TYRONE TROY TAYLOR and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Ms K Hogan, Member 6 March 2013 Perth
[2013] AATA 119
[2013] AATA 119
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/1741
Re
TYRONE TROY TAYLOR
APPLICANT
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
RESPONDENT
Tribunal Ms K Hogan, Member
Date 6 March 2013 Place Perth DECISION SUMMARY
The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his rate of parenting pension and parenting payment (single) was calculated, and that consequently the applicant received an overpayment of parenting pension and parenting payment (single) in the period 4 October 1996 to 31 July 2001.
…(sgd) K Hogan..……
Ms K Hogan, MemberCatchwords
Social Security Law – Parenting Payment – Overpayment of Parenting Payment – Debt Due to Commonwealth as a Result of Overpaid Parenting Payment – Failure to Advise of a Change of Circumstances - Tribunal Unable to Waive Debt Pursuant to Section 1237A of the Social Security Act - Whether Applicant Knowingly made False Statement or False Representation or Failed or Omitted to comply with the Requirements of the Social Security Act and the Social Security (Administration Act) – Whether Special Circumstances Exist in Respect to the Applicant – Tribunal Unable to Waive or Write Off the Debt under Section 1236 or 1237AAD of the Social Security Act – Decision Under Review Set Aside and Remitted for Further Consideration
Legislation
SocialSecurity Act 1991
Social Security (Administration) Act 1999
Cases
Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director General of Social Security (1984) 6 ALD 1
Dranichnikov v Centrelink [2003] FCAFC 133
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173
REASONS FOR DECISION
Ms K Hogan, Member
6 March 2013
HISTORY
1.The applicant seeks review of a decision of the Social Security Appeals Tribunal (SSAT) dated 18 April 2011.
2.The SSAT decision affirmed the decision of Authorised Review Officers (ARO) which reviewed and affirmed the decisions by Centrelink dated 19 August 2002:
(a)to raise and recover a debt in the amount of $5,207.70 for overpayment of parenting pension for the period 4 October 1996 to 19 March 1998 (the first decision); and
(b)to raise and recover a debt in the amount of $10,865.80 for overpayment of parenting payment (single) for the period 20 March 1998 to 24 June 1999 (the second decision); and
(c)to raise and recover a debt in the amount of $21,052.49 for overpayment of parenting payment (single) for the period 7 July 1999 to 31 July 2001 (the third decision); and
(d)the decision by Centrelink dated 20 August 2002 to raise and recover a debt in the amount of $382.60 for overpayment of parenting payment (single) for the period 25 June 1999 to 8 July 1999 (the fourth decision).
3.Essentially the decisions of 19 August 2002 and 20 August 2002 relate to overpayments of parenting pension and parenting payment (single) for the consecutive period 4 October 1996 to 31 July 2001.
ISSUES
4.The issues to be considered by the Tribunal are:
(a)whether the applicant was overpaid parenting pension and parenting payment (single) at the relevant times; and
(b)if the applicant was overpaid any amount for any relevant time or period, whether the payment is a debt due to the Commonwealth and whether the payment should be recovered.
EVIDENCE
5.The Tribunal was provided with a number of documents including:
(a)the section 37 documents;
(b)written submissions from the applicant and the respondent.
6.The applicant gave evidence.
7.The Tribunal heard oral submissions on behalf of the parties.
THE LEGISLATIVE FRAMEWORK
8.The legislation relevant to this decision is contained in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
9.Section 66A(1) of the Administration Act prescribes a general requirement that a claimant or recipient of a social security payment notify Centrelink within 14 days of any event or change in circumstances that may affect the payment.
10.Section 68(2) of the Administration Act provides that the Secretary may give a person to whom this sub-section applies a notice that requires the person to do either or both of the following:
(a)inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstance is likely to occur;
(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment.
The Administration Act came into effect on 1 March 2000. Prior to that the notice of provisions found at s 68 of the Administration Act were found at section 506D of the Social Security Act 1991.
Sub-section 100(1) of the Administration Act provides that a retrospective rate reduction can occur when a person fails to comply with a notice issued under sub-section 68(2) of the Administration Act.
Subsection 1223(1) of the Act provides that an overpayment is a debt due to the Commonwealth.
Subsection 1236(1A) of the Act provides that Centrelink may decide to write-off recovery of a debt for a stated period or otherwise, if and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
Section 1237A of the Act deals with waiver of debt arising from an error. Subsection 1237A(1) of the Act provides that subject to subsection 1237A(1A) Centrelink 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.
Section 1237AAD of the Act provides that Centrelink may waive the right to recover all or part of a debt if 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 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.
The Administrative Appeals Tribunal (AAT) considered the meaning of the word 'solely' in Re Gerhardt and Secretary, Department of Employment, Education and Training [1996] AATA 173 :
40. There is nothing in subsection 289(1) which indicates that any meaning should be given to ”solely” other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error. The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of a Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error. Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.
