Poidevin and Secretary, Department of Education, Employment and Workplace Relations

[2007] AATA 2062

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 2062

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No A2007/3745

GENERAL ADMINISTRATIVE  DIVISION		)
Re		LEIGH POIDEVIN

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date17 December 2007

PlaceCanberra

Decision The decision under review is affirmed.

..........signed....................................

Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - Newstart Allowance - Sickness Benefit - obligations notified - earnings in employment not declared - income not taken into account - overpayments - debt - no administrative error - lack of good faith - Applicant knowingly made false statements and failed to comply with the Act - debt cannot be waived - write off not appropriate - decision affirmed

Social Security Act 1991 ss 8, 643, 660F (repealed), 657 (repealed), 709, 1068, 1072, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 ss 68, 100

Iannella v French (1968) 119 CLR 84

REASONS FOR DECISION

17 December 2007 Mr S. Webb, Member         

1.      Leigh Poidevin claimed and was paid Newstart Allowance and Sickness Benefit for varying periods from 1999.  For many years he has suffered from debilitating health conditions that have required surgical and other medical treatment.  He worked to support his wife and children, but omitted to declare the entirety of his earnings.  Centrelink raised debts against him.  Mr Poidevin was charged with fraud and entered a guilty plea.  Mr Poidevin requested review of the decision to raise and recover debts from him.  However, the decision was affirmed on reconsideration by an Authorised Review Officer and subsequently by the Social Security Appeals Tribunal.  The matter is presently before this Tribunal.

2.      The relevant facts follow.  On 20 April 1999 Mr Poidevin lodged a claim for Newstart Allowance.[1]  In the claim form he stated that he was not doing any ongoing paid work.[2]  Information set out in notes accompanying the claim form included: “Changes you must tell us about… you, or your partner, start paid work…”[3] and “Income includes personal earnings…”.[4]

[1] T4 and T5.

[2] T4 folio 36.

[3] T5 folio 72.

[4] T5 folio 73.

3.      On 14 July 1999 Centrelink received information that Mr Poidevin earned an amount of $1,209.19 in employment by Adecco Industrial Pty Ltd from 7 May 1999 to 20 June 1999.[5]

[5] T6.

4.      On 23 June 2001 Mr Poidevin lodged a claim for Sickness Benefit.[6]  In the claim form he stated that he was separated from his partner, Ms Catherine Poidevin[7]  and that he was employed by “Group 4 Security”.[8]  On 6 August 2001 Centrelink issued a notice concerning Mr Poidevin’s Sickness Benefit, including the following information “YOU MUST TELL US IF ANY OF THESE THINGS HAPPEN OR IS LIKELY TO HAPPEN… You start paid work…; … you start to receive or stop receiving income, your income changes from the rate last notified or the income shown above is incorrect; …”.[9] 

[6] T7.

[7] T7 folio 95.

[8] T7 folio 105; T9 folio 126 refers.

[9] T11 folio 129.

5.      On 9 January 2002 Centrelink received an Employment Separation Certificate from Group 4 Securitas indicating that Mr Poidevin had been employed from 29 October 2000 to 23 December 2001.[10]  On the same day Mr Poidevin completed a Customer Declaration Form in which he placed a tick next to “Casual/Part-time Employment”, but did not declare any income.[11]  On 20 March 2002 Centrelink received a completed Newstart Medical Review Form in which Mr Poidevin indicated that he was employed as “Security Personel [sic]” from April 2000 to September 2001.[12]

[10] T14 folio 133; T30 refers.

[11] T15 folio 134.

[12] T16 folio 139.

6.      The documents make clear and it is not disputed that Mr Poidevin earned income in employment as follows:

EmployerAmount paid    Period

Canberra Units Plan Services  from 1997 to December 2001[13]

[13] See T31 folio 204. It is stated that Mr Poidevin received a fortnightly payment of $320 in the period from 1997 to December 2001. Exact dates of payment were not found.

Canberra Units Plan Services  $4,415.97          from December 2001 to 19 June 2002[14]

[14] T31 folio 208.

Adecco Industrial Pty Ltd         $1,935.62          10 May 1999 to 18 July 1999[15]

Dale and Hitchcock                  $817.53             2 June 2000 to 12 June 2000[16]

Waterland Pty Ltd  $1,119.00          20 June 2000 to 20 July 2000[17]

Group 4 Securitas  $40,073.74        29 October 2000 to 23 December 2001[18]

Canberra Units Plan Services  $9,171.63          4 September 2002 to 27 August 2003[19]

Tempo Cleaning Services       $7,271.97          4 November 2002 to 5 October 2003[20]

Star Security  $1,058.56          27 December 2002 to 1 May 2003[21]

Country Security Group           $2,922.16          19 April 2003 to 4 June 2003[22]

Canberra Units Plan Services  $2,377.83          10 September 2003 to 3 December 2003[23]

Australian Security Patrols      $6,322.50          23 January 2003 to 26 November 2003[24]

[15] T25.

[16] T34.

[17] T35.

[18] T30.

[19] T31.

[20] T27.

[21] T26.

[22] T23.

