Purches and Secretary, Department of Family and Community Services

[2005] AATA 267

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 267

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2004/892     

GENERAL ADMINISTRATIVE DIVISION		)
Re		ELAINE PURCHES

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date24 March 2005

PlaceSydney

Decision The decision under review is affirmed.

[Sgd]Ms N Isenberg
  Member

CATCHWORDS

SOCIAL SECURITY – age pension – debt due to the Commonwealth – whether debt attributable “solely” to Commonwealth’s error - whether debt should be waived – “special circumstances” – decision affirmed.

Social Security Act 1991 ss 1223, 1237A and 1237AAD

Secretary, Department of Social Security and Hales (1998) 51 ALD 695
Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)
Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 717
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Secretary, Department of Social Security v Ellis (1997) 24 AAR 535 at 539-540
Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990)
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464,
Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797,
Re Colaiacolo and Secretary, Department of Social Security (AAT N84/439, 24 April 1985)

REASONS FOR DECISION

24 March 2005 Ms N Isenberg, Member

DECISION UNDER REVIEW

1.        The decision under review before the Administrative Appeals Tribunal (“the Tribunal") is the decision of the Social Security Appeals Tribunal (“the SSAT"), dated 21 June 2004, to raise and recover a debt of $4,263.31 from Mrs Purches for the overpayment of age pension for the period of 7 June 2000 to 26 August 2003.  The SSAT affirmed the decision of an Authorised Review Officer (“ARO”) on 14 April 2004 who affirmed the decision of the Secretary, Department of Family and Community Services (“the Respondent”).

BACKGROUND

2.        Most of the facts in the matter were not in dispute and the following findings of fact, by way of background, can be made. 

3.        Age pension was granted to Mrs Purches with effect from 29 June 1999.  Prior to the grant of age pension she had been receiving partner allowance since September 1995 (except for the period between December 1998 and March 1999).

4.        On 10 November 2003, Mrs Purches was notified that she had been selected in a data match of Centrelink pensions and Australian Taxation Office (ATO) salary incomes.  The letter advised that ATO records showed her income other than Centrelink income was $7,531, while Centrelink records, as at 22 April 2003, had showed her other income was $0 (T40).

5.        On 20 November 2003 Mrs Purches responded to the letter (T41) and also provided copies of pages from her 2001/02 income tax return and her taxation notice of assessment (T41).  The return shows that Mrs Purches earned $7,531 from the NSW Department of Education and Training (DET).

6.        On 12 January 2004 Centrelink obtained a Work Details Report from the DET in respect of Mrs Purches (T42).  The report indicated that she had been a casual employee since 30 July 1993 and included details of her earnings from July 1993 to September 2003.

7.        On 29 March 2004 a Centrelink delegate determined that Mrs Purches had been overpaid an amount of $4,263.31 of age pension for the period 16 June 2000 to 26 August 2003 because the correct amount of her earnings had not been taken into account (T48 and T49).  Mrs Purches was notified of the debt on 31 March 2004 (T52).

ISSUE BEFORE THE TRIBUNAL

8.        The issue to be determined is whether there is a debt due to the Commonwealth by Mrs Purches and, if so, whether it should be waived.

LEGISLATION

9.        The relevant legislation in this matter is the Social Security Act 1991 (“the Act”) in particular sections 1223, 1237A and 1237AAD.

THE HEARING

10.      A hearing was held on 4 February 2005 and was resumed on 16 March 2005.  On both occasions Mrs Purches was self-represented, although assisted on the second occasion by her cousin, Ms J Cowley.  The Respondent was represented by Mr Gary Richardson, an advocate from the Centrelink Service Recovery Team.

11.      The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence.  Other documents were tendered by Mrs Purches and are referred to as relevant.  Centrelink also tendered a detailed analysis of its computer records.

12.      Mrs Purches gave evidence and was cross-examined on behalf of the Respondent.  I also asked her questions.

CONSIDERATION OF EVIDENCE AND FINDINGS

13.      In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.

Is there a recoverable debt?

14.      The rate of age pension payable to a person is calculated having regard to Pension Rate Calculator A (section 1064).  The rate calculator requires the income (including wages) of a person to be taken into account in determining the rate payable.  

