Price and Secretary, Department of Family and Community Services
[2003] AATA 448
•16 May 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 448
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2002/252
GENERAL ADMINISTRATIVE DIVISION
)
Re CHARLENE PRICE Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr M Allen, Member Date 16 May 2003
Place Perth
Decision
The Tribunal varies the decision under review by deciding that, in the special circumstances of the case, the balance of the debt due by Ms Price outstanding as at 8 May 2002 be waived.
……..…….(sgd M Allen) ....................
Member
CATCHWORDS
Social Security – Youth Allowance - whether debt due to the Commonwealth - whether special circumstances exist to justify waiver of the debt – applicant having physical and mental disabilities – whether more appropriate to waive debt than to write it off
Administrative Appeals Tribunal Act 1975 section 37, 43
Social Security Act 1991 section 540, 541, 1223, 1236, 1237A, 1237AAD
Re Secretary Department of Social Security and Hales (1998) 51 ALD 695
Re Jonauskas and Secretary Department of Family and Community Services (2001) AATA 72
Re Beadle and Director General Social Security (1984) 6 ALD 1
Re Boscolo and Secretary Department of Family and Community Services (1999) 53 ALD 277
REASONS FOR DECISION
1. This an application by Ms Price for review of a decision made by the Social Security Appeals Tribunal (SSAT) on 19 June 2002. On that day the SSAT affirmed a decision of a delegate of the Secretary made on 7 April 2002 as varied by an Authorised Review Officer (ARO) on 8 May 2002 to raise and recover a debt of $6,126.63 in respect of overpaid Youth Allowance Benefit between 2 June 1999 and 28 March 2000.
2. The matter was first heard on 6 February 2003 when Ms Price represented herself and Ms Hackney represented the Secretary. During the course of that hearing I became aware that Ms Price was now in receipt of a Disability Support Pension (DSP) and the matter was adjourned for further information to be provided regarding the basis of her disability. The matter resumed on 26 March 2003 when Ms Price again represented herself and Ms Hackney again represented the Secretary.
3. The Tribunal received into evidence the documents filed by the Secretary pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) and also other documents tendered by Ms Price (P1) and the Secretary (A1 to A6). Ms Price gave oral evidence.
Background
4. There was no significant disagreement between the parties about the facts of the case. From the documentary and oral evidence available to me the following findings of fact can be made.
5. Ms Price was born in February 1982 and was seventeen years old in the middle of 1999. For some time prior to 1999 she had been estranged from her parents (who had been divorced for some years) and was living independently.
6. During 1998 and the first half of 1999 Ms Price received Youth Allowance benefit on the basis that she was to be a full-time student at the North Lakes Senior Campus.
7. Between January 1999 and January 2000 Centrelink wrote various letters to Ms Price concerning her Youth Allowance and informing her of her obligations to notify Centrelink of changes in her circumstances, including if she ceased being a full-time student. Initially those letters were sent to an address in Hamilton Hill but from August 1999 the letters were sent to an address in Palmyra as a result of a notification to Centrelink by Ms Price that her address had changed. None of these letters was returned to Centrelink undelivered.
8. In the middle of 1999 Ms Price experienced difficulties at school and a meeting was held between the Deputy Principal, Ms Price and her father. There is some uncertainty about whether Ms Price was asked to leave school or whether she decided to leave school voluntarily, but in any event she withdrew from school on 1 June 1999 – which was near the end of term 2.
9. It is was not until March 2000 that Centrelink became aware that Ms Price was no longer a full-time student and on 24 March 2000 Centrelink wrote to Ms Price at the last address known to them (ie the address in Palmyra).
10. That letter was returned to Centrelink undelivered so Centrelink cancelled the Youth Allowance and raised a debt of $5,440.23 in respect of the period from 2 July 1999 (ie the first day of term 3) until 28 March 2000.
11. Ms Price contacted Centrelink in early April and confirmed to Centrelink that she was no longer a student. At that stage her Youth Allowance was re-instated on the basis that she registered as a job seeker looking for work – although she did not actually find work. In October 2000 Ms Price became pregnant and in early 2001, after a process of psychological assessment, she was granted a Disability Support Pension (DSP) with effect from 11 January 2001. Ms Price was considered eligible for a DSP on the basis of a 20 point impairment due to a congenital absence of a left arm below the elbow and a ten point impairment due to a border-line intellectual disability. Ms Price’s child was born in June 2001.
