Ringin; Secretary, Department of Family and Community Services - [2002] AATA 281

DECISION AND REASONS FOR DECISION [2002] AATA 281

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2001/1355

GENERAL ADMINISTRATIVE DIVISION       )
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Applicant
           And    DANIEL RINGIN
  Respondent

DECISION

Tribunal Mr J Handley, Senior Member

Date19 April 2002
PlaceMelbourne

Decision      The decision under review is set aside and in substitution IT IS DECIDED that the respondent was overpaid Youth Allowance in the sum of $2,288.39. The application is remitted to the applicant to calculate the basis for repayment, having regard to the financial circumstances of the respondent.
  ......………………………………
  Senior Member
CATCHWORDS
Social Security - Youth Allowance paid to bank account of a parent of a minor - failure to report changed circumstances - whether respondent was a 'recipient' - whether respondent obliged to notify changed circumstances - whether overpaid - decision set aside.
Social Security Act 1991 s.543, s.543A, s.543B, s.559, s.559(a), s.559E(1) & (a), s.561A(1), s.561B(1),(3) & (8), s.1021, s.1223(1)(a) & (b)
Re Secretary, Department of Family and Community Services and Rowe 2001 AATA 152.
Herdegen and Commissioner of Taxation (Federal Court of Australia - G2773-2776 decided 15 December 1988) Gummow J

