Taseski and Taseska and Secretary, Department of Family and Commu Nity Services

[2003] AATA 875

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 875

ADMINISTRATIVE APPEALS TRIBUNAL      )

)No W2002/299

) and W2002/321

GENERAL ADMINISTRATIVE  DIVISION		)
Re		NAUM TASESKI NIKOLINA TASESKA

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr M Allen, Member

Date5 September 2003

PlacePerth

Decision The Tribunal varies the decisions under review to the extent that the debt owed by Mr Taseski in respect of the period between 5 July 2000 and 4 August 2000,and the debt due by Mrs Taseska in respect of the period from 5 July 2000 to 13 October 2000 should be waived pursuant to Section 1237A of the Social Security Act 1991.

…...........(sgd M Allen)...............

Member

CATCHWORDS

SOCIAL SECURITY – Disability Support Pension – whether debt due to the Commonwealth – whether debt solely attributable to administrative error – whether payments received in good faith – whether special circumstances exist to justify waiver of the debt

Administrative Appeals Tribunal Act, 1975 ss 37, 43
Social Security Act, 1991 ss1223, 1236, 1237A, 1237AAD
Social Security Administration Act, 1991 s68

Secretary, Department of Social and Hales (1998) 51 ALD 695
Secretary, Department of Education Employment Training & Youth Affairs v Prince (1997) 152 ALR 127
Haggerty v Department of Education Employment Training & Youth Affairs (2000) 31 AAR 529
Pledger v Secretary, Department of Family & Community Services [2000] FCA 1576
Re Jonauskas and Secretary, Department of Family & Community Services [2001] AATA 72

REASONS FOR DECISION

5 September 2003 Mr M Allen, Member          

1.      This is an application by Mr and Mrs Taseski for review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 8 July 2002.  In that decision the SSAT affirmed decisions made by a delegate of the Secretary on 13 June 2001 as varied by an Authorised Review Officer (“ARO”) on 23 April 2002 and 29 May 2002 to raise and recover debts of:

(a)$6,186.76 from Mr Taseski in respect of overpaid New Start Allowance (“NSA”) and Disability Support Pension (“DSP”); and

(b)$6,732.35 from Mrs Taseska in respect of overpaid Partner Allowance (“PA”) and DSP.

2. At the hearing of the matter Mr and Mrs Taseski represented themselves with the assistance of an interpreter in the Macedonian language and the Secretary was represented by Ms Hackney from Centrelink’s Administrative Law Team. The Tribunal received into evidence the documents produced pursuant to s37 of the Administrative Appeals Tribunal Act 1975 and exhibits tendered by the applicants (A1) and the respondent (R1 – R19). Mr Taseski gave sworn evidence.

3.      At the outset it should be noted that Mr and Mrs Taseski have paid to the Secretary the full amount of the alleged overpayment and, accordingly, any decision in these proceedings in favour of the applicants would result in a repayment to them of all or part of the amounts so paid.

Background

4.      From the documentary and oral evidence before the Tribunal, much of which was not in dispute, the following background findings of fact can be made. 

5.      Mr Taseski was born in 1941 and Mrs Taseska was born in 1942.  For many years Mr Taseski worked for BHP in the north of Western Australia until 1999.

6.      In February 2000 Mr Taseski approached Centrelink in relation to a claim for NSA and he signed an application form (T5) on 23 February 2000.  In Section E of that form (dealing with income and assets) Mr Taseski answered “yes” to questions about whether he had money in bank accounts, superannuation funds and a motor vehicle, but answered “no” to other questions concerning assets, including question 13 which asked: “Do you currently have any income or assets not already mentioned?”.  A number of categories of other assets are set out in that question with boxes to be ticked, if applicable.  Mr Taseski ticked none of the boxes.  The application form contains spaces for details of bank accounts and superannuation funds to be included but the form does not contain such information, nor was it included in the T documents.  Nevertheless, I presume that Mr Taseski did provide details of his bank accounts and superannuation funds to Centrelink at the time because no issue has arisen about that.

7.      Mr Taseski was granted NSA from 22 February 2000.

8.      At the same time, Mrs Taseska applied for and was granted PA with effect from 22 February 2000.

9.      Between then and May 2000 Centrelink wrote to Mr and Mrs Taseski on a number of occasions in relation to their benefits, each letter advising of the need to inform Centrelink if the value of their combined assets exceeded $181,500.

10.     In fact, at the time of their applications, Mr Taseski owned an approved deposit fund with approximately $160,000 and Mrs Taseska had a superannuation account with about $4,300.  The parties also had a savings bank account of approximately $17,000.

11.     On 22 May 2000 Mr Taseski lodged a claim for DSP (T11) and answered “yes” to the question of whether Centrelink already had current information about his income and asset details.  He was granted DSP from 18 May 2000.