APPLICANT
The applicant relied upon his statement of facts and contentions and sought review of the SSAT decision on the basis, inter alia, that the calculations made by the respondent were incorrect because they had the wrong information and had made incorrect assumptions.
The applicant contended that whilst he had failed to file taxation returns for many years, he has now filed the relevant returns for the years which are the subject of these proceedings. The applicant argued that Centrelink should use the profit and loss statements prepared by his accountant and the Taxation Office assessments in assessing his level of income during the relevant period and in calculating whether there has been any overpayment.
The applicant gave evidence that his accountant, Mr. J Devietti, had submitted taxation returns to the Deputy Commissioner of Taxation for the years 30 June 1996 to 30 June 2002. The taxation returns had been prepared on the basis of profit and loss statements prepared by Mr. Devietti and whilst the profit and loss statements were prepared on the basis of limited statements, invoices, diaries and "best estimates" (letter to respondent from Mr. Devietti dated 7 February 2013) the respondent should accept the figures because the Deputy Commissioner of Taxation had accepted them.
In response to questioning regarding his bank statements the applicant said most of the transactions were no longer identifiable but the money may well have been money belonging to people for whom he had sold items and put the money into his account for safe keeping:
This is not from - this could be not from amusement equipment. This could be from other ventures that I do. I wasn't only in amusement equipment in those years.
---We were in a lot of things. We had a lot of things going at that time. We didn't only have amusement equipment and buy - - -
We were selling things for people, we were buying things. We - we done lots of things so that's - yes, so some of these - - -
---Some of these - yes, some - yes, some of these things I could have sold things for people and put the money into my account till I gave the money back to these people.
I can't provide evidence to that because it's a long way back, and at that time I was buying and selling from people - selling people's things for them and getting commissions, and lots of things were happening, and I'm telling you that all of those amounts don't mean anything to me. And there are - you might think that's income but it's probably - yes, it's - lots of things have happened, and I said - as I said, if you're relying on these statements here, these are true and correct because these all have assessments from the Taxation Department (Transcript pp12-13).
The applicant gave evidence that:
(a)initially his amusement ride business was little more than a hobby (Transcript p 18);
(b)he did not tell Centrelink about the money that he was producing and the income that was going into his accounts at that time:
…because I was doing everything with my accountant so I thought that, you know, ...- Centrelink knew that I had the amusements and Centrelink knew that I was - I had Mr Debetti as my accountant, because Mr Debetti has been working for me since day 1 (Transcript pp17-18);
(c)he earned commissions from his activity of buying and selling (though no evidence was forthcoming regarding the amount of income derived from this) (Transcript pp12-13);
(d)he is presently living off a line of credit from his bank but will soon recommence work as an amusement ride operator (Transcript p 28);
(e)he owns a house which he rents out for approximately $700.00 per week, although he has had trouble with the tenants:
They haven't paid rent for about two months.(Transcript p 29);
(f)he suffers from vertigo for which he takes medication (Transcript p 29);
(g)the debt arising from the first decision has been repaid.
RESPONDENT
The respondent contended that the applicant was provided appropriate notice from time to time but was, at least, provided notices pursuant to section 68 on 6 August 1996, 24 October 1996, 28 November 1996, 11 February 1997, 4 August 1997, 20 November 1997, 22 March 1998, 14 September 1998, 22 February 1999, 7 April 1999, 29 September 1999 (T4 - T 11).
The respondent contended that during the period 4 October 1996 and 31 July 2001 the applicant operated and earned income from business as an amusement ride operator. The applicant did not tell Centrelink of his earned income and did not otherwise comply with the notices that Centrelink issued him pursuant to s 68. As a consequence the applicant was overpaid parenting pension and parenting payment (single).
The respondent contended that the applicant was not entitled to the parenting pension and parenting payment (single) that he received between 4 October 1996 and 31 July 2001 and he was therefore overpaid the amounts calculated in the first four decisions.
The respondent did not accept that there was any administrative error on the part of Centrelink such as to suggest that waiver was appropriate as the notices issued to the applicant under ss 68(2) of the Administration Act clearly required that the applicant inform Centrelink of changes to income. The respondent contended that the applicant experienced changes to income and that he failed to inform Centrelink about those changes and that therefore the debts cannot be waived on the ground of administrative error.
The respondent contended that even if the Tribunal were to find that the debts could be waived on the ground of administrative error that any such administrative error (which was not admitted) is not solely that of Centrelink, nor did the applicant receive in good faith the payments that resulted.
The respondent contented that the applicant has the capacity to repay the debts without causing “severe financial hardship” and that it was inappropriate to write off any or part of the debts under section 1236 of the Act.
On 6 December 2004, the applicant was found guilty of fraud against the Commonwealth in the Townsville Magistrates Court in respect of his failure to declare earnings from carrying on business as an amusement ride operator.
