Treloar and Secretary, Department of Social Services (Social services second review)

[2017] AATA 571

Treloar and Secretary, Department of Social Services (Social services second review) [2017] AATA 571 (5 April 2017)

Division:GENERAL DIVISION

File Number(s):      2016/1310 & 2016/4052

Re:Geoffrey Scott Treloar

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member Britten-Jones

Date:5 April 2017

Date of written reasons:        28 April 2017

Place:Adelaide

For the reasons given orally at the conclusion of the hearing, the Tribunal affirms the decision under review

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Senior Member Britten-Jones

CATCHWORDS

SOCIAL SECURITY - sickness allowance – overpayment – whether overpayment is a legally recoverable debt – whether all or part of the debt should be waived or written off - whether special circumstances - whether eligible for a disability support pension from an earlier date - decision under review affirmed.

LEGISLATION

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

CASES

Edwards v Secretary, Department of Employment and Workplace Relations [2007] AATA 16   

REASONS FOR DECISION

Senior Member Britten-Jones

28 April 2017

1. At the conclusion of the hearing of the above matter, the terms of the decision intended to be made and the reasons therefore were stated orally. After the giving of the oral reasons, the applicant by email on 12 April 2017, pursuant to subsection 43(2A) of the Administrative Appeals Tribunal Act 1975, requested the Tribunal to furnish him with a statement in writing of the reasons of the Tribunal for its decision.

2. The oral reasons for decision have been transcribed by DTI Corporation Australia Pty Ltd.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reason for the said decision.

3. The said transcript is annexed hereunto and furnished to the applicant and to the respondent as it is the reason for the Tribunal’s decision.

I certify that the following  paragraphs are a true copy of the reasons for the decision herein of Senior Member Britten-Jones

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Administrative Assistant

Dated: 28 April 2017

Date(s) of hearing:	5 April 2017
Applicant:	In person
Advocate for the Respondent:	Ms E Moran
Solicitors for the Respondent:	Sparke Helmore Lawyers

EXTRACT OF TRANSCRIPT

SENIOR MEMBER:  From November 2008 until 30 July 2010 the applicant Mr Treloar received social security benefits, some which now have to be repaid because of a receipt of payments under an income protection insurance policy held with Super SA.  Mr Treloar has applied to review the decision that was made to raise and recover the overpayments of those benefits.  Mr Treloar also seeks a review of the decision granting him a Disability Support Pension from 11 March 2009 on the basis that it should have been paid from 23 October 2008.

The facts, many of which are not in dispute, are as follows.  Mr Treloar received payments under his income protection insurance policy held with Super SA.  He lodged a claim under that policy on 28 June 2008.  He received some fortnightly payments under that policy from 4 July 2008 to 23 October 2008.  Further payments under the policy were provided by way of lump sums but not until December 2010 when $15,930.86 was received and August 2011 when $37,313 was received under that income protection insurance policy.  Prior to these lump sums being received, Mr Treloar had applied for, and been receiving a sickness allowance from Centrelink from 10 November 2008 and a Disability Support Pension from 11 March 2009.

Mr Treloar gave the appropriate notification to Centrelink when he received his lump sum insurance payments under his policy.  Despite being paid as two lump sums the moneys paid were income protection for the period 10 November 2008 to 30 July 2010.  Unfortunately for Mr Treloar the receipt of those income protection payments had an effect on the social security benefits he had been receiving.  Centrelink calculated that by taking into account the income protection payments Mr Treloar had been overpaid and was, therefore, indebted to the Commonwealth in the amounts as follows.  $4,639.85 for sickness allowance for the period 10 November 2008 to 10 March 2009.  $1,957.42 for Disability Support Pension for the period 11 March 2009 to 8 May 2009 and $14,614.13 for Disability Support Pension for the period 29 June 2009 to 30 July 2010.

