would otherwise be payable under subregulation (1) in respect of a required assurance until the Commonwealth has taken all reasonable steps to enforce the bond lodged in respect of the assurance.

(3)      An amount payable under subregulation (1) is reduced by:

(a)any amount obtained by the Commonwealth under the bond that has not been applied to reduce a person’s liability to the Commonwealth; and

(b)any amount paid to the Commonwealth in respect of the support.

11. Section 1227 of the Act states that if a person is liable to pay an assurance of support debt, the debt is a debt owed to the Commonwealth.   The assurer signed an assurance of support on 13 February 2002.  He knew what the implications of signing an assurance of support debt were from previous experience.  The fact that he did not know that Ms Phan was getting the payments does not excuse him from incurring the debt.  The Tribunal is satisfied that there is an assurance of support debt.  The assurer has not challenged the amount of the debt and the Tribunal is satisfied that the calculations are correct.

SHOULD THE DEBT BE WAIVED?

12.     Ms Phan qualified for NSA and PPP as the family member of an Australian citizen or permanent resident under s 3(1) of the Social Security Legislation Amendment (Newly Arrived Residents Waiting Period and Other Measures) Act 1997. Hence, she was exempted from the usual 104 week waiting period after gaining permanent residence that applies to other migrants. However, s 596A of the Act requires Centrelink to undertake investigations before granting NSA where there is an assurance of support in place.

596A       A person is not qualified for newstart allowance in respect of a period if the Secretary is satisfied that throughout the period:

(a)an assurance of support was in force in respect of the person (in this section called the assuree ); and

(b)the person who gave the assurance of support was willing and able to provide an adequate level of support to the assuree; and

(c)it was reasonable for the assuree to accept that support.

13.     Ms Phan was paid NSA without Centrelink conducting any check as to whether the assurer could provide support to her.  There is no record of Centrelink making any attempt to contact the assurer by telephone or in writing until after the period for which the assurance of support had been given had almost expired.  The assurer gave evidence that he was not contacted.  Centrelink has conceded that there were administrative errors in its dealings with this case.    

14. Given Centrelink’s failure to undertake the checks prescribed in s 596A, it is arguable that the payment of NSA to Ms Phan was due solely to administrative error. Section 1237A of the Act provides for waiver of debt in certain circumstances if a payment has been made because of 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)….

15. However, the assurer cannot benefit from a waiver due to error on Centrelink’s part pursuant to s 1237A(1). Ms Phan received the payments, not he.

16. The only waiver provision that appears to be available to Mr Phan is that found in s 1237AAD on the ground of special circumstances.  It was that provision that the SSAT relied upon in waiving the debt.

1237AAD.    The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)       making a false statement or false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.

17.     There is no evidence to suggest that either Ms Phan,  the assurer or any other person made false statements or failed to comply with a provision of the Act.   Centrelink was fully aware of the date Ms Phan became the holder of a permanent visa.  In her application for PPP lodged on 6 June 2003, Ms Phan indicated that an Assurance of Support was in effect. There was no corresponding question on the documentation regarding NSA. Centrelink’s file notes at the time of the grant of both NSA and PPP show that Centrelink was fully aware of when she arrived in Australia. The assurer kept Centrelink informed of changes of address when receiving NSA himself. The Tribunal finds that neither the assurer nor Ms Phan knowingly made false statements or representations to Centrelink; nor did they deliberately fail to comply with a provision of the Act. The assurer therefore meets the criteria in s 1237AAD(a) of the Act.

18. The assurer has provided written and oral evidence concerning his dealings with the then Department of Social Security (DSS) in relation to an assurance of support debt in 1992. The assurer had provided an assurance of support for his uncle, aunt and four cousins who migrated from Vietnam. DSS contacted him when claims were lodged for benefits. He was sent a letter when the amount of special benefit paid to his aunt and uncle was $340.40 and was asked to let the DSS know if he could support them. Section 596A was inserted into the Act in 1992 to govern such procedures. The assurer described DSS procedures at that time which included his coming in for interview and signing relevant documentation, of which he provided copies. The assurer acknowledged in writing he would be liable for the debt arising out of the DSS payments and made separate arrangements with other relatives for them to assist. The debt was repaid. He said that he expected Centrelink to follow the same procedures in relation to the assurance of support given in relation to Ms Phan.

19.     The assurer said that he had been approached by his brother and the brother’s friend in 2002 to sign the assurance of support.  Ms Phan had married his brother’s friend in 1999.  The friend was unemployed and his family members were also on benefits.  They were therefore not in a position to provide an assurance of support.  DIMIA decided that an assurance of support, which was discretionary for the holder of a partner visa, was required before Ms Phan could join her husband.  The assurer’s wife was against him signing the assurance of support for someone who was not even a relative.  The assurer said he was sympathetic to the plight of the young man and only agreed because he knew the procedures involved.  He expected Centrelink to contact him if Ms Phan applied for a benefit.  He also expected Ms Phan or her husband to let him know if she planned to do so.  He anticipated making an agreement with relatives of Ms Phan for repayment and/or assisting her to find a job instead of claiming benefits. 

20.     The assurer told the Tribunal that he has not had any contact with his brother’s friend since signing the assurance of support.  He did not know that Ms Phan had arrived in Australia or that she had claimed NSA or PPP.  He does not even know her or her husband’s address.  The assurer only learned of her arrival date and the claim for benefits after the two year period covered by the assurance of support had expired.  The assurer said that over the past year, he and his brother had tried to locate Ms Phan and her husband without success.  His brother was no longer working with Ms Phan’s husband.  She had moved house to an unknown location.  The assurer tried to obtain Ms Phan’s address through Centrelink but was refused on privacy grounds. 

