Sweeper and Secretary, Department of Family and Community Services

[2000] AATA 171

DECISION AND REASONS FOR DECISION [2000] AATA 171

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No Q1997/970

GENERAL ADMINISTRATIVE DIVISION          )          

Re      BEVERLEY SWEEPER    

Applicant

And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        

Respondent

DECISION

Tribunal       Dr  E K  Christie, Member           

Date7 March 2000           

PlaceBrisbane

Decision      The decision under review is affirmed.   

...........(Signed)...................................
  DR  E K  CHRISTIE
  MEMBER

ADMINISTRATIVE APPEALS TRIBUNAL         )
  )          No. Q1999/970
GENERAL ADMINISTRATIVE DIVISION           )

Re:                 BEVERLEY SWEEPER

APPLICANT

And:               SECRETARY, DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES

RESPONDENT

CORRIGENDA

Before:  Dr EK Christie, Member

Date:              13 March 2000

Place:            Brisbane

The Tribunal amends its Reasons for Decision dated 3 March 2000 by substituting the file number Q1997/970 as it appears on the decision page for file number Q1999/970.

SIGNED
  DR E K CHRISTIE
  MEMBER

CATCHWORDS
SOCIAL SECURITY – Family payments – overpayment – whether debt should be waived because of administrative error – whether special circumstances exist to warrant waiver of debt
Social Security Act 1991: ss.1237A, 1237AAD
Re Beadle and Director-General of Social Security(1984) 6 ALD 1

REASONS FOR DECISION

Dr  E K  Christie, Member  

1. This is an application by Beverley Sweeper to review a decision of the Social Security Appeals Tribunal ("the SST") made on 4 August 1999 to raise and recover an overpayment of family payment of $989.80 for the period 2 July 1998 to 8 April 1999.  The SSAT decision affirmed an earlier decision made by an Authorised Review Officer on 8 June 1999.

2. In its decision, the SSAT found that there was no factual basis to waive whole or part of the debt for either "administrative error" or for "special circumstances".

3. At the hearing, the applicant, Beverley Sweeper, represented herself.  The respondent was represented by Ms. J. Dwyer, a Departmental advocate.

4. At the hearing the Tribunal had in evidence before it documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975, the "T" documents (Exhibit 1) and the following exhibits:

• Exhibit 2 -  Income Tax Assessment Notice, Douglas Sweeper, for the year ending 30 June 1997 (Issued 23 July 1997).

• Exhibit 3 – Income Tax Assessment Notice, Douglas Sweeper, for the year ending 30 June 1998 (Issued 27 November 1998).

• Exhibit 4 – Employee Salary Details, Douglas Sweeper, at 26 November 1997

• Exhibit 5 – Employee Salary Details, Douglas Sweeper at 27 May 1998.

ISSUES BEFORE THE TRIBUNAL

1. The only issue before the Tribunal was whether the overpayments of family payment could be waived, ie in part or in full, because of "administrative error" or for "special circumstances".  About $100 of overpayments had been recovered as at the date of the hearing.
   FACTS

2. The general facts were not in dispute and may be stated briefly:

• Mrs. Sweeper was in receipt of family allowance in respect of two dependent children during the period 2 July 1998 to 8 April 1999.

• Around 24 November 1997, Mrs Sweeper received a letter about her family payment requiring her to advise Centrelink within 14 days if her combined taxable income for the 1997/1998 or 1998/1999 tax year would be more than $69,239.

• Around 7 December 1998, Mrs. Sweeper received a further letter requiring her to advise Centrelink if her combined taxable income for the 1997/1998 or 1998/1999 tax year would be more than $69,725.

• Mr and Mrs Sweeper's actual combined taxable income for the 1997/1998 tax year was $72,439.

• Mrs. Sweeper inadvertently failed to notify Centrelink within 14 days that her 1997/1998 combined taxable income was more than either $69,239 or $69,725.

1. On receiving advice of overpayment from Centrelink, Mrs. Sweeper immediately contacted Centrelink.
   EVIDENCE OF BEVERLEY SWEEPER

2. Mrs. Sweeper stated that the income of her husband as a Telstra employee fluctuated widely each year:

• 1995/1996:         $46,392

• 1996/1997:         $60,802 (Exhibit 2)

• 1997/98:              $72,439 (Exhibit 3)

She said that in 1997/1998, her husband was transferred by Telstra to a position which involved a great deal of shift work.  It was difficult to estimate her weekly wages because it varied depending on the amount of overtime he received – as well as other factors such as the receipt of Telstra shares by employees and holiday pay.

