Plug; Department of Social Security - [2000] AATA 744

DECISION AND REASONS FOR DECISION [2000] AATA 744

ADMINISTRATIVE APPEALS TRIBUNAL )

) No W1998/404

GENERAL ADMINISTRATIVE DIVISION          )
           Re      SECRETARY, DEPARTMENT OF SOCIAL SECURITY
  Applicant
           And    DEBRA JEANETTE PLUG
  Respondent

DECISION

Tribunal The Hon Justice D F O'Connor, President Mr R D Fayle, Senior Member Ms S McKnight, Member

Date25 August 2000
PlacePerth

Decision      The Tribunal sets aside the decision under review and in substitution decides that the respondent's rate of family allowance is properly increased from 12 March 1998.
  ..............................................
  President
SOCIAL SECURITY – family allowance – sufficient notice – whether mere indication of the rate paid constitutes sufficient notice of the decision regarding the applicable rate

Social Security Act 1991 (Cth) s 887
Administrative Appeals Tribunal Act 1975 (Cth) s 3(3)

Re McAllan and Secretary, Department of Social Security (1998) 51 ALD 792
Austin v Secretary, Department of Family & Community Services (1999) 29 AAR 528
Rose v Secretary, Department of Social Security (1990) 21 FCR 241
Secretary, Department of Social Security v SRA (1993) 118 ALR 467
Re Secretary, Department of Social Security and Sting (1995) 39 ALD 721
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193
Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98
Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273

REASONS FOR DECISION

The Hon Justice D F O'Connor, President Mr R D Fayle, Senior Member Ms S McKnight, Member

