Spence and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 25
•10 January 2008
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 25
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/0136
GENERAL ADMINISTRATIVE DIVISION ) Re
ARIEL SPENCE
Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date10 January 2008
PlaceSydney
Decision The Administrative Appeals Tribunal decides that:
1. Any overpayment to the Applicant of parenting payment single (PPS) arising out of the following is waived:
(a) Weekly workers’ compensation payments from 21 November 2001 to 2 December 2003.
(b) Employment at Echo Point Inn and Imperial Hotel from 28 February 2001 to 8 May 2001.
2. In respect of any overpayment of PPS arising from the Applicant’s employment, at Gardener’s Inn between 9 May 2001 and 3 July 2001, and Carrington Hotel on 6 May 2001, and the Landcare Board during 11 November 2001 through to 9 October 2003, is to be paid by the Applicant to the Respondent.
3. It is noted that the debt arising out of the Applicant’s work at Spotless between 11 October 2000 and 21 November 2000 and from lump sum workers’ compensation payments for the period 20 April 2001 to 30 November 2001 was admitted and is therefore payable by the Applicant to the Respondent.
4. The matter is remitted to the Respondent to recalculate the consolidated debt now payable by the Applicant to the Respondent in accordance with this decision.
..................[SGD].............
Ms N Isenberg
Senior Member
CATCHWORDS
SOCIAL SECURITY – parenting payment – debt due to the Commonwealth – whether debt
attributable “solely” to Commonwealth’s error – whether debt should be waived – “special
circumstances”.
LEGISLATION
Social Security Act 1991 – s 1223(1), 1237A, 1237AAD
CASE LAW
Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)
Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787
Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576
Haggerty v Secretary, Department of Education, Training and Youth Affairs (2000) 31 AAR 529
Jazazievski v Secretary, Department of Family & Community Services (2002) 65 ALD 424
Ward v Secretary, Department of Employment & Workplace Relations [2006] AATA 187, 3 March 2001
Re Saunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security v Hales (1998) 82 FCR 155
Davy v Secretary, Department of Employment & Workplace Relations [2007] AATA 1114
Riddell and Secretary, Department of Social Security (1993) 30 ALD 31
REASONS FOR DECISION
10 January 2008
Ms N Isenberg, Senior Member
DECISION UNDER REVIEW
1.Centrelink raised and sought recovery of a debt to the Commonwealth of parenting payment single (PPS) on 7 May 2005, which was affirmed by an authorised review officer on 2 August 2005. The Social Security Appeals Tribunal (“SSAT”) on 5 May 2006 set aside the original decision and sent the matter back to Centrelink, to be recalculated and consolidated into one debt. An application for review of the SSAT decision was lodged with this Tribunal on 23 January 2007.
ISSUE BEFORE THE TRIBUNAL
2.Whether there was a debt in respect of PPS paid to Ms Spence arising out of her employment and receipt of workers’ compensation payments during the period 28 February 2001 to 2 December 2003, if so, whether that debt should be recovered.
LEGISLATION
3.The relevant legislation in this matter is the Social Security Act 1991 in particular sections 1237A and 1237AAD.
THE HEARING
4.l had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence. The following documents were also tendered: specialists’ letters from Drs Lee and Park dated 18 and 20 December 2006, respectively, and 31 January 2007. Centrelink’s 21 April 2004 medical report by Dr Obeidullah, a 21 May 2004 Work Capacity / Participation Assessment report, and an approved 23 August 2004 claim for Disability Support Pension. Also submitted were fortnightly records of Ms Spence’s blood sugar levels, from 9 October 2006 to 8 October 2007.
5.Ms Spence gave oral evidence and was cross-examined on behalf of Centrelink. I also asked her questions.
CONSIDERATION OF EVIDENCE AND FINDINGS
Is there a recoverable debt?
6. There was some confusion as to the quantum of the alleged debt. It had previously been addressed as a consolidated debt although various aspects of Ms Spence’s work (and workers’ compensation) affected the components of the overall debt.
