Salsone and Secretary, Department of Family and Community Services
[2002] AATA 1117
•30 October 2002
DECISION AND REASONS FOR DECISION [2002] AATA 1117
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2001/499
) No A2001/500
GENERAL ADMINISTRATIVE DIVISION )
Re VINCENZO SALSONE & MARIA SALSONE
Applicants
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr M J Sassella, Senior Member
Date30 October 2002
PlaceCanberra
Decision The tribunal affirms the decisions under review.
..............................................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Age Pension – debts due to Commonwealth – recipients provided all financial information to Centrelink – Centrelink calculated rates erroneously – whether debts can be waived – whether sole administrative error on part of Commonwealth and receipt of moneys in good faith – whether special circumstances justify waiver – held no sole administrative error by Commonwealth – held no special circumstances
Social Security Act 1991 ss 68, 1223, 1224, 1237A, 1237AAD
Privacy Act 1988
Backhouse and Secretary, Department of Family and Community Services, Re [2000] AATA 139
Beadle and Director-General of Social Security, Re (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670
Bestel and Secretary, Department of Family and Community Services, Re [1999] AATA 867
Brown and Secretary, Department of Family and Community Services, Re [1999] AATA 113
Hales, Director-General of Social Security v (1983) 47 ALR 281
Jonauskas, Re Secretary, Department of Family and Community Services and (2001) 65 ALD 553
Kaupe and Secretary, Department of Family and Community Services, Re [2001] AATA 825
REASONS FOR DECISION
30 October 2002 Mr M J Sassella, Senior Member
THE APPLICATIONS
Application A2001/499 is an application the Administrative Appeals Tribunal ("the tribunal") by Vincenzo Salsone ("the first applicant"), born 2 August 1927 (T1A), for review of a decision of the Social Security Appeals Tribunal ("the SSAT") dated 18 October 2001 (T2) affirming the decision of a Centrelink authorised review officer ("ARO"), a sub-delegate of the Secretary, Department of Family and Community Services ("the respondent") dated 24 October 2000 (T20A) which was that Mr Salsone owed Centrelink a debt of $2,643.90.
Application A2001/500 is an application to the tribunal by Maria Francesca Salsone ("the second applicant"), born 8 May 1933 (T1B), for review of a decision of the SSAT dated 18 October 2001 (T2) varying the decision of a Centrelink ARO dated 24 October 2000 (T20B). The SSAT decided that the quantum of a compensation debt owing by Mrs Salsone was to be reduced. It affirmed the debt of $2,643.90 owed to Centrelink by Ms Salsone.
THE HEARINGThe tribunal convened a hearing in this matter in Canberra on 5 August 2002. Ms Caterina Salsone of counsel represented the applicants. Ms Pat D'Cunha of the Centrelink Advocacy and Administrative Law Team represented the respondent. The tribunal heard oral evidence from both applicants. The tribunal took into evidence the following documents:
Exhibit TD1 – Section 37 Statement and associated documents (T1 – T30) provided by the respondent.
Exhibit A1 – Applicant's statement of facts and contentions, 8 May 2002.
Exhibit R1 – Respondent's statement of facts and contentions, 16 May 2002.
FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS
On 18 February 1998 both applicants lodged claims for Age Pension (T3A-D), attaching copies of their income tax returns for 1996-1997 (T4A-B).
On 19 February 1998 a letter of grant was sent to each applicant (T5A-B). These letters advised each applicant to read the reverse side of the letter where certain important details appeared. The letters advised that the applicants' combined yearly income was assessed as $4,637.75. The letters advised, among other things, that a recipient was to notify Centrelink within 14 days if the combined yearly income figure was incorrect. The rate of pension was $292.20 a fortnight. There was no reference to income from superannuation payments.
On 15 December 1998 Centrelink completed a data-matching exercise with Comsuper (T6). This related to superannuation payments made by Comsuper to the first applicant.
On 18 January 1999 Centrelink wrote to the first applicant to inform him that his pension had been reassessed to $190.70 a fortnight (T7). The income details included reference to superannuation income of over $15,000 a year.
In May 2000 work began in Centrelink to calculate the level of overpayment involved (T9A-T10). Debts were raised in an amount of $2,262.20 each.
