Smith and Department of Family and Community Services - [2001] AATA 281

DECISION AND REASONS FOR DECISION [2001] AATA 281

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/1078

GENERAL ADMINISTRATIVE DIVISION       )        No N2000/1691
           Re      COLIN SMITH
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr R P Handley, Senior Member

Date9 April 2001
PlaceSydney

Decision The Tribunal affirms the decisions under review.

[sgd]R P Handley
Senior Member
CATCHWORDS
Social Security – job search allowance/newstart allowance – debt recovery – failure to declare earnings from casual employment – prosecution – disparity between reparation order and amount sought to be recovered – amount of weekly repayments – whether tribunal has jurisdiction to review reparation order – whether recovery of debt should be waived – whether applicant knowingly made a false statement or representation
Social Security Act 1991 – ss1237A, 1237AAD

REASONS FOR DECISION

Mr R P Handley, Senior Member

This matter involves two applications by Colin Smith:
(1) an application dated 14 July 2000, for a review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 1 June 2000 in relation to the raising and recovery of a debt of $10,299.99 in respect of job search allowance/newstart allowance paid during the period 15 January 1993 to 17 June 1994; and
(2) an application dated 31 October 2000, for a review of a decision of the SSAT made on 23 June 1999 in relation to the raising and recovery of debts of $6,908.07 and $10,938.99 in respect of newstart allowance paid, respectively, during the periods 1 July 1994 to 30 June 1995 and 1 July 1995 to 30 June 1997.
At the hearing, Mr Smith was self-represented and the Secretary of the Department of Family and Community Services ("the Department") was represented by Mr Bernard Slattery of Centrelink. The evidence before the Tribunal comprised the documents produced pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the T-Documents") together with the documents tendered by the parties. Mr Smith gave oral evidence at the hearing.
background
Mr Smith was born on 2 October 1948 and is now aged 52. Until 20 June 1991, he was employed as a heavy vehicle mechanic by International Trucks (N2000/1078, T4). On 18 October 1991, he commenced employment as a casual school bus driver for Pearce Coaches (N2000/1078, T6). On 18 December 1992, Mr Smith lodged a claim for job search allowance (N2000/1078, T4) which was granted from 25 December 1992 (N2000/1078, T13). On 31 December 1993, he was transferred to newstart allowance (N2000/1078, T13).
Following a data matching review undertaken with the Australian Taxation Office ("ATO") which revealed a discrepancy in the income details held by the Department of Social Security ("DSS") and the ATO, on 28 May 1996 the DSS raised a debt against Mr Smith of $8041,50 in respect of newstart allowance paid during the period 1 June 1994 to 30 June 1995 (N2000/1691, T8).
On 7 May 1997, payment of newstart allowance to Mr Smith was cancelled for failure to attend an interview (N2000/1078, T16).
On 15 August 1997, DSS raised debt of $10,938.99 in respect of newstart allowance paid to Mr Smith during the period 13 July 1995 to 1 May 1997 (N2000/1078, T17).
On 16 October 1997, an authorised review officer affirmed the decision of 28 May 1996 to raise a debt in respect of the period 1 June 1994 to 30 June 1995, but referred the matter to the original decision maker to recalculate the debt using details of Mr Smith's weekly earnings supplied by his employer, rather than his annual income averaged on a fortnightly basis (N2000/1691, T19, T20). Also on 16 October 1997, the authorised review officer affirmed the decision of 15 August 1997 to raise a debt of $10,938.99 in respect of the period 13 July 1995 to 1 March 1997 (N2000/1691, T20).
On 29 October 1997, DSS raised a further debt of $10,299.99 in respect of job search allowance and newstart allowance paid during the period 15 January 1993 to 17 June 1994 (N2000/1078, T8, and T9).
On 29 October 1997, the debt in respect of the period 1 June 1994 to 30 June 1995 was recalculated at $6908.07 (N2000/1078, T21).
In the case of all three debts, the overpayment of job seach allowance/newstart allowance arose because of Mr Smith's undeclared earnings from his casual employment with Pearce Coaches.
On 23 June 1999, the SSAT affirmed two decisions to raise the debts of $6908.07 and $10,938.99 (N2000/1691, T2).
On 12 August 1999, Mr Smith was convicted of eight offences under the Social Security Act 1991 ("the Act"), section 1350, in respect of his failure to declare income from Pearce Coaches while receiving a social security payment (N2000/1691, T30). These offences covered the following periods:
11/2/1993 to 22/4/1993
6/5/1993 to 23/9/1993
7/10/1993 to 30/12/1993
10/2/1994 to 16/6/1994
13/7/1995 to 14/12/1995
on or about 28/12/95
8/2/1996 to 26/12/1996
6/12/1997 to 1/5/1997

