Williams and Secretary, Department of Employment and Workplace Relations

[2005] AATA 1133

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1133

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2005/44

GENERAL ADMINISTRATIVE DIVISION		)
Re		GREGORY WILLIAMS

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date16 November 2005

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

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

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Newstart Allowance – Departmental error – lack of good faith – debt due to the Commonwealth – special circumstances – write-off or waiver – decision affirmed

Social Security Act 1991 ss 1223, 1236, 1237A, 1237AAD

Re Secretary, Department of Family and Community Services and Trio (2002) 70 ALD 206
Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

16 November 2005 Senior Member L Hastwell     

1.      Mr Gregory Williams (the applicant) was a recipient of Newstart Allowance from August 2000 until October 2004.  The respondent (the Department) has decided to raise and recover an overpayment of Newstart Allowance to the applicant which overpayment arose between 18 December 2001 and 22 March 2004.

2.       The Department asserts that during those dates (the debt recovery period) Centrelink failed to take into account payments of superannuation to the applicant, hence he was significantly overpaid Newstart Allowance.

3.      The delegate’s original decision raising the overpayment was made on 4 June 2004.  That decision was affirmed by an Authorised Review Officer on 20 July 2004.  The Social Security Appeals Tribunal (the SSAT) affirmed the decision on 30 September 2004, but wrote off recovery of the debt for a period of 3 months.  The applicant seeks a review of the SSAT decision.

background

4.      The applicant left the Australian Army in 2000 and became a recipient of a Comsuper pension.  He declared that entitlement to the Department when he made application for Newstart Allowance, and until December 2001 he was paid the correct rate. 

5.      Due to a Departmental error in December 2001, the superannuation payments were zeroed on the applicant’s Centrelink screen.  His Newstart Allowance substantially increased, and he continued to receive the higher rate of Newstart Allowance until the Department detected the error and corrected their records.  A substantial overpayment arose from this original error.

6.      It is agreed between the parties that the overpayment occurred between 18 December 2001 and 22 March 2004, and has been correctly calculated as being $21, 009.44. 

7.      The applicant argues that he should not be required to repay that amount because of the special circumstances of his case. 

legislation

8.      The relevant legislation is contained in the Social Security Act 1991 (the Act). Section 1223(1) of the Act provides that the overpayment represents a debt to the Commonwealth.

9. Section 1237A(1) of the Act provides for the waiver of a debt in certain circumstances as follows:

“(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.

Note:   Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).”

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

“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.”

11. Section 1236 of the Act provides for writing off recovery of a debt for a period of time as follows:

“(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.

…

(1C)     For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a)      deductions from the debtor’s social security payment; or

(b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c)      setting off under section 84A of that Act;

the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.”

issues

12.     The issues for the Tribunal to determine are:

·did the overpayment arise solely as a result of an administrative error; and if so

·        did the applicant receive the payments in good faith; or

·whether there are special circumstances in this case that would justify a waiver of some or all of the debt; or

·        whether there are grounds for write off of the debt for a period.

the hearing

13.     The applicant represented himself and gave evidence on his behalf.  Mr Goldsworthy represented the Department.  The T documents were received into evidence.  Other exhibits will be referred to where relevant.

14.     The applicant gave his evidence in a straight forward manner.  He left the Army in the year 2000 and for a few months he did not have access to his Comsuper pension that he became eligible for when he left the Army.  During those months he was solely dependant on Newstart Allowance.  When his Comsuper pension became payable in November 2000, he immediately notified the Department, and the appropriate adjustment was made to his benefit to take account of this additional income.

15.     In December 2001 because of the financial difficulties the applicant was experiencing he obtained an advance from the Department.  He commenced receiving a full Newstart Allowance shortly thereafter.  There was no explanation given by the Department for this sudden increase in his benefit.  He admits that he realised a mistake had been made, but he described his life as being a mess at the time and he did not advise the Department that they had made a mistake.  He continued to receive a full Newstart allowance and his full Comsuper pension for over two years before the Department picked up the error.

findings of fact

16.     The applicant was overpaid Newstart Allowance in the sum of $21,009.44 between 18 December 2001 and 22 March 2004.

17.     The debt arose as a result of an administrative error when a Departmental officer zeroed the applicant’s Comsuper pension on his screen, and failed to reinstate that figure after an advance had been made to the applicant.

18.      The applicant experienced an immediate significant increase in his Newstart Allowance.  He knew, or strongly suspected, this was incorrect, and he failed to bring this error to the Department’s attention.

19.     The applicant did not record his Comsuper pension on his fortnightly income form.  He had been assured by a Departmental officer when he originally notified of his Comsuper pension in 2000 that he did not need to record it as the Department had that information.  He continued to fail to record it even when he strongly suspected the reason for his sudden increase in pension was the failure of the Department to continue to take his income correctly into account.

