Rivett-Carnac and Anor and Secretary, Department of Employment and Workplace Relations

[2006] AATA 362

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 362

ADMINISTRATIVE APPEALS TRIBUNAL      )

)       No Q2005/285, Q2005/460

GENERAL ADMINISTRATIVE DIVISION		)
Re		CHRISTINA RIVETT-CARNAC and MARCUS LEAN

Applicants

And SECRETARY, DEPARTMENT
OF EMPLOYMENT AND
WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr KS Levy, Member

Date21 April 2006

PlaceBrisbane

Decision

(1) The decision of 28 September 2004 by Centrelink be set aside in respect to Mr Marcus Lean and Ms Christina Rivett-Carnac; and

(2) The following decision be substituted: 

(a) The Tribunal finds there are “special circumstances” in respect of Mr Lean, including his autism, an error by Centrelink which needs to be taken into account in Mr Lean’s favour and there are discrepancies in gross earnings used in Centrelink calculations (see paragraph 59). His debt must be re-calculated to correct those amounts.  The consequential effect of these calculations should then be used to recalculate the debt due by Ms Rivett-Carnac.

(b) There are no “special circumstances” which would take Ms Rivett-Carnac’s case out of ‘the usual or ordinary case’.

(c) Upon re-calculation of the debts due by Mr Lean and Ms Rivett-Carnac, as outlined in paragraph (a), the Tribunal then directs that:

(i)     the original decision in respect of Mr Lean be set aside and any residual debt waived;

(ii)    any residual debt of Ms Rivett-Carnac (following the recalculation of a ‘notional’ debt for Mr Lean, taking account of any errors as outlined in paragraph 59), should then be recoverable by the Commonwealth against Ms Rivett-Carnac.

.........[Sgd]............

KS Levy
  Member

CATCHWORDS

SOCIAL SECURITY – disability support pension – overpayment – failure to accurately report income – whether to write off or waive debt – special circumstances   

Social Security Act 1991 ss 1223(1), 1236, 1237, 1237A, 1237AAD

Dingli and Secretary, Department of Social Security [1996] AATA 11436
Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 10941
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 76 ALD 105
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Dranichnikov v Centrelink (2003) 75 ALD 134
Groth v Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Hales (1998) 153 ALR 259
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580; (1994) 36 ALD 563

REASONS FOR DECISION

21 April 2006    Dr KS Levy, Member

Introduction

1.        The applicants have both been in receipt of disability support pensions, and following Mr Lean’s employment on a casual basis with Muller Sawmills Pty Ltd from 13 May 2002, their disability support pensions were affected.  On 28 September 2004 Centrelink made decisions to recover debts in respect of disability support pension in relation to each of the applicants as follows:

(a)In respect of Ms Christina Rivett-Carnac, to recover a debt of $1,411.16 in respect of disability support pension for the period 31 May 2002 to 18 March 2004; and

(b)In respect of Mr Marcus Lean, to recover a debt of $1,392.72 in respect of disability support pension for the period 31 May 2002 to 18 March 2004.

2.      These debts were referred to an Authorised Review Officer for a review of the original decision, and on 8 November 2004, both decisions were affirmed.  A subsequent application was made to the Social Security Appeals Tribunal (“the SSAT”) and on 7 March 2005, the SSAT affirmed both those decisions also. 

3. On 16 May 2005 the applicants sought review of the SSAT decision under section 29(1) of the Administrative Appeals Tribunal Act 1975. 

4.      This application was heard at Casino, New South Wales on 13 December 2005.  Mr Lean was unrepresented.  Ms Rivett-Carnac was represented by Ms M Cameron, Solicitor.  The respondent was represented by its advocate, Mr J Howard.  

