Rigas and Secretary, Department of Family and Community Services
[2004] AATA 1086
•28 September 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1086
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/288
GENERAL ADMINISTRATIVE DIVISION ) Re EMMANUEL RIGAS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Ms MJ Carstairs, Member Date28 September 2004
PlaceBrisbane
Decision The Tribunal varies the decision so that the outstanding amount of the applicant’s debt of newstart allowance, and his wife’s debt of partner allowance is waived from the date of the Tribunal’s decision.
..................[Sgd].......................
M J Carstairs
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – overpayment of benefits – applicant received lump sum compensation benefits for a workplace injury – debts arose due to operation of law and not administrative error on the part of the Department – applicant suffering financial hardship – special circumstances exist to warrant the waiver of the Commonwealth’s right to recover the remainder of the debts – decision varied
Social Security Act 1991 ss 1237A, 1237AAD, 1180, 1181, 1184K
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Efstratiadis v Commonwealth (1990) 22 FCR 16
Director-General of Social Security v Hangan (1982) 45 ALR 23
Re Matteo and Director-General of Social Security (1981) 4 ALD 398
Secretary, Department of Social Security v Hales (1998) 82 FCR 154WRITTEN REASONS FOR ORAL DECISION
19 October 2004 Ms MJ Carstairs, Member
1. This is an application by Emmanuel Rigas (the applicant) for review of a decision made by the Social Security Appeals Tribunal (the SSAT) on 12 March 2004. The SSAT set aside a decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 27 January 2004 which had determined that the applicant had a recoverable debt of newstart allowance totalling $2775.24 and his wife a recoverable debt of $2111.88, relating to the period 26 February 2003 to 5 June 2003 (the relevant period). During the relevant period the applicant received compensation payments on a periodic basis for a work injury. These periodic compensation payments affected the amount of social security payments which both he and his wife could receive.
2. This application was heard by the Tribunal on 28 September 2004 and an oral decision was given that day varying the decision under review. On 30 September 2004 the respondent requested written reasons for the Tribunal’s decision pursuant to s43(2A) of the Administrative Appeals Tribunal Act 1975. The following are the Tribunal’s reasons for its oral decision.
3. At the hearing on 28 September 2004, the applicant represented himself. The respondent was represented by its advocate Mr J Howard.
4. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 as well as exhibits marked A1- A6 and R1-R3.
BACKGROUND
5. The applicant is aged sixty three. He suffered a work injury on 23 December 2003 and the first periodic amount of compensation was paid to him for the period 31 January 2003 to 25 February 2003 (the first payment). Centrelink made an administrative decision to recover newstart allowance paid to the applicant and partner allowance paid to his wife during the period that related to the first payment.
6. Centrelink payments to the applicant and his wife resumed. In May 2003 (T6) WorkCover Queensland notified Centrelink that the applicant would be paid another amount of periodic compensation as a lump sum from 26 February 2003, representing payments of $424.50 per week (the second payment). The effect of this amount weekly compensation was that the applicant was not entitled to any newstart allowance, and his wife’s partner allowance was reduced.
7. As a general principle, the Social Security Act 1991 (the Act) makes provision for the circumstances where people are paid both compensation and social security payments for the same period. The legislation operates on the principle that people should not obtain income support from two sources. There are provisions that allow for the recovery of social security payments where this may have occurred.
8. The applicant’s matter became more complicated because of a series of administrative errors, acknowledged by the respondent. Centrelink advised WorkCover Queensland on 13 June 2003 (T8) that the applicant and his wife’s debts to Centrelink totalled $5822.78 and that under s1184 of the Act WorkCover should not pay the second payment until this amount was repaid to Centrelink. However on 15 June 2003 Centrelink advised WorkCover Queensland that the applicant’s debts could be recovered by weekly deductions of $50 from ongoing compensation payments. After this second advice, WorkCover Queensland paid the second payment to the applicant. Centrelink later realised that there was no power under the legislation for recovery to take place by the proposed $50 deductions.