7. During the period under review, payments were made to Ms Spence on the basis that she was not receiving any income. In fact, she received income from the following sources:
· Casual jobs:
EMPLOYER
START DATE
END DATE
Spotless
11 October 2000
21 November 2000
Echo Point Motor Inn and Imperial Hotel
28 February 2001
8 May 2001
Gardener’s Inn
9 May 2001
3 July 2001
Carrington Hotel
6 May 2001
6 May 2001
(5 hours in total)
·$201 for each attendance at Landcare Board meetings held on:
YEAR
LANDCARE BOARD MEETING
2001
11 November
2002
27 February, 9 March, 18 September, 21 November
2003
20 February, 21 March, 9 October
· Allianz Australia (‘Allianz’) Workers’ Compensation:
PAYMENT TYPE
START DATE
END DATE
Lump Sum
20 April 2001
30 November 2001
Weekly
21 November 2001
2 December 2003
8.There was no dispute that Ms Spence had been paid more PPS, than that to which she was entitled.
9.In relation to her work at Spotless during and after the 2000 Olympics, there was no dispute that she had been overpaid. Furthermore she did not dispute this portion of the debt and was happy to pay back the overpayment of income support, received during the period of her employment by Spotless.
10.Also, as a result of receiving a lump sum payment of some $12,198.74 from Allianz Australia, Ms Spence had to pay back $4886.76 to Centrelink, which she did. She did not dispute this portion of the debt either.
11.As to the balance, there is a recoverable debt: subsection 1223(1) of the Act.
Should the debt be recovered?
12.The Act makes provision in limited circumstances for debts not to be recovered:
1237A(1)“Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.”
13.For a debt to be waived under section 1237A, two conditions must be met, namely that the debt arose solely because of administrative error and, secondly payments were received by the debtor in good faith.
Was the debt solely attributable to an administrative error by Centrelink?
14.Centrelink contended that the word “sole” should be given its ordinary meaning. In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”. This approach was used by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996, unreported). This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 where the Tribunal stated that “solely” in section 1237A(1) should be given its ordinary meaning: “only” or “to the exclusion of all else”.
15.As convenient as it may have been to deal with the debt on a consolidated basis, the debts fall into two clear categories: that associated with her workers’ compensation payments and those connected with each of her casual jobs.
Workers’ compensation
16.Ms Spence gave evidence that after ceasing work and up until she first received workers’ compensation, she had received Centrelink benefits. In about November or early December 2001, she recalled a telephone conversation with Peter Scott, a Centrelink Officer. She said she told him of forthcoming arrears of compensation that would be paid to her on 10 December 2001. Ms Spence knew she would have to repay Centrelink.
17.She told Mr Scott she was expecting further compensation payments because the Allianz case manager had said that as long as there was a current medical certificate - and she had one that went beyond December - she would continue to be paid workers’ compensation.
18.Ms Spence provided Mr Scott with the name and telephone number of her case manager at Allianz. Mr Scott said words to the effect: ’leave it to me and I will sort it out’. By this she understood Mr Scott would deal directly with Allianz and that she was required to do nothing further. When she received slightly reduced Centrelink benefits she assumed Mr Scott had contacted Allianz and that she was then getting the amount she was entitled to. Only much later did she receive any correspondence from Centrelink about her PPS.
19.While she agreed she had previously received correspondence from Centrelink that she was to notify of changes, Ms Spence believed she had in fact notified Centrelink by virtue of her conversation with Mr Scott. Mr Scott was not called to contradict her evidence.
20.Centrelink records confirm that on 18 December 2001, Centrelink contacted Allianz, it was noted that the payment made to Ms Spence represented arrears of compensation relating to the period 20 April 2001 to 30 November 2001. The Centrelink officer recorded the rates at which Ms Spence would be paid compensation until 30 November 2001. The file note continued:
Payments will continue on production of further medical certs. The [customer] had phoned earlier and had advised that ALZ were waiting on our charge before paying her. She also mentioned that she had a further med cert [i.e. medical certificate] up until the end of December but has not lodged it as yet. 18/12/01 - Debt raised for period 20/04/01 - 30/11/01 totalling $4886.76. Previous debts excluded.