5.      The following documentary exhibits were admitted into evidence:

Exhibit 1Documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) – Marcus Lean

Exhibit 2Documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) – Christina Rivett-Carnac

Exhibit 3Supplementary Documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) – Marcus Lean and Christina Rivett-Carnac

Exhibit 4Report by Dr Amitosh Mondal dated 21 August 2005 in respect of Christina Rivett-Carnac

Exhibit 5Report by Dr Neville Young, Physician, Brisbane dated 5 March 2004 and by Dr Peter Hill, Endocrinologist, Brisbane dated 4 September 2002 in respect of Christina Rivett-Carnac

Exhibit 6Current statements of disability support pension in relation to Marcus Lean and Christina Rivett-Carnac

Exhibit 7Statement of Facts and Contentions on behalf of the applicant Christina Rivett-Carnac

Exhibit 8Statement of Facts and Contentions on behalf of the respondent

6.      Oral evidence was given on oath by both applicants.  No other witnesses were called.

Issues

7.      The issues for determination by the Tribunal in this matter are:

(i)whether Mr Lean and Ms Rivett-Carnac were overpaid amounts of disability support pension;

(ii)whether the amounts which were overpaid (if any) are debts due to the Commonwealth; and

(iii)whether all or any part of the debts due to the Commonwealth should be recovered, written-off or waived.

Evidence

8.      Each of the applicants had suffered health problems and were granted disability support pensions.  They live together on a property which they are purchasing at Drake, New South Wales, outside of Casino.

9.      On 13 May 2002, Mr Lean obtained employment at Muller Sawmills Pty Ltd and notified Centrelink accordingly.  The rate of disability support pension for each of the applicants was then subsequently affected and there was a requirement to advise Centrelink of the amounts earned each fortnight by Mr Lean.  Both applicants claim that this has been diligently attended to by Ms Rivett-Carnac.

10.     On 2 February 2004, Centrelink undertook a data-matching exercise with the Australian Taxation Office (ATO) and it appears that Mr Lean’s declared income to Centrelink was $19,870 per annum from 31 May 2002, whereas the ATO records indicate he earned $25,936 per annum.  Confirmation of Mr Lean’s earnings was made with Muller Sawmills Pty Ltd.  On 28 September 2004, debts were then raised in respect of overpayment of disability support pension against Ms Rivett-Carnac ($1,411.16) and against Mr Lean ($1,392.72) for the period 31 May 2002 to 18 March 2004.

11.     Oral evidence was given by Ms Rivett-Carnac who maintained that she diligently informed Centrelink of Mr Lean’s fortnightly earnings.  She stated that she understood her obligations to Centrelink and that she was required to inform Centrelink if either she or Mr Lean worked and where there was a change to the previous fortnightly earnings, then she was required to advise Centrelink on a fortnightly basis. 

12.     She explained that Mr Lean did casual work.  This meant he was paid weekly on Fridays.  She stated on oath that she had diligently reported his income to Centrelink by telephone because of the distance between their residence and Casino and also, their car was used by Mr Lean to get to work. 

13.     In reporting to Centrelink, Ms Rivett-Carnac stated that she rang each fortnight as was the requirement specified by Centrelink.  She mentioned that Mr Lean was paid on Fridays but it was a requirement that she report on Thursdays for the previous fortnight’s income.  Therefore, she was required to report one day earlier than the completion of the current week.  As a result, she clarified for the Tribunal that she reported the two previous full weeks of income for which she had Mr Lean’s payslips.  The current week in which she was reporting would be reported as one of the weeks for the following fortnight.

14.     Ms Rivett-Carnac was asked whether she made note of the reference numbers given to her by a Centrelink officer when she made these reports.  She stated that this might have been mentioned but she did not write down these references.  She was perturbed to find later to be told that the dates that she had reported and the amounts did not coincide with Centrelink’s records.  She said that she was not capable of undertaking any calculations herself and that she was not well but she was absolutely committed to providing the information sought by Centrelink each fortnight.  She also reiterated that she understood that if she did not provide the correct information then she would end up in a similar position to which she and Mr Lean were at present.

15.     Ms Rivett-Carnac stated that she was told not to bring in the payslips to Centrelink but merely to report them over the phone.  However, now she insists on travelling in once a fortnight and delivering the payslips to Centrelink, even though they live approximately 80 kilometres from the town.

16.     In relation to her health problems, Ms Rivett-Carnac stated that she presently has chronic fatigue syndrome and an overactive thyroid gland.  She also has a liver problem as well as depression (as a result of her thyroid problems).  She was presently on medication for the thyroid as well as for depression.  She believes that the debt with Centrelink has contributed to her health problems and until April 2005, she had refused medication for depression but rather, had sought the assistance of naturopaths.

17.     In relation to her financial position, Ms Rivett-Carnac currently receives $187 per fortnight from her disability support pension.  Other relevant facts pertaining to her financial situation are as follows:

(a)      House value - $170,000.