20.     There is no objective evidence in Departmental records that the applicant made contact with the Department during the debt recovery period to query the rate of payment.  The CRAM records were received as Exhibit R3.

21.     The applicant has had some personal difficulties since leaving the Army.  His marriage has broken down, and he is involved in Family Court proceedings to gain contact with his children.  Because of his right to a Comsuper pension, he fared badly in property settlement proceedings arising out of his marriage, in that he was left with little capital, his pension and with no ability to re-house himself in an escalating property market.

22.     The applicant has had significant child support obligations to pay.  He fell into arrears and is now paying off those arrears.  He was involved in a further relationship, but his partner died.  He has had health difficulties and his mother has been ill.  It has been a very difficult period of re-adjustment in his life.

23.     The applicant is now a permanent Commonwealth public servant.  He is an APS2 in the Australian Taxation Office (ATO).  His annual salary is $38,800.00, and his Comsuper pension is $16,500.00 per annum.  He is paying off his child support debt by fortnightly payments of $80.00.  In addition, he pays his assessed child support obligation.  He is now in stable rental accommodation and in a new relationship.

consideration and application of the law

24. The applicant could have the debt waived pursuant to s 1237A of the Act if he received the payments in good faith. The applicant admitted that he had a strong suspicion that he should not be receiving the higher Newstart Allowance. He elected to continue to receive those payments rather than bring the error to the Department’s attention. He continued to lodge forms that did not specifically refer to his superannuation payments.

25.     In that regard the comments of Deputy President Forgie in the case of ReSecretary, Department of Family and Community Services and Trio (2002) 70 ALD 206 must be noted:

“It seems to me that the cases of Prince, Haggerty and Jazazievska are consistent with each other and the following principles may be drawn from them:

·Good faith must be determined by reference to the state of mind of the recipient of the payment.

·Where the recipient knows that he or she is not entitled to the payment, he or she cannot have received it in good faith.

·Where the recipient suspects that he or she is not entitled to the payment and has an objective basis for that suspicion, he or she cannot have received it in good faith.”

26. The Tribunal is quite satisfied that in the circumstances, s 1237A of the Act is not applicable as the applicant has not made out the requirement of good faith.

27. Section 1237AAD of the Act allows waiver in special circumstances. The Department has not submitted that s 1237AAD(a)(ii) applies in that the debt arose as a result of the applicant failing or omitting to comply with the provisions of the Act. It is arguable whether his failure to accurately record his superannuation receipts on his fortnightly forms could come within that provision, however the Department does not put that point. They submit that there are no special circumstances in this case.

28. There is established authority with respect to what amounts to special circumstances under s 1237AAD of the Act. Each case rests on its own particular set of facts.

29.     The concept of special circumstances has been considered on many occasions by the Tribunal, and the Tribunal looked to the decision in Re Beadle and the Director General of Social Security (1984) 6 ALD 1, which is considered a leading authority. In that case 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.

…”

30.      In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in 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. …"

31. Section 1237AAD of the Act itself requires that the special circumstances must be other than financial hardship alone.

32.     There is no doubt that the applicant has had a difficult time since leaving the Army and his period of re-adjustment to civilian life has been made more difficult by the breakdown of his marriage and his involvement in Family Court proceedings.  He has experienced a series of personal setbacks during the period 2000 to 2004.  Nevertheless, these events did not justify him knowingly or recklessly receiving extra benefits during that time and then retaining them.  Nor do these events in themselves amount to special circumstances.  Relationship breakdowns and family crises are very much part of modern life, and something that many people experience.  The applicant has successfully moved on in his life.

33.     The Tribunal is not satisfied that the circumstances in this case are so unusual, uncommon or exceptional that the applicant’s case qualifies as giving rise to special circumstances within the definition in Beadle. 

34.     The applicant has now successfully found stable employment and has a better than average income with the combination of his ATO salary and his Comsuper pension.  He has child support obligations that are assessed on his salary.  That is an obligation that is neither uncommon nor unusual.  He has negotiated payment of his child support arrears at an appropriate rate, and one would assume he can also negotiate an appropriate repayment rate with the Department with respect to the overpayment.

35. The Tribunal does not find that s 1237AAD (b) of the Act is applicable in this case. The only other basis on which the Tribunal could consider writing off the debt is pursuant to s 1236(1A) of the Act. That provision has no applicability here as he has the capacity to repay the debt over time.

36.     The Tribunal is satisfied that the debt has been correctly raised in the circumstances and remains a recoverable debt due to the Commonwealth.  In these circumstances the Tribunal affirms the decision under review.  There is no need for any further write-off of recovery of the debt for a period, and in any event the period of write-off of recovery as set by the SSAT has now expired.

I certify that the 36 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  30 September 2005
Date of Decision  16 November 2005
Counsel for the Applicant         In person
Solicitor for the Applicant          -
Counsel for the Respondent     Mr C Goldsworthy
Solicitor for the Respondent     Centrelink Legal Services Branch