QX03/2 and Secretary, Department of Family and Community Services
[2003] AATA 144
•14 February 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 144
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2001/554
GENERAL ADMINISTRATIVE DIVISION )
Re QX03/2 Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr EK Christie, Member Date14 February 2003
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and in substitution therefor determines that the debt due to the Commonwealth be written off with a direction that proceedings for the recovery of the debt be deferred for a period of twelve (12) months, or for such time as necessary, for the applicant’s psychiatric condition to be fully diagnosed, treated and stabilised. (Sgd) EK Christie
Member
CATCHWORDS
SOCIAL SECURITY – newstart allowance – whether marriage-like relationship – whether debt due to the Commonwealth should be waived – whether administrative error – whether special circumstances – whether debt due to the Commonwealth should be written off – relevance of non-financial matters for write off.
Social Security Act 1991 ss 1236, 1237A, 1237AAD
Secretary, Department of Social Security v Danielson (1997) 44 ALD 21
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re L and Secretary, Department of Social Security (1995) 21 AAR 412
Secretary, Department of Social Security v Hodgson (1992) 108 ALR 322
Department of Social Security v Hales (1983) 47 ALR 281
Lee v Secretary, Department of Social Security (1996) 139 ALR 57REASONS FOR DECISION
14 February 2003 Dr EK Christie, Member 1. This is an application to review a decision made by the Social Security Appeals Tribunal (“the SSAT”), on 1 June 2001, to raise and to recover an overpayment of newstart allowance of $21,161.17 paid to the applicant over the period 8 September 1997 to 28 October 2000.
2. At the hearing the applicant represented himself. Mr Paul Kanowski, a Departmental Advocate, represented the Department of Family and Community Services (“the Department”).
3. 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 1A (Folios 1 – 186), Exhibit 1B (Folios 187-329)], and the following documents:
§Exhibit 2 Supplementary “T” Documents
§Exhibit 3 Centrelink File of the applicant’s partner
§Exhibit 4 Fortnightly Centrelink Forms submitted by the applicant – 12 September to 24 October 2000
§Exhibit 5 Listing of the applicant’s partner’s wages – 12 October 1997 to 24 October 2002
§Exhibit 6 Statement of the applicant’s partner – 23 November 2000
4. At the end of the hearing the Tribunal exerted its inquisitorial powers to resolve the following issues, given their implications for ensuring that the best informed decision could be made by the Tribunal:
(a)A statement from the applicant’s treating psychiatrist (Dr M Foxcroft) primarily related to the applicant’s medical condition and his capacity to make rational decisions to manage his financial and personal affairs; and
(b)Further documentation from Centrelink in relation to departmental advice letters sent to the applicant over the relevant period.
5. Dr Foxcroft, the psychiatrist who treated the applicant for a short period, could not provide a response to the request of the Tribunal because he had last seen the applicant on 4 August 1999 and could not provide an objective response to the questions the Tribunal had asked [see paragraph 4(a)]. Centrelink documentation, on departmental advice matters and medical issues, was received on 3 July 2002, 6 August 2002, 13 and 18 November 2002 and 10 December 2002.
6. Following Dr Foxcroft’s response, the Tribunal summonsed medical documents Dr Foxcroft held in relation to his consultation with the applicant. These documents were received by the Tribunal on 20 November 2002. Centrelink’s response to these documents were received by the Tribunal on 2 January 2003.
Facts
7. The general facts were as follows:
§The applicant’s partner received newstart allowance over the period 8 September 1997 to 24 October 2000, except for a four month break in 1998.
§As a recipient of newstart allowance, the applicant was required to lodge fortnightly forms which stated the gross amount of earnings for himself and his partner.
§Following a data match in September 2000, Centrelink became aware that the correct amount of social security entitlements may not have been paid to the applicant.
§The data match revealed there may have been an error in the amount of earnings stated on the fortnightly forms completed by the applicant.
Issues to be decided
8. The Tribunal considered it prudent to consider as a preliminary issue whether the applicant was in a marriage-like relationship with his partner over the period of the overpayments. The SSAT concluded that on the evidence before it, it was “reasonably satisfied that Amanda was the applicant’s partner throughout the relevant period” (T2 Folio 7). This issue affected the rate of social security entitlements for the applicant.
