Re Stubbs and Secretary, Department of Families and Community Services
[2003] AATA 729
•1 August 2003
Ngai; Secretary, Department of Social Services and (Social services second review) [2016] AATA 963 (30 November 2016)
Division
GENERAL DIVISION
File Number
2016/0012
Re
Secretary, Department of Social Services
APPLICANT
And
Po Ngai
RESPONDENT
DECISION
Tribunal Senior Member R W Dunne
Date 30 November 2016 Place Adelaide The Tribunal sets aside the decision under review and in the place of that decision decides that 50 percent of the present current debt should be waived.
......................[Sgd]...............................
Senior Member R W Dunne
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – claim for paid parental leave (PPL) – PPL period – when PPL is payable – whether there has been overpayment of PPL – recovery of PPL debt – waiver requirements – whether solely administrative error – whether special circumstances – decision under review set aside.
LEGISLATION
Paid Parental Leave Act 2010 (Cth), ss 11, 13, 31, 45, 167, 195 and 199
Social Security Act 1991 (Cth), s 7
CASES
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729
Secretary, Department of Employment and Workplace Relations v Taylor [2007] AATA 1377Centkowska v Department of Social Services [2016] AATA 342
SECONDARY MATERIAL
Paid Parental Leave Guide
REASONS FOR DECISION
Senior Member R W Dunne
November 2016
INTRODUCTION
The matter under review in this case is the decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal at first review (AAT1) made 27 November 2015. The applicant is the Secretary, Department of Social Services (which is referred to in these reasons as “the Department”) and the respondent is Po Yu Ngai.
The issue to be decided is whether paid parental leave (“PPL”) is payable to the respondent and whether a debt arising from overpayment is due to the Commonwealth.
The claim for PPL in respect of the respondent’s child was initially rejected by the Department, but then granted. The Department subsequently determined that the respondent was never eligible for PPL and decided to raise and recover a PPL debt arising from overpayment.
At the hearing before me, the Secretary was represented by Mr Adam Hay (from the Department of Human Services) and Ms Ngai represented herself, with assistance from her husband, Mr Lim. I admitted into evidence the T documents[1] lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth), together with the following exhibits:
·copy of respondent’s PPL and FAO payment summary screen;[2]
·copy of respondent’s FAO income summary screen;[3]
·copy of respondent’s WCH separation summary dated 16/11/2015;[4]
·copy of respondent’s FMC separation summary dated 7/4/2015.[5]
[1] Exhibit A1.
[2] Exhibit A2.
[3] Exhibit A3.
[4] Exhibit R1.
[5] Exhibit R2.
ISSUES BEFORE THE TRIBUNAL
The issues before me are:
(a)Whether the respondent is entitled to payment of PPL under the Paid Parental Leave Act 2010 (“Act”), and if so for what period?
(b)If there is no entitlement, does the respondent have a PPL debt?
(c)If so, are there any grounds to waive recovery of the debt, in whole or in part?
LEGISLATION
The legislation that is presently relevant is contained in the Act. Section 11 of the Act provides that a determination made about whether parental leave pay is payable to a person must specify the person’s PPL period. A person’s PPL period must be the same as, or within, the maximum PPL period for the child.
Section 11 of the Act then continues to read:
“…
(3) The maximum PPL period for a child is the period that:
(a)starts on the child’s maximum PPL period start day; and
(b)ends on the child’s maximum PPL period end day.
(4) The maximum PPL period start day for a child is:
(a)if, on or before the day (the relevant day) that is 28 days after the day the child was born, the primary claimant both made an effective claim for parental leave pay for the child and verified the child’s birth—the later of the following days:
(i) the day the child was born;
(ii) the primary claimant’s nominated start date; and
(b)if, on or before the relevant day, the primary claimant made an effective claim for parental leave pay for the child but did not verify the child’s birth—the later of the following days:
(i) the day the primary claimant verifies the child’s birth;
(ii) the primary claimant’s nominated start date; and
(c)if the primary claimant makes an effective claim for parental leave pay for the child after the relevant day—the later of the following days:
(i) the day the claim is made;
(ii) the primary claimant’s nominated start date.