21.Ms Spence’s evidence was that she believed that Centrelink was aware that she was receiving compensation payments, had worked out what she was entitled to and paid her accordingly. She did not suspect anything was wrong or that Centrelink had made a mistake.
22.I find that Ms Spence had a conversation with Mr Scott of Centrelink. As a consequence, Centrelink was on notice that she was in receipt of workers’ compensation payments and that these were likely to continue. The file note of 18 December 2001 confirms that Centrelink contacted Allianz. It was noted that ongoing payments would be made, subject to the production of medical certificates. Centrelink was in possession of all the necessary information to make the correct decisions in relation to adjusting the benefits.
23.I therefore find that the debt in relation to Workers’ Compensation arose solely from Centrelink.
Good faith in relation to workers’ compensation payments
24.I must look to the actual state of Ms Spence’s knowledge in considering if the overpayments were received in good faith: Pledger v Secretary, Department of Family and Community Services [2002] FCA 1576.
25.In Pledger, Weinberg J said:
It is a serious matter to say of someone that he has not acted in good faith. An allegation of that type connotes an element of moral turpitude. It should not lightly be made.
26.Want of good faith will arise where there is a positive belief that the payment has been made by mistake or if there is a suspicion by the claimant that he may not be entitled to a payment together with some objective basis for that suspicion: Haggerty v Secretary, Department of Education, Training and Youth Affairs (2000) 31 AAR 529.
27.It was submitted by Centrelink that Ms Spence was aware of, and received notices relating to, the requirement for compensation to be declared and for adjustment to entitlements (including a liability to repay) arising out of the receipt of compensation. I find nothing inconsistent with this in her evidence. She contacted Centrelink promptly to advise of her compensation payments and had a reasonable belief that she had discharged her obligations. Hence the payments were received by her in good faith.
28.I therefore find in respect of the weekly compensation payments, that the consequent debt to Centrelink is properly waived under s 1237A.
Casual jobs
29.Echo Point Motor Inn
Ms Spence‘s position was that Centrelink was aware of this job. She said she took her pay slips into Centrelink at Katoomba. The office was on the way home from her job. She understood the pay slips were photocopied. Centrelink records note that on 14 March 2001 she attended and reportedly ‘wanted to advise of wages etc’. The records also suggest enquiries were made of the employer. As a result her PPS was suspended.
30.Imperial Hotel
Centrelink records show Ms Spence made contact on 26 April 2001 in relation to her work at the Imperial Hotel. After she left the Imperial Hotel she applied for PPS again.
31.Carrington Hotel
Ms Spence worked at the Carrington Hotel for one day only for a type of working interview. She agreed she did not tell Centrelink about the job but said she did not think she had to.
32.Gardener’s Inn
Ms Spence agreed that she did not notify Centrelink about this job where she worked for 10 hours per week for less than 2 months. She said a Centrelink officer, who she could not name, told her she could work 10 hours per week and continue to receive PPS.
33.Landcare
Ms Spence has been a volunteer with Landcare for about 10 years, working over 30 hours per week in an unpaid capacity. She has been on the Board of Land and Water Conservation and attends a meeting in Sydney approximately every 7-8 weeks, for which she is paid ‘$200’ each time. She said she told an unnamed Centrelink vocational officer, during an interview at Centrelink’s Springwood office, of her receipt of these payments but said she was told these need not be reported as she was not paid fortnightly. Her evidence was that she did not think a couple of hours would affect her PPS.
34.It was submitted that the balance of the debt arising from periods of casual employment only came to the attention of Centrelink via data match. I do not accept this to be the case in relation to her work at the Echo Point Motor Inn because Centrelink’s own records note her attendance in relation to reporting wages. Similarly Centrelink’s records noted her work at the Imperial Hotel.
35.Therefore in relation to her work at Echo Point and the Imperial Hotel I find any overpayment made to Ms Spence following her documented attendance at Centrelink on 14 March 2001 was solely attributable to an administrative error by Centrelink.
