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

[2019] AATA 410

Webeck and Secretary, Department of Social Services (Social services second review) [2019] AATA 410 (15 March 2019)

Division: GENERAL DIVISION

File Numbers:         2018/1093, 2018/1094 and 2018/1095

Re:Judith Webeck

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr L Bygrave, Member

Date:15 March 2019

Place:Sydney

The reviewable decision of the Social Security and Child Support Division of the Tribunal dated 13 February 2018 is varied as follows:

·Judith Webeck was overpaid disability support pension in the amount of $2,194.48 for the period of 5 October 2013 to 23 June 2014; and

·Judith Webeck was overpaid disability support pension in the amount of $11,311.69 for the period of 24 June 2014 to 11 April 2016.

Pursuant to section 1223 of the Social Security Act 1991 (Cth), any outstanding debt amounts are to be repaid to the Commonwealth.

The reviewable decision as it relates to the cancellation of Judith Webeck’s disability support pension from 16 February 2014 otherwise remains unchanged.

................................[sgd]........................................

Dr L Bygrave, Member

CATCHWORDS

SOCIAL SECURITY – disability support pension – whether decision to cancel disability support pension was correct – applicant received periodic payments for compensation following workplace injury – whether periodic payments for compensation should be disregarded – whether there were special circumstances – whether applicant has debts for the overpayment of disability support pension – whether all or part of debts can be waived – whether there was administrative error – decision under review varied

LEGISLATION

Social Security Act 1991 (Cth) – ss 17, 1064, 1173, 1184K, 1223, 1236, 1237A

Social Security (Administration) Act 1999 (Cth) – s 80

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Dranichnikov v Centrelink [2003] FCAFC 133

REASONS FOR DECISION

Dr L Bygrave, Member

15 March 2019

INTRODUCTION

1. Mrs Judith Webeck has been in receipt of periodic payments of compensation for a workplace injury she sustained on 25 May 1995. She subsequently claimed disability support pension and, relevant to this matter, received disability support pension for the period from 10 November 2011 to 11 April 2016.

2. The Department of Human Services (Centrelink) subsequently made decisions to cancel Mrs Webeck’s disability support pension, and to raise and recover debts from her for the overpayment of disability support pension. These decisions were affirmed by authorised review officers of Centrelink on 3 May 2017, 16 May 2017 and 21 August 2017.

3. Mrs Webeck applied for review of these decisions in the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal (the Tribunal) and, on 13 February 2018, the SSCSD affirmed the decisions to:

   ·cancel Mrs Webeck’s disability support pension from 16 February 2014; and

   ·vary a debt in the amount of $3,826.35 for overpayment of disability support pension for the period 5 October 2013 to 23 June 2014; and

   ·raise and recover a debt in the amount of $11,296.43 for overpayment of disability support pension for the period 25 June 2014 to 11 April 2016.

4. Mrs Webeck lodged an application for review to the General Division of the Tribunal on 5 March 2018.

5. The matter was heard in Sydney on 8 February 2019. Mrs Webeck did not have legal representation; she attended the hearing and gave oral evidence by conference telephone. I then provided the parties with the opportunity to file further evidence and written submissions after questions were raised at the Tribunal hearing regarding the calculations of debts.

   ISSUES

6. The determinative issues for the Tribunal are:

   (a)whether Mrs Webeck’s disability support pension was properly cancelled;

   (b)whether all or part of Mrs Webeck’s periodic payments for compensation may be disregarded;

   (c)whether Mrs Webeck has debts for the overpayment of disability support pension in the amounts of $3,826.35 for the period 5 October 2013 to 23 June 2014 and $11,296.43 for the period 25 June 2014 to 11 April 2016; and

   (d)if so, whether there are any grounds for waiving all or part of the debts.

   RELEVANT LEGISLATION AND CONSIDERATION

7. Part 3.14 of the Social Security Act 1991 (Cth) (the Act) contains provisions that deal with compensation payments; these provisions are designed to ensure a person does not receive both compensation payments and social security payments for the same event.