(5)The maximum PPL period end day for a child is the earlier of the following days;
(a)the day that is 125 days after the maximum PPL period start day (which is 18 weeks from (and including) that start day);
(b)the day before the child’s first birthday.”
Section 13 of the Act requires that the Secretary must make a determination if a primary claimant has made an effective primary claim for parental leave pay for a child. Section 13 of the Act then relevantly reads:
“…
When parental leave pay is payable to primary claimant
(2)The Secretary must determine that parental leave pay is payable to the primary claimant for the primary claimant’s PPL period if, when making the determination, the Secretary is satisfied that the primary claimant was or will be eligible for parental leave pay on each day in the period that;
(a)starts on the day the child was born; and
(b)ends on the last day of the primary claimant’s PPL period.
Note:The Secretary is prevented from making a determination under this subsection in certain circumstances: see Division 3
Primary claimant’s PPL period
(3)The Secretary must specify in the determination under subsection (2) that the primary claimant’s PPL period:
(a)starts on the child’s maximum PPL period start day; and
(b)ends on:
(i) if the Secretary is satisfied that the primary claimant was or will be eligible on each day in the child’s maximum PPL period—the child’s maximum PPL period end day; or
(ii) if the Secretary is satisfied that the primary claimant was or will be eligible for a period that is shorter than the child’s maximum PPL period—the last day in the child’s maximum PPL period that the primary claimant was or will be eligible.
When parental leave pay is not payable to primary claimant
(4)The Secretary must determine that parental leave pay is not payable to the primary claimant if the Secretary is not satisfied of the matters in subsection (2).”
Section 31 of the Act sets out when a person is eligible for parental leave pay for a child on a day. Relevantly, in this case, a person must satisfy the Australian Residency Test. Section 31 then reads:
“…
(2)First, a person is eligible for parental leave pay for a child on a day if, on that day:
(a)the person satisfies the work test (see Division 3); and
(b)the person satisfies the income test (see Division 4); and
(c)the person satisfies the Australian residency test ( see Division 5); and
(d)the person is the primary carer of the child (see Division 6); and
(e)the person has not returned to work (see Division 7).
(3)…
(4)Third, a person is eligible for parental leave pay for a child on a day if, on that day:
(a)if the person is the primary claimant:
(i) the person satisfies the work test (see Division 3); and
(ii) the person satisfies the income test (see Division 4); and
(iii) the person satisfies the Australian residency test (see Division 5); and
(iv) the person satisfies the conditions prescribed by the PPL rules; and
(b)…”
Section 31(2)(c) and s 31(4)(a)(iii) refers to the Australian residency test. Section 45 of the Act explains when a person satisfies the Australian residency test. The section then provides that a person satisfies the Australian residency test on a day if, on that day the person is an Australian resident.
Section 6 of the Act provides that the expression “Australian resident” has the same meaning as in subsection 7(2) of the Social Security Act 1991, which reads:
“(2) An Australian resident is a person who:
(a)resides in Australia; and
(b)is one of the following:
(i) an Australian citizen;
(ii) the holder of a permanent visa;
(iii) a special category visa holder who is a protected SCV holder.”
BACKGROUND
The material facts in this case are not in dispute and are largely extracted from a statement of facts and contentions (“SOFIC”) of the applicant.
The respondent lodged a claim for PPL with the Department on 8 October 2014. On 16 November 2014, the Department decided to reject the respondent’s claim for PPL as she did not meet the Australian residency test on the day that the child was born. This was described in the applicant’s SOFIC as the “first original decision”.
On 20 January 2015, the respondent contacted the Department and sought a review of the first original decision. On 17 February 2015, the Department reconsidered the first original decision to reject the respondent’s claim for PPL and the claim was granted. The respondent was paid for the full 18 weeks of the claimant’s PPL period. On 30 March 2015, the Department raised a Family Tax Benefit (“FTB”) Part B debt for the amount of $1,367.50 for the period from 8 October 2014 to 9 February 2015. This debt was raised as the respondent was not entitled to FTB payments for the same period she was eligible for PPL. On 27 April 2015, the respondent sought a review of the decision to raise the FTB debt. On 20 May 2015, the Department determined that the respondent was never eligible for PPL as she did not meet the Australian residency test on the day that her child was born. This was described in the applicant’s SOFIC as the “second original decision”.
