Re Vito Pennisi and Director-General of Social Security
[1984] AATA 145
•27 October 2016
Thomas and Secretary, Department of Social Services (Social services second review) [2016] AATA 847 (27 October 2016)
Division
GENERAL DIVISION
File Number
2015/4714
Re
Thea Thomas
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member J Sosso
Date 27 October 2016 Place Brisbane The Tribunal affirms the decision under review.
..........................[Sgd]..............................................
Senior Member J Sosso
CATCHWORDS
SOCIAL SECURITY – Parenting Payment – Overpayment – Debt – portability - Australian residence – whether applicant exceeded maximum portability period – whether special circumstances – calculation of six week period – fractions of a day – whether administrative error – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 5, 500D, 1217, 1218C, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) s 68CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 (2007) 100 ALD 9
Beadle v Director-General of Social Security (1985) 60 ALR 225
Dowsley v Westpac Life Insurance Services Ltd [2013] NSWSC 1208
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Prowse v McIntyre (1961) 111 CLR 264
Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693
Re Vito Pennisi and Director-General of Social Security [1984] AATA 145
Ryde v Secretary, Department of Family and Community Service [2005] FCA 866
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32
Wood v The Retirement Benefits Fund Board [2016] TASSC 15REASONS FOR DECISION
Senior Member J Sosso
27 October 2016
INTRODUCTION
Ms Thea Thomas (the Applicant) seeks a review of a decision of the Administrative Appeals Tribunal Social Services and Child Support Division of 10 August 2015 which affirmed a decision of the Authorised Review Officer (ARO) of the Department of Human Services (Centrelink) to raise and recover a parenting payment (PP) debt of $19,287.61 for the period 1 November 2013 to 23 November 2014.
The Applicant is the principal carer of Grace, her daughter, who was born on 23 September 2010 and was in receipt of a PP. The Applicant was born on 25 October 1983 and has legal qualifications. She completed a Masters in Law externally through the University of Melbourne while in Indonesia. During the period 2012 – 2014 she was a single mother of Grace and travelled between her family home in the Northern Territory and Bali, Indonesia. More recently she has moved from the Northern Territory to Toowoomba, Queensland. She is currently a single mother of two young children and is not engaged in full-time employment.
Section 500 of the Social Security Act 1991 (the Act) mandates that to receive a PP a person must have at least one PP child and be an Australian resident.
To be a PP child section 500D(2) of the Act requires that the child is a child of the person, the person is not a member of a couple, the child has not turned 8 and the person is the principal carer of the child.
The Act mandates, for PP payments, maximum portability periods for both the carer and the child.
Section 1217 provides in Item 11 of the Table a maximum portability period for a carer of 6 weeks. Section 1218C allows for an extension of the portability period in certain circumstances.
Critically, section 5(21) of the Act provides that if a child leaves Australia temporarily and continues to be absent from Australia for more than six weeks (prior to 1 January 2013 it was 13 weeks), a person cannot be the principal carer for the purpose of PP payments unless, inter alia, the carer’s portability period has not ended.
From November 2012 until May 2015 the Applicant lived primarily in Bali with Grace and her mother, Mrs. J Thomas. The Applicant made regular trips between Bali and Darwin but she was not always accompanied by Grace. Mrs. J Thomas suffered from diabetes, hyperlipidaemia, diabetic peripheral neuropathy, chronic back pain from a slipped disk, a crushed nerve and a number of other ailments (Exhibit 1 T10 pp. 135-138). The Applicant contends that her extended stay in Indonesia was due to her mother’s illness and the consequent need to care for her.
Between 22 November 2012 and 6 April 2015 the Applicant flew from Darwin to Indonesia on 19 occasions. On eight of those occasions she returned to Indonesia having only visited Australia for one day. On four occasions her visit lasted two days and on two for three days. During the same period the Applicant remained in Bali on average for five or six weeks each trip, and on one occasion for twelve and a half weeks.