12.     On 5 July 2000 Mrs Taseska lodged a claim for DSP (T17) and on about the same day Mr Taseski completed and lodged a “Partner Details” form with Centrelink in support of that application (T18).  In Part C of that document Mr Taseski answered “yes” to the question whether he had any bonds or debentures and identified an investment with a finance company.  He did not answer the question “Do you own any shares, options ... or other securities?” but he answered “yes” to the question “Are any of the shares ...listed on an Australian Stock Exchange?”.  He disclosed that the company was BHP and that the shares were ordinary shares.  It is conceded by the respondent that Mr Taseski wrote “11,000” in the appropriate box asking for the number of shares held.  However, for reasons that cannot be explained, some person has whited out that number using correcting fluid.

13.     Mr Taseski gave evidence, and it was not disputed, that he was asked by the Centrelink officer who received the form whether there were 11,000 BHP shares or whether the shares had a dollar value of $11,000.  This exchange between Mr Taseski and the Centrelink officer will be referred to later in these Reasons.

14.     Either on that same day (ie 5 July) or by the latest on approximately 7 July 2000, and as a result of the conversation referred to in the previous paragraph, Mr Taseski took to Centrelink a document issued to him by BHP concerning a Dividend Investment Plan in which he participated (T20 folio 163).  That statement disclosed that as at 24 November 1999 Mr Taseski had been allocated 184 new BHP shares under the investment plan, bringing his total shareholding in BHP to 11,690 shares.  At the same time, Mr Taseski provided Centrelink with statements concerning his approved deposit fund and Mrs Taseska’s superannuation account.

15.     In error, Centrelink wrongly recorded Mr Taseski as owning 184 BHP shares instead of 11,690 shares.  As a consequence, Centrelink wrongly calculated the amount of DSP payable to Mr Taseski and Mrs Taseska from 5 July 2000.

16.     Between July and December 2000 Centrelink wrote to Mr and Mrs Taseski on a number of occasions concerning their DSP benefits and advised them of the need to inform Centrelink if their combined financial investments exceeded varying amounts between $41,000 and $51,000.  In December 2000 Centrelink started to include Mr and Mrs Taseski’s combined superannuation assets for the purposes of the Assets Test because, by that time, Mr Taseski had received income support benefits for 39 weeks after reaching the age of 55 years.  Mr Taseski was informed of this development by letter dated 5 December 2000 and was advised of the need to inform Centrelink if the combined financial investments of he and his wife exceeded $210,817 – an amount that was said to be $1,000 more than the value of financial investments that Centrelink had recorded for Mr Taseski.

17.     In June 2001 Mr and Mrs Taseski intended to travel overseas for a holiday and in order to arrange for the payment of their benefits while they were away Mr Taseski called at his Centrelink office.  In the course of that conversation Mr Taseski was informed that Centrelink had a record of him owning less than 200 BHP shares, and he immediately pointed out that that was not correct.  The officer produced the Dividend Investment Plan document and the obvious error was identified.

18.     On 13 June 2001 Centrelink decided that Mr and Mrs Taseski had been overpaid NSA and DSP (in the case of Mr Taseski) and PA and DSP (in the case of Mrs Taseska) and raised debts and made the decision to recover those debts.  Those decisions were affirmed by an ARO, but the ARO varied the amounts to be recovered by a small amount because of an alteration to the effective date from which Mr and Mrs Taseski’s superannuation assets should be taken into account.

The Issues

19. Mr and Mrs Taseski do not dispute that they were overpaid the various benefits right from the beginning because of the non-inclusion of the value of the BHP shares as one of their assets, which would have affected the amount of benefits that they received. Accordingly, it was not in dispute that there had been an overpayment of moneys made to Mr and Mrs Taseski, and that these overpayments constituted a debt due to the Commonwealth pursuant to s1223(1) of the Social Security Act 1991 (“the Act”). The issue before the Tribunal was whether those debts should be recovered by the Commonwealth, or whether the debt should be waived or written off.

20.     Mr and Mrs Taseski conceded that they should have to repay the overpayments that occurred prior to 5 July 2000 because they acknowledged that they had not provided Centrelink with the details of Mr Taseski’s BHP shareholding – although they contended that this failure was an entirely innocent one.  The only issue, therefore, for the Tribunal to determine is whether the overpayments that occurred after 5 July 2000 should be waived or written off.

Considerations

21. French J. in Secretary, Department of Social and Hales (1998) 51 ALD 695 commented as follows: (at p 695, 696):

“From time to time in the administration of Social Security Benefits overpayments occur. Sometimes these are result of innocent non-compliance with the requirements of the law which can be affected by the stress associated with the circumstances that lead to the receipt of benefits in the first place. 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, albeit in a way appropriate to the circumstances which lead to the overpayment and the circumstances of the persons concerned. However, the confining of a recovering regime by rigid rules, particularly in this area of the law, is likely to be productive of unfair or harsh outcomes in some of the great variety of fact situations that can arise. There are provisions in the Act which recognise that reality. They relate to the writing off and the waiver of debts otherwise due to the Commonwealth.”

