Pirri and Secretary, Department of Family and Community Services

[2000] AATA 231

DECISION AND REASONS FOR DECISION [2000] AATA 231

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     NoW1999/194

General administrative DIVISION         )          

Re      Maria Grazia Pirri

Applicant

And    Secretary, Department of Family and Community Services         

Respondent

DECISION

Tribunal       Mr R D Fayle, Senior Member      

Date23 March 2000

PlacePerth

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal sets aside the decision under review and remits the matter to the respondent with a direction that it waive that part of the debt due to administrative error, arising from the first payment date after June 1997 for a period ceasing on the next ordinary review date of the entitlement to the relevant allowance/payment or 20 March 1998, which ever occurred first.

...........(sgd R D Fayle)...........
  Senior Member
CATCHWORDS
SOCIAL SECURITY – applicant received Parenting Allowance and Parenting Payment - spouse notified respondent of likely increase in income - forms completed as a consequence - no action taken by respondent - applicant did not notify when income actually exceeded specified amount - overpayment arose - whether overpayment due solely to administrative error - whether overpayment received in good faith.
Social Security Act 1991 ss 506D, 950, 1237A(1)
Butterworths Encyclopaedic Australian Legal Dictionary

Australian Telecommunications Commission v Kreig Enterprises Pty Ltd (1976) 14 SASR 303
Tillmanns Butcheries Pty Ltd v Australian Meat Industries Employees' Union (1979) 27 ALR 367.
Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 44 ALR 557.
Mallow and Secretary, Department of Social Security AAT 12211, 12 September 1997

REASONS FOR DECISION

23 March 2000        Mr R D Fayle, Senior Member                  

1. This is a review of a decision of the Social Security Appeals Tribunal ("SSAT") on 27 May 1999, which affirmed the decision, on 26 March 1999, by the respondent's Authorised Review Officer, that Mrs Maria Pirri ("the applicant") was overpaid Parenting Allowance by $1,044.40 and Parenting Payment by $1,108.30.

2. The applicant was unrepresented. She and her husband, Mr Elio Pirri, each gave evidence. Mr Steve Ellis, an advocate with the Centrelink Administrative Law Team, represented the Secretary to the Department of Family and Community Services ("the respondent"). The Tribunal had before it the documents lodged by the respondent pursuant to s37 of the Administrative Appeals Tribunal Act 1975 ("the T documents", numbered T1 – T20); a copy of a letter of 15 December 1997 from Centrelink to Mrs Pirri; and copies of Mr and Mrs Pirri's notices of assessment for income tax for each of the years ended 30 June 1997 and 1999.

3. Certain facts are not disputed.  On 21 November 1996 Mrs Pirri received a letter from the respondent (T4) which informed her of her entitlement to receive Parenting Allowance of $35.50 each fortnight commencing on 5 December 1996.  That letter also informed her of her obligation to notify the respondent, within 14 days, if her "total personal income goes over $118.65 a fortnight".  Also, on 22 March 1998, a similar letter was sent by the respondent to Mrs Pirri relating to her then entitlement to Parenting Payment.  This letter explains that from 20 March 1998 the former Parenting Allowance was replaced by the Parenting Payment.  The letter contains a similar instruction of the need to contact the respondent and advise if "your total personal income goes over $60 a fortnight". At no time was either of those instructions literally complied with, in the sense that Mrs Pirri notified the respondent when her personal earnings from her part-time job exceeded the limits referred to above.  However, it should be noted that the letter of 21 November 1996, in relation to the instructions which must be followed by the recipient states that:

   "You must tell us if any of these things happen or is likely to happen: …". [emphasis added]

And the letter of 22 March 1998 is similarly couched :

"You must tell us about events or changes in circumstances affecting your payment within the 14 day period which starts on the day after the day on which they happen or are likely to happen." [emphasis added]

1. It is not disputed that Mrs Pirri's earnings from her part-time job as an accounts clerk did exceed those limits for the periods during which the overpayments have been calculated.  Neither is it disputed that the amount of the overpayments have been properly calculated according to the Social Security Act 1991("the Act") Module D (s1068A-D1) test.

2. The issue, so far as the applicant is concerned, is whether what her husband did to inform the respondent about their changing income circumstances was sufficient to put the respondent on notice.  And whether, on the basis of that information, the respondent should have sought more information if it considered it necessary to enable a review of the fortnightly payments.  In the course of the hearing the applicant acknowledged that that part of the overpayment relating to the period after receipt of the letter of 22 March 1998 is not contested.

