WALL and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2010] AATA 740

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 740

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/5416

GENERAL ADMINISTRATIVE DIVISION		)
Re		DAVID BENJAMIN WALL

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member R W Dunne

Date29 September 2010

PlaceAdelaide

Decision The Tribunal varies the decision under review.

..............................................

R W DUNNE
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – applicant receiving Newstart Allowance – commenced employment – did not correctly declare earnings to respondent over significant period – decisions made to raise and recover Newstart Allowance debts – changes to debts identified as a result of review by respondent - whether overpayments of Newstart Allowance – applicant charged and convicted of obtaining financial advantage under the Criminal Code – whether there are grounds to waive recovery of all or part of the debts – special circumstances – decision under review varied.

Social Security Act 1991 (Cth) ss 8(1), 23(1), 643, 1068, 1217, 1223(1), 1228B, 1236(1) and (1A), 1237A(1), 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 68(2), 94(1)

Criminal Code (Cth) s 135.2(1)

Re Geoffrey Hodgson and Secretary, Department of Social Security [1992] AATA 126 
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383
RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123
Re Rumere and Secretary, Department of Family and Community Services [2002] AATA 470
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Riddell v Secretary, Department of Social Security (1993) 30 ALD 31
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

REASONS FOR DECISION

29 September 2010   Senior Member R W Dunne   

introduction

1.      This is an application by Mr David Wall (“applicant”) for review of the decision of the Social Security Appeals Tribunal (“SSAT”) made on 22 October 2009.  The SSAT affirmed a decision made by an Authorised Review Officer affirming earlier decisions made by officers of the respondent (“Centrelink”) to raise and recover overpayments of Newstart Allowance totalling $14,643.21 made during various periods between 30 June 2003 and 9 June 2008.

2.      The dates of the decisions, the overpayment amounts and the periods to which they relate are as follows:

(a)      on 22 September 2006, to recover a Newstart Allowance debt amounting to $7,656.25 (including a 10 percent recovery fee) for the period

30 June 2003 to 6 August 2006;

(b)      on 27 August 2007, to recover a Newstart Allowance debt amounting to $2,862.28 (including a 10 percent recovery fee) for the period 28 November 2006 to 2 April 2007;

(c)       on 23 January 2007, to recover a Newstart Allowance debt amounting to $2,382.89 (including a 10 percent recovery fee) for the period 25 July 2006 to 27 November 2006;

(d)      on 7 April 2008, to recover a Newstart Allowance debt amounting to $418.53 for the period 20 July 2007 to 4 February 2008;

(e)      on 6 June 2008, to recover a Newstart Allowance debt amounting to $275.86 for the period 16 May 2008 to 26 May 2008; and

(f)       on 6 August 2008, to recover a Newstart Allowance debt amounting to $1,047.40 for the period 5 February 2008 to 9 June 2008.

3.      On 13 November 2009, Mr Wall applied to this Tribunal for review of the decision of the SSAT.  At the hearing, he represented himself and Ms Julie Edwards (from Centrelink Advocacy Branch) appeared on behalf of the respondent.  The Tribunal received into evidence the T documents (Exhibit R1) and the supplementary T documents (Exhibit R2) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, together with the following documents:

·respondent’s Statement of Facts, Issues and Contentions dated 2 June 2010, with Annexures 1-5 (Exhibit R3); and

·respondent’s supplementary Statement of Facts, Issues and Contentions dated 15 July 2010, with Annexures 1-6 (Exhibit R4).

4.      Exhibit R4 includes changes to the overpayments of Newstart Allowance that the respondent has identified as a result of a review of the debts in question.  The following are the changes that the respondent has identified:

(a)      a changed Newstart Allowance debt totalling $7,816.21 (including a recovery fee of $710.55) for the period 7 July 2003 to 7 August 2006;

(b)      a changed Newstart Allowance debt totalling $2,395.18 (including a recovery fee of $217.70) for the period 8 August 2006 to 27 November 2006;

(c)a changed Newstart Allowance debt totalling $425.47 for the period

21 August 2007 to 4 February 2008.

As a result of the changed Newstart Allowance debts, the overpayments of Newstart Allowance relate to various periods between 7 July 2003 and 9 June 2008 and total $14,822.40. 

issues for the tribunal

5.      The issues for the Tribunal to determine are:

(a)      Whether there have been overpayments of Newstart Allowance to the applicant and, if so, whether the amounts overpaid have been correctly calculated.

