Raschilla and Secretary, Department of Social Services (Social services second review)

[2018] AATA 1352

Raschilla and Secretary, Department of Social Services (Social services second review) [2018] AATA 1352 (23 May 2018)

Division:General Division

File Number:           2017/2404

Re:Innocenzo Raschilla

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:William Stefaniak AM RFD, Senior Member

Date:23 May 2018

Place:Sydney

The decision under review is affirmed.

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William Stefaniak AM RFD, Senior Member

Catchwords

SOCIAL SECURITY – Age Pension – overpayment of age pension due to miscalculation of combined income with partner – when is mail considered to be received – no special circumstances – no basis to write off or waive debt – decision under review affirmed

Legislation

Social Security Act 1991 (Cth)

REASONS FOR DECISION

William Stefaniak AM RFD, Senior Member

23 May 2018

BACKGROUND

1. The applicant has been in receipt of an age pension since 11 February 2011.

2. The applicant lived with his wife and daughter in Balgownie, Wollongong NSW. His wife, Mrs Raschilla, worked with a group called House with No Steps. Mrs Raschilla looked after all the paperwork for the family. The applicant worked around the home and was a great cook amongst other things.

3. Unfortunately, Mrs Raschilla was injured at work on 21 November 2011 and from 1 March 2012 until 19 January 2013, she received workers compensation payments. During this time, the applicant was paid the age pension at a rate that took into account the workers compensation payments of his wife. This state of affairs continued until 25 May 2016 and led to an overpayment of the applicant’s age pension.

4. The applicant’s wife in her evidence before this Tribunal, stated that she told Centrelink that she was returning to work prior to November 2012 as she had been fit for suitable duties since October 2012 (see T-Documents, page 294). She returned to work on 29 October 2012.

5. Centrelink also had a medical certificate, presumably given to them by Mrs Raschilla, dated 30 April 2013 stating that she was fit for pre-injury duty (see T-Documents, page 294). It should be said that Mrs Raschilla said in evidence that she did not recall taking this certificate in to Centrelink but recalled taking in a certificate at the end of September 2012 before she and her husband went on a trip to Italy.

6. Between 11 February 2011, the date that he was granted an age pension, and 12 September 2012, the applicant had been sent a total of ten letters by Centrelink, including the letter of 12 September 2012 clearly advising him of the need to report any changes in his or his wife’s income. The applicant and his wife could not recall getting any of these letters, although they stated that a letter dated 19 September 2012 (News for Seniors) was sent when they were in Italy and accordingly, they would not expect to get that letter.

7. The last letter the respondent sent to the applicant was dated 22 March 2013, and no further letters were sent until after 2 June 2016 when the matter was re-activated after a visit by Mrs Raschilla to the Corrimal office of Centrelink in May 2016. A letter was then sent on 14 June 2016.

8. The Tribunal has no reason to doubt the written evidence of the respondent and the oral evidence given under oath by the applicant, his wife and his adult daughter.

9. Whilst having no recollection of receiving any letters from 2012 until 14 June 2016, the applicant and his daughter do recall receiving a pension card every couple of years.

10. The fact that Centrelink did not send any letters after 22 March 2013 until one was sent on 14 June 2016 after the matter had been reactivated on 2 June 2016, explains the fact that the Raschillas did not receive any letters during that time.

11. Mrs Raschilla’s Centrelink file was closed in 2013 (see T-Documents, page 294) and Mrs Raschilla was told of that fact when she later visited the Corrimal office in May 2016. It appears to be because she was no longer receiving any benefits herself from that time in 2012 / 2013.

12. When the overpayment was discovered in May or June 2016, the respondent sought to recover it.

13. The issue is whether the applicant has to pay the overpayment back or whether the debt can be waived because it was a debt wholly due to departmental error or, if not, there are special circumstances in the case.

    CAN THE DEBT BE WAIVED?

14. Mrs Raschilla told the Tribunal that she did everything required of her and had she known of the problem, she would have rectified it. She and her family thought that the problem may lie with the Australian Postal Corporation, as mail for her Russell Street address would often go to the two other Russell streets in the Wollongong area, namely, in Woonona and Fairy Meadow.

15. Indeed, on several occasions, the applicant and his family had to go to the other Russell Streets to retrieve important mail that they were expecting. They would also receive mail incorrectly sent to their place and have to deliver it to the correct address or repost it.