REASONS FOR DECISION

19 April 2002 Mr J Handley, Senior Member

The applicant Secretary applies to review a decision of the Social Security Appeals Tribunal (SSAT) made on 21 September 2001.
The SSAT then reviewed a decision a Centrelink officer to recover a Youth Allowance debt for the period 13 November 1999 to 16 June 2000, in the total sum of $2,288.39. The SSAT set that decision aside and decided that the respondent did not have "a legally recoverable debt". The SSAT also decided that Daniel Ringin was not the "recipient" of the Youth Allowance benefit.
The application proceeded to hearing before the Tribunal on 28 March. Mr Todd appeared on behalf of the applicant. The respondent's mother and stepfather appeared on Daniel's behalf. The respondent himself did not appear.
The application may be briefly summarised as follows-
Mr Ringin (Daniel) was born on 1 November 1983. On 21 October 1999, shortly prior to achieving his 16th birthday, he made application for Youth Allowance. Mrs Ringin, his mother, was then in receipt of newstart allowance.
On 1 November 1999, Daniel received a notice from the applicant advising him of his reporting obligations. That notice is found at T6, page 19 and is described as a "Recipient Notification Notice" pursuant to s561B of the Social Security Act 1991. A number of "changes" giving rise to a reporting obligation are recited, but significantly (for the purposes of this application) he was obliged to notify if he or his parents marry, or reconcile with a separated partner, or start living with someone as their partner.
On 13 November 1999, Mrs Ringin commenced living with Mr Lane. Having also received a similar notice, she notified the Rosebud Centrelink office on 15 November 1999 of her new relationship. Mrs Ringin's entitlement to Newstart Allowance ceased, due to the affect of Mr Lane's income.
Centrelink continued to make payments of Youth Allowance to Mrs Ringin on behalf of Daniel. On 26 November, another Recipient Notification Notice was forwarded to him.
In June 2000, Mrs Ringin contacted the Rosebud Centrelink office. As a result, Youth Allowance payments then ceased and an overpayment was raised. A debt was calculated of $2,288.39, being Youth Allowance paid between 13 November 1999 and 16 June 2000.
Mr Todd submitted that payments of Youth Allowance were paid into a bank account nominated by Mrs Ringin, his mother. He submitted that Centrelink was obliged to make payments to his mother, by reason of his age and by operation of s.559E(1) of the Social Security Act 1991. Despite this, Daniel was, he submitted, the 'recipient' of Youth Allowance and was obliged to notify changed circumstances as directed by the Recipient Notification Notice.
Mr Todd argued that Daniel did not comply with Recipient Notification Notices by informing Centrelink that his mother had commenced to live with Mr Lane. Had he given that notice, his payments would have ceased because the income of Mr Lane precluded him from receiving Youth Allowance. By reason of those payments continuing, an overpayment occurred and a debt was raised.
In conclusion, it was submitted that there was no basis upon which the debt could be waived, nor any special circumstances permitting waiver or write-off of the debt.
At the hearing, Mr Lane spoke on behalf of Mrs Ringin and Daniel. He submitted that at all relevant times Mrs Ringin was the recipient of Youth Allowance. He submitted that the relevant legislation fails to define the word "recipient", but according to dictionary meanings, a recipient is a person who "receives" or "is receiving".
Mr Lane spoke with reference to a number of authorities, which Mr Todd forwarded when the Statement of Facts and Contentions was filed. Mr Lane said that the decision in Re Rowe and Department of Family and Community Services 2001 AATA 152 should be distinguished because that application concerned the "obligations of a mother to make payments at the direction of the beneficiary". Mr Lane said that in the present case, Mrs Ringin was not obligated to make payments to her son at his direction. Additionally, Mr Lane relied on a decision of Gummow J in Herdegen and Commissioner of Taxation (Federal Court of Australia - G2773-2776 decided 15 December 1988) where Mr Lane understood that Mrs Ringin was a "bare trustee". Having regard to the Herdegen decision, she was therefore under no obligation to pass monies to her son unless he demanded.
Mr Lane submitted that at all relevant times, the respondent was a minor living with his mother, was at her direction and was not in a position to demand anything. He submitted that Mrs Ringin was entitled to spend her son's money upon household domestic and educational costs, which were the basis in fact for the expenditure of the monies received as Youth Allowance. (Mr Lane said that Daniel did not open mail he received and did not read the mail that his mother opened.) Mr Lane submitted that Daniel delegated decision-making to his mother and it was her responsibility to notify Centrelink of the changes in circumstances. He submitted that she did notify Centrelink. She assumed that upon her notification with respect to her own payments of Newstart Allowance which Centrelink would necessarily end the Youth Allowance payable to Daniel, as the changed circumstances were identical. Mr Lane submitted that Mrs Ringin notified Centrelink on at least two occasions of the changed circumstances applicable to Daniel and the continuing payments by Centrelink were its own error. It was submitted that it was "unbelievable" that a minor should notify changed circumstances concerning his mother's private life. Mr Lane also stated that it was "unbelievable" that Daniel's reasoning capacity would permit him to notify Centrelink of those changes (which would also necessitate him taking time off school).
