QX99E and Secretary, Department of Family and Community Services

[2000] AATA 163

DECISION AND REASONS FOR DECISION [2000] AATA 163

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No     Q1999/552

GENERAL ADMINISTRATIVE DIVISION          )          

Re      QX99E          

Applicant

And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        

Respondent

DECISION

Tribunal       Dr EK Christie, Member     

Date3 March 2000

PlaceBrisbane

Decision      The Tribunal sets aside the decision under review and in substitution therefor decides: to waive part of the debt – that is, the debt accrued over the period 9 March 1996 to 13 February 1997; in accordance with subsection 1237(2) of the Social Security Act 1991, the waiver is to be effective for the period 9 March 1996 to 13 February 1997; and the debt accrued over the period 14 February 1997 to 26 August 1997 remains a debt due to the Commonwealth which is to be recovered.    

(Sgd)  EK Christie 
  MEMBER
CATCHWORDS
SOCIAL SECURITY - rent assistance - overpayment - whether debt can be waived in part, or in full, for "administrative error" or "special circumstances".

Social Security Act 1991 ss 1237A, 1237AAD, 1237(2)
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435

REASONS FOR DECISION

3 March 2000           Dr EK Christie, Member                 

1. This is an application to review a decision of the Social Security Appeals Tribunal ("the SSAT") made on 25 March 1999 to recover from the applicant a rent assistance overpayment of $2,952.40 paid between 9 March 1996 and 28 August 1997. The SSAT decision affirmed the decision of an Authorised Review Officer of Centrelink, authorised under Section 1301 of the Social Security Act 1991 ("the Act"), made on 18 June 1998.

2. In reaching its decision, the SSAT concluded that the applicant was not eligible for rent assistance payment as she paid rent to Queensland Housing ("government rent").  The SSAT found no evidence of "administrative error" or "special circumstances" in order to waive the debt.

3. At the hearing the applicant represented herself.  The respondent was represented by Mr N Foster, a Departmental Advocate.

4. At the end of the hearing, the Tribunal sought written submissions from Mr Foster on how the application should be decided.  These submissions were received on 20 October 1999 and sent to the applicant for review.  In addition, a "Statement of Financial Circumstances" was sought from the applicant.  This Statement was received by Centrelink on 15 October 1999.  Response submissions of the applicant were received on 3 November 1999.
   Issues before the Tribunal

5. It was common ground that the overpayment had led to a legally recoverable debt.  The issue for the Tribunal to decide was whether the rental assistance overpayments could be waived in part, or in full, because of "administrative error" or "special circumstances".  If this were not the case, whether the debt could be written off.
   Facts

6. The general facts were not in dispute and may be stated briefly.  The applicant was severely injured in a motor vehicle accident in 1973.  She was in a coma for 3 weeks and remained in hospital for 2 ½ years.  Her husband left her after she regained consciousness.  One of the effects of the accident is that she had a permanent tracheostomy since 1973.  This has caused problems with breathing as well as significant speech impairments.

7. The applicant's general health is also limited by diabetes, angina and raised blood pressure (Document T15 Folio 58).

8. The applicant received a family allowance entitlement which included an amount of rent assistance over the period 9 May 1996 to 28 August 1997.

9. The applicant moved into accommodation owned by Queensland Housing on 26 April 1996 and commenced paying government rent.
   Evidence of the Applicant

10. The applicant said that on receiving an offer of accommodation from Queensland Housing Commission (QHC) she immediately went to Centrelink to obtain a statement of social security benefits.  She then gave this statement to QHC and then moved into her new flat.

11. The applicant believed that she had done everything to fulfil her social security obligations.  Centrelink had been notified of her change in accommodation and were aware of the organisation to whom she was paying rent.  During cross-examination she said whilst she was unsure whether QHC would tell Centrelink of her change of address, "as far as she was concerned, they would [advise of her address change] as they were all connected".

12. In terms of receiving Centrelink advice letters, the applicant said that these events occurred some time ago and thought it likely that she received this mail.  However, she only contacted Centrelink if they required an answer.

13. The applicant emphasised that Centrelink had made the mistake and found it difficult to understand why it had taken over 14 months to identify it.  The applicant referred to a conversation she had with a Centrelink officer named "Peter" at the Nundah office.  Peter had found the error on his computer, but had assured her that the overpayment was an error on Centrelink's part and that she would not have to repay it.  Peter had said to her that:

    "It is not your mistake.  Don't worry about it because when they make mistakes they just cancel it out."