16. As Mrs Raschilla had already spent some time ensuring that the respondent was correct in its maths (and indeed she was successful in dropping the debt by about $5,000 due to an over calculation by Centrelink), both parties were comfortable that the overpayment was now correct. The issue before the tribunal was who should pay for it.

17. The Tribunal accepts that the debt was, as at June 2016, $18,841.54 and that the applicant has been paying it back at the rate of $50 per fortnight. It was accepted that as at the date of the January hearing, the debt was down to about $17,200.

18. Mrs Raschilla would collect the mail from the letter box and she and her family swore they did not receive any notifications from the respondent after 2012. During the course of the hearing, this was explained, not by the mail being sent to the wrong house address, but because after a certain time (which the tribunal takes to be March 2013), there was no need for the respondent to send to the applicant any mail as it was assumed that any issues with Mrs Raschilla’s income had stabilised and not changed.

    THE LAW INRELATION TO THE FACTS IN THIS MATTER

19. The test is a very strict test. Under s 1236 of the Social Security Act 1991 (Cth) (the Act), a debt can be written off if the debt is irrecoverable at law, the applicant’s whereabouts are unknown, or the applicant is not receiving a social security payment under the Act and has no capacity to repay the debt or it is not cost effective for the Commonwealth to take action to recover the debt.

20. None of these factors apply in the applicant’s case and indeed the applicant is currently repaying the debt pending the outcome of this hearing, albeit with some difficulty due to financial pressures caused by the Applicants current ill health.

21. The debt came about because the respondent did not have complete and accurate details about Mrs Raschilla’s employment and income.

22. The rationale for the legislation in relation to overpayments made to clients of the respondent is the premise that if someone has innocently benefited by getting money that they were not entitled to, it is reasonable to expect them to pay it back. The department does not expect them to pay it back immediately and often will accept deductions from pensions as low as $20 as repayment.

23. It is only if the factors in s 1236 apply or the error is solely the department’s error or if there are exceptional circumstances (see s 1237AAD of the Act) that an exception will be made to this basic rule.

    DID THE DEBT OCCUR SOLEY BECAUSE OF DEPARTMENTAL ERROR AND IF NOT ARE THERE SPECIAL CIRCUMSTANCES WHICH WOULD JUSTIFY WAIVING THE DEBT IN THIS CASE?

24. In the Tribunal’s view, the family has done nothing wrong. Mr and Mrs Raschilla have been hard working, decent Australians raising their loving family successfully over several decades and paying their fair share of taxes along the way. All members of the family who gave evidence impressed the Tribunal as witnesses of truth and character.

25. The Tribunal is also satisfied that some of the various officers of the department that Mrs Raschilla in particular dealt with could have been more helpful and if the department was more proactive, any debt owed could have been picked up earlier.

26. The Tribunal notes however, that it does appear that Mrs Raschilla did assume that the department would have been given all necessary information by the third party insurer and that she did not have to provide through the applicant, regular details of her income.

27. It was clear to the Tribunal that the applicant and his wife did not at any time from October 2012 through to May 2016, give the respondent any pay slips related to Mrs Raschilla’s income from her employment despite her obvious willingness to do so if asked directly.

28. The applicant said her income did not change at work from the time she ceased to be on compensation payments in January 2013 until May 2016 when Mrs Raschilla approached Centrelink herself to advise of a change in her work circumstances. This consisted of a change of hours worked and that she had not been receiving workers compensation payments since January 2013.

29. The Tribunal also accepts that Mrs Raschilla was the spokeswoman for the family and she did all the paperwork for herself and the applicant. It also accepts that at the end of the day, despite earlier indications that any mail may well have gone to Woonona or Fairy Meadow, that may not have been particularly relevant from March 2013 onwards as no mail apart from two pension cards was sent out.  

30. The Tribunal notes that the respondent no longer has to send out every March, July and September, a notice telling age pension holders of any Consumer Price Index changes to their pension. These notices used to also contain a section reminding the pensioner to report any change of income and circumstances.

31. These notices are, and have been for several years now, deemed by law to have been notified to the pension holder, although the only notification in reality would be in a slight change in pension received in the recipient’s bank account.