On 22 June 2015 the Department, having reviewed the respondent’s eligibility for PPL, decided to raise and recover a PPL debt of $11,538.90. On 7 July 2015, an authorised review officer (“ARO”) decided to affirm the second original decision. The ARO decided that the respondent was not eligible for PPL and affirmed the decision to raise and recover the debt. The Department also cancelled the FTB debt and refunded the amount of $1,367.50 to the respondent on the basis that she was eligible for FTB if she was not eligible for PPL. On 14 September 2015, the respondent requested a further review by the AAT1. On 27 November 2015, the AAT1 reviewed and set aside the decision under review. The AAT1 substituted its own decision that the respondent was eligible for and should be paid PPL for the period of 18 weeks from 8 October 2014, and so there was no PPL debt. On 4 January 2016, the applicant requested a review of that decision by the AAT1.
EVIDENCE OF THE RESPONDENT
It was Ms Ngai’s evidence that she was in Australia from 2003 to 2006 on a student visa. She went to Hong Kong in 2005, where she had been born in 1983. From 2011 onwards she had been employed in Hong Kong by Leighton (Asia). She married Mr Lim in March 2012. Ms Ngai and Mr Lim were both granted permanent resident visa’s on 19 December 2013. At the time of the AAT1 hearing, she had one child, (a son) who was born in Hong Kong in July 2014. She arrived in Australia with her son on 29 September 2014. Ms Ngai and Mr Lim purchased a residential property at Kensington Park in 2015 for $350,000.
In cross-examination by Mr Hay, Ms Ngai said that her husband was an engineer and worked at the Royal Adelaide Hospital. She had a degree in commerce and had been employed by Leighton (Asia) as a purchasing officer. Her income in that capacity had been approximately $60,000 per annum. She and her husband owned two motor vehicles and there were no existing loans in respect of those vehicles. She said their family bills were paid for by her husband and their property was subject to a mortgage. In relation to FTB, she was no longer working, however she was not receiving the FTB “B” component because their income was too high. As she had been receiving PPL payments, it was necessary for her to pay back the FTB benefits that she had been receiving.
CONSIDERATION
Is the respondent entitled to payment of PPL under the Paid Parental Leave Act 2010, and if so for what period?
On the material available, the respondent lodged an effective claim for PPL pursuant to s 55 of the Act. She was the primary carer of the child; she satisfied the work test because of her service with her employer, Leighton (Asia); she satisfied the income test and she had not returned to work. Accordingly, she satisfied paragraphs 31(2)(a), (b), (d) and (e) of the Act. To determine whether the respondent is eligible for PPL, the issue is whether at all relevant times she satisfied the Australian residency test as required by paragraph 31(2)(c) of the Act.
Under subsection 45(1) of the Act, a person satisfies the Australian residency test on a day if, on that day, the person is an Australian resident. Section 6 of the Act provides that the expression “Australian resident” has the same meaning as it appears in subsection 7(2) of the Social Security Act 1991. As can be seen from paragraph 11 above and on the evidence available, it is clear that when she made her claim for PPL on 8 October 2014 the respondent was an Australian resident. She resided in Australia and she was the holder of a permanent visa.
Under s 11(1) of the Act, if a person makes a claim for PPL the Secretary must make a determination that parental leave pay is payable to the person for a child, and the Secretary must specify in the determination the period for which parental leave pay is payable to the person. That period is the person’s PPL period. Section 11(2) provides that a person’s PPL period must be the same as, or within, the maximum PPL period for the child. Section 13(1) of the Act provides that where the respondent has made an effective claim for parental leave pay for her child, the Secretary must make a determination on the claim. Under s 13(2) of the Act the Secretary must determine that parental leave pay is payable if the Secretary is satisfied that the respondent was or will be eligible for parental leave pay on each day in the period that starts in July 2014 and ends in October 2014 (which is the last day of the respondent’s PPL period). The respondent’s PPL period is thus the same as the maximum PPL period for her child.