12. Centrelink began to make fortnightly deductions from Ms Price’s benefits in reduction of the debt and it was not until early 2002, when she found it difficult to make ends meet because of the added expenses of the baby, that Ms Price sought a review of the original decision to raise and recover the debt. On 8 May 2002 an ARO reconsidered the position and determined that the debt should be raised; that the debt should start from 2 June 1999 (i.e. the day after the last day on which Ms Price attended school) rather than 2 July 1999; and determined that were no grounds to waive or write-off the debt.
13. The SSAT affirmed that decision on the basis that in the period in question Ms Price was neither a full-time student nor looking work and did not therefore satisfy the activity test and was not eligible to receive Youth Allowance. The SSAT considered whether it could waive the debt. The SSAT said it was sympathetic to Ms Price’s history and to the circumstances under which the debt arose. However, the SSAT concluded that “it did not find itself able to conclude that any of the waiver provisions permitted it to wipe out a debt which would not have accumulated if Ms Price had made sure that Centrelink’s mail reached her hands had this happened, it must be assumed that she would have that Youth Allowance was continuing, even though she had left school, and had it stopped.”
Issues
14. The issues to be determined in these proceedings are:
· is there a debt due by Ms Price to the Commonwealth and what is the amount of that debt; and
· should the debt be waived or written-off in the circumstances of the case.
Evidence
15. From the uncontested evidence given to the SSAT and orally in the present proceedings and from the various documents available to me Ms Price’s evidence can be summarised as follows.
16. Ms Price’s parents have been divorced for many years. She lived with her mother until she was about 14 and then with her father until she was about 15 and thereafter lived independently. She had been involved in “trouble” with the authorities for a number of years and the state child welfare authorities had been interested in her situation for some years. A particular welfare officer maintained contact with her on a fairly regular basis.
17. Up until the middle of 1999 Ms Price lived independently with friends in Hamilton Hill – but she was in fact spending most of her time with her older boyfriend at his address in Fremantle.
18. There had been a history of trouble at school. Ms Price believed other students often picked on her or made fun of her because of that congenital malformation of her left arm. After several incidents she had attended a meeting with the Deputy Principal and her father and there was a discussion about her leaving school and she decided to do so. She understood the Deputy Principal to say that the school would inform Centrelink that she was no longer a student. Alternatively, the Deputy Principal might have said that the school would inform the authorities – which could have meant Centrelink or the welfare officer that monitored her situation and who might have, in turn, informed Centrelink of the situation. I note that Ms Price’s father, who gave evidence to the SSAT, informed the SSAT that he could not be sure that the Deputy Principal mentioned Centrelink but that the Deputy Principal might have mentioned “the authorities”.
19. Ms Price said that she knew that Centrelink had to be informed that she was no longer a full-time student – but she did not do so because she assumed that the school or the welfare officer would do it.
20. In August 1999 she had moved her belongings from the address in Hamilton Hill to the home of some friends in Palmyra. Although she spent sometime there she spent most of her time with her boyfriend in Fremantle. She notified Centrelink of this change of address but in fact she did not receive any mail at the Palmyra address. The people that she regarded as her friends apparently did not pass on any mail.
21. From mid 1999 she had gone even further “off the rails” and had become heavily involved in using drugs and helping her boyfriend deal in drugs. She was personally a regular user and had some degree of addiction to amphetamines. This continued until about mid 2000. Her older boyfriend controlled her drug supply and had control over her access card to her bank account.
22. She knew that the Centrelink payments were continuing but she did not pay particular regard to that. To the extent that she did think about it she must have assumed that she had been automatically transferred to some other form of benefit such as unemployment benefits – but she in fact made no attempt to find work.
23. When her Youth Allowance payments stopped in April 2000 she went to Centrelink and claimed unemployment benefits and registered as a job seeker – but she was not in fact required to look for work because, she presumes, of her arm disability.