21.     The assurer submitted that  his situation could be described as being special circumstances.  Centrelink did not follow legislative requirements or its own policy guidelines when it failed to contact him when Ms Phan first applied for NSA.  He said he was therefore denied the opportunity to make arrangements or agreements with Ms Phan’s husband and family for her financial support.  He indicated that he knows many Vietnamese small business persons and believes that he could have obtained employment for Ms Phan rather than her having to claim benefits.  The assurer told the Tribunal that his personal circumstances had changed since the SSAT hearing.  His most recent contract position had ended and he was  looking for work again.  He is being paid NSA.  He and his wife have separated since the SSAT hearing and the subsequent appeal by DEWR against the waiver of the debt.  He said that the trouble concerning the assurance of support had been a factor in the separation.  His wife had been reluctant to agree to his signing the assurance and only relented when he explained that he would be contacted by Centrelink if Ms Phan applied for any benefit and that he could then make arrangements to have any debt covered by Ms Phan’s relatives and/or get her a job.  The imposition of the debt and the garnishment of his wages had caused a rift between his wife and him.   

22.     Mr Zita, representing Centrelink, submitted that there are no special circumstances that would justify waiving the debt.  He cited Re Beadle and Director-General of Social Security (1985) 7 ALD 670, in which the Full Court of the Federal Court looked at the term special circumstances in the context of extending the time to lodge a claim for an allowance for caring for a handicapped child.  The Full Court endorsed the approach taken in the Tribunal’s decision (Re Beadle and Director‑General of Social Security (1984) 6 ALD 1) which stated that special circumstances must be unusual, uncommon or exceptional (at 4). He stated that the assurer had been aware of the significance of signing the assurance of support. He said that the assurer should have made efforts to keep in touch with Ms Phan’s husband so that he was aware of her arrival and her subsequent claim for benefits. Furthermore, Mr Zita said that it was probable that the assurer would not have been in a position to support Ms Phan at the time she applied for NSA as he had recently been retrenched and was on NSA himself. Hence, he would not have met the criteria in s596A, an assertion challenged by the assurer.

23.     Mr Zita cited the case of Re Mandlawi and Secretary, Department of Family and Community Services [2005] AATA 236, in which a person provided an assurance of support for a person who was not a relative or friend, as an appropriate precedent for this Tribunal to follow.  In Mandlawi, the Tribunal found that the applicant’s situation could not be described as special circumstances.  However, this case differs from Mandlawi, as the assuree in that case had not declared that she was subject to an assurance of support when applying for special benefit.  Furthermore, in Mandlawi, the assurer was able to contact the assuree and her husband to attempt to negotiate a resolution of the matter.  In this case, the assurer does not even know where Ms Phan lives. 

24. Mr Zita also submitted that arrangements should have been in place for Ms Phan to let the assurer know she was applying for the benefits. With hindsight, that should have happened but it did not. Her failure to do so does not negate the Centrelink’s failure to comply with its legislative obligations and its failure to follow the procedures it has laid down for treatment of those giving assurances of support. Centrelink has not provided any evidence or statistics to show that it regularly fails to make enquiries pursuant to s 596A of the Act concerning NSA applicants who are covered by assurances of support. Centrelink has not indicated that it is the norm that the assurer is not contacted contrary to the legislative provision and procedural guidelines. The assurer was not able to take the opportunity to make arrangements for Ms Phan that he may well have been able to make, had he been aware of her lodging the NSA application. She did in fact, state in her application for PPP that she was the subject of an assurance of support.  It appears that there was no question on the NSA form concerning assurance of support but it is noted that she was a recent arrival in the document concerning grant of NSA

25.       For the Tribunal to use its discretion to determine that the assurer’s situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary.  In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases (at para 26).  Her Honour was considering s 1237AAD which is the relevant section of the Act in this matter. Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case (at para 26).

26. Centrelink’s failure to meet its legislative obligation under s 596A of the Act or to follow its own guidelines for NSA applicants has been a major factor in the assurer ending up in this situation. The Tribunal is satisfied there was a strong probability that the assurer could have made satisfactory arrangements with Ms Phan’s husband or relatives to receive reimbursement of the debt that was to accumulate and/or to assist her to get a job. He was aware of his obligation under an assurance of support, but expected to be notified if it was to be activated.  He had previously made arrangements with others to meet an assurance of support debt.  He does not know where Ms Phan or her husband live; or even if they know that he has been required to reimburse her NSA and PPP payments.  He has not been able to privately negotiate with them to assist him with the repayments.  The assurer’s circumstances have deteriorated since he signed the assurance of support.  At that time, he was working and living in his own home.  He had to sell his house following his job loss in mid-2002 and was unemployed for 12 months.  He obtained fresh employment and was employed at the time of the SSAT hearing but his contract has now ended and he is again unemployed.  He and his wife have separated with one of the catalysts being the assurance of support debt.  Hence, his situation is now even worse than it was at the time of the SSAT decision.   

27.     The Tribunal is satisfied that this case is out of the ordinary and that there is hardship or unfairness that is sufficient to justify departure from the general rule in the particular case.  The Tribunal finds that it is appropriate to waive the debt due to special circumstances.  The SSAT decision is upheld. 

DECISION

28.     The Tribunal affirms the decision under review.

I certify that the twenty‑eight [28] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  20 January 2006
Date of decision:  2 February 2006
Advocate for applicant:                Self-represented
Advocate for respondent:            Mr W Zita, Centrelink