According to paragraph 10 of the applicant’s SOFIC, the Department determined that the respondent was never eligible for PPL as she did not meet the Australian residency test on the day that her child was born. Before me and in referring to paragraph 10 of the applicant’s SOFIC, Mr Hay contended that the Secretary was not empowered to make a determination that PPL was payable to the respondent pursuant to s 13(2) of the Act because she was not eligible for PPL on each day in the period that started on in July 2014. I agree with this contention, but I question whether “empowered” is the correct term to use. According to the evidence, the respondent arrived in Australia with her son on 29 September 2014. There was no evidence before me that she satisfied the Australian residency test before that date. In the Department of Immigration and Border Protection records in the T-documents, she departed Australia on 30 December 2006 and arrived on 29 September 2014. Although Mr Lim gave evidence before the AAT1 that he had been living in Australia on a permanent basis since 27 June 2014, the same did not apply to the respondent. And Mr Lim did not give any evidence before me.
I have mentioned the AAT1 above and the substituted decision the Member gave there. The Member referred s 31(2) of the Act and to a person’s eligibility for parental leave pay for a child on a day if, on that day certain things were satisfied. The Member also referred to the Centrelink decision to raise the PPL debt because the respondent did not meet the residency requirement on the day her child was born, or possibly that she did not meet this requirement continuously from date of birth to date of claim. I agree with the Member that “residency” is a question of fact. A person can be a resident of one country one day and become a resident of Australia (or another country) the next day. In fact, a person can be a resident of two countries on the same day, depending on how their respective domestic laws are interpreted. I am unable to agree that the wording of s 31 of the Act involves acceptance of the principle that Australian residency under the Act is tested “on a day”. In my view, the “on a day” test in the Act is an interpretational tool, like the use of the expression “the relevant day” in paragraph 11(4)(a) of the Act, to enable or assist in the way the Act is to be understood.
In paragraph 27 of the AAT1 decision, the Member acknowledged that the respondent became a resident of Australia on 29 September 2014 when she started living in Australia with her husband and child. In paragraph 28 of the Member’s decision he also acknowledged, as a following consequence, that the respondent was not an Australian resident when the child was born. But the Member then found that the Act did not require this to be the case. He said that what s 31 of the Act, when read with s 45, means is that the respondent cannot be paid PPL for a day unless she is an Australian resident on that day. The Member had found earlier that the respondent met all other eligibility requirements of the Act, other than the Australian residency requirement, and that she made an “effective” claim for PPL on 8 October 2014. The Member then found that, as at 8 October 2014, the respondent also met the Australian residency requirement. She was permanently living in Australia that day and she also held a permanent resident visa that day. He said these are the only “residency” requirements which need to be satisfied and they were satisfied on 8 October 2014, and from then on, on each day in the following 18 weeks. It followed that she became “eligible” for PPL on 8 October 2014.
I agree that the respondent did satisfy the Australian residency test on 8 October 2014. She was an Australian resident pursuant to s 6 of the Act on 8 October 2014. However, I do not agree that she became “eligible” for PPL on that day. Under s 13(2) of the Act:
(a)The Secretary must determine that parental leave pay is payable to the respondent for her PPL period, which in her case (pursuant to paragraph 11(5)(a) of the Act) is the period starting on 8 October 2014 and ending on 10 February 2015.
(b)If, when making the determination, the Secretary must be satisfied that the respondent was or will be eligible for parental leave pay on each day in the period that started on the day her child was born (in July 2014) and ended on the last day of her PPL period (10 February 2015).
I note that on 20 May 2015 the Secretary determined that the respondent was never eligible for PPL as she did not meet the Australian residency test on the day her child was born. In my view, this was correct. The Secretary could not be satisfied that the respondent was or will be eligible for parental leave pay on each day in the period referred to in s 13(2) of the Act, which started in July 2014. Mr Hay pointed out that this was in accordance with policy in the form of the Paid Parental Leave Guide, which relevantly reads at paragraph 2.2.4.10:
“To remain eligible for PLP, a primary claimant in normal circumstances must meet the above residency test from the child’s DOB …
..
