QX06/18 and Secretary, Department of Employment and Workplace Relations

[2006] AATA 1060

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1060

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No D2005/32

GENERAL ADMINISTRATIVE DIVISION		)
Re		QX06/18

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date8 December 2006  

PlaceBrisbane (Heard in Darwin)

Decision The Tribunal varies the decision under review to the extent of waiving repayment of $2148.68 but otherwise affirms the decision to recover the debt of $340.34.

.................Signed...............

Deputy President

CATCHWORDS

SOCIAL SECURITY – disability support pension – overpayment – failure to declare income – administrative error – no special circumstances – Tribunal varies the decision under review

Social Security Act 1991 (Cth) ss 1237A, 1237AAD

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186

Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484

Groth v Secretary, Department of Social Security (1996) 40 ALD 541

REASONS FOR DECISION

8 December 2006     Deputy President P E Hack SC       

Introduction

1.The applicant was paid disability support pension during the period 3 December 2003 to 10 August 2004. Centrelink contends that in that period, and taking in to account his earnings from casual employment, he was paid amounts in excess of the amount to which he was entitled.

2.Centrelink made a decision to raise and recover from the applicant a debt based on that overpayment. That decision was affirmed on internal review and by the Social Security Appeals Tribunal.

3.The applicant now seeks a review in this Tribunal.

Background

4.It is important to have some regard to the applicant’s disability. The applicant was born in 1977. During his early childhood he had severe epilepsy. At the age of 11 years a right temporal lobectomy was performed on him. The procedure was a success from a surgical standpoint but, according to the report of the consultant neurologist, he is left with a fixed neuro-psychological deficit which does impair particularly his non-verbal abilities.

5.These passages from a December 1996 report of a psychologist illustrate the difficulties he has with non-verbal abilities:

[His] weakest performance was on a test of sequential thinking, including the ability to see relationships between events, establish priorities and order activities chronologically.

…

[He] has a significant visual memory problem. This means that information that is presented in the form of diagrams, drawings, maps or networks is not easily remembered by [him]. His memory for words or stories is at an average level although he does appear to become overloaded by too much information. [His] concentration is at an average level, and once he learns information he retains it well.

…

Extensive testing of this well presented young man has revealed a visual memory deficit and some obsessiveness of thought which may be interpreted as a “difficult” or “unpleasant” personality. Of these two findings, the latter will be a more significant occupational barrier.

6.The “obsessiveness of thought” and the “difficult and “unpleasant” aspects of the applicant’s personality were certainly evident during the hearing, while he was giving evidence and when submissions were being made by his representative and the respondent’s representative. I have no difficulties in seeing that the applicant would present to Centrelink officers as a “difficult” person to deal with and one who may, because of his innate difficulties and because of the likely reactions to his manner, have difficulty in communicating his message to Centrelink staff.

7.These matters have a particular significance in this case.

8.As a recipient of disability support pension the applicant was obliged to report any earnings to Centrelink on a regular basis and he was, at all times, aware of that obligation.

9.The difficulties in the present case arise from four periods of casual employment as follows:

·     Mirambeena Resort – 6 December 2003 to 8 March 2004;

·     Tim’s Surf and Turf – 23 March 2004 to 5 April 2004;

·     Yots Café – 12 May 2004 to 20 July 2004;

·     Buzz Café – 2 August 2004 to 9 August 2004.

10.The material before me suggests that the applicant reported about half of the income received from his employment with Mirambeena Resort, effectively all of his income from Tim’s Surf and Turf and none of his income thereafter.

11.When giving his evidence the applicant was minded to accept that he may have missed reporting his Mirambeena income on occasions and I am satisfied that the material before me records the extent to which he disclosed that income.

12.The picture from April 2004 onwards is somewhat different. The applicant says that, having obtained what seemed at the time to be good casual employment with Yots, he informed Centrelink of that fact, that he no longer required payment of disability support pension and that he wanted nothing more to do with Centrelink. I have no doubt that he expressed himself more brutally than that; indeed, my observations of him and his manner of speaking suggest that in all probability he was downright rude. But I do accept that he did convey that message.

13.I reach that view essentially because I am satisfied that the applicant’s evidence on the point ought to be accepted. There is however, some, support for the applicant’s account from the documents.

14.The record of his contacts with Centrelink shows frequent contact with Centrelink, on some occasions more than once a day, up until 28 April 2004. From that date there is no contact until 16 August 2004. The first of these dates is just prior to his commencing with Yots, the latter is just after he ceased work with Buzz Café. That pattern seems to me to be consistent with the applicant’s evidence that having obtained the employment with Yots Café he told Centrelink, amongst other things, that he wanted nothing more to do with Centrelink. Similarly there is support for the applicant’s account from the fact that no reports of income were made at all during this period. That is in stark contrast to the earlier period when the applicant reported his earnings frequently, albeit irregularly.

15.These matters lead me to conclude that the applicant did inform Centrelink in late April 2004, in terms, that he wanted his disability support payments to cease but that no record was made of this information and it was not acted upon.

16.Thereafter the applicant continued to receive gross payment of disability support pension in the order of $488 per fortnight. He says that he was not aware that he was continuing to receive these payments because he was working long (and chaotic) hours and lacked the time to check this sort of detail. Additionally he says that during this period he was so badly in debt to his bank for credit card debt that when payments were made to his bank account they were automatically swept out to repay his overdue credit card debts. I should say that the applicant did not strike me as a person who would keep a close account of his financial transactions.