[23] T31.

[24] T69.

7.      In the period from April 1999 to December 2003 Mr Poidevin did not declare all of this income to Centrelink.[25]  However, it appears that Mr Poidevin informed Centrelink about some employment and earnings.[26]

[25] see T39 folios 237 and 238, T39 folio 251 to 255; T57 folio 505; T58 folio 508; and T59 folio 516.

[26] See T59 folio 513 and T39 folios 239 to 250.

8.      Centrelink determined that Mr Poidevin had been overpaid amounts of Newstart Allowance and Sickness Benefit.  On 13 and 17 February 2004 Centrelink wrote to Mr Poidevin informing him of the debts in relation to specific periods.[27]  On 16 June 2004 the determinations concerning Mr Poidevin’s overpayment debts were affirmed by the original decision maker.[28]  On 9 July 2004 an authorised review officer affirmed that decision.[29]  Mr Poidevin applied for review by the Social Security Appeals Tribunal.  On 19 July 2007 that Tribunal affirmed the decision.[30]

[27] T84, T85, T86, T87, T88 and T89

[28] T92

[29] T96 and T97

[30] T2

9.      The issues to be determined are:

(a)Has Mr Poidevin been paid an amount of a social security payment to which he was not entitled?

(b)If so, what is the amount of the overpayment?

(c)Is that amount a debt due to the Commonwealth for which he is liable?

(d)If so, are there grounds to write off or waive the debt in whole or in part?

10.     Mr Poidevin says that he made a mistake and was found guilty of fraud.  He says that this has changed his life and he has greater difficulty obtaining employment as a result.  In Mr Poidevin’s submission, at the time he was struggling with poor health and was on strong medications.[31]  He could not cope and was experiencing difficulties making ends meet and supporting his young family.  He was concerned about the future, especially the costs of future treatment for his ailments.  His marriage broke down.  Mr Poidevin asserts that it is unfair that he was prosecuted and penalised for the fraud, when his ex-wife was not.  He says that he is in financial difficulty repaying the debt and is seriously depressed.  In his submission, he should not have to repay the total amount of the debt.  He says that Centrelink made an error holding him solely responsible, and in all the circumstances, the debt should be waived.

[31] T10, T12, T13 and T52 refer

11.     I do not agree.

12.     Under the social security law, a person who claims and receives a social security payment must comply with their notified legal obligations.  The relevant notice provisions were set out in the Social Security Act 1991 (“the Social Security Act”) (section 657, concerning Newstart Allowance, for example) prior to the commencement of the Social Security (Administration) Act 1999 (“the Administration Act”) (see ss 67, 68, 72 and 74 of the Social Security Act, for example). Failure to comply with notified obligations may result in a retrospective rate reduction (s 660F of the Social Security Act (repealed); s 100 of the Administration Act). The rate of Newstart Allowance and Sickness Benefit is to be determined using the rate calculator at s 1068 of the Social Security Act (ss 643 and 709 of the Social Security Act). The rate calculator applies an income test (Module G) whereby the claimant’s ‘ordinary income’, being the gross income from all sources, is taken into account (see the Social Security Act, at s 1072, and definitions of ‘ordinary income’ and ‘income’ at s 8). If a person obtains payment of a social security benefit to which they were not entitled, the amount of the overpayment is a debt due to the Commonwealth (s 1223 of the Social Security Act, as amended). A debt to the Commonwealth may be written off (s 1236 of the Social Security Act) or waived (see s.1237A and s 1237AAD of the Social Security Act) in certain circumstances.

13.     I have reviewed the overpayment and debt calculations for each of the periods in question[32], and doing the best with the available evidence, I am reasonably satisfied that those calculations are correct.  Mr Poidevin failed to declare income and was overpaid the following amounts:

[32] See T40, T42, T44, T46 and T49.

PERIODAMOUNT

20 April 1999 to 12 July 1999  $947.81 Newstart Allowance

25 February 2000 to 19 April 2000  $685.20 Newstart Allowance

17 July 2000 to 10 September 2000                  $540.83 Sickness benefit

14 June 2001 to 8 November 2001  $1,533.14 Newstart Allowance

20 December 2001 to 3 December 2003          $9,805.84 Newstart Allowance[33]

[33] As above.

14. I find, and it is not in dispute, that Mr Poidevin was properly informed about the requirement to declare all of his income and that he was properly notified of his legal obligations to inform Centrelink about any change in his income. Mr Poidevin did not declare all of his earnings and income and he failed or omitted to comply with his obligation to inform Centrelink about changes in his income during the periods in question. Thus, it follows that the amounts he received by way of overpayments of Newstart Allowance and Sickness Benefit to which he was not entitled are debts due to the Commonwealth for which Mr Poidevin is liable, pursuant to s.1223 of the Social Security Act.

15.     The final question is whether there are grounds to write off or waive those debts.  I am satisfied that there are not.

16. Mr Poidevin is not within the terms of s.1236 of the Social Security Act. The debts are recoverable at law and it is cost effective for the Commonwealth to do so. Mr Poidevin’s whereabouts are known and he has some capacity to repay the debt – he is earning in employment and recovery of the debt by appropriate instalments is unlikely to result in severe financial hardship. Thus, the debt cannot be written off.

