Smith and Secretary, Department of Education, Employment and Workplace Relations
[2011] AATA 301
•10 May 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 301
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/4413
GENERAL ADMINISTRATIVE DIVISION ) Re CHRISTOPHER SMITH Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mark Hyman, Member Date10 May 2011
PlaceCanberra
Decision The decision under review is varied such that:
(a) $10.00 per fortnight is to be deducted from Mr Smith’s social security payment;
(b) The adjusted rate is to apply beginning from the first Newstart Allowance payment date following the date of this decision;
...............[sgd]...............................
Mark Hyman, Member
CATCHWORDS
SOCIAL SECURITY – debt repayment – recovery from social security payments – rate of payment – financial hardship – application of backdating provisions – backdating provisions do not apply
Acts Interpretation Act 1901, s 13
Administrative Appeals Tribunal Act 1975, ss 37, 43
Social Security Act 1991, ss 23, 1068, 1223, 1230C, 1231, 1234, 1236
Social Security (Administration) Act 1999, ss 3, 78, 81A, 85, 85A, 107, 108, 109, 110, 110A, 112, 114, 115, 116, 129
Re Smith and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 866
Walker v Secretary, Department of Social Security (1995) 129 ALR 198
Lesi v Minister for Multicultural and Indigenous Affairs [2003] FCAFC 285
Thiagarajan v Secretary, Department of Employment and Workplace Relations [2007] AATA 2065
Sanderson v Fotheringham (1885) 11 VLR 190
Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1
REASONS FOR DECISION
10 May 2011 Mark Hyman, Member 1. Mr Smith, the applicant, used to be a farmer. After his farming business failed, he sought to re-educate himself, and to that end enrolled in a number of courses at Canberra Institute of Technology and the Australian Catholic University. He obtained financial support and assistance from Centrelink, in the form of Austudy. In February 2008 Mr Smith’s study load changed, dropping him below the threshold at which he was entitled to the assistance he was receiving. He did not advise Centrelink of these changes, and when Centrelink discovered the mismatch between his allowances and his circumstances, Austudy payments were stopped and a debt was raised for the overpayment that had occurred. Mr Smith is now receiving Newstart allowance, and the debt is being recovered through fortnightly deductions from that payment. In 2009, Mr Smith challenged the raising of the debt, but without success.
2. Mr Smith applied to have the rate of recovery of his debt set at a lower level, and to be repaid any amounts that he previously paid above the lower rate. On 17 September 2010, the Social Security Appeals Tribunal (SSAT) decided Mr Smith’s deductions should be set at $40 per fortnight and rejected the claim for repayment of funds previously recovered at earlier, higher rates. Mr Smith has now sought review of the SSAT decision in this Tribunal.
3. The issues before me for decision are:
(a)At what fortnightly rate should Mr Smith’s debt be recovered?
(b)Should any payments already made above that rate be repaid him?
4. The matter was heard on Wednesday 9 March. Mr Smith represented himself; Ms Harlock, a Centrelink advocate, represented the respondent.
5. Mr Smith gave sworn evidence at the hearing. Besides the documents submitted under section 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), both Mr Smith and Centrelink submitted further documentation, as detailed below.
Facts and evidence
6. Mr Smith’s debt to the Commonwealth arose from his receiving Austudy payment when not entitled to it over the period 25 February 2008 to 24 June 2008. On 2 February 2009 Centrelink raised a debt of $3,731.13 (T7). When Mr Smith made no arrangements to pay the debt, Centrelink began deducting repayments fortnightly from his Newstart allowance.
7. Mr Smith sought review of the decision to raise the debt. Centrelink’s decision was affirmed by an authorised review officer (ARO) on 30 April 2009 and by the SSAT on 17 June 2009. On 10 November 2009 this Tribunal affirmed the decision to raise the debt and decided that there were no grounds to write it off or waive it (Re Smith and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 866).