36.Her admission to the SSAT that she mostly told Centrelink about her wages was consistent with her evidence before me. However in relation to her work at Gardeners’ Inn and Landcare she provided reasons for her failure to do so. In relation to her one day’s work at the Carrington Hotel, she perhaps understandably did not think she had to.
37.Ms Spence agreed in cross-examination that she had previously received notices setting out her obligations to inform Centrelink of changes in her circumstances. Several, from July 2000 to August 2001, were contained in the T documents. For that reason it cannot be said in relation to the debts arising out of her work at the Carrington Hotel that she was excused from informing Centrelink. Similarly, I do not accept her explanation in relation to the work at Gardeners’ Inn and Landcare. She apparently made some assumptions based on conversations she may have had with unnamed Centrelink officers. Generic ‘advice’ did not, in my view, relieve her of her clear obligations and her failure to inform Centrelink was an error on her part.
38.In relation to her work at the Carrington Hotel, at Gardeners’ Inn and on the Landcare board I find that any overpayment was not solely attributable to an administrative error by Centrelink. Having come to that view it was not necessary for me to consider the element of good faith in respect of overpayments as a result of those jobs.
Good faith regarding Echo Point and the Imperial Hotel
39.I accept that Ms Spence acted in good faith in respect of any overpayment arising from her work at Echo Point Motor Inn and the Imperial Hotel. Ms Spence believed that she fulfilled her obligations to Centrelink in relation to informing it of income from employment that was relevant to her parenting payment. Having contacted Centrelink and informed it of her employment, she believed that anything she received from Centrelink was her correct entitlement.
40.She knew she ought to disclose her changing circumstances to Centrelink and I accept that she believed that she had. She had an honest belief that she was entitled to receive and retain that payment: see for instance Jazazievski v Secretary, Department of Family & Community Services (2002) 65 ALD 424; Ward v Secretary, Department of Employment & Workplace Relations [2006] AATA 187, 3 March 2001.
41.I therefore find in respect of her work at Echo Point and Imperial Hotel, that the consequent debt is properly waived under s 1237A.
Are there special circumstances why the remainder of the debt should be waived?
42.I have found that the debt arising from the workers’ compensation weekly payments is to be waived, as is the debt arising from Ms Spence’s work at Echo Point and Imperial Hotel. Together, from the figures provided by the Respondent in its Statement of Facts and Contentions, these total about $20,000. This appears to leave a debt of a maximum of about $11,000, according to the Respondent’s solicitor’s calculations of 2 November 2007, although the precise amount is unclear.
43.A further provision of the Act allows for waiver of debts in “special circumstances”:
“1237AAD. 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 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.”
44.Before considering Ms Spence’s circumstances I must be satisfied that she is not precluded from consideration by 1237AAD(a). There was no evidence that Ms Spence intentionally or deliberately failed to comply with her obligations: Inadvertent or unintentional failure does not constitute "knowingly", even when an applicant knows he needs to notify: Re Saunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495.
45.Turning to consider if Ms Spence’s circumstances are special, I note that in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Keifel J, after referring to the Federal Court's decision in Beadle, observed that special circumstances:
Would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case …it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
Evidence was given about several aspects of Ms Spence’s personal circumstances which were said to be ‘special’.
46.Ms Spence suffers from a number of very serious health problems including heart problems which will require surgery. Ms Spence also requires knee surgery but has not been able to proceed due to financial constraints. As a result she has ongoing painful swelling and pain in her knee which limits the distance she can walk.
47.Ms Spence is also an insulin dependant diabetic but her condition is uncontrolled. It is said to be exacerbated by stress. She also experiences hypoglycemic episodes on an average of twice per week. She has recently had hemorrhaging into her left eye as a complication of her diabetes.
48.She has a peptic ulcer, which can be exacerbated by stress. She also suffers from incontinence of the bladder and bowel, and this causes embarrassment and sometimes limits her movements from home.