This application is for a review of a decision of the Social Security Appeals Tribunal (SSAT) made on the 24 August 1998, in which the SSAT decided to vary a decision made by a Centrelink delegate of the Secretary to the Department of Social Security on 28 May 1998 as affirmed by an authorised review officer on 15 July 1998, to increase the respondent's rate of family allowance from 12 March 1998 and not from any earlier date.
Relevant Legislation and Materials
"Section 887 Date of effect of favourable determination
887(1) The day on which a determination under section 878 or 883 (the favourable determination) takes effect is worked out in accordance with this section.
…
(3) If:
(a) a decision (the previous decision) is made in relation to a family allowance; and
(b) a notice is given to the recipient advising the recipient of the making of the previous decision; and
(c) the recipient applies to the Secretary under section 1240, more than 13 weeks after the notice is given, for review of the previous decision; and
(d) a favourable determination is made as a result of the application for review; and
(e) subsections (6), (7) and (8) do not apply to the determination;
the determination takes effect on the day in which the recipient sought the review.
(4) If:
(a) a decision (the previous decision) is made in relation to a family allowance; and
(b) no notice is given to the recipient advising the recipient of the making of the previous decision; and
(c) the recipient applies to the Secretary under section 1240 for review of the previous decision; and
(d) a favourable determination is made as a result of the application for review; and
(e) subsections (6), (7), and (8) do not apply to the determination;
the determination takes effect on the day on which the previous decision took effect.
…"
The documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T documents) were before the Tribunal, including the following letters: 26 March 1996, 25 June 1996, and 16 March 1998. Other letters were put forward as Supplementary T documents: 28 December 1995, 2 January 1996, 23 January 1996, 16 April 1996, 20 August 1996, 19 September 1996, 8 March 1997, 18 March 1997, 28 April 1997, and 3 June 1997.
History of the Application
The respondent's claim history relevant to this matter commenced in October 1995, when she lodged a claim for parenting allowance. The claim form contains the following statements:
"If you need help to work out what you can be paid please call Social Security on 132468 or get in touch with your local Social Security office. You can also ask for a Parenting Allowance pamphlet which will help you to work out how much you can get."
The respondent lodged a Family Payment and Childcare Assistance Review form and then received a letter dated 28 December 1995 stating that she would paid a Family Payment of $299.45 per fortnight, starting on 4 January 1996. On 2 January 1996 she received a further letter stating that she would receive Family Payment of $299.45 starting on 18 January 1996.
In early January 1996 the respondent separated from her husband. On or about 19 January 1996, the respondent advised the applicant that she was receiving private maintenance from her husband of $100 per fortnight. On or about 23 January 1996 the respondent was notified by letter that she would be paid a reduced amount of $277.95 every second Thursday starting on 1 February 1996. The letter also advised: "Your Family Payment has changed because your maintenance has changed" and that "You must tell us if you: … start to receive maintenance, or the amount of maintenance you receive changes."
It was agreed between the parties that on 6 March 1996 Mrs Plug notified the Department that she and her husband had reconciled. Also on 6 March 1996 Mrs Plug applied for a Parenting Allowance, then providing further details of assets and income on 22 March 1996. That form included information about the respondent's partner including his name and occupation and taxable income for the year ended 30 June 1995 and an estimate for the current year. Both the applicant and her husband signed the form. However, Centrelink continued to assess Mrs Plug's entitlement taking into account maintenance income of $100 per fortnight.
On 26 March 1996 the applicant wrote to the respondent and advised that she would be paid Family Allowance of $246.45 per fortnight commencing on 11 April 1996. The amount was calculated on the basis of receipt of $100 per fortnight of private maintenance. The letter stated that the Family Payment was lower because Mrs Plug was no longer eligible for Guardian Allowance, however it was not stated explicitly or explained in the letter to her that the maintenance had been taken into account in calculating the rate of payment. Mrs Plug did not query the rate of payment advised in that letter.
Subsequent payments were calculated on the same basis until 28 May 1998, when the respondent requested a review of the decision not to pay arrears of Family Allowance back to 5 March 1996, as the date of reconciliation with Mr Plug. On 5 May 1997 the respondent requested in writing that the applicant provide a statement of the total amount of each payment for the period March 1996 to March 1997 as she needed the information for her husband's bankruptcy. A statement of all payments was sent.
On 7 July 1997 the applicant wrote to the respondent, stating that the Child Support Agency had worked out that she should get at least $124.33 a month from the children's other parent as child support, and that she had to collect at least that amount in order for full Family Payment to be paid. That letter further stated that "as you are getting at least this amount you do not have to do anything further …". The respondent did not contact the applicant to query the contents of the letter of 7 July 1997.
On 16 March 1998 the applicant advised the respondent that the rate of her social security payments would increase to $399.09 per fortnight from 26 March 1998, and that this included a Family Allowance component of $264.00 per fortnight , family tax payment and rent assistance. The stated reason for the increase was "because you are now getting more Rent Assistance".
On 11 June 1998 the applicant reconsidered the decision and determined that arrears would be backdated to 16 March 1998, being the date when the respondent last received notification of the rate of Family Allowance being paid to her. The respondent sought reconsideration of that decision by the Authorised Review Officer (ARO), claiming that she should be paid at the higher rate from the date [6 March 1996], on which she notified Centrelink that she and her husband had reconciled.
On 15 July 1998 the Authorised Review Officer determined that the respondent's request dated 28 May 1998 for review of the Family Allowance was made within 13 weeks of the letter dated 16 March 1998, and therefore she could be paid arrears back to the payday preceding the date of that decision, being 12 March 1998.
The respondent appealed to the SSAT. On 31 August 1998 the SSAT varied the decision to make the increased family payment payable from 6 March 1996 to 7 July 1997 because it found that the respondent had only been "properly notified", within the meaning of subsection 887(3)(b) on 7 July 1997, at paragraph 11 of the SSAT's decision:
"… no mention was made in the notices of the fact that the Department was taking into account maintenance income. There was no way Mrs Plug could have known this, and the [SSAT] took the view that Mrs Plug was not notified of the decision to take maintenance into account within the meaning of subsection (4) of section 887. The [SSAT] took the view that a notice must not only inform the recipient of what the decision is, but it must also include sufficient information for the recipient to know what the main reasons for the decision are. In this case one of the main reasons for the decision regarding the rate of Mrs Plug's family payment was that it was calculated taking into account maintenance income. There was not enough information given to Mrs Plug for her to decide whether or not to seek a review of the decision."