14. The applicant stated that for some time Centrelink had been recovering the overpayment by deducting $10 per fortnight from her entitlements.  However, the amount recovered had now increased to $16.70 per fortnight.  At no stage had Centrelink informed the applicant that this increase was to be introduced.

15. During cross-examination, Mr Foster referred the applicant to a number of Centrelink advice letters which set out the applicant's obligations.  For example, the need to notify Centrelink of a change of address or if rent assistance was received (including the amount of rent paid).  In respect of the advice letter dated 9 October 1995, the applicant said that she was unsure whether she had received this letter but it was likely that she had.  She said that it was her tendency to read the front of these letters only – and not the back.

16. Mr Foster sought a response from the applicant in relation to the following 3 Centrelink advice letters, all sent to the same address:

• Document T8 – 13 February 1997

• Document T13 – 15 May 1997

• Document T18 – 31 July 1997

Mr Foster questioned the applicant at length as to why she had not adhered to her obligation as a social security recipient to notify Centrelink that these addresses on these notices were incorrect.  Had she done so, on at least one opportunity, the overpayment would have been identified and the problem would have ended.

1. It was at this stage that the applicant responded in relation to this issue and a Tribunal request on the need to provide a detailed statement of her income and expenses.  The applicant said that her former husband was extremely violent and had chased her throughout Queensland and had tried to kill her.  Police in one provincial town had told her of the threats to her life.  As a result she lived in constant stress because of her ex-husband's threats.  Her grandchildren also lived in fear of her ex-husband.  To deal with the threats to her life she had reverted to her maiden name and moved frequently throughout the State staying in many provincial towns in order to avoid confrontation from her violent ex-husband.  In order to travel, and to live for short periods in different towns, she had borrowed extensively from friends.  As a result she was left owing a great deal of money to friends but with very little financial resources to repay the loan.  During all these movements, she had retained the address Centrelink had referred to - but had not lived continuously in this residence.

2. In response to a Tribunal question about the care and attention the applicant received during the time she went to Centrelink offices, given her speech impairment, the applicant said that she was treated like all Centrelink clients.  She would queue up, and on raising a query at the counter, she said that the staff could not wait to answer the question as quickly as possible.  She referred to one senior Centrelink staff officer who had been "exceptionally rude to her".  Over time, only one Centrelink staff officer had taken her speech impairment into account.
   Contentions and Submissions of the Parties

3. Mr Foster submitted that the debt could not be waived on the basis of administrative error because of the following reason:

• the failure of the applicant to advise the Department of her new address or rent details when she moved to Petrie;  the failure of the applicant to advise was an error which led to the overpayment.

1. Mr Foster contended that the evidence of the applicant indicated that she had lived at a number of different addresses.  Accordingly, Centrelink was entitled to expect that the applicant would advise of a new address – as well as changes in rent details.  Moreover, because the applicant had been a recipient of social security entitlements since the mid-1970s, it would be reasonable to expect that she was aware of her statutory duties to advise Centrelink of appropriate changes in these details.

2. However, there were three occasions where the applicant failed to advise Centrelink of changes in address and rent details which, in turn, led to her pension being suspended [30 January 1997 (Document T6), 12 May 1997 (Document T9) and 22 July 1997 (document T16)].  In each of these situations, mail had been returned from the Sandgate address.  Mr Foster contended that Centrelink's efforts to verify the applicant's accommodation circumstances were defeated by her unwillingness to provide the correct information.

3. Centrelink had used a variety of methods to verify the applicant's correct address including verbal requests, a request for a rent receipt and a visit by a field officer.

4. Mr Foster further submitted that the applicant did not receive the overpayment of rental assistance in good faith because she had reason to know that she was not entitled to receive rent assistance.  She had considerable experience with the Social Security system and it would be reasonable for the applicant to expect that she was not entitled to receive more rent assistance than the total rent paid over the same period.  Moreover, Mr Foster submitted that the applicant had reason to know that she was still being paid rent assistance after moving to Petrie because of the following Centrelink notification notices sent to her.

• 8 September 1996 (Document T5 Folio 41)

• 13 February 1997 (Document T8 Folio 46)

• 15 May 1997 (Document T13 Folio 53)

• 31 July 1997 (Document T18 Folio 64)

24.Mr Foster contended that these notification notices should have made the applicant aware Centrelink was basing its payments on incorrect information provided by the applicant.  Accordingly, he further contended that the applicant should have been aware that she was not eligible for rent assistance payments so that her continued receipt of such payments could not have been "in good faith".