Grace was regularly absent from Australia for lengthy periods of time. Grace exceeded the 6 week maximum portability requirement on more than one occasion: 21 February, 16 May and 15 August 2013. This is illustrated below:
Absence: 22.11.12 – 22.03.13 17 weeks 2 days
Presence: 22.03.13 - 4.4.13 1 week 6 days
Absence: 4.4.13 – 21.6.13 11 weeks 2 days
Presence: 21.6.13 – 4.7.13 1 week 6 days
Absence: 4.7.13 – 1.11.13 17 weeks 2 days
Presence: 1.11.13 – 5.11.13 4 days
Absence: 5.11.13 – 19.1.14 10 weeks 6 days
Presence 19.1.14 – 22.1.14 3 days
Absence: 22.1.14 - 23.5.14 17 weeks 3 days
Presence: 23.5.14 – 25.5.14 2 days
Absence: 25.5.14 – 6.7.14 6 weeks 1 day
Presence: 6.7.14 – 23.7.14 2 weeks 3 days
Absence: 23.7.14 – 1.9.145 5 weeks 4 days
Presence: 1.9.14 – 3.9.14 2 days
Absence: 13.10.14 – 29.12.14 11 weeks 1 day
Presence: 29.12.14 – 6.4.15 14 weeks
As Grace was absent from Australia for greater than six weeks, PP payments could only continue if the Applicant, as her principal carer, did not exceed her maximum portability period. It is the contention of the Secretary, Department of Social Services’ (the Respondent) that this occurred on 25 September 2013, and from that point PP was only payable when both Grace and the Applicant were physically present in Australia.
On 24 November 2014 Centrelink cancelled the Applicant’s PP on the basis she was no longer an Australian resident. A debt of $22,848.22 to Centrelink arose as a result. The Applicant sought a review, and two decisions were made by the ARO. Ultimately the ARO decided that the Applicant was an Australian resident but had been overpaid PP from 25 September 2013 to 23 November 2014 in the sum of $19,287.61. The ARO determined that $1615.99 had been rightfully paid to the Applicant because both she and Grace were present in Australia. Finally the ARO determined that $1944.62 paid to the Applicant during 25 September 2013 and 31 October 2013 not be repaid as it arose due to an administrative error on the part of Centrelink and was received in good faith.
ISSUES
The Respondent concedes that the Applicant was an Australian resident during the debt period and that the Applicant has a PP child under the age of eight years.
There are three key issues to be determined:
(a)was the Applicant paid in excess of her PP entitlement; and, if so
(b)is the ensuing debt totally recoverable, or can some or all of it be waived; or
(c)can the debt be written off?
Was the Applicant Paid In Excess of Her PP Entitlement
Respondent’s Contentions
The Respondent contends that Grace exceeded her maximum portability period on 21 February 2013, having departed Australia on 22 November 2012 and having remained overseas in excess of the (then) 13 week time limit. Pursuant to section 5(21) ongoing PP payments were dependent on Grace remaining in the company of the Applicant, who, in turn, had to comply with her portability requirements.
The Respondent also contends that while Grace returned to Australia several times during the debt period, she failed to remain for a continuous six week period as required by section 5(24), and was therefore “unable to ‘reset’ her own ‘portability clock’”. Further, while the Applicant continued to return from Indonesia to Australia within the required portability period, thereby successfully ‘resetting’ her portability clock, she exceeded the six week time period on 25 September 2013.
The Respondent contends (Respondent’s Supplementary Submissions (RSS) para 1.2) that the six weeks should be calculated on a daily basis commencing with the date of departure as the first day of absence. Consequently the 42 day period ended at midnight on 24 September 2013. The Respondent contends that if the Applicant’s time calculations were correct then an ordinary week would be extended by one day in that both the first and the second Wednesday are counted (para 2.2). Instead, it is submitted, the correct approach would recognise that a week commencing on a Wednesday concludes at midnight the following Tuesday; otherwise an ordinary week would be extended by an eighth day (para 2.2).
The Tribunal’s attention was also drawn to section 1218C of the Act which provides a discretion to extend the portability period in certain circumstances. Relevantly it provides for the exercise of such discretion when a person is unable to return to Australia because of serious illness to a person or a family member of a person.
The Respondent contends that in order to exercise this discretion, not only must the Applicant establish that there was a serious illness, but that such event occurred or began during the period of absence – section 1218C(2)(a). The Respondent contends that the Applicant’s mother’s condition existed and was known for a significant period prior to her departure for Indonesia on 14 August 2013.
It is also contended that diabetes and the other ailments of Mrs. J Thomas could have been treated in Australia and there was no medical reason for her remaining in Bali. Indeed, the Respondent contends that Mrs. J Thomas returned to Australia on several occasions between November 2012 and December 2014 (Exhibit 1 T5 p. 110).
Applicant’s Contentions
The Applicant gave evidence at the 21 September 2016 hearing. She testified that she and Grace went to Bali on a holiday with her mother. It was during that holiday that her mother became ill and could not walk. Her mother’s health fluctuated, and at times she was totally incapacitated.