1. Mrs. Sweeper said that when she received the Centrelink notification notice on 7 December 1998, she had assumed that there was no reason to contact Centrelink because, based on the previous financial year, they were about $8,000 under the threshold for entitlement.

2. Mrs. Sweeper said that it was not until she received the notification notice dated 9 April 1999 (T8) that she "knowingly realised" that she had received an overpayment of family payment.

3. Mrs. Sweeper stated that through its data-matching program, Centrelink had the capability to detect incorrect payments in her situation because of fluctuations in her combined annual income (of $40-70,000).  Because of this awareness by Centrelink, she said it was reasonable to expect Centrelink to provide advice to her on the use of the "income estimate" approach to claiming family payment entitlements.

4. Mrs. Sweeper said that the first time she had made a query to Centrelink was following the receipt of the notification notice dated 9 April 1999 (see T8, T9).  This then led to her completing a form titled "Changes in Your Income and Assets" on 16 April 1999 (T11).  It was at this time that she became aware of the "Estimated Income" approach as the basis for calculating her entitlement.  This information        had never been made available to her earlier, by way of any correspondence or literature from Centrelink.  Furthermore, there was nothing on the notification notice which made her aware of this alternative approach.

5. In response to questions from Ms. Dwyer, Mrs. Sweeper agreed that she did not read the back of the notification notices (T6, T7) at the time they were received.  Nor had she taken any notice of her husband's group certificate when it was received.
   CONTENTIONS AND SUBMISSIONS OF THE PARTIES

6. The Departmental advocate stated that notification notices were issued by Centrelink to family payment recipients at the end of each calendar year.  This notice set out the obligations of the recipient.  Family payment entitlements were usually based on the "base tax year".  The "base tax year" was the last completed financial year prior to the new calendar year [Social Security Act 1991 ("the Act) s.1069-H(13-14)].

7. Ms. Dwyer submitted, by reference to s.1069-H18 that a change to the "appropriate tax year" required a "notifiable event" occurring in relation to a social security recipient.  A "notifiable event" was an event "if a notice is given to the person under subsection s.872(1) [of the Act]" (s.1069-H6).  For example, the Centrelink notice (T6) was a "notifiable event" under the Act.  This notice (T6 at Folio 22) stated that the annual income limit for family payment for two children was $69,239;  and Mrs. Sweeper was required to tell Centrelink if she or her partner's combined taxable income for the financial year was more than the $69,239 limit (see T6 Folio 23).

8. Ms. Dwyer contended by reference to s.1069 – H18 of the Act, that changes to "appropriate tax year" would follow because of the effect of the notifiable event that is, when Centrelink had been advised by the social security recipient following receipt of the notification notice.  For example, if the persons income was likely to exceed 110% of the person's income for the "base tax year".  By way of clarification, Ms. Dwyer stated that the "110% estimate" did not apply to the family payment income limit itself ($69,239).

9. Ms. Dwyer contended that it would be a reasonable assumption to expect that Mrs. Sweeper would have responded to the notification notice (T6) if her combined income exceeded the family payment annual income limit.  The notification notice sent by Centrelink had provided her with an opportunity to change the basis of determining her entitlement from the "base tax year" approach to the "income estimate" approach.  Because Mrs. Sweeper failed to respond to the notification notice, Centrelink was not in a position to determine which approach was appropriate for Mrs. Sweeper's financial circumstances.

10. Ms. Dwyer submitted that the Act (ss.1069-H 20,21) also enabled a family allowance recipient to request the Secretary to change to use of the "income estimate" approach for determining family allowance entitlements.  However, for these sections to apply, Centrelink would have to be aware of the person's financial circumstances.

11. Ms. Dwyer's further submission was that there were no provisions in the Act for estimates to be backdated, except for the date provided.  In Mrs. Sweeper's case this would be 22 April 1999 (T11) when she completed the "Changes to Your Income and Assets" form.

12. It was Mrs. Dwyer's contention that the overpayment could not be waived for administrative error because Mrs. Sweeper had contributed to the error by failing to respond to two Centrelink notification notices which set out combined annual income limits for family payments.

13. It was Ms. Dwyer's contention that there was an onus on Mrs. Sweeper to keep an eye on their combined taxable income through:

• noting the income amount on her husband's income tax returns (Exhibits 2,3);

• being aware of her husband's progressive income through the year recorded on his payslips (Exhibits 4,5);  and

• the preparation of the income tax return and noting the amount of income in her husband's group certificates.

By failing to do so, Mrs. Sweeper had contributed to the overpayments being made.