Charges in respect of the periods 9 February 1995 to 6 April 1995 and on or about 20 April 1995 were dismissed.

The Downing Centre Local Court sentenced Mr Smith to perform a total of 400 hours community service, and the Court made a reparation order under the Crimes Act 1914, section 21B, of $19,326.19 (N2000/1691,T30).
On 20 December 1999, an authorised review officer affirmed the decision of 28 October 1997 to raise and recover a debt of $10,299.99, in respect of the period 15 January 1993 to 17 June 1994 (N2000/1078, T11).
In August 1999, Centrelink commenced garnisheeing Mr Smith's wages at a rate of $50 per week. Recovery at this rate was affirmed by an authorised review officer on 20 December 1999, but reduced to $25 per week by the SSAT on 13 March 2000 (N2000/1078, T2).
On 1 June 2000, the SSAT affirmed the decision to raise and recover a debt in respect of the period 15 January 1993 to 17 June 1994, but remitted the matter to Centrelink to recalculate the debt on a fortnightly basis in accordance with the details of Mr Smith's income provided by Pearce Coaches, rather than his annual income averaged on a fortnightly basis (N2000/1078, T2).
On 14 July 2000, Mr Smith lodged an application with the Tribunal to review the SSAT decision made on 1 June 2000 (N2000/1078, T1).
On 15 September 2000, Centrelink recalculated the debt in respect of the period 15 January 1993 to 30 June 1994 at $8,553.59 (N2000/1078, T29). Mr Smith was notified of this by letter dated 16 October 2000.
On 31 October 2000, Mr Smith lodged a further application with the Tribunal to review the SSAT decision made on 23 June 1999 (N2000/1691, T1).
Extensions of time were granted by the Tribunal in respect of both Mr Smith's applications.
In summary, the Department is seeking to recover three debts:
(1) $8,553.59 in respect of the period 15 January 1993 to 30 June 1994;
(2) $6,908.07 in respect of the period 1 July 1994 to 30 June 1995; and
(3) $10,938.99 in respect of the period 1 July 1995 to 30 June 1997.

