Spooner and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1669

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1669

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/0506

GENERAL ADMINISTRATIVE DIVISION		)
Re		TERRY SPOONER

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member P McDermott, RFD

Date17 August 2007

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

.................[Sgd].............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – disability support pension – applicant did not report his or his partner’s income accurately to Centrelink – overpayment – debt due to the Commonwealth – debt cannot be waived or written-off – decision affirmed

Social Security Act 1991 (Cth) ss 1073B, 1073C, 1223, 1236, 1237A, 1237AAD

Secretary, Department of Social Security v Hales (1998) 51 ALD 695

Dranichnikov v Centrelink (2003) 75 ALD 134
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

17 August 2007   Senior Member P McDermott, RFD

Introduction

1.      I have to determine whether Mr Terry Spooner was overpaid disability support pension in the period from 10 July 2003 until 21 June 2006. If I decide that Mr Spooner was indeed overpaid disability support pension, I will then have to consider whether he has to repay the amount of any overpayment.

History of the Matter

2.      From 10 July 2003 until 21 June 2006 (a period which I shall refer to in these reasons as the “relevant period”) Mr Spooner was in receipt of disability support pension. At various times during the relevant period Centrelink sent Mr Spooner notices which required him to notify Centrelink if his circumstances changed [T7 to T30].

3.      In April 2006 and July 2006 Centrelink sent notices to the employers of both Mr Spooner and his partner which requested details of the employment income of both persons. The information from the employers which detailed this employment income was before me as evidence [T40, fols 315-389; T42, fols 392-399].

4.      On 25 August 2006 Centrelink made a decision that during the relevant period Mr Spooner had been overpaid disability support pension in the amount of $2,134.04. Mr Spooner requested a reconsideration of that decision. On 18 September 2006, Centrelink varied the debt to $1,977.52.

5.      On 2 November 2006 an authorised review officer made a decision that the debt period concluded on 21 June 2006 (instead of 19 July 2006, as was originally decided) and that the recoverable amount should be $2,121.21. The authorised review officer had regard to the actual earnings of Mr Spooner and his partner.  On 22 November 2006 Mr Spooner lodged an appeal against that decision to the Social Security Appeals Tribunal (SSAT). On 18 January 2007 the SSAT affirmed the decision.

6.      On 26 February 2007 Mr Spooner made an application to this Tribunal to review the decision of the SSAT.

Consideration

7.      Mr Spooner gave evidence before me that during the relevant period there was a change to the system of reporting employment income to Centrelink. Indeed, Mr Spooner was correct in this assertion as there was an important change to the social security law on 20 September 2003.

8. On 20 September 2003, ss 1073B and 1073C of the Social Security Act 1991 (“the Act”) commenced operation. Section 1073B of the Act essentially provides for employment income to be attributed on a daily basis throughout the instalment period in which it is derived. Section 1073C of the Act provides for that daily attribution of employment income to be converted into a fortnightly or yearly amount.

9.      This change in the social security law was taken into account by the authorised review officer. The reasons of that officer include a table which contains details of earnings prior to 20 September 2003 [T33, fols 191-192] and earnings after that date [T33, fols 193-197]. The contention of the Secretary is that the declared earnings of Mr Spooner and his partner were respectively $68,167.71 and $56,953.05 and that the actual earnings (including as apportioned from 20 September 2003) of Mr Spooner and his partner were respectively $73,614.64 and $60,414.11.

10. The Secretary also contends that, as a result of the application of ss 1073B and 1073C of the Act, Mr Spooner was entitled to receive $5,836.44 in the relevant period whereas he received payments totalling $8,114.17 during the relevant period. Having regard to a previous debt which was previously raised against Mr Spooner, it was contended by the Secretary that the amount of $2,121.21 is the amount of the debt.

11.     I accept that Mr Spooner was regularly reporting his income and his partner’s income to Centrelink. I appreciate that there were difficulties caused by the variation of the income of his partner and the fact that she was paid bonuses. I make the observation that despite his various medical conditions, he is a person who obviously does not want to be dependent on the taxpayer. He is in regular employment as well as having a business. I appreciate that Mr Spooner did not fully appreciate that different income tests are used to calculate the entitlement to family tax benefit and disability support pension. Mr Spooner also had difficulties in understanding the changes to the social security law which I have mentioned.

12.     I am satisfied that Mr Spooner has been overpaid the sum of $2,121.21. I have studied the reasons of the authorised review officer as well as examining the tables of the employment income of both Mr Spooner and his partner. At the conclusion of the hearing, Mr Spooner was frank in conceding: “I probably have been overpaid”.

13.     As Mr Spooner has been overpaid disability support pension, it is understandable that the Secretary wants to recover the amount of the overpayment. In Secretary, Department of Social Security v Hales (1998) 51 ALD 695 at 696 French J explained: “The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered”.

14. The amount of the overpayment is a debt due to the Commonwealth under s 1223(1) of the Act.

15.     I have next given consideration to whether the debt should be waived.

16. I am satisfied that the debt cannot be waived under s 1237A of the Act as there is no evidence before me that the debt arose as a result of sole administrative error.

17. I have also given consideration to the application of s 1237AAD of the Act which enables the Secretary to waive the debt due to special circumstances. The Federal Court of Australia has held that “special circumstances” are circumstances which take a “case out of the ordinary”: see Dranichnikov v Centrelink (2003) 75 ALD 134 at 148. As Kiefel J explained in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 “there must be some feature out of the ordinary” for there to be special circumstances in a case. I do not consider that the evidence before me discloses the existence of special circumstances.

18. For the sake of completeness I should mention that I have also considered the possible application of s 1236 of the Social Security Act 1991 which enables the Secretary to write off a debt. This provision was not one of the statutory provisions which were reproduced in the T-Documents. I raised the application of this provision to Mr Spooner at the hearing. However, he declined the opportunity for an adjournment of the hearing to provide additional financial information in respect of a company and a family trust. In these circumstances I do not consider that this is an instance where the debt should be written off under s 1236 of the Act.

Decision

19.     I affirm the decision of the Social Security Appeals Tribunal. 

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P McDermott, RFD

Signed:         .....................................................................................
  Legal Research Officer

Date/s of Hearing  7 June 2007
Date of Decision  17 August 2007
Applicant  self-represented
Respondent  Mr M Amundsen, departmental advocate