Pitts and Secretary, Department of Social Services (Social services second review)
[2023] AATA 3957
•28 November 2023
Pitts and Secretary, Department of Social Services (Social services second review) [2023] AATA 3957 (28 November 2023)
Division:GENERAL DIVISION
File Number(s): 2023/2378
Re:Sean Pitts
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member George
Date:28 November 2023
Place:Adelaide
The Tribunal affirms the decision under review.
................................[sgnd]..................................
Senior Member George
CATCHWORDS
SOCIAL SECURITY – disability support pension – applicant in receipt of disability support pension while in gaol – applicant incurred debt – whether appropriate to waive or write off debt – decision under review affirmed.
LEGISLATION
ADMINISTRATIVE APPEALS TRIBUNAL ACT 1975 (CTH)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Bullivant and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 64
Condren and Department of Family and Community Services [1999] AATA 575
REASONS FOR DECISION
Senior Member George
28 November 2023
Mr Sean Pitts was granted a disability support pension (“DSP”) in April 2011.[1] He was remanded at Darwin Correctional Centre in August 2018.[2] He continued to receive DSP whilst imprisoned until October 2019.[3]
[1] Exhibit R3, Respondent’s Tender Bundle, Grant of Disability Support Pension Letter, page 44.
[2] Exhibit R3, Respondent’s Tender Bundle, Remand Warrant, page 121.
[3] Exhibit R3, Respondent’s Tender Bundle, page 124.
In July 2020, a Centrelink Authorised Review Officer (“ARO”) affirmed a decision made in November 2019 that Mr Pitts had a DSP debt of $27,829.89.[4] On 23 March 2023, the Social Services and Child Support Division of the Tribunal (“AAT1”) affirmed the decision of the ARO.[5] This is the reviewable decision.
[4] Exhibit R2, T-Documents, T14, Letter to Applicant: Your Review Outcome, page 57.
[5] Exhibit R2, T-Documents, T3, Decision of AAT1.
It is not in issue that Mr Pitts accrued a DSP debt of $27,829.89 during his period of imprisonment. The issues are whether the debt should be written off, or whether the right of recovery of the debt should be fully or partially waived.
For the following reasons, the Tribunal has decided to affirm the decision under review.
LEGISLATIVE FRAMEWORK
Section 1158 of the Social Security Act 1991 (Cth) (“the Act”) provides that DSP is not payable while the recipient is in gaol.
Section 66A of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”) contains a general requirement that applies to DSP recipients and others, whereby they must inform Centrelink within 14 days of changes to their circumstances. This section is central to the Secretary’s case.
Section 1223(1) of the Act provides that where a person obtains a benefit that they were not entitled to then the amount of the payment is a debt due to the Commonwealth by the person. The debt is taken to arise when the person obtains the benefit of the payment.
Under s 1236 of the Act, the Secretary has limited powers to write off debts on behalf of the Commonwealth 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.
Section 1237 of the Act provides the Secretary with the power to waive the Commonwealth’s right to recover all or part of a debt, where under:
(a)section 1237A of the Act, the Secretary must waive the right to recover a debt that it attributed solely to an administrative error.
(b)section 1237AAD of the Act, the Secretary may waive the right to recover all or part of the debt if the Secretary is satisfied that 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 the Act (and its 1947 antecedent) or the Administration Act;
(c)And:
(i)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(ii)it is more appropriate to waive than to write off the debt or part of the debt.
SHOULD THE DEBT BE WRITTEN OFF?
There is no evidence before the Tribunal that supports a finding that the Applicant’s DSP debt should be written off because it is irrecoverable at law.
Mr Pitts’ whereabouts is known. He has capacity to repay the debt by deductions from his Centrelink payments, albeit over a lengthy period, and therefore the Tribunal does not find that he has no capacity to repay the debt. Also, there is no evidence before the Tribunal that it is not cost effective for the Commonwealth to take action to recover the debt.
Accordingly, The Tribunal finds that the debt should not be written off.
SHOULD THE RIGHT OF RECOVERY OF THE DEBT BE FULLY OR PARTIALLY WAIVED?
Administrative error on behalf of the Commonwealth – s 1237A of the Act
Mr Pitts submits that it was an error of the Commonwealth that he received payments he was not entitled to arising from being imprisoned under the surname ‘Pearce’ rather than Pitts. Mr Pitts’ evidence is that the police were monitoring his bank account and that they knew that he was receiving the DSP. From the evidence, the Tribunal is satisfied that this reference to ‘police’ was the Northern Territory Police.
The Tribunal is satisfied that an administrative error has arisen at about the time of Mr Pitts’ remand where he has become known by Northern Territory Correctional Services by the surname ‘Pearce’ rather than Pitts. This was not an error of the Northern Territory courts. It is more likely an error by either of the Northern Territory Correctional Services or the Northern Territory Police, however as neither of those entities were placed on notice of these proceedings it would be procedurally unfair for the Tribunal to make adverse findings about them. In any event, the Tribunal is satisfied that this administrative error was not made by the Commonwealth.
The Secretary submits that there was no administrative error on behalf of the Commonwealth as Mr Pitts had a continuing obligation under s 66A of the Administration Act to inform Centrelink that he was incarcerated. As Mr Pitts did not do so, the Secretary submits that “this contributed, if not outright caused, the debt arising in the first place.”[6]
[6] Exhibit R1, Respondent’s Statement of Facts, Issues and Contentions, page 6 [30].
Centrelink was eventually informed of Mr Pitts’ incarceration through data-matching in October 2019. Centrelink then suspended his DSP.