Although Mrs. J Thomas had a pre-existing medical condition, the Applicant testified that her health rapidly deteriorated when she arrived in Indonesia, and she was incapable of immediately returning to Australia. The Applicant also testified that her mother received medical treatment in Bali which was unavailable in Australia, and though not hospitalised, she was under constant medical care.
The Tribunal has considered the care plan of Mrs. J Thomas which was prepared by Dr Barbara Allen and dated 27 September 2012 (Exhibit 1 T10 pp. 135-138) as well as other medical evidence (Exhibit 1 T10 pp. 139 – 153). The medical records disclose that Mrs. J Thomas was born on 16 September 1947 and was 65 years of age when the Applicant first travelled with her to Bali.
The Applicant testified that, as an Officer of the Court, she was always careful to comply with her legal obligations. In that regard she contended that she had been in regular contact with Centrelink to ensure that she was compliant with all relevant PP requirements. The Applicant testified that she would have obviously complied with all requirements mandated by the Act to ensure that her PP was not jeopardised.
During cross-examination Ms. Campbell, on behalf of the Respondent, drew the Applicant’s attention to 22 notices that were sent to her from Centrelink (Exhibit 1 T11 pp. 156 – 220). At the beginning of each notice is a statement that the recipient is under an obligation to notify Centrelink within 14 days (or 28 days if residing outside of Australia) if any of a number of listed matters happen or are likely to happen. One of those events is: “when you return to Australia or if you go to another country.” The Applicant stated that she did not receive any of the 22 notices. A perusal of the notices indicates that from 2012 until 2014 each was sent to PO Box 3, Virginia, Northern Territory.
The Applicant contends that she did not exceed the portability period (Applicant’s Submissions to AAT (AS) 6 June 2016 p.1). During the hearing of 21 September 2016 the Applicant submitted that the six week portability period in section 1217 of the Act should be calculated on a weekly basis. If such a calculation was made, it was contended, her return to Australia on 25 September 2013 would have been within the portability period. The consequence of this would be that the Applicant’s debt would be limited to the period 6 July 2014 until 23 November 2014.
Leave was granted for both parties to provide the Tribunal with supplementary submissions on the question of the calculation of time prescribed by the Act.
The Applicant subsequently contends (Supplementary Submissions (SS) 26 September 2016 para 3.1) that the portability period must be calculated as a maximum period of 6 weeks beginning at the commencement of the period of absence (i.e. 7:10 pm 14 August 2013). Further, she contends (SS para 3.2) that the portability period should be calculated from the actual time of departure and not from the first day of departure. The consequence of this, it is contended (SS para 3.3), is that the Applicant returned within her portability period, as that period would not have ended until 7:10 pm on 25 September 2013.
The Applicant also contends (SS para 4.2) that she could only have exceeded her portability period if the six weeks commenced before her departure, namely 12:00 am of the day of her departure, and 19 hours before her actual departure. The consequence of such an interpretation, it is contended, is that her portability clock would have started even though she was still in Australia on 14 August 2013 and had not actually departed for Indonesia.
The Applicant further contends that section 1218C applies and the discretion allowed by that provision be exercised in her favour. Although her mother was ill prior to travelling to Indonesia, it is contended that her condition deteriorated after she travelled to Bali when serious complications arose. At the 21 September 2016 hearing the Applicant stated that a medical emergency arose in Bali due to an underlying infection that her mother suffered from. Her mother received alternative treatment in Bali that she could not get in Australia, and her medical condition was so unstable that she could not return to Australia. In these circumstances the Applicant contends that she was unable to return to Australia permanently while her mother was in such a parlous condition in Bali.
Consideration
The first, and fundamental, question is whether the Applicant and Grace complied with the portability requirements of the Act for the receipt of PP.
Questions have arisen whether Grace was in the care of the Applicant when she travelled to Australia while Grace remained in Indonesia with her grandmother. Material before the Tribunal (Exhibit 1 T6 p.121) indicates that a view reached by at least one Centrelink officer that the Applicant’s PP entitlements ceased on 13 May 2013, which was the date she returned to Australia without Grace. The Applicant has made extensive submissions regarding the issue of whether Grace was in her care at relevant times. However, the debt before the Tribunal only arose from 25 September 2013, and the key issue has been one of calculation of time rather than of care.
The Respondent has provided the Tribunal (Exhibit 1 T12 pp 230 – 232) with the Immigration advised movements of the Applicant and Grace from and to Australia between 10 December 2007 and 6 April 2015. The veracity of this material has not been called into question and the Tribunal accepts its accuracy.
