Re Balancio and Secretary, Department of Family and Community Services

[2003] AATA 466

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 466

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/513

GENERAL ADMINISTRATIVE DIVISION		)
Re		FELICITY BALANCIO

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr O Rinaudo, Member

Date23 May 2003

PlaceBrisbane

Decision

The Tribunal varies the decision under review, in that:

§   in relation to the decision to raise and recover a debt of $2,375.96, paid as parenting payment (single) between 25 September 2001 and 8 January 2002, the Tribunal sets aside the decision under review; and

§   in relation to the decision to recommence payments of parenting payment (single) from 18 March 2002 and to refuse a request to pay arrears of benefits from 13 January 2002, the Tribunal affirms the decision under review.

(Sgd) Mr O Rinaudo
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – family payment (single) – overpayment – whether debt properly raised – whether debt should be recovered – special circumstances

SOCIAL SECURITY – benefits and entitlements – family payment (single) – arrears – whether applicant is entitled to be paid arrears of benefit – date from which benefits payable

Social Security Act 1991

Social Security (Administration) Act 1999

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Taylor’s Central Garages (Extra) Ltd v Roper [1951] WN 383
RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123

REASONS FOR DECISION

23 May 2003 Mr O Rinaudo, Member    

1.      This is an application for review of a decision of the Social Security Appeals Tribunal, dated 22 May 2002, which affirmed the following decisions of Centrelink (as affirmed by an authorised review officer) to:

§raise and recover a debt of $2,375.96 paid as parenting payment (single) between 25 September 2001 and 8 January 2002; and

§recommence payment of parenting payment (single) from 18 March 2002 and to refuse a request to pay arrears of benefits from 13 January 2002.

2. The Tribunal heard this matter on 25 November 2002. Ms Balancio attended the hearing in person and represented herself. The respondent was represented by Mr Ffrench, a departmental advocate. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (as exhibit 1), and the following documentary exhibits:

§Exhibit 2:  Letter from the applicant to the Tribunal, 18 November 2002;

§Exhibit 3:  Letter from the applicant to the Tribunal, 10 November 2002;

§Exhibit 4:  Bundle of documents relating to quotations for repairs;

§Exhibit 5:  Bundle of documents from the applicant;

§Exhibit 6:  Bundle of documents relating to Family Court proceedings;

§Exhibit 7:  Bundle of documents from respondent – computer printouts.

3.      In addition to the documents tendered in evidence Ms Balancio sought to provide to the Tribunal further material after the close of the hearing.  Ms Balancio told the Tribunal that these documents were vital to her case and it was imperative that the Tribunal saw the documents. The Tribunal granted Ms Balancio permission to provide this further material on the basis that it was relevant and there being no objection from the respondent. Ms Balancio provided the Tribunal with a substantial volume of material.  A copy of this further material was sent to the respondent with a request that if the respondent wanted to make any submission in reply to the matters raised in the further documents it was to do so before 17 January 2002. No further submission was received from the respondent.

4.      The Tribunal perused the further material finding it to be mainly documents relating to court proceedings about family matters, correspondence with various solicitors, court proceedings about unpaid costs and various correspondence with Centrelink.  None of the further material was relevant to the application being considered by the Tribunal.  All of the additional material has been added to Ms Balancio’s file held by the Tribunal.

5.      In September 2001, Ms Balancio was in receipt of parenting payment (single).  Her entitlement to the pension was calculated on the basis of an annual income of $346.49 (see T4, folio 51). However, on 25 September 2001, the applicant commenced work with Tempstart Business Services, and from 26 October 2001, with the Clem Jones Home for the Aged.  The respondent contends that the applicant failed to notify the Department of the income she had earned through this employment and that, consequently, she had received benefits at a rate to which she was not entitled.  The respondent contends that the applicant was overpaid the amount of $2,375.96 in benefits during the period 25 September 2001 and 8 January 2002, and that there are no circumstances in this case that would warrant the right to recover that money being waived. 

6.      On 8 January 2002, Ms Balancio’s parenting payments (single) were cancelled due to the level of her income. 

7.      On 13 January 2002, Ms Balancio ceased work.  On 18 March 2002, she lodged a fresh claim for parenting payment (single), which was granted.  At that time, the applicant requested arrears of the payments to 13 January 2002.  That request was refused. 