8. The rate of disability support pension paid to a person is calculated in accordance with section 1064 of the Act; a person’s income and assets are considered in the process to calculate their maximum basic rate.

9. Subsection 17(2) of the Act defines “compensation” as:

   (a)a payment of damages; or

   (b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or

   (c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or

   (d)any other compensation or damages payment;

   (whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.

10. A letter from Allianz Australia to Mrs Webeck on 8 November 2013 stated she received periodic compensation payments from 25 May 1995 in respect of a workplace injury under NSW state legislation.[1] I am satisfied that these payments are compensation as defined in the Act.

    [1] Exhibit T-T1, page 4.

    Issue – Was Mrs Webeck’s disability support pension correctly cancelled?

11. Section 1173 of the Act sets out the effect of periodic compensation payments on the rate of Mrs Webeck’s disability support pension; relevantly, periodic compensation payments are assessed as a dollar for dollar deduction against Mrs Webeck’s rate of disability support pension because she was not receiving disability support pension when the compensable event (that is, her workplace injury) occurred on 25 May 1995.

12. On 7 March 2017, Allianz Australia provided Centrelink with a list of weekly benefits paid to Mrs Webeck for the period from 25 May 1995 to 12 March 2017.[2] This shows Mrs Webeck received weekly compensation payments in the following amounts:

    ·$250 for the period from 10 November 2011 to 15 February 2014; and

    ·$758.80 from 16 February 2014 with periodic increases to $811.52 from 14 October 2016.[3]

    [2] Exhibit T-T16, pages 96 to 102.

    [3] I note there are some variations to these amounts in the list of weekly benefits. Mrs Webeck explained these variations were due to periods where medical evidence was provided late to Allianz Australia, which may delay payments for a fortnight period.

13. Based on the evidence before the Tribunal, I am satisfied the decision to cancel Mrs Webeck’s disability support pension from 16 February 2014 was correct. This is because Mrs Webeck’s periodic payments for compensation from 16 February 2014 were sufficiently high to reduce her pension rate to nil. As Mrs Webeck was not eligible to receive disability support pension from 16 February 2014, Centrelink made the correct decision to cancel her disability support pension pursuant to subsection 80(1) of the Social Security (Administration) Act 1999 (Cth).

    Issue – Should all or part of Mrs Webeck’s periodic compensation payments be disregarded?

14. Section 1184K of the Act provides:

    (1)  For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:

    (a)  not having been made; or

    (b)  not liable to be made;

    if the Secretary thinks it is appropriate to do so in the special circumstances of the case.

    (2)  If:

    (a)  a person or a person’s partner receives or claims a compensation affected payment; and

    (b)  the person receives compensation; and

    (c)  the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;

    the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1).

15. The term “special circumstances” is not defined in the legislation; however, the Federal Court and the Tribunal have considered the issue of special circumstances on many occasions. In every case, the individual circumstances of the case were examined to determine whether the circumstances were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. Reduced to its simplest, the decision-maker is required to consider whether there are circumstances in the particular case that suggest an exception should be made and the usual rule should not apply: see, for example, Dranichnikov v Centrelink [2003] FCAFC 133 at [65]-[66]; see also Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33].

16. In relation to her circumstances, Mrs Webeck told the Tribunal that she has complicated and complex medical issues for which she takes multiple medications. Mrs Webeck confirmed she owns 70% of her home that she lives in; her three children own the remaining 30%. She has savings in superannuation and owns shares, and continues to be in receipt of compensation payments of approximately $822.08 weekly.

17. While I understand Mrs Webeck’s distress, unfortunately there is no evidence before the Tribunal that shows her situation can be distinguished from the circumstances of others. I cannot be satisfied there are special circumstances that warrant all or part of her weekly compensation payments being disregarded pursuant to section 1184K of the Act.

    Issue – Does Mrs Webeck have debts for the overpayment of disability support pension?

18. Subsection 1223(1) of the Act provides:

    1223 Debts arising from lack of qualification, overpayment etc.

    (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.