8. The amounts subsequently deducted from Mr Smith’s Newstart allowance are at the heart of this review. Initially, in March 2009, the deduction was set at $65.05 each fortnight. Centrelink wrote to Mr Smith on 4 March 2009 to advise him of this figure (T8). Mr Smith insisted before the Tribunal that his initial repayment was $64.95 rather than $65.05; that is inconsistent with Centrelink’s documentary evidence, but in any case the difference is not material.
9. Mr Smith contacted Centrelink on 13 March 2009 and a Centrelink officer recorded that he agreed to pay $50 per fortnight (T9). On the same day, Mr Smith was given written notice of the adjusted rate (ST1).
10. On 19 November 2009 Mr Smith again contacted Centrelink. Centrelink staff recorded that he agreed that $20 should be withheld from his Newstart allowance. Centrelink advised Mr Smith of this change by letter of 19 November 2009 (Exhibit R1). Deductions continued at this rate until the date of the SSAT decision.
11. Thus, Mr Smith made one repayment at $65.05 on 16 March 2009; 16 repayments at $50.00 per fortnight, from 30 March 2009 to 27 October 2009; and 23 repayments at $20.00 per fortnight from 20 November 2009 to 13 September 2010 (T45).
12. Mr Smith contacted Centrelink on 12 May 2010 to complain that he had not been advised, when the debt was first raised, that he could pay less than $50 per fortnight. He argued that he should have been paying $20 each fortnight from the beginning, and that he should be refunded any excess he had already paid over that amount. Centrelink considered this argument and decided that he could not be refunded the amount he had paid in excess of the $20 deduction, because he had agreed to pay the $50 deduction set in March 2009. Centrelink continued to affirm this position when Mr Smith made further complaints on 17 and 26 May (T14, T16).
13. Mr Smith attended a Centrelink office on 31 May 2010 and completed a ‘Statement of Financial Details’ (T17) and submitted various documents in support of that statement, relating to banking and medical information (T18, T19).
14. On 2 June 2010 Centrelink reconsidered its decision not to refund any payments by Mr Smith in excess of $20 per fortnight. Centrelink affirmed its decision, again on the basis that Mr Smith had agreed to the $50 rate of repayment on 13 March 2009, and also because more than 13 weeks had elapsed since the decision had been made. Centrelink wrote to Mr Smith on 2 June 2010 advising the outcome of its reconsideration (T22).
15. On 18 June 2010 Mr Smith requested that a Centrelink authorised review officer (ARO) review the decision. The ARO affirmed the decision on 1 July 2010 (T28). On 3 August 2010 Mr Smith lodged an application for review of the ARO’s decision with the SSAT (ST6). The SSAT set aside the Centrelink decision and substituted a decision that the rate of repayment should be set at $40 per fortnight, but that recovery was to be deferred until 6 December 2010, to allow Mr Smith to meet some pressing medical and dental expenses (T2). Mr Smith sought review of that decision by this Tribunal on 12 October 2010 (T1).
16. It appears that Mr Smith negotiated a lower rate of $10 per fortnight with Centrelink during September 2010, but that the SSAT’s decision, and the deferral it directed, meant that that negotiated rate was of no effect (T40).
17. Repayments did not in fact recommence on 6 December because Centrelink was negotiating with Mr Smith regarding the matters before this Tribunal. Repayments then began again in January 2011, but on 8 February 2011 the Tribunal stayed the payments until further order. Mr Smith tendered evidence in the form of three Newstart Allowance statements (Exhibits A5, A6 and A7) that repayments had in fact continued after the Tribunal’s stay order. Ms Harlock, for the respondent, said that an error had been made and any repayments recovered after the stay order had been refunded. Mr Smith acknowledged that this was so.
18. Mr Smith tendered a table (Exhibit A4) he had prepared with the assistance of CARE Financial Services (a government financial counselling service) setting out his projected fortnightly expenditure, using a repayment rate to Centrelink of $10 each fortnight. The table also shows Mr Smith’s only other ongoing debt, a credit card debt which he says he has maintained at essentially the same level since failure of his farm, paying the interest bill, but not the principal, each fortnight. That account is supported by other evidence showing a credit card debt of $4,955.58 at 2 June 2010. The respondent accepted the figures in the table as accurate and reasonable and noted that Centrelink could agree to a repayment rate of $10 per fortnight (transcript, p 29).