The Applicant departed Australia at 19:10 on Wednesday 14 August 2013 and returned at 12:30 am on Wednesday 25 September 2013. The Applicant testified that she boarded an aeroplane in Bali late in the evening of 24 September 2013 and arrived in Darwin in the early hours of 25 September 2013. The central question is whether this period of time exceeds the six week maximum portability period.
The issue is whether the calculation of six weeks can be based on a particular time in a day and end at another time in a day. In other words, can fractions of a day be used as the basis for the computation of time as contended by the Applicant? This issue was decided by the High Court in Prowse v McIntyre (1961) 111 CLR 264. The law is stated by Taylor J (at 276) as follows:
“the law takes no account of fractions of a day…Thus in Fitzhugh v Dennington (1704) 2 Lord Raymond 1094 (92 ER 225) Lord Holt said: ‘So if a man were born the first of February, and lived to the thirty-first of January twenty-one years after five o’clock in the morning, and then makes his will and dies by six at night, that will is good, and the devisor is of age’ (1704) 2 Lord Raymond, at p. 1096 (92 ER at p. 226). Likewise – ‘a will devising lands, made by such a person on that day, is a good will; because the law makes no fraction of a day’ (Toder v Sansam (1775) 1 Brown 468 at p. 475 (1 ER 695 at p. 700). As Sir William Blackstone observes in a foot-note to the passage already quoted from the Commentaries – ‘If he is born on the 1st of January, he is of age to do any legal act in the morning of the last day of December, though he may not have lived twenty-one years by nearly forty-eight hours; the reason assigned is, that in law there is no fraction of a day; and if the birth were on the first second of one day, and the act on the last second of another, then twenty-one years would be complete; and in the law it is the same whether a thing is done upon one moment of the day or on another.”
There have a number of decisions since 1961 which have endorsed the proposition that, unless there is statutory guidance to the contrary, no account is to be made of fractions or parts of a day in the commutation of time: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, Dowsley v Westpac Life Insurance Services Ltd [2013] NSWSC 1208 and, most recently, Wood v The Retirement Benefits Fund Board [2016] TASSC 15 per Heerey AJ at [22]. There is also a very helpful Tribunal decision: Re Vito Pennisi and Director-General of Social Security [1984] AATA 145.
It is therefore not permissible to calculate the six week maximum portability period by recourse to a particular hour on 14 August computing from that fraction of the day forwards.
The next issue is how the six week time period is properly calculated. Guidance is provided by section 1217(4) of the Act. This subsection, inter alia, provides that a person’s maximum portability period begins at the commencement of the period of absence and ends at the earlier of either the first time at which the absence is not an allowable absence or the end of the period that is the person’s maximum portability period.
The Respondent’s contention that the start of the portability period includes the first day that the Respondent is absent from Australia is supported by section 1217(4)(a). However, if there be any doubt then that is removed by section 36 of the Acts Interpretation Act 1901 which provides in Item 2 of the Table that where a period of time is expressed to begin at, on or with a specified day, then the period of time includes that day.
Further, Item 4 of the Table to section 36 provides that if a period of time is expressed to end at, on or with a specified day, then the period of time includes that day.
The calculation of time is governed by the wording and context of the relevant statutory scheme. For example, if a period of time is describe to run “from” a particular date, then the High Court held in Forster v Jododex Pty Ltd (1972) 127 CLR 421, the time is calculated exclusive of the first specified day. This common law rule is mirrored in Item 5 of the Table to section 36.
The relevant period of time specified by the Act is expressed in weeks and not days. However, a week is comprised of seven days and as such a weekly period is simply the aggregation of seven days. To quote Windeyer J in Prowse v McIntyre (277): “In measuring lapse of time the common law eschews metaphysics.” Consequently, and applying ordinary rules of statutory interpretation, the six week period specified by the Act is simply 42 days calculated inclusive of the first day as mandated by section 1217(4).
To sum up, the six week period commenced on the day the Applicant departed Australia on 14 August 2013 and ended at midnight on 24 September 2013. There is, obviously, a degree of harshness in adopting such an interpretation. The Applicant’s uncontested testimony is that she departed Indonesia on 24 September and arrived in Australia shortly after midnight in the early hours of 25 September 2013. However, as Windeyer J observed in Prowse v McIntyre (279): “Time is a local phenomenon…the date and time of an event or of an act are ordinarily the date and time determined by the calendar and clock at the place where the event happens or act is done, notwithstanding that the actual occurrence is at different times in different parts of the world.” In this instance, there is a statutory cut off point and the Applicant arrived in Darwin after that time. There is no mandate in the Act to adopt a different statutory construction. The ordinary rules of statutory interpretation and the clear wording of the Act lead inexorably to the result that the Applicant exceeded the maximum portability period with the cascading implications contended by the Respondent.