(b)      Mortgage - $150,000.

(c)       Mr Lean’s income - $487 per fortnight (approximately).

(d)      Mr Lean’s disability support pension - $187 per fortnight.

(e)Mr Lean works in Casino and travels approximately 59 kilometres from their house each day.  This amounts to costs of approximately $130 per week in travel from Drake to Casino.

(f)Their property currently has no electricity connected to the house.

(g)The house has grey water and drainage problems which would cost approximately $2,000 to repair.

18.     Under cross-examination, Ms Rivett-Carnac clarified that there was no electricity connected to the property but that this was a factor related to the Local Government in that area, and that electricity poles had been erected but no further development had occurred.  She also responded to a question by the respondent’s advocate that the property value given to the SSAT hearing was $230,000 but the current value reflects the grey water problem and other issues affecting the value currently.

19.     Ms Rivett-Carnac stated that she cannot explain why there would be a discrepancy between the Centrelink figures and those that she reported.  She thought some figures were accurate but at other times the figures were quite inaccurate.  She said there was no reason why the figures should differ as she quoted the gross figure over the phone to Centrelink. 

§  Mr Lean

20.     Mr Lean made a sworn statement from the witness box and was cross-examined.  He stated that “what you see is what you get”.  He confirmed the evidence of Ms Rivett-Carnac that she had been very diligent in providing information fortnightly to Centrelink.  On questioning by the Tribunal, Mr Lean stated that he had been home at times when Ms Rivett-Carnac had been on the phone to Centrelink and could confirm that she had provided information as required.  He did state that he had been amazed that Ms Rivett-Carnac had been able to keep going in dealing with this issue with Centrelink.  He said the only reason they pursued this matter is because “they want the truth to prevail”.

21.     Under cross-examination, Mr Lean stated that he is working at present and getting $506 per week.  This was a net wage (not gross) and for this wage he works 40 hours per week plus 5 hours overtime. 

22.     In relation to his health, he stated that he is autistic and has only been able to gain short term periods of work in the workforce.  However, he emphasised that he does love working and he drives 80 kilometres from work to home each way every day.

23.     As far as the reporting of his earnings, he stated that he gave his payslips to Ms Rivett-Carnac and therefore she would be aware of his earnings on a weekly basis. 

24.     Under cross-examination by Ms Cameron, Mr Lean said Ms Rivett-Carnac does all of the paperwork on their behalf, and that he did not do that work.  He emphasised that all dealings with Centrelink were handled by Ms Rivett-Carnac, although on the odd occasion “he had to speak on the phone”.

Medical Evidence

25.     The documentary evidence refers to Mr Lean as suffering from Autism.  His disability is a congenital condition and is therefore permanent.  However, he works at a sawmill and enjoys being able to work.

26.     Ms Rivett-Carnac has been diagnosed with Chronic Fatigue Syndrome and possibly Obstructive Sleep Apnoea.  According to a report by specialist physician, Dr Neville Young, it appears that she also has suffered from Hashimoto’s thyroiditis and a depressive disorder.  Contributing factors to these conditions may be past use of illicit drugs and physical trauma resulting from a home invasion.  Dr Young also noted  a number of psychological issues. In particular, he reported that Ms Rivett-Carnac had a degree of stress-incontinence of urine and a depressive disorder with associated symptoms which he described as follows: “Her memory has been impaired and she is not able to concentrate as she would like. She is frustrated and angry with life in general…. ”. He also noted that “…she was amenable …to discussing her problems with a psychologist or psychiatrist…She has a lot to get off her chest”.      

Submissions

27.     Ms Cameron submitted that Ms Rivett-Carnac had correctly advised Centrelink within 14 days of Mr Lean commencing work on 13 April 2002.  Further, she correctly advised of updates of Mr Lean’s earnings through telephone calls or by attending the Centrelink office.  Ms Cameron argued that sometimes the amounts reported appeared to be undeclared.  She stated that this was due to the administrative error or Centrelink.  She emphasised also that not only were the errors in the Centrelink records from the occasions when Ms Rivett-Carnac reported income, but also the job agency notified Centrelink and that there were discrepancies in that period also.  She therefore argued Centrelink failed to codify the income correctly.