19. Mr Smith also tendered other documents which he regarded as supporting his case:
(a)Edited extracts from an article in the journal Welfare Rights Review criticising Centrelink over its debt recovery practices, accompanied by Mr Smith’s arguments and conclusions on whether he should be treated as having a debt to the Commonwealth (Exhibit A1);
(b)A copy of a newspaper article describing the health impacts of financial hardships and high levels of debt on students (Exhibit A2); and
(c)A copy of a newspaper article suggesting that large debts owing to the Commonwealth in other circumstances have been written off (in particular Higher Education Loan Program (HELP) debts (Exhibit A3).
The statutory context
20. The Social Security Act 1991 (Cth) (the Act) governs the raising and recovery of debts because of overpayments.
21. Section 1223 of the Act provides that if a social security payment is made to a person who is not entitled to it, the amount paid is a debt due to the Commonwealth. Section 1231 relevantly provides that: debts may be recovered by making deductions from social security payments; the Secretary is to determine the amount of the deduction; and the debt must be recovered unless written off or waived by the Secretary.
22. The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) issues the Guide to Social Security Law (the Guide), which provides those administering social security legislation with guidance on how various decisions are to be made. The Guide sets out policy considerations that guide interpretation of Social Security Law and the exercise of discretion where legislation provides for it. The Guide notes that it is not itself law and that it is not a complete guide to the interpretation of legislation, which must always be the starting point.
23. The part of the Guide relevant to debt recovery, chapter 6.7.2, states that agencies must recover debts, and that the ‘fundamental purpose of debt management is to recover debts as quickly and efficiently as possible without causing real financial hardship to debtors’. Chapter 6.7.2.30 states under the heading ‘Amount of deduction’ that:
The amount of the deduction will be determined by the Secretary. In determining the amount of the deduction, the debtor's financial circumstances must be considered in some detail to determine an appropriate rate of recovery.
24. Under section 129 of the Social Security (Administration) Act 1999 (the Administration Act), a person affected by a decision under social security law may apply for review of that decision.
25. Under section 109 of the Administration Act, the date of effect of a favourable determination made under review varies depending, relevantly, on when an application was made for review. If a recipient of social security benefit is given notice of a decision and applies for review within 13 weeks of receiving notice, a favourable review takes effect from the time of that original decision. If the person is given notice of a decision and seeks review more than 13 weeks after receiving notice, a favourable review takes effect on the day on which application for review was made. In section 109, the definition of ‘favourable determination’ is limited to determinations made under specific sections of the Administration Act (section 108).
Consideration
At what rate should Mr Smith be required to repay his debt?
26. The figures submitted by Mr Smith and accepted by Centrelink (Exhibit A4) show him to be in a precarious financial position. He is a man in his late fifties, who by his own admission has neglected his health and is now confronted by dental, optical and general health challenges (asthma, diabetes, skin cancers) that make demands on his limited financial resources. He is, nevertheless, applying himself to study, presumably in the hope or expectation of future gainful employment. Mr Smith’s estimate of his fortnightly expenditure gives no indication that he is in any way profligate or extravagant. After all his estimated and known expenditures are totalled (including a Centrelink repayment of $10.00), Mr Smith’s fortnightly surplus is $2.00.
27. At the hearing and in some of his documentary evidence, Mr Smith spoke of the possibility that in the future he would receive some form of assistance in regard to his farm, which failed some eight years ago. That assistance might – in the context of his current position – be substantial. It appears that Mr Smith needs to complete and submit taxation information or tax returns from the years when he was farming if his claim is to be determined. He is yet to do so.
