Secretary, Department of Social Security v Migotto, A

[1991] FCA 420

Re: THE SECRETARY OF THE DEPARTMENT OF SOCIAL SECURITY
And: ANNA MIGOTTO
No. Q G67 of 1991
FED No. 420
Social Security
30 FCR 295/103 ALR 36
14 AAR 128

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)

CATCHWORDS

Social Security - overpayment of Austudy allowance under Student Assistance Act 1973 - debt due to the Commonwealth - deductions from sickness benefits - whether Secretary of Department of Social Security has statutory power to waive debt - s.251(1) Social Security Act 1947

Social Security Act 1947: ss.246(1), (2) and 251(1), (4)

Student Assistance Act 1973: ss.31A(1), (3) and 31C(1)

Bill of Rights 1688: s.1

Church v Department of Education (1987) 73 ALR 69

The Case of Dispensations (1604) Jenk 307, 145 ER 224

HEARING

BRISBANE

#DATE 24:7:1991

Counsel for the Applicant: Mr W. Vitali

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr P. Applegarth

Solicitors for the Respondent: Gilshenan and Luton

ORDER

The appeal be allowed.

The decision of the Administrative Appeals Tribunal dated 12 November 1990 be set aside.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In 1989 the respondent commenced studies at the Mount Gravatt College of Advanced Education. She received an Austudy allowance under the Student Assistance Act 1973 as amended. She became incapacitated by reason of severe depression and agoraphobia and ceased her studies on 29 May 1989. On 11 September 1989 she applied to the Department of Social Security ("DSS") for sickness benefits and this application was approved, backdated to 14 August 1989. However, she had continued to receive her Austudy benefits after she ceased her studies. According to the medical evidence, her illness rendered her incapable of dealing with her financial affairs, including the transfer from Austudy to sickness benefits. She continued to receive Austudy payments until 9 September 1989 resulting in an overpayment of $887.94.

1. On 19 October 1989 the Department of Employment, Education and Training ("DEET"), which administers the Austudy scheme, wrote to DSS requesting that department to recover the overpayment of Austudy allowance from the respondent's sickness benefit payments. DSS acceded to that request and commenced to withhold from the fortnightly sickness benefit payments amounts which were applied towards reduction of the respondent's liability to repay the Austudy overpayments. Section 246(2)(c) of the Social Security Act 1947 provides the statutory warrant for such deductions.

2. The respondent appealed to the Social Security Appeals Tribunal. It was argued on her behalf that the Secretary of DSS should in the circumstances waive the right to recover the Austudy payments under s.251(1) of the Social Security Act. The Social Security Appeals Tribunal dismissed that appeal but the respondent then appealed to the Administrative Appeals Tribunal ("AAT") which allowed her appeal.

3. In its decision dated 12 November 1990 the AAT "determine(d) that the Secretary of DSS has power under section 251(1) of the Social Security Act 1947 as amended, if he thinks proper to do so, to waive the right of the Commonwealth to recover from the (respondent) the overpayment of Austudy for the period from 29 September (sic - presumably May) 1989 to 9 September 1989".

4. From that decision the Secretary of DSS appeals to this court. The point which arises is whether the Secretary of DSS can lawfully waive the right of the Commonwealth to recover the Austudy overpayments made to the respondent.

5. The relevant legislation is as follows:
   

Social Security Act 1947

s.246 (1) Where, in consequence of a false statement or representation, or in consequence of a failure or omission to comply with any provision of this Act, an amount has been paid by way of pension, allowance or benefit under this Act which would not have been paid but for the false statement or representation, failure or omission, the amount so paid is a debt due to the Commonwealth.

(2) Notwithstanding anything contained in this Act, where -

(a) an amount has been paid by way of pension, benefit or allowance under this Act that should not have been paid;

(b) an amount has been paid by way of pension or allowance under the Veterans' Entitlements Act 1986 or the Seamen's War Pensions and Allowances Act 1940 that should not have been paid;

(c) an amount has been paid to a person under a prescribed educational scheme that should not have been paid; or

(d) on or after 12 August 1988, an amount has been paid to a person under a program included in the programs known as Labour Force Programs that should not have been paid; and the person to whom that amount was paid is receiving, or is entitled to receive, a pension, benefit or allowance under this Act (other than a funeral benefit under Part VIII), that amount (including any amount payable by the person under subsection (3)) shall, unless the Secretary takes action under sub-section 251(1) in relation to that amount, be deducted from that last-mentioned pension, benefit or allowance by reducing each payment of that pension, benefit or allowance by a proportion of that pension, benefit or allowance, being a proportion decided by the Secretary in each particular case, until the sum of the amounts by which the payments are reduced equals that amount.

(2A) .....

(3) .....

(5) .....

s.251 (1) The Secretary may, on behalf of the Commonwealth, decide to -

(a) write off debts arising under or as a result of this Act, or debts arising under or as a result of this Act that are included in a class of debts specified by the Minister by notice in writing published in the Gazette;

(b) waive the right of the Commonwealth -

(i) to recover from a person the whole or a part of a debt that is payable by the person under or as a result of this Act; or

(ii) to recover debts under or as a result of this Act included in a class of debts specified by the Minister by notice in writing published in the Gazette; or

(c) allow an amount that is payable by a person to the Commonwealth under or as a result of this Act to be paid in instalments.