For post-birth claims, the primary claimant must already meet the Australian residency test from the time of the child’s birth, and must continue to meet the residency test until the end of their PPL period.”
While I am not bound to apply policy guidelines, in my opinion there are no cogent reasons to disregard the policy in the particular circumstances in this case (see Re Drake and Minister for Immigration and Ethnic Affairs (No 2)).[6] The Secretary contended that the respondent did not satisfy the residency requirements for eligibility in the period from July 2014 to 28 September 2014 in order for a determination to be made that PPL was payable.
[6] (1979) 2 ALD 634 at 639-645.
In my respectful opinion, the AAT1 was wrong in adopting the approach it did – in interpreting s 31 of the Act, reading it with s 45 and in using an “on a day” test. The Secretary submitted that the AAT1 erred in law by conflating the separate but cumulative operation of sections 11 and 13 of the Act. This may have been what the Member was doing in paragraph 28 of his reasons. The Secretary said at paragraph 40 of its SoFIC that:
“… the AAT1 was incorrect in deciding that the Respondent’s PPL period, which was determined under section 11 of the Act, would provide a basis for the Respondent to be eligible for parental leave pay pursuant to section 13. Section 11 of the Act provides that the PPL period may start on a date later than the child’s date of birth. However, that later start date does not provide a basis to establish eligibility for PPL pursuant to section 13 of the Act at that later time.”
In the circumstances, I find that on the evidence the respondent is not entitled to payment of PPL under the Act. Accordingly, there is no need to determine the respondent’s PPL period under the Act.
As there is no entitlement, does the respondent have a PPL debt?
As I noted in paragraph 25 of these reasons, the Department determined that the respondent was never eligible for PPL as she did not meet the Australian residency test on the day her child was born. Having reviewed the respondent’s eligibility for PPL, on 22 June 2015 the Department decided to raise and recover a PPL debt of $11,538.90. The Secretary contends that the debt has been correctly calculated, that the respondent has been overpaid PPL totalling $11,538.90 and that this amount constitutes a legally recoverable debt pursuant to s 167 of the Act.
On the material before me, I am satisfied that the respondent has a PPL debt. However, it appears from a SOFIC prepared for the respondent by the Legal Services Commission of South Australia that the respondent has repaid part of the debt and the amount outstanding is now less than $11,538.90.
Are there any grounds to waive recovery of the debt, in whole or in part?
Provisions exist in the Act relating to the waiver of the right to recover a debt. Section 195 of the Act reads:
“Waiver of debts—administrative error
The Secretary must waive the right to recover so much of a debt as is attributable solely to an administrative error made by the Commonwealth, or an agent of the Commonwealth, if:
(a) the debtor received in good faith the payment of payments that gave rise to that proportion of the debt; and
(b) the debtor would suffer severe financial hardship if it were not waived.”
Section 195 provides that the Secretary must waive the right to recover a debt where it has arisen solely as a result of administrative error. In the present case, the Secretary accepts that the debt was attributable solely to Commonwealth administrative error. However, subsection 195(b) requires that the debtor would suffer severe financial hardship if the debt were not waived. The term “severe financial hardship” is not defined in the Act. There are numerous Tribunal decisions that seek to explain what severe financial hardship means. For example, in Stubbs and Secretary, Department of Family and Community Services[7] the Tribunal said:
“20. Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature”.
[7] [2003] AATA 729.
It appears that the respondent was in receipt of FTB from 4 November 2014 and is now in receipt of PPL in respect of her second child.[8] Moreover, it was the respondent’s evidence that she and her husband purchased a property together at Kensington Park for $350,000, that he is an engineer and that he works for the Mechanical Services section at the new Royal Adelaide Hospital. It appears that the respondent was previously renting a property in Ascot Park, but is now recorded by the Department as residing in Kensington Park. However, the Department has no record of any real estate owned by the respondent or her husband. The Secretary contends that the respondent’s family income for FTB purposes is not indicative of her being in straightened financial circumstances. Apparently, she is in a better position than most other recipients of social security and family assistance payments. The Secretary further contends that there is no evidence that the respondent would suffer severe financial hardship if the debt were not waived. Accordingly, the Secretary submits that waiver under s 195 of the Act is not available on the material evidence.