9. The primary question for the Tribunal to decide was whether the overpayments of newstart allowance received by the applicant could be waived, in part or in full, under either the “administrative error” or “special circumstances” provisions of the Social Security Act 1991 (“the Act”) or whether the overpayments could be written off.
Whether the Applicant was a Member of a Couple
10. Section 4(3) of the Act sets out five criteria which must be considered in order to form an opinion whether the applicant was in a marriage-like relationship with his partner over the period the overpayments of newstart allowance were made to him.
“Member of a couple – criteria for forming opinion about relationship
4(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)any legal obligations owed by one person in respect of the other person; and
(iv)the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to each other; and
(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other, including:
(i) the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage-like relationship.”
11. The Tribunal has carefully considered the oral evidence of the applicant and his partner given at the hearing against each of the above criteria. Statements made by each of them, as part of their evidence, is linked to the above criteria as follows:
(a) Financial Aspects of the Relationship
Both the applicant and his partner shared in the purchase of a motor vehicle. They held a joint bank account. The applicant’s partner has listed him as one of two dependants in relation to her superannuation.
(b) Nature of the Household
The applicant and his partner share household tasks and expenses. In terms of household contents, some items are owned and used independently, whereas other items are shared.
(c) Social Aspects of the Relationship
The applicant’s family accepted that they were in a relationship. His partner stated that she did not socialise with the applicant’s friends as she did not approve of them, and described their personal life “as different people having different interests but [who] remained together for each other”. Whilst the applicant’s partner acknowledged that, in completing social security forms, she had ticked off that their relationship was "de facto", she stated that she was “not in a position to know the status of the relationship [terminology] and so was not in a position to challenge the description”.
(d) Sexual Relationship
This issue was not in dispute. A sexual relationship existed.
(e) Nature of Commitment to One Another
The applicant provided emotional support to his partner following major surgery in 2000. Their relationship had continued over the period of overpayments notwithstanding they had to weather difficult passages in life over this time.
12. Based on all this evidence and the requirements for a “marriage-like relationship” specified by the Act, the Tribunal can make no conclusion other than to find that the applicant was a member of a couple for the purposes of the Act.
Whether Debt to the Commonwealth Should be Waived in Part or in Full
13. The relevant sections of the Act that must be satisfied in order for a debt due to the Commonwealth to be waived, in part or in full, under the “administrative error” and “special circumstances” provisions are as follows:
“SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
(1) Administrative error. 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.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
…
SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
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.”
14. Section 1236 of the Act provides for the Secretary to write off a debt:
“(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.”
Oral Evidence of the Applicant
15. The applicant stated that he attended the Stones Corner Centrelink office when completing his initial application for newstart allowance. He said that he was unsure how to complete the form (T11) as he did not know the dates his partner worked or how much she had earned. Following Centrelink advice, he had simply put in a figure of $509 as this was the amount his partner had earned when she worked casually. He said that he relied on Centrelink advice at this time which did not require him to verify this figure. He had also acted on Centrelink advice to insert “whole period” as he was unaware of the actual dates his partner had worked.
16. With respect to his employment with “Captain Snooze”, the applicant said that he had been paid, irregularly, in cash and had never received a payslip. He said that he had tolerated these conditions because he believed his employer’s promise that he would get a full-time job with this company. Eventually, he was placed on the books as an employee of “Captain Snooze”. “Captain Snooze” had then declared his past income earnings to Centrelink.
17. The applicant acknowledged during cross-examination that some fortnightly forms that he had sent to Centrelink had not disclosed the actual cash payments he had received from “Captain Snooze”.
18. When asked during cross-examination about fortnightly forms he had completed (T13-T16) in which he had stated his partner’s earnings varied from $450-$509 per fortnight, the applicant conceded that he assumed the source of these figures was “probably pulled out of his head”.. When questioned whether he had actually asked his partner what her earnings were, he said that he had not been given a figure on every occasion he queried this point with her. During further cross-examination, the applicant conceded that he was not always in a position when completing the fortnightly forms to declare whether his partner’s earnings were correct and acknowledged that at some times he may not have correctly declared the income of his partner.
