Snauc and Secretary Department of Employment and Workplace Relations

[2006] AATA 235

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 235

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2005/792

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DRAGANA SNAUC

Applicant

And SECRETARY DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr J D Campbell, Member

Date13 March 2006

PlaceSydney

Decision The decision under review is affirmed. 

[Sgd] Dr J D Campbell   Member

CATCHWORDS

SOCIAL SECURITY - disability support pension - issues of notification of partner's income - overpayment - debt - sole administrative error - special circumstances – the decision under review is affirmed.

Social Security Act 1991 - sections 1223, 1237A, 1237AAD

Social Security Administration Act 1998 - section 5

Acts Interpretation Act 1991 - section 28A

REASONS FOR DECISION

13 March 2006   Dr J D Campbell, Member          

1.      Mrs Snauc has been in receipt of a Disability Support Pension (“DSP”) since 2 February 2000. In a partner statement dated 31 January 2000, Mr Snauc declared his weekly gross earnings as $600, with the DSP payment amount calculated using this amount.

2.      Each year an estimate of combined annual income for Mr and Mrs Snauc was provided to Centrelink. Various communications between Mr and Mrs Snauc and Centrelink occurred over the ensuing four years in relation to Mr Snauc’s earnings, his Newstart Allowance during a short period of unemployment, Mrs Snauc’s rate of DSP payment and notice of her responsibility to notify Centrelink if the combined annual income of her and Mr Snauc was to exceed a nominated figure.

3.      A data matching process conducted by Centrelink with the Australian Taxation Office in August 2004 indicated a discrepancy between what had been reported to Centrelink and what had been declared to the Australian Taxation Office in relation to Mr Snauc’s gross income for financial years 2000/2001; 2001/2002; 2002/2003 and 2003/2004. A verification process as to what gross income had been paid to Mr Snauc during those financial years by the two employers Little and Rabie  Retravision of Penrith and Kibbler’s Pty Ltd of Cowra demonstrated inconsistency between actual gross income and what had been reported to Centrelink by Mrs Snauc and Mr Snauc.

4.      On 24 December 2004, Mrs Snauc, having been advised in November 2004 of an overpayment of DSP, was informed that she had a debt of $8,095.63 owing, this resulting from overpayment of DSP from 14 July 2000 to 30 September 2004.

5.       Mrs Snauc is contesting such findings, believing that Centrelink had been notified of the estimated combined annual income for each of the financial years in question, and that Centrelink had been provided with advice as to Mr Snauc’s earnings over the period in question. Mrs Snauc believed that if any overpayment had occurred, it was due to sole administrative error by Centrelink. In the alternative, Mrs Snauc contended that the debt should be waived because of special circumstances existing relating to her health, financial circumstances of her family and the part played by Centrelink in the creation of the overpayment.

ISSUES

6.The relevant issues in this matter are:

(a)Was there an overpayment of DSP payments to Mrs Snauc between 14 July 2000 to 30 September 2004?;

(b)If there was an overpayment, what was the cause(s)?;

(c)If there was an overpayment ,is this a debt owed by Mrs Snauc?;

(d)If a debt exists, can it be written off?;

(e)If a debt exists, can the debt be waived because of sole administrative      error?;

(f)If a debt exists, can the debt be waived because of special circumstances?

FINDINGS

7.For the reasons nominated later in this decision, I find that :

(a)There was a DSP overpayment of $8,095.63 to Mrs Snauc during the period 14 July 2000 to 30 September 2004;

(b)The causes for the overpayment were:

(i)       A misunderstanding by the Snaucs’ that estimates of  combined annual income given annually for family tax   benefit purposes would be accessed automatically by   Centrelink in determining Mrs Snauc’s amount of DSP   payment;

(ii)       That despite providing Centrelink with advice of Mr   Snauc’s earnings in response to particular requests by   Centrelink and during the period in which Mr Snauc was   on Newstart Allowance and upon Mr Snauc   commencing work with Kibblers in early December 2002,   Mrs Snauc did not advise Centrelink of Mr Snauc’s   income in circumstances where she should have, having   been put on notice to do so and being aware that her rate        of DSP payment was related to the total amount of   combined income for a period.