This is a total of $26,400.65.
mr smith's case

Mr Smith did not dispute the calculation of the debts. He was, however, concerned about the difference between the reparation order of $19,326.19 made by the Local Court and the debt of $26,400.65 which the Department is seeking to recover.
Mr Smith read out a statement he had prepared for the hearing. He said he had been retrenched at the age of 42 without any redundancy payout. At first, he was too proud to seek any Government assistance. He worked as a casual bus driver and mechanic at Thredbo and then as a casual bus driver for Pearce Coaches. The Depot Manager at Pearce Coaches suggested that he apply for social security benefits because the manager was unable to give him any more hours work. He made an appointment at the Merrylands office of the Department where he spoke with a female officer. He told her that he had a casual job but no regular hours because he was on call. The officer told him that he could earn a certain amount before social security payments would be affected but did not tell him specifically what this amount was. He did not fill out his income details on the application form because he did not know these details. The officer did not show him how to fill out the form. She seemed to assume that this was common knowledge. He was not given any brochures or customer charter setting out his rights and responsibilities.
Mr Smith said he continued to look for work while he was receiving social security benefits. He assumed that the money he was earning from his casual work was "ok" in terms of his social security benefits. He said while he accepted some of the blame for what happened, nevertheless, the Department was also negligent in failing to inform him properly of his responsibilities. Mr Smith said that the attitude of Centrelink staff is now more helpful and understanding of people's needs. He was able to obtain a copy of their customer service charter.
The Tribunal asked Mr Smith about when he had been called in by the Department for review interviews while he was receiving social security benefits. Mr Smith said he did not mention that he was doing casual, on-call work, because he was not asked. He was only asked about his efforts to find work.
Mr Smith said he has been working for Australia Post for the past three and a half years. When he got the job, he stopped applying for social security benefits.
Mr Smith said when the court proceedings against him were started, he applied for Legal Aid but was told he did not qualify. He was referred to the Welfare Rights Centre but they said they could not help him. Mr Smith saw a solicitor at Penrith but he asked for $800-$900 "up-front" to take the matter on and Mr Smith did not have this money. Consequently, Mr Smith represented himself in court. The matter was adjourned twice and then transferred from Penrith Local Court to the Downing Centre Local Court.
Mr Smith said he barely spoke two words in court. He suffers badly from nerves, for which he takes medication. The magistrate suggested that he should plead guilty and referred him to the duty barrister to discuss how much he was able to repay. Because he was already paying child maintenance of $100 per week, it was proposed that he repay $25 per week to the Department. This figure was accepted by both the Director of Public Prosecutions ("DPP") and the magistrate. The magistrate ordered Mr Smith to serve 400 hours of community service. Mr Smith took three weeks holiday to serve the first 200 hours and served the other 200 hours on Saturdays over about four months.
Mr Smith could not understand why the Department then garnisheed his wage for $80 per week when the Court had accepted $25 per week. He was only earning $550 per week gross. Mr Smith objected and, finally, the SSAT reduced these payments to $25 per week.
Mr Smith could also not understand why the Department was now seeking to recover $26,400.65 when the Local Court reparation order was for $19,326.00. he pointed to the DPP's letter dated 17 June 1999 (Exhibit A1), by which Mr Smith was notified that the prosecution was not proposing to rely on certain applications for job search/newstart allowance dated between June 1994 and January 1997. Mr Smith also noted that some of the charges against him were dismissed because no evidence was offered by the prosecution (N2000/1691, T30).
Mr Smith submitted a statement by Kathryn Anne Wheatley dated 18 June 1999 provided to him by the DPP (Exhibit A3). In that statement, Ms Wheatley, a Customer Services Officer at the Merrylands office, said she could not recall the conversation with Mr Smith, which she recorded in a file note (N2000/1691, T9). Mr Smith noted that Ms Wheatley was not called to give evidence in the court proceedings.
Mr Smith also provided a series of references as to his good character (Exhibit A2). He said he has had a happy second marriage of 10 years. He has two children from his first marriage, a daughter who is aged 23 and a son, David, aged 20, who is severely affected by spina-bifida and confined to a wheel chair. Mr Smith said he is still paying back maintenance through the Child Support Agency.
the department's case
Mr Slattery explained that the Department is seeking to recover a sum greater than the $19,326.00 reparation ordered by the court, because the period in respect of which recovery is sought is a longer one. He could only guess at why the DPP had not sought reparation in respect of a larger sum – perhaps not all the evidence had been available at that time.