(b)Whether the overpayments of Newstart Allowance are debts due to the Commonwealth.

(c)Whether all or part of the Newstart Allowance debts should be waived or written-off.

legislation

6.      A person’s entitlement to a social security payment (including Newstart Allowance) arises under the Social Security Act 1991 (“Act”) and the Social Security (Administration) Act 1999 (“Administration Act”). Under s 94(1) of the Administration Act, if a person who is receiving a social security payment (such as Newstart Allowance) is given a notice under s 68(2) and the notice requires the person to inform Centrelink of the occurrence of an event or a change of circumstances (such as the receipt of income from work or an intended absence overseas that might affect their payment) within a specified period (usually 14 days), if the person does not inform Centrelink accordingly and ceases to be qualified for the social security payment, the payment is cancelled. If a social security payment is made and a person who obtains the benefit of the payment is not entitled to that benefit, the amount of the payment is a debt due to the Commonwealth by the person (s 1223(1) of the Act). Newstart Allowance recipients are usually required to report their earnings from work every fortnight on their Application for Payment Forms. Section 643 of the Act explains that a person’s Newstart Allowance rate is to be worked out using Benefit Rate Calculator B at the end of s 1068.

7. Part 4.2 of the Act provides for the circumstances in which social security payments may be portable overseas. Under s 1217 of the Act, where a person is receiving Newstart Allowance in Australia, the Allowance continues to be payable to that person, while he or she is absent from Australia, for a maximum period of

13 weeks, provided it is an “allowable absence”, that is (as stated in Column 4 in Item 15 in the table at the end of s 1217):

“A temporary absence for any of the following purposes:

(a)       to seek eligible medical treatment;

(b)       to attend to an acute family crisis;

(c)       for a humanitarian purpose.”

8. Under s 1228B of the Act, in some circumstances an amount of 10 percent may be added to a Newstart Allowance debt by way of penalty. Section 1228B reads:

“1228B  Additional 10% penalty for understatement etc. of income

(1)An amount by way of penalty is added to a debt due to the Commonwealth under this Chapter by a person in relation to a social security payment if:

(a)      at the time the payment was made, the person:

(i)had attained the minimum age for youth allowance as defined by section 543A; and

(ii)       had not reached pension age; and

Note:For pension age see subsections 23(5A), (5B), (5C) and (5D).

(b)      the payment was:

(i)        a social security benefit; or

(ii)       a disability support pension; or

(iii)      a wife pension; or

(iv)      a widow B pension; or

(v)      a pension PP (single); and

(c)      the debt arose wholly or partly because the person had:

(i)refused or failed to provide information in relation to the person’s income from personal exertion; or

(ii)knowingly or recklessly provided false or misleading information in relation to the person’s income from personal exertion;

when required, under a provision of the social security law, to provide information in relation to the person’s income from personal exertion.

Note:   For income from personal exertion see subsection 8(1).

(2)The amount added by way of penalty is an amount equal to 10% of so much of the debt as arose because the person refused or failed to provide the information or provided the false or misleading information.

(3)An amount worked out under subsection (2) must be rounded down to the nearest 5 cents.

(4)This section does not apply if the Secretary is satisfied that the person had a reasonable excuse for refusing or failing to provide the information.

(5)This section does not apply in relation to a debt due to the Commonwealth under section 1229A or 1229AB.”

9. Under s 1236 of the Act, the Secretary (or the Tribunal, standing in the shoes of the Secretary) may, in certain circumstances, decide to write-off a debt for a stated period or otherwise. Section 1236 relevantly reads:

“1236  Secretary may write off debt

(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

(1A)The Secretary may decide to write off a debt under subsection (1) 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.

…”

10. There are limited provisions in the Act for waiving the right to recover all or part of a debt. One of these, s 1237A(1), allows for waiver of recovery where the proportion of a debt is attributable solely to administrative error on the part of the Commonwealth and was received by the debtor in good faith. Section 1237A(1) provides:

“1237A  Waiver of debt arising from error

Administrative error

(1)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.