(iii)      That despite notice being given by Mr Snauc of his return   to full time work in December 2002, and despite Mr   Snauc’s belief that he advised Centrelink of the relevant   fortnightly salary, the rate of DSP payment of Mrs Snauc   was calculated upon a combined annual income of   $10,270 from 9 January 2003. Despite Mr and Mrs Snauc   denying having received the letter from Centrelink on 9   January 2003 to this effect, both Mr and Mrs Snauc were   aware that Mrs Snauc’s rate of DSP payment should   have been reduced on Mr Snauc’s return to full time   work, with annual salary of similar order to that previously   received when working full time with Retravision.

(iv)      That despite returning to full time work in December 2002   and despite Mr Snauc’s denial that they received the   letter from Centrelink dated 9 January 2003, Mrs Snauc   continued to received DSP payments at a fortnightly rate   in excess of $330 from 13 January 2003 to 1 November   2004. Such payments were made by Centrelink in the   absence of any recorded advice from either Mr or Mrs   Snauc as to a change in combined annual income during   this period, apart from a combined annual income   estimate given for family tax benefits for year 2003/2004.

(v)      That the DSP overpayment of $8,095.63 to Mrs Snauc for   the period 14 July 2000 to 30 September 2004 is a debt   due and owed by Mrs Snauc to the Commonwealth.

(vi)      That in this matter write off of the debt is not appropriate.

(vii)      That the debt cannot be waived because of sole   administrative error.

(viii)     That the debt cannot be waived because of special   circumstances.

CONSIDERATION AND FINDINGS

8.I note the following:

·     Mr and Mrs Snauc came to Australia in 1987, and that subsequently they have worked diligently to establish themselves in this country.

·     Mrs Snauc has endured a long history (since 1990) of illness involving migraine, a neck injury, hypertension, diabetes and multiple sclerosis with varying periods of infirmity and incapacity.

·     Mr and Mrs Snauc have conducted their business affairs in a manner which they believe to be beyond reproach. In so doing they have filed annual tax returns through an accountant and have endeavoured to comply with Centrelink requirements to the best of their understanding.

OVERPAYMENT OF DSP

9.In reviewing the evidence before me I note the following:

·     That for financial year 2000/2001 Mrs Snauc’s estimated combined income for family tax benefit purposes was $31,000 while the actual annual income for Mr Snauc was $34,565;

·     That for financial year 2001/2002 the relevant figures were $34,474 and $31,120 respectively;

·     That for financial year 2002/2003 the relevant figures were $30,000 and $24,816 respectively;

·     That for financial year 2003/2004 the relevant figures were $37,820 and $32,195 respectively;

·     That on 8 June 2001 Centrelink advised Mrs Snauc that her rate of DSP payment was calculated on a combined annual income of $31,228.42, and further to advise within 14 days if the latter amount changed;

·     That a similar letter was sent by Centrelink on 15 June 2001 detailing similar amounts and notice to report;

·     That on 21 February 2002 Centrelink advised Mrs Snauc that her DSP rate of payment was calculated on a combined annual income of $28,869 and to advise within 14 days if the latter figure changed;

·     That on 8 October 2002 Centrelink advised Mrs Snauc that her DSP rate of payment had changed from 21 October 2002 with advice required if her partner was to resume work;

·     That on 9 January 2003 Centrelink advised Mrs Snauc that her rate of DSP payment had changed with the amount of combined annual income being $10,270, with advice required within 14 days if the latter amount were to change;

·     The salary payment summaries from both employers (Retravision and Kibblers) and Mr Snauc’s period of unemployment, together with the calculation of DSP payments made to Mrs Snauc during the period in question.

10.     Having noted the material referred to, I am satisfied that the material demonstrates inconsistency between the actual and reported combined incomes upon which the rate of DSP payments is calculated. I am satisfied that throughout the period (14 July 2000 to 30 September 2004), apart from the period 17 October 2002 to 27 December 2002 during which Mr Snauc received Newstart Allowance, there has been an underreporting of combined income by Mrs Snauc. This in turn, has resulted in an overpayment of DSP during this period. Further in reviewing the calculations as to the amount of overpayment I am satisfied that the overpayment amount is $8,095.63 for the period 10 July 2000 to 30 September 2004.