22. Section 1237(1) of the Act grants to the Secretary, and hence to this Tribunal by virtue of s43(1) of the AAT Act, the ability to waive the Commonwealth’s right to recover the whole or part of a debt due from a debtor only in circumstances described in a number of specified sections of the Act. Two waiver sections are relevant in the current proceedings, namely s1237A and s1237AAD.

23. Section 1237A(1) of the Act provides that:

“The Secretary must waive the right to recover the proportion of a debt that is attributable to 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”.

24.      In this case it is not disputed that Mr Taseski advised Centrelink of his BHP shareholding on either 5 July 2000 or,  at the latest,  on 7 July 2000 and the Secretary concedes that there was administrative error by the failure to take into account the full shareholding in calculating Mr and Mrs Taseski’s rate of payment from that time.

25.     The question therefore arises whether it can be said that the debt that arose is “attributable solely” to the administrative error made by the Commonwealth, or whether there were other factors, such as error by Mr and Mrs Taseski, that contributed to the creation of the debt.

26. Ms Hackney for the Secretary contended that, for the period after 5 July 2000, the failure of Mr Taseski to advise the Secretary within 14 days of receipt of letters dated 21 July 2000, 4 September 2000 and 5 December 2000, which were notices issued under s68 of the Social Security Administration Act 1991, constituted a failure to comply with those notices and consequently that failure contributed to the creation of the debt because Mr Taseski failed to advise the Secretary that the value of his combined financial investments was greater than the amounts specified in the various letters.  Likewise, Ms Hackney contended that Mrs Taseska’s failure to advise the Secretary within 14 days of the receipt of the letter dated 29 September 2000 regarding the assets of she and her husband also constituted a failure to comply with the notice, and also contributed to the debt.

27.     It is not in dispute in the proceedings that Mr and Mrs Taseski did not respond to the various notices referred to above.  Mr Taseski said that he had read the various letters received from Centrelink and, although his ability to read English is not great, he did understand what he read.  However, his evidence was that he read only the front page of each letter and not the back page because he believed that any important information would be on the front page and that nothing of importance would be on the back page.  In that respect he was, of course, clearly in error.

28. I find that Mr and Mrs Taseski did not inform the Secretary within 14 days of receipt of the various notices requiring them to notify if their combined financial investments exceeded various amounts. For the period after 5 July 2000 the relevant letters were those dated 21 July 2000 in the case of Mr Taseski and 29 September 2000 in the case of Mrs Taseska. From a date 14 days after the date of those notices (4 August 2000 in the case of Mr Taseski and 13 October 2000 in the case of Mrs Taseska) they were in breach of their obligations to notify, and those failures contributed to the overpayments that gave rise to the debt. It cannot therefore be said that the debts that arose after 4 August 2000 (in relation to Mr Taseski) and 13 October 2000 (in relation to Mrs Taseska) are attributable solely to administrative error on the part of the Commonwealth. It follows that the part of the debt that arose after those two dates cannot be waived under s1237A of the Act.

29. However, the parts of the debts that arose between 5 July 2000 and those two dates were, in my opinion, attributable solely to administrative error on the part of Centrelink. They must, therefore, be waived pursuant to s1237A provided that the payments made to Mr and Mrs Taseski in those periods were received in good faith. The answer to that question requires consideration of the evidence given by Mr Taseski as to how the circumstances set out above arose.

30.     Mr Taseski gave evidence that although he speaks a little English his reading and writing ability in English is not great.  He can read and write in Macedonian and his wife can read a little in Macedonian but cannot write in that language.  She speaks almost no English and can neither read nor write in English.  They had therefore enlisted the assistance of two acquaintances who helped them fill out the NSA claim forms and the DSP forms.  These friends had English as their second language but their ability in English was much greater than that of Mr Taseski.  The friends had worked through the forms with them and he had supplied them with the information that they asked for in order to complete the forms.  He has no recollection of either of them asking for information about shareholdings owned by he or his wife.

31.     The first time that he became aware of an obligation to provide information about shareholdings was when he was attempting to fill in the Partner Details form in support of his wife’s DSP claim and he had provided the details of his BHP shareholding in the form – which he had then discussed with the Centrelink officer.  When he told the Centrelink officer that he had over 11,000 BHP shares the officer had said that this might mean that he was not entitled to a pension, but that the officer could not make a decision about that and that Centrelink would take the relevant papers and let him know about the effect of the shareholding in writing.