On 16 June 2000 Centrelink wrote to each applicant advising each that a debt was owed (T11). The rate of each pension was reduced to $90 a fortnight and $143 was to be withheld from each pension each fortnight (ex A1).
On 26 July 2000 Centrelink wrote to the second applicant noting that she had received a compensation payment and that she was to repay Centrelink $13,786.60 (T14). The rates of pension were reduced to $1 each a fortnight with $115 each withheld each fortnight (ex A2).
At some stage each applicant asked that the decision to recover the debts arising because of the Comsuper payments be reviewed (T18A, T18B). The original decision-maker reviewed the decisions and decided that they were correct (T18A, T18B). The matters were referred to an ARO (T19A, T19B).
The ARO dealt with the first applicant, Mr Salsone, as follows (T20A). He noted that the first applicant had declared his Comsuper income in his claim form but that Centrelink had overlooked it and it was not taken into account in assessing the Age Pension rate. However, the grant letter had required the first applicant to notify Centrelink if the income assessment was incorrect. The first applicant had not notified Centrelink of the incorrect calculation. Mr Salsone had thus received an excess of Age Pension to which he was not entitled. The correct period of the overpayment was from 5 March 1998 to 21 January 1999. The debt had been calculated as commencing and ending earlier, ie running from 19 February 1998 to 7 January 1999. This resulted in a recalculated debt amounting to $2,643.90. Thus the debt was reduced by an amount just under $20. It was decided that the debt could not be waived because it had not arisen solely due to administrative error. The debt would not have arisen had the first applicant notified that the income calculation was wrong.
The ARO dealt with the second applicant in the same way as with the first (T20B).
On 8 February 2001 the second applicant sought a review of the decision to recover the compensation debt (T22). The original decision-maker confirmed the decision on 12 February 2001 (T23). It was referred on to an ARO who affirmed the decision on 21 March 2001 (T24).
On a date uncertain there was an application for review of all the overpayment decisions lodged with the SSAT (T2). The SSAT made its decision on 18 October 2001 (T2). The SSAT found that the debts arising from Mr Salsone's receipt of the Comsuper pension were recoverable in full. However, the SSAT reduced by $239.42 the compensation debt for reasons similar to those of the ARO when the Comsuper-related debts were reduced. The debts were not amenable to waiver.
At the hearing several arguments were advanced for the applicants to support the suggestion that the debts should be waived under s 1237A(1) or s 1237AAD of the Social Security Act 1991 ("the Act"):
Waiver of debt arising from error
Administrative error
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.
1237A.(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.…
Waiver in special circumstances
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.…
It was not disputed that the applicants provided Centrelink with all relevant income information prior to the grant of the Age Pensions. It is also not disputed that Centrelink erred in its assessments of the rates of pension (T2). It was also admitted for the applicants that debts due to the Commonwealth had arisen in accordance with ss 1223 and/or 1224 of the Act. It was accepted that the letters sent to the applicants notifying them of grants of Age Pension were recipient notification notices under s 68 of the Act.
In oral evidence Mr Salsone admitted to some errors in his claim and associated forms. These, however, reflected a misunderstanding of a question, and/or may have been filled in by a Centrelink officer who was assisting at the time and may reflect his or her misunderstanding, and/or were neutralised by the documents given by Mr Salsone to Centrelink regarding his finances.
Mr Salsone did not recall the Centrelink officer telling the applicants that they were to notify Centrelink of changes in their circumstances. He did not think that the Centrelink officer told them to check closely the letters they would receive from Centrelink.
The first applicant addressed T5A, the letter notifying him of his grant of pension. He said that when he received the letter he concentrated on the information about the grant and rate of pension. He did not notice the list of matters regarding which he was told he had a duty to notify Centrelink. The total combined yearly income quoted was $4,637.75. This was too low. Mr Salsone's superannuation pension alone was over $15,000 a year. Mr Salsone said that he understood that Centrelink would best know how to strike his annual rate of income on the basis of the comprehensive details he had given them.
Mr Salsone explained that Mrs Salsone, the second applicant, does not read English. He therefore reads correspondence to her. Mr Salsone did not read to her the section of the letter relating to obligations. He thought it was merely formal material and unimportant.
Once the pension payments began there were no further letters from Centrelink until January 1999. Further, it was only in July 2000 that Centrelink took any account of Mrs Salsone's workers' compensation payments. By this stage, said Mr Salsone, he and his wife were very upset.