1. Mr Foster submitted that the applicant's debt should not be waived, in part or in full, under the special circumstances provision of the Act because of a number of reasons.

2. Firstly, Mr Foster contended that the applicant had knowingly omitted to comply with the Act. The applicant had received notification notices requiring her to advise of any change in address; the applicant's evidence "acknowledged that she would have received such notices and that she would have read them".  Accordingly, by her failure to advise Centrelink of such a change, the applicant had knowingly failed to fulfil her statutory obligations.  Mr Foster referred to the applicant in terms of her previously notifying Centrelink of new address and rent details "numerous times previously".

3. Mr Foster referred to the manner in which rent assistance overpayments continued to be made – on three separate occasions when the applicant's pension was suspended following returned mail.  Mr Foster submitted that this indicated that "the debt is also attributable to false statements knowingly made by the applicant". He stated that the applicant's pension was restored in February, May and July 1997, on the basis of advice from the applicant that she was still living at a Sandgate address.  However, on each occasion the applicant was living at a Petrie address.

4. Accordingly, it was Mr Foster's contention that the "applicant knowingly made statements which she knew were untrue", and "because of these false statements incorrect payment of rent assistance continued to her".

5. Next, Mr Foster submitted that there were no special circumstances in the applicant's case.  The circumstances in which the overpayment arose were due to the applicant "deliberately misleading Centrelink on repeated occasions";  that there were no factors in her case which overrode this consideration.

6. Mr Foster further submitted the applicant's "health was not a special circumstance warranting waiver".  Nor was the applicant's assertion that she believed QHC would advise Centrelink of her rent and address details a reason to waive the debt – particularly when the applicant continued to receive correspondence from Centrelink sent to her old address.

7. Mr Foster contended that an assessment of the applicant's Statement of Financial Circumstances indicated that financial hardship could not be considered as a special circumstance.  Whilst Mr Foster conceded that the applicant's financial situation was "uncomfortable", he submitted it "was not so dire as to warrant write-off of the debt".  Recovery of the overpayment via withholdings from the applicant's pension, he said, had continued over the preceding two years "without causing severe financial hardship".

8. It was Mr Foster's final contention that the problems in the applicant's personal life – specifically her concerns related to her former husband - should not be used as the basis to justify the applicant misleading Centrelink and to receive overpayment of the social security benefits.

9. Mr Foster concluded by submitting that the recovery of the overpayments should not be written-off because the applicant had a capacity to repay the debt.  Her Statement of Financial Circumstances indicated her financial situation to be uncomfortable, but not desperate.  The social security benefits received by the applicant were her sole source of income yet the applicant had displayed a past capacity to repay her debt from her social security benefits.  Accordingly, it was "difficult to see how continued recovery of a similar rate could be said to cause severe financial hardship".  In addition, the applicant's evidence revealed that she was "able to borrow money from family and friends and that these loans were always repaid".

10. The applicant emphasised that at no time had she ever set out "to cheat or steal from Centrelink";  rather to have honest dealings at all times.  At no stage, she submitted, was she aware that she received extra monies from Centrelink.

11. The applicant submitted that she believed QHC would inform Centrelink of her change in address.  The applicant went to Centrelink's Nundah Branch to seek assistance with regard to moving from her Sandgate address to the QHC unit at Petrie.  From Centrelink she was referred to, and went to, the Wesley Mission for help.  After that she went to QHC to confirm the arrangements.  From there she was referred back "to Centrelink to obtain a Statement of Earnings" in order for QHC to determine rental payments.  On receiving this form she went back to Centrelink to advise of the flat being provided to her by QHC as well as the QHC requirement for a Statement of Earnings.  She then gave this Statement to QHC.  Accordingly, she submitted that on at least two occasions Centrelink had been informed of her changes in address and rent details, directly, by her.

12. The applicant referred to her Statement of Financial Circumstances submitting that a total sum of $140 per week was the net amount available for her to keep a household of 2 adults.  The applicant queried submissions on behalf of Centrelink that she may have been imprudent in spending this amount on personal items stating:

    "…how would they know how I coped, I would like to tell them, how they put me through hell and back…"

and

"If it wasn't for this man [a Lifeline counsellor] helping me to cope with counselling and money matters, I would have gone out of my mind so Centrelink you can see how I managed when large amounts were taken out of my pension…".