28. Ms Cameron argued that the debt should be waived under section 1237A of the Social Security Act 1991 (“the Act”) as there was a debt which was due solely to the administrative error of Centrelink. She argued also that payments were received in good faith and that even if that were not accepted, then the debt should be waived under section 1237 as there were “special circumstances”. These were Ms Rivett-Carnac’s health problems and that her financial circumstances were dire. She also referred to the findings of the SSAT which were that Ms Rivett-Carnac was truthful; she honestly believed that she had correctly advised Centrelink; she knew her responsibilities and advised of changes that occurred; she believed she had fulfilled her responsibilities; and there was no evidence of any non-compliance with the Act.

29. Ms Cameron argued that the decision should be set aside under section 43 of the Administrative Appeals Tribunal Act 1975.

30.     Mr Howard submitted that it was the respondent’s position that there is no part of the debt which is due to administrative error.  He stated that it was highly unlikely or improbable that this would occur on as many occasions as shown on the record.  He submitted that Ms Rivett-Carnac had merely overlooked reporting some payments.

31.     Mr Howard referred to Ms Cameron’s contention that the job agency also had notified Centrelink of earnings but in this regard, mistakes were also evident in Centrelink records.  He said this was true but there were only two such mistakes – on 12 January 2004 and 21 January 2004 (Folios 24 and 26 of the Supplementary “T” Documents).

32. Mr Howard also referred to Supplementary “T” Document 13 (Folio 22) where the amount is shown as $494.61 when the actual amount received was $822.43 (see T43, Folio 105). Reconciliation of these figures at the Tribunal hearing was not apparent. Mr Howard undertook to get a further reconciliation of these figures and make further submissions to the Tribunal. He therefore argued there was no administrative error; that there were no special circumstances under section 1237AAD; and, in any event, that section must be used for circumstances other than financial hardship.

33.     The Tribunal determined that further submissions should be submitted by 20 January 2006 and the time for answers to those further submissions by the applicant should be made by 3 February 2006.  The submissions were finally lodged with the Tribunal on 27 March 2006.  No additional submissions were received on behalf of the applicant.

Findings of Fact

34.     The Tribunal has made the following findings of fact:

(i)Both applicants were in receipt of disability support pension during the periods covered by the debts raised.

(ii)Mr Lean commenced employment with Muller Sawmills Pty Ltd on 13 May 2002.

(iii)Ms Rivett-Carnac and Mr Lean were both witnesses of truth.

(iv)Ms Rivett-Carnac regularly declared Mr Lean’s earnings to Centrelink by telephone during the period in question.

(v)Ms Rivett-Carnac’s reports to Centrelink were on the Thursday whereas Mr Lean’s payday fell on a Friday.  Therefore, her fortnightly reports did not include the current week but the two consecutive weeks immediately prior to the actual week of reporting.  Therefore, the income of the current week during which the report was made would be reported a fortnight later and the information reported was the latest information reported.

(vi)There were only 31 reports to Centrelink out of 51 fortnightly payments to Mr Lean in respect of the period under review.  Taking account of this reporting pattern, the reporting has not been full or effective by or on behalf of the applicants.

(vii)Some of the summary records of Centrelink were inaccurate and the number of errors were significant in proportion to the total number of occasions in which fortnightly earnings of Mr Lean  were reported.  However, other records were relied on by the ARO, as shown in the attachment to the letter to Ms Rivett-Carnac dated 8 November 2004 (Folio 126-128).

Consideration

35.     I have carefully considered all of the evidence presented by the applicants and the respondent in relation to the issues to be determined by the Tribunal.  The answers to the issues to be determined are set out below.

(i)        Were the applicants overpaid disability support pension?

36.     Ms Rivett-Carnac was overpaid Disability Support Pension based on the evidence available.  Mr Lean has been overpaid based on some of the evidence available, although some revision of the debt claimed in respect of his record is warranted (see paragraphs 58 and 59 below). 

(ii)       Are the amounts overpaid debts due to the Commonwealth?

