Weekes and Secretary, Department of Family and Community Services
[2004] AATA 770
•22 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 770
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2004/91
GENERAL ADMINISTRATIVE DIVISION ) Re
OLIVIA WEEKES
Applicant
And
DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Ms N Isenberg, Member Date22 July 2004
PlaceSydney
Decision The decision under review is set aside and in substitution thereof the Tribunal decides that the debt be waived.
..............................................
Ms N Isenberg
Member
CATCHWORDS
SOCIAL SECURITY – Parenting payment partnered – Debt due to the Commonwealth – Whether debt attributable “solely” to Commonwealth’s error - Whether debt should be waived – “Special circumstances” – (CTH) Social Security Act 1991 ss 1223, 1237A and 1237AAD.
LEGISLATION
Social Security Act 1991.
CASE LAW
Secretary, Department of Social Security and Hales (1998) 51 ALD 695
Re Greenwood and Secretary, Department of Social Security (1991) 25 ALD 775
Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)
Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Riddle and Secretary, Department of Social Security (1993) 30 ALD 31
REASONS FOR DECISION
22 July 2004 Ms N Isenberg, Member DECISION UNDER REVIEW
1. The decision under review before the Administrative Appeals Tribunal (“the Tribunal") was the decision of the Respondent, the Secretary, Department of Family and Community Services ("Centrelink") dated 1 September 2003 (T11, p.32), as affirmed by the Authorised Review Officer (“ARO”) on 3 October 2003 (T20, p.47), and the Social Security Appeals Tribunal (“the SSAT") on 3 December 2003 (T4, p.3), to raise and recover a debt of parenting payment partnered (“PPP”) of $3,246.45 for the period of 20 May 2002 to 28 August 2003 from Ms Weekes
BACKGROUND
2. Most of the facts in the matter were not in dispute and the following findings of fact by way of background can be made.
3. On 19 March 2002, Centrelink wrote to Ms Weekes and advised her that she was being paid PPP of $127 per fortnight based on her partner’s annual income of $22,230 (equivalent to $855 per fortnight). The letter also contained a requirement that she notify Centrelink within 14 days if her partner’s earnings exceeded $855 per fortnight.
4. On 14 May 2002, Centrelink wrote to Ms Weekes again and advised her that she was then being paid PPP of $97.65 per fortnight based on her partner’s annual income of $23,319.92 (equivalent to $896.92 per fortnight). The letter also contained a requirement that she notify Centrelink within 14 days if her partner’s earnings exceeded $896.92 per fortnight.
5. On 29 August 2003, Centrelink received an employer verification report from The Plan Centre of Newcastle Pty Ltd (“Plan Centre”) which indicated that from 20 May 2002 Mr Bentley’s income exceeded $896.92 per fortnight.
6. On 1 September 2003, Ms Weekes payments were cancelled because her partner’s earnings exceeded the upper income threshold limit for continued payment of PPP.
7. The debt was said to be caused by Ms Weekes failure to advise Centrelink that her partner’s earnings exceeded $896.92 per fortnight.
ISSUE BEFORE THE TRIBUNAL
8. Whether there is a recoverable debt of PPP of $3,246.45 for the period 20 May 2002 to 28 August 2003; and if so, whether the debt should be recovered.
LEGISLATION
9. The relevant legislation in this matter is the Social Security Act 1991 in particular sections 1223, 1237A and 1237AAD.
THE HEARING
10. A hearing was held before the Tribunal on 2 June 2004 at which Ms Weekes appeared without representation but assisted by her partner Mr James Bentley. Centrelink was represented by Mr Luke Carter, an advocate from the Centrelink Service Recovery Team.
11. The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence.
12. Both Ms Weekes and Mr Bentley gave evidence and were cross-examined on behalf of Centrelink. I also asked them questions.
CONSIDERATION OF EVIDENCE AND FINDINGS
13. In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.
IS THERE A RECOVERABLE DEBT?