In answer to questions from me, Mrs Ringin said that she opened letters her son received from Centrelink and read them. She said that she notified Centrelink of the change in her circumstances, as well as these circumstances affecting Daniel. When Mr Todd asked Mrs Ringin to comment on a file memorandum, found at page 22 of the T documents, dated 15 November 1999 (which made no mention of notification concerning Daniel) Mrs Ringin said that she was unaware that Daniel had to personally give notification. In any event, she said that she would not notify Centrelink of only "half the story". That is to say, having told Centrelink of the change in her circumstances, it would be inconsistent that she would not also notify the change in Daniel's circumstances because those changed circumstances were identical. With respect to the second notice, dated 26 November 1999, Mrs Ringin said that she assumed that Centrelink decided that Daniel did have a continuing entitlement to benefit because another Recipient Notification Notice had been forwarded, subsequent to her notification on 15 November.
At all relevant times, Youth Allowance was being paid at approximately $148 per fortnight. Those monies were being paid into Mrs Ringin's bank account. That account produced a bank statement monthly. Mrs Ringin said that she was aware after November 1999 until June 2000 that the statement recorded continuing fortnightly payments of Youth Allowance. She said that she expended those monies in the interim. When she approached the Rosebud Centrelink office in June 2000, she was told that Daniel must personally notify the office that his circumstances had changed. She said that she arranged then to take him to the office after school where he notified a counter officer of the changed circumstances. She said that it was at that time that his payments ceased.
Prior to June 2000, Mrs Ringin said that she did attend the Rosebud Centrelink office on one other occasion and had rung the Rosebud office on other occasions, on dates she could not recall. She said that she asked for his payments to stop. She said that she gave her details, believing that his file was linked to hers and to give his details was unnecessary.
Mrs Ringin said that her son did not attend the hearing because he had recently commenced an apprenticeship as a bricklayer. She was not aware of his current earnings because his salary had "not been settled".
Neither Mrs Ringin nor Mr Lane raised any argument as to the calculation of the sum alleged as overpaid of $2,288. Although, it appears that that sum has been reduced by with-holdings of Family Allowance Supplement paid to Mrs Ringin. When Mr Todd learnt of this, he expressed some concern and undertook to make inquiries of the local Centrelink office. This is particularly so, when repayment (if it all) of the alleged debt is Daniel's responsibility.
Conclusion and Reasons for Decision
For reasons that will hopefully become clear, I am not satisfied that Mrs Ringin, the person to whom the Youth Allowance was paid "on behalf of" Daniel is the 'recipient'. That is, I am satisfied that Daniel is the recipient.
Section 559 provides for the commencement of Youth Allowance, in defined circumstances and when it is payable to a 'person'. Section 559(a) states that Youth Allowance becomes payable when "the person is qualified for the allowance". A combination of ss540, 543, 543A and 543B being the qualifying provisions concerning the age of Youth Allowance in summary provides entitlement to persons over the age of 16 and under the age of 25 (subject to limited qualifications). Throughout these provisions, the beneficiary who qualifies for Youth Allowance is described as the 'person'. Section 561B(1), by necessary implication, regards the 'person' as the 'recipient'. It says-
"The Secretary may give:
(a)       a person to whom a Youth Allowance is being paid on the person's own behalf; or
(b)       a person on whose behalf a Youth Allowance is being paid to a parent of the person under section 559E;
a notice that requires the person to tell the Department if:
(c)       a stated event or change of circumstances occurs; or
(d)       the person becomes aware that a stated event or change of circumstances is likely to occur."
The Act does not define 'recipient' in the context of Youth Allowance, however it is defined (for example) in the context of family payments under s.6AA and in the context of double orphan pensions under s.1021. The above analysis is necessary in order to comprehend who is intended to be the 'recipient' of Youth Allowance. In the present application, Daniel is the 'recipient'. Mrs Ringin is not undertaking full time study. Mrs Ringin is not, with respect, under 25 years of age. Therefore, she does not qualify for Youth Allowance, as she is not the 'person' for the purposes of qualifying for this benefit.
Section 559E(1) provides that payments of Youth Allowance to persons under the age of 18 and who are not independent are to be paid "on behalf of the person". Subsection (a) relevantly provides that the payment is to be made to the parent of the 'person'.
Section 561A(1) must be read inconjunction with s559E and in the context of Daniel being under 18 years, Mrs Ringin was paid Youth Allowance on behalf of Daniel as his parent. She is not the 'person' s561A contemplates.
Section 561B(1) of the Social Security Act ("the Act") permits the Secretary of the Department to issue a notice to a person being paid a benefit, which requires that person to notify of specified changed circumstances. Section 561B(8) provides that a person must not without reasonable excuse refuse or fail to comply with a notice, if that person is capable of complying with it.
Centrelink issued notices to Daniel pursuant to s561B(1) and (3) on 1 and 26 November 1999 (see p.19 T-doc T6).
The applicant argues that Daniel failed to report the change in his circumstances. Yet on the evidence of Mrs Ringin, he would not have been aware of the reporting obligations because she opened his mail from Centrelink, read it and did not inform him of the contents.
As a matter of law however, Centrelink sent notices as it was obliged to do. Those notices were received and the reporting obligations cannot be frustrated by a person intervening to withdraw mail and not notify a beneficiary of the contents.