The respondent produced copies of the applicant’s Police Records which detail offences between 1991 and 1995 relating to stealing, defrauding and false pretenses for which the applicant received, variously: imprisonment, probation, community service orders and suspended sentences.
The respondent submitted that given the applicant had been convicted for fraud in relation to Centrelink matters; it is not open to the applicant to seek a waiver pursuant to the special circumstances provisions found at section 1237AAD in respect of the first to fourth decisions.
The respondent contended that the debt was not caused by the administrative error of the Commonwealth and recovery could not be waived under the terms of section 1237A of the Act.
The respondent submitted that the applicant had actual knowledge of the requirement to notify Centrelink of changes to his circumstances and knowingly failed to do so. The respondent further contended that the applicant had no circumstance that might be considered unusual or uncommon so as to be considered special in the context of other social security recipients.
CONSIDERATION OF THE ISSUES
The Tribunal found that:
(a)Centrelink provided notices pursuant to s 68 to the applicant from time to time but at least, on 6 August 1996, 24 October 1996, 28 November 1996, 11 February 1997, 4 August 1997, 20 November 1997, 22 March 1998, 14 September 1998, 22 February 1999, 7 April 1999, 29 September 1999 ( T4 - T 11) which advised him to notify Centrelink of changes to his circumstances including if he commenced work or if his income changes, within 14 days;
(b)there was no record on the Centrelink file that the applicant had advised Centrelink of his earnings in the relevant period;
(c)the applicant did not notify Centrelink of his changed income or that he had commenced work within 14 days of the event as he was required to do by section 66A(1) of the Administration Act;
(d)the applicant contributed to the error that led to the debt.
The Tribunal found therefore it could not waive the debt pursuant to section 1237A of the Act.
The Tribunal considered whether the applicant knowingly made a false statement or false representation or failed or omitted to comply with the requirements of the Act and the Administration Act. The meaning of the word 'knowingly' has been discussed in a number of decisions made by the AAT. In Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 Deputy President Forgie commented, at [48], that:
There is nothing in section 1237AAD which suggests that the word ”knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act.
The Tribunal found the applicant did not knowingly omit to comply with a provision of the Act; however it was satisfied he had not notified Centrelink of his income within the required time frame.
The Tribunal considered whether the applicant’s circumstances were ‘special’ within the meaning of the Act. In every case, the individual circumstances of the case were examined to determine whether they were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. In particular, the Full Federal Court in Dranichnikov v Centrelink [2003] FCAFC 133 determined that whether there are special circumstances in a particular case is dependent on whether there are circumstances that would distinguish the case from the usual case.
The term 'special circumstances' is not defined in the Act however, it has been extensively considered in case law:
In Beadle and Director General of Social Security (1984) 6 ALD 1 (at 3) the AAT stated as follows:
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.
In Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25 (at 33) the Federal Court stated as follows:
There is less risk of overstatement if the words “unusual” or “uncommon” are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case.
The Tribunal considered the evidence regarding the applicant's health and his current financial circumstances and found that the applicant’s circumstances were not 'special circumstances' within the meaning of the Act.
Having decided the applicant’s circumstances were not ‘special circumstances’ within the meaning of the Act the Tribunal was unable to waive the debt under s 1237AAD of the Act.
The Tribunal found the debt is recoverable at law, the applicant has the capacity to repay the debt, his whereabouts are known and it is cost effective for the Commonwealth to take action to recover the debt. The Tribunal decided therefore the debt could not be written off under section 1236 of the Act.
The Tribunal notes that the Profit and Loss Statements in the name of Tyrone Taylor and the corresponding Notices of Assessment do not contain the same figures. The Tribunal further notes that there is no evidence before the Tribunal as to the amount of income derived from the commissions paid to the applicant. It is not clear what information may have been included in the returns submitted to the Deputy Commissioner of Taxation and whether, for example, he had declared the commissions he earned from buying and selling goods. It is therefore not possible for this Tribunal to calculate the amount of income earned by Mr. Taylor in the relevant years.
It seems to the Tribunal that the appropriate disposition of this proceeding is that the Tribunal should set aside the decision under review and remit the matter to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his entitlement to parenting pension and parenting payment (single) was calculated, and that consequently the applicant received an overpayment of parenting pension and parenting payment (single) in the period between 4 October 1996 to 31 July 2001.
DECISION
The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the finding that the applicant’s ordinary income was not taken fully into account when his rate of parenting pension and parenting payment (single) was calculated, and that consequently the applicant received an overpayment of parenting pension and parenting payment (single) in the period 4 October 1996 to 31 July 2001.
I certify that the preceding 45 (forty-five) paragraphs are a true copy of the reasons for the decision herein of Ms K Hogan, Member .
..(sgd) T Freeman.....................
Associate
Dated 6 March 2013
Date of hearing 15 February 2013 Applicant In Person
Advocate for the respondent Mr Guthrie
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