It is this decision which is the subject of review by the AAT.

What amounts to "notice" under section 887?

Submissions and Discussion

The applicant contends that it made a series of decisions calculating the rate of Family Payment payable to the respondent on the basis that $100 per fortnight was being received as private maintenance. The first such decision which was notified occurred on 26 March 1996, determining that the Family Payment was $246.45 per fortnight. The applicant claims that by setting that information out in a letter to the respondent, the required notice was given to the respondent advising her of the making of a previous decision within the meaning of subsection 887(3)(b). The applicant argues that the provision does not require expressly (nor by implication) that the notice must include the reasons or grounds for decision. Thereafter the applicant claims subsequent letters to the respondent constitute, in each case, notice of the making of a decision within the meaning of subsection 887(3)(b).
The applicant seeks to have the SSAT decision set aside and that of the original decision-maker affirmed, but in the alternative, seeks a variation of the date of the relevant decision from 6 March 1996 as determined by the SSAT, backdating any additional payments to 12 March 1998.
His Honour Justice Drummond in Austin v Secretary, Department of Family & Community Services (1999) 29 AAR 528 has considered the meaning of the language used in the relevant legislation which is under consideration here.
The applicant argues that Austin has established that a communication will constitute proper "notice" for the purposes of section 660G of the Act (agreed to be the same for relevant purposes as section 887) if it can be identified as a communication to the benefit recipient that a decision has been made to pay him or her a particular benefit at a particular rate. The applicant drew the Tribunal's attention particularly to paragraph 30 of the Austin judgment, at 536 where his Honour said:
"… each of s 660K(2) and (3) applies only if "a notice is given to the person to whom the allowance is payable advising the person of the making of the previous decision", ie, a decision made in relation to a newstart allowance of the kind that can be corrected pursuant to either s 660G or 660J. The giving of notice plays an important role in fixing the cut-off date for calculating payments determined under s 660G or s 660J to be necessary to redress unjust decisions made in the past. It is therefore unlikely that Parliament intended that the answer to the question whether a notice had been given might permit of an investigation into a range of information supplied by the Department to the benefit recipient over a longer or shorter period to determine whether an inference could be drawn from a part or from the entire body of that information that a prior decision as to the rate or the entitlement had been made. I therefore consider that a communication will only constitute a good "notice" of the earlier unjust decision for the purpose of s 660K(2)-(4) if it meets the following requirements. In the case of a decision correctable under s 660G, it must be identifiable as a communication to the benefit recipient that a decision has been made to pay him or her newstart allowance at a particular rate. In the case of a decision correctable under s 660J, it must be a communication that a decision has been made to cancel or suspend the newstart allowance that was being paid to that person."
Further, Drummond J said (in paragraph 26, at 535):
"… it is not necessary for any reasons for a decision to be notified to a benefit recipient before there can be "notice" given of that decision within the meaning of that term in s 660K. Re McAllan was not correctly decided."