15.      Centrelink calculated that Mrs Purches was overpaid an amount of $4,263.31 because all her income from wages as a casual teacher was not taken into account when working out the rates of age pension payable to her.

16.      The amount of the debt was discussed at length.  Of particular relevance was the information from the DET (T43 ), demonstrating that Mrs Purches had worked on a number of dates during the relevant period and, for whatever reason, payments for those work days had not been taken into account in calculating her pension entitlement.

17.      At my request Mr Richardson obtained further information (Exhibit R1).  This explained, to my satisfaction, that the debt had been accurately calculated.

18. The amounts overpaid to Mrs Purches in the relevant period are debts due to the Commonwealth under section 1223(1) of the Act. The amount overpaid in the period prior to 1 July 2001 is a debt under (the now repealed) section 1223(1), because “the amount was not payable to” Mrs Purches. The amount overpaid in the period from 1 July 2001 is a debt under current section 1223(1) because Mrs Purches obtained the benefit of it but “was not entitled for any reason to obtain that benefit”. 

19. Consequently, the amount of the overpayment is a debt owed by her to the Commonwealth under subsection 1223(1) of the Act.

20.      I therefore find that there is a recoverable debt in the sum of $4263.31.

Should the debt be recovered?

21. The Act makes provision, in limited circumstances, for debts not to be recovered:

“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.”

22.      For a debt to be waived under section 1237A, two conditions must be met:

(a)      the debt must be solely attributable to administrative error; and

(b)      the debtor must have received the payments in good faith.

Was the debt solely attributable to an administrative error by Centrelink?

23.      Centrelink has no record that Mrs Purches notified it of income from casual earnings between August 1998 and July 2002.  Mrs Purches said that she kept Centrelink informed of when she worked.  While there is evidence that she did declare her casual earnings from time to time between July 2002 and August 2003, a comparison of the amounts recorded by Centrelink as declared by her and the gross amounts actually paid by her employer indicates that her earnings in this period were under declared.

24.      In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”.  This definition was adopted by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996) and in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787.

25.      From time to time Centrelink sent notices to Mrs Purches advising her, among other things, of the income being used for calculating her regular pension payments and set out her notification obligations (T4, T5, T6, T7, T8, T9, T10, T11, T12, T13, T15, T19, T22, T23, T25, T27, T30, T33, T35 and T36).  Mrs Purches was unsure which of the letters she received, especially as she has moved house four times, and now only has some of the letters.  Some of these were in fact tendered by her (Exhibit A1), which were dated 25 June 2001, 15 October 2001, 6 February 2002, 21 May 2002, 22 May 2002 and 3 June 2002).  These relate to T8, T9, T10, T11, T12 and T13 respectively.

26.      She said that before her move to the Central Coast, she attended the Hornsby Centrelink office where she had an arrangement to report, in relation to her income, every 12 weeks.  At Wyong this was changed to every four weeks.  She said ‘only 18 months ago’ she learned that she is supposed to report every two weeks if she has worked.  I brought her attention to the letters she had tendered, which referred to an obligation to inform Centrelink within 14 days.  Those letters date from 25 June 2001, considerably longer than 18 months ago.  She agreed that the letters required her to notify Centrelink within 14 days if she earned income. 

27.      In support of her evidence, the Centrelink record (T20) dated 4 October 2002 noted that she would advise Centrelink every 12 weeks.  The previous record, dated 12 August 2002 (T15) however showed she agreed to report monthly.

28.      In addition she said that she would sometimes phone up the day after she worked and make a ’guestimation’ as to what she might be paid.

29.      Mrs Purches said that for the most part she would attend the Hornsby office because it was reasonably close to where she did casual teaching (Epping).  At that time she was liquidating her assets because of her divorce and needed to keep Centrelink informed about that also.  When she attended she would tell them about her work too.  She assumed that when the clerk recorded information about her investments, information was also entered on the computer about her employment.  She said that sometimes she would be told that she should get back to Centrelink at the ‘end of the fortnight’, although it was not clear if that related to the Centrelink pay period, or the DET pay period.

30.      While Mrs Purches was unable to confirm all the work dates, because she has not retained all her pay slips, there was no evidence which would lead me to a view other than that the DET records of Mrs Purches’ work days are accurate.

