Powell and Department of Family and Community Services
[2001] AATA 195
•15 March 2001
DECISION AND REASONS FOR DECISION [2001] AATA 195
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2000/893
GENERAL ADMINISTRATIVE DIVISION )
Re LAYLA POWELL
Applicant
And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr E K Christie, Member
Date15 March 2001
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and in substitution therefor decides: 1. To waive the debt of $3794.19 arising from overpayment of Family Payment accrued over the period 31 August 1999 to 13 February 2000; and 2. In accordance with subsection 1237(2)(c) of the Social Security Act 1991, the waiver is to take effect from 13 February 2000.
..............(Signed)................................
DR E K CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY – Youth Allowance - overpayment – whether special circumstances exist to warrant waiver of debt.
Social Security Act 1991: ss 1237A(1), (2), 1237AAD
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
Maurits and Secretary, Department of Social Security (AAT Decision 12967 delivered 5 June 1998)
Mills and Secretary, Department of Social Security (1997) 2 [11] SSR 155
Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543
ORAL REASONS FOR DECISION
Dr E K Christie, Member
This is an application by Layla Powell to review a decision of the Social Security Appeals Tribunal ("the SSAT") made on 1 September 2000 to raise and recover an overpayment of Youth Allowance of $3794.19 for the period 31 August 1999 to 13 February 2000. The SSAT decision affirmed an earlier decision made by an Authorised Review Officer on 30 March 2000.
In its decision the SSAT found that there was no factual basis to waive whole or part of the debt for either administrative error or for special circumstances.
At the hearing the applicant, Layla Powell, represented herself. The respondent was represented by Ms. J. Dwyer, a Departmental Advocate.
At the hearing the Tribunal had in evidence before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, the "T" documents (Exhibit 1) and the following exhibits:
Exhibit 2 – Statement of Theresa Scherer, Centrelink, Bundaberg.
Exhibit 3 – Centrelink Customer Record Access Monitor Report
ISSUES BEFORE THE TRIBUNAL
The only issue before the Tribunal was whether the overpayments of Youth Allowance could be waived, in part or in full, because of administrative error or because of special circumstances. The Department has recovered some of the overpayment by periodic instalments from Ms. Powell.
FACTSMs. Powell agreed to the following findings of fact made by the SSAT (T2, Folio 7) with some qualifications:
"*Ms Powell was studying full time in semester 1 of 1999 and receiving youth allowance.
*Ms Powell was not a full time student in semester 2 of 1999 and was not looking for work.
*Ms Powell relied on advice from Centrelink that she remained qualified for youth allowance as she was attending practical training.
*Ms Powell is currently a full time student and receiving fortnight youth allowance and rent assistance after deductions of $40.00 per fortnight withholding.
* Ms Powell is unable to meet her financial commitments from this amount.
*Ms Powell received a notice from Centrelink on the 14 June 1999, which required her amongst other things to notify Centrelink if she "stop being a full time student" or "vary, your enrolment".
*Ms Powell cancelled her enrolment on 31 August 1999 but did not tell Centrelink."
Ms. Powell's qualifications in relation to the SSAT's findings of fact were:
(a)that she was unsure whether or not she was a full-time student in Semester 2 of 1999; and
(b)she did not tell Centrelink when she cancelled her enrolment on 31 August 1999 because she thought it unnecessary following her telephone query.
Ms. Powell expanded on these points in her oral evidence.
EVIDENCE OF LAYLA POWELL
Ms. Powell said that she had failed Semester 1, 1999 of her Veterinary Science degree program. Faculty progress rules precluded her from continuing on to Semester 2. Ms. Powell decided that as she could not continue on with Semester 2, she would undertake the Preclinical Practical Course component of the Veterinary Degree program in Semester 2, 1999 – a pre-condition for graduating in Veterinary Science.
Ms. Powell's mother rang the Centrelink Office in Bundaberg on 9 July 1999 (see T5, Folio 31), to advise that her daughter had failed Semester 1 and her need to discuss her eligibility for social security entitlements in Semester 2, 1999.
Theresa Scherer of Centrelink then rang Ms. Powell the same afternoon (see T10, Folio 39).
Ms. Powell's account of her telephone conversation with Ms. Scherer was as follows:
"I explained to [Theresa Scherer that] I failed and wouldn't be attending uni until I repeated next year, however I'd be undertaking prac work. The prac is a subject called Preclinical Prac Work and consists of eight weeks practical experience on various farming properties.
The subject is a compulsory part of the Vet degree but as the prac is done during uni holidays, it wasn't necessary for me to be enrolled to undertake the prac work.