24. In mid 2000 the violent and drug-affected relationship came to an end when her boyfriend assaulted her. She subsequently became pregnant in September/October 2000 and at that stage made a decision to put her life in order. She gave up drugs and committed herself to becoming healthy for the sake of her child. In early 2001 she had applied for the Disability Support Pension. The basis of her claim, so far as she understood it, was the congenital arm condition, depression, the affects of a burst eardrum and her pregnancy. She had been surprised to learn recently that part of her eligibility for DSP had been the intellectual disability.
25. She now lives independently with her child. Her only income is Family Tax Benefits of approximately $344 gross per fortnight and the DSP of approximately of $435 gross per fortnight. The deductions from that are $10.00 per fortnight to Homeswest and $25.00 per fortnight made by Centrelink to reduce the debt, leaving her with approximately $740.00 per fortnight net.
26. Her major fixed commitments are, per fortnight:
Rent $ 280.00
Telephone $ 20.00
Electricity/Water/Gas $ 80.00
Food $ 120.00
Medication $ 25.00
Total $ 505.00
27. This leaves her with about $235.00 per fortnight to cover all other expenses relating to herself and her child. She has recently finished paying off a fine relating to a drug conviction that was incurred prior to her pregnancy and she had recently incurred a fine of $220.00 for having an expired train ticket. She will go to Court in relation to that matter to get an order for payment by instalments. She has no savings.
28. She has re-established a relationship with her mother since her child was born and she has a reasonable relationship with her father. Nevertheless, both her parents have their own lives to lead. She has an 18-year-old brother, but basically she is on her own. She manages financially with some difficulty. Her arm disability does not really cause any physical problems apart from the lifting and other aspects of caring for her child - which places some strain on her arm and makes it sore.
29. She does not know what the future holds. She is now much more settled in that she has a purpose in life that she did not previously have. She would like eventually to work and perhaps to be trained in retail marketing or similar work. She realises that her arm will make employment difficult to obtain.
30. The debt owed to Centrelink has meant that she has been unable to borrow money in the past.. She would like to buy a car, which would help her attend any training course or to get work. She would have to borrow to be able to buy a car and at the moment that is not possible.
31. Documentary evidence from a number of medical practitioners was available regarding the assessment in early 2001 of Ms Price for the purposes of her application for a DSP. It was noted (A3) that she has had psychological treatment on and off since childhood and had attended the Selby Psychiatric Clinic as late as 2000. A history of depression was noted although she did present as clinically depressed in early 2001.
32. A psychological assessment (A4) noted a long history of difficulties from a very early age, particularly academic difficulties and limited school achievement. The assessment noted personal conflict within her home life and recorded a history of drug and personal abuse within her relationship. The assessment concluded that her depressive symptoms were not likely to be in the clinical range and that her IQ score placed her in the borderline capacity and indicated that she was functioning in the lower 6% compared to her age peers. The assessment noted that Ms Price claimed to have made many suicide attempts, none of which had required medical treatment.
33. The diagnosis was that Ms Price had borderline intellectual functioning and that her history of affective disturbance was more likely due to maladaptive personality traits (consistent with borderline personality disorder) than to mood disorder. It was possible this was due to the personality consequences of a head injury she had received at the age of nine months. Ms Price was judged as unfit for work except for part-time work of 8 hours a week in specialist employment services. The psychological condition prevented her from undertaking vocational rehabilitation.
Consideration
34. Section 540 of the Act provides that a person is qualified for a Youth Allowance in respect of a period if throughout the period the persons satisfies the activity test or is not required to satisfy the activity test. At the relevant time Ms Price was not exempt from satisfying the activity test.
35. Section 540(1) provides that a person satisfies the activity test if the person is undertaking full-time study or actively seeking and willing to undertake paid work.
36. It is not in dispute that Ms Price satisfied the activity test until 1 June 1999 by undertaking full-time study. Likewise it is not in dispute that from 2 June 1999 Ms Price was neither a full-time student nor actively seeking work and that that situation continued until April 2000 when she registered as a job seeker.
37. Accordingly, Ms Price did not satisfy the activity test and was not qualified to receive Youth Allowance from 2 June 1999. Accordingly, she was not qualified to receive Youth Allowance payments from that date until the date of the cancellation on 28 March 2000. Consequently, the amount of the payments made in that period is a debt due to the Commonwealth by Ms Price. That debt has been calculated as $6,126.63 (see T14) and I find that a debt of that amount was due by Ms Price to the Commonwealth.