14. Centrelink contended that an overpayment of PPP for the period 20 May 2002 to 28 August 2003 has arisen because the earnings of Mr Bentley, Ms Weekes’s partner, exceeded those upon which Centrelink had based its calculation of her entitlement. The method of calculating the rate of PPP is set out in section 1068B of the Act. Consequently, the amount of the overpayment is a debt owed by her to the Commonwealth under subsection 1223(1) of the Act, which states:
“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.”
15. During the period under review payments were made to Ms Weekes on the basis that Mr Bentley’s fortnightly income did not exceed $896.92. In fact Mr Bentley frequently earned more than this amount.
16. There was no dispute that Ms Weekes had been paid more PPP, than that to which she was entitled.
17. I therefore find that there is a recoverable debt.
SHOULD THE DEBT BE RECOVERED?
18. The Act makes provision in limited circumstances for debts not to be recovered.
1237A(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.”
19. For a debt to be waived under section 1237A, two conditions must be met, namely that the debt arose solely because of administrative error and the debtor received the payments in good faith.
WAS THE DEBT SOLELY ATTRIBUTABLE TO AN ADMINISTRATIVE ERROR BY CENTRELINK?
20. Ms Weekes told me that she had applied for PPP shortly after her son was born on 3 April 2000. Mr Bentley had been a student studying architectural design at TAFE and got his first job for a couple of weeks, when their son was about 10 months old, which would be in about February 2001. In October 2001 he obtained his first job as an architectural designer with Plan Centre and at that time worked a couple of days fulltime, and spent 23 hours per week at TAFE. When TAFE finished in mid December he was engaged at Plan Centre fulltime on an hourly basis for between 38 and 45 hours per week.
21. In April 2002, Mr Bentley reduced his hours slightly so as to be able to care for Ms Weekes and their son, because at the time, Ms Weekes mother was terminally ill and the burden of her care was falling on Ms Weekes. She was not coping well with her responsibilities and her grief.
22. In May 2002 he became permanent, but was still paid on an hourly basis.
23. On 28 February 2002, Ms Weekes appears to have lodged a PPP review form, although this was not included in the papers before me, but was referred to at T3, p.9. The earnings of Mr Bentley were declared as follows:
Date
Amount
($)
19 November 2001
567.00
03 December 2001
717.00
18 December 2001
930.00
02 January 2002
857.40
14 January 2002
796.80
29 January 2002
1010.4
11 February 2002
886.2
25 February 2002
855.00
24. It appears that originals or copies of payslips were provided to Centrelink. (T4, p.10)
25. The last payment of $855 a fortnight, annualised to $22,230.00, was used by Centrelink to calculate Ms Weekes’ entitlement to PPP at that time.
26. By letter dated 19 March 2002, (T5,p.12), she was advised that she must inform Centrelink if her partner’s fortnightly income exceeded $855. Ms Weekes said she could not recall if she received the letter but said that it was her practice that whenever she received a letter from Centrelink she would phone up and confirm its contents. Her biggest fear was getting into debt.
27. In April 2002, Ms Weekes was asked to complete a further PPP review, (T6, p.15). Ms Weekes said that Centrelink told her that because Mr Bentley’s income fluctuated an annual estimate or an average of his earnings was sufficient. Ms Weekes and Mr Bentley said that they indicated on the form that his weekly wage was $468, an intentional overstatement, so as to avoid any possibility of an overpayment by Centrelink on the basis of their having understated his income. The form was lodged with Centrelink on 10 May 2002, (T6, p.15).
28. On the basis of the accompanying payslips, entitlement to PPP was then calculated on the payslip average of $896 per fortnight (T7, p.21). This is in contrast with the previous method of calculation, where the last payment was used as the basis of the calculation.