19. During cross-examination the applicant was taken to fortnightly forms he had completed on 16 March 1999 (T18), 28 March 2000 (T36) and 11 April 2000 (T39) in which he had stated his partner’s earnings were $510 on each occasion. Over this time period his partner had worked full-time. The applicant was then referred to Exhibit 5 in which his partner’s earnings for each of these periods were shown as $789.04, $1,342.49 and $1,223.82.
20. The applicant responded, saying that, in these circumstances, he had asked his partner a number of times what her income was before completing his fortnightly forms. However, he was unsure as to the number of times he had raised this query with her and estimated it to be about 25% of the time.
Evidence of the Applicant’s Partner
21. The applicant’s partner acknowledged that her income changed from around $415 per fortnight in October 1997 to $1,155 per fortnight in October 2000. Her employment status changed from casual to full-time by late 1998 / early 1999.
22. She agreed with Mr Kanowski’s question that the applicant would have been aware of her increase in wages and hours worked as she moved from casual to full-time work over time. She stated that she would have told the applicant about the extra hours she was working but stated that he may not have sought any information on the actual hours involved.
23. She concluded by saying that social security payments to the applicant ceased in October 2000. The applicant was now finding sporadic employment opportunities but had no stability in his work prospects.
Contentions and Submissions of the Parties
24. Mr Kanowski submitted that the overpayments could not be waived under the “administrative error” provisions of the Social Security Act because the primary cause of overpayment was the incorrect estimate by the applicant of his partner’s income. He submitted that the applicant had contributed to the administrative error that led to the overpayment of newstart allowance.
25. It was Mr Kanowski’s contention that the overpayment could not be waived under the “special circumstances” provisions of the Act because of the knowing failure of the applicant to list income earned from “Captain Snooze” as well as a failure to state the correct income earned by his partner. Mr Kanowski submitted that the applicant had “knowingly” contravened a provision of the Act because of his failure to check with his partner the income she had earned. As a result, “guesses” largely formed the basis for the amounts he had inserted on the fortnightly forms.
26. Mr Kanowski further submitted that the applicant would have been aware, at the time, when his partner’s income had increased, that is, when she changed from casual to full-time work, yet this change in income was not reflected in the fortnightly forms he had completed. Further, Mr Kanowski contended that the “complete failure on the applicant’s part” to confirm his partner’s earnings before completing the fortnightly forms resulted in the applicant “knowingly contravening” a provision of the Act.
27. Mr Kanowski submitted that the applicant’s actions, in completing fortnightly forms, were also reckless and so represented a further dimension for finding that he had “knowingly contravened” a provision of the Act.
28. Mr Kanowski submitted that there was nothing “unusual”, “uncommon” or “exceptional” in the facts of this application for review that warranted the description of “special circumstances”.
29. Mr Kanowski’s concluding submission was that the applicant was a young man who was motivated to find work and it was not appropriate to write-off the debt.
30. The applicant submitted that a “lack of communication” between himself and his partner had led to the problems of overpayment - because of the uncertainty he had with respect to information on the income and hours she had worked.
31. The applicant stated that, in this situation, he had relied on Centrelink advice when completing entitlement forms from the outset (see paragraph 15) and had continued on the same basis when completing fortnightly forms. It was his belief, based on his knowledge of “data matching” that any error in payments would be “picked up”.. It was also his belief that the data matching programme would pick up payment errors much earlier than was the case in his circumstances. He concluded that if this were the case, the overpayments would not have been as large as they were.
Supplementary Evidence and Submissions
32. The “trigger” for the Tribunal to exert its inquisitorial powers was a statement by the applicant’s Client Manager, Mission Employment [Community Support Programme] (1 September 1999, Exhibit 1). Neither party had raised this issue at the hearing and, following Tribunal questions, the applicant’s medical problem was confirmed. The following comment contained in the statement was the basis for further information sought by the Tribunal:
“[the applicant] was assessed…and referred to Coorparoo Mental Health Service for a further evaluation. He was then referred to Dr Malcolm Foxcroft… [The applicant] presents with interesting personality characteristics, and occasionally referred to himself in the third person. He was very talkative, almost manic… He stated that he was having a fairly good day and often referred to ‘episodes’ but I was unable to ascertain the nature of these.”
