Winderbaum and Secretary, Department of Families, Community Services and Indigenous Affairs

[2007] AATA 1197

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1197

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1181

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JUSTIN WINDERBAUM

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member, Mrs Josephine Kelly

Date30 March 2007

PlaceSydney

Decision The decision under review is affirmed.   

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

Senior Member, Mrs Josephine Kelly

CATCHWORDS

SOCIAL SECURITY – debt raised in relation to family tax benefit – whether debt arose solely due to administrative error by Centrelink – whether Applicant would suffer severe financial hardship if debt not waived – whether special circumstances exist – held debt is attributable solely to an administrative error - held Applicant would not suffer severe financial hardship – special circumstances not found – reviewable decision affirmed. 

LEGISLATION

Sections 95, 97, 101 A New Tax System (Family Assistance)(Administration) Act 1999

REASONS FOR DECISION

Senior Member, Mrs Josephine Kelly     

Introduction

1.      Mr Justin Winderbaum seeks the review of a decision made by the Social Security Appeals Tribunal on 24 May 2006 which affirmed the decision of the Centrelink Authorised Review Officer to raise and seek recovery of a debt of Family Tax Benefit (‘FTB’) of $1,793.57 for the period 1 July to 13 December 2004 (the debt period).  For the reasons that follow, I affirm the reviewable decision.

The issues

2.      The issues in this case are:

i.   is the debt attributable solely to an administrative error made by the Commonwealth (s 97(1) A New Tax System (Family Assistance) (Administration) Act 1999 (the Act)), and

ii.    if so, would Mr Winderbaum suffer severe financial hardship if it were not waived?  (s 97(2)(b) of the Act)

iii.   Alternatively, are there special circumstances (other than financial hardship alone) that make it desirable to waive the right to recover the debt and is it more appropriate to waive than to write off the debt (s 101 of the Act).

Background

3.      Mr Winderbaum lodged a claim for FTB on 25 January 2005 (T5) at the Centrelink office at Chatswood.  Before that date, he had left and returned to Australia on a number of occasions.  His daughter was born on 22 March 2004.   He advised Centrelink that he was departing Australia on 19 April 2005.  He and his family currently live in Canada.  The hearing of these proceedings was conducted over the telephone.  Mr Winderbaum’s wife, Ms Sandra Dayan, represented him.

4.      Mr Winderbaum was paid in arrears for two separate periods on 11 and 15 February 2005.  On 10 May 2005 a decision was made to raise and seek recovery of two debts.  I am only concerned with one of them as set out above.  The debt arose because Mr Winderbaum was overseas during the debt period except for the period 13 August to 7 September 2004, and he was therefore entitled only to the base rate of FTB.  The apparent cause of the over-payment was that Question 6 in the claim form, which requested details of absences from Australia in the last 3 years, was not filled in.  It is not in disputed that copies of Mr Winderbaum’s and his wife’s passports were made at the time the form was filled in, in January 2005, and were retained on the file.  

5.      Centrelink wrote to Mr Winderbaum on 1 August 2005 advising that his FTB had been cancelled because he had not provided requested information about his income (T2 f4).

The case for Mr Winderbaum

6.      Mr Winderbaum’s case is that Centrelink made an administrative error when it paid him the arrears at the higher rate for the period he was absent from Australia and the debt should be waived.  Ms Dayan said during the hearing that the Centrelink officer who helped them fill out the form told them that they did not have to answer question 6 because they had just arrived in Australia and would be paid from the date they applied. She also said that he told her that if anything was missing,Centrelink would contact them and they would not be paid until that information had been received. 

7.      When she received the lump sum arrears payments into her bankbook she called Centrelink.  She was told she was entitled to it because her daughter is an Australian born overseas.  She was also told she may be able to claim the maternity payment. 

8.      Mr Winderbaum is working part-time, earning $500 a week before tax.  They also receive a payment of $200 a month from the Canadian government and $700 every three months from the Quebec government. Ms Dayan does not work.  She has two young children to care for.  They pay rent of $1,000 a month.  Ms Dayan said it was very tough trying to live on their income.

9.      She said that they had had a rough year.  Their daughter fell down 10 flights of stairs and cracked her skull.  Mr Winderbaum found her unconscious on the floor and rushed her to hospital where she remained for three days.  They had had to watch her closely because she could not have her head shaken.  She is not completely over it. 

10.     Mr Winderbaum suffers from back and knee pain and has to have orthotics that cost $300 or $400.  It is very hard for Mr Winderbaum living on the other side of the world.  Ms Dayan said her health is fine.  Her father was in hospital at the time of the hearing.  She is conscious of having to pay off the debt if they return to Australia.  It would be a big challenge to return with two small children and face such a debt.

11.     Ms Dayan explained that having this debt has caused her a lot of stress.  She said that she had never owed money like this and she spent all her life thinking about it.  She went to see a psychologist who told her to get it over and done with. 

12.     Ms Dejean, who appeared for the Secretary, made clear to Ms Dayan that the debt has been written off while Mr Winderbaum is overseas, that is, repayment is not being sought at the moment (s 95 of the Act).  However, should Mr Winderbaum return to Australia, repayment may be pursued.  If he were receiving a social security benefit, an arrangement might be made to deduct some part of any benefit to repay the debt. If he was working he also may be required to repay the debt.

Consideration

13.     Ms Dayan sent a letter to Centrelink following the receipt of a letter from a collection agency about the debt.  In that letter she stated that when she received the money into the bank account in February 2005 they called Centrelink because they were not expecting it and were told they were entitled to it.  This is consistent with her oral evidence and was not disputed.

14.     The case for the Secretary was that there was no administrative error because the Winderbaums did not fill in question 6.  While Centrelink may not have worked out the correct position from the copied passports, the Winderbaums contributed to that error.

15.     I accept Ms Dayan’s evidence that they were told that they did not need to fill in Question 6 because they would receive payments from the date they applied.  I find that the debt is attributable solely to an administrative error made by the Commonwealth.

16.     However, it is also necessary that Mr Winderbaum satisfy s 97(2)(b) of the Act, that is, that he would suffer severe financial hardship if the debt were not waived.  I accept the evidence of Mr Winderbaum and Ms Dayan about their financial circumstances, however, I do not consider that they would suffer severe financial hardship if the debt were not waived.  In coming to that conclusion I take into account that proof of destitution is not necessary to establish severe financial hardship (see Preston v Secretary, Department of Family and Community Services [2004] FCA 300).

17.     The next question is should the right to recover the debt be waived pursuant to s 101 of the Act.  I am satisfied that the debt did not result from Mr Winderbaum  knowingly making a false statement or representation or failing or omitting to comply with a provision of the family assistance law (s 101(a)). The remaining questions are:

i.   Are there special circumstances (other than financial hardship alone) that make it desirable to waive the right to recover the debt and, if so,

ii.     is it more appropriate to waive than to write off the debt (s 101)? 

18.     In my opinion, Mr Winderbaum’s  financial circumstances and the other circumstances affecting his life as set out above are not special circumstances such that the debt should be waived.  In coming to that conclusion I have taken into account the observations of Hill J in Dranichnikov v Centrelink (2003) 85 ALD 134 at paragraphs 65 and 66.

19.     I therefore do not need to address the second question.

Decision

20.     For the above reasons  I affirm the decision under review.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member,
Mrs Josephine Kelly

Signed: Ms Preethi Nimmagadda

Associate

Date of Hearing  19 March 2007  
Date of Published Decision      30 March 2007
Representative for Applicant     Ms Dayan (wife of Applicant)
Solicitor for Respondent           Centrelink Legal Services