It is readily apparent that Mr Treloar could have paid those debts totalling $21,211.40 out of his insurance payout which totalled in excess of $52,000.  It must have been apparent to Mr Treloar, and indeed he accepts that he was aware that the receipt of the insurance proceeds would affect his social security entitlements but instead of paying out the amounts construed as being debts to the Commonwealth Mr Treloar has decided to challenge them.  In action number 1310 of 2016 relating to the review of the debt decision, Mr Treloar summarises his contentions in his written statement of facts and contentions dated 8 January 2017 at paragraph 53 as follows.  He says that he should not be financially disadvantaged in repaying a sickness allowance debt when he was eligible for a Disability Support Pension and that it would not be Parliament’s intention to financially disadvantage a person.

He says that he was unduly subjected to a preclusion period between 22 December 2010 and 22 August 2012.  He says that he has already been penalised by the preclusion period and at the time the AAT made a decision on 19 December 2013 he would have been eligible for his Disability Support Pension and would have had no outstanding debt.  He says that Centrelink unfairly garnished his income tax refund and has penalised him in doing so.  He says that his Disability Support Pension was incorrectly cancelled in August 2011 and not reinstated for a period of 53 months causing financial losses to him.

He says that he incurred other financial losses in having to readjust taxation returns for previous years and these are debts that have had to be paid by him on top of his Centrelink debts.  He says that the applicant has suffered numerous defective decisions by Centrelink which have resulted in further complaints being lodged with other government agencies by him causing further distress and inconvenience.  He says that he should not be financially disadvantaged in repaying a sickness allowance debt when he was eligible for a Disability Support Pension and that it would not be Parliament’s intention to financially disadvantage a person.

I make the following findings on the debt decision.  By letter dated 22 December 2010 to Mr Treloar, Super SA approved payments for income protection for the period 10 November 2008 to 8 May 2009.  Super SA deferred but later accepted liability for the period 29 June 2009 to 30 July 2010.  It follows then that Mr Treloar was entitled to income protection benefits during the period he was receiving sickness allowance and DSP.  As Mr Treloar was entitled to income protection benefits between 10 November 2008 and 10 March 2009 that were above the income cut-off per fortnight for sickness allowance, the whole of the sickness allowance was found by Centrelink to have been overpaid to him.

In relation to the DSP payments, the income cut-off threshold is higher and as such, Mr Treloar remained entitled to some of the DSP payments despite the income protection benefits he was entitled to between March 2009 and July 2010. The next question is whether the overpayments are debts due to the Commonwealth. Section 1223, subsection (1) of the Social Security Act provides as follows:

Subject to this section if;

(a)       a social security payment is made; and

(b)       a person who obtains the benefit of a payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

I find that the overpayments of sickness allowance and Disability Support Pension are debts due to the Commonwealth by virtue of section 1223, subsection (1) of the Act.  Mr Treloar was not entitled to all of the sickness allowance and part of the Disability Support Pension because of the receipt by him of the income protection insurance amounts.  The next question is whether there are grounds to waive part of the debt.  Section 1237A, subsection (1) does not apply because there was no administrative error when the payments were made.  Mr Treloar relies on section 1237AAD which provides for a waiver in special circumstances.  Section 1237AAD says:

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.

Mr Treloar gave evidence by way of the material relied upon by him that the numerous mistakes made by Centrelink and the confusing and inaccurate information provided by Centrelink amounted to special circumstances to support a waiver.  He also says that he was penalised when his Disability Support Pension was wrongly cancelled in August 2011.  With respect to that cancellation, I note that the decision to cancel from August 2011 was subsequently overturned so as to have an effect that Disability Support Pension was reinstated from the date of August 2011.

Mr Treloar says that despite being reinstated at a later date, the fact remains that he suffered for the period he was not receiving the Disability Support Pension.  I do not consider that to be a special circumstance warranting a waiver.  I also reject the contention that Mr Treloar’s frustrations with Centrelink would amount to a special circumstance.  Mr Treloar’s main contention is that the receipt of the lump sums after being paid his social security entitlements amounts to special circumstances.  He says that he received the benefits from November 2008 until July 2010 in good faith and that Centrelink delayed until April 2014 before informing him of the debt he had to repay.  That was some four years after he received the social security benefits and some three years after he got the insurance payout.