[8] Exhibit A2.
Section 199 of the Act provides that a debt may be waived if there are ‘special circumstances’ that make it desirable to waive the debt. Section 199 reads:
“Waiver of debts—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 or misleading statement or representation; or
(ii) failing or omitting to comply with a provision of this Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt (or part); and
(c)it is more appropriate to waive the debt (or part) than to write off the debt (or part).”
The term “special circumstances” is not defined in the Act. It has been extensively considered in other social security and family assistance cases. However, there do not appear to be any precedent cases specifically considering the special circumstances provisions of this Act.
Although the Secretary accepts that the debt was attributable solely to Commonwealth administrative error, Mr Hay submitted that the respondent’s family, health or other issues do not satisfy the requisite “special circumstances”. On the evidence before me, I note that the debt did not result wholly or partly from the respondent or her husband making a false or misleading statement or representation to the Secretary or that they failed to comply with a provision of the Act. When the respondent arrived in Australia with her child, on 8 October 2014 she applied for PPL. Initially the claim was rejected and then it was subsequently granted. In the hearing, I was unable to ascertain why things changed. Then, surprisingly it was decided that the respondent did not qualify for PPL and a significant debt was raised. This was all very confusing for her and her husband.
The respondent had experienced difficulties during the birth of her daughter and she required treatment in theatre and had a blood transfusion. The experience would have been traumatic for both the respondent and her husband. Later, the respondent’s fifteen month old son was referred by the family GP to Paediatric Emergency. The GP directed the father to take the child to hospital as he had been coughing up blood. The Paediatric Registrar examined the child and reassured the father that the source of the blood was oropharyngeal and caused by coughing.
In other cases, it has been recognised that administrative error alone can be sufficient to enliven a waiver for special circumstances, even where it is not the only cause of the overpayment. The administrative error that occurred in the respondent’s case must have been very confusing to her and her husband. When her claim for PPL was rejected and then later granted it would have been unclear to the respondent why she was not entitled to receive the PPL all along. It has been recognised in some cases that administrative error alone can be sufficient to enliven a waiver in special circumstances. In the respondent’s statement of facts and contentions that was prepared for her, the decision in Secretary, Department of Employment and Workplace Relations v Taylor[9] was referred to. There, the respondent was overpaid $19,273.06 of parenting payment due to administrative error relating to income estimates. The Tribunal decision was to waive all, but a very small proportion, of the debt due to administrative error. In the decision of Centkowska v Department of Social Services[10] 50 percent of the applicant’s parenting payment debt of $13,447.72 was waived on the basis of administrative error.
[9] [2007] AATA 1377.
[10] [2016] AATA 342.
In my view, given the difficulties that the respondent and her husband were exposed to when they arrived in Australia with their family, I believe that she has demonstrated special circumstances which make it desirable to waive a portion of the debt. Although the Secretary’s submission was that the respondent’s circumstances are not sufficiently “special” to warrant the exercise of the discretion to waive all or part of the debt under s 199 of the Act, I am satisfied that the respondent’s circumstances in this case are special.
CONCLUSION
The respondent was originally indebted to the Commonwealth in the amount of $11,538.90. In the SOFIC that was prepared for her it is said that the respondent has repaid part of the debt and the current debt at the time of the SOFIC was $8,450.00. The amount of the current debt at the moment is not known.
As I am satisfied that there are special circumstances that exist, those special circumstances make it desirable in my view to waive 50 percent of the current debt at the date of these reasons.
DECISION
For the reasons that have been outlined above, the Tribunal sets aside the decision under review and in the place of that decision decides that 50 percent of the present current debt should be waived.
I certify that the preceding 41 (forty -one) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne .......................[Sgd].................................................
Administrative Assistant
Dated 30 November 2016
Date(s) of hearing 18 October 2016 Advocate for the Applicant Mr A Hay Solicitors for the Applicant Dept of Human Services Respondent In person
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