Simpson and Department of Family and Community Services

[2001] AATA 175

DECISION AND REASONS FOR DECISION [2001] AATA 175

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2000/533

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

DECISION

Tribunal       Deputy President DP Breen, Presidential Member      

Date8 March 2001

PlaceBrisbane

Decision      The Tribunal affirms the decision under review.           

(Sgd)          DP BREEN
  PRESIDENTIAL MEMBER
CATCHWORDS
SOCIAL SECURITY - overpayment - family allowance - provision of income estimates - re-calculation of benefits when actual income greater than 110% of estimate.

Social Security Act 1991

REASONS FOR DECISION

8 March 2001          Deputy President DP Breen, Presidential Member                  

1. This was a review of a decision made by an Authorised Review Officer of Centrelink to raise and recover an overpayment of family allowance of $2,191.80 for the period 2 July 1998 to 14 January 1999 against Mrs Tracey Simpson.  That decision was affirmed by the Social Security Appeals Tribunal on 15 May 2000.

2. The matter was heard by me in Hervey Bay on 14 December 2000.  Mr C Simpson, the applicant's husband, represented the applicant.  Mr P Kanowski, Departmental Advocate, represented the respondent.  Submissions were made by both parties and the "T" Documents were taken into evidence as Exhibit 1.

3. In May 1998 Mr Simpson was retrenched from his job and Mrs Simpson was on maternity leave.  Mrs Simpson initially put in an estimate of joint income for the 1998/99 financial year of $23,500 with her claim for family payment.  The Simpsons were told that they could update their estimates on a weekly basis if they wanted to so as to reflect any changes in their financial circumstances.

4. The Simpsons were very conscientious and honest in their dealings with Centrelink.  They updated their estimates three times between June 1989 and January 1999.  The first two changes were close to the original estimate.  However, towards the end of 1998 Mrs Simpson returned to the workforce and obtained employment in a Government Department.  This led to the Simpsons providing an amended estimate in January 1999 which was more than double the original estimate.  Their family allowance was adjusted accordingly.  Their actual total income for the 1998/99 financial year was $57,867.

5. The legislative scheme which governs Centrelink payments on the basis of income estimates requires that Centrelink review the payments at the end of the financial year and compares the actual income with the estimated income.

6. Each estimate is compared with the actual annual income.  If the actual income is greater than 110% of any of the estimates, Centrelink is obliged to re-calculate the entitlements.  In this case, $57,867 is greater than 110% of each of the estimates provided.

7. Centrelink then assesses, on the basis of the actual annual income, the amount of benefits the claimant should have received.  This is compared with the total benefits they did receive.  The difference is the overpayment due.

8. The estimation of annual income becomes a difficult task when circumstances change dramatically during the year.  While the Simpsons fairly accurately estimated their income for the first six months and then again for the second six months, the legislation requires the re-calculation to be on a twelve month basis.  In any case, where there has been a substantial improvement in financial circumstances, there will generally be an overpayment, irrespective of the honesty and diligence of the claimants.

9. Although there appears to be some element of unfairness in this case, in that the re-calculation results in a deemed entitlement at a lower level of benefits during the first six months when the Simpsons did really need the assistance, that is simply how the legislation works.  It is not an issue which this Tribunal has power to address.  It is a matter for Parliament.

10. As a matter of law, there is an overpayment of family payment owed to the Commonwealth.  There are no provisions under which this debt can be waived given the circumstances of this case.

11. For the above reasons, the Tribunal affirms the decision under review.  The stay of payment issued by this Tribunal on 14 December 2000 is lifted as at 15 March 2001 and the Tribunal directs that Centrelink negotiate with Mrs Simpson as to a reasonable rate of recovery given her current financial circumstances as a result of her pregnancy.

    I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President DP Breen, Presidential Member

    Signed:         Emma Oettinger
      Associate

    Date/s of Hearing  14.12.00
    Date of Decision  8.3.01
    Rep. for the Applicant              Mr C Simpson, applicant's husband
    Solicitor for the Respondent    Mr P Kanowski, Departmental Advocate