Walters and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1283

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1283

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S 200600236

GENERAL ADMINISTRATIVE DIVISION		)
Re		RAYMOND WALTERS

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date2 May 2007

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

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

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Disability Support Pension – income from employment – failure to notify income within 14 days – administrative  error – good faith – write-off or waiver considered – living in remote community – no special circumstances – debt recoverable – decision affirmed

Social Security Act 1991 ss 1223(1), 1236(1A), 1237, 1237AAD

Social Security (Administration) Act 1999 s 68(2)

Secretary Department of Education, Employment, Training and Youth Affairs v Prince (1997) 128 ALR 127

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

2 May 2007   Senior Member L Hastwell   

1.      Raymond Walters (the applicant) has been a recipient of Disability Support Pension (DSP) for a number of years and has also worked from time to time during that period.

2.      The applicant and his wife moved to a remote Aboriginal community (Mimili) on 13 December 2001.  They were employed there running the general store from that date until 10 February 2003.

3.      The respondent (the Department) alleges that the applicant did not notify Centrelink that he was receiving income from paid employment until his brother telephoned Centrelink on 8 March 2002 and advised them that the applicant was working and wanted his DSP stopped.

4.      An overpayment of DSP has been raised for the period from 14 December 2001 until 7 March 2002.  The initial decision was to raise and recover a debt of $3,879.16.  That decision was varied by an Authorised Review Officer on 30 May 2006 and the debt was reduced to $2,074.18.  The applicant sought review of that decision to the Social Security Appeals Tribunal (SSAT), and on 12 July 2006 the SSAT affirmed the decision.

relevant legislation

5. Section 68(2) of the Social Security (Administration) Act 1999 (the Administration Act) requires that a person advise any changes to their circumstances that may affect their Centrelink payments within 14 days of those changes occurring.

6. Section 1223 (1) of the Social Security Act 1991 (the Act) provides as follows:

“1223(1)        Subject to this section, if:

(a)      a social security payment is made; and

(b)a person who obtains the benefit of the 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.”

.

7.      Section 1237AAD of the Act provides for waiver of a debt in special circumstances as follows:

“1237AAD 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 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.

Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.”

8.      Section 1236(1A) of the Act provides for write-off of a debt in some circumstances:

“1236(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.”

issues

9.      The issues for the Tribunal to determine in this case are:

·Has there been an overpayment of disability support pension?

·If so, has the amount of the overpayment been correctly calculated?

·Is the overpayment a debt due to the Commonwealth?

·Is there any basis for waiver or write off of the debt?

the hearing

10.     The applicant and his wife were both present at the hearing.  The applicant called Mr Jeff Lye to give evidence by telephone. 

11.     There was a great deal of common ground between the parties, save that the applicant claims to have notified the Department of his changed circumstances by telephone on 4 January 2002 and the Department asserts that the first  notification of his employment at Mimili was on 8 March 2002.

12.     The applicant told the Tribunal that he notified the Department by telephone of his employment on 4 January 2002.  He made the phone call from the office of Mr Lye.  When he received a bank statement in March of 2002 and saw that his DSP payments were still being paid into his account, he immediately contacted his brother (who worked in the Department) and asked him to ensure that the notification of his changed circumstances was put on his Centrelink file.

13.     He agreed that he knew he was not entitled to the DSP payments that he had received after the commencement date of his employment.  However, he had used those funds and considered that in the circumstances he should not be required to repay the money.

14.     The applicant considered that he and his wife were doing the community a service by working in this remote Aboriginal community.  He described the conditions of the community as being “third world”.  He acknowledged that he had not notified Centrelink within 14 days of the commencement of his employment at Mimili, but asked the Tribunal to accept that the Christmas break and the pressure of work in the lead up to 4 January 2002 were the reason he had not notified within 14 days.

15.     He described him and his wife as being in tight financial circumstances.  His wife is about to have an operation and they would be returning to their home in Mildura which is currently rented out.  They have quite a large mortgage on the property.  He considers it likely that they will be entirely dependent on Centrelink benefits for their support in the future.