In this judgment his Honour expressly approved the reasoning of Deputy President Forgie in ReSecretary, Department of Social Security and Sting (1996) 39 ALD 721 which had concluded that "notice" within the relevant section was given when the communication from the decision-maker advised the recipient of two things, namely, that a decision had been made in relation to the benefit in question and consequently what is the rate of benefit.
The SSAT in its decision had drawn support from ReMcAllan and Secretary, Department of Social Security (1998) 51 ALD 792. As stated above Drummond J has expressly concluded that Re McAllan was not correctly decided. The applicant also submits that the ratio in Austin is binding on the AAT in this case.
Applying this ratio the applicant submits that the letters sent to the respondent communicate that a relevant decision was taken to pay the Family Payment benefit, and they specify the rate at which the benefit will be paid. The rate has been arrived at by applying the rate calculator referred to in section 1069 of the Act, to the circumstances of the respondent. As Drummond J put it in Austin at 539:
"Provided this figure [as referred to in the Department's letter to the benefit recipient] is the amount arrived at by applying the rate calculator referred to in s 1068 to Mr Austin's circumstances and not that amount adjusted for matters such as tax liabilities that are not factors in the rate calculator, it is , in my opinion, "a notice … advising [Mr Austin] of the making of the previous decision", ie the decision made some time prior to the date of that letter in relation to the rate at which newstart allowance is payable to him for the period 5 to 18 March 1996. But it can be a notice of nothing more than that narrow decision. That decision reflected the error in respect of the amount of Mr Austin's rental income that was originally made on 18 May 1993. But, for the reasons given, this letter does not constitute notice of the making of latter decision (or any other prior decisions as to the rate at which newstart allowance was to be paid to him), to which it makes no reference.
Section 1069 deals with the effect of maintenance income on the payment rate for Family Payment. The applicant claimed that where the total amount payable referred to in any letter to the benefit recipient, included any other type of benefit (such as Family Tax Payment), this was specified and the rate given.
The applicant claims the letters each reflect a decision to pay benefits from time to time; each decision remained operative until overtaken by a subsequent decision when the rate payable might be changed. This situation, it is claimed, is akin to the letters under consideration in Austin at 539, in paragraph 46. The series of letters in question here run from 26 March 1996 to 12 March 1998. There is no contest as to what they said and that they were received by the respondent.
The crux of the applicant's submission is that there is a distinction between giving notice of the making of a decision, and furnishing reasons for a decision. The applicant points out that a statutory duty to give reasons can be quite onerous, particularly in the context of calculating a benefit under section 1069 of the Act. Further to impose an "intermediary" requirement on the applicant, for example, to explain decisions to pay benefits, would create "great uncertainty" in the administration of the relevant legislation. The four elements of a relevant decision as notified set out in Sting were and could only be as follows:
(a)      advice of the grant;
(b)      the rate of payment;
(c)       the date on which payments will commence; and
(d)the manner in which payments will be made. (see Sting at 723, paragraph 12)

These obligations are to be distinguished from an obligation to give reasons for making the decision. In Austin at 539 his Honour said "Provided the amount stated in each is the figure thrown up by the rate calculator, both letters are sufficient 'notices' for the purposes of s 660K of the two decisions there referred to, …".

In response the respondent submits that section 887(4) of the Act is a beneficial provision intended to give a measure of protection to family payment recipients who are not notified of a decision in relation to family allowance. Accordingly, subsection 887(4) of the Act should not be construed narrowly or pedantically because to do so would be contrary to the purpose of the section.
In support of this approach the respondent adopted the principle stated by Black CJ in Secretary, Department of Social Security v SRA (1993) 118 ALR 467 at 471 when he said:
"Although the Social Security Act is concerned with social policy, and being remedial legislation should not receive a narrow or pedantic construction (see Rose v Secretary, Department of Social Security (1990) 21 FCR AT 244; 92 ALR 521 at 524), the settled rules of construction apply and ordinary words used in the Act should receive their ordinary and natural meaning unless, in accordance with the accepted rules of statutory construction, there is good reason to prefer some other meaning."
The respondent also relied on section 15AA of the Acts Interpretation Act 1901 to press an interpretation which would promote the purpose or object underlying the Act being preferred to a construction that would not promote that object or purpose.
As the SSAT observed, the purpose of subsection 887(4) is for family payment recipients to be given sufficient information about the decision to decide whether or not to seek review of the decision. This requires the notice given to the recipient to include sufficient information for the recipient to know what are the main reasons for the decision, otherwise the notice is ineffective.
As the rate of the respondent's family payment was calculated erroneously assuming that the respondent was receiving maintenance income, in order for the notice to serve any meaningful purpose, that fact or reason ought to have been communicated to the respondent. The respondent argued that in the absence of such communication, there was no reason for the plaintiff to do otherwise than to assume she was being paid correctly and, on its face, the notification letter would not prompt enquiry.