9. The applicant spent the compensation payment when it was paid to him, on the understanding that there was no Centrelink charge upon it. When the debt was raised later, he sought review of the decision with an authorised review officer and the SSAT. As a result of the SSAT decision the debts for the applicant and his wife were reduced by half and, according to exhibit R2, the debts at the date of hearing totalled $1387.62. The applicant has not paid any of his debt. The applicant’s wife has repaid $605.99 at the time of the hearing, as withholdings of $30 per fortnight were being deducted from the applicant’s newstart allowance to repay her debt. Her debt was $449.95 at the date of hearing.
10. The applicant applied to this Tribunal on 13 April 2004. The SSAT treated the decision in regard to the applicant and his wife’s debts as one decision and this Tribunal is satisfied that although there is no formal application by Mrs Rigas for review of her debt, the matter of her debt is before the Tribunal.
EVIDENCE
11. The evidence did not depart from that given before the SSAT and the facts are not in dispute. The SSAT made the following findings of fact:
§ At all material times Mr Rigas was in receipt of newstart allowance and his wife was in receipt of partner allowance.
§ On 9 May 2003, Centrelink was advised by WorkCover Queensland that Mr Rigas was to receive periodic compensation from 26 February 2003.
§ On 13 June 2003, Centrelink notified WorkCover Queensland that an amount of $3,104.73 newstart allowance and $2,718.06 partner allowance (total $5,822.78) was recoverable from Mr Rigas’ arrears payments.
§ Mr Rigas was also notified by letter of this amount the same day.
§ On 17 June 2003, Centrelink notified WorkCover Queensland to recover a previous debt totalling $6,715.29 from Mr Rigas’ ongoing periodic compensation payments by weekly deductions of $50.00.
§ Following review, Centrelink altered recovery of the previous debt to a lump sum of $892.51 and deductions of $15.00 a week. Mr Rigas and WorkCover Queensland were notified of this on 2 July 2003.
§ WorkCover Queensland released to Mr Rigas his full compensation arrears payment without deduction of the charge amount of $5,822.78 owing to Centrelink.
§ Mr Rigas spent the lump sum money received from WorkCover Queensland on outstanding bills.
§ Mr Rigas is aged 63, and has carpel tunnel and marginal English literacy skills. His wife has poor health and is unable to work.
§ Mr Rigas lives in rental accommodation and has limited means and work prospects.
12. The Tribunal adopts the findings of fact made by the SSAT, and notes the respondent’s concession that there was no fault on the part of the applicant, who kept Centrelink informed of all aspects concerning the receipt of his compensation.
13. The applicant stated that he received $3031 in compensation and used it to buy software and pay some debts to family and friends who had lent them money. He said that he hoped that the purchase of computer software would assist him to find other work now that he is not able to work as a cleaner.
14. The applicant gave evidence about his son’s medical condition. He said that he and his wife are unable to go to Melbourne to see about his son’s health because they have no money left over from their social security payments and because he cannot obtain and advance payment from Centrelink because he owes a debt.
15. The additional evidence included a report of Dr Alison Bignell stating that she has looked after the applicant and his wife since January 2003 and that they have attended at the Capalaba Medical Centre for ten years. She stated:
Mr and Mrs Rigas have attended this surgery for greater than 10 years and me personally since January 2004. Particularly over the past two years they have suffered from marked social stresses, and resultant depression due to:
1)Son diagnosed with a mental disorder - ? schizophrenia – 2 years ago at age 35 years.
2)Mr Rigas unable to work because of an injury in 2002 to his hands which was not cured by surgery. He now suffers from symptoms of depression.
3)Mrs Rigas suffers from arthritis in both knees and wrists; and difficult to control diabetes. She also suffers from depression.