Mr Slattery drew the Tribunal's attention to the table of Mr Smith's declared and assessed earnings between 30 June 1995 and 1 May 1997 (N2000/1691, T27) which included a period after May 1996 when Mr Smith was aware of the debt raised against him on 28 May 1996 of $8041.50, for the period 1 June 1994 to 30 June 1995 in respect of undeclared earnings. Mr Smith continued to under-declare his earnings until May 1997. Mr Slattery submitted that Mr Smith must have knowingly under-declared these earnings.
With regard to the rate of recovery of the debt, Mr Slattery was unable to explain why the Department had garnisheed Mr Smith's wage to recover $80 per week when the Local Court had accepted a repayment of $25 per week. He noted that this had now been rectified following the SSAT decision of 13 March 2000 and that Mr Smith is still repaying $25 per week.
Mr Slattery submitted that the debt had been correctly raised and should be recovered. Noting the Court's reparation order of $19,326.19, with respect to which the Tribunal has no jurisdiction, he submitted that, nevertheless, the power of waiver could not be exercised in Mr Smith's case because Mr Smith "knowingly" made false statements or representations.
consideration of law and findings
Mr Smith does not dispute the calculation of the debts. His concern is the disparity between the Local Court reparation order of $19,326.19 and the $26,400.65 now sought to be recovered by the Department.
The Tribunal has no jurisdiction to review the reparation order made by the Court. The Tribunal notes that of the offences with which Mr Smith was charged, relating to specific periods between 11 February 1993 and 1 May 1997, no evidence was offered in relation to two offences (count 5 – 9 February 1995 to 6 April 1995, and count 6 – on or about 20 April 1995) and that those charges were dismissed. Of the other eight offences, the periods in question do not, disregarding counts 5 and 6, constitute a continuous period between 11 February 1993 and 1 May 1997. There are gaps. There is no explanation for this on file and, as Mr Slattery suggested, one can only guess that insufficient evidence was available at the time of the prosecution to establish the continuous period.
However, the Tribunal notes that with the dismissal of counts 5 and 6, the periods prosecuted successfully exclude the period 17 Jun 1994 to 17 July 1995. Thus, the third debt raised of $6908.07 in respect of the period 1 June 1994 to 30 June 1995, is largely excluded from the court proceedings. It would appear that this probably accounts for the disparity between the reparation order of $19,326.19 and the $26,400.65 now sought to be recovered by the Department.
With regard to Mr Smith's other concern, the garnisheeing of $80 per week from his wages, when the Court had accepted a repayment of $25 per week, the Tribunal notes that there was no notification of this amount in the letter from the DPP to Centrelink dated 18 August 1999 (N2000/1691, T29). It is not clear what the status of the $25 repayment was, although a note on file (N2000/1078, T24) records that Mr Smith's barrister confirmed that the Court had decided that a reasonable repayment was $25 per week. In any event, Mr Smith exercised his right to seek a review of the sum garnisheed and, on appeal to the SSAT, this was reduced to $25 per week, the sum still being recovered.
As to recovery of the debt, the Tribunal has already noted that it has no jurisdiction to review the reparation order made by the Court. However, it does have jurisdiction to review the remainder of the debt raised by the Department. There is no suggestion that the debt arose solely due to an administrative error by the Department (section 1237A(1)). Thus, the only relevant power which would enable the recovery of the debt to be waived is that set out in section 1237AAD of the Act:
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 a 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.
Section 1237AAD is only applicable if the debtor or another person did not knowingly make a false statement or representation or fail or omit to comply with a provision of the Act. The Tribunal finds that the debt did arise because Mr Smith made a false statement to the Department, in that he failed to declare the earnings from his casual employment with Pearce Coaches. Mr Smith acknowledged that he was aware that there was a ceiling on what he could earn in casual employment before his social security benefit would be affected. He failed to notify the Department of his casual employment when completing his application for payment of job search/newstart allowance forms (for example, N2000/1691, T4), at times when his employer has verified that he was working (for example, N2000/1691, T11).
Since there is no applicable power to enable recovery of the debt to be waived, the debt must be recovered and the two decisions of the SSAT under review must be affirmed.

I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R P Handley, Senior Member
Signed:         .....................................................................................
  Associate
Date/s of Hearing  23 March 2001
Date of Decision  9 April 2001
Counsel for the Applicant        Self-Represented
Counsel for the Respondent    Mr Bernard Slattery