38. The next issue to be considered is whether that debt should be recovered from Ms Price. I was informed at the hearing that as a result of deductions made from Ms Price’s benefits that the debt had been reduced to $3,708.91 as at 26 March 2003.
39. French J. in Secretary, Department of Social and Hales (1998) 51 ALD 695 commented as follows: (at p 695, 696):
“From time to time in the administration of Social Security Benefits overpayments occur. Sometimes these are result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that lead to the receipt of benefits in the first place. The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which lead to the overpayment and the circumstances of the persons concerned. However, the confining of a recovering regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.”
40. Section 1237(1) of the Act grants to the Secretary, and hence to this Tribunal by virtue of s43(1) of the AAT Act, the ability to waive the Commonwealth’s right to recover the whole or part of a debt due from a debtor only in circumstances described in a number of specified sections of the Act. Two waiver sections are relevant in the current proceedings, namely s1237A and s1237AAD.
41. Section 1237A(1) of the Act provides that:
“The Secretary must waive the right to recover the proportion of a debt that is attributed solely to administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.”
42. In the present case, there is no question of Centrelink having committed any administrative error at all and hence s1237A is not relevant and no waiver under that provision is possible.
43. In certain circumstances a debt may be waived in the exercise of the discretion to do so. Section 1237AAD of the Act is as follows:
“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 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.
44. Ms Hackney did not argue that the failure of Ms Price to notify Centrelink that she had ceased to be full-time student was a “knowing” failure. In any event, on the evidence, I am satisfied on balance that the failure was not a knowing failure in the sense of having actual knowledge of an obligation and making a deliberate choice to not meet that obligation (see the decision of Deputy President Forgie in Jonauskas and Secretary Department of Family and Community Services at paras 68 to 73). On that point I accept the evidence of Ms Price that, although she knew of the obligation to inform Centrelink of her changed circumstances, she believed, following the meeting at school, that either the school or the welfare officer would notify Centrelink and that the continuation of her benefits was because she had transferred to some other form of benefit. I accept that in the period from mid 1999 to mid 2000 Ms Price was under the influence of an older man and drugs. On the evidence I can not determine whether Ms Price did nor did not actually receive the letters from Centrelink that were addressed to her at the Palmyra address, but I accept that she thought that she was entitled to some form of benefit even though she had stopped being a full-time student. In my opinion, her failure to notify Centrelink that she was not longer a student was not a knowing failure to meet her obligations. I am therefore satisfied that sub section 1237AAD(a) is satisfied.
45. As regards sub section 1237AAD(b) Ms Hackney argued that there were no special circumstances in this case. Specifically, Ms Hackney argued that:
· it was not reasonable that Ms Price took no action to notify Centrelink of an address other than the Palmyra address;
· it was not reasonable for Ms Price to have relied on the possibility that the school or the welfare had notified Centrelink;
· there is no medical evidence available regarding the extent of any drug problem Ms Price may have had;
· the birth of Ms Price’s child is not a special circumstance – many DSP recipients are single mothers.
· Both Ms Price and her child are apparently in reasonable health and she is meeting the child’s needs.
· The existence of an intellectual disability at the time in question is not sufficient to constitute a special circumstance.
· She knew of her obligations and attended Centrelink at various times and it has not been established that she couldn’t deal with her own affairs at the time.
46. What should be regarded as special circumstances is an issue that confronts this Tribunal regularly. Reference is frequently made, with approval, to the decision of the Tribunal in Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, that one should look for circumstances that are, unusual, uncommon or exceptional. They need not be unique but they must have a particular quality of unusualness that permits them to be described as special. In ReBoscolo and Secretary Department ofSocial Security (1999) 53 ALD 277 at 281 and 282 French J. described the core of the requirement as being that there be something unusual or different to take the matter out of the ordinary course, but without requiring that the case be extremely unusual, uncommon or exceptional.
47. All the circumstances regarding the debt must be viewed from the perspective of what has obviously been a turbulent and disturbed early life for a young woman who is intellectually and emotionally ill equipped to handle the trials of life that many other people may well cope with. Ms Price has had behavioural and intellectual problems all her life and there is some evidence that this may be due to a head injury as a baby. There is also the more obvious physical disadvantage of her malformed arm – which I am sure would have generated many social and emotional problems as well as physical ones. All these problems, I am sure, have made problems in situations that arose – such as the separation of her parents when she was very young and the subsequent estrangement from her mother – harder to cope with.