37.     The statutory framework which is relevant in this case is the Social Security Act 1991. The relevant statutory provision which relates to debts from 1 July 2001 is section 1223(1) of the Act which provides as follows:

“1223(1) Subject to this section, if:

(a)       a social security payment is made; and

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

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

38. Based on the finding in paragraph 36, the Tribunal determines that the overpayments are debts due to the Commonwealth and which have arisen under section 1223(1) of the Act. Following a number of amendments to this section, it is clear that a strict and narrow interpretation of this subsection is required at the outset subject to the application of the write off and waiver provisions (see below).

(iii)      Should the debts be recovered?

§  Write-off

39. One of the considerations for dealing with recovery of the overpayment would be to have the Secretary write-off the debt. The authority for this option is contained in section 1236 of the Act. This relevantly provides:

“1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a)       the debt is irrecoverable at law; or

(b)       the debtor has no capacity to repay the debt; or

(c)       the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d)       it is not cost effective for the Commonwealth to take action to recover the debt.

1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

(a)       the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b)       there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c)       the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d)       the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1236(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a)       deductions from the debtor's social security payment; or

(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c)       setting off under section 84A of that Act;

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.”

40. Clearly, section 1236 can only apply in limited circumstances. It can apply where the debt is not recoverable at law, if the debtor is impecunious or has no capacity to repay the debt; where the debtor’s whereabouts are unknown; or where it is not cost effective for the Commonwealth to recover the debt.

41. In this case, while the applicants’ circumstances are clearly very difficult from a financial point of view, none of the circumstances outlined in section 1236 could be said to be applicable. Therefore, the Tribunal finds that the debt cannot be written-off under section 1236 of the Act.

§  Waiver

Waiver – Statutory Provisions

42. In considering whether waiver is applicable to the applicants, reliance can be placed on section 1237A which is concerned with administrative error or under-estimating the value of property as being the cause of the debt. Alternatively, reliance can be placed on section 1237AAD, where there are “special circumstances” involved.

Waiver Due To Administrative Error

43. Section 1237A(1) provides as follows:

“1237A.(1)  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.”

44.     It was argued by the respondent that waiver is only relevant in the case where administrative error can be seen to be “solely” attributable to the debt being incurred.  The respondent also referred to the case of Dingli and Secretary, Department of Social Security [1996] AATA 11436. The respondent further submitted that as the applicants had not responded to various questions on the pro forma required by Centrelink, then it cannot be said to be “solely” due to administrative error.  Here, the respondent also referred the Tribunal to the case of Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 10941 where Deputy President Forgie said that “solely” should be given its ordinary meaning.  She also pointed out that the Secretary’s duty to waive extends only to errors attributable to the Commonwealth.  The Secretary does not have a duty to waive debts where errors or other factors, independent of the Commonwealth’s administrative error, are concerned.

“If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.  Whether it is or is not attributable in that situation to the Commonwealth’s administrative error, will be a question of fact”. (See paragraph 40 in Gerhardt’s case).

45.     But whether the circumstances of the debts could be said to arise solely because of administrative error, assistance is provided from the judgment of Selway J in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 76 ALD 105. There, his Honour said:

“The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event.  The word ‘attributable’ means ‘capable of being attributed’.  It involves an objective assessment of causation.  The words a debt attributable solely to an administrative error can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.”

46.     The additional evidence and submissions lodged on behalf of the respondent do not seem to deal with reconciliation of the figures referred to at paragraph 32 which were not explained at the hearing.

47.     However, additional data showing the breakdown of Mr Lean’s earnings were included in that recent submission by the Respondent.  These showed Mr Lean’s payslip earnings in the following categories: Superannuation, Award Pay, Overtime, Protective Clothing, Holiday pay, Holiday bonus, Termination, Gross Pay, Tax Deducted and Net Pay.  From these figures it is apparent that there has been inconsistency in reporting by Ms Rivett-Carnac.  For example, it appears that for the fortnight ending 22 May 2002, an amount of $870.17 (Gross) was earned with $2.40 being Protective Clothing Allowance.  On 26 May 2002, Ms Rivett Carnac reported $867.77 earned, that is, the gross pay less the protective clothing allowance.  But on 5 July 2002, 19 July 2002, 20 August 2002, 5 September 2002, 27 September 2002, and 31 January 2003, Centrelink was advised of the net pay of Mr Lean.  While the amounts of net pay usually coincided with the net pay on the payslips, gross pay should have been advised to Centrelink.