Further, in Austin's case at 538, Drummond J said that specifying the amount payable may or may not be advice of the rate at which the benefit is payable. At paragraph 41, his Honour said:
It will only be where the recipient is advised of payment of an amount that is the result of applying the rate calculator referred to in s 1068 to his circumstances, without adjustments not provided for by that calculator, that the advice will be capable of constituting "notice" within s 660K(2) to (3).
The respondent submits that it is undesirable for the test of validity to depend on whether there must be a further calculation.
The respondent also argued that subsections 887(2), (3) and (4) should be construed to require notice of the "previous decision", not notice merely of the "previous rate". While the respondent said Austin was correct in concluding it was necessary to inform a recipient of the "rate" of payment, the respondent argued Austin was silent on whether other matters might constitute a "decision" in respect of which notice may need to be given.
The respondent submitted that the word "decision" is widely defined in section 23 of the Act by adopting the meaning of "decision" in subsection 3(3) of the Administrative Appeals Tribunal Act1975 and that the definition is not intended to be exhaustive. The respondent relied for this submission upon the decision in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 335, in the context of the Administrative Decisions (Judicial Review) Act 1977, where Mason CJ (with whom Brennan and Deane JJ agreed) said that the word decisions may signify a determination of any question of substance, or more narrowly, a determination effectively resolving an actual substantive issue.
In this case, a matter of substance was that the respondent was believed to be receiving maintenance income. This belief formed part of the ultimate decision. Therefore, submitted the respondent, the failure of the applicant to inform the respondent that this formed part of the decision had the result that the applicant failed to give to the respondent notice of the "decision".
The decision in Austin binds this Tribunal even if one could technically say that the actual sections of the legislation are different. They are relevantly identical in form. Even if not bound we would require strong argument to depart from the reasoning particularly when it has been endorsed by the Tribunal's own decision in Sting. This conclusion is a difficult one to reach because of the intrinsic unfairness created when a party like this respondent is disadvantaged where the applicant has failed to take into account the financial consequences of the notified reconciliation. This is, unfortunately, as was pointed out in Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193, a matter for compensation not untenable statutory interpretation.
Estoppel
The respondent relied on two ameliorating principles to avoid the conclusion reached above and we will now consider these in turn. Firstly we ask the question: whether the conduct of the applicant gives rise to an estoppel in a case such as this.
The respondent sought to argue that the behaviour of the applicant as well as creating a legitimate expectation in the respondent also gave rise to an estoppel which would operate to prevent the applicant relying on the strict words of the legislation.
The applicant says that the respondent cannot, as a matter of fact in this case, or as a matter of law, rely on the applicant's conduct to create an estoppel. In Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 208 Gummow J relevantly said:
"As a starting point, I should note that the present case is not one where a party asserts that the executive or other public authority is estopped from asserting that a particular action, of which the other party seeks performance, would be ultra vires as exceeding the powers given by or pursuant to a law of the Parliament. Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying."
The courts consider that powers and obligations given to the executive under statute is limited to the extent of the power given. To decide otherwise would allow an extension of power and responsibility by the action of those whose duty it is to exercise the power. The general principles of estoppel must be, in public law, limited by the ultra vires doctrine (see Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98 at 105-7 per Davies and Branson JJ) and if the effect of creating an estoppel would contradict a statute and extend the duty and authority of a decision maker it will not operate.
In this case the respondent argues that because the applicant had previously written letters which contained more that the bare decision and the rate, it was prevented by the doctrine of estoppel from relying on an argument that the legislation required only such information to be communicated even if that is what the legislation required.
We do not accept that the doctrine of estoppel applies in this case. The effect of its operation would be to require action by the applicant which would, apart from the estoppel, not be required by the law. There is no general power for parties affected to require reasons for decisions in such a case. The applicant submits that it would, if operating in an ad hoc way, create great "uncertainty".
Legitimate Expectation
The final question to be determined is whether the doctrine of legitimate expectation applies in a case such as this.
It was agreed by the parties that the applicant has, in the past, from time to time informed the respondent of the essential parts of the applicant's decisions on matters of substance. The respondent argues that, in such circumstances, she had a legitimate, reasonable expectation that she would be informed of the essential parts of the applicant's decisions at all times.