After February 1998 Mr and Mrs Salsone received notices from Comsuper and Comcare telling them that their superannuation and workers' compensation had risen because of rises in the cost of living. Mr Salsone said that they did not tell Centrelink of these rises because they assumed Centrelink would get the information from Comsuper and Comcare directly.
Mr Salsone mentioned that Mrs Salsone's Age Pension ceased in September or October 2001 because of the effect of the Act in requiring a reduction of $1 in Mrs Salsone's pension rate for every $1 she receives from Comcare in weekly compensation. He had asked Centrelink to reduce the rate of recovery which was applicable to his Age Pension to reduce the debts owed so that it would be only $80 a fortnight. Mr Salsone said that he and Mrs Salsone are not well. They need "a lot of help". They receive no pensioner concessions. They cannot do their own house cleaning. The cost of living becomes dearer all the time. They had to sell an investment property in Sydney in February 2000 because the calls on them by the body corporate seeking additional levies were too high. That yielded $40,000 but the money went in full on household repairs and expenses.
Mrs Salsone also gave evidence. She emphasised that there had been no discussions at Centrelink about pensioner obligations and that she left it to her husband to read correspondence and explain it to her. She spoke of her health problems. She had had breast cancer, shingles, back and hip problems. She has financial difficulties such that she cannot afford to go to see her children in Sydney. She has an extraordinary expense in the form of special foods because of her insulin level. She told the tribunal that she had understood that Centrelink had access to data that meant it could update changes in a pensioner's income.
It was suggested that this was an appropriate case for waiver in accordance with s 1237A(1) of the Act.
As at 18 February 1998 Centrelink had been provided with all relevant information. This is correct.
There was no error by the applicants or any attempt to deceive. This is correct.
Neither applicant was informed orally of the obligations they had if they received a pension. The tribunal accepts that this is so, however there is no obligation in the Act requiring Centrelink to give oral advice on such matters. As a matter of commonsense Centrelink would be expected to answer a question put orally by a customer. However, failing that, the administrative scheme proposed in the Act is one whereby communications are in writing. This is understandable. Social security law and administration are unavoidably complex and everyone's rights are better protected if communications are in writing. A social security recipient who cannot understand English can seek assistance with Centrelink correspondence from other family members, social agencies or Centrelink itself, which has access to interpreters and social workers.
The applicants dealt with correspondence by the husband reading it and communicating relevant messages to his wife. This is purely a matter of domestic choice as between Mr and Mrs Salsone.
The letters from Centrelink to the applicants on 19 January 1998 were not read astutely. This was because the first applicant did not understand that he should do so. This was because he had not been told that he should read letters carefully. It was not until July 2000 that the first applicant understood that he had such obligations. The tribunal has addressed a similar argument above.
Section 1237A(1) requires that there be sole administrative error on the part of the Commonwealth if waiver is to occur. Ms Salsone, for the applicants, submitted that they were not told of their obligations in a way calculated to bring home to them their obligations. There was one single letter. There was no oral communication. The tribunal has already expressed its views on this above.
Even if the first applicant had read the reverse side of the letter of grant he would not have been aware that he had to do anything. This is because he would not have known that there was a matter that he had to report to Centrelink. This is a curious submission. Had Mr Salsone read the letter in full and considered the contents he would have realised that the parties' combined yearly income was surprisingly low as it appeared in the letter and he had to notify Centrelink within 14 days if that amount was wrong.
Centrelink had not explained to the applicants the concept of combined yearly income. The tribunal considers that this phrase has a reasonably clear meaning. In any case, had Mr Salsone read the letter and not understood this concept, he could and should have inquired of Centrelink as to its meaning.
No one had explained to the first applicant that he had to read the whole of any Centrelink letter. The tribunal was unimpressed by this argument. It is difficult to see why Centrelink would include irrelevant material in an important letter telling a claimant that he or she was to be paid a pension, how much he or she would receive, how that amount was calculated and what he or she had to do in order to fulfil his or her obligations. This was the letter establishing the business and statutory relationship between Centrelink and a customer. A Centrelink customer would neglect reading the entirety of such a letter at his or her own risk.