28. I am not in a position to make any finding in respect of that matter. It is clear that at present Mr Smith does not have access to the assistance he hopes one day to receive. In its absence, his financial position is very insecure. If and when the assistance becomes available, Mr Smith’s financial position will be different, and the appropriate rate of repayment could then be reassessed.
29. It is apparent from some of Mr Smith’s evidence and arguments that Centrelink’s decision to establish the debt to the Commonwealth in February 2009 still rankles with him. He put forward arguments that the debt itself was unjust and illegal. This continued a line of argument which he made before the SSAT. Indeed, the SSAT concluded (T2, at [22]) that Mr Smith’s objection to his rate of repayment was driven by his continuing resentment of the very existence of the debt. Some of the documents Mr Smith tendered as evidence (especially Exhibit A1) go to that issue.
30. Before me, Mr Smith was quite focused on his current financial position, although it was clear that he continues to feel that the debt is unjust. As was explained to him at the hearing, that matter is outside my jurisdiction, which is limited to matters raised by the reviewable decision. What is more, this Tribunal decided in Re Smith and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 866 that the debt was due the Commonwealth and that there were no grounds for waiving it or writing it off. The matter is settled.
31. Other material tendered by Mr Smith (in particular Exhibits A2 and A3) suggest that other debtors to the Commonwealth have been treated more leniently than he has. These are not arguments to which I can give any weight. Mr Smith’s case is determined by his circumstances and the law; what is reported in the media as having happened to other people in other circumstances (and probably under other provisions of the social security law) is irrelevant to his case.
32. Mr Smith is receiving social security payments in the form of Newstart allowance, and under section 1231 of the Act repayments must be recovered, the debt not having been waived or written off. His financial circumstances are very precarious, however, and it is clear that on the figures put forward by him and accepted now by Centrelink, his repayments must be set at a low figure to allow him to continue to feed himself, educate himself and get some level of health and dental care. Balancing the public interest in repayment of debt against his extremely limited financial capacity to pay, I find that the maximum amount that can reasonably be deducted from his social security payments is $10 per fortnight. Mr Smith’s fortnightly repayment is therefore set at $10.00, to be paid beginning from the first Newstart Allowance payment date following the date of this decision.
Should some or all of Mr Smith’s previous repayments be refunded to him?
33. In dealing with Mr Smith’s request for a refund of repayments in excess of the amount now set, Centrelink relies on two arguments. First, each time a rate was set for Mr Smith, after the initial default payment of $65.05, it was agreed to by Mr Smith. Second, each time Centrelink varied the repayment amount it sent a notice to Mr Smith advising him of the change in rate. Each of those notices advised him of his review rights. Centrelink argues that under section 109 of the Administration Act, unless Mr Smith applied for review within 13 weeks of each of the decisions, a favourable outcome can only take effect from the date of his application for review.
34. It is not clear to me whether Centrelink regards the consent of Mr Smith to a repayment rate as an agreement between him and the Secretary as contemplated by section 1234 of the Act. That view cannot be sustained, as the agreement of repayments under section 1234 of the Act is a payment method clearly distinguished in section 1230C from deductions from social security payments.
35. The date on which Mr Smith sought review of the decisions relating to his repayment rate is a little difficult to determine on the evidence before me. Mr Smith appears to have written a letter to Centrelink complaining (among other things) about the repayment rate on 24 February 2010. That letter could be regarded as an application for review. But the copy available to me (ST5) has a note that it was ‘re-edited 17 May 2010’, and a stamp that it was received by Centrelink on 18 May, so that it is not clear whether it properly dates from 24 February or 17 May. On 18 May 2010, Mr Smith completed a ‘Review of a Centrelink decision’ form, apparently lodging it with Centrelink on 25 May 2010. In the respondent’s ‘Statement of facts, issues and contentions’, Ms Harlock for Centrelink – perhaps in an inadvertent slip - suggested that Mr Smith sought review on 19 November 2009. In her closing submission, Ms Harlock referred to the two possible dates of 24 February 2010 and 17 May 2010, with reference to the letter (ST5) referred to above. Ms Harlock noted that even if the date of 24 February 2010 is accepted as the date of application for review, it lies outside the 13 week period from 19 November 2009, which ended on 18 February 2010.