17.The possibility of the applicant receiving disability support pension while working came to light through data matching. On 24 January 2005 Centrelink, having investigated the matter, raised a debt of $2436.05 on the basis that the applicant had received payments in that amount to which he was not entitled.

18.The debt was re-calculated as $2489.02 by the authorised review officer but otherwise affirmed on 10 June 2005. On 136 October 2005 the Social Security Appeals Tribunal affirmed the decision.

The Issues

19.Ms Davies, who appeared for the applicant, was initially minded to put in issue the calculation of the debt but, when pressed for particulars, limited the applicant’s challenge to one of submitting that there was a degree of unfairness to the applicant in looking at the overpayments collectively. That was so, it was said, because, in many fortnights, the overpayment was a small amount that ordinarily Centrelink could waive on the basis that it was too small to warrant recovery action.

20.I am unable to accept that argument. It is contrary to the statute which creates a single debt where there has been an overpayment.

21.The applicant’s more substantial case was that the debt ought be waived under either s 1237A or s 1237AAD of the Social Security Act 1991 (Cth) (the Act).

The former, in sub-section (1), provides as follows:

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.

Thus, the issues that arise are

·     was the debt (or part of it) attributable solely to an administrative error made by the Commonwealth; and,

·     were payments received in good faith.

22. Section 1237AAD provides:

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.           

Mr McQuinlan, who appeared for the Secretary, accepted that the overpayment did not result from a knowing failure on the part of the applicant, that is, that the element in paragraph (a) was satisfied. The live issue is whether there are any special circumstances.

Administrative Error

23.It is, in my view, necessary to distinguish between that part of the debt that arises before the applicant’s employment with Yots (a period that I shall describe as the first part of the debt) from that that arises on and after that employment (the second part of the debt).

24.The first part of the debt was not attributable at all to administrative error; it was due to the applicant’s failure to declare all of his earnings. I am not satisfied that the applicant reported all of his earning during the period of the first part of the debt. As a result s 1237A can have no operation in relation to the first part of the debt.

25.The position is different in relation to the second part of the debt. If, as I find, the applicant informed Centrelink that he was working and did not want payment of disability support, the payments thereafter (which amounted to overpayments) were due to Centrelink’s failure to give effect to this notification. In my opinion the debts that arose from the period ending 18 May 2004, an amount that I calculated to total $2148.68, were due solely to administrative error on the part of the Commonwealth, viz., the failure of Centrelink to give effect to the applicant’s notification.

Good Faith

26.The meaning of receipt in good faith in this context has been considered in two cases relied upon by the respondent. In Secretary, Department of Education, Employment, Training and Youth Affairs v Prince[1] Finn J said of an equivalent provision:

For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received - i.e. is not entitled to use the money received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.

[1] (1997) 50 ALD 186 at p 189.

27.Subsequently in Jazazievska v Secretary, Department of Family and Community Services[2] Cooper J said:

A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists.

[2] [2000] FCA 1484 at [41]

28.The applicant has a demonstrated deficit in sequential thinking, including the ability to see relationships between events, establish priorities and order his activities chronologically. During the period of his employment of Yots he was working long hours, in itself, an unfamiliar talk to him. His finances were chaotic. That was of his own making, but he had, through a combination of circumstances, no real idea of what was coming in and going out of his bank account. In circumstances where he had neither the time nor the need to keep a close watch on his bank account I conclude that he did not know, at the time of receipt, and he had no reason to know, that he was still being paid disability support pension.

29.But his lack of knowledge, in his circumstances, does not amount to the turning of a blind eye. In his work setting, and coupled with his cognitive difficulties, and his chaotic finances, he did not turn an eye at all, blind or sighted. 

30.It follows that in my view the applicant is entitled to succeed in relation to the second part of the debt and that the amount of $2148.68 ought be waived pursuant to s 1237A.

Special Circumstances

31.The expression “special circumstances” is not apt to be defined with any degree of precision. In Groth v Secretary, Department of Social Security[3] Kiefel J spoke of the requirement of circumstances that distinguish the particular case from others.

[3] (1996) 40 ALD 541 at p 545

32.What was relied upon here was the financial hardship that the applicant would suffer if required to repay the debt and his medical condition.

33.I do not consider those matters, or the applicant’s circumstances generally, warrant a description of special circumstances.

34.There is nothing unusual about financial hardship. Cases in this Tribunal where s 1237AAD is called in aid almost invariably have an element of financial hardship to them. And, by definition, any overpayment of disability support pension will involve an applicant with a significant and permanent impairment.

35.I am not satisfied that debt ought be waived pursuant to s 1237 AAD.

Conclusion

36.In the result I would vary the decision under review to the extent of waiving repayment of $2148.68 but otherwise affirm the decision to recover the debt $340.34.

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         ................Signed...................................................
  Leisa Pendle, Associate

Date of Hearing  21 November 2006
Date of Decision  8 December 2006          
Solicitor for the Applicant          Ms C Davies, Darwin Community Legal Services
Solicitor for the Respondent    Mr R McQuinlan, Centrelink Legal Services