The Applicant, however, contends that if she has exceeded the maximum portability period, then the period should be extended pursuant to section 1218C of the Act.
Section 1218C lists 11 events, the occurrence of which may result in the Respondent extending the portability period. All of the specified events have one element in common. Namely that the event occurs whilst the relevant person is overseas. The events can be basically divided into three categories. The first is where the person or a member of the family has an accident, becomes ill or dies. In short each of the bases is health related. The second category is due to the intervention of a legal event, namely criminal or custody proceedings or a robbery or serious crime committed against the person or a family member. The final category is where due to a natural disaster, war or civil or industrial unrest, movement back to Australia is impeded.
In the context of this matter, the only two specified events that can be considered are paragraph (b) which is “a serious illness of the person or a family member of the person” and (c) “the hospitalisation of the person or a family member of the person.”
Paragraph (c) can be immediately excluded as Mrs. J Thomas was never hospitalised in Bali. The Applicant testified that her mother accessed alternative therapies that were not available in Australia, but those therapies did not involve hospital treatment.
Paragraph (b) is also unavailable on the facts presented to the Tribunal. It is evident from the care plan prepared by Dr Allen on 27 September 2012 that Mrs. J Thomas had a pre-existing medical problem of some magnitude. A care plan is only prepared where a multidisciplinary care team approach is appropriate. In the case of Mrs. J Thomas this involved a podiatrist, chiropractor, endocrinologist, occupational therapist, obstetrician as well as her general practitioner. For some period before Mrs. J Thomas travelled to Bali she was unwell and taking a variety of prescription medicine (Exhibit 1 T10 p. 139).
Section 1218C(b) is designed to deal with the situation where a person who, while overseas, becomes incapacitated by a serious illness. There are, at least, two possibilities that could arise.
First, a person who, though well when leaving Australia, becomes seriously ill while overseas. This is not the case with Mrs. J Thomas as she was unwell when she left Australia and was the subject of a comprehensive care plan and the patient of numerous medical specialists.
The second possibility is that although a person is unwell when leaving Australia, their condition worsens such that they are unable to return to Australia. Insofar as paragraph (c) specifically deals with hospitalisation, it is open to interpret paragraph (b) as encompassing a situation where a person suffers a relapse in a remote or underdeveloped location and is incapable (for whatever reason) of accessing hospital treatment.
The evidence before the Tribunal discloses three problems with the Applicant’s contention that section 1218C(1)(b) applies. The first is that Mrs. J Thomas could have quite easily accessed hospital treatment if she chose. It would appear that the failure to access hospital treatment was her own decision and, instead, she accessed alternative therapies. The second flows from the first. It is difficult to accept that Mrs. J Thomas developed a serious illness whilst in Bali if she chose not to get orthodox medical treatment, especially as she was the subject to a recent and well developed multidisciplinary care plan. Section 1218C(1)(b) was not drafted to encompass events where a person decides of their own volition to abstain from orthodox medicine and utilise alternative therapy treatments. The third problem is that Mrs. J Thomas returned to Australia on several occasions during the 2012 - 2014 time period. Ms. Pamela Gough, the ARO officer noted on 20 January 2015 (Exhibit 1 T5 p. 110): “Thea explained that her mother did return to Australia at different times for treatment, for example she had some procedures carried out to improve her eyesight which had deteriorated due to Diabetes.”
In summary, not only could Mrs. J Thomas have returned to Australia during her lengthy stay in Indonesia to obtain medical treatment in Australia, but she did so. Further, there is no evidence that she could not have accessed medical facilities in Bali, including hospitalisation, if she had a serious illness. All of the evidence indicates that Mrs. J. Thomas may have suffered a relapse whilst on her holiday, but she chose to remain in Indonesia for two years and when she required orthodox medical treatment made short term trips to Australia. The extended absence of Mrs. J Thomas from Australia was not because of an intervening serious illness that incapacitated her and made her return to Australia difficult, dangerous or ill-advised, but a conscious lifestyle decision. In these circumstances section 1218C(1)(b) has no application.
Should the Debt be Waived?
Statutory Provisions
Chapter 5 of the Act deals with overpayments and debt recovery. Part 5.4 deals with non-recovery of debts. Two relevant provisions are: section 1237A, which deals with administrative error and section 1237AAD which allows for waiver in special circumstances.