There is no dispute that the common law will give content and meaning to the nature of procedural fairness required when statutory duties are prescribed in statute, even when the statute itself is silent on the matter. In Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273 at 291-292 for Mason CJ and Deane J, the principle was expressed as follows:
"[I]f a decision-maker proposes to make a decision inconsistent with a legitimate expectation, procedural fairness requires that the persons affected should be given notice and an adequate opportunity of presenting a case against the taking of such a course"
The difficulty with the doctrine in a case such as this is that the "expectation" asserted here is not related to the actual making of the decision but rather to the manner of its notification to the party affected. In Teoh the limits of the doctrine were expressed as being limited to a requirement to be fair. It is not a principle which creates substantial rights over and above those provided for in the statute concerned. So, in a case such as this, it does not operate to require a decision-maker to act in a particular way, for example, to give reasons for a decision or provide the information about the process of decision-making. In this case there was no positive decision taken to depart from the ordinary method of decision-making. In the course of making the decision a mistake was made and the calculation ultimately made was incorrect.
The desirability for recipients to be given sufficient information so as to be on notice to make further inquiries was referred to by Deputy President Forgie when she said in ReSecretary, Department of Social Security and Sting (1995) 39 ALD 721 at 727 –728 (paragraphs 34 – 36):
"(34) Before leaving this decision, I should observe that I consider that the department should improve the information which it gives social security recipients regarding the rate of their entitlements. The information which it is said was printed on the back of Mr Sting's letter contains a great deal of closely typed information. That information deals with matters such as the recipient's obligations to advise the department of changes in his or her circumstances, the nature of income and assets, taxation obligations and the recipient's rights to have the decision reviewed. It does not deal with the way in which the rate of entitlement has been calculated. Nowhere on the front or back of the letter is there any indication whether the person is being paid at the married or single rate, is being paid a pharmaceutical or rental allowance or that his or her rate has been adjusted for some other reason such as his or her age. Those matters cannot be worked out by reference to the total payable for people who cannot be expected to know the relevant rates.
(35) That sort of information should be available in much the same way as the Australian Taxation Office is able to make information available when it sends a taxpayer a taxation assessment. It should be available so that a person is able to determine whether or not he or she thinks the rate appropriate. For people such as Mr Sting, who live in a country town with no access to a regional office of the department, information is not readily obtainable. Telephones and letters are not always viable means of communication. In addition, experience in this tribunal shows that there is often a general assumption that the department will have calculated the rate correctly. That assumption is only dispelled by some other occurrence. By the time it is dispelled the time for review has passed and so too have a person's rights to be paid that to which he or she would otherwise have been entitled.
(36) While it may be possible to understand why parliament has sought to limit the amount of arrears payable to a person, it is not possible to understand why it has not imposed an obligation upon the secretary to give recipients sufficient notice to enable them at least to be on notice that they should make further inquiries regarding the rate of their newstart allowances."
We adopt and endorse those remarks. They are particularly apt in a public policy environment where concepts of "mutual obligation" exist and parties govern their conduct by reference to a customer charter. The current customer charter of Centrelink opens with the banner headline "What we can do to help each other" and among other duties says that Centrelink will "explain the things you need to know" and "provide accurate and consistent information which is easy to understand". These expressions of intent are not, in our view, fully reflected in the relevant legislation, if there is no legal obligation to provide the information to this respondent which would have put her on notice of the anomaly. The provision of such information should be neither onerous nor costly in the electronically-produced letters which communicate to social security beneficiaries.
The decision under review is set aside and in substitution the respondent's rate of family allowance is increased from 12 March 1998 and not from any earlier date.
I certify that the 48 (forty eight) preceding paragraphs are a true copy of the reasons for the decision herein of her Honour Justice D F O'Connor, President, Mr R D Fayle, Senior Member, and Ms S McKnight, Member.
Signed:         .....................................................................................
  Associate
Date of Hearing  18 April 2000
Date of Decision  25 August 2000
Counsel for the Applicant        Dr J T Schoombee
Solicitor for the Applicant         Australian Government Solicitor
Counsel for the Respondent    Mr L A Tsaknis
Solicitor for the Respondent    Gibson Tovey Mills