Further, it was submitted that any error on Mr Salsone's part was so intrinsically tied to the procedural errors of Centrelink that he should not be held responsible for them. They should be seen as errors on the part of the Commonwealth. Only a year later did Centrelink contact the applicants about an error in their assessments. At this time there was still no explanation offered regarding combined yearly income. The applicants could have legitimately believed that everything was fixed up. Not until July 2000 did Centrelink reassess the pensions on the basis of financial data given to it in February 1998. The tribunal does not see that the contribution of the applicants to the creation of these debts can be ignored. While Centrelink was at fault initially, that fault should have been remedied had Mr Salsone dutifully read the whole of the letter and acted on it. For reasons given already the tribunal does not accept that Centrelink was at fault administratively other than in failing to take account of the declared items of income.
In relation to waiver because of special circumstances under s 1237AAD of the Act, Ms Salsone suggested the following as special circumstances:
On 18 February both applicants fully disclosed all their income to Centrelink. They believed they would have to notify later changes to those details.
The incorrect assessments were due to Centrelink's administrative errors.
The applicants were not advised at the initial interview or after that that they were obliged to check that information on letters sent to them by Centrelink was correct.
The applicants were unaware that they had been overpaid.
The applicants understood that Centrelink obtained income details directly from other Commonwealth agencies such as Comsuper and Comcare.
The applicants knew too little English to understand what was on the reverse of Centrelink letters such that they were in a position to act to overcome Centrelink's negligence. This was partly because of Centrelink's failure to explain matters to them.
In as much as the applicants may have breached their obligations under s 68 of the Act it was said that they had a reasonable excuse in accordance with s 68(5) of the Act.
The term "combined yearly income" on the grant letters was a term neither applicant understood or had explained to him or her.
Centrelink's delay in acting on the errors once they were discovered greatly increased the quantum of each overpayment.
Had Centrelink brought home to the applicants their obligations before it had discovered its own errors the resultant overpayments would be substantially lower.
The applicants' financial and health situation, which will not improve, is a special circumstance.
A number of decided cases were cited. Ms Salsone submitted that several of these were applicable to assist the applicants. First was Re Backhouse and Secretary, Department of Family and Community Services [2000] AATA 139. The applicant in that case received Parenting Payment (Single). She declared income from employment of "$411.95 gross". She did not state whether this was weekly of fortnightly income. Centrelink took it to be fortnightly. Centrelink paid Ms Backhouse on that basis for about six months before Centrelink approached Ms Backhouse's employer who confirmed this as her income but on a weekly basis. A debt was raised immediately. In the appeals process Ms Backhouse admitted to not reading the part of Centrelink's letters where the calculations of rate were explained. She had not, accordingly, notified Centrelink that it was acting on an incorrect understanding of her annual income.
The tribunal waived half of the debt under s 1237AAD of the Act. It took the view that Ms Backhouse's health, that of her family members, the family's financial situation, her sons' remedial tutoring requirements and the department's administrative error constituted special circumstances. It waived half of the debt because it considered that the department and Ms Backhouse were equally at fault in the creation of the debt. The thinking appeared to be that the department should have queried the ambiguous statement of income earlier than it did.
The tribunal does not regard this case as directly applicable in the present circumstances. Firstly, s 1237A of the Act appears to cover the field as regards the prospects for waiver in respect of administrative error. If waiver is not available under that provision then there is a strong presumption that s 1237AAD should not be invoked to circumvent s 1237A. The tribunal in Re Bestel and Secretary, Department of Family and Community Services [1999] AATA 867 (paragraph 69) adopted a similar view.
Secondly, the SSAT addressed the applicants' health and financial circumstances in the present case (T2) in a fashion that appears to this tribunal to have been absolutely correct. The SSAT ascertained in this case that their total annual income a year ago was $34,036 plus Mr Salsone's Age Pension of $138.15 a fortnight. In addition, the applicant's health and financial situation seems not dissimilar to that of a great many age pensioners.
The tribunal and the Federal Court have said the following about the requirement for special circumstances. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 Toohey J said at page 3:
"An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. 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."
This passage was largely endorsed by the full Federal Court in Beadle v Director-General of Social Security (1985) 7 ALD 670, 675. The situation of the applicants would not satisfy the criteria in these authorities.