Section 1237A requires the Secretary to waive the right to recover the proportion of any 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.
Section 1237AAD allows the Secretary to waive the right to recover all or part of a debt if, firstly, the debt did not arise from the debtor (or another person) knowingly making a false statement or representation or failing or omitting to comply with a statutory provision and there are special circumstances (other than financial hardship) and it is more appropriate to waive than write off the debt.
The Applicant’s Contentions
The Applicant contends (AS para 3) that even if she incurred a debt to the Commonwealth, it should be waived for; the following reasons:
(a)the Applicant has not contravened the Act. The Applicant contends that in order to backdate the debt there must be a contravention of the Act and relies on section 80;
(b)the error was solely attributable to the Commonwealth because the payments were received in good faith and the debt was raised more than six weeks after the first payment that caused the debt;
(c)in accordance with section 1237AAD of the Act the debt did not result from the Applicant knowingly making a false statement or representation nor failing or omitting to comply with any statutory requirements.
(d)there are special circumstances, including the ongoing medical condition of her mother and the hospitalisation of her father on 24 October 2013;
(e)the debt was incurred because the Applicant relied on representations made by Centrelink;
(f)Centrelink failed to afford the Applicant procedural fairness when reaching their decisions, informing the Applicant when they had made a decision and changing the rationale for reaching their decisions;
(g)retrospectively enforcing an error caused by the Commonwealth would cause the Applicant significant hardship; and
(h)a number of subsidiary points, some of which duplicate the contentions outlined above.
The Applicant’s reliance on section 80 in her first proposition is problematic as section 80 was repealed by Act No 192 of 1999, and, in any event, dealt with the age pension.
The Respondent’s Contentions
The Respondent concedes that $1944.62 of the debt should be waived pursuant to section 1237A; this being the payments for the period 25 September 2013 until 31 October 2013. The Respondent notes that the Applicant contacted Centrelink from Indonesia on 27 September 2013 (Exhibit 1 T 13 p. 285), and, as such, Centrelink were aware of the Applicant’s living and travel arrangements, specifically that she was living mostly in Bali and had exceeded her portability period on 24 September 2013. In this instance the Applicant left Australia on 25 September 2013 and did not return until 31 October 2013.
The Respondent denies any administrative error on the part of the Commonwealth during the period 1 November 2013 until 23 November 2014. It is contended that the Applicant was aware of the portability requirements of the Act, made strategic visits to Australia to avoid voiding her PP requirements and failed to respond to the numerous notices that were sent to her during this period.
Consideration
Apart from the above concession made by the Respondent, there is no evidence before the Tribunal that Centrelink made any administrative errors of the type contemplated by section 1237A. That is not to say that Centrelink is totally blameless in this matter, and there is material before the Tribunal which indicates that some errors were made by Centrelink (Exhibit 1 T 7 p.120).
The Applicant was acutely aware of the portability requirements of the Act. She telephoned Centrelink on 22 August 2013 from Indonesia regarding those requirements (Exhibit 1 T3 p. 287). On 27 September the Applicant telephoned Centrelink on three separate occasions (14:01, 14:56 and 15:08 – Exhibit 1 T10 pp. 283 – 285) about her residency requirements. This was then followed up by another telephone call on 10 October 2013 (Exhibit 1 T13 p. 282). It is abundantly clear from even a brief perusal of the many contacts that the Applicant made with Centrelink over a two year period that she was conscious of her legal obligations and was very keen to ensure that her PP was not voided either due to loss of residency or failure to meet the portability requirements.
The travel pattern of the Applicant is illustrative of her knowledge of the law and her desire to comply with her legal obligations, albeit not totally successfully.
The Applicant’s denial that she received any of the 22 notices sent to her by Centrelink advising her of her legal obligations is difficult to accept, particularly as the postal address was a post office box as distinct from a roadside post box. However, even if the mail had been sent directly to her Darwin residential address, there is evidence before the Tribunal that this address is shared with other members of her family, and presumably her father or her sister would have been collecting the mail.
Irrespective of whether the Applicant received the many notices, she was under a legal obligation to notify Centrelink of her intention to leave Australia – section 68 Social Security (Administration) Act 1999. A person with the legal background of the Applicant, and a person who was in regular contact in Centrelink about their social security entitlements whilst overseas, would, or should, have been aware of this basic obligation. Yet despite this, and with one notable exception, the Applicant failed to comply with this important requirement. If there are any issues of administrative failure by Centrelink in notifying the Applicant of matters, or of tardiness (and none are immediately obvious), then much, if not all, of any fault can be traced back to the Applicant not keeping Centrelink informed of her movements. If she had done so, then perhaps much of what transpired could have been avoided.