Theresa said that as I was doing a compulsory part of a degree that could only be studied fulltime, I was eligible to continue to receive Youth Allowance. In other words I was to continue as I was because it wasn't necessary for me to change to the dole (Youth Allowance – job seeker). I asked her if she could double-check that which she did while I was on the phone."
and
"I didn't advise Centrelink that I'd cancelled my enrollment and wasn't studying as I had already told them that in July. I'd told Therese I would be cancelling it and she didn't tell me I had to contact Centrelink when the cancellation actually occurred." [T17 Folio 53]
Ms. Powell said that if she had been given the correct advice by Theresa Scherer and Centrelink she would have pursued other entitlements for which she would be qualified under the Social Security Act – such as Job Seeker Allowance. Instead, she had relied on Centrelink advice which proved to be incorrect. As a consequence she was faced with an overpayment of Youth Allowance when instead she may have been eligible to receive an equivalent amount under another form of social security benefit, but for the incorrect advice at the time of the telephone query.
During cross-examination, Ms. Powell said that she had asked Ms. Scherer whether there was anything else she needed to do for Centrelink in her circumstances. She was advised "no just continue as you are".
In response to a Tribunal question, Ms. Powell said that she had received no Centrelink notification notices following the telephone advice; the only subsequent notice from Centrelink being advice of overpayment (T16, 30 March 2000).
CONTENTIONS AND SUBMISSIONS OF THE PARTIES
Ms. Dwyer for the respondent submitted that it was probable that the advice given by Ms. Scherer at the time of the telephone query was consistent with her statement (Exhibit 2):
"…. If a customer advises that they have cancelled their enrolment in studies, I would transfer their activity from Student to Jobseeker, then follow through with the appropriate forms and legislative procedures."
Ms. Dwyer submitted that to be qualified for Youth Allowance, a person must satisfy the activity test [ss.540(a)(i) Social Security Act]. A person satisfies the activity test when undertaking full-time study in respect of a period [ss.541(1)(a) Social Security Act]. Moreover, a person is undertaking full-time study when the person is enrolled in a course of education at an educational institution [ss.541B(1)(a)(I) Social Security Act].
Because Ms. Powell ceased to be enrolled in her degree program on cancelling her enrolment on 31 August 1999, from this date on, she was not satisfying the activity test and not entitled to Youth Allowance.
Ms. Dwyer said that the debt could not be waived for "special circumstances" because Ms. Powell had knowingly failed to comply with a provision of the Act by not informing Centrelink of the change in her circumstances. Ms. Dwyer contended Ms. Powell was aware because of the notification notice (T4, 14 June 1999), that there was a need to advise Centrelink that she had cancelled her enrolment. However, she did not do so.
Ms. Dwyer further submitted that the debt could not be waived because of "administrative error" as Ms. Powell had failed to adhere to her obligation to notify Centrelink that she had cancelled her enrolment. In failing to so notify Centrelink she had contributed to the administrative error that led to the overpayment. That is, the administrative error had not been solely caused by the Commonwealth. Ms. Dwyer also submitted that s.1224 of the Social Security Act 1991 applied to prevent Ms. Powell relying on the waiver provisions for "administrative error" given that Ms. Powell had failed to comply with a provision of the Act.
Ms. Powell made the following submissions:
That incorrect information provided to her by Centrelink in relation to her query as to the status of the Preclinical Practical Work for social security entitlements had led to the overpayment;
That she had told Theresa Scherer several times that she would not be enrolled full-time and would only be doing practical work in Semester 2;
That Theresa Scherer's statement (Exhibit 2) was inconclusive and questioned its value;
That she had not told Centrelink that she had cancelled her enrolment on 31 August 1999 as she had acted on the Centrelink advice as being correct; and
That she had only done what she had been told to by Theresa Scherer and contended that Ms. Scherer's advice was that everything was in place for her to receive Youth Allowance.
CONSIDERATION OF THE ISSUES
The objective of the Tribunal is to review administrative decisions on their merits and in accordance with the law at all times. The relevant statute is the Social Security Act 1991 ("the Act").
The first question to be considered relates to the credibility of Ms. Powell and the veracity of her account as to her dealings with Centrelink. I accept Ms. Powell to be a witness of truth and her account to be consistent over time.
The next question for the Tribunal to decide is whether the "special circumstances" provision of the Act can be applied to waive whole, or part, of the debt.
"SECTION 1237AAD WAIVER IN SPECIAL CIRCUMSTANCES
1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:(a)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 this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt."
The first issue is for the Tribunal to decide whether Ms. Powell knowingly failed to comply with a provision of the Act in failing to notify Centrelink, in response to their notification notice (T4, 4 June 1999), that she had cancelled her University enrolment on 31 August 1999.
The principles in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435 are relevant with respect to the meaning of "knowingly":
"(48) There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation of that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."