CAUSES OF OVERPAYMENT

11.     Primarily the cause of the overpayment was an underreporting of combined income in a timely fashion by Mrs Snauc or Mr Snauc on Mrs Snauc’s behalf.  Such underreporting of combined income was a consequence of both a belief held by the Snaucs’ that the annual combined income estimate for family tax benefits submitted to Centrelink would be accessed by Centrelink in determining the amount of DSP payment to Mrs Snauc and a failure to diligently provide at all times advice as to changes in Mr Snauc’s fortnightly earnings. The latter is very much evidenced by a failure to report a combined annual income change as evidenced by the two letters from Centrelink dated 8 and 15 June 2001 which indicate that the rate of DSP payment was being calculated on $31,228.42, when indeed the actual gross income for Mr Snauc was $34,565 for financial year 2000/2001 (group certificate T7/p60). Similarly for financial year 2001/2002 the gross income for Mr Snauc was reported as $31,120 (T10/p67) as opposed to a combined income designated at $28,819 in Centrelink’s letter of 21 February 2002.

12. The issue of underreporting of Mr Snauc’s fortnightly income is further evidenced by the Centrelink letter of 9 January 2003 in which a combined annual income of $10,270 is reported by Centrelink as the figure used for the calculation of Mrs Snauc’s rate of DSP payment. I note that at the Tribunal hearing Mr Snauc stated that the letter of 9 January 2003 was never received. I further note that this was the first occasion in the documentation before me that such a statement had been made. While I note the circumstances, I am mindful that the letter of 9 January 2003 from Centrelink is deemed to have been received by Mrs Snauc pursuant to section 5 of the Social Security (Administration) Act 1999 and section 28A of the Acts Interpretation Act 1991.

13.     Further while Mr Snauc did inform Centrelink of his return to work in December 2002 with a weekly figure of $197.50 being established by Centrelink in relation to advice given. I note that Mr Snauc believed he had informed Centrelink of a more correct weekly/fortnightly earnings figure in early January 2003, once he had commenced working full time with Kibblers. I notice the absence of any written documentation by either party in relation to such advice.

14.     More importantly I do observe the provision of a combined income amount by Mrs Snauc of $555 per week when requested to complete a pensioner entitlement review form on 20 February 2002. I note that such an amount was used in calculating Mrs Snauc’s rate of DSP payment and advised to Mrs Snauc on 21 February 2002, with a requirement to notify Centrelink if the combined annual income of $28,869 changed. I note such was done when Mr Snauc became unemployed with a significant increase in the amount of DSP fortnightly payment as a result in the decline of Mr Snauc earnings, with the amount increasing from $199.18  (7 October 2002) to $361.30 (4 November 2002), both payments being in retrospect. I observed that this fortnightly rate was reduced by some twenty to thirty dollars over the period November 2002 to 26 July 2004. I also note the quantum of DSP payments made to Mrs Snauc from 17 July 2000 to 7 October 2002 of between $130 (approximately) and $184 (approximately) in relation to nominated combined annual incomes at the following times:

29 March 2000  $31,228.42

8 June 2001  $31,228.42

15 June 2001  $31,228.42

21 February 2002               $28,869.00

15.     From such figures there is clear evidence of a relationship between the level of combined annual income declared and the amount of DSP payment made to Mrs Snauc. Mr Snauc indicated that he was aware of such a relationship, but believed he had informed Centrelink of the requisite amount of weekly earnings in January 2003.  I note the absence of any written record by either Mr Snauc or Centrelink as to the furnishing or recording of such advice. I do observe, however, that if such advice had been given the amount of DSP payment to Mrs Snauc would have decreased measurably (in the order of $150 per fortnight), an outcome of that order being not unexpected to the Snaucs in view of their previous experiences with DSP payments at similar combined annual income levels. It is my finding that Mrs Snauc further contributed to the overpayment by failing to notify Centrelink of combined annual income post January 2003 in circumstances where it was evident that she was receiving an amount of DSP payment clearly inconsistent with what she had received, when Mr Snauc’s earnings were compatible with what he was earning at Kibblers.

IS THERE A DEBT OWED?