36. Mr Smith’s major argument is that he was not advised by Centrelink in early 2009 that he could negotiate a rate at which to repay his debt. He says that he was told that $50 was the minimum he could pay. Only after his Tribunal hearing later in the year did he realise that the rate was negotiable. Thus he did not realise until that time that he had even a basis for seeking review. He says that Centrelink staff at various times advised him that ‘the computer’ would only accept particular minimum figures; and that others were paying less than he was on larger debts. The agreement of Centrelink to a repayment rate of $20 (and later $10) means that the earlier rate of $50 was ‘in error’ and that he paid a significant sum in excess of ‘the correct rate’. Mr Smith also seeks to have interest paid to him at credit card rates in recognition of the cost of having funds denied him.
37. Section 109 is not provided with exceptions. If it applies to him – and there are reasons for doubting that it does, as explored below – then Mr Smith’s reduced repayment rate is backdated to the time of his application, and not before. The evidence before me suggests that the date of application should be taken as either 18 May 2010, the date of receipt by Centrelink of Mr Smith’s letter and also the date on which he completed an application for review of a Centrelink decision, or 25 May 2010, the date on which the application was lodged. I have concluded that I do not need to resolve this issue, for the reasons given below.
38. Centrelink staff, the ARO, and Ms Harlock all see section 109 as applying to Mr Smith, although none appears to have considered whether that implies that the reduction of repayment from $20 to $10 fortnightly should be backdated to May 2010. The SSAT decided that no repayments should be refunded to Mr Smith, but without reference to any legislative basis for that decision.
39. Sections 107-116 of Division 9 of the Administration Act provide for backdating options where a review of entitlements has resulted in a favourable outcome. The generality of the scheme is that if an applicant has sought review of a determination promptly (within 13 weeks of notice), a favourable outcome will lead to the higher level of benefit being backdated to the date of the original determination. But if Centrelink has notified the recipient of the determination, and the recipient has not sought review within 13 weeks, then the favourable outcome is not backdated.
40. In the current matter, Centrelink is seeking to apply these provisions (specifically those of section 109) and Mr Smith is seeking to resist their application. Division 9 of the Administration Act applies where a review restores a benefit or a higher rate of benefit:
·section 107 applies to claims for a social security payment or concession card;
·section 109 applies to a social security payment;
·section 110 applies to changes in payments made because of changed circumstances;
·section 110A applies to resumed payments of specified kinds after a payment has been suspended because of non-compliance;
·section 111 applies to increases resulting from indexation or adjustment;
·section 114 applies to ‘other determinations’; and
·sections 115 and 116 apply to decision about concession cards.
Under section 108, Subdivision B of Division 9 (sections 109-114) refers only to favourable determinations in relation to decisions under sections 78, 85 and 85A of the Administration Act. These sections deal with increased rates of social security payments, resumed payments after cancellation or suspension, and rate increases in payments following reductions for non-compliance, respectively.
41. Section 78 provides that the Secretary, may increase the rate if satisfied that the rate at which a social security payment is being, or has been paid, is below the rate provided for by the social security law. In Mr Smith’s case, it is arguable that reduced deductions from his Newstart allowance result in an increase in the amount he receives, and that he therefore falls within the section. Similarly, section 109 deals, relevantly, with decisions ‘in relation to’ a person’s social security payment, where a review leads to a favourable determination. In Mr Smith’s case, a decision to reduce deductions from his benefit may be regarded as a decision ‘in relation to’ his social security payment, and would have the effect of increasing the amount he is paid. Clearly, that is a favourable outcome. On the face of it, Mr Smith is covered by these provisions. A closer analysis of the legislation, however, suggests that these provisions do not apply to him.