…”

11. Under s 1237AAD of the Act, debts due to the Commonwealth may be waived on the grounds of “special circumstances”. Section 1237AAD reads:

“1237AAD  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.”

background and evidence of applicant

12.     The facts of this case are not materially in dispute and may be extracted from the reasons for decision of the SSAT.  Mr Wall was receiving Newstart Allowance, which was granted from April 2003 and ceased on 19 August 2008.  He commenced casual employment with IPA Personnel on 7 July 2003 and ceased on 16 May 2008.  He commenced casual part-time employment with Australian Postal Corporation on 28 May 2008 and this employment is continuing.  Mr Wall did not correctly declare his earnings from employment during various periods between 30 June 2003 and

15 May 2008 and between 27 May 2008 and 9 June 2008.  This resulted in the decisions made by Centrelink to raise and recover the Newstart Allowance debts referred to in paragraphs 2(a) to 2(d) and 2(f) above.  On 16 May 2008, he left Australia for an overseas trip and returned on 27 May 2008.  This resulted in Centrelink raising the Newstart Allowance debt referred to in paragraph 2(e) above.

13. On 30 January 2007 and 27 February 2007, Complaints were issued by Centrelink in the Adelaide Magistrates Court and Mr Wall was charged with five counts of obtaining a financial advantage contrary to s 135.2(1) of the Criminal Code.   Mr Wall pleaded guilty to all counts in the Complaints.  He was convicted and sentencing orders were made which included that he enter into a good behaviour bond for two years and make reparation in the sum of $10,845.18. 

14.     Mr Wall’s evidence was that he had suffered from alcoholism for some time.  During the debt periods he was drunk almost every day.  He believed that Centrelink had allowed the debts to arise and had continued to pay him Newstart Allowance during the periods, even though he was not correctly declaring his earnings.  During the debt periods, he was not responsible for his actions or inactions.  He was not aware of what he was doing and Centrelink should have stopped him.  His family drank and, for 10 years, he had been able to work while he was drunk. 

15.      When cross-examined by Ms Edwards, Mr Wall said he was currently employed with Australian Postal Corporation and received a wage of $1,000 per week (net).  He repaid $20 per fortnight to Centrelink in respect of his outstanding debts.  He said this arrangement was not unduly burdensome.  He was no longer receiving Centrelink payments and had no other income.  He paid rental of $200 per week for premises that he shared with another.  As to the issue of “special circumstances”, he said he was not a bad person, but had made mistakes.  He did not wish to be a burden on society, but wanted to be “given a break”.  He acknowledged that, between July 2003 and April 2007, he had wrongly declared his earnings to Centrelink.

consideration

Have there been overpayments of Newstart Allowance to the applicant and, if so, have the amounts overpaid been correctly calculated?

16. The respondent has contended that Mr Wall was required to report events or circumstances that might affect his entitlement to Newstart Allowance in the relevant reporting periods. I note that his Application for Payment Forms for Newstart Allowance included questions requiring him to advise Centrelink, when he started working, the amount he earned during the relevant period(s), if he received any other money, if he intended to go overseas or if he had been overseas. I also note that, in the notices that were issued to him under s 68(2) of the Administration Act, Mr Wall was required to advise, in his Application for Payment Forms, any changes in his circumstances that might affect his Newstart Allowance. The respondent submitted (and I accept) that, by reference to the Application for Payment Forms (Exhibit R2, S1-S4) and the s 68(2) notices (Exhibit R1, T3, pages 231-296) issued to him, Mr Wall would have been reasonably aware of the requirement to report his earnings during the relevant periods to Centrelink. He agreed that he had not correctly declared his earnings throughout the relevant periods, and he told the SSAT this (Exhibit R1, T2, page 6). He lodged his fortnightly Application for Payment Forms with Centrelink providing an estimate of the income earned.