16. Section 1223(1) of the Social Security Act 1991 (“the Act”) determines that the amount of payment is a debt due to the Commonwealth where an individual is paid a benefit to which she was not entitled. In the matter at hand Mrs Snauc was paid a benefit in the amount of $8,095.63, during the period 14 July 2000 to 30 September 2004 to which she was not entitled. I find that this amount constitutes a debt due and owed to the Commonwealth by Mrs Snauc. Further I note that sections 1223(1AA) and sections 1223(1AB) of the Act are not relevant in this matter, as any DSP payment was not paid other than to Mrs Snauc. Similarly I note that section 1223(1B) is not relevant in this matter, as the section deals with payments to carers.

WRITE-OFF OF THE DEBT

17. Section 1236 of the Act provides for the debt to be written off where the debt is irrecoverable at law or the debtor has no capacity to repay the debt, or where the debtors whereabouts remains unknown or the debtor is not receiving a social security payment and it is not cost effective for the Commonwealth to take action to recover the debt.

18.     Having assessed Mrs Snauc’s circumstances I conclude that such circumstances do not satisfy any of the criteria nominated. Accordingly I conclude that the debt cannot be written off.

WAIVER AND SOLE ADMINISTRATIVE ERROR

19.     Section 1237A(1) provides for the waiver of a debt owed where the debt or a proportion of a debt is attributable solely to an administrative error made by the Commonwealth and the debtor received such payments in good faith that gave rise to the debt.

20.     In this matter Mrs Snauc asserts that sole administrative error occurred when there was a failure by the Commonwealth to interview her and counsel her prior to the payment of a benefit. Such a contention was based upon social security legislation regarding assurance of support, in which an individual guaranties repayment of social security benefits paid to an individual. It is evident that Mr and Mrs Snauc are not in the relationship of where Mr Snauc guarantees to pay for social security benefits paid to Mrs Snauc for a defined period or vice versa. It is evident that such a concept is not relevant to the circumstances of this matter, and hence any issue of sole administrative error does not arise on this issue.

21.     Mrs Snauc further contends that there has been a failure by Centrelink to act upon advice given to them over time. In particular Mr Snauc contends that Centrelink failed to act on advice given in relation to combined annual income estimates for family tax benefit and in relation to advice he believes he gave to Centrelink in early January 2003. I have already noted that the advice given in early January 2003 was said to be verbal and that there is no written record of the advice being proffered or the advice being received. I can take that matter no further. In relation to the estimates supplied annually it is evident that they were given to Centrelink for family tax benefits and were not cross checked when calculating the rate of Mrs Snauc’s  DSP payment. Further I have indicated some concern about how the $197.50 fortnightly rate was determined in late December 2002 or early January 2003. In such circumstances and in the absence of a written record as to advice provided, no further inference can be drawn, there being two parties involved, one providing the advice (Mr Snauc) and one dealing with the advice provided (Centrelink). I am unable to conclude as to which, if any party was in error, for the amount arrived at may reflect the first two weeks of earnings from Kibblers plus deemed earnings.

22.     However the matter of the debt creation does not end with the circumstances surrounding January 2003. The debt accrued, commenced with, and continued with the under reporting of combined annual income by Mrs Snauc throughout the years in question. This occurred despite many requests to Mrs Snauc to provide advice within 14 days if indeed income went above or below a nominated level. This, in general terms she did not do, with the exceptions being the notification of 20 February 2002 and the notification by Mr Snauc when on Newstart Allowance during the period October to December 2002. While Mrs Snauc may argue that the annual estimates were provided, these too were not accurate, even if they were accessed by those calculating the rate of DSP payment. More importantly however Mrs Snauc did not notify Centrelink of her husband’s earnings when clearly she was requested to do so in the circumstance that a combined income amount nominated by Centrelink was not consistent with the then combined annual income known by Mr and Mrs Snauc, more so the latter.

23.     In such circumstances I conclude that there is no evidence to support a sole administrative error made by the Commonwealth in this matter. While I do believe that Centrelink may have been more diligent in cross checking other information available within the department, and indeed perhaps a little more diligent when an individual reports that he has returned to work full time and is earning $198 a fortnight, or even as noted $395 per fortnight (letter of 9 January 2003) the major contributor to the debt has been an almost continuous under reporting of annual income for the four years in question. While cross referencing to annual estimates for family tax benefits may have triggered an alarm, so should have the notices sent to Mrs Snauc detailing the combined annual income used in determining the rate of DSP payment made. Further Mrs Snauc, in understanding the relationship between combined annual income and rate of DSP payment, should have in the circumstances of her husband’s return to full time work in late December 2002 sought clarification from Centrelink when the amount of DSP payment did not decrease to that what was paid when her husband was earning a similar amount in 2002, prior to his receipt of Newstart Allowance, when unemployed and during the period in which they moved from Penrith to Cowra.