42. Section 23 of the Act defines ‘social security payment’ to mean a social security pension or benefit, an allowance under the Act, a payment under Chapter 2 of the Act (which provides for a range of benefits), or a pension, benefit or allowance under the 1947 Act. Section 78 of the Administration Act (in which under section 3(2) terms have the same meaning as in the Act, unless the contrary intention appears) applies to ‘the rate at which a social security payment is being, or has been, paid’, that is, to the pension or benefit the person is receiving.
43. Chapter 2 of the Act establishes the various pensions and benefits under social security law: Part 2.11A establishes Austudy and Part 2.12 establishes Newstart. Chapter 3 of the Act sets out the calculators and methods used to calculate the rate of the various benefits. Part 3.5A sets out the method for calculating Austudy, and Part 3.6 sets out in section 1068 the method for calculating Newstart allowance (among other benefits). Newstart allowances, like other benefits, are calculated without reference to any debt that may be owed the Commonwealth; debts are dealt with separately in Chapter 5. Thus the amendment of the rate of social security payment under section 78 of the Administration Act refers only to the determination of the pension, benefit or allowance: it does not extend to an adjustment for debt, which is not a change to a benefit but a separate process focused only on debt recovery. That conclusion is borne out by Centrelink’s own practices: when a recipient is sent advice, the rate of benefit is specified, and then deductions such as debt repayments are separately identified.
44. Division 9 of the Administration Act is headed ‘Date of effect of determinations’. Under section 13 of the Acts Interpretation Act 1901 (Cth) the headings to divisions and subdivisions in an Act are part of an Act (whereas the headings to sections are not). The meaning of a heading to a division or subdivision cannot override the actual text of a section or sections where the meaning of the latter is clear, but where there is ambiguity it may be used to resolve that ambiguity: Sanderson v Fotheringham (1885) 11 VLR 190; Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1. The first three subdivisions in Division 9 are headed ‘Determinations relating to claims’ (section 107), ‘Determinations under section 78, 81A, 85 or 85A’ (sections 108-114) and ‘Determinations under section 89’ (sections 115-16). Subsequent subdivisions deal with backdating for reviews that lead to adverse outcomes. It is reasonably clear from the wording of the sections together with the subdivision headings that Division 9 is intended to provide for recipients of social security benefits who seek review where their benefits have been denied them or delivered at a reduced rate. A recipient who promptly seeks review will be given backdated benefits if successful. But the Division does not extend beyond determinations regarding the restoration (or otherwise) of benefits to those denied them and seeking review.
45. Mr Smith is a recipient of Newstart allowance, but the matter presently under review is not whether he is entitled to a social security benefit or the rate at which he should receive such a benefit. Rather, it is the rate at which he should pay a debt raised because of overpayment. Division 9 of the Administration Act does not apply to the change in rate of repayment of his debt. The variation in repayment rate is not a decision conferring or withholding an entitlement; indeed it is not a decision regarding Mr Smith’s social security payment, which is unchanged. It is, rather, the exercise of discretion regarding the recovery of funds due the Commonwealth by a quite separate process, as established under section 1231 of the Act. That process is being used to deduct amounts from his social security payments, with the effect that the amount he sees paid into his account is reduced.
46. In Kevin Walker v Secretary, Department of Social Security (1995) 129 ALR 198 (‘Walker’), the Federal Court noted that the provisions of Chapter 5 of the Social Security Act 1991 form a code for the raising and repayment of debts due the Commonwealth under social security law. That was in quite a different context, but the point is relevant in the present matter. Section 1230C sets out all the methods by which the Commonwealth may recover a debt raised under the Chapter, and in Walker the Federal Court noted that that list was exhaustive. Of the five methods set out there, only two involve deductions from social security payments, namely recovery from the debtor’s social security payment, and recovery from another person’s social security payment. The other methods (by arrangement, by legal proceedings and by garnishee order) do not involve social security payments. As the operation of section 109 of the Administration Act relates to ‘social security payments’, it could on any construction only apply to the first two methods of recovery. It would be a curious result for the legislature to have intended that the first two methods should allow the operation of the backdating provisions in the Administration Act, but that the other three should not.