8.      There are two separate issues before the Tribunal for determination.  Firstly the Tribunal must consider whether the decision to raise a debt for the overpayment of parenting payment (single) was correctly made and, if so, whether that debt should be recovered by the Commonwealth. And secondly, whether the decision to refuse to pay arrears of parenting payment (single) for the period 13 January 2002 to 18 March 2002 was correctly made.

Evidence Before the Tribunal

9.      Ms Balancio gave evidence at the hearing. 

10.     Ms Balancio told the Tribunal that her financial problems arose out of lengthy court proceedings with her former husband about family matters.  These proceeding extended from 1991 to 1998. 

11.     Ms Balancio was awarded the house but due to “negligence” of the Family Court and the solicitors involved in the case, the house was auctioned requiring Ms Balancio to buy back the house at auction.

12.     Ms Balancio said that her health was not good as a result of the termination of her employment and the “non-sense litigation”.  She provided a number of medical reports to the Tribunal for its consideration (see Exhibit 3).

13.     Ms Balancio said that she was borrowing money to live including $7,000.00 from her daughter, $7,000.00 from her brother and $5,000.00 from her son.  She told the Tribunal that she was paying $342.00 per fortnight mortgage repayments; $151.00 per week loan repayments for a $9.000.00 loan; and $30.00 per week repayment of a Mastercard debt.  Ms Balancio said that her son was on youth allowance.  She told the Tribunal that she has three dogs, four cats and a goat.  She said that her house is badly in need of repairs.  Her son lives at home.  She says that she needs $400 per week to live on.

14.     Ms Balancio said that she has no other source of income, she has paid substantial legal fees and has health problems.  She asked where she could get a job when she was stressed.

15.     In her letter of 18 November 2002 (Exhibit 2) Ms Balancio notes that:

§Her and her daughter’s passport were removed by the Supreme Court of New South Wales until her daughter turns 18 years of age. She comments that “we served the time imposed by the court and we deserved compensation for damages, I won the custody and access matter and the results were false imprisonment”.

§She suffered because of the incompetence of her lawyers in respect of the Family Court proceedings from 1991 to 1998, including losing her house and having to buy it back at auction.

§Child support and maintenance was not given to her after her house was sold by auction.

§The solicitors acting for her were not competent and should be “disbarred”.

§After orders of the Family Court in 1989 her house was not transferred into her name by her solicitor despite several reminders.

§She was not paid under a Life and Disability Insurance policy which was cancelled when she made a claim in 1999-2000.  The insurance company refused to pay her disability claim.

§Ms Balancio was terminated from jobs in 1991, 1992 and 1999.

§She was involved in a Supreme Court case in New South Wales which was without foundation in relation to the sale of her property in Illawong.

16.     Ms Balancio asked the Tribunal to look into these matters and to overturn the decisions of the Courts and to provide her with some redress for the wrongs committed against her by several solicitors.

17.     Under cross-examination Ms Balancio acknowledged that she received the letter dated 9 July 2001 setting out the things that she must tell Centrelink, including “if you start work” (see T4, folio 51–52).

18.     Ms Balancio denied that she said to a Centrelink officer “she did not advise Centrelink of her income or bring payslips in as it is none of our business” as reported by a Centrelink officer on 18 March 2002 (see T9, folio 77).

19.     Ms Balancio wants the Tribunal to waive the debt and to award her the back payments she did not receive and to redress the wrongs caused to her over the years in the courts and by the solicitors.

Consideration

20.     Ms Balancio was confused about the role of the Tribunal.  The only role the Tribunal has in this application is to review the decisions made by Centrelink as affirmed by the Social Security Appeals Tribunal.  The Tribunal has no role outside of this.  It certainly cannot review decisions made by State or Federal Courts.  So the redress which Ms Balancio seeks with respect to the proceedings arising from disputes with her former husband, in respect of children and property, are not matters which the Tribunal can consider.