The material before the Tribunal suggests that in its dealings with the Applicant, Centrelink officers performed their duties in a professional, and prompt manner. The information provided by Centrelink officers was, overall, accurate and appropriate. In these proceedings, the Respondent has made concessions where they were reasonably open, and did not ventilate the question of residency, even though it was arguably open. In short, there have been no administrative errors that would enliven the operation of section 1237A. The debt did not arise because of representations made by Centrelink officers. Indeed, if there is one matter that is beyond debate, it is that the Applicant is an articulate and legally qualified person who was acutely aware of her legal obligations; her travel patterns and contacts with Centrelink demonstrate that she was not in a disadvantageous positon.
To sum up, there is no evidence of any administrative error by the Respondent which caused or contributed to the debt arising in the period November 2013 until November 2014.
Turning to the waiving of a debt in whole or part because of special circumstances as allowed by section 1237AAD, consideration must be given to the various judicial pronouncements on what constitutes “special circumstances”. This term is not defined by the Act, but, fortunately, has been the subject of extensive consideration by the Federal Court.
In Beadle v Director-General of Social Security (1985) 60 ALR 225 the Full Court (Bowen CJ, Fisher and Lockhart JJ) said (at 228):
“The Director-General has power to fix a longer period in special circumstances. Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate. For example, where the delay beyond six months was due to the claimant’s being misled by a departmental officer or was due to the negligence of a third party it might be thought the normal six months would be inappropriate; that special circumstances had been shown which warranted a longer period. More difficult would be questions of ignorance, illiteracy, isolation, illness and the like. It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase ‘special circumstances’, although lacking in precision, is sufficiently understood in our view not to require judicial gloss.”
In that case the appeal was from the Administrative Appeals Tribunal where it was held that “special circumstances” are those circumstances that are “unusual, uncommon or exceptional”. The Full Court found no error of law by the Tribunal and said (at 230): “we are in broad agreement with the approach of the Tribunal.”
In Secretary, Department of Social Security v Hales (1998) 82 FCR 154 French J found (162) that the “concept of special circumstances is broad” and the evident purpose of section 1237AAD is “to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words.”
Subsequently in Ryde v Secretary, Department of Family and Community Service [2005] FCA 866 Branson J observed (at [25]) that the Full Court in Beadle did not endorse the view of the Tribunal that circumstances were special only if they were ‘unusual, uncommon or exceptional”. Her Honour then said (at [26]): “the statutory requirement for ‘special circumstances’ discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness... must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case.”
Reference can also be made to the decision of Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 (2007) 100 ALD 9. His Honour made the following very helpful observations ([33]/17-18):
“the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ’unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.”
The Respondent also drew my attention to the Administrative Appeals Tribunal decision of Re Davy and Secretary, Department of Employment and Workplace Relations (2007) 94 ALD 693. In particular the Respondent relies on the following observations of Deputy President Forgie (715-716/[80]):
“The ‘special circumstances’ are not merely directed to the person’s own circumstances. Rather, they are directed to those that are ‘special circumstances….that make it desirable to waive’. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it….He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement.”
Finally, Keifel J observed in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 that there must be some evidence to “take it out of the usual or ordinary case” and “there must be some feature out of the ordinary.”
The Applicant’s submissions do not disclose circumstances that take this matter out of the usual or ordinary case. The fact that there is no evidence of negligence or falsity by the Applicant of itself indicates nothing other than the Applicant did what she was required to do by law; nothing more or less. The fact that her mother is ill, her father is unwell and she is a single parent is also unexceptional; indeed if she were not a single mother and the carer of her child, then she would not have been receiving PP in the first place. There is no evidence that Centrelink has been negligent, tardy or unfair in its dealings with the Applicant. On the contrary, I have already found that Centrelink has engaged appropriately and professionally with the Applicant.
The evidence discloses no unfairness and no particular hardship. In this matter the Applicant has received the benefit of money she was not entitled to, and there is no inherent unfairness in requiring her to repay it. During the hearing the Applicant testified that she was no longer living in the family home in Darwin and had since moved to Toowoomba to be closer to the father of her second child. She is now paying a considerable sum in rental payments. However, her move to Toowoomba and her intention to remain living there despite her separation from the father of her second child, are lifestyle decisions she has made of her own volition.
The Applicant has legal qualifications. She is intending to pursue a PhD degree and in the past has had the financial support of her family. Her regular trips to and from Indonesia between 2012 and 2015 demonstrate the extent to which she is part of a supportive family.