29. On 14 May 2002, (T8, p.22), a further letter was sent to Ms Weekes advising her that she must inform Centrelink if her partner’s fortnightly income exceeded $896.92. Ms Weekes thought she received that letter and that she telephoned Centrelink because the amount referred to bore no relation to the information she and Mr Bentley had provided. Centrelink’s Customer Record Access Monitor Report (‘CRAM’) certainly showed activity on 17, 20, 23 and 30 May 2002, although it is unclear to what that may have related.
30. Ms Weekes and Mr Bentley said that on the form they had already advised Centrelink that Mr Bentley’s average weekly income was $468, or $936 per fortnight. This may have been a more accurate base figure from which Centrelink should have calculated her entitlement, rather than $896.92.
31. Centrelink contended that there is no evidence to suggest that there was any administrative error on its part at all. I do not accept this to be the case. The material available to Centrelink was that Mr Bentley’s income fluctuated. Centrelink failed to apply either the same test as it had previously applied or to adopt the figure estimated by Ms Weekes.
32. It was unclear however if adopting Ms Weekes’ figure would have prevented the debt from arising, given that the majority of weekly payments made to Mr Bentley in the period under review are in excess of this amount.
33. I turned then to consider Ms Weekes’s evidence that she was so concerned to avoid getting into debt with Centrelink that she was in continual contact with Centrelink, questioning the amount that was being paid to her. It is unclear as to the precise information provided by Ms Weekes by telephone but whatever information was provided did not find its way into Centrelink records in relation to PPP.
34. In this regard the advocate for Centrelink referred to the CRAM report which records ‘every time’ the customer’s file is accessed including when there has been telephone contact by a customer. He said that while the records show that Ms Weekes contacted Centrelink on numerous occasions during the period under review these calls were in relation to her Family Tax Benefit entitlements only, and not in relation to PPP.
35. Centrelink contended that the word “sole” should be given its ordinary meaning. In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”. This approach was used by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996) paragraph 40 , in which the Tribunal stated:
“There is nothing in sub-section 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 the 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.”
36. This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 paragraph 19. The Tribunal stated that “solely” in section 1237A(1) should be given its ordinary meaning (“only” or “to the exclusion of all else”).
37. There was no evidence before me that Ms Weekes raised with Centrelink that her payments of PPP were not fluctuating as Mr Bentley’s income fluctuated, as this would reasonably be expected if she were keeping Centrelink informed of Mr Bentley’s income, should it have exceeded $896.92, or indeed $936 per fortnight.
38. I therefore find that while there was an administrative error on Centrelink’s part, that error was not solely responsible for the debt.
39. Having come to the view that the debt did not arise solely from an administrative error by Centrelink, it is not necessary for me to examine the issue of Ms Weekes’s good faith.
ARE THERE SPECIAL CIRCUMSTANCES WHY THE DEBT SHOULD BE WAIVED?
40. A further provision of the Act allows for waiver of debts in what is termed “special circumstances”.
“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 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.”
41. At the hearing Ms Weekes produced the original letters, the Centrelink computer versions of which are at T5 and T8. Ms Weekes and Mr Bentley pointed out that the amount of fortnightly income above which they were obliged to inform Centrelink was ‘buried’ in what appeared to be pro forma information. Upon inspection I am inclined to agree that, for the ordinary person, even locating that information amongst a long list of circumstances affecting pension such as private trusts, deferred annuities, insurance bonds and being confined to a psychiatric institution amounts to it being ‘buried’. While there is no doubt that a person has an obligation to comply with the requirements of the letter in accordance with Secretary, Department of Social Security and Hales (1998) 51 ALD 695, the form of the letter makes it unlikely that the ordinary person would readily identify that, in amongst some esoteric financial circumstances, there may be an obligation to inform Centrelink of something so basic as a change of income beyond a very specific amount, even to individual cents. I therefore find that Ms Weekes did not knowingly omit to comply with the Act. In any event, her evidence was that she did inform Centrelink of changes in Mr Bentley’s income.