48.     In respect of other fortnights, it is apparent that either no amount or an amount not identifiable as either the gross or net amount was reported.  Of the 51 fortnights/reporting periods, reports are evident in only 31 reporting periods.  There was therefore significant error on behalf of the applicants.

49.     The Tribunal noted that the reliability of some of the records of Centrelink as mentioned in paragraphs 55-60 are dubious and are dealt with in more detail later. However, in light of the pattern of reporting by or on behalf of the applicants, it cannot be said that the debt was due solely to administrative error by the Commonwealth.

Waiver Due To Special Circumstances

50. Section 1237AAD of the Act provides:

“1237AAD.  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.”

51. In relation to section 1237AAD(a), the Tribunal finds that the applicants did not knowingly make false statements or false representations, and they did not fail or omit to comply with a statutory provision of the Act.

52.     But are there “special circumstances”?  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, the Administrative Appeals Tribunal determined that:

“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition….This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

53.     “To some extent, the question whether there were special circumstances must depend on how it came about that the error occurred.”  (Dranichnikov v Centrelink (2003) 75 ALD 134). There, the Tribunal found that special circumstances involve a situation which is peculiar or exceptional in amount, degree of intensity etc. These circumstances may relate to personal circumstances, health issues, financial circumstances or other matters.

54.     However,  “special circumstances” also is concerned with avoiding unfairness.  In Groth v Department of Social Security (1995) 40 ALD 541 at 545 Keifel J said that “special circumstances” involves showing that the facts of a case are distinguished from other cases “….to take it out of the usual or ordinary case…..it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary”.  Likewise in Secretary, Department of Social Security v Hales (1998) 153 ALR 259 at 267, French J emphasised that “special circumstances” as specified is intended “to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness…”.  Further, “special circumstances” is intended to relate to the overall situation of the applicant rather than isolated aspects of evidence.  (Secretary, Department of Social Security v Thompson(1994) 53 FCR 580; (1994) 36 ALD 563).

55.     In considering the circumstances as a whole, the state of the records and the degree of culpability are relevant.  In relation to the supplementary submissions by the respondent dated 27 March 2006, the accuracy of some of the Centrelink records must be called into question.  Mr Howard conceded errors on two occasions only.  The records that Centrelink supplied and which were appended as Attachment C to his supplementary submissions received on 27 March 2006, show that of the contacts apparently made with Centrelink in respect of Mr Lean, the following contacts acknowledged by Centrelink on Folios 126-128 (Exhibit 1) are not shown in the Centrelink printout at Attachment C mentioned above : 7 June 2002, 20 June 2002, 5 July 2002, 19 July 2002, 20 August 2002, 5 September 2002, 27 September 2002, 9 December 2002, 31 January 2003, 23 June 2003, 20 June 2003, 22 July 2003, 15 September 2003, 16 October 2003, 30 October 2003, 27 November 2003, 12 December 2003, 12 January 2004.

56.     The following dates only are shown on the printout at Attachment C and which coincide with reports of advice of fortnightly earnings: 27 May 2002, 29 August 2002, 2 October 2003, 13 November 2003, 24 December 2003, 21 January 2004, 9 February 2004, 19 February 2004, 4 March 2004.

57.     Therefore, the evidence submitted at Attachment C records only 9 occasions where the applicant advised of fortnightly earnings. When compared with the summary at Folios 126–128, there were 18 occasions where the summary at Attachment C omits reference to advice from the applicant, notwithstanding the acknowledgment by Centrelink in Folios 126-128 of Exhibit 1, that these 18 occasions were reported.

58.     The Tribunal also noted that even though Attachment C records acknowledgement of contact on 29 August 2003, the codes shown do not include access to the Earnings record (i.e. EAN or EANS). That of itself is not indicative of error. However, the reference to that date on Folio 127 shows Mr Lean’s “partner advised gross earnings of $974.00 for 15 August 2003 and $1,094.57 for 29 August 2003”.  The totals of Folio 126-128 seem only to take account of the report of $1,094.57 and not the amount of $974.00.