17.     During the period 30 June 2003 to 2 April 2007, Mr Wall declared income totalling $1,748.39, whereas his actual income during that period was $25,469.71.  During the period 30 July 2007 to 4 February 2008, he declared income totalling $7,459, whereas his actual income during that period was $8,295.94.  During the period 5 February 2008 to 9 June 2008 he declared income totalling $5,584, whereas his actual income during that period was $6,429.25.  During the period     16 May 2008 to 27 May 2008, Mr Wall was overseas, having not sought prior approval for his absence from Centrelink.  A total debt of $14,643.21 was raised by Centrelink officers in respect of the periods between 30 June 2003 and 9 June 2008.  It was this total debt that was considered and affirmed by the original Authorised Review Officer and the SSAT.  After reconsideration, the amount of the total debt was increased by Centrelink to $14,822.40, in respect of the periods between 7 July 2003 and 9 June 2008, because the actual dates worked were used in the recalculation. 

18. By way of my further consideration, Newstart Allowance is subject to an income test, the details of which are set out in Benefit Rate Calculator B at the end of s 1068 of the Act. The term “income” under the Act includes all types of income such as personal earnings and sick or holiday pay (s 8(1)). Newstart Allowance is payable for temporary absences from Australia for up to 13 weeks. Section 1217 of the Act provides that, for Newstart Allowance to be payable during a person’s absence from Australia, that absence must be either to seek eligible medical treatment, to attend to an acute family crisis or for a humanitarian purpose. In addition, within the operation of s 1217, approval for the absence overseas and the reason for the absence should be approved by Centrelink before the person leaves Australia. I understand that Mr Wall did not seek prior approval for his absence that satisfied the requirements of s 1217. His absence was to meet with a sponsor from Alcoholics Anonymous for assistance in overcoming his alcohol addiction. Like the SSAT, I accept that this was the purpose of his trip to New Zealand. However, it does not, in my view, constitute “eligible medical treatment”. Thus, Mr Wall’s absence from Australia does not meet the guidelines set out in s 1217 and, as such, he was not eligible to receive Newstart Allowance for the period of his absence. It follows that he was overpaid Newstart Allowance for the period 16 May 2008 to

26 May 2008 and I so find. 

19. I note that, on 5 October 2007, in the Adelaide Magistrates Court, Mr Wall pleaded guilty to five counts of obtaining a financial advantage, contrary to s 135.2(1) of the Criminal Code.  A conviction was recorded with imprisonment for six months, but he was released upon entering into a recognisance in the sum of $500 to be of good behaviour for two years.  A reparation order was made in the sum of $10,845.18 covering periods of offending from 28 November 2005 to 27 November 2006 (10 months non-continuance offending over 12 months) and from 11 December 2006 to 4 April 2007 (five months).  I note further that, in March 2001, having been charged with various driving offences, Mr Wall was convicted of driving under the influence and disobeying provisional licence conditions.  He was fined $1,500 and his driving licence was disqualified until further order.  Then, in April 2005, he was convicted of various driving offences (including drive under disqualification, drive unregistered motor vehicle and drive under the influence) and was fined $3,000 and disqualified from holding a driving licence for six years.

20.     Mr Wall referred to the psychological report of Mr GJ Ireland dated

17 September 2007, which related to an assessment conducted on 12 July 2007 (Exhibit R3, Annexure 1). This report was obviously obtained by his legal representative in relation to the charges laid under s 135.2(1) of the Criminal Code.  I note that Mr Ireland also conducted a psychological assessment of Mr Wall in February 2005.  In respect of the 2007 assessment, Mr Wall reported that, over the last two and a half years since February 2005, he had drank a lot less alcohol and that he stopped altogether on 27 July 2006.  In relation to Mr Wall’s offending behaviour, the following observations were made by Mr Ireland in his 2007 report:

“As stated above when he began and went on to stop drinking Mr Wall stated that he found he was accumulating money.  Mr Wall stated that although he knew at one level that he was going to create significant problems for himself, he continued to take payments from Centrelink when he was not entitled to them. … He stated that he knew at the time his behaviour was wrong.

…

In discussing his offending behaviour, Mr Wall was keen to say he did not want his explanations to be seen as excuses, but just the way it was for him at this time.  … He stated that while he knew he was doing the wrong thing and likely to be getting into trouble, he continued to believe he could bluff his way through.” (emphasis added)

When asked to address specific questions, Mr Ireland said in his report:

“As best I am able to judge, Mr Wall was struggling with his Alcohol Dependency Disorder during the time that the offending occurred.  He reports having managed to stop drinking in July 2006 in the midst of the period in which the offending is reported to have occurred.

