Winterich and Secretary, Department of Family and Community Services

[2004] AATA 572

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 572

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          N2003/1215

GENERAL ADMINISTRATIVE DIVISION		)
Re		Robert Winterich

Applicant

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal Rear Admiral A R Horton AO, Member

Date4 June 2004

PlaceSydney

Decision The decision under review is affirmed.

[Sgd] Rear Admiral A R Horton AO, Member

CATCHWORDS

SOCIAL SECURITY – raising and recovery of debt – carer payment – relevant periods of payment at higher rate than entitled – applicant did not advise Centrelink of incorrect total annual income being applied from 29 June 2000 to 28 August 2002 and in the fortnight ending 22 September 2002 – error not solely attributable to administrative error by respondent – consideration as to special circumstances – criteria for special circumstances not met – decision affirmed

Social Security Act 1991 – ss1223(1), 1236(1), 1236(1A), 1237A, 1237AAD

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

Director General of Social Services v Hales (1983) 47 ALR 281

Social Security Appeals Tribunal – decision re Mrs Tangisi Winterich

REASONS FOR DECISION

4 June 2004 Rear Admiral A R Horton AO, Member   

1.        This is an application to review a decision of the Social Security Appeals Tribunal (“SSAT”) on 24 June 2003 that set aside a decision of an Authorised Review Officer (“ARO”) on 11 April 2003. The SSAT found that a debt is owing to the Commonwealth by Mr Robert Winterich as a consequence of overpayment of Carer Payment for the period 29 June 2000 to 28 August 2002, and for the fortnight ending 22 September 2002.

2. The debt was originally calculated at $5141.42 by the Secretary, Department of Family and Community Services (“the Respondent”). The SSAT waived the debt for the periods 4 August 1999 to 28 June 2000 and 29 August 2002 to 2 November 2002 (with the exception of the fortnight ending 22 September 2002) finding these debts resulted solely from Centrelink error under the provisions of s1237A(1) of the Social Security Act 1991 (“the Act”). As a result of this finding, the debt amount was reduced to $4200.47 .

3. At the hearing on 11 May 2004, Mr Winterich was self represented. He was accompanied by his wife, Mrs Tangisi Winterich. Ms. Andrea Garcia, an advocate from the Centrelink Service Recovery Team appeared for the Respondent. The Tribunal took into evidence the documents provided by the Respondent pursuant to s37 of the Administrative Appeals Tribunal Act 1975, and the Respondent’s Statement of Facts and Contentions, with attachments which particularly related to a data matching program with the Australian Tax Office under the relevant legislation (Exhibit R1).

4. At the outset, Mr Winterich accepted that the relevant periods before the Tribunal were those referred to above, that is from 29 June 2000 to 29 August 2002, and for the fortnight ending 22 September 2002. His position was that he should not be required to repay any overpayment, given that such overpayment had been received in good faith, had resulted from the inadequacies of the Respondent, and that the component of such debt in respect of the Disability Support Pension (“DSP”) received by his wife had been waived by the SSAT under the special circumstance provisions at s1237AAD of the Act.

EVIDENCE AND FACTS 

5.        Mr Winterich, born in 1943, was granted Carer Payment in 1993, he caring for his wife who has motor neurone disease.  At that time he lived at Collaroy Plateau.  In 1989, he left full-time employment to care for his son who had been seriously injured in a motor vehicle accident.  He was unemployed until February 1999, when he commenced casual employment with Tempo Services Limited, as a cleaner at a local primary school.  His reason for seeking such employment was to enable him to finance the purchase of a new vehicle, his present vehicle being costly to repair and keep running.    His hours of work were somewhat erratic depending on the school terms and the requirements of his employer.

6.        In July 1999, which seemingly coincided with him becoming a permanent casual employee, he informed Centrelink of his employment with Tempo.  Such employment was for four hours a day, five days a week, with the exception of school holidays when work was not available.  He was not eligible for holiday or sick pay.  Mr Winterich’s understanding was that he could not work more than 20 hours per week and retain the full carer payment, and he believed he was keeping Centrelink informed of significant changes to his work pattern, rather than in detail as his weekly commitments varied.  Following receipt of this information, Centrelink ascertained from Tempo that Mr Winterich had commenced employment in February that year.

7.        In December 1999, Mr Winterich advised Centrelink that his employment would cease, because of the school holidays.  On 21 January 2000 he advised Centrelink that his employment would recommence on 24 January 2000, and a file note records his gross fortnightly income as $480.  Centrelink accordingly advised Mr Winterich of his carer payment obligations, the carer payment rate, and the combined annual income upon which it was based ($12,505).  Similar advice was repeated in April and May 2000.