16. The statement of financial circumstances (T40 and exhibit A3) set out that the household expenses total $19,817.80 (in fact the figures totalled $19,908) and income totals $19,822. No amounts were included for clothing and other discretionary spending and the applicant said that he and his wife buy only the things necessary to stay alive. The applicant and his wife have bank account balances totalling less than $100 at the time of the hearing. His payments from WorkCover ceased on 15 February 2004.
CONSIDERATION OF THE ISSUES
17. Part 5.1 of the Act also deals with non‑recovery of debts. Two provisions require consideration, namely s1237A and s1237AAD. Section 1237AAD of the Act provides that in special circumstances a debt may be waived in the following 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 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.
18. Section 1237A is a provision which deals with Centrelink error and provides:
Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
19. The note to s1237A of the Act makes plain that the section does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors. On the issue of waiver, Mr Rigas submitted that he had supplied all information and acted honestly and his submission relied upon the errors all being those of Centrelink. Mr Howard agreed that the debt arose through no fault of the applicant. However he submitted that the debt did not arise solely as a result of administrative error. He referred to the Full Federal Court decision in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 which found that where compensation is paid the debt exists because the person received compensation. It is that which gives rise to the debt and not the administrative error, so that it cannot be said that the debt arises solely as a result of administrative error as required for s1237A to come into operation.
20. I accept the submission of Mr Howard that s1237A does not apply here. The SSAT correctly ascertained, referring to Sekhon in their reasons, that this was not a matter to which s1237A could apply.The SSAT also noted that s1237A refers to the debt arising solely as a result of administrative error whereas the errors in this case relate to the point of time of recovery of the debt, not to the debt itself. It is well settled law that the administrative processes to recover a debt do not themselves create the debt: Efstratiadis v Commonwealth (1990) 22 FCR 16, Director-General of Social Security v Hangan (1982) 45 ALR 23 and Re Matteo and Director-General of Social Security (1981) 4 ALD 398.
21. The Tribunal accepts the submission that the applicant and his wife have incurred debts that arise by force of the legislation under s1180 and s1181. The Tribunal accepts also the submission that s1184K has no role to play, for the reasons set out by the SSAT which this Tribunal respectfully adopts.
22. Any recovery action under the legislation should take account of the applicant’s circumstances. It is to enable people’s circumstances to be taken into account that provisions in the Act in Parts 5.3 and 5.4 allow for non-recovery of debts or delaying recovery until a person can repay. In Secretary, Department of Social Security v Hales (1998) 82 FCR 154 the Federal Court said at 155:
… From time to time in the administration of social security benefits overpayments occur. Sometimes these are the result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that led to the receipt of benefits in the first place. The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which led to the overpayment and the circumstances of the persons concerned. However, the confining of a recovery regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. …
23. The SSAT were correct to exercise the discretion under s1237AAD of the Act and this is acknowledged by the respondent. The respondent submitted that the fair balance was struck at 50% by the SSAT. There is some force in that submission. However I accept the applicant’s submission that had he known that the money would need to be repaid he would have dealt with things differently and that account must be taken of the difficulties that they now face as they try to make ends meet without their full entitlement to pension. Taking into account the medical evidence provided that the applicant and his wife both suffer from symptoms of physical disability as well as depressive disorders, the financial circumstances which reflect that the applicant and his wife have no money to spare to cover any but the most basic expenditure, the age of the applicant and his inability now to work in the manual kinds of job where he has previously been employed and taking into account the son’s debilitating disorder which has created additional anxiety for them and led to the applicant leaving employment, the Tribunal decides that the amounts that remain outstanding on the applicant and his wife’s debts should be waived on and from the date of this decision.
24. For reasons given orally the Tribunal varies the decision of the SSAT and waives the outstanding amounts of the debts from today’s date.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Ms MJ Carstairs, Member
Signed: Sarah Oliver
AssociateDate of Hearing 28 September 2004
Date of Oral Decision 28 September 2004
Date of Written Reasons 19 October 2004The Applicant appeared in person
For the Respondent Mr J Howard, Departmental Advocate
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