16.     A statement of financial circumstances was contained in the T documents.

17.     The applicant pointed out to the Tribunal that for many years he had worked while also being entitled to DSP and he had never previously had an overpayment raised against him. 

18.     Mr Lye gave evidence by telephone from Cairns.  He said that he could recall the applicant making a telephone call from his office to Centrelink and that it was he who gave the phone number to the applicant.  He did not hear the content of the conversation.

19.     The Department relied on its statement of facts, issues and contentions, and the Departmental records of all contact between the applicant and the Department (T17).

submissions

20.     The applicant contended that he had notified the Department in early January 2002 of his changed circumstances and any payment after that date was due to a Departmental error. 

21.     He acknowledged that he was not entitled to the additional payments that he had received.  However, he argued that there were special circumstances in his case and he should not be required to repay the funds to the Department.  He alleged that Departmental error resulted in the overpayment occurring.  He pointed to the remoteness of the location in which he was living and the difficulties of his employment as being the reason for him being slightly late in notifying the Department of his changed circumstances.

22.     The Department asserted that even if the Tribunal found that there had been a notification by the applicant of his changed circumstances on 4 January 2002, the payments were not received in good faith as when he discovered that he had received those payments the applicant knew that he was not entitled to them and should have offered to repay the debt to the Department at that point.  He should not have gone on to use those funds for his own purposes.

23.     The Department relied on authorities to support its contention that there were no special or unusual circumstances in this case that would justify a waiver of the debt.

consideration

24.     It is common ground there has been an overpayment in this case and that the debt has been correctly calculated. 

25.     The computing records of contacts between the applicant and the Department (T17) show no record of any notification to the Department of the applicant's employment at Mimili prior to 8 March 2002.  The March notification is recorded at T17/170 and is consistent with the applicant's evidence that notification was made by his brother. 

26.     The applicant's evidence to this Tribunal varied in some respects from the evidence that he gave to the SSAT.  That decision is contained at T2.  In giving evidence to the SSAT the applicant claimed that he had received a letter from Centrelink after his brother’s notification to them on 8 March 2002 in which Centrelink advised him that his DSP had now been cancelled, that it had made a mistake and that he would not need to pay back the money and that Centrelink would not pursue it further.

27.     No such letter appears in the Centrelink records, nor could the applicant produce a copy of that letter at the time of the SSAT hearing. 

28.     No such evidence was given to this Tribunal and the applicant's evidence before this Tribunal was that he heard nothing from Centrelink at all until a debt was raised in 2006.

29.     The Tribunal found the applicant was telling the truth to the best of his ability, but that his recall was at times faulty. 

30.     The Tribunal is satisfied that Mr Lye was truthful in his evidence and that he recalls providing Centrelink's telephone number to the applicant and being aware that the applicant was contacting Centrelink about his changed circumstances soon after his arrival in Mimili. 

findings of fact

31.     The Tribunal made the following findings:

·The applicant commenced work at the Mimili Aboriginal community on 13 December 2001 at which time he was a recipient of DSP. 

·The applicant was at all times aware of his obligations to notify changed circumstances to Centrelink and for many years he had regularly notified Centrelink of income changes that may affect his DSP.

·The Tribunal is satisfied, on the balance of probabilities, that the applicant did make a notification of his change of circumstances to the Department in early January 2002.

·Due to Departmental error, the notification was not recorded and no action was taken by the Department until the second notification by the applicant's brother to the Department in March 2002.

·When the applicant saw his bank statement in March 2002 and realised he had been paid DSP through January and February of 2002 he knew that he was not entitled to those funds.  He expected that the Department would follow up on the overpayment. 

·The applicant and his wife own a home in Mildura.  They have modest financial circumstances and the debt is significant to them.  They have reached a point in their lives when it is likely that they will be solely dependent on Centrelink payments for their support.

