Sampford and Secretary, Department of Family and Community Servic Es

[2004] AATA 14

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 14

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1043

GENERAL ADMINISTRATIVE  DIVISION		)
Re		SONIA SAMPFORD

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal M.A. Griffin

Date8 January 2004

PlaceSydney

Decision The Tribunal affirms the decision under review.

[Sgd] M. A. Griffin, Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit - overpayment - debt to Commonwealth - waiver – decision affirmed

A New Tax System (Family Assistance (Administration)) Act 1999 ss 71, 95, 97, 101

Dranichnikov v Centrelink [2003] FCAFC 133

REASONS FOR DECISION

8 January 2004 M.A. Griffin            

1.      This is an application by Sonia Sampford (“the Applicant”) for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 31 March 2003.  The SSAT affirmed decisions of a delegate of the Secretary, Department of Family and Community Services (“the Respondent”) and an Authorised Review Officer (“ARO”) to raise and recover debts of $5372.82 for overpayment of family tax benefit (“FTB”) for the period 1 July 2001 to 30 June 2002. 

2.      At a telephone hearing of this matter on 25 November 2003, Mrs Sampford represented herself and Mr E. Thistlethwaite, a Centrelink advocate, represented the Respondent.

3. The Tribunal received into evidence the documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (T1-T15).  

BACKGROUND

4.        On 12 December 2000, Mrs Sampford gave Centrelink an estimate of income for herself and her husband, for the 2001/2002 financial year, of $62000.00. This estimate was used to calculate her FTB entitlement until she provided a further estimate on 3 September 2001 of $52000.00. This later estimate comprised of $22000..00 for herself and $30000.00 for her husband.  Due to a Centrelink systems error, the FTB entitlement was assessed from 8 October 2001 on the basis of an income estimate of $22000.00 and not the amount of $52000.00 provided by Mrs Sampford. The couple’s actual combined income for the 2001/2002 financial year was $59127.00. On 4 September 2002, Centrelink raised a debt of $5194.98 for the period of 8 October 2001 to 30 June 2002 because the FTB had been based on an income estimate that was less than the actual income.

5.        Also, on 2 July 2001 Mrs Sampford advised Centrelink that her son Craig’s income for the 2001/2002 financial year would exceed the income limit of $8078. Again as a result of a Centrelink systems error, payments for Craig were not cancelled until August 2001. As a result Mrs Sampford was overpaid $177.84 for Craig and Centrelink also raised a debt for this amount. On 13 September 2002, Centrelink determined that Mrs Sampford owed a total debt of $5372.82.

6.        Mrs Sampford asked Centrelink to review the decision. On 10 December 2002, an ARO affirmed the decision, noting that Centrelink wrote to Mrs Sampford on 8 October 2001 advising her that the FTB had been calculated on the basis of a combined estimated income of $22000.00 (T10).

EVIDENCE

7.        Mrs Sampford said she did not receive the 8 October 2001 letter from Centrelink advising of the $22,000.00 combined income used as the basis to calculate her payments. She said she had noticed an increase in the amount of her payments around that time and rang Centrelink to confirm that she was getting the right amount, to be told that she was. She said she was also receiving a carer’s pension at the time for her daughter Gemma who has cerebral palsy. She said she is still having problems with Centrelink about the payments for Gemma. Mr Thistlethwaite confirmed that there were continuing system problems concerning Mrs Sampford and her daughter but said that Mrs Sampford could assume the payments would be made.

8.        I asked Mrs Sampford about her current personal and financial circumstances. She said she works as casually a nurse and needs to have flexibility in her work to take care of Gemma. She said the financial figures she gave to the SSAT were correct except for the amount of her wages. She said she actually earns between $500 and $750 net per fortnight and not per week as recorded by the SSAT. She said she had recently been ill and had not worked for a few weeks. She said her husband is a bricklayer and he has recently lost some working time due to rain. She said that for the 2002/2003 financial year their combined taxable income was $39,080.00. She said they have little disposable income by the end of the month and have around $1,000.00 in savings “if lucky”.. Mrs Sampford said she and her husband both have motor vehicles, which are needed for work and to transport Gemma. They owe about $29,000.00 on a loan for the vehicles.