19. On 16 May 2017, an authorised review officer of Centrelink varied Mrs Webeck’s debt for the overpayment of disability support pension to the amount of $3,826.35 for the period 5 October 2013 to 23 June 2014.[4] A Centrelink authorised review officer further decided on 21 August 2017 to affirm a debt for Mrs Webeck in the amount of $11,296.43 for overpayment of disability support pension from 25 June 2014 to 11 April 2016.[5]

    [4] Exhibit T-T22, page 118.

    [5] Exhibit T-T26, page 131.

20. In written submissions and at the Tribunal hearing, the Secretary’s lawyer explained the debt for 5 October 2013 to 23 June 2014 had been recalculated by Centrelink and was now $2,194.48. I requested further submissions about these calculations from the Secretary, which were provided on 14 February 2019. These submissions include a MultiCal – Centrelink Debt Calculator for the period 1 October 2013 to 23 June 2014 that shows Mrs Webeck was overpaid disability support pension in the amount of $3,825.88. I understand that following concerns raised by Mrs Webeck, this amount was later recalculated to be $2,194.48; this amount has been recovered by Centrelink. A MultiCal – Centrelink Debt Calculator for the period 24 June 2014 to 11 April 2016 shows Mrs Webeck was paid disability support pension in the amount of $11,311.69 and entitled to nil pension during this period. While I note this amount is marginally higher than the debt of $11,296.43 raised by Centrelink on 21 August 2017, I am satisfied with the Secretary’s explanation that this discrepancy relates to coding applied against Mrs Webeck’s income.

21. Based on the evidence, I am satisfied that Mrs Webeck has debts for the overpayment of disability support pension in the amounts of $2,194.48 for the period of 5 October 2013 to 23 June 2014 and $11,311.69 for the period of 24 June 2014 to 11 April 2016. I find that these amounts are debts to the Commonwealth in accordance with section 1223 of the Act.

    Issue – Are there any grounds for writing off or waiving all or part of the debts?

    Should the debts be written off?

22. Section 1236 of the Act provides, in part:

    1Secretary 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.

23. There is no evidence to suggest that any of the conditions set out in subsection 1236(1A) are met.  I am not satisfied the debts should be written off.

    Should the debts be waived by reason of ‘administrative error’?

24. Pursuant to section 1237A of the Act, a debt arising from error may be waived:

    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.

25. Mrs Webeck provided a written statement dated 2 February 2019 and submitted in her oral evidence to the Tribunal that she notified Centrelink her periodic payments of compensation were increasing to $758.80 from 16 February 2014.

26. I have regard to the following documents:

    ·A letter from Allianz to Mrs Webeck dated 8 November 2013, setting out changes to her weekly payment rate. Mrs Webeck has handwritten on this letter:

    This letter taken to Hornsby Centrelink. I was notifying Centrelink re w/c income to change on 14 February 2014. Centrelink copied this & made me an app with Centrelink financial person at Hornsby Centrelink.[6]

    ·A handwritten letter by Mrs Webeck addressed to “Centrelink Dissability [sic]” with a fax date stamp of 2 March 2014, in which Mrs Webeck stated she was notifying Centrelink of some changes to her circumstances including changes to property transfers between family members. She further noted that her “income will be increasing…very soon…[and she] will notify…how much it will increase when [she] knows the final outcome…”[7]

    ·A handwritten letter by Mrs Webeck addressed to “Centrelink Disability Team” dated “March 2014” advising that she now receives $1,327.60 workers compensation payment a fortnight after tax and she received her first payment on 21 February 2014.[8]

    ·A handwritten letter by Mrs Webeck addressed to “Centrelink Disability” dated 23 June 2014 that advised about “family property changes” and noted “all else for me as far as income ect [sic] is still the same as indicated in March”.[9]

    ·A handwritten letter by Mrs Webeck addressed to “Disability Team” dated 28 July 2014, which provided information about finalising family property and noted “no other changes”.[10]

    ·A handwritten letter by Mrs Webeck addressed to “Centrelink Disability Team” dated “September 2014” notifying that her “workers compensation income has recently gone up to $1,332.80”.[11]

    [6]  Exhibit T-T1, page 4.

    [7]  Exhibit T-T6, page 40.