32.     In relation to the receipt of the various letters requiring he and his wife to inform Centrelink of changed circumstances, Mr Taseski’s evidence was as set out in paragraph 27 above.  Mr Taseski said that he understood generally the need to inform Centrelink of changed circumstances - such as if he won Lotto, or if he and his wife had separated.  However, as his pension and that of his wife continued to be paid in the period after 5 July he assumed that the information he had given Centrelink about the BHP shares would not have an effect on his pension.  When the amount of his DSP payment had been reduced from about $330 per fortnight to $285 per fortnight in December 2000 (because the superannuation money was now taken into account) he thought that the reduction was because of the BHP shareholding now being taken into account.  The pension payments had fluctuated slightly from payment to payment and he assumed that this was because of fluctuations in the market price of the shares.

33.     It is clear on the authorities that the test for whether or not a payment has been received in good faith is entirely subjective and depends upon the actual state of mind of the recipient: Secretary, Department of Education Employment Training & Youth Affairs v Prince (1997) 152 ALR 127 per Finn J; Haggerty v Department of Education Employment Training & Youth Affairs (2000) 31 AAR 529 per French J and Pledger v Secretary, Department of Family & Community Services [2000] FCA 1576 per Weinberg J.

34. In the present case I am concerned only with the period between 5 July 2000 and the two dates referred to in paragraph 28 above. Mr Taseski believed that when he provided the Dividend Investment Plan document to Centrelink, he had provided them with all the information they needed about his assets and that Centrelink would, in due course, tell him what effect this would have on his pension. Nothing happened to cause him to believe that he had no entitlement or a reduced entitlement between when he provided the information to Centrelink and the expiration of the 14 day period within which he was to notify Centrelink after receipt of the 21 July 2000 letter. In my opinion Mr Taseski received payments between 5 July 2000 and 4 August 2000 in good faith and that the same can be said in relation to payments received by Mrs Taseska between 5 July 2000 and 13 October 2000. It follows that those payments in those periods must be waived pursuant to s1237A of the Act. I would add that I consider that Mr and Mrs Taseski continued to receive the payments made after those dates in good faith – but, of course, after those dates the debts were no longer due solely to administrative error and good faith is no longer relevant.

35. In relation to the payments made to Mr Taseski after 4 August 2000, and to Mrs Taseska after 13 October 2000 the issue arises of whether the debt that arose after those dates should be waived in the exercise of the discretion to do so that is contained in s1237AAD of the Act. That section is as follows:

“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 that debt or part of the debt.”

36. Ms Hackney did not contend that the failure of Mr and Mrs Taseski to notify Centrelink in response to the various notices received after 5 July 2000 about the true position of their assets was a deliberate misrepresentation or false statement. In that sense Ms Hackney did not argue that there had been a “knowing” failure to comply within the meaning of ss1237AAD(a). On the evidence, I am satisfied that the failure was not a knowing failure in the sense of having actual knowledge of an obligation and making a deliberate choice to not meet that obligation: see Re Jonauskas and Secretary, Department of Family & Community Services [2001] AATA 72 per Deputy President Forgie at paras 68-73. I accept Mr Taseski’s evidence that, having told Centrelink of the details of the BHP shareholding, it was difficult for him to go back and ask them if they had made a mistake and that he thought that he had met his reporting obligations. I am therefore satisfied that ss1237AAD(a) is satisfied.

37. As regards whether there are any special circumstances involved in the case, Mr and Mrs Taseski did not identify any specific factors that ought to be regarded as special other than the misunderstanding on their part as to what had to be reported, and Centrelink’s error when they did finally inform Centrelink of the true position of the BHP shareholding. In my opinion, none of those factors are sufficiently “unusual, uncommon or exceptional” as to constitute special circumstances. Mr and Mrs Taseski are both in their 60s and own their own home. They have a reasonable degree of financial security and disposable income – as evidenced by the fact that they have had at least two holidays overseas since 1999. They were able to repay the debt in full when it was drawn to their attention. In all the circumstances I do not consider that any special circumstances exist in this case as would justify a waiver of the debt under s1237AAD of the Act.

38. In summary, therefore, my decision is that the decision under review to raise and recover debts from Mr and Mrs Taseski should be varied to the extent that the debt arising between 5 July 2000 and 4 August 2000 in relation to Mr Taseski, and between 5 July 2000 and 13 October 2000 in relation to Mrs Taseska should be waived pursuant to s1237A of the Act, but in all other respects the decision under review should be affirmed.

I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member

Signed:         ...............(sgd V Wong)...............................
  Associate

Date/s of Hearing  8 May 2003
Date of Decision  5 September 2003
Counsel for the Applicants       In person
Counsel for the Respondent     Ms K Hackney 
Solicitor for the Respondent     Service Recovery Team Centrelink