48. In the year from mid 1999 I am satisfied that Ms Price was under great personal strain and living in an impossible situation. Leaving school in difficult circumstances was only one problem. The drug addiction and abusive relationship (the evidence of which from Ms Price I accept) must have placed great mental and physical strain on any young woman – but especially one with a cognitive disability such as Ms Price has.
49. Whether her assumption that the school or the welfare officer would notify Centrelink that she was no longer a student was objectively reasonable or not is, in my opinion, not to the point. I am satisfied that she held that belief and that objective rationality would have played a very small part (if any) in her thought processes at that time and in the period following.
50. To her credit she has changed her lifestyle in her own interests and, perhaps more importantly, the interests of her child. She says she is managing financially with some difficulty and is rebuilding a relationships with her parents and her life generally. Many things will have to go right for Ms Price to maintain a stable living environment for herself and her child. Ms Price has already been paying off the debt for three years and the outstanding balance of $3,708.91 as at 26 March 2003 will require a further six years approximately to discharge at the present rate of $25.00 per fortnight. That commitment will, in my opinion, be a material obstacle for Ms Price to overcome in making a new life for herself and her child.
51. In my opinion Ms Price’s family, medical and psychological history; the circumstances in which she was living in 1999/2000; as well as the efforts she has made to rehabilitate herself and care for her child are, taken together, circumstances that are sufficiently out of the ordinary to be described as special and which in my opinion make it desirable to waive part of the debt. I would add that I believe it is relevant that when Ms Price stopped being a full-time student she would have been eligible for other benefits. On its own that may not amount to a sufficiently special circumstance, but it is a relevant factor that can be taken into account and lends weight to my conclusion regarding special circumstances.
52. I have considered whether all or only part of the debt should be waived. In my opinion it would reasonable for Ms Price to repay some of the debt. Although it is somewhat arbitrary, I consider that Ms Price should be required to repay that part of the debt that she had in fact repaid by the date of the review decision by the ARO 2002. That was the first occasion on which the situation was reviewed (albeit internally) by a person other than the original decision maker. In my opinion the balance of the debt outstanding on that day should be waived.
53. As regards sub section 1237AAD(c), I must consider whether it is more appropriate to waive that part of the debt that I believe should be waived than to write it off (ie defer its recovery for a period of time). Section 1236 permits the collection of debt to be delayed for a stated period or otherwise, but only in the circumstances referred to in the section. Section 1236(1A) sets out four circumstances in which a debt may be written-off if any one of the four are applicable. Only one of the circumstances is relevant in the present case ie paragraph 1236(1A)(b), which provides that a debt may be written-off if the debtor has no capacity to repay the debt. Section 1236(1C) provides that a person will be taken to have a capacity to repay a debt if the debt is recoverable by means of deductions from a person’s social security payment unless recovery by those means would cause the person severe financial hardship.
54. As noted above, the debt has already been party recovered by instalment deductions made from Ms Price’s social security payments and Ms Price’s evidence is that, although it is difficult, she does manage financially. I am not satisfied that Ms Price would experience severe financial hardship if those deductions were to continue and hence I can not conclude that it would be appropriate to write-off further collection of the debt.
55. Having concluded that, in my opinion, it would be appropriate to waive part of the debt and having also concluded that it would not be appropriate to write-off the debt, it must follow that it is, for the purposes of s1237AD(c), more appropriate to waive than to write-off the debt: see Hales (supra, at p 704).
56. My decision is, therefore, that I vary the decision of the SSAT by affirming that a debt of $6,126.63 in respect of the period from 2 June 1999 to 28 March 2000 was due by Ms Price to the Commonwealth but that, in the special circumstance of the case, the balance of that debt outstanding on 8 May 2002 should be waived.
I certify that the preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member.
Signed: ........(sgd R Morgan).........................................
AssociateDate/s of Hearing 6 February 2003 and 26 March 2003
Date of Decision 16 May 2003
Counsel for the Applicant Self
Counsel for the RespondentSolicitor for the Respondent Ms K Hackney, The Service Recovery Team, Centrelink
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