21.     Nor does the Tribunal have any jurisdiction or power over solicitors.  This is an issue for the proper authority, which in most cases will be the relevant State Law Society or legal complaints tribunal.  If Ms Balancio wants to have the actions of her previous solicitors reviewed she should contact the appropriate body.

22.     The Tribunal will shortly consider the issues properly before it.  However, before doing so the Tribunal makes a short comment on the applicant’s health.

23.     The applicant provided the Tribunal with reports from several doctors (see Exhibit 3).  These reports date back to 1995 with the most recent being in 2000.  This is a report from Dr G P Jenkins, Consultant Psychiatrist.  Dr Jenkins had seen Ms Balancio on many occasions from 1993 to January 2000 (at the time of writing the report).  Dr Jenkins says:

“When I first saw Mrs Balancio she was considerably stressed by prolonged litigation over property settlement with her former husband and the result of this, which led to she and her children being forcibly evicted from the former matrimonial home.

She developed insomnia, depressed mood, poor concentration, loss of interest in life and a desire to withdraw and she was having difficulty in organising herself to seek employment at the time.

In interview she is always very agitated and voluble and very prone to see herself as being poorly done by other people, particularly her solicitors, who she changed quite frequently.  Because of this she eventually decided to represent herself in the family Court and then became even more agitated and depressed because she failed to obtain a judgement in her favour and the Court ordered her house to be sold.

In my opinion Mrs Balancio suffers from Major Depressive Disorder of agitated/depressed type.  In my opinion, this disorder has caused Mrs Balancio to become permanently incapable of performing any kind of work for which she is suited by qualification, training and experience.  In my opinion, Mrs Balancio requires to live a sedentary life because any further employment, either part time or full time, would be highly likely to produce an exacerbation of her Major Depressive Disorder.”

24.     Dr Hazell had diagnosed major depressive illness with delusional features in August 1999.

Overpayment of Parenting Payment (Single)

25. In relation to the first issue before the Tribunal, the power of the respondent to raise and recover a debt from a social security recipient is provided for in section 1223(1) of the Social Security Act 1991 (the Act).  That section provides that:

“Subject to this section, if:

(a)a social security payment is made; and

(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

26.     The Act also provides that, in certain circumstances, the right to recover a debt due to the Commonwealth can be waived.  Those circumstances include cases where there has been an administrative error by the department which was the sole reason the debt arose, or cases where there are “special circumstances” which would warrant the debt being waived.  There is no suggestion in this case that the debt arose from administrative error, and therefore the Tribunal has not considered those provisions in the Act.

27.     The “special circumstances” provisions are contained in section 1237AAD of the Act.  That section 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 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.”

28.     In order for the circumstances of this case to be considered “special” there must be circumstances which are “unusual”, “uncommon” or “exceptional” (see Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3) to warrant a debt being waived. In Beadle v Director-General of Social Security (1985) 60 ALR 225, the Full Federal Court observed (at 228) that the phrase “special circumstances” would usually include events that rendered the operation of the statute in a particular case “unfair or inappropriate”.

29.     However, before considering the question of whether there are any special circumstances, the Tribunal must be satisfied that the debt did not wholly or partly result from the debtor or another person knowingly making a false statement or failing or omitting to comply with their obligations under the Act (see section 1237AAD(a)). The principles in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 are relevant with respect to the meaning of “knowingly” in section 1237AAD:

“There is nothing in s1237AAD 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 knowledge at the time and to events surrounding the false statement or the act or omission.”

30.     In this case, the respondent sent a letter to the applicant, on 9 July 2001 (T4, folios 51-53), notifying her of her obligations under the Act.  That letter states that the applicant was required to notify Centrelink, within 14 days, if “you start work or recommence work, change jobs, or start any form of business or self employment” or if “your income, not including financial investments or maintenance, increases”.

31.     In Taylor’s Central Garages (Extra) Ltd v Roper [1951] WN 383 at 385, Devlin J considered the meaning of the word “knowledge” and found that actual knowledge can be inferred from the evidence and the nature of the acts done.  Further, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123 at 126, Hope, Reynolds and Hutley JJA, in a joint judgment stated:

“… a court is entitled to infer knowledge on the part of a particular person on the assumption that such a person has the ordinary understanding expected of persons in his line of business, unless by his or other evidence it is convinced otherwise.  In other words, the true position is that the court is not concerned with the knowledge of a reasonable man but is concerned with reasonable inferences to be drawn from a concrete situation as disclosed in the evidence as it affects the particular person whose knowledge is in issue.  In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge.  However, this conclusion may be easily overturned by a denial on his part of the knowledge with the court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge.”