33. Following his consultation on 4 August 1999, Dr Foxcroft, the applicant’s treating psychiatrist, made the following observations of the applicant, in a report to the Coorparoo Mental Health Service:
“Thank you for referring this man whom I saw on 4.8.99. He presents with a history of depressed mood and anxiety symptoms which has been present since he had moved to Brisbane from Coffs Harbour. He describes having been contemplating suicide but he was afraid to leave his debts and the legacy of killing himself to his girlfriend and family. He had been with his girlfriend for nine years and had felt that his life was heading nowhere with few work options or other alternatives. He has a long history of depressive symptoms, having had suicide attempts in Grades 7 and 8 by taking medication overdoses.
…
At the time of presentation he described symptoms of poor sleep, early morning wakening, low energy levels, poor concentration and some suicidal ideation. He had significant symptoms of anxiety related to his depression. I felt he was suffering from a major depressive disorder, possibly secondary to his poly-substance abuse and unemployment. I prescribed his Aurorix 300 mgs b.d. and I have asked him to return for regular review. When he was reviewed again on 9.8.99 he reported some improvement in his mood and some relief at having discussed his problems and shared them with someone else. I have asked him to continue the Aurorix 300 mgs b.d. and I have offered him regular review and follow up to provide him with ongoing support. Thanks once again for referring this patient. I shall keep you informed of our progress.”
34. Centrelink records (provided to the Tribunal on 13 November 2002) confirmed that the agency had identified the applicant as having special needs for psychology assessment as well as his being classified as “High Impact” in relation to a “Secondary Classification, Personal Factors”.
35. In a statement prepared by the applicant’s former Client Manager for his CSP Provider, reference was made to her observations of the applicant over a twelve to eighteen month period. Specifically, that he was in an “emotionally turbulent relationship”, that he “had problems with anxiety and depressions” and that he was a person “overwhelmed by his situation in life”: see Mission Australia letter, 14 November 2002.
36. In his supplementary submission to Dr Foxcroft’s medical report, Mr Kanowski acknowledged the applicant’s symptoms of “depression and anxiety” and his lack of motivation. However, in response to the issue as to whether the applicant was capable of managing his affairs during the debt period, Mr Kanowski contended that the medical information did not support any conclusion that the applicant was so incapable. He further contended that the applicant was required to lodge application for payment forms at a customer service centre fortnightly in order to be paid newstart allowance and that he had managed to organise himself to do this. Mr Kanowski further contended that there was no reason to suppose that he was incapable of organising himself to provide accurate information on the forms about his partner’s earnings.
37. The applicant made no supplementary submission in relation to the further documentation provided to the Tribunal.
Consideration of the Issues
38. The objective of the Tribunal is to review administrative decisions not only on their merits but in accordance with the law at all times. The relevant legislation is the Social Security Act 1991(“the Act”).
39. With respect to the length of the overpayment period, the Tribunal concludes that the period from 8 September 1997 to 28 October 2000 is the relevant overpayment period, because:
(a)at the time the applicant completed the Registration as a Jobseeker application form on 8 July 1997, the form made him aware of the requirement to advise Centrelink of his income and his partner’s income;
(b)the grant letter sent to the applicant on 25 August 1997 notified him that he would receive the maximum amount of newstart allowance and that it was calculated on his declared income of less than $1 per fortnight; and
(c)the grant letter sent to the applicant on 8 December 1997 notified him of the need to inform Centrelink of the correct amount of income earned by his partner. This notification requirement was repeated on the lodgement forms completed by the applicant over the period 10 November 1998 to 30 August 2000 (T11-T30; T36-T49).
