Primo and Anor and Secretary, Department of Family and Community Services

[2003] AATA 664

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 664

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/597 and Q2002/596

GENERAL ADMINISTRATIVE DIVISION		)
Re		FERNANDO PRIMO RAQUEL BENEDETTO

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Dr E K Christie, Member

Date15 July 2003

PlaceBrisbane

Decision

The Tribunal sets aside the decision under review and in substitution therefor the Tribunal determines that:

§   there has been an overpayment of youth allowance made to Fernando Primo in the amount of $1,784.95 for the period 8 June 2000 to 11 December 2000;

§   there has been an overpayment of youth allowance made to Raquel Benedetto in the amount of $2,342.51 during the period 8 June 2000 to 18 December 2000; and

§ there are special circumstances in these matters that warrant the right to recover those debts being waived pursuant to section 1237AAD of the Social Security Act 1991.

(Sgd) Dr E K Christie
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – youth allowance – overpayment – whether applicants failed to notify Centrelink of their mother’s employment – recovery of debt – whether right to recover debt should be waived – whether there has been an administrative error – whether there are special circumstances

Social Security Act 1991

Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

15 July 2003 Dr E K Christie, Member   

1.      This is an application for review of decisions of the respondent to raise and recover debts of youth allowance as follows:

§In relation to Fernando Primo, a debt of $2,330.61 for the period 23 December 1999 to 11 December 1999; and

§In relation to Raquel Benedetto, a debt of $2,494.38 for the period 2 December 1999 to 18 December 2000.

2.      The applicants sought review of those decisions by the Social Security Appeals Tribunal and, on 5 June 2002, the Tribunal decided to set aside the decisions under review and remitted the matters for reconsideration in accordance with its directions. The Tribunal found that the applicants’ entitlement to youth allowance should have been calculated using the Family Actual Means Test (the FAMT) rather than the Parental Income Test (the PIT).  The applicants sought a review of that decision by this Tribunal.

3. The matter was heard by the Tribunal on 28 November 2002. The applicants, who are brother and sister, were represented at the hearing by their parents. The respondent was represented by Ms Shea, a Departmental Advocate. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“the T documents”) and a number of documentary exhibits tendered by the parties.

4. During the course of the hearing, evidence was provided to the Tribunal which demonstrated that Mr Primo (Snr) had been the holder of a Health Care Card from 7 December 1999 until 7 June 2000. Section 1067G-F3(a)(d) of the Social Security Act 1991 (“the Act”) provides that the Parental Income Test is not to be applied to a person who is the holder of a Health Care Card. As such, it became apparent that the debts raised against the applicants had been incorrectly calculated and that their entitlement to youth allowance should have been calculated using the FAMT method. The Tribunal therefore adjourned the hearing of these matters and directed the respondent to review the application of section 1067G-F3(a)(d) to the factual material before the Tribunal.

5.      On 6 December 2002, the respondent wrote to the Tribunal advising that a portion of the applicants’ debts relating to the period when their father was the holder of a Health Care Card did not exist.  In relation to Fernando Primo, the respondent conceded that $1,250.99 of his debt was incorrectly raised; and in relation to Raquel Benedetto, the respondent conceded that $1,157.94 of her debt was incorrectly raised; and the Tribunal so finds..

6.      Following the recalculation referred to above, the respondent now contends that the following debts are outstanding and recoverable from the applicants:

§In relation to Fernando Primo, a debt of $1,784.95 for the period 8 June 2000 to 11 December 2000; and

§In relation to Raquel Benedetto, a debt of $2,342.51 for the period 8 June 2000 to 18 December 2000.

7.      The debts the subject of these proceedings came about after data matching with the Australian Taxation Office (on 24 August 2000) revealed that the applicants’ mother had been in paid employment, as a day care provider, since 3 April 1998.  The respondent contends that the applicants failed to notify Centrelink of their mother’s earnings during the period of the overpayment.

8.      Mrs Primo, the applicants’ mother, gave evidence that she notified Centrelink when she commenced employment, but that she had not understood that she was self employed. She considered herself to be employed by Woodridge Family Day Care. She produced to the Tribunal a number of payment records from her employment (Exhibits 4, 5 and 6). 