1. In terms of waiver of the overpayment for "special circumstances", Ms. Dwyer contended that Mrs. Sweeper had not "knowingly" failed to comply with her statutory obligations as set out in the Centrelink notification notices.

2. However, she contended that there were no "unusual", "uncommon" or "exceptional" sections of Mrs. Sweeper's case which warranted the description "special circumstances".  She submitted that lack of knowledge of the legislation and the alternative means of assessing family payment is quite a common occurrence with family payment recipients.  Mrs. Sweeper had been issued with notification notices and so given an opportunity to respond.  That is, to enable Centrelink to put into place an alternative approach for calculating her entitlements.  However, Mrs. Sweeper had failed to respond to the Centrelink notices.

3. Mrs. Sweeper submitted that whilst there may have "inadvertence" on her part, she had not contributed to the administrative error.

4. Moreover, Mrs. Sweeper contended that there were "special circumstances" in her case because of the following reasons:

• On completion of the "Change in Income and Assets" form, her entitlements had increased.   If she had been aware of the "income estimate" approach, much earlier, she would have completed this form before April 1999 (T11).  The failure of Centrelink to make her aware of the "income estimate" approach had disadvantaged her as it had resulted in the overpayment being made;  the overpayment would have been avoided if she had been in possession of all the facts;

• That there was an onus on Centrelink to inform their clients of the different approaches to calculating entitlements if Centrelink sought just and reasonable outcomes;  and

• That because she had no knowledge of the different approaches she contended that she had been discriminated against.  If she had the knowledge she would not have been in the situation of receiving an overpayment.  She submitted that the "unjust outcome" was a special circumstance.

CONSIDERATION OF THE ISSUES

1. The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times.  The relevant statute is the Social Security Act (1991) ("the Act").

2. The first issue to be considered relates to the credibility of Mrs. Sweeper and the veracity of her account as to her dealings with Centrelink.  I find Mrs. Sweeper to be a witness of truth and that she had acted honestly in all of her dealings with Centrelink.

3. I further find that, based on the financial information provided to Centrelink by Mrs. Sweeper, Centrelink has adhered to their statutory obligations in the method used for calculating Mrs. Sweeper's family allowance entitlements.

4. Section 1237A of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived because of administrative error.

"SECTION 1237A – WAIVER OF DEBT ARISING FROM ERROR
1237A(1)  Administrative error.  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.
Note:  Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor)."

1. The Tribunal concludes that Mrs. Sweeper's failure to respond to the two Centrelink notification notices has contributed to the administrative error which led to the overpayment.  Accordingly, the debt cannot be waived because of administrative error.

2. Section 1237AAD of the Act provides for a debt due to the Commonwealth to be waived because of "special circumstances":

   "SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
   1237AAD  The Secretary may waiver the right to recover all or part of a debt if the Secretary is satisfied that:

   (a)the debt did not result wholly or partly from the debtor or another person knowingly:

   (i)making a false statement or a false representation;  or

   (ii)failing or omitting to comply with a provision of this Act or the 1947 Act;  and

   (b)there are special circumstances (other than financial hardship alone) that make it desirable to waive;  and

   (c)it is more appropriate to waive than to write off the debt or part of the debt."

1. The term "special circumstances" is not defined in the Act.  The leading case is Beadle v Director-General of Social Security (1984) 6 ALD 1 where the Tribunal said at page 3:

   "An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

1. It is concluded that the circumstances in which the overpayments of family allowance were paid to Mrs. Sweeper were not "unusual", "uncommon" or "exceptional" so as to constitute special circumstances.  It would be reasonable to expect that the notification notices, together with the information available to Mrs. Sweeper on combined income (see paragraph 21) would have been sufficient to lead to a query to Centrelink.  In turn, such a query would have triggered a response by Centrelink to issue a "Change in Income and Assets" form to Mrs. Sweeper.  One consequence would be that the appropriateness of the "income estimate" approach could have then been considered, thereby making Mrs. Sweeper aware of this alternative approach to calculating entitlements.

2. For all of the above reasons, the Tribunal has no alternative other than to find that the overpayments of family payments Mrs. Sweeper received over the period 2 July 1998 to 8 April 1999 cannot be waived under the "administrative error" or "special circumstances" provisions of the Act.

3. The decision under review is affirmed.

   I certify that the 35 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member

   Signed:         .....................................................................................
              B. Htchcock, Secretary

   Date/s of Hearing  14 February 2000
   Date of Decision  7 March 2000
   Applicant  Mrs. Sweeper, herself
   Counsel for the Respondent    Ms. J. Dwyer, Departmental Advocate