3. Both the applicant and Mr Pirri gave evidence, which is consolidated for the sake of simplicity.  Whilst unemployed in 1995 Mr Pirri completed Newstart report forms as and when required and duly reported Mrs Pirri's earnings from part-time employment with Sealanes.  She had been working there for some time prior to that, firstly for one day per week, because she had a small child and in June a second child arrived.  Mr Pirri became employed in 1997 and in May 1997 they purchased and investment property. Mr Pirri, being aware of the need to keep the respondent informed of changing circumstances because of past experience relating to the Newstart Allowance, telephoned the respondent in June 1997 for the specific purpose of advising it of changing family financial circumstances.  At the time he was no longer in receipt of Newstart Allowance that having ceased when he obtained work earlier in the year and had duly notified the respondent. However, he still held a Health Care Card as did the applicant.  It was Mr Pirri's understanding that this privilege would terminate automatically and it did in November 1997.

4. Mr Pirri's evidence was that in June 1997 he looked up the telephone number for Centrelink (the administrator of the respondent's benefits) and was directed to the number which covered a range of benefits including the Parenting Allowance.  He called the number and spoke to an officer, informing them that their income and assets would change as a result of the acquisition of the investment property and that Mrs Pirri would be increasing her hours of work now that the youngest child was over one year old.  He said he gave a fairly accurate prediction of his anticipated earnings based on his actual wages which did not vary.  He also said that he advised them of what he believed to be a reasonable estimate of Mrs Pirri's earnings on the basis that she would be paid so much per day and her employer had offered her as much work as she wanted.

5. Mr Pirri said that soon after the day of the telephone call he received, from the respondent, some blank forms to complete.  So far as he could recall these asked whether they would be receiving rental income, income from overseas, any benefits from Superannuation, details of any money in the bank and interest to be earned, whether married etc, and similar details relating to your partner.  He said that he duly completed the form and returned it promptly.  He believed that that information would be used to reassess Mrs Pirri's entitlement to Parenting Allowance, having provided an estimate of her anticipated income.  The Parenting Allowance was the only Social Security benefit which the family was then receiving apart from the benefit of the Health Care Cards.

6. The T documents do not contain any record of the alleged telephone call or copies of the completed forms adverted to by Mr Pirri.  Mr Ellis explained that it would not be unusual for such completed forms to be unavailable.  He said that he understood the procedure to be that once the forms are received by the respondent they are batched, along with (hundreds of) others received on a daily basis, and archived.  They are not kept on personal files.  He submitted that, in any event, if the form existed the information it contained would not be relevant to the assessment of the applicant's entitlement to Parenting Payment.

7. Mr Ellis submitted that the letter of 21 November 1996 gave the applicant a clear direction to notify the respondent if her income went over $118.65 and this she did not do. He submitted that Parenting Payment is calculated on the basis of "the amount of the person's ordinary income on a fortnightly basis". Mr Ellis then drew the attention of the Tribunal to the Act's definition of "ordinary income", pointing out that it is essentially income derived or earned and not income which is estimated to be derived or earned in future. His submission is that the Module leaves no room for estimated amounts of income and in keeping with the instructions contained in the letter of 21 November 1996 (and of 22 March 1998), the calculation requires prompt reporting of actual earnings.

8. Mr Pirri told the Tribunal that because he had regularly reported both his and Mrs Pirri's earnings to Centerlink as a condition for Newstart Allowance, they both assumed that there was no need to report Mrs Pirri's earnings separately.  It was not until about May or June 1997 when circumstances had changed, (he no longer being on Newstart), that they felt a need to report their financial circumstances without being prompted by Centrelink.  That gave rise to the telephone call in June 1997 and the subsequent submission of the completed forms.

9. The Tribunal is of the view that both Mr Pirri and the applicant honestly believed, at least until they received the letter of 22 March 1998, that they had complied with the necessary requirements to advise the respondent of any change in their incomes.  This belief was based on Mr Pirri's experience as a result of having been entitled previously to Newstart Allowance and the need to comply with its relevant conditions. Mr Pirri and the applicant understood that the joint information which they provided to the respondent in that regard, and pursuant to the June 1997 telephone call and lodgement of the consequentially completed form, sufficed to meet their obligations to inform the respondent.  Mr Pirri told the Tribunal that in addition he had provided Centrelink with both his and the applicant's income tax assessments as and when requested and he understood that that information was relevant to each of their entitlements.

10. Section 506D(1) of the Act states:

    506D(1)         The Secretary may give a person to whom parenting payment is being paid a notice that requires the person to inform the Department if:

    (a)a specified event or change of circumstances occurs; or

    (b)the person becomes aware that a specified event or change of circumstances is likely to occur.