31.      I accept that Mrs Purches attended the Hornsby Centrelink office with some regularity to discuss her investment situation. However I cannot accept that if Mrs Purches reported her earnings on each of the 50 odd occasions she worked between 7 June 2000 and 1 July 2002, the Centrelink officer failed to record Mrs Purches reported earnings on every occasion.

32.      While Mrs Purches was generally adamant that she had informed Centrelink of her earnings, she stated at the hearing (transcript p38):

“In the stressful circumstances that have prevailed since the breakdown of my marriage I have limited ability to pay careful attention to matters otherwise temporal, or physical immediate to me because I'm running a household, and also I've got other things that I belong to too, and I am not going to have this take over my whole life which it virtually has, I must say.  I belong to quite a few - I belong to a church.  I'm on the executive of the little area that I live in - it's a managed area and I'm on the executive there and that's quite a - it's not a paid job at all.  I do that voluntarily.  I'm part of the thyroid group that meets in the central coast and also I do want to have a private life as well.” 

33.      When asked whether she had notified Centrelink that she had been teaching in the calendar year 2000, she said, “Well, all I can say is, according to the Hornsby formula, to the best of my ability, yes.” (transcript p44)

34.      I attempted to reconcile the information Centrelink relied on to determine Mrs Purches’ entitlement after July 2002 and the DET information.  For the most part the information provided understated Mrs Purches earnings and was not matched by a corresponding adjustment when payment from the DET was ultimately received by Mrs Purches.  It was not a matter of random inaccuracies with some overstatements and some understatements.

35.      I therefore am not prepared to find that there was an administrative error on Centrelink’s part.  Even if I could so find, on the basis of Mrs Purches’ evidence, I would not come to the view that any error by Centrelink was responsible for the debt.

36.      Having come to the view that the debt did not arise solely from an administrative error by Centrelink, it is not necessary for me to examine the issue of whether or not Mrs Purches acted in good faith.

Are there special circumstances why the debt should be waived?

37. Section 1237AA of the Act allows for waiver of debts in what is termed “special circumstances”. It was Mrs Purches’ main submission that special circumstances exist in her case. The relevant section provides as follows:

“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 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.”

38.      The term “special circumstances” has been examined by this Tribunal and the Federal Court.  In Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, Toohey J stated:

“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 on 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.”

39.      Mrs Purches referred me to medical evidence as to her health.  She suffers Graves’ disease which is in relation to her thyroid.  The condition “affects all major organs, including the heart, brain, liver, kidneys and skin, affecting functions such as muscle strength, vision, appetite, temperature/temperature tolerance, cholesterol levels, mood and concentration, memory, hormonal balance generally, etc.”   She referred to the report of Professor Robinson who, in addition to providing information about Mrs Purches' thyroid condition, wrote of her labile hypertension, multiple food allergies and intolerance for stress.  Side effects of her medication include palpitation, weakness, tiredness and changes in body weight. 

40.      Mrs Purches told me of a recent diagnosis of Jupitrons’ syndrome which relates to involuntary curling of the fingers through the contraction of the ligaments in the hands and fingers.  It is unknown if surgery is necessary and the prognosis is also unknown.  Mr Richardson submitted that as there was no medical evidence about the condition, the effect of that condition should not be taken into account.

41.      Recently, while lifting a branch after storms (a task she has to undertake because she lives alone) she hurt her back.

42.      She had a compensation claim in 1983 in relation to her cervical spine and she thinks her neck could seize up ‘at any time’.  Mr Richardson asked me to note that Mrs Purches had managed to work for many years with that condition.

43.      Mrs Purches also referred me to Dr Davidson’s report dated 29 April 2004 which states that she has post traumatic stress disorder as a consequence of her ‘recent battle with Centrelink’.  Several times during the hearing Mrs Purches became upset and Ms Cowley spoke of her cousin’s distress about the present proceedings.  I observed that Mrs Purches was also clearly troubled by her divorce.  Mr Richardson submitted that the evidence about Mrs Purches’ ‘psychiatric’ condition should be given little weight as the doctor, in her ‘one line’ report, provided no evidence as to causation, treatment or prognosis.  Mrs Purches agreed that her doctor was not a psychiatrist, but she has great confidence in her.  She receives no treatment for this condition, other than being advised to continue her meditation.  She has not been referred to a psychiatrist.