…

Mr Wall’s Alcohol Dependency Disorder is currently in remission as based on his report of abstinence over the last 14 months.  He continued to display some marked features of an anti-social personality pattern and I think it is likely that to eliminate these attitudes and behaviours entirely will take many years and continued effort on his behalf.  I do not however consider him to be suffering from a Personality Disorder as such.”

21.     Mr Wall also referred to the character reference from Mr Simon Palk, who was a lecturer in law at the Adelaide University between 1975-2004.  Mr Palk was a member of Alcoholics Anonymous at the time Mr Wall joined the organisation in mid 2006.  Having read Mr Palk’s reference, I was unable to find it to be of any real assistance in dealing with Mr Wall’s case. 

22. I have reviewed the overpayment particulars contained in paragraphs 2 and 4 above and my finding in paragraph 18. I am satisfied that there have been the overpayments of Newstart Allowance that are mentioned in the reporting periods between 7 July 2003 and 9 June 2008. I have also reviewed the particulars contained in the Centrelink Debt Calculator Tool and, as far as I am able to determine, the overpayments of Newstart Allowance, as detailed in paragraph 2, and the changes to the overpayments of Newstart Allowance that the respondent has identified, as detailed in paragraph 4, have all been correctly calculated. With regard to the changes to the overpayments, I note the provisions of s 180(1) of the Administration Act, which read:

“180  Variation of decision before AAT review completed

(1)If an officer varies a decision after an application has been made to the AAT for review of that decision but before the determination of the application, the application is to be treated as if:

(a)the decision as varied had been affirmed by the SSAT; and

(b)the application were an application for review of the decision as varied.”

Based on the application of s 180(1), it is competent for me upon review to consider the changed overpayments in paragraph 4 without affirmation by the SSAT.

23. The Newstart Allowance debts referred to in paragraph 2(b) and paragraphs 4(a) and 4(b) each include a 10 percent “recovery fee”, purportedly imposed by the respondent under s 1228B of the Act. Under s 23(1) of the Act, Newstart Allowance is a social security benefit and so its payment falls within the scope of s 1228B. Section 1228B refers to the addition of a penalty where a debt arose wholly or partly because the debtor involved had refused or failed to provide information, or knowingly or recklessly provided false or misleading information, in relation to his or her income from personal exertion. Mr Wall acknowledged that he wrongly declared his earnings to Centrelink in the period between July 2003 and April 2007. But, he contended that, at the time he made the wrong declarations, he was suffering from alcoholism and did not know what he was doing. However, I note he was gainfully employed during this period and, in my view, it is highly unlikely that he would not have known that he was making wrong or false declarations. In doing so, he would have acted recklessly or indifferently in providing the false or misleading information he did to Centrelink. Moreover, in his psychological assessment in July 2007, Mr Ireland noted Mr Wall himself had reported that, since February 2005, he had drank a lot less alcohol and had stopped drinking altogether on 27 July 2006. On the balance of the evidence, I am satisfied that Mr Wall recklessly provided false or misleading information to Centrelink in relation to his income from personal exertion and that he did not have a reasonable excuse for refusing or failing to provide the information accurately and in a timely manner. The imposition of a 10 percent recovery fee or penalty on the older Newstart Allowance debts, between 7 July 2003 and 2 April 2007, is in my view appropriate in the circumstances.

24.     As I have mentioned, Mr Wall’s Newstart Allowance debts during the periods between 7 July 2003 and 9 June 2008 totalled $14,822.40.  Of this sum, $10,845.18 was the subject of a reparation order made on 5 October 2007 in respect of offending that occurred between 28 November 2005 and 27 November 2006 and between 11 December 2006 and 4 April 2007.  Ms Edwards submitted that the Tribunal had no jurisdiction to revisit, to adjudicate upon or in any way to affect the operation of the reparation order.  She referred to the decision in Re Geoffrey Hodgson and Secretary, Department of Social Security [1992] AATA 126 where Senior Member TE Barnett, in dealing with the operation of a reparation order in the case before him, said (at paragraph 18):

“It [the respondent] will also have to decide whether it can proceed to enforce the reparation order in the light of this decision which, constitutes partial waver and write off by the Commonwealth, as this Tribunal certainly has no power to rule on the question of the reparation order.”