17. There is no evidence that any part of Mr Poidevin’s debts is solely attributable to an administrative error on the part of the Commonwealth. I have found no evidence of any administrative error. Thus the debts cannot be waived pursuant to s.1237A of the Social Security Act.

18. There is no evidence that the Court imposed any penalty on Mr Poidevin in relation to the offence that has given rise to his debts that requires me to waive the debts or any part thereof pursuant to s.1237AA of the Social Security Act.

19. Under s 1237AAD of the Social Security Act, there is discretion to waive a debt if there are special circumstances (other than financial hardship alone) that make it desirable to do so. However, the discretion cannot be enlivened and applied if the debtor knowingly made a false statement or representation, or knowingly failed or omitted to comply with a provision of the Social Security Act. The word ‘knowingly’ imparts both knowledge and intent (Iannella v French (1968)[34]).  In other words, if Mr Poidevin knew that he was required to inform Centrelink about his employment and income, and he deliberately decided not to do so, such actions, whether in the form of false statements or representations, or by way of failings or omissions, would have been undertaken ‘knowingly’. 

[34] 119 CLR 84.

20. Mr Poidevin asserted that he was told by an employer that he did not have to declare all of his earnings in employment to Centrelink. That may be so, but it does not follow that Mr Poidevin did not knowingly make a false statement or knowingly fail or omit to comply with provisions of the Social Security Act and the Administration Act. Mr Poidevin entered a guilty plea and was convicted in relation to the charges of fraud - “obtained financial advantage knowing or believing that you were not eligible to receive that financial advantage” [35]- that he faced as a result of the events that gave rise to the debts presently in issue.  I understand that he now contests the basis for that guilty plea.  Nevertheless, in oral evidence he accepted that he had done wrong: he said that he had made a mistake in difficult circumstances but was responsible for his own actions.  Mr Poidevin gave oral evidence that he read the letters he received from Centrelink and understood the obligation he was under to declare all of his income.  Nevertheless, he failed or omitted to do so.  On certain occasions during the periods in question Mr Poidevin completed forms that required him to declare his employment and earnings but he did not do so.  At other times he completed similar forms and declared some of his employment and income.  This evidence taken as a whole indicates that Mr Poidevin had knowledge of what was required of him when completing and lodging forms in relation to Newstart Allowance and Sickness Benefit, and answering questions concerning details of his employment and income in connection with those payments, and deliberately decided not to inform Centrelink about some or all of those relevant matters.  I so find.  

[35] T38 folio 235

21. As Mr Poidevin knowingly made a false statement and knowingly failed to comply with his obligations under the Act his debts cannot be waived on the basis of ‘special circumstances’ pursuant to s 1237AAD of the Social Security Act.

22.     Thus, in conclusion, there are no powers available to me to waive Mr Poidevin’s debts.  I note his submissions concerning his poor health and his state of mind during the periods in question, especially in relation to chronic pain and a previous brain injury.  These are unfortunate circumstances but they do not disturb my findings concerning the state of his knowledge and intention when making the false statements about his employment and income, and when failing or omitting to comply with his legal obligations.

23.     In Mr Poidevin’s submission, he has been “hard done by”. He has been prosecuted and convicted of an offence when his ex-wife has not. The reasons why are not apparent on the evidence that is before me. Those are matters determined by other processes and authorities. I am satisfied that Mr Poidevin, by his own actions, incurred the debts in these proceedings by his own fraudulent actions and he is liable to repay them. In the circumstances, that result is not unfair, unintended or unjust. I have heard Mr Poidevin’s evidence in relation to his circumstances, including his medical issues and family difficulties. I accept that those matters may be difficult to deal with. I note that Mr Smith, a neighbour, gave evidence that in recent times Mr Poidevin has become depressed. There is some evidence that Mr Poidevin was depressed in 2004. I also accept that Mr Poidevin has experienced financial difficulties. However unfortunate those circumstances may appear, they are not special circumstances that render Mr Poidevin’s case apart from the usual run of cases. Thus, setting to one side Mr Poidevin’s difficulties in relation to subs 1237AAD(a), it would not be appropriate to waive his debts under s 1237AAD.

conclusion

24.     Mr Poidevin knowingly failed or omitted to declare all of his earnings in employment during periods when he was in receipt of Newstart Allowance and Sickness Benefit.  As a result he was paid amounts to which he was not entitled.  Those amounts are debts to the Commonwealth.  I have found no error in the calculation of the debt amounts.  There are no grounds to write off or waive the debts in the circumstances.  Mr Poidevin has repaid a proportion of the debts.  As a result of this decision, by a suitable arrangement with Centrelink, he must repay the outstanding amount of his debts.

25.     The decision under review is affirmed.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

Signed:       ...signed............................................
  Jane Gribble
  Associate

Date of Hearing  13 November 2007
Date of Decision  17 December 2007
Representative for the Applicant  Self
Solicitor for the Respondent        Jillian Furner
  Centrelink Legal Services