49.Ms Spence has had what she describes as "a really terrible time" in respect of her family situation in the last few years. Her younger brother died unexpectedly in 2003 and Ms Spence provided emotional and financial support for his family and to her mother. Ms Spence was herself greatly affected emotionally by her brother’s death. Ms Spence was also primarily responsible for dealing with probate, settling debts and arranging the funeral and the customary large post-funeral event.
50.Ms Spence's father also died in July 2004, adding to the burden that she was already carrying. There was a falling out in the family after his death and she does not now speak to her mother or two of her brothers.
51.Ms Spence's daughter has attempted suicide by drug overdose, resulting in kidney damage.
52.Ms Spence gave evidence of financial hardship. She receives approximately $900 a fortnight. She is a single parent with three children. Her son remains partially financially dependent upon her.
53.Ms Spence pays $480 rent fortnightly for the three bedroom house where she lives with her son who only pays $60 per week board. That is not sufficient to cover his costs but he cannot afford to pay more. It is very difficult for Ms Spence to live on what is left over and her finances are always tight.
54.The dispute with Centrelink has been ongoing for some time and is a constant source of stress to Ms Spence. As a result of worrying about the debt, she has difficulty getting more than 3-5 hours sleep, feels depressed and worries that she will have to pay back $5,000 that Centrelink repaid her. There has been a great deal of confusion in interpreting the SSAT decision and different Centrelink officers seem to have given her conflicting information about it.
55.I agree that Ms Spence’s circumstances are unfortunate and, as was submitted on her behalf, she is someone with ‘a great deal on her plate’. However, taxpayers are entitled to expect that in the ordinary course money paid to people which they are not entitled receive will be recovered: Secretary, Department of Social Security v Hales (1998) 82 FCR 155.Recently, in Davy v Secretary, Department of Employment & Workplace Relations [2007] AATA 1114, 9 March 2007 at 80, the approach to s.1237AAD was considered as follows:
Events outside Mr Davy’s control have brought about his current circumstances. They are out of the ordinary but I do not consider that they are special circumstances within the meaning of s.1237AAD(b). The ‘special circumstances’ are not merely directed to the person’s own circumstances. Rather, they are directed to those that are ‘special circumstances … that make it desirable to waive’. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it. Certainly, he did not know that his father was giving him his own money but the fact that he was deceived by his father does not mean that it is desirable to waive the debt. He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement. His not knowing that his father had continued to receive the money does not take him outside the expectation that all social security recipients should repay money when they receive money but are not entitled to it. The system of administration of the SS Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s.1237AAD of the Act.
56.I have come to the conclusion that while Ms Spence’s circumstances are unfortunate there is nothing unusual, exceptional or uncommon about her situation so as to set her apart from others in receipt of Centrelink benefits that recovery of the debt would not be unjust or unreasonable as she has had the benefit of the money to which she was not entitled.
DECISION
57.Any overpayment to the Applicant of PPS arising out of the following is waived:
·Weekly workers’ compensation payments from 21 November 2001 to 2 December 2003.
·Employment at Echo Point Inn and Imperial Hotel from 28 February 2001 to 8 May 2001.
58.In respect of any overpayment of PPS arising from the Applicant’s employment, at Gardener’s Inn between 9 May 2001 and 3 July 2001, and Carrington Hotel on 6 May 2001, and the Landcare Board during 11 November 2001 through to 9 October 2003, is to be paid by the Applicant to the Respondent.
59.It is noted that the debt arising out of the Applicant’s work at Spotless between 11 October 2000 and 21 November 2000 and from lump sum workers’ compensation payments for the period 20 April 2001 to 30 November 2001 was admitted and is therefore payable by the Applicant to the Respondent.
60.The matter is remitted to the Respondent to recalculate the consolidated debt now payable by the Applicant to the Respondent in accordance with this decision.
I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
Signed:………[SGD].........................................................
AssociateDate of Hearing 5 November 2007
Date of Decision 10 January 2008
Appearance for the Applicant Ms K Sant
Appearance for the Respondent Mr M Fordham
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