47. It follows that the decision that leads to a debt being raised may be subject to sections 107-114 because it involves determination that a benefit is not payable, or is payable at a reduced rate, and a review may lead to the restoration of the benefit. If the relevant conditions are met, the decision may be backdated in accordance with the provisions in the Administration Act. But where a debt has already been raised and decisions are taken about the rate of repayment, as here, any review must be undertaken within the code set out in Chapter 5 of the Act, and the backdating provisions do not apply.
48. Chapter 5 is prospective, and there is no explicit provision within it for backdating reduced rates of repayment. Under section 43(5B) of the AAT Act the Tribunal‘s decisions take effect from when they are given unless they are specified to come into operation at a later date. Under section 43(6), a decision of the Tribunal varying or substituting for the decision under review takes effect ‘for all purposes’ on and from the day on which the decision under review had effect, unless the Tribunal otherwise orders. Caution must be exercised where this involves retrospective application: see Lesi v Minister for Multicultural and Indigenous Affairs (2003) 203 ALR 420; Thiagarajan v Secretary, Department of Employment and Workplace Relations (2007) 99 ALD 351.
49. It might be argued that the open wording of Chapter 5 of the Act implies that the decision-maker may exercise discretion in the timing of the operation of a decision. The only basis for doing so would be financial hardship. I note that over the past six months barely a deduction has been made from Mr Smith’s Newstart allowance because of the deferral by the SSAT and the stay by this Tribunal. No restoration of funds at this point, no matter how much it might ease Mr Smith’s hardship now, can ease the hardship he might have faced six months and more ago. None of the payments Mr Smith has made in the past above the rate now determined are to be refunded to him.
50. It would not be useful, however, for any adjustments to be made at this stage to the deductions made or withheld since the SSAT’s decision of September 2010. Mr Smith’s finances are sufficiently straitened that it is not to be expected that he would have accumulated any surplus, or have any capacity to cope with further adjustments. The deferral by the SSAT and the stay by this Tribunal should be maintained, and the amended rate of deduction should only be applied from after this decision.
51. Mr Smith appears to regard the lower rate of payment that he has sought and now obtained as an entitlement that he has been hitherto denied. It is not. It represents the exercise of discretion by the Commonwealth in recovering a debt, in recognition of his difficult financial position.
52. That said, it is clear that he has not been treated as the Act requires. The Act requires that the debt be recovered, but recovery is not intended to put the person from whom the debt is recovered into severe financial hardship. Centrelink’s own Guide emphasises the need to obtain detailed financial information when deciding on repayment rates. From Mr Smith’s own account of his interactions with Centrelink – an account which is detailed and consistent – no detailed financial information was sought from him until May 2010. Centrelink argues that he willingly entered into an arrangement to repay at the rate of $50 per fortnight, but that argument cannot be given weight if his options were never explained to him. Given Mr Smith’s very limited financial resources, this was a failure to show him proper consideration.
53. It also appears from the decision on this matter by the ARO that Centrelink computers have default settings for debt repayment rates. That is corroborated by Mr Smith’s account of his dealings with Centrelink. Such settings appear to act as constraints on the proper exercise of discretion by Centrelink staff. Any such defaults need to be established in such a way that counter staff can ensure compliance with the Act as well as proper and considerate treatment of Centrelink clients.
Decision
54. The decision under review is varied such that:
(a)$10.00 per fortnight is to be deducted from Mr Smith’s social security payment,;
(b)The adjusted rate is to apply from the first Newstart Allowance payment date following the date of this decision.
I certify that the 54 preceding paragraphs are a true copy of the reasons for the decision herein of Mark Hyman, Member
Signed: ...........................[sgd].....................................................
C Baillie, AssociateDate of Hearing 9 March 2011
Date of Decision 10 May 2011Representative for the Applicant: Self represented
Solicitor for the Respondent Raewyn Harlock,
Centrelink Advocacy Branch
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