I do not consider it to be unusual or uncommon for insurance payments relating to an earlier period to be made sometime after the receipt of social security benefits for the same period.  In support of that proposition, the representative for the respondent relied upon a decision in this tribunal in Edwards v Secretary, Department of Employment and Workplace Relations [2007] AATA 16. That was a decision involving the requirement to repay a debt as a result of a subsequently-received insurance payout. In that case, the Tribunal was not satisfied that the situation that the Edwards’ found themselves in is vastly different from other social security recipients who have incurred debts due to late payments of workers compensation payments.

The same thing can be said with respect to the late payment of the income protection insurance amount.  I do accept that there was some delay by Centrelink in calculating the debt to be repaid, but the fact remains that Mr Treloar had received over $52,000 in insurance proceeds which well and truly covered the $21,000 debt that Centrelink found that he had to repay.  Accordingly, I find no special circumstances for waiving the debt and the decision under review in 1310 of 2016 will be affirmed.

In the other action, 4052 of 2016, Mr Treloar made contentions in his written material as follows, that he had a notional claim or a deemed claim for Disability Support Pension for the period 23 October 2008 to 10 March 2009 rather than sickness allowance.  Mr Treloar says that he has an incorrect claim or inappropriate claim for Disability Support Pension for the period 23 October 2008 to 10 March 2009 rather than sickness allowance.  He says that the overpayment of sickness allowance in the amount of $4,639.85 should be reversed and any amounts of Disability Support Pension that he may be entitled to should be applied to any outstanding amounts of overpayment for Disability Support Pension.

He says that part of the compensation payments should be treated as not having been made and he says that the amount of $3314.45 garnished by Centrelink from the Australian Taxation Office should not still be reapplied against his debt and that Centrelink had the administrative power to reverse and change the debt amount without his permission and he says that in all of those circumstances the case amounts to special circumstances and that the debt or part of the debt should be waived.  With respect to the issue of the amount that was garnished by Centrelink, that amount, although garnished at one stage, has, in fact, been repaid by Centrelink and so the debt remains and, therefore, Mr Treloar is in no worse a position than if the amount had not been the subject of a garnishee notice. 

Mr Treloar asserts further that he was entitled to DSP as at 23 October 2008 instead, or rather than the sickness allowance which he was paid and he says that his claim for sickness allowance was an incorrect claim under section 15 of the Social Security Administration Act 1999 (the Administration Act). The earliest a social security payment becomes payable is on the person’s relevant start day which in this case is the day on which Mr Treloar made his claim. This was on 12 March 2009 or, in fact, 11 March 2009 as it was subsequently corrected to. The Administration Act does not provide for a social security start date any earlier than the deemed claim date even where a favourable determination is made as a result of an application for review.

Section 109 of the Administration Act provides that favourable determinations can take effect at the earliest on the day on which the original determination was made. This is conditional upon several requirements. The relevant requirement here is that the application for review be lodged within 13 weeks after notice of the decision is given. In this case, Mr Treloar’s application for review was lodged six years and eight months after the decision was made. I find that there is no legislative mechanism by which Mr Treloar could be entitled to Disability Support Pension any earlier than 12 March 2009.

In relation to Mr Treloar’s contention that his claim for sickness allowance was an incorrect claim and should have been a claim for Disability Support Pension, I reject that contention. Section 15, subsection (2) of the Administration Act defines an incorrect claim as follows:

For the purposes of this section, a claim made by a person is an incorrect claim if;

(a)       the claim is for a social security payment, other than a supplementary payment; and

(b)        when the claim was made the person was not qualified for the payment claimed but was qualified for another social security payment, other than a supplementary payment.

Mt Treloar provided no evidence that he was not qualified for sickness allowance in October 2008 and there is no evidence that Mr Treloar was, indeed, qualified for Disability Support Pension prior to 12 March 2009. I find that section 15 of the Administration Act has no application to this matter. The order of the tribunal is that the decisions under review in both actions are affirmed.

END OF ORAL DECISION