44.      As to her financial position, Mrs Purches gave evidence of her recurring expenses.  She estimated that her strata levies are about $470 per quarter and her electricity costs $150 per quarter during the warmer months and $200 in winter.  She spends about $80 per month on her car, as well as about $156 twice yearly for maintenance.  Last winter she needed to approach the Samaritans to assist in paying her bills.  Her first submission detailed her expenses for December 2004. 

45.      She submitted that Centrelink’s payments to single pensioners are unjust because single pensioners must bear living expenses alone.

46.      She said she has significant medical expenses and while some are covered by Medicare, her doctor does not bulk bill and she is out of pocket.  She must have three-monthly blood tests for her thyroid condition and regularly visits her specialist.  It is not yet known what expenses will be associated with her newly diagnosed Jupitrons’ syndrome.

47.      While she has private health insurance this ‘does not cover everything’.  Despite her ongoing outlay for medical expenses, she does not manage to meet the threshold for tax relief.

48.      Mrs Purches agreed, when asked by Mr Richardson, that she owned her own home ‘outright’, although she said that she has taken out a loan whereby cash is made available to her against the equity in her home.  She said she was ‘slowly going broke’.  Her pension is $476.50 per fortnight (the maximum single rate), although, out of this sum, an amount of $40 per fortnight is being withheld in payment of the debt.  In addition she receives $112 per fortnight by way of superannuation.

49.      She has no other assets other than her car, valued at about $15,000, and about $1000 in her credit union account. 

50.      I accept that her only assets are her home and her car.  While she sees her overall financial position being whittled away, she, nonetheless, has these assets, unlike many other age pensioners.  Insofar as the house is concerned she has identified a means of liquidating that asset, while maintaining it as her residence.  In Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 717, the Tribunal considered that it was inequitable to claim financial hardship when the claimant owns a valuable asset.  I accept that she may be distressed at seeing her equity in the house diminish but the house is, in my view, appropriately considered a ‘valuable asset’.

51.      I accept that Mrs Purches may be having problems paying her bills and has, in the past, sought charitable assistance.  It is not enough, however, for Mrs Purches to show that she is under financial pressure: see, for example, Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 at 699-700; see also Secretary, Department of Social Security v Ellis (1997) 24 AAR 535 at 539-540 per Carr J. The circumstances must make the burden unusual or extreme.

52.      While she may suffer some hardship it is not, in my view, severe hardship.  In Re Martin and Secretary, Department of Social Security (AAT 6482, 14 November 1990) SM McGirr said at paragraph 11:

“When the hardship to be caused does not amount to severe hardship, it is not sufficient to establish “special circumstances”.”

53.      In my view the evidence does not support a contention that there is something unusual in Mrs Purches’ circumstances that would set her case apart from other single aged pensioners.  Her current financial position does not, in my view, amount to one which is ‘severe’.  In fact her position is far better than that of many age pensioners.

54.      The advocate for the Respondent did not dispute Mrs Purches’ ill health as a consequence of her thyroid condition.  I accept that she requires some ongoing medical monitoring and treatment, not all of which will be covered by Medicare or her health insurance.  I also note her contentions in respect of her neck, back, her newly diagnosed Jupitrons’ syndrome and her ‘post traumatic stress disorder’.  However, there is little indication that those conditions, per se, would require substantial ongoing costs. 

55.      There are a number of cases in which health issues were found not to constitute special circumstances: Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797, Re Colaiacolo and Secretary, Department of Social Security (AAT N84/439, 24 April 1985).

56.      I accept that her overall health may be deteriorating.  However, at this time, I do not regard her conditions to be so debilitating as to distinguish her from other women of her age, such as to amount to circumstances which are special.

57.      Having reviewed the authorities I find that Mrs Purches’ ill health is not sufficient to amount to special circumstances.

58. Even if I were to consider all aspects of Mrs Purches circumstances together, I do not consider that they are sufficiently special so as to warrant the exercise of the discretion in s1237AAD.

DECISION

59.      The decision under review is affirmed.

I certify that the 59 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed:         A. Krilis
  Associate

Date of Decision  24 March 2005
Advocate for the Respondent   Mr Gary Richardson