The Secretary submits that it had limited means to verify that Mr Pitts was incarcerated.[7] The Secretary also submits that it cannot be expected that Commonwealth, State and Territory agencies must share information as this would remove Mr Pitts’ obligations to report any changes to his circumstances. Indeed, the Tribunal observes that any such an arrangement may not be possible within the operation of existing Commonwealth, State and Territory privacy legislation.
[7] Exhibit R1, Respondent’s Statement of Facts, Issues and Contentions, page 6 [30].
In Condren and Department of Family and Community Services [1999] AATA 575 at [59] Senior Member Barbour considered the question of administrative error in similar circumstances to those of Mr Pitts. In that matter, the Department discovered the applicant's imprisonment because of the data-matching process. The Senior Member found that the applicant was, because of his own failure to notify the Department, at least partially to blame for the overpayment of DSP. The Senior Member concluded therefore that the overpayment was not attributable solely to an administrative error by the Department.
Over the course of years, Mr Pitts was informed on various occasions that he had an obligation to report any changes in his circumstances to Centrelink. He did not report that he was incarcerated, or at the very least change his address to Darwin Correctional Centre at the time that his Rent Assistance ceased. This failure to report, at least partially, resulted in his debt.
Balancing the evidence before it, the Tribunal is satisfied that Mr Pitts’ debt was not the result of an administrative error attributed solely to the Commonwealth. Therefore, the debt cannot be waived on this basis.
Special circumstances – s 1237AAD of the Act
The Secretary submits that it is open to the Tribunal to find that the Applicant knowingly failed to comply with his obligations under the Act. The balance of the evidence before the Tribunal does not support a finding that Mr Pitts knowingly failed to comply with his obligations under the Act, in effect thereby committing an act of fraud.
Mr Pitts’ evidence is that, due to conversations with prison staff and inmates, he believed that he was entitled to receive DSP whilst in Darwin Correctional Centre. That may be so. However, the only reasonable course would have been for Mr Pitts to also have directed his enquiries to Centrelink. Telephone calls from prison may be difficult to schedule and expensive, but Mr Pitts had both time and the benefit of his DSP. Mr Pitts could have written to Centrelink or instructed another person to do so on his behalf. He took no such steps.
For the right to recover the debt to be waived under “special circumstances”, the circumstances need to be so unusual or exceptional that they give rise to an unjust, unreasonable, inappropriate, or unjustified outcome.[8]
[8] Exhibit R2, T-Documents, T3, Decision of AAT1.
Mr Pitts expressed dissatisfaction at the outcome of his criminal proceedings. His evidence was that his legal representation was incompetent. Mr Pitts’ evidence was limited on the issue of his conviction as he wished to maintain some appeal rights. Noting that Mr Pitts was convicted after a trial before a jury in the Supreme Court of the Northern Territory, the current outcome of his criminal proceedings does not amount to a special circumstance for the purpose of s 1237AAD of the Act.
Mr Pitts is in poor health, particularly with back and heart issues. During the hearing, he submitted photos of medication that he takes to manage his heart issues and back pain. Mr Pitts carries Nitroglycerin should he feel the onset of a heart attack. He visits his General Practitioner at least once monthly to obtain new prescriptions.
While the Tribunal is satisfied that Mr Pitts suffers from poor health, there is insufficient evidence before the Tribunal as to how this amounts to a special circumstance for the purpose of s 1237AAD of the Act. In making this finding, the Tribunal has considered the decision of Deputy President Hotop in Bullivant and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 64 at [47].
Mr Pitts’ evidence clearly indicates that he has severely constrained financial circumstances. His evidence is that he would suffer further financial hardship by repaying his debt.
Mr Pitts now owes approximately $19,000. He receives a newstart allowance of approximately $700 per fortnight. He currently has accommodation that he rents from an ex-girlfriend, although this is not a permanent situation.
Mr Pitts gave evidence that by the time he pays his bills at each fortnight, he only has a few dollars remaining. The Tribunal accepts this evidence and that he will likely be repaying his debt for the foreseeable future. However, the Tribunal is not satisfied that this amounts to a special circumstance for the purpose of s 1237AAD of the Act.
The Applicant had the benefit of the money he received through his DSP while in gaol. He did not save it, rather he either spent it or distributed it to others. Mr Pitts was not entitled to receive that money and while paying back the debt will cause him financial hardship, there is insufficient evidence before the Tribunal that Mr Pitts’ circumstances are so unusual or exceptional that they give rise to an unjust, unreasonable, inappropriate, or unjustified outcome attracting waiver.
Accordingly, the Tribunal is satisfied on the evidence before it that special circumstances do not apply to Mr Pitts. The right to recover the debt cannot be waived in full or in part under s 1237AAD of the Act. The correct decision of the Tribunal is therefore to affirm the decision under review.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 32 (thirty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member George
.............................[sgnd]..................................
Associate
Date of Decision: 28 November 2023 Date of Hearing: 30 October 2023 Representation for the Applicant:
Self-represented Solicitor for the Respondent: Alex Chan
Sparke HelmoreANNEXURE A – EXHIBIT REGISTER
33. EXHIBIT
DESCRIPTION OF EVIDENCE
PARTY
DATE OF DOCUMENT
DATE RECEIVED
DATE TENDERED
R1
Respondent’s Statement of Facts, Issues and Contentions.
R
1/8/2023
1/8/2023
30/10/2023
R2
T-Documents
Various
19/5/2023
R3
Tender Bundle
Various
1/8/2023
A1
Applicant’s Statement of Facts, Issues and Contentions
A
21/8/2023
21/8/2023
A2
Photos of the Applicant’s Medication
N/A
30/10/2023
0