In Re Brown and Secretary, Department of Family and Community Services [1999] AATA 113 Mrs Brown was granted an Age Pension on 28 August 1992. A grant letter from the then Department of Social Security ("DSS") told her that she was to notify any change in income increasing her income to more than $43 a week. In October 1992 the Defence Force Retirement and Death Benefits agency advised Mrs Brown of her entitlement to a pension of $257.88 a fortnight payable from the day after the date of her husband's death, 2 June 1992. Although Mrs Brown began to receive this pension, and although she received at least 15 notices from DSS telling her to notify increases in income, she did not notify DSS. DSS decided that she had incurred a debt of over $15,000 when the problem was discovered in May 1997. She thought that the various government departments sorted these things out amongst themselves and she had no obligation to notify. The tribunal held that s 1237A was not applicable because there had not been error only on the part of DSS. The DSS error was seen to be not following up a comment by Mrs Brown to a DSS officer filling in her form that she thought she was in receipt of some other form of government pension and not pursuing the fact that the pension paid to her and her deceased husband had been at less than maximum rate, suggesting that there was additional money coming from somewhere else. The tribunal waived 5/6 of the amount owing at the time of the hearing. It considered that DSS had failed to follow its own procedures and investigate information provided to it by both Mrs Brown and the Department of Veterans' Affairs. It also considered that Mrs Brown was in some distress when completing forms and formalities as her husband had recently died. These were seen to be matters constituting special circumstances.
This tribunal again expresses some reservations as to whether it was appropriate in Re Brown (above) to permit s 1237AAD to be used in relation to administrative error when s 1237A has been found to be not applicable. The tribunal would note also that there was no situation of grief applying in the present case.
In Re Kaupe and Secretary, Department of Family and Community Services [2001] AATA 825 Ms Kaupe was in receipt of Parenting Payment (Single) in May 2000 when she accepted work. She notified Centrelink in May that she would be receiving an estimated $23,000 over 33 weeks. On 10 August 2000 a Centrelink officer telephoned Ms Kaupe and told her that she had been overpaid around $2,000 because Centrelink had not acted on her advice. This was a different case from the instant case. The debt was held to have arisen because of Centrelink's sole administrative error. The only remaining issue under s 1237A(1) of the Act was whether Ms Kaupe had received the unreduced social security payments in good faith, as required by the subsection. It was held that she did not receive the payments in good faith as her payments continued at the same level in circumstances where Ms Kaupe would have expected them to fall. However, the tribunal waived 75% of the debt using s 1237AAD of the Act. It regarded as special circumstances the fact that the debt arose through Centrelink's administrative error and the fact of Ms Kaupe's financial situation. She was repaying the debt by withholdings and was having to borrow money to get by. The tribunal reiterates its concerns about using s 1237AAD to circumvent s 1237A of the Act. In any event, the tribunal notes that this case was quite different from the instant case. In Re Kaupe (above) there was no contribution by Ms Kaupe to the administrative error and her financial situation was less robust than that of Mr and Mrs Salsone.
The respondent referred the tribunal to Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553. Various errors occurred in this case. Mr Jonauskas claimed an Age Pension in July 1997. His wife's income was recorded as $397.38. This was a weekly figure but was recorded as fortnightly by Centrelink. Mrs Jonauskas submitted a form in which she declared earnings of some $480 a week. Age Pension was granted on 22 July 1997. The letter of grant alerted Mr Jonauskas that he needed to read the reverse of the letter. The reverse told him that the rate of pension was assessed on the basis of income from earnings at a rate of $10,331.88 as combined yearly income. The reverse of the letter explained that income was "gross", not net income. It required notification if the income amount appearing was incorrect.
On 6 August 1997 Centrelink again saw a pay advice belonging to Mrs Jonauskas. Further letters were sent to Mr Jonauskas in August 1997 and September 1997. These advised the same combined yearly income and a requirement to notify if the amount was incorrect.
In March 1999 Centrelink sent Mr Jonauskas an income and assets review form. Mr Jonauskas returned this stating that his wife earned $511.19 gross each week and that she had earned $25,929.00 in the previous 12 months. Tax assessments for 1997 and 1998 indicated a taxable income for Mrs Jonauskas of over $26,000 in 1997 and over $25,000 in 1998. A pay advice for 7 March 1999 was lodged showing taxable income for Mrs Jonauskas of $522.59.