32.     Following the RCA Corporation case, it is open to the Tribunal to infer that the applicant had actual knowledge of her obligations under the Act where there were opportunities for her to gain that knowledge and where there were no obstacles to her acquiring the knowledge. 

33.     The Tribunal is satisfied that the applicant had the opportunity to gain knowledge of her obligations under the social security legislation, in that her obligations were clearly set out in the letter sent to the applicant by the respondent on 9 July 2001.   However, in March 2000, Ms Balancio had been diagnosed with Major Depressive Disorder, which would in the Tribunal’s view have affected her capacity to fully understand the obligations required of her.  She was not supposed to return to the workforce when she did, no doubt out of necessity.  In this case the Tribunal is prepared to give the benefit of the doubt to Ms Balancio on the basis of the available medical evidence.

34.     Therefore, the Tribunal finds that the applicant did not knowingly fail to comply with her obligations under the Act.

35.     The Tribunal must then consider whether there are special circumstances in this case which would allow the debt to be waived.  The Tribunal is satisfied that the combination of the state of health of Ms Balancio, together with her serious financial circumstances, make it appropriate to waive the debt in this case.  Mrs Balancio has been subjected to numerous court cases over the years from early 1990 to 1999 including being sued for costs by her own solicitors.  It is clear from the medical evidence that this has taken its toll on her over the years.  It appears that Ms Balancio has a serious psychological problem arising from her treatment by various individuals in the legal battles she has fought over the years.  She is bitter and confused and feels like the victim.

36.     Accordingly, the Tribunal sets aside the decision under review, in relation to the decision to raise and recover the overpayment of parenting payment (single), and substitutes a new decision that there are special circumstances in this case which warrant the right to recover the debt being waived.

Refusal to Pay Arrears of Parenting Payment (Single)

37. Section 42 of the Social Security (Administration) Act 1999 provides that the start date for a person’s social security benefit will be the day on which the claim in made. In Ms Balancio’s case, she lodged her claim for parenting payments (single) on 18 March 2002. Pursuant to section 42, her start date for the receipt of those benefits is, therefore, 18 March 2002.

38. There are some exceptions to the rule in section 42. The only exception of relevance in this case is the case where a person lodges a claim with 14 days of telephone contact with the department about a claim for benefits. The applicant contacted Centrelink by telephone on 4 February 2002 regarding the cancellation of her parenting payments on 8 January 2002. A record of that conversation appears at T7 (folio 75):

“Customer Phoned on 4/02/2002 at 10:13 Receipt number: 9124

Cus pho re why her PPS had cancelled.  Advised cus she did not tell us of her employment and was receiving max PPS.  Advised cus to get payslips from employer of all work done and attend CSC to check if can reclaim now that work has finished.  Terminated call after 20mins when cus would not let me explain and/or advise the action necessary to assess her situation.”

39. It appears that Ms Balancio did not take any action following this telephone call. When she did re-apply for payments, she did so in March 2002, more than 14 days after her telephone conversation with Centrelink. Therefore, she is not entitled to arrears of benefits pursuant to section 42 of the Social Security (Administration) Act 1999.

40.     Accordingly, the Tribunal affirms the decision under review in so far as it relates to the decision to refuse the claim for payment of arrears of parenting payment (single) for the period 13 January 2002 to 17 March 2002.

Decision

41.     For the above reasons, the Tribunal decides:

§in relation to the decision to raise and recover an overpayment of parenting payment (single), the Tribunal sets aside the decision under review and determines that there are special circumstances in this case that warrant the right to recover the debt being waived; and

§in relation to the decision to refuse to pay arrears of parenting payment (single), the Tribunal affirms the decision under review.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  25 November 2002
Date of Decision  23 May 2003
The Applicant Appeared in Person
Solicitor for the Respondent     Mr Ffrench, Departmental Advocate