40. The fortnightly forms lodged by the applicant, that declared the amount of his partner’s earnings over the period 1997 to the first half of 1998, are no longer held by the respondent. However, the Tribunal concludes, that in the absence of such forms, an inference[1] can be drawn from computer printout statements [the “Earned Income Details” screens] that record the income amount declared by the applicant on the fortnightly forms that he had completed (see T48 Folio 181 Application for Payment of NSA and T56 Folio 244 Earned Income Details, Ipswich Details). The fortnightly amount of the applicant’s partner’s earnings that were declared are recorded and appear on the computer printout statement as “Earned Income Details”.
[1] See Secretary, Department of Social Security v Danielson (1997) 44 ALD 21 as to the Federal Court’s reasoning in this regard.
41. The Tribunal next considers the question of waiver of the overpayments under the “administrative error” provisions of the Act (section 1237A(1)). The Tribunal can make no other finding, based on the applicant's oral evidence (paragraphs 17-19) and his partner’s oral evidence (paragraphs 22-23) other than to conclude that the applicant has contributed to the administrative error that led to the overpayments of newstart allowance. Consequently, the overpayment cannot be waived for “administrative error”.
42. The next question for the Tribunal to consider is whether the debt can be waived under the section 1237AAD provisions of the Act. This question requires consideration of the meaning to be given to the terms “knowingly” and “special circumstances” in other decisions made by the Tribunal.
43. 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 (at 445):
“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 or 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.”
44. The Tribunal must also consider 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 been 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 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.” [Emphasis added]
45. In the absence of any objective medical or other expert evidence as to the applicant’s medical condition in relation to his capacity to make rational decisions to manage his financial and personal affairs, the Tribunal can make no other conclusion, according to the civil standard of proof, but to find that the applicant knowingly failed or omitted to comply with a provision of the Social Security Act. The Tribunal makes this finding because:
(a)The applicant’s failure to check with his partner the income that she had earned, as well as his oral evidence that the source of his earnings he had provided to Centrelink may have been “probably pulled out of his head” (paragraph 18); and
(b)The applicant’s evidence that he had not always disclosed to Centrelink the actual cash payments that he had received from Captain Snooze.
46. Furthermore, based on all the evidence and information before the Tribunal and the Tribunal’s findings of fact, the Tribunal can find no basis to establish that there are circumstances about this application that justify the description of “special circumstances” in that they are neither “unusual”, “uncommon” or “exceptional”. Consequently, the overpayment cannot be waived because of “special circumstances”.
47. Finally, the Tribunal considers the write-off provisions of the Act and their application to the facts of this application for review. In contrast with waiver, the writing off of a debt does not extinguish it. The debt remains enforceable, but a decision is made not to pursue it, either indefinitely or for a short period. In either case, the decision can be reversed and enforcement proceedings commenced at any time in response to any change in the circumstances which led to the decision in the first place. With write-off, the Secretary retains the right to commence recovery proceedings at a later date if there is an improvement in the individual’s financial circumstances [see comments of Matthews J in Re L and Secretary, Department of Social Security (1995) 21 AR 412].
48. In Secretary, Department of Social Security v Hodgson (1992) 108 ALR 322, Hill J stated:
“I can see no difficulty in the Tribunal varying the decision of the Secretary to recover the relevant portion of the debt by including a direction that the Secretary defer proceedings for recovery for a nominated period. Such a course would seem to be authorised by subsection 32(1) of the Administrative Appeals Tribunal Act 1975.”
49. In her consideration of the “Hales Factors” [Department of Social Security v Hales (1983) 47 ALR 281] and write-off in L’s case, Mathews J commented (at 428):
“In summary, I consider that matters relating to the personal financial hardship of the individual are always relevant in any decision as to write-off under s 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned. Will recovery cause such personal hardship as to run contrary to the beneficial nature of this legislation? If an affirmative answer is reached to this question, then it would be appropriate to defer recovery in the manner contemplated by s 1236(1).”
50. The Tribunal has carefully considered all of the information and evidence before the Tribunal in relation to the section 1236 “write-off” provisions of the Act as well as the relevant common law interpretations for the application of the “write-off” provisions of the Act.