    [8]  Exhibit T-T7, page 41.

    [9]  Exhibit T-T7, page 42.

    [10] Exhibit T-T7, page 43.

    [11] Exhibit T-T7, page 44.

27. At the Tribunal hearing, Mrs Webeck contended that she had repeatedly notified Centrelink about changes to her workers compensation payments – as shown by these handwritten letters. She stated that she had taken letters to Centrelink Hornsby and these letters had been copied and she had presumed the information was placed on her file. Consequently, Mrs Webeck submitted that any decision to continue paying her disability support pension after 16 February 2014 was Centrelink’s error and she should not be liable for any debts arising from the overpayment of disability support pension to her.

28. I note the Centrelink document recording archive contains no record of receiving Mrs Webeck’s letters of March 2014, 23 June 2014, 28 July 2014 and September 2014. There is also no record that Mrs Webeck provided the letter from Allianz Australia dated 8 November 2013 to Centrelink. I also note that Mrs Webeck’s oral evidence contained some (albeit not deliberate) factual inconsistencies about how and when she provided documents to Centrelink and she told the Tribunal her son had, on occasion, told her that she “did not need to provide so much information” to Centrelink.

29. Centrelink document recording archives show Mrs Webeck attended an appointment with a financial adviser at Centrelink Hornsby on 22 January 2014; case notes from this appointment stated there was discussion about changes to property and the “effect of increase of compo payments to $755pw”.[12] A further Centrelink record on 5 April 2014 noted Mrs Webeck advised about some property changes in the future and she has her accountant “looking at her income and will advise of any changes to this soon”.[13]

    [12] Exhibit T-T27, page 168.

    [13] Exhibit T-T27, page 169.

30. Based on the evidence before the Tribunal, I make the following findings:

    ·Mrs Webeck intended to inform Centrelink about changes to her periodic compensation payments in 2014 and believed that she had notified Centrelink in writing about these changes.

    ·Centrelink records do not show Mrs Webeck provided written notification about the date and amount of changes to her periodic compensation payments from 16 February 2014.

    ·Centrelink records show Mrs Webeck was notified and therefore aware that changes to these payments may affect the rate at which she was paid disability support pension.

31. While I accept Mrs Webeck is frustrated that Centrelink did not cease her disability support pension in February 2014 when her periodic compensation payments increased, there is insufficient evidence before me to find this was solely due to Centrelink’s administrative error. In particular, I am satisfied that Mrs Webeck was aware that increases to her weekly compensation payments were likely to reduce or cancel her disability support pension. I also note that Mrs Webeck, in both her handwritten letters and oral evidence to the Tribunal, demonstrated a comprehensive understanding and knowledge about her payments from both Centrelink and Allianz Australia. While I understand there were complicating factors both in relation to changes to the value of her assets as well as the increase in her compensation payments, it is not clear to me why Mrs Webeck did not raise questions with Centrelink in 2014 when her rate of disability support pension did not change despite a substantial increase in her periodic compensation payments.

32. For these reasons, I find the debts cannot be waived due to sole administrative error.

    Should the debts be waived by reason of special circumstances?

33. For the reasons set out in paragraphs 15 to 17 above, I am not satisfied the debts should be waived due to special circumstances.

    DECISION

34. The reviewable decision of the SSCSD dated 13 February 2018 is varied as follows:

    ·Mrs Webeck was overpaid disability support pension in the amount of $2,194.48 for the period of 5 October 2013 to 23 June 2014; and

    ·Mrs Webeck was overpaid disability support pension in the amount of $11,311.69 for the period of 24 June 2014 to 11 April 2016.

1. Pursuant to section 1223 of the Act, any outstanding debt amounts are to be repaid to the Commonwealth.

2. The reviewable decision as it relates to the cancellation of Mrs Webeck’s disability support pension from 16 February 2014 otherwise remains unchanged.

I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member

.........................[sgd]...........................................

Associate

Dated: 15 March 2019

Date of hearing:	8 February 2019
Applicant:	In person
Solicitors for the Respondent:	Mr S Agnello Department of Human Services