I consider further the effect the reparation order has on the Newstart Allowance debts of Mr Wall later in these reasons.

Are the overpayments of Newstart Allowance debts due to the Commonwealth?

25. Section 1223(1) of the Act sets out the circumstances where a recoverable debt arises from the overpayment of social security benefits. I am satisfied that the overpayments of Newstart Allowance in Mr Walls’ case are recoverable debts due by him to the Commonwealth.

Should all or part of the Newstart Allowance debts be waived or written off?

26. There are limited provisions in the Act for waiving the right to recover all or part of a debt. One of these, s 1237A(1), allows for waiver of recovery where the proportion of a debt is attributable solely to administrative error on the part of the Commonwealth and was received by the debtor in good faith. In my view, s 1237A(1) is not applicable in Mr Wall’s case. In relation to the overpayments of Newstart Allowance, there is no proportion of the debts that was attributable solely to administrative error on the part of the Commonwealth. As I have found, the debts arose wholly because Mr Wall recklessly provided false or misleading information to the respondent.

27. The other waiver provision is s 1237AAD of the Act. Under that provision, debts due to the Commonwealth by a person may be waived on the grounds of “special circumstances”. However, for the waiver to apply, the debts must not result from the person knowingly making a false statement or false representation, or knowingly failing or omitting to comply with a provision of the Act. The meaning of the word “knowingly” was considered in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 when Deputy President S Forgie said (at paragraph (48)):

“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. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.”

28.     In Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383 at 385, Devlin J considered the meaning of “knowledge” and found that actual knowledge can be inferred from the evidence and the nature of the acts done. Further, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123 at 126, the Court of Appeal in the Supreme Court of New South Wales said:

“In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge. However, this conclusion may be easily overturned by a denial on his part of the knowledge which the court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge.”

29.     Following the decision in RCA Corporation, it is open to the Tribunal to infer that a person had actual knowledge of their obligations under the Act where there were opportunities for them to gain that knowledge and where there were no obstacles to them acquiring the knowledge. In the present case, the respondent sent letters to the applicant notifying him of his obligations under the Act. However, there may well have been obstacles that would have prevented Mr Wall from being alert enough to understand his obligations under the Act. Those obstacles were his inebriated state at the time of the overpayments. I am satisfied that, as a result of his inebriation, certainly in respect of the overpayments between July 2003 and

late 2005/early 2006, Mr Wall’s ability to comprehend his obligations and responsibilities under the Act was reduced. Accordingly, I am satisfied that he did not knowingly fail to comply with his obligations under the Act and s 1237AAD can apply. I deal with it below in paragraph 32.

30. Sections 1236(1) and 1236(1A) of the Act allow for the write-off of debts due to the Commonwealth. In s 1236(1A), the Secretary may write-off the debts of the applicant, for a stated period or otherwise, only in the following situations:

(a)      The debts are irrecoverable at law.  In the present case, I am satisfied that the respondent is able to recover the debts of the applicant at law.

(b)      The debtor has no capacity to repay the debts.  I do not have before me particulars of the applicant’s assets or his current financial position.  However, he said in his evidence he was currently employed with Australian Postal Corporation and received a wage of $1,000 per week (net).  He was repaying $20 per fortnight to Centrelink in respect of his outstanding debts.  and this arrangement was not unduly burdensome.  Having regard to this information, there is no contrary evidence that the applicant does not have the capacity to repay the debts.

(c)       The debtor’s whereabouts are unknown.  This exception is not applicable in the applicant’s case.

(d)      It is not cost effective for the Commonwealth to take action to recover the debts.  Although no submissions were put to me by Ms Edwards in relation to this aspect, I accept that it is cost effective for the Commonwealth to take action to recover the debts.

31. It follows that the debts of the applicant due to the Commonwealth are not capable of being written-off, for a stated period or otherwise, pursuant to s 1236(1A) of the Act.