(1A) .....

(1B) .....

(1C) .....

(2) .....

(3) .....

(4) A reference in subsection (1) to a debt, or to an amount, arising or payable under or as a result of this Act includes a reference to:

(a) a debt or an amount payable to the Commonwealth because of subsection 42(1) of the Veterans' Entitlements Act 1986; and

(b) an assurance of support debt.

(5) .....

Student Assistance Act 1973 (as amended by Student Assistance Legislation Amendment Act 1988)

31A. (1) Subject to subsection (3) but in spite of any other provisions of this Act, where, whether before or after the commencement of this section:

(a) an overpayment of an amount has been made to, or in respect of, a person;

(b) an amount has been paid by way of pension, benefit or allowance under the Social Security Act 1947 that should not have been paid or that has been paid solely because of a decision under subsection 136(2A) of that Act;

(c) an amount has been paid by way of pension or allowance under the Veteran's Entitlements Act 1986 or the Seamen's War Pensions and Allowances Act 1940 that should not have been paid; or

(d) an amount has been paid to, or in respect of, a person under a prescribed educational scheme that should not have been paid; and the person to or in respect of whom that amount was paid is receiving, or is entitled to receive, benefit payable under student assistance, that amount (and any amount payable by the person under subsection (4)) may be deducted from that benefit by reducing each payment of that benefit by a proportion determined by a prescribed officer in each case until the sum of the amounts by which the payments are reduced equals that amount or those amounts.

(2) .....

(3) Subsection (1) does not apply in relation to an amount if recovery of that amount is waived under paragraph 31C(1)(b) of this Act or under paragraph 186(1)(b) of the Social Security Act 1947, paragraph 206(1)(b) of the Veterans' Entitlements Act 1986 or paragraph 55B(1)(b) of the Seamen's War Pensions and Allowances Act 1940, as the case may be.

(4) .....

31B. .....

31C. (1) The Minister may, on behalf of the Commonwealth, by instrument in writing:

(a) write off the amount of any overpayment made to a person;

(b) waive the right of the Commonwealth to recover from a person the whole or a part of the amount of an overpayment made to the person; or

(c) allow a person to repay to the Commonwealth by instalments the amount of any overpayment made to the person.

(2) .....

(3) .....

(4) .....

1. It was accepted that overpayments of Austudy allowance are recoverable as a debt due to the Commonwealth. I was not referred to any express statutory provision to this effect, but it was conceded, correctly in my view, that a payment purportedly made under a statutory entitlement, where the facts which would have given rise to that entitlement did not exist, is recoverable at common law as money paid under a mistake of fact: Church v Department of Education (1987) 73 ALR 69 at pp 82-85, 86-87. If there is to be a valid waiver of a debt due to the Commonwealth, there must be a statutory power to waive: cf. The Case of Dispensations (1604) Jenk 307, 145 ER 224, Bill of Rights 1688 s.1. Section 251(1)(b) confers such a power on the Secretary of DSS, but confines the power to debts which answer the description contained in sub-paras. (i) and (ii).

2. In the present case the debt admittedly owed by the respondent to the Commonwealth did not answer the statutory description. It was not "payable.... under or as a result of" the Social Security Act. If the Commonwealth were to proceed in a court for recovery of this debt, its statement of claim would not plead, as an element if its cause of action, any entitlement under the Social Security Act.

3. The Commonwealth has chosen to avail of itself of a means of recovery provided by the Social Security Act, viz s.246(2)(c). But I do not think that means that the debt itself can be said to be "payable... under or as a result of" the Social Security Act. Section 251(1)(b)(i) deals with waiver of the right to recover debts of the stipulated kind by any means at all - whether deduction from other Social Security payments, action in the courts or any other means. It is not in my view concerned with a waiver of any particular means of recovery.

4. Further support for this view is provided by s.251(4), which is a deeming provision. It is directed to a very limited category of debt not arising or payable under the Social Security Act and provides that, for the purpose of ss.(1), such debts are to be treated as if they did so arise or were so payable. In my opinion, the limited terms of ss.(4) point against a conclusion that the power to waive contained in s.251(1)(b) extends to all debts due to the Commonwealth, or to all debts which the Commonwealth seeks to recover by deduction from payments under the Social Security Act.

5. I think therefore that the applicant's argument based on the language of the legislation is correct. Considerations of policy and convenience lead to the same result. The logical place to confer power to waive Austudy overpayments is with those who have the responsibility of administering that scheme. This in fact has been done by s.31C(1) of the Student Assistance Act.

6. In my opinion therefore the appeal should be allowed and the decision of the AAT dated 12 November 1990 set aside. There is no suggestion that any wrongful conduct on behalf of the respondent lead to the overpayment. Indeed the medical evidence explains how this probably occurred without any fault on her part. The applicant brought this appeal, as I was told, to obtain a ruling on a legal point of general practical importance. In the circumstances, I shall make no order as to costs. The respondent may still be able to seek a waiver under the Student Assistance Act.