42. The term “special circumstances” has been examined by the AAT and the Federal Court. In Re Beadle and Director General of Social Security (1984) 6 ALD 1 at 3, Toohey J stated:
“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.”
43. Ms Weekes’s circumstances were examined by the SSAT, which came to the conclusion that there was nothing unusual, exceptional or uncommon about her situation so as to set her apart from others in receipt of income support payments and that recovery of the debt would not be unjust or unreasonable. I do not agree.
There are a number of issues which in my view set Ms Weekes’ circumstances apart:
· Ms Weekes was undergoing great emotional stress at the time of her dealings with Centrelink in the period under review. Her mother was terminally ill and the majority of the care of her mother fell to her. In addition, other members of her family relied on her greatly, especially as her father was away overseas working at this time of family crisis. That she was not coping, was further evidenced by Mr Bentley having to take time off work to care for her and their son. She was clearly distressed during the hearing when discussing her mother’s illness and ultimate death.
· During the hearing Ms Weekes and Mr Bentley expressed on a number of occasions their concern that they had always been anxious not be in Centrelink’s debt. Ms Weekes said that it was for this reason that she was continually in contact with Centrelink to ensure that this did not occur. While I have made no findings as to precisely what Ms Weekes may have told Centrelink about Mr Bentley’s change in earnings I accept the genuineness of her ongoing concern that they not incur any debt. Centrelink’s advocate conceded that Ms Weekes’s Family Tax Benefit (“FTB”) was never overpaid despite this also being affected by Mr Bentley’s income. This would tend to suggest that Centrelink was informed of his income, as Ms Weekes contended.
· Ms Weekes and Mr Bentley said that Centrelink had miscalculated their FTB and that as a result had underpaid them and had to provide a cheque to correct the error. They were not expecting that amount and thought it would have been more sensible for Centrelink to have offset any overpayment of PPP against the underpayment for FTB. I have observed that Centrelink did not appear to be able to process information in respect of one type of pension where also relevant in relation to other types of pension of the same group. It was agreed at the hearing, that the only benefits to which Ms Weekes was entitled were those arising out of her status as a parent. She is not, for example, in receipt of disability support pension or unemployment benefits. I consider it unreasonable to expect a Centrelink customer to have to make multiple phone calls in order to convey the same information as it might affect pensions of the same group.
· According to a Centrelink file note (T7, p.21) another review was scheduled for 28 May 2002, but this apparently did not occur. Had this taken place a debt of such magnitude may not have accrued. If more frequent formal enquiries had been made of Ms Weekes as to Mr Bentley’s income then a debt of such magnitude may not have accrued. If enquiries had been made of Mr Bentley’s employer earlier than 15 months after the last formal enquiry then a debt of such magnitude may not have accrued.
· Ms Weekes and Mr Bentley have been so distressed by their experience with Centrelink that they have cut their ties with Centrelink altogether. The advocate for Centrelink conceded that there are likely to be some entitlements which are not being paid to the family because they have not been claimed.
44. I find the circumstances of this matter, when taken together, to be special in that they are "unusual, uncommon or exceptional" and "have a particular quality of unusualness that permits them to be described as special": Re Beadle and Director General of Social Security (supra).
45. The breadth of the discretion in relation to “special circumstances” was commented on by the Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31 at 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.”
46. While it may be that no single one of the circumstances described above is sufficiently exceptional or uncommon to be described as special, the combination of those circumstances in one unfortunate relationship with Centrelink is indeed unusual. For these reasons I find that Ms Weekes’ circumstances are special within the meaning of section 1237AAD of the Act.
DECISION
47. The decision under review is set aside and the debt of parenting payment partnered of $3,2465.45, for the period 20 May 2002 to 28 August 2003 is waived.
I certify that the preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member
Signed: .....................................................................................
AssociateDate of Decision 22 July 2004
Advocate for the Respondent Mr L Carter
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