9.        Mrs Sampford and her husband live in their own home and have a mortgage of around $160,000.00 on the home. They also own an investment property, worth about $250,000.00 with a mortgage of around $225,000.00. She said they have been able to pay $400.00 per month towards the mortgage on the investment property since June 2002 but may have to stop doing that over the Christmas period due to added expenses and the effect of the weather on her husband’s work. Mrs Sampford said she has stopped the FTB payments because of the overpayment debt, which had now been reduced by withholdings to $2,816.42.

CONSIDERATION OF ISSUES

10.      As I understood her evidence, Mrs Sampford does not dispute that she was overpaid FTB. Her concern is that it was Centrelink’s systems errors that have placed her in this situation. Her point being that “this was caused through no fault of my own”.

11.      The relevant legislation is A New Tax System (Family Assistance (Administration)) Act 1999 (“the Act”), section 71 of which provides that any amount paid to a person greater than the amount that should have been paid to the person under the family assistance law is a debt due to the Commonwealth.  It is clear that Mrs Sampford was overpaid FTB and the amount of overpayment is a debt due to the Commonwealth. The issue is whether the debt can be waived or at least written off for a period of time.

12.      Under section 97 of the Act, the Secretary must waive a debt that is attributable solely to an administrative error made by the Commonwealth, if the debtor would suffer severe financial hardship if it were not waived. The Respondent accepts that Mrs Sampford acted in good faith and that the debt arose from a Centrelink systems error. However, Mr Thistlethwaite submitted that Mrs Sampford would not suffer severe financial hardship if the debt were not waived.  I have considered the evidence from Mrs Sampford regarding her financial circumstances, particularly the investment property, her equity in the property and her capacity to pay $400 per month since June 2002 towards the mortgage of that property.  Mrs Sampford is in regular paid employment and her husband, although affected by the vagaries of weather, earned almost $65000.00 over the past two years. In the circumstances, I can not be satisfied that she would suffer severe financial hardship if the debt were not waived.

13.      Section 101 of the Act allows for waiver of a debt where there are special circumstances. In Dranichnikov v Centrelink [2003] FCAFC 133 at paragraph 65, Hill J in considering the term “special circumstances” said:

“65. … The origin of the test apparently adopted by the Secretary appears to be the decision of the first instance Judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225.  That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154..  The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth).  Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given.  The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.

66. To some extent the question whether there were special circumstances must depend on how it came about that the error occurred.  Again that is not a matter to which the decision maker apparently averted.  Other cases which have considered analogous words such as “special reasons” has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case.  There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.

67. It is possible to read the decision statement as suggesting that the present case was one incapable of falling within the words “special circumstances”..  If that is what was held, it would involve legal error.  However, the real problem with the exercise of discretion under s 101 as with the mandatory provisions of s 97, is that the decision maker appears not to have considered at all what the circumstances were which gave rise to the overpayment.  Whether those circumstances were or were not special will obviously be a matter for the decision maker when the factual circumstances have been ascertained.”

14.      Centrelink system errors gave rise to the overpayment, however I am not satisfied this is sufficient to distinguish it from the usual case of overpayment or to take it out of the ordinary. On the evidence presented, I find that there are no personal or financial matters raised by Mrs Sampford that could constitute special circumstances, nor is there anything in the circumstances which gave rise to the overpayment that constitutes “special circumstances”.. As a result, Mrs Sampford does not satisfy section 101 of the Act, and the debt may not be waived.

15.      Section 95 of the Act provides for write off of a debt in certain circumstances. If a debt is written off, an administrative decision has been made not to seek recovery of the debt at that time. The debt still exists and may be recovered later. Mr Thistlethwaite submitted this was an appropriate matter for write off until Mrs Sampford was in a better position to repay the debt.  Mrs Sampford said six months would be a sufficient period to allow her to do so. I have had regard to this submission and to the words of section 95 and I am satisfied that write off may only occur where the debtor has no capacity to repay the debt. On the evidence before me that is not the situation in this case, nor are any of the other grounds set out in section 95 made out. Therefore there are no grounds to write off the debt. This is not to say that the Respondent is prevented from taking its own action to defer or delay recovery of the debt.

16.      For these reasons, the Tribunal finds that the overpayment of FTB totalling $5372.82 for the relevant period is a debt due to and recoverable by the Commonwealth and that there are no grounds to waive or write off the debt.

DECISION

17.      The Tribunal affirms the decision under review.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of M.A. Griffin

Signed:         A. Krilis
  Associate

Date/s of Hearing  25 November 2003
Date of Decision  8 January 2004
Representative for the Applicant    Self Represented
Advocate for the Respondent        Mr E. Thistlethwaite