51. The Tribunal concludes that it is not in dispute that the applicant has a psychiatric condition that remains to be fully diagnosed and treated. Moreover, the Tribunal finds that the applicant’s life is one affected by emotional turbulence, anxiety and depression. Moreover, the applicant’s life has involved past attempts on his life and some “suicidal ideation” remains.
52. Furthermore, the Tribunal accepts the evidence of the applicant’s partner as evidence of truth. Specifically, that the applicant has no stability in his work prospects and could only find sporadic employment.
53. In the Full Federal Court decision of Lee v Secretary, Department of Social Security (1996) 139 ALR 57, Davies J considered the Tribunal’s approach to write-off where psychiatric circumstances existed, noting that it was appropriate to consider non-financial factors (at 67-68):
“It would be wrong for a decision-maker deliberately to circumvent, by making a decision to write off, the restrictions which the legislature has imposed on the power to waive. Yet there is a distinction between the waiver and the write off powers of which the Tribunal was clearly aware. In my opinion, the Tribunal gave attention to appropriate considerations, considerations which were relevant to the administration of the Act. The Tribunal directed that one-half of the debt should be written off having regard to Ms Lee’s psychiatric problems and to the need to reduce the financial pressures which would otherwise exacerbate those psychological problems. A write off is not restricted to cases where the debtor cannot be found or has no funds from which recovery can be made. The write off of debts by commercial enterprises is a very common thing and there is no limit to the range of matters which may be taken into account in the making of a particular write off. If circumstances change, of course, the debt may be recovered. In my opinion, the decision was one at which a reasonable decision-maker could have arrived, though one would not be surprised if officers of the Department preferred, in other cases, to follow the policy inherent in the amendments made to s 1237 rather than her Honour’s guide.”
54. Against these findings of fact, the Tribunal has considered the application of the “Hales Factors” and the reasoning in Lee’s case in relation to the potential impacts on the applicant if an immediate recovery were sought for the substantial amount of overpayment ($21,161.17) – given the uncertainty of the applicant’s existing psychiatric state and the consequential impact upon him as well as his employment prospects.
55. The Tribunal concludes that “Hales Factor (g)”:
“compassionate considerations and the fact that the Act is social welfare legislation and any financial hardship which may result from an action for recovery:
has application in this case as it is consistent with the reasoning adopted by Mathews J in L’s case and Davies J in Lee’s case.
56. Accordingly, the Tribunal concludes that proceedings to recover the overpayment should be considered by incorporating the totality of the applicant’s situation, that is his psychiatric state and his financial circumstances. The Tribunal concludes that the debt due to the Commonwealth should be written-off with a direction that the proceedings for the recovery of the debt be deferred for a period of twelve months, or for such time as necessary, for the applicant’s psychiatric condition to be fully diagnosed, treated and stabilised. Following such time, any proceedings to recover the write-off should be founded on a Statement of Financial Circumstances prepared by the applicant, together with regular (annual) assessment of his psychiatric condition and financial circumstances over the debt recovery period – with the incorporation of any appropriate revisionary actions as needed. Such an approach is considered prudent given the amount of overpayment and the projected time to recover the debt.
57. For all of the above reasons the Tribunal finds that there is no basis for waiving the overpayment of $21,161.17 paid to the applicant over the period 8 September 1997 to 28 October 2000 under the “administrative error” or “special circumstances” provisions of the Act. It remains a debt to be recovered by the Commonwealth.
58. However, the Tribunal finds that the debt should be “written-off” for a specified period to ensure that the applicant’s psychiatric state is fully diagnosed, treated and stabilised before any recovery of the debt proceeds.
59. The Tribunal decides that the decision under review be set aside and in substitution therefor determines that the debt due to the Commonwealth be written-off. The Tribunal further directs that proceedings for the recovery of the debt be deferred for a period of twelve months, or for such time as necessary, for the applicant’s psychiatric condition to be fully diagnosed, treated and stabilised.
I certify that the 59 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed: .......................................................................................
AssociateDate of Hearing 21 June 2002
Date of Decision 14 February 2003The applicant appeared in person
Solicitor for the Respondent Mr P Kanowski, Departmental Advocate
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