Furthermore, in Mills and Secretary, Department of Social Security (1997) 2 (11) SSR 155, the Tribunal made the following statement in its consideration of the meaning of the term "knowingly":
"20. The Tribunal finds that Dr Mills' debt did not arise because he 'knowingly' omitted to comply with the Act. The Tribunal finds that the debt arose because Mr Mills acted on the advice of an officer of the respondent being satisfied in his own mind, that, in trying to regain a foothold in the employment field, his expenses were at least the same as his income and he understood that they could be offset against his income. Dr Mills' circumstances do not fall within the usual circumstances which lead to overpayments."
The Tribunal concludes that an analogous situation exists in Ms. Powell's situation as she had relied on Departmental advice given to her.
Accordingly, based on the principles in the Callaghan and Mills cases, the Tribunal finds, on the civil standard of proof, that in failing to notify Centrelink in response to their 14 June 1999 notification notice, Ms. Powell did not "knowingly" fail to comply with a provision of the Act. The Tribunal concludes that paragraph (a)(ii) of Section 1237AAD of the Act is satisfied.
The next issue for the Tribunal to consider is whether paragraph (b) of Section 1237AAD of the Act is satisfied – that is, whether there are "special circumstances (other than financial hardship alone) that makes it desirable to waive" the right to recover all or part of the debt. The Tribunal has had to consider the meaning and application of the expression "special circumstances" on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has become an oft-quoted benchmark as to the interpretation of "special circumstances". In that case the Tribunal said (at 3):
"An expression such as 'special circumstances' is by it very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
The question of incorrect advice given to social security recipients by Departmental officers has also been considered in the context of "special circumstances" by the Tribunal in Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543:
"Any failure to regard the seriousness of the consequences of the giving of wrong advice as not being a circumstance special to the person or persons who have suffered as a result of that advice would be cruel. Citizens are entitled to act upon the advice given to them by representatives of government through its department and agencies. Citizens also are entitled to have confidence in the advice that they are given by persons in authority and who represent government departments and agencies. Citizens should be entitled to expect nothing less."
and
"The responsibility for efficient and effective administration of departmental practice and policy must carry with it a responsibility for any error or mistake which is made by the departmental officers alone. The presence of the debt in the circumstances of this case is a circumstance undoubtedly special. That the department would seek to enforce it and recover it only reinforces the circumstances being special."
The Tribunal concludes, in relation to the overpayment over the period 31 August 1999 to 13 February 2000, that for the following reasons there are "special circumstances" in Ms. Powell's situation consistent with the interpretation in the Beadle and McAvoy cases:
That no notification notices were sent by Centrelink to Ms. Powell after her telephone query. The only notice sent to Ms. Powell was sent on 14 June 1999 (T4);
That Ms. Powell was entitled to act on the Centrelink advice given to her by Ms. Scherer, given that two queries had been made including a request for Ms. Scherer to double check the advice given to Ms. Powell;
That the Centrelink advice given to Ms. Powell was crucial in the subsequent actions taken by her viz. "to have confidence in the advice given to her by persons in authority and who represent government departments…";
There were no objective facts that can be proved from Ms. Scherer's statement upon which an inference can be founded that she specifically advised Ms. Powell in the general way she has claimed (see paragraph 15): see Caswell & Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169. Moreover, Ms. Scherer's statement is qualified with comments such as "I have no clear recollection of speaking to this customer [Ms. Powell]" and "I do not recall any specific conversation with her". Such qualifications reduce the evidentiary weight that attaches to the statement;
That Ms. Powell has done all she could reasonably have done to ascertain her rights to Youth Allowance and had a right to receive the correct and informed advice. The Tribunal has a view that in such a situation the Department must bear some responsibility for the overpayment: see Maurits and Secretary, Department of Social Security (AAT Decision 12967 delivered 5 June 1998).
For all of the above reasons, the Tribunal concludes that the circumstances are unusual or uncommon in Ms. Powell's situation and so justify the legal meaning of "special circumstances".
The Tribunal further finds that it is more appropriate to waive than to write off the debt: see T2, Folio 9 paragraph 31, SSAT Application of the Law.
Given these findings the Tribunal has no need to consider the question of waiver for administrative error.
For all of the above reasons, the Tribunal sets aside the decision under review and in substitution therefor decides:
(a)to waive the debt arising from overpayment of Youth Allowance accrued over the period 31 August 1999 to 12 February 2000 because of "special circumstances"; and
(b)in accordance with subsection 1237(2)(a) of the Social Security Act 1991, the waiver is to take effect from 13 February 2000.
I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member
Signed: .....................................................................................
B. Hitchcock, SecretaryDate/s of Hearing 26 February 2001
Date of Decision 15 March 2001
Applicant Ms. Powell, herself
Respondent Ms. J. Dwyer, Departmental Advocate
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