11. The letter of 21 November 1996 states that it is issued "under section 950 of the Social Security Act 1991". That provision was subsequently repealed and when the Act was amended to insert Chapter 2, Parenting payment Part 2.10, s506D was inserted. The only difference between the two provisions is the term "parenting allowance" in s950(1) became "parenting payment" in s506D(1). Otherwise they are identical.

12. Strictly construed, it is sufficient to comply with a notice issued pursuant to either s950(1) or s506D(1) of the Act if the recipient advised the respondent that it was likely that their total personal income(s) would go over a certain amount at a designated future time. Implied in this proposition is a condition that the recipient based his or her estimate on fairly reliable objective criteria. That, in the opinion of the Tribunal, would be sufficient information to facilitate a review by the respondent of a recipient's future entitlement to parenting allowance, as a case in point. In the Tribunal's opinion the use of the word "likely" in the context of the statutory provisions would indicate a reasonable degree of certainty – more likely than not, as opposed to speculation or a reasonable degree of uncertainty. There would seem to be implied a need for responsible and objectively supportable estimates where a social security recipient is to receive a benefit based on a projected level of personal income – mere conjecture or plucking figures from thin air would not suffice. In the present case Mr Pirri's evidence is that the written information relating to his and the applicant's anticipated employment earnings, which he supplied in response to the telephone call to Centrelink in June 1997, was an objective estimate. He said that at the time his income was fixed and regular and the applicant's depended only on the number of days which she worked which in turn was her choice. Those facts should produce a fairly reliable estimate of income to be received over a relatively short term such as a few months, as, it is understood, was required.

13. The unchallenged facts establish that the overpayments in question arose and that their quantum is not in question and that they constitute a debt due to the Commonwealth. In these circumstances the only possible relief open to the applicant is waiver of part or the whole of the debt (s1237 of the Act grants the Secretary the power to waive). Section 1237A of the Act requires the Secretary to waive the right to recover the portion 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 portion of the debt.

14. In the Tribunal's opinion the overpayments arising from the time when the applicant's likely relevant personal income was advised to the respondent following the June 1997 telephone call, for a period up to the usual date upon which the respondent would routinely review the payment (or 20 March 1998, whichever occurred first), is attributable solely to an administrative error. That error is identified by the Tribunal as the respondent not reviewing the applicant's relevant payment in the light of the furnishing, on behalf of the applicant, information of the likely income to be derived from employment. If this alone is insufficient reason on which to base a finding of sole administrative error then the Tribunal also identifies another as such, being a failure to act responsibly in the circumstances. That is, the evidence strongly implies that the respondent failed to send out all the proper forms for completion, in response to the telephonic information about the applicant's anticipated income communicated, by her spouse on her behalf, to the respondent by telephone in June 1997. In the Tribunal's opinion there is a responsibility on the respondent, when dealing with established and ongoing social security beneficiaries, to have regard to the particular benefit which they are receiving at the time of being provided with relevant information pursuant to s506D(1) or its predecessor, s950(1), of the Act.

15. In the opinion of the Tribunal the applicant received the payments in question in good faith – that is, the payments in question up until 20 March 1998.  The applicant believed that she had properly notified the respondent of her changing income levels and assumed that the payments subsequently received would have been properly calculated.  She did not know how, if at all, the increased income would impact on her entitlement to Parenting Allowance/Payment and there was no reason why she should think the payments she received were wrong.  In short, she was not aware of the overpayment until it was pointed out to her by the respondent at a later date, which gave rise to these proceedings.  The relevant circumstances of the applicant in this case are contrasted with those in Mallows and Secretary, Department of Social Security AAT 12211, 12 September 1997.  In that case Senior Member J Handley observed that the applicant suspected that she had been overpaid – and that she was "wilfully blind to a degree, she received monies she was not entitled to and chose not to pursue the matter further."
    Decision

16. For the above reasons the Tribunal, pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, sets aside the SSAT decision under review and remits the matter to the respondent with a direction that it waive that part of the debt due to administrative error, arising from the first payment date after June 1997 for a period ceasing on the next ordinary review date of the entitlement to the relevant allowance/payment or 20 March 1998, which ever occurred first.

    I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R D Fayle, Senior Member

    Signed: S Railton    

    .................(sgd S Railton)...................
    Associate

    Date of Hearing  2 March 2000
    Date of Decision  23 March 2000
    For Applicant  Unrepresented

    Respondent's representative     Mr Steve Ellis,

    Advocacy and Administrative Law Team, Centrelink