Thomas and Secretary, Department of Social Services
[2014] AATA 131
•11 March 2014
[2014] AATA 131
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/2447
Re
Sharon Thomas
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mr P Wulf, Member
Date 11 March 2014 Place Brisbane The decision under review is affirmed.
........................................................................
Mr P Wulf, Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – Undeclared Income – Income declared during incorrect periods – Failure to declare full amount of income earned – Recovery of overpayments – Whether overpayments recoverable – Whether special circumstances justify waiver of debt – No special circumstances – Recoverable without penalty as mistakes made in good faith – Decision under review affirmed.
LEGISLATION
Social Security Act 1991 (Cth) ss 8, 1064, 1068, 1223, 1228B, 1236, 1237A, 1237AAD.
Social Security Administration Act 1999 (Cth) ss 63, 68.
CASES
Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Dranichnikov v Centrelink [2003] FCAFC 133
REASONS FOR DECISION
Mr P Wulf, Member
11 March 2014
INTRODUCTION
Ms Sharon Thomas ("the applicant")[1] seeks review of a decision made by Centrelink on 20 February 2012,[2] where Centrelink decided to raise and recover financial support she received in the form of Newstart Allowance (“NSA”) for three periods, being: 6 December 2008 to 2 January 2009; 3 January 2009 to 23 February 2009; and 3 July 2010 to 16 December 2011. At the same time she was being paid an income from her employment as hospitality staff at numerous locations and with multiple employers.
[1] Exhibit 1, T-Document 1, pp. 1-2.
[2] Exhibit 1, T-Document 4, pp. 23-25.
An authorised review officer (“ARO”) affirmed the first two periods in a decision of 26 August 2009,[3] while the ARO’s decision as to the third period was made on 21 March 2013.[4] The applicant was advised the debts would be recovered. The ARO’s decisions were affirmed by the Social Security Appeals Tribunal (“SSAT”) on 6 May 2013.[5] On 24 May 2013, the applicant applied to the Tribunal for review of the SSAT’s decision.
[3] Exhibit 1, T-Document 18, pp. 99-104.
[4] Exhibit 1, T-Document 40, pp. 240-243.
[5] Exhibit 1, T-Document 2, pp. 3-9.
For the reasons that follow, the Tribunal finds that the applicant was overpaid during the three periods although, in the majority, the overpayments were made through unintentional errors by the applicant. No penalty should therefore be imposed. Therefore the debts were made out and the decision is affirmed.
ISSUES FOR THE TRIBUNAL
The issues for the Tribunal to determine are;
(a)Was the applicant overpaid NSA for the period 6 December 2008 to 2 January 2009; and if so, does she have a debt of $165.33 in excess payments received when employed at Cowboys Leagues Club;
(b)Was the applicant overpaid NSA for the period 3 January 2009 to 23 February 2009; and if so, does she have a debt of $176.95 in excess payments received when employed at the Dalrymple Hotel;
(c)Was the applicant overpaid NSA for the period 3 July 2010 to 16 December 2011; and if so, does she have a debt of $1,189.62 in excess payments received when working for multiple employers;
(d)Should all or part of the recovery of these debts be waived; and if not
(e)Should a recovery fee be imposed on some or all of the debts.
ANALYSIS
The applicant has been in receipt of NSA for numerous years while at the same time undertaking casual employment. She has applied to both the SSAT and this Tribunal for review on a number of decisions.
The following facts do not appear to be in dispute and the Tribunal finds accordingly:
a)Ms Thomas was paid NSA during the first debt period while working at both Premier Van Park and Cowboys Leagues Club. Ms Thomas declared her full income during that period but by an unfortunate error she made despite her best intentions, Ms Thomas included income for two days in an incorrect fortnight period (previous fortnight) although she did note the correct dates on the actual form;[6] and
b)Ms Thomas was paid NSA during the second debt period while working at the Dalrymple Hotel. Ms Thomas declared her income during that period as only being $500,[7] although it is clear that this was not the full amount she earned during that period.[8] Ms Thomas failed to declare income to an amount of $297.99 and this may have been as a result of her only declaring her net income rather than the requirement to declare her gross income. Notwithstanding the variation and small discrepancies, the Tribunal is willing to give Ms Thomas the benefit of the doubt and is therefore of the opinion that she was making her best endeavours to calculate her income correctly over the relevant period.
[6] Exhibit 1, T-Document 7, pp. 67-69
[7] Exhibit 2, pp. 11
[8] Exhibit 1, T-Document 12, pp. 83-86
The primary analysis related to additional income earned during the third. During this 17 month period, Ms Thomas had several roles in both Brisbane and on the Sunshine Coast. The evidence shows that, throughout the period, there were multiple times when Ms Thomas did not fully declare her income. One example of this was discussed at length during the hearing including a request being made by the Tribunal to double check an amount declared versus the amount that had been proposed by the respondent as having been earned (income earned from Queensland Turf Club during the week to 31 October 2010 under pay roll 1435). In this case, Ms Thomas had declared that for the period from 23 October 2010 to 5 November 2010, she earned $140[9] while the Queensland Turf Club provided evidence to the respondent that she had in fact been paid $885.76 during the period 25 October 2010 to 31 October 2010 and then an additional $190 for the remainder of that period from an alternate source.
[9] Exhibit 3
LEGISLATION
The relevant law is contained in the Social Security Act 1991 (Cth) (“the Act”) and the Social Security (Administration) Act 1999 (Cth) (“Administration Act”).
Ms Thomas received NSA during the debt periods. The rate of payment of NSA is subject to an income test. Income is defined in s 8 of the Act and includes an income amount earned or received for the person’s own use or benefit such as that from employment. The interpretation has been explained further in the Drake v Minister for Immigration and Ethnic Affairs (No 2).[10]
[10] (1979) 2 ALD 634
A person's NSA rate is to be worked out using the benefit rate calculator in s 1068 of the Act. The amount of NSA paid on a fortnightly basis is dependent upon the amount of ordinary income earned by a person.