32. The law is also clear that mail is deemed to have been sent and received by pension holders if the recorded address of the pension holder is correct. It does not matter if the mail is sent to the wrong address by Australia Post, or if it is stolen from the letter box. It is still deemed to have been received. So, even if any mail had been sent to the applicant from March 2013 to June 2016 and not received, or had gone to the wrong address as was not infrequently the case here, it would not affect the outcome of this case as it cannot be classified as special circumstances.

33. The applicant also gave evidence that he had health problems at the relevant time, but as Mrs Raschilla looked after all the paperwork and usually cleared the mail box, this does not help him and I agree with the Social Services and Child Support Division of the Tribunal, that his health problems do not amount to special circumstances.

34. Whilst the Tribunal notes that the last time the applicant would have received a letter clearly stating that it was his responsibility to notify the respondent of any changes in his wife’s income and circumstances was on 12 September 2012 and accepts that whilst he did not receive it, that letter is still valid notice of his obligations for the reasons given above.

35. The Tribunal understands the applicant’s case and their frustration in that he and his wife did all one would logically expect a lay person to do and thought at all times they were doing the right thing and fulfilling their obligations. Unfortunately, by law that was not so.

36. The only issue the Tribunal can think of that should have alerted the applicant and his wife to the need to notify the department, was the ongoing requirement which the applicant and his wife should have been aware of, which is the need to periodically notify the department of Mrs Raschilla’s income and any changes to it. This may then have led to the Applicant or Mrs Raschilla in late 2012 or January 2013 advising the department that the compensation payments were to cease or had ceased as at 19 January 2013.

37. Indeed, it was such a change in circumstances, namely the change of hours worked by Mrs Raschilla to only 25 hours a week in May 2016, which led to this issue coming to light.

38. As the Tribunal understands it, Mrs Raschilla was under the impression that it was the third party insurer or perhaps her employer who had a duty to tell the department of her financial circumstances, and if they failed to advise the department back in late 2012, then it was their fault. If that was their responsibility and not hers, then she may well have a claim, against either the insurer or her employer and she may wish to look at that further.

39. However, despite the Tribunal having considerable sympathy for the applicant’s plight, it has no ability under the law to stretch the narrow interpretation given to “special circumstances” to the facts of this case. The  additional financial strain the applicant and his family are also now under as a result of his health problems is not a special circumstance as many pensioners are under strain and this can be largely alleviated by the respondent only taking a token amount each fortnight (e.g. $20 per fortnight) as a repayment.

40. Nor unfortunately can it say that the error could be wholly attributed to the respondent. The respondent after all, is dependent on the information it is given, and in the absence of clear evidence that it, for example, received and lost relevant information of Mrs Raschilla’s income given to it by either the applicant, through his wife, or by her insurer or employer, then it is impossible to satisfy the very stringent test applied to what amounts to sole departmental error and/or special circumstances.

41. If the applicant feels aggrieved by the actions or inactions of the department, he and Mrs Raschilla on his behalf, can consider seeking some monetary redress under the scheme all federal government departments run to compensate people who suffer loss through maladministration.

    The Commonwealth Ombudsman or indeed the respondent itself can advise the applicant and Mrs Raschilla further on this should they wish to pursue it further. It may be that the facts in this matter as relayed to the Tribunal may support such an application and it is probably worth exploring if nothing else.

42. However, for the reasons given above, there is nothing this Tribunal can do except affirm the reviewable decision and note that the applicant, should only have to repay the debt at the lowest rate allowed by the department which the Tribunal notes is currently $20 per fortnight instead of the $50 per fortnight at present being paid because of financial pressures caused by his ill health.

43. Further to this, the Tribunal agrees with the daughter of the Applicant and Mrs Raschilla that her parents have been good Australians who have worked hard, paid their taxes and raised their family well and deserve a break.

44. The Tribunal cannot find for them in this case but would certainly support and commend any request they may make for a reduction in how much they pay per fortnight in repayment of the debt.

    DECISION  

    For the reasons given above, the reviewable decision is affirmed.

I certify that the preceding 44 (forty-four) paragraphs are a true copy of the reasons for the decision herein of William Stefaniak AM RFD, Senior Member

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Associate

Dated: 23 May 2018

Date(s) of hearing:	18 January 2018 & 7 February 2018
Solicitors for the Respondent:	A. Wong, Department of Human Services