Phillips and Department of Family and Community Services - [2001] AATA 241

DECISION AND REASONS FOR DECISION [2001] AATA 241

ADMINISTRATIVE APPEALS TRIBUNAL )

) No T2000/149

GENERAL ADMINISTRATIVE DIVISION       )
           Re      MICHELLE LYNNE PHILLIPS
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Ms A F Cunningham (Part-time Member)

Date23 March 2001
PlaceHobart

Decision      The decision under review is affirmed.
  [Ms A F Cunningham]
  Part-Time Member
CATCHWORDS
Social Security – parenting payment – overpayment – waiver – administrative error – meaning of "received in good faith".
Social Security Act 1991 – s.1237A

REASONS FOR DECISION

23 March 2001 Ms A F Cunningham (Part-time Member)

The applicant has sought the review of a decision made by a Centrelink officer on 19 May 2000 to raise and recover a debt in the sum of $1,383.14 in respect of the payment of parenting payment for the period 1 March 2000 to 10 May 2000. The decision was subsequently affirmed by the Social Security Appeals Tribunal (SSAT) on 17 October 2000.
The Tribunal was requested to determine the appeal on the basis the written material before it which included the 'T' documents submitted pursuant to s.37 of the Administrative Appeals Tribunal Act 1975. Counsel for both parties submitted statements of facts and contentions.
The following facts do not appear to be in contention:
(i)That the applicant was in receipt of parenting payment, which from 8 December 1999 was paid at the minimum rate of $66.20 per fortnight and from 1 March 2000 at the rate of $294.70 per fortnight.
(ii)That the applicant's husband commenced employment on or about 19 November 1999 and received a weekly income of approximately $738.18.
(iii)That on 15 February the respondent sent the applicant a notice advising her of her obligation to notify Centrelink if her husband's income increased from $0, which notice the applicant alleges not to have received.
(iv)That the applicant notified Centrelink of her husband's income on 8 May 2000.
(v)That Centrelink raised a debt of $1,383.14 on 19 May 2000 and sought to recover the overpayment.
(vi)That the applicant claims that she was unaware of the overpayment because she and her husband did not receive a bank statement for the relevant period.
There appears to be no dispute between the parties and the Tribunal concludes that the sum of $1,383.14 was incorrectly paid to the applicant and is accordingly a debt due to the Commonwealth within the meaning of s.1223(5) of the Social Security Act 1991 ("the Act").
The issue for the Tribunal to decide is whether the debt owed can be waived pursuant to the provisions s.1237A of the Act which provides:
"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."
The Tribunal must find firstly that the debt or a proportion of the debt arose solely due to administrative error and secondly that the debtor received the payments in good faith.
The material before the Tribunal indicates that for the period 8 December 1999 until 16 February 2000, the applicant was in receipt of the minimum rate of parenting payment in the sum of $66.20. This rate was subsequently increased from 1 March 2000 to the sum of $294.70 due to an error on the part of Centrelink. The authorised review officer in his decision dated 10 July 2000 stated that the applicant was entitled to receipt of the minimum payment of $66.20 during the period that she was paid at the higher rate of $294.70. The Tribunal can discover no explanation for the increased payment which appears to have occurred at the same time that the respondent sent the applicant a notice requiring her to advise of any increase in her partner's income.
The Tribunal concludes that the increased payment was attributable solely to administrative error for even if, the applicant had notified Centrelink of her partner's income, from 19 November 1999 she was nevertheless entitled to receive the minimum rate of parenting payment that she had been receiving. The amount of overpayment is the difference between this sum and the increased amount paid in error by Centrelink. The Tribunal accepts the respondent's contention that the applicant should have been aware of her obligation to notify Centrelink of any change in either her or her partner's financial circumstances. However it appears, that even if she had done so, she was nevertheless entitled to receive the minimum rate of parenting payment. There appears to be no other explanation for the increase in rate of payment from $66.20 to $294.70 per fortnight other than administrative error.
The remaining issue for consideration in relation to waiver of the debt is whether the applicant received the overpayments in good faith.
The leading authority as to the meaning of the term "received in good faith" is the decision of Finn J in Secretary, Department of Education, Employment, Training and Youth Affairs v Barry Prince (1997) 1565 FCA. Counsel for both parties contended that the SSAT in its decision made an error of law with regard to the interpretation of Finn J's decision by concluding that because the applicant and her partner were unaware of the overpayments, they could not have formed the belief that they had a genuine entitlement to the monies and therefore could not be said to have received the overpayments in good faith.
What his Honour actually said in Re Prince was that a person cannot said to be receiving payments in good faith if that person knows or has reason to know that her or she is not entitled to receive the payments. His Honour went on to state "Absent such knowledge or reason to know, the receipt would be in good faith". The relevant legislative provision in Re Prince was s.289 of the Student and Youth Assistance Act 1973, referrable to waiver of a debt and which section is couched in similar terms to s.1237A. Of that section Finn J said "In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise."
The Tribunal is satisfied on the material before it that the applicant would have been aware that she was not entitled to receive an increase in her parenting payment above the minimum payment that she had been receiving. The Tribunal is satisfied that even if the applicant did not receive the notification forwarded by Centrelink on 15 February 2000, previous correspondence from Centrelink would have forewarned her of her obligation to notify of any change in her financial circumstances and in particular an increase in income received either by herself or her partner. Whilst the Tribunal accepts that the applicant may not have been aware of the receipt of the payments until she received the bank statement, nevertheless it cannot be said that she received the payments in good faith in that she would have been aware that she was not entitled to the increased payments.
The Tribunal having determined that the payments were not received by the applicant in good faith, the debt could not be waived pursuant to the provisions of s.1237A of the Act. Accordingly the Tribunal affirms the decision under review.

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Part-time Member)
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  Matter decided on the papers
Date of Decision  23 March 2001