24.     In summary I conclude that there was no sole administrative error made by the Commonwealth, as the evidence does not support such a conclusion. While there are matters that in hindsight could have been performed with more diligence by Centrelink, a significant responsibility for the error arises from the actions or lack  thereof by Mrs Snauc and her husband. I need take this issue no further.

25.     In relation to the issue of receiving the money in good faith, I am mindful of Mrs Snauc’s inactivity in this matter, and this coupled with her knowledge of her relationship between combined income and rate of DSP payment as evident in her long time experience clearly raises the issue of whether she received such overpayments in good faith. On the other side of the equation I recognise her relatively short time living experiences in Australia and more importantly the consequences of living  with medical disabilities of varying levels of infirmity and incapacity. In such circumstances, I feel no need to make a finding on this issue, as I have already concluded that sole administrative error was not made by Centrelink.  As such the debt cannot be waived because of sole administrative error.

WAIVER AND SPECIAL CIRCUMSTANCES

26. A debt can be waived pursuant to section 1237AAD of the Act if the debt did not arise wholly or partly from the debtor or an other person making a false statement or false representation or omitting or failing to comply with a provision of the Act and there are special circumstances other than financial hardship that make it desirable to waive.

27.     The discretion associated with a finding of special circumstances has been the subject of much opinion. In general terms the word special relates to circumstances which are considered to be unusual, uncommon or exceptional.

28.     In Mrs Snauc’s circumstances there are three issues to be explored, namely the circumstances of her health, her and the family’s financial viability and any particular circumstances that may have contributed to the debt accrual – all such circumstances having to be considered in terms of the adjective “special”.

29.     In analysing the circumstances of how the debt was accrued I am unable to discern circumstances out of the ordinary, or which were so unusual, uncommon or exceptional. In so stating I find any inference of contribution to the debt accumulation by Centrelink to be minimal, with Mr and Mrs Snauc more reliant on their misunderstanding of their reporting requirements, such misunderstandings giving rise to the debt creation.

30.     In relation to financial hardship I conclude that upon analysis of the Snauc’s financial circumstances, every effort and endeavour has been made by them to live within income sources attained by resourceful planning and hard work. While not over resourced Mr and Mrs Snauc and their daughter live in a mortgaged house and are able to manage debt and live in circumstances that cannot be described as financially unusual or uncommon. In such circumstances, I find that Mrs Snauc’s financial circumstances are not special.

31. In terms of Mrs Snauc’s health, it is evident that she suffers periods of infirmity and of incapacity from a myriad of conditions, namely migraine, cervical disc injury, hypertension, diabetes and multiple sclerosis. With such a range of medical conditions it is evident that her ability to cope with stressful situations is compromised with emotional lability being much in evidence. Clearly her range of medical conditions is sufficient for her to be granted DSP. However there is a degree of variability in her ability to undertake daily tasks and attend to issue in public. Nevertheless it is evident from decided cases that the medical circumstances alone of an individual, even where they qualify for DSP are insufficient to constitute special circumstances. In the circumstances of Mrs Snauc’s ill health, I conclude that such cannot be considered so be unusual, uncommon or exceptional at this time and therefore not special circumstances as required by the Act.

32.     I make a similar finding if all the circumstances nominated are considered together, as again they are not unusual, uncommon or exceptional. In summary I conclude that the debt cannot be waived as special circumstances have not been found to exist. Further I find it unnecessary to consider the issues of the other two criteria existing within the section as they well carry the matter no further. I would suggest however, that in the light of the difficulties apparently experienced by Mrs Snauc and her husband in carrying through their reporting obligations, arrangements be made by Centrelink to work through the issues with Mr and Mrs Snauc in a face to face environment.

DETERMINATION

33.The decision under review is affirmed.

I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member

Signed:         Associate

Date of Hearing                  3 February 2006
Date of Decision   13 March 2006
Representative for the Applicant      Mr Snauc 
Advocate for the Respondent     Ms Sharma