32. Mr Wall has submitted that the discretion provided in s 1237AAD of the Act should be exercised in his favour in respect of all the Newstart Allowance debts totalling $14,822.40. I have already found that he did not knowingly fail to comply with his obligations under the Act and that s 1237AAD can apply. However, he has pleaded guilty and has been convicted of five counts of obtaining a financial advantage under s 135.2(1) of the Criminal Code, and a reparation order has been made. In these circumstances, the exercise of the discretion under s 1237AAD, where special circumstances may exist, is not appropriate in the case of the Newstart Allowance debts of $10,845.18 which are the subject of the reparation order (see Re Rumere and Secretary, Department of Family and Community Services [2002] AATA 470 at paragraph 13; Re Geoffrey Hodgson (supra) at paragraph 18).

33. The remaining Newstart Allowance debts amount to $3,977.22 and include the debt of $275.86 relating to the period between 16 May 2006 and 26 May 2006 when Mr Wall was in New Zealand. In relation to this latter amount, no part of the debt for the period between 16 May 2006 and 26 May 2006 relates to Mr Wall knowingly making a false statement or representation or failing to comply with the Act. However, I have already found that Mr Wall was not eligible to receive Newstart Allowance for the period of his absence, and it follows that only Newstart Allowance debts of $3,701.36 remain to be considered under the special circumstances waiver in s 1237AAD.

34.     The expression “special circumstances” has been considered on numerous occasions by Courts and Tribunals.  In the case of Re Beadle and Director-General of Social Security (1984) 6 ALD 1, 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 on 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."  (emphasis added)

35.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Re Beadle, observed that special circumstances:

"... would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. ..."

36.     In Riddell v Secretary, Department of Social Security (1993) 30 ALD 31, the Full Court of the Federal Court said at page 38:

"Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other."

37.     Finally, in Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25, Besanko J in the Federal Court said (at paragraph 33) when referring to the test of special circumstances:

“ … The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. 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. …”

38.     I appreciate that Mr Wall may experience difficulty in repaying the debts that have arisen due to the overpayment of Newstart Allowance to him.  However, I am satisfied that his financial circumstances, whilst they might be straitened and stressful at times, are not such that they can be categorised as “special”.  Moreover, Mr Wall himself reported to Mr Ireland that he had not drank any alcohol since July 2006.  In this regard, I note that the majority (if not all) the debts of $3,701.36 that remain to be considered under the special circumstances waiver arose in the period

post-July 2006. I am of the view that these circumstances are not “unusual” or “uncommon” and do not distinguish Mr Wall’s case from the ordinary or usual case. The waiver in s 1237AAD of the Act is, therefore, not available.

conclusion

39.     The overpayments of Newstart Allowance which have been the subject of my review, including the changed overpayments that I have considered pursuant to

s 180(1) of the Administration Act, are as follows:

(a)      a Newstart Allowance debt amounting to $7,816.21 (including a
10 percent recovery fee of $710.55) for the period 7 July 2003 to

7 August 2006;

(b)a Newstart Allowance debt amounting to $2,862.28 (including a

10 percent recovery fee) for the period 28 November 2006 to 2 April 2007;

(c)a Newstart Allowance debt amounting to $2,395.18 (including a

10 percent recovery fee of $217.70) for the period 8 August 2006 to

27 November 2006;

(d)a Newstart Allowance debt amounting to $425.47 for the period

21 August 2007 to 4 February 2008;

(e)a Newstart Allowance debt amounting to $275.86 for the period

16 May 2008 to 26 May 2008; and

(f)a Newstart Allowance debt amounting to $1,047.40 for the period

5 February 2008 to 9 June 2008.

For the reasons that I have outlined, the decisions to raise and recover the overpayments and the Newstart Allowance debts in this paragraph 39, totalling $14,822.40, are affirmed.

decision

40.     The Tribunal varies the decision under review to the extent indicated in paragraph 39 of these reasons.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

Signed:         .....................................................................................
  Associate

Date/s of Hearing  3 August 2010
Date of Decision  29 September 2010
Advocate for the Applicant       Self  
Advocate for the Respondent   Julie Edwards
  Centrelink Advocacy Branch