I agree with the Respondent’s contention that the Applicant is a well-educated person who has ample career opportunities potentially available to her. I also agree with the Respondent’s contention that the Applicant is capable of repaying the debt by modest instalments from her ongoing entitlements or if she obtains employment as a legal practitioner.
Finally, it can be observed that the social security system hinges on a simple but fundamental proposition. The recipient of a social security payment must be entitled to receive it, and if he or she is not entitled, then repayment is appropriate except as allowed by law. The concept of special circumstances was inserted to ensure that fairness and compassion remain an integral part of the waiver discretion. But as Deputy President Forgie correctly highlights, it is critical to evaluate the exercise of this discretion in the context of the overall administration of Australia’s social security system. Disadvantage, including financial disadvantage, was, and remains, the motor force for the creation and maintenance of social welfare. The fact that a person is in a position of disadvantage is not, then, a special circumstance. Rather, it is one of the key entry points into the social welfare safety net. It is this policy and socio-economic matrix which Deputy President Forgie was, as I understand it, alluding to, and which must be kept in mind when considering the appropriate application of the discretion allowed by section 1237A.
Write-Off
Section 1236 of the Act empowers the Secretary to write off a debt for a stated period or otherwise. There are four bases for writing off a debt. Only the first two are relevant to this matter; namely, that the debt is irrecoverable at law or that the debtor has no capacity to repay the debt - section 1236(1A).
Section 1236(1C) provides that if the debt is recoverable by means of deductions from the debtor’s social security payment, the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
The Applicant contends (AS para 2) that she has no capacity to repay the debt and pursuing the debt would result in severe financial hardship. Moreover, she also contends that it would not be cost effective for the Commonwealth to take action to recover the debt, and would result in the Applicant being forced into bankruptcy.
The Respondent provided evidence that Centrelink has been withholding $20 per fortnight from the Applicant’s PP since at least August 2015. It was also contended that the debt is not irrecoverable at law, and the Applicant does have the capacity to repay, albeit slowly and by modest fortnightly deductions. In this context, it was contended that the Applicant’s submissions regarded being forced into bankruptcy have no substance.
The discretion to write off a debt, unlike waiver, does not extinguish it. The exercise of this discretion does not impact on the liability of the debtor, and the debt potentially remains enforceable - Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32. Consequently if this discretion is exercised, the decision can be reversed and enforcement proceedings commenced if there is a change in the circumstances which resulted in the activation of the discretion.
In 1997 the write off provisions were amended by restricting their availability. The Explanatory Memorandum to the relevant Bill stated that various Tribunal decisions had tended to use the write off provisions as a pseudo waiver where the waiver conditions were not satisfied. The 1997 amendments codified the circumstances in which a debt can be written off and were designed to prevent the undermining of the waiver provisions.
Bearing in mind the policy underlying the current wording of section 1236 and even adopting a liberal approach, it cannot be said that the debt owed by the Applicant is either irrecoverable at law or that the Applicant has no capacity to repay the debt. Further, the Applicant has failed to demonstrate that she is suffering severe financial hardship as a result of the $20 per fortnight being deducted from her PP.
Clearly the financial circumstances of the Applicant have changed over the past twelve months. She is now the mother of two young children. She has moved from her family home in Darwin where she was in receipt of favourable treatment from her extended family, to renting premises in Toowoomba at considerable expense. She also testified to some unfortunate, and no doubt distressing, domestic problems that arose when she moved to Toowoomba. Her only income is social security payments.
The Tribunal is certainly not unsympathetic to the current position of the Applicant. No doubt Centrelink will carefully monitor the Applicant’s circumstances to ensure that a mechanistic approach to the deduction of money to repay her debt does not result in disadvantage and distress to her and her two young children. If her financial position deteriorates, she can make application for the Secretary to write off her debt repayments and if she can demonstrate severe financial hardship an appropriate exercise of discretion would, no doubt, be made.
The evidence before the Tribunal is insufficient to warrant the activation of the write off discretion in section 1236 at this time.
CONCLUSION
For the reasons outlined above, Ms Thea Thomas is subject to a PP debt for $19,287.61 for the period 1 November 2013 to 23 November 2014.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 92 (ninety -two) paragraphs are a true copy of the reasons for the decision herein of Senior Member J Sosso ........................[Sgd]................................................
Associate
Dated 27 October 2016
Date of hearing 21 September 2016 Applicant
Solicitors for the Respondent
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Sparke Helmore
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