Section 1223(1) of the Act provides that an amount of payment to which a person was not entitled for any reason is a debt owed to the Commonwealth. Section 1223(1AB) sets out the circumstances under which a person is taken not to have been entitled to obtain the benefit of a payment and includes in subs (d) where, "the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation".
Section 1236 provides for write-off of a debt where the debt is either irrecoverable at law, or the debtor has no capacity to repay the debt, or the debtor's whereabouts are unknown, or it is not cost-effective for the Commonwealth to take action to recover the debt.
Section 1237A provides for a waiver of debts which is attributable solely to an administrative error if the debtor received the payments in good faith.
Section 1237AAD provides for the waiver of debts in special circumstances and provides as follows:
Waiver in special circumstances
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 a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration 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.
Sections 63 and 68 of the Administration Act provide the power to the Secretary to require a person to notify matters that might affect their social security payment.
Section 1228B of the Act allows for an additional 10% penalty to be added to a debt due to the Commonwealth where the debt arose wholly or partly because a person refused or failed to provide information in relation to the person’s income or knowingly or recklessly provided false or misleading information in relation to the person’s income.
DISCUSSION AND FINDINGS
The Tribunal finds that Ms Thomas was overpaid NSA on account of her failing to declare the full amount of income earned by her during the three debt periods. This was in contravention of the requirements of the Administration Act which required her to notify the full amount of income earned.
As noted above, the Tribunal is of the opinion that while the first debt occurred as a result of Ms Thomas recording her income on the wrong form (although attempting to be fully honest as to her income) it still resulted in her being overpaid and, accordingly, a debt must be raised.
For the second period, it is clear that Ms Thomas earned more income than she declared in that she did not fully declare all the income she earned at the Dalrymple Hotel. This failing appears to be premised on a number of factors, including that she only declared her net income rather than her gross income and that she attempted to calculate her fortnightly income for a specific period that fell across an alternate period of her payslip. This does not however, as indicated above, show there was a deliberate attempt to deceive.
By contrast, during the third period, there are numerous examples of where Ms Thomas has not properly declared her total income. This does not appear, on the evidence, to be as a result of confusion in her income and/or reporting the income in different periods.
In accordance with the provisions of the Act,[11] the amount of overpayment is a debt due to the Commonwealth. The question remains as to whether the debt, which the Tribunal accepts is correctly calculated at $1,531.90, can be written off or waived under any of the provisions referred to above.
[11] Section 1223(1).
The Tribunal finds that it is not appropriate to write off the debt under s 1236(1)(A) of the Act. Given the evidence that the debt has already been recovered and this hearing is more about whether Ms Thomas should be repaid the amount that has been recovered, the Tribunal does not accept that the applicant has no capacity to repay the debt. The Tribunal considers that none of the other factors referred to in this section apply in the circumstances.
The Tribunal does not consider that waiver of the debt is appropriate pursuant to s 1237A(1) of the Act because no portion of the debt was attributable solely to administrative error. While Ms Thomas argued that she had done her best to advise Centrelink of the appropriate amounts, the Tribunal only accepts the evidence related to the first debt period. In the second and third periods the sole reasons for the overpayment were that Ms Thomas did not fully declare her income during the entire periods and she did not comply with her disclosure requirements under the legislation.
The penultimate consideration is whether the debt should be waived pursuant to s 1237AAD of the Act. The provisions in this section are conjunctive in that the Tribunal must be satisfied that the debt did not arise wholly or partly from the person making a false statement, or failing or omitting to comply with a provision of the Act or the Administration Act; and there are special circumstances (other than financial hardship alone) that make it desirable to waive the debt and it is more appropriate to waive the debt than to write it off.
The term "special circumstances" has been considered on numerous occasions by both the AAT and the Federal Court, and generally accepted as circumstances that are different from the usual cases such that they take the case out of the ordinary (for example, see Dranichnikov v Centrelink).[12]
[12] [2003] FCAFC 133.
The respondent did not strongly contend that the debt arose from the applicant knowingly making a false statement or representation. Further, the respondent submitted that the circumstances of this case did not have the quality of being special. The Tribunal agrees. The circumstances that gave rise to the debt in this case were that Ms Thomas failed to declare the correct amount of her income on numerous occasions, particularly during the third debt period. Further, the under declaration was a substantial amount over the debt period of numerous years and should, in the Tribunal's view, have been obvious to Ms Thomas from time to time during this period. For these reasons the Tribunal finds that the circumstances in this case are not sufficiently special to justify a waiver pursuant to s 1237AAD of the Act.
The final matter is whether the Tribunal should allow for a penalty of 10% under s 1228B of the Act. The Tribunal is of the opinion that the applicant did not knowingly or recklessly provide false or misleading information in relation to her income. As highlighted above, Ms Thomas sometimes provided accurate or close to accurate information. Further, it is noted that the respondent indicated to the Tribunal that it would not be requesting the Tribunal to order that a penalty fee be applied in this case. On these bases, the Tribunal does not find that it is appropriate that an additional 10% penalty be imposed.
DECISION
For the reasons set out above, the Tribunal finds that the applicant has been overpaid NSA and these amounts are recoverable. Therefore the decisions are affirmed.
I certify that the preceding 28 (twenty -eight) paragraphs are a true copy of the reasons for the decision herein of Mr P Wulf, Member ........................................................................
Associate
Dated 11 March 2014
Date of hearing 6 November 2013 Applicant In person Solicitors for the Respondent Tim Ffrench, Departmental Advocate
0
0
0