9.      Mrs Primo stated that she regularly informed Centrelink of her income, but that the Department had failed to note her income in relation to her children’s youth allowance payments. It would appear that the income information was used by Centrelink to assess payments of family tax benefit being paid to Mrs Primo, but was not taken into account when assessing the entitlement of her children to their benefits. The applicants contend that the debts have arisen as a result of the administrative error of the Department in failing to have regard to her income details when assessing the children’s entitlement to youth allowance.

10.     The Tribunal is satisfied that the applicants received social security benefits during the relevant period.  The Tribunal is also satisfied that, in light of the fact that Centrelink was unaware of their mother’s employment, the applicants received more benefits to which they were entitled. Accordingly, the Tribunal finds that the monies paid to the applicants to which they were not entitled are a debt due to the Commonwealth.

11.     Consequently, the issue for the Tribunal to determine is whether the right to recover the outstanding debts should be waived under either the “administrative error” or “special circumstances” provisions of the Social Security Act 1991.

Considerations of the Issues

12.     The objective of the Tribunal is to review administrative decisions on their merits but in accordance with the law at all times.  The relevant legislation is the Social Security Act 1991 (“the Act”).

13. Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived:

“1237A – Waiver of debt arising from error

1237A(1)  Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an 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.

…

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 the 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.”

14.     In relation to “administrative error”, the legislation is very strict – requiring that the debt arose solely due to an administrative error on the part of the respondent.  In order to succeed, the applicant must not contribute, in any way, to the administrative error.  The respondent has contended that the applicants in this case contributed to the debt by failing to notify the Department that their mother was working during the relevant period.  The respondent contends that the applicants were personally responsible for notifying the Department and that their failure to discharge that obligation has contributed to the debts arising. 

15. The Tribunal finds both Mr and Mrs Primo to be credible witnesses and witnesses of truth. However, the Tribunal cannot be certain that Mrs Primo, when she spoke to the departmental officers, specified each of the payments that would be affected by her employment, and therefore she may have inadvertently contributed to the debts arising. In such a factual situation, it cannot be said that the Department is solely responsible for the debts arising. As a result the debts cannot be waived under the administrative error provisions of the Act.

16.     Waiver for “special circumstances” requires consideration of the meaning of the terms “knowingly” and “special circumstances” as applied by the Tribunal in other cases it has decided.

17.     The meaning of the term “knowingly” has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 where Deputy President Forgie stated that “knowingly” requires a person to have actual knowledge that he or she is making a false statement or failing or omitting to comply with their obligations (at 445). However, the respondent concedes that the applicants did not knowingly fail to comply with their obligations under the Act.

18.     The leading case with respect to the meaning of “special circumstances” is Re Beadle and Director-General of Social Security (1984) 6 ALD 1 where the Tribunal said (at 3):

“An expression such as ‘special circumstances’ is by its 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.”

19.     In this case, Mrs Primo notified Centrelink of her earnings, but those details were not included on her children’s files in relation to their payments of youth allowance.  Throughout the relevant period, both Fernando and Raquel lived at home with their parents.  The applicants contend that they should be entitled to rely on Centrelink to record the information wherever necessary to ensure that overpayments do not occur. The Tribunal agrees. It would seem “unusual” or “uncommon” or “exceptional” that a person could contact Centrelink in accordance with their notification obligations and Centrelink fail to properly record that information so as to prevent errors arising and overpayments being made.

20.     Furthermore, the Tribunal concludes that, based on the factual situation of these applications for review, “something unfair, unintended or unjust has occurred” in the circumstances that have led to the overpayments and so justify the description of “special circumstances”: see the observations of Kiefel J on the meaning of “special circumstances” in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545.

21.     Accordingly, the Tribunal sets aside the decision under review and in substitution therefor determines that:

§there has been an overpayment of youth allowance made to Fernando Primo in the amount of $1,784.95 for the period 8 June 2000 to 11 December 2000;

§there has been an overpayment of youth allowance made to Raquel Benedetto in the amount of $2,342.51 during the period 8 June 2000 to 18 December 2000; and

§there are special circumstances in these matters that warrant the right to recover those debts being waived pursuant to section 1237AAD of the Social Security Act 1991.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  28 November 2002
Date of Decision  15 July 2003

For the Applicants  Mr and Mrs Primo 
For the Respondent                  Ms Shea, Departmental Advocate