Mrs Ringin said that she notified Centrelink of her changed circumstances and by reason of that notification her ongoing entitlement to newstart allowance ceased. She said at the hearing that she also notified Centrelink that the changed circumstances were applicable to her son and that Centrelink should have ceased his benefits. When another Recipient Notification Notice was received on 26 November 1999, Mrs Ringin said that she assumed that her son had a continuing entitlement. Payments continued until June 2000 and Mrs Ringin was aware of those payments because they were recorded in bank statements that she received monthly. It is not clear to me why Mrs Ringin attended the Rosebud office in June 2000 and eventually arranged for Daniel to personally attend the office and notify of his changed circumstances. Nonetheless, after November 1999 Youth Allowance was paid on behalf of Daniel to a bank account held by Mrs Ringin. After November 1999 there was no entitlement to those benefits because Daniel did not qualify.
Putting to one side the issue of notification as discussed earlier and whether Centrelink should have crossed referenced files, there is no doubt that beyond November 1999, Daniel did not have an entitlement to Youth Allowance.   The amount paid beyond November 1999 as Youth Allowance is a debt due to the Commonwealth, pursuant to s1223(1)(a) and (b) because I am satisfied Daniel was the "recipient" for the purposes of this section which reads-
"Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:
(a)       the recipient was not qualified for the social security payment when it was granted; or
(b)       the amount was not payable to the recipient;
the amounts so paid is a debt due to the Commonwealth."
In reaching these conclusions, I am in agreement with the decision of the Tribunal in Re Secretary, Department of Family and Community Services and Rowe 2001 AATA 152. In that application a similar factual circumstance arose. The Tribunal decided that the beneficiary's mother into whose bank account Youth Allowance was paid became the trustee of her son for the purposes of receipt of the monies.
The only reason that the monies were paid to Mrs Ringin was by operation of s559E of the Social Security Act. Daniel personally qualified for Youth Allowance and money was paid as a result. He was the person to whom monies were payable and Mrs Ringin was his trustee for the purposes of the receipt of the monies. She was obliged to account to him for payments (whether she did so or not) from her account.
The language of the relevant sections of the Act is imprecise and the word "recipient" is not defined. To define any person other than Daniel as the recipient would frustrate the object and purpose of the legislation.
Daniel was the person who received the Recipient Notification Notice. That notice was addressed and sent to him because he was the recipient of a benefit. He cannot be the "recipient" for the purposes of the notice, but not the "recipient" for the purposes of receipt of payment. Additionally, Mrs Ringin received the monies into her bank account by operation of law, because at all relevant times Daniel was a minor. A person is a 'recipient' by reason of their qualification to be paid and to receive a benefit (refer also Secretary, Department of Family and Community Services and Lyster 2000 AATA 380).
The SSAT decided that Daniel was not the recipient by reason of its interpretation of what constituted "bare trustee" as discussed Gummow J in Herdegan. The SSAT decided that "bare trustee" is a person who holds property without any duty, except to convey property upon demand made by a beneficiary. The SSAT decided that Daniel was not in a position to direct Mrs Ringin as to the use of Youth Allowance once paid into her account. I am unable to discern from the reasons for decision of the SSAT how that conclusion was reached. Additionally it was found that the Act "does not require that the parent accept the payment on the basis that the use of the payment would be at the discretion of the beneficiary, and not the parent". I am unable to understand the relevance of this comment in the context of this application. Mrs Ringin as the parent received the monies per force of law. Whether Daniel consented to his mother using those monies for domestic and other educational and social purposes is not known. But there is no evidence that Daniel was ever denied or prohibited from making any demand upon Mrs Ringin to account to him for those monies. Indeed, as a matter of law, I could not envisage a circumstance where Daniel could not ever have such a demand satisfied.
Having regard to the circumstances of this application as learnt at the hearing, I cannot find that the applicant made an error, nor can I find any special circumstances that would permit the debt being waived.
Youth Allowance was paid beyond November 1999 when there was no entitlement to it. An overpayment has occurred, but as to repayment I am unable to reach any conclusion because of Daniel's present financial circumstances.
Mrs Ringin said that he had recently commenced employment but his wage was not known. I would assume as a first year apprentice that his salary would be modest.
The application should be remitted to the applicant for assessment of Daniel's present financial circumstances and a decision made as to repayment, whether by instalments or with-holdings or in some other manner.
In the circumstances, the decision is set aside. In substitution for the decision made by the SSAT, it is decided that there has been an overpayment of Youth Allowance for the period 13 November 1999 to 16 June 2000 in the sum of $2,288.39. The application is remitted to the applicant for assessment of the capacity of Daniel to make repayment of that sum.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley, Senior Member.
Signed:           C. Irons ...............
  Secretary
Date/s of Hearing  28 March 2002
Date of Decision  19 April 2002
Counsel for the Applicant        Mrs Ringin and Mr Lane
Solicitor for the Applicant
Counsel for the Respondent    Mr M. Todd

Solicitor for the Respondent