·For reasons that are not clear, and which have not been explained by the Department, the overpayment was not raised until early 2006, being some four years after the event.

consideration and application of the law

32.     The Tribunal is satisfied in this case that an administrative error occurred and accepts the evidence of the applicant as supported by his wife and Mr Lye, that he notified Centrelink of his changed circumstances in a telephone contact with a call centre in early January 2002.

33.     Section 1237 of the Act provides that the Secretary must waive the right to cover the proportion of a debt that is attributable solely to administrative error if payments were received in good faith by the recipient.

34.     In the case of the Secretary Department of Education, Employment, Training and Youth Affairs v Prince (1997) 128 ALR 127, Justice Finn of the Federal Court analysed the meaning of “received in good faith”.  This was in the context of the Student and Youth Assistance Act 1973.  The wording of the relevant section in that Act is identical to the words used in s 1237 of the Act.  He took a narrow view of the meaning of “received in good faith”.  In that case, which was similar in its facts to this case, the recipient of the payments was unaware that he was receiving those payments for a period of time and then became aware that he had received payments.  He made attempts to stop ongoing payments.  The question was whether he had received the payments in good faith that he only became aware of retrospectively.

35.     Justice Finn commented at p 131 as follows:

“… It is clear in the present case that at all relevant times after 22 December 1993 Mr Prince actually knew that he had no entitlement to receive Austudy payments. Is the consequence of this that he could never claim that any of the payments he received from DEETYA as Austudy payments in 1994 were received in good faith even though at the time of receipt of the first three he was unaware that he had received the payment? In other words, can a receipt be otherwise than in good faith when the recipient is unaware that the payment has been received? The short answer to that in my view is "yes". Knowing that, in the relevant period, he had no entitlement to receive an Austudy payment, he was never in a position to be able to assert that any mistaken payment made to him was one to which he had an entitlement. Thus while he may have received a payment of which he was ignorant, he could not, in the sense that I have explained, have received it in good faith.”

36.     Based on Prince's case it cannot be said to that the applicant in this case received the payments of DSP in good faith.  He was not aware that he was receiving the payments until March 2002.  However, as soon as he saw those payments in his account he knew they were payments to which he was not entitled.  He quite properly arranged for his brother to make a notification to Centrelink.

37.     In the circumstances s 1237 of the Act is not applicable in this case.

38.     Are there special circumstances in this case such that it is appropriate to waive some or all of the debt pursuant to s 1237AAD of the Act?

39.     Special circumstances arise on the facts of an individual case.  It is accepted that for circumstances to be special they must be something unusual, uncommon or exceptional arising out of the circumstances of the case.  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal summarised the position 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.”

40.     The legislation itself provides that the special circumstances must be something other than hardship alone.

41.     In this case the applicant was aware that the extra payments should not have been paid to him. He hoped that Centrelink would not seek recovery of the debt, but eventually they did. The fact of working in a remote community is not a justification for the applicant keeping the benefit of the funds incorrectly paid to him. He has chosen to work in interesting and remote locations over many years and that has been his choice and not a fact that in itself gives rise to special circumstances in this case.

42.     The applicant and his wife own a home (with a mortgage) and have reached the point in their life where they will probably rely entirely on Social Security benefits for their support into the future.  His wife is about to have surgery although the applicant did not elaborate further on this point.  This in itself is not an unusual or exceptional circumstance.  There is nothing significantly out of the ordinary in the applicant's circumstances.

43.     The Tribunal is not satisfied that there is anything unusual, exceptional or uncommon about this case that would warrant a finding that there are special circumstances that justify a waiver of any or all of the debt. 

44.     The Tribunal considered whether write-off was applicable under section 1236 of the Act.  In this case the applicant has the capacity to repay the debt by deductions from his current Centrelink payments and so there is no basis for write-off under this section. 

45.     In the circumstances the Tribunal affirms the decision under review.

I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell

Signed:         .............J Coulthard.........................................
  Associate

Date of Hearing  19 March 2007
Date of Decision  2 May 2007
Advocate for the Applicant       In person
Counsel for the Respondent     Ms C Knight
Solicitor for the Respondent     DLA Phillips Fox