Centrelink entered the new information on the computer but retained the earlier income details also. On 18 June 1999 Centrelink raised an overpayment of $6,917.30 for the period from 19 July 1997 to 1 April 1999.
The tribunal, Deputy President Forgie, decided that the debt was recoverable in full. Section 1237A was inapplicable because of Mr Jonauskas's failure to notify Centrelink that the combined yearly income amount was incorrect. The tribunal considered whether there were special circumstances to permit waiver under s 1237AAD of the Act. The circumstances advanced as special included:
Mr Jonauskas had delayed claiming a pension for two years after he qualified for a pension. This was held not to be a special circumstance.
Mr Jonauskas had a fall in September 1995 which left him with difficulty in moving, giddiness, deafness, tinnitus in the right ear, memory loss.
Mr Jonauskas had some difficulty reading English in that he needed to use a dictionary at times.
Repayment of the debt would expose Mr and Mrs Jonauskas to some financial hardship.
Deputy President Forgie wrote at pages 572-573:
"(78) Also relevant are the circumstances in which Mr Jonauskas came to fail or omit to comply with his obligation to notify the Department that it had not correctly stated his combined income. Having heard his evidence, I am satisfied that he took no interest in the letter of 22 July, 1997 other than to look at the amount he would be paid. He made no effort to read the rest of the information on the front of it. Had he done so, his attention would have been directed to the back of the letter. He did not turn the letter over. Mr Jonauskas did not ask anyone else to check the letter for him to make sure that he understood its contents. He did not respond to the invitation on the front of the letter to get in touch with the Department if he wanted to know more. The telephone number and office hours were printed at the top of that front page. I am satisfied that he was careless as to whether the letter contained information as to matters he was required to deal with. Perhaps that was because he expected the Department to put the correct information into the computer but, for all that, he was still careless as to whether it had.
"(79) I am not satisfied that Mr Jonauskas' circumstances are special. Many people who are on the Age Pension suffer from ill health and have difficulties in managing their affairs because of it. Many have some degree of difficulty in reading letters whether because of lack of English or because of problems caused by ill health. This does not justify their being careless or reckless about the manner in which they manage their affairs. They may seek assistance from family members although they are not obliged to. There are avenues of assistance available to them and one of those is to telephone the Department, and now Centrelink, for assistance and guidance as to a person's obligations. People who have difficulties and have the capacity to understand their difficulties use those avenues or at least make some attempt to. Mr Jonauskas neither used them nor made any attempt to do so. I am satisfied that he had the capacity to understand his situation. He also had the capacity to understand any obligations that he might have known he was under but, by making no attempt to read the letter of 22 July, 1997 (or subsequent letters) chose not to know about them. In view of this, I have concluded that there are no special circumstances making it desirable to waive the debt."
The tribunal endorses the remarks made by Deputy President Forgie in this case. While the tribunal is not bound to follow its own decisions, the general practice is for a Senior Member or Member to follow a decision by a Deputy President in order to promote consistency in tribunal decision making. In any event, the tribunal would adopt the learned Deputy President's approach as a matter of preference. As this tribunal sees it the legislation recognises several facts of life, unfortunate though they may be, about social security administration. These include:
That Centrelink does not have automatic access to databases maintained by other government agencies such that it can automatically update the income details of its customers. The Privacy Act 1988 imposes strict safeguards designed to prevent such access from occurring in the absence of certain safeguards.
That Centrelink makes mistakes, perhaps too many mistakes, in assessing rates of pensions, allowances and benefits and has to rely on the most interested parties, its customers, to check their assessments and contact Centrelink if there is an error.
That Parliament, in passing the legislation in the Act on waiver of debts, leant in favour of debts being generally recoverable unless there are good, largely circumscribed, reasons for waiving them. Mere error by Centrelink is not alone sufficient to bring about a waiver. The full Federal Court in 1983 in Director-General of Social Security v Hales (1983) 47 ALR 281 said per Sheppard J at pages 322-333:
"There is not to be found in the Tribunal's reasons any indication that it did put into the scales the consideration that the respondent had, for whatever reasons, received public moneys to which she was not lawfully entitled. To me, notwithstanding considerations of hardship which there are in this and many other cases, that must always be a paramount consideration. After all, the legislature has expressly provided for recovery of overpayments in the very legislation pursuant to which these benefits are paid. Thus it contemplated recovery from persons to whom overpayments of social service benefits had been made. So the essence of the question is whether the Tribunal's failure to mention and deal with this critical consideration establishes that it has been guilty of an error of law in the exercise of its discretion."