59.     Clearly, when recalculating any underreporting in Folios 126-128, the amount of $974.00 for fortnight 15 August 2003 (13 August 2003 in Muller Sawmills records) should be taken into account in the total declared for Mr Lean.  That reported amount would then, based on the total in Folio 128 (T47), exceed the total of the actual amount earned.  However, it is noted that there also appear to be errors in the amount of “Actual gross fortnightly income…” on Folio 128 for the dates of 30 October 2003, 27 November 2003, 12 December 2003, 24 December 2003, 12 January 2004, 21 January 2004, 9 February 2004, 19 February 2004 and 18 March 2004, compared to the pay records in Attachment A to Centrelink submissions of 27 March 2006.  The amount in folio 128 (T47) for the final fortnight shown as ending on 18 March 2004 in fact ends on 24 March 2004. Adjustments to the amounts for the above dates (including an adjustment for the fortnight ending 24 March 2004 to take account only of the amount which was due to 18 March 2004 – the last date of the overpayment period), appear to be necessary also.  Some of the dates of fortnights in Folio 128 do not align with the Muller’s Sawmill records.

60.     These errors should be referred back to Centrelink for correction and recalculation of Mr Lean’s overpayment.

61.     In considering whether there are “special circumstances” relating to either applicant, it is relevant that both applicants have serious disabilities.  Mr Lean is disabled with autism and reliant on Ms Rivett-Carnac to report his earnings.  He is incapable of performing this task himself although despite his disability, he is keen to work and drives up to 80km each way to work daily.  His sincerity of purpose was apparent to the Tribunal.  Ms Rivett-Carnac reported on his behalf but demonstrated some inconsistency by the reporting of net earnings for some periods, as is evident in paragraph 47 above.  However, she also reported gross earnings on some occasions, and reported inexplicable amounts at other times.  From the report of Dr Neville Young, a medical cause for some of her complaints is not apparent and there is not adequate explanation for the failure to report at all for some periods. That evidence, together with all other evidence available, provides little mitigation for the extent of inconsistency in reporting.

62.     The Tribunal accepts that some of Ms Rivett-Carnac’s problems are psychological, but they are not sufficient, based on the evidence, to make her so dysfunctional that she was not capable of reporting earnings accurately.  It is noted for example on 12 January 2004 she called twice within one hour about her own record but did not report Mr Lean’s earnings on that date.  While she reported to Dr Young that she had some “memory” problems, there is no indication of neuropsychological problems that could attribute the lack of reporting to a significant cognitive deficit.  Therefore, the Tribunal does not accept that she is so affected that a failure to report for many months at a time could be accounted for by her reported  memory problems. 

63.     The Tribunal is satisfied that Ms Rivett-Carnac’s failure to report is not counterbalanced by the extent of inadequacies in some of the summary reporting systems of Centrelink. The likelihood of failure to record the majority of calls as shown in this case is highly improbable, as, despite some system inaccuracies in the summary reports, there are many individual transactions acknowledged in the ARO’s report that are not apparent in the summary report shown in Attachment C to the supplementary report of 27 March 2006. Therefore, there seem to be other information systems available within Centrelink which are not reported in the summary system submitted to the Tribunal. 

64.     Based on the lack of accuracy of the Centrelink records and Mr Lean’s complete reliance on Ms Rivett-Carnac for reporting, the Tribunal finds there are “special circumstances” in respect of Mr Lean.  These include his autism, an error by Centrelink and there are discrepancies in gross earnings used in Centrelink calculations which need to be taken into account in Mr Lean’s favour (see paragraph 59). His debt must be re-calculated to correct those amounts.  The consequential effect of these calculations should then be used to recalculate the debt due by Ms Rivett-Carnac.

65.     There are no “special circumstances” which would take Ms Rivett-Carnac’s case out of ”the usual or ordinary case”.

66.     Upon re-calculation of the debts due by Mr Lean and Ms Rivett-Carnac, the Tribunal then directs that:

(i)     the original decision in respect of Mr Lean be set aside and any residual debt waived;

(ii)    any residual debt of Ms Rivett-Carnac (following the recalculation of a ‘notional’ debt for Mr Lean, taking account of any errors as outlined in paragraph 59), should then be recoverable by the Commonwealth against Ms Rivett-Carnac.

I certify that the 66 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, Member

Signed:         Robert Hayes
  Legal Research Officer

Date of Hearing  13 December 2005 (Casino)
Date of Decision  21 April 2006
Solicitor for the Applicant          Ms M Cameron - McKenzie Cox
For the Respondent                 Mr J Howard, Departmental Advocate