1. The applicant concluded with the submission that she did not believe that she did anything wrong either knowingly or unknowingly.  The mistakes had been made by Centrelink.  She had persevered in dealing honestly with Centrelink at all times.   The applicant further submitted that she could not understand why the overpayment had occurred, as there was nothing on her part which caused the overpayment.  At no stage was it her intention  take anything from Centrelink to which she was not entitled.  As a result she contended that the overpayment should not have to be repaid.  In addition, she should be entitled to be repaid all the money Centrelink had recovered to date.
   Consideration of the Issues

2. The objective of the Tribunal is to review administrative decisions on their merits and in accordance with the law at all times.  The relevant statute is the Social Security Act 1991 ("the Act").

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

   "SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
   1237A(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 be one or more other factors (such as error by the debtor).

   SECTION 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 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."

4. On consideration of all the evidence and information before the Tribunal, the Tribunal concludes that the applicant has contributed to the administrative error in failing to ensure Centrelink were aware of her correct address – particularly following the three situations in which her social security entitlements were suspended following her mail being returned from her Sandgate address.  The Tribunal finds that the overpayment cannot be waived because of administrative error because the applicant has contributed to the error.

5. The meaning of the term "knowingly" has been considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435 where Deputy President Forgie stated at 445:

   "(48) 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."

1. Applying the principles in Callaghan's case, the Tribunal finds, that on the civil standard of proof, the applicant had not "knowingly" failed to comply with a provision of the Act (see paragraphs 10, 11 and 35). It was her understanding that she had fulfilled all her obligations, from the outset, by supplying all the relevant information to Centrelink on receiving an offer of a flat from Queensland Housing (see paragraph 10). Accordingly, the Tribunal concludes that paragraph (a) of Section 1237AAD of the Act is satisfied.

2. The next issue for the Tribunal to consider is 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."

3. The Tribunal finds that there are "special circumstances" in the applicant's situation which warrant the description of "unusual" – possibly "exceptional".  The applicant's concerns for personal safety led to a history of constant changes to the location to what she called her home – in order to avoid potential violence to herself and her daughter (paragraph 17).  These circumstances represent a plausible explanation as to the ensuing confusion and uncertainty as to what the address was where she actually lived at the relevant time and what Centrelink had recorded as her residential address.  The applicant's evidence was that during all these movements she had retained the address Centrelink had referred to, notwithstanding that she did not live continuously in this residence (paragraph 17).  The applicant's concern for her personal safety led to a situation where, at different times, there were differences between the address she referred to as her residence for Centrelink purposes and the address she and her daughter actually resided, at any one point in time.  The applicant's evidence in this regard reflects personal safety for herself and her daughter to be a paramount need.

4. Notwithstanding this finding, the Tribunal finds that this need could not continue without some advice on changes in circumstances to Centrelink.  The Tribunal concludes that it would have been reasonable to expect the applicant to provide such advice to Centrelink on the first occasion her social security entitlements were restored following suspension because of re-directed mail (see paragraphs 21 and 23) viz. 13 February 1997 (Document T8).

5. The Tribunal further finds that it is more appropriate to waive the debt than to write it off.  The applicant has a demonstrated capacity to repay the debt (see paragraph 33).

6. For all of the above reasons, the Tribunal decides to waive part of the debt because of "special circumstances".  The part of the debt to be waived relates to overpayments accrued over the period 9 March 1996 to 13 February 1997.  The debt accrued over the period 14 February 1997 to 28 August 1997 remains a debt due to the Commonwealth which is to be recovered.

7. To some extent this decision is compatible with the following submission of Mr Foster:

   "Even on a favourable view of the applicant's case, the suspensions provided an opportunity to correct matters which was not taken.  Clarification by the applicant of her new address at this stage would have been especially desirable given the applicant's own evidence that she had not personally advised the respondent of the Petrie address and rent details."

8. The Tribunal sets aside the decision under review and in substitution therefor decides:

   (a)to waive part of the debt – that is, the debt accrued over the period 9 March 1996 to 13 February 1997;

   (b)in accordance with subsection 1237(2) of the Social Security Act 1991 the waiver is to be effective for the period 9 March 1996 to 13 February 1997; and

   (c)the debt accrued over the period 14 February 1997 to 26 August 1997 remains a debt due to the Commonwealth which is to be recovered.

   I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

   Signed:         Emma Oettinger     
     Associate

   Date/s of Hearing  8.10.99
   Date of Decision  3.3.00      
   Counsel for the Applicant         
   Representative for Applicant   Applicant appeared in person
   Counsel for the Respondent     
   Solicitor for the Respondent    Mr N Foster, Departmental Advocate