The tribunal finds that there are no special circumstances included in the matters suggested as special in paragraph 28 above.
The fact that both applicants fully disclosed their finances to Centrelink was not a special circumstance. The Act requires and presumes that all applicants do that. The fact that they believed they would have to notify only subsequent changes in their circumstances, rather than also check the initial calculation, is not so much a special circumstance, as understood in the law (see paragraph 33 above), as an error resulting from the applicants' own ignorance stemming from their failure to read a Centrelink letter.
The fact that the incorrect assessments resulted from Centrelink errors was not a special circumstance. Such errors occur relatively frequently and the statutory remedy for them is to require recipients to check their entitlements.
The fact that there was no oral advice given to the applicants to check information in Centrelink letters was not a special circumstance. The reason is the statutory scheme of the Act as discussed above in paragraph 26.
The fact that the applicants were unaware that they had been overpaid is not a special circumstance. They should have been aware had they read their Centrelink letters assiduously.
The fact that the applicants thought Centrelink obtained income details direct from other agencies and that, apparently, relieved them from having to provide or confirm such matters, was not a special circumstance. There was nothing said to them or appearing in Centrelink's material sent to the applicants to suggest that this occurred. Indeed, to the contrary, Centrelink pressed that the obligation to notify was placed on the applicants personally.
The fact that the applicants have problems with the English language was not a special circumstance. This is not uncommon among social security recipients.
The applicants did not have a "reasonable excuse" for failing to notify under s 68(1) of the Act. Their excuse was that they had not read the relevant Centrelink recipient notification notice. The Act operates on the basis that recipients read such notices. As a matter of policy it would be curious if a social security recipient could avoid statutory consequences by invoking a defence that they had failed to do what they were required under the statute to do, ie read notices.
The fact that the term, "combined yearly income", was not explained to either applicant is not a special circumstance. The term has a reasonably clear meaning such that there is no express or implied onus on Centrelink to explain the term in every case. The onus was on the applicants to read their letters and seek advice on anything they did not understand.
The fact that there was a delay in acting on the overpayment, which increased the quantum of the debt, was not a special circumstance. First, this occurs not infrequently. Second, where this is an issue, it is a matter of administrative error appropriately dealt with under s 1237A of the Act.
The tribunal does not accept that Centrelink failed to bring home to the applicants their obligations. As discussed earlier, Centrelink took reasonable steps, as detailed in the Act, to apprise the applicants of their obligations in writing.
The applicants' financial and health situation is not a special circumstance. This matter was amply discussed and resolved by the SSAT, with which this tribunal agrees. In short, Mr and Mrs Salsone are financially better off than a great many other social security recipients and their health, although not perfect, is not noticeably worse than that of many other Age Pension recipients whom the tribunal sees.
The applicants did not address the large compensation debt in their arguments or submissions. This debt was referred to in the applications to the tribunal for review. For completeness the tribunal makes the following findings in relation to that debt owed by Mrs Salsone.
The tribunal finds that the SSAT's treatment of the compensation debt was appropriate in that the SSAT waived a small part of that debt under s 1237A of the Act. The tribunal finds that that debt has been accurately calculated by the SSAT, taking into account the waived amount. The tribunal could see no additional elements of administrative error to justify any additional waiver under s 1237A. The tribunal could identify no special circumstances to justify exercise of the discretion in s 1184K of the Act to regard some or all of the compensation as not having been received.
CONCLUSIONThe tribunal has found that each applicant owes a debt to the Commonwealth in respect of overpayments of Age Pension and that the second applicant owes a compensation debt to the Commonwealth in the amount settled by the SSAT. The tribunal has also found that the debts cannot be waived.
DECISIONThe tribunal affirms the decisions under review.
I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Sassella, Senior Member
Signed: .....................................................................................
AssociateDate of hearing 5 August 2002
Date of decision 30 October 2002
Counsel for the applicant Ms C SalsoneAdvocate for the respondent Ms P D'Cunha, Centrelink Advocacy and Administrative Law Team
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