8.        On 28 June 2000, Centrelink wrote to Mr Winterich advising him of an increase in carer payment (to $325.70) “based on a combined annual income of $29.74”.   At this time, Mr Winterich was still employed, and there is no evidence before the Tribunal to indicate that he informed Centrelink otherwise, or that the combined annual income, for the purposes of calculating carer payment, should be reduced from that previously used by Centrelink.  So too, there is no evidence before the Tribunal to indicate why Centrelink made such a significant change from the order of the combined annual income being calculated up to that time.

9.        The letter of 28 June 2000 is of a standard format, requiring the recipient to inform Centrelink in the event of any of a number of changes, such as address, carer arrangements, assets and in particular, income changes.  Mr Winterich indicated to the Tribunal that he was familiar with the “standard” letter, but did not recall receiving the letter of 28 June 2000.  Nonetheless, he accepted that the letter would probably have been delivered.   The Respondent’s Statement of Facts and Contentions states that Mr Winterich was subsequently paid Carer Payment until 27 August 2002 at a rate of $325.70 based on a combined annual income of $29.74.  There is no record before the Tribunal to confirm or otherwise that “routine” format letters, which one assumes would have repeated the details of the annual income base used to calculate the rate of carer payment, were forwarded to Mr Winterich in the 26 month period following the advice of 28 June 2000. 

10.      On 16 July 2002, Centrelink advised Mr Winterich that a data matching check with the Australian Tax Office indicated a significant mismatch in respect of the 2000/1 financial year (Exhibit R1 Attachment 2).  Centrelink sought advice as to the employment conditions and salary/wages of Mr Winterich from Tempo Services on 3 September 2002, and resulting from this information, a debt was raised for recovery on the basis that Mr Winterich failed to advise Centrelink of his earnings, this being later affirmed by an ARO on 11 April 2003 (T32 p 71). The latter records that carer payments had been calculated without any income from Tempo Services being taken into account.

11.      In August 2002, Mr Winterich suffered a heart attack, which led, some short time later, to surgery and he was obliged to stop work.  In evidence to the Tribunal he stated that he sought to return to work, unsuccessfully as it transpired, in late September 2002, and the overpayment of carer payment occurred in that fortnight ending 22 September 2002.   More recently he and his wife sold their property, downsizing to a smaller home, and utilising part of the profit to pay bills and take a holiday.

12.      In evidence, Mr Winterich accepted that overpayment occurred during the above periods.  He maintained that he was not aware of the contents of the letter of 28 June 2000 nor the low annual income on which his carer payment had been calculated.  He received his carer payments in good faith.  He was unable to understand why the recovery of the debt could not be waived under the criteria of “special circumstances” as had been the case for his wife in a decision by the SSAT, on 24 June 2003, in respect of  an overpayment of her DSP resulting from the incorrect joint annual income used in calculating that pension.   

13.      The Respondent submitted that there are no grounds to waive the recovery of the debt from overpayment for the relevant periods, as such overpayment did not result solely from an error by Centrelink.  Mr Winterich had failed to respond to the letter of 28 June 2000, which required him, in this instance, to advise of an error in the total annual income being used to calculate his carer payment.   In fact, he did not provide advice to Centrelink until 28 August 2002, this following requests from Centrelink on 16 July 2002 (Exhibit R1 Attachment 2) and 22 August 2002 (Exhibit R1 Attachment 3) for details of his income.       

14. The Respondent further submitted that special circumstances, financial or otherwise, as might be considered under s1237AAD of the Act, did not exist.

LEGISLATION AND DECISION

15.      The two relevant periods are between 28 June 2000, when Mr Winterich was advised by letter that carer payment was being calculated on an annual income of $29.74, and 28 August 2002, when the correct annual income was applied and the fortnight ending 22 September 2002.   Mr Winterich accepts that these are the relevant periods under consideration.  

16. S1223(1) of the Act states that subject to certain conditions, if a social security payment is made and the person who obtained the benefit was not entitled for any reason to receive that benefit, then the amount of payment is a debt due to the Commonwealth. The conditions under which the Secretary might write off a debt are contained in s1236 of the Act, which relevantly states:

“1236(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.

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

…

(d)it is not cost effective for the Commonwealth to take action to recover the debt.”

17.      These conditions do not apply to Mr Winterich.  The debt is not irrecoverable at law, and Mr Winterich has demonstrated a capacity to repay, monies being withheld by Centrelink from his current payments, such that the outstanding balance was $1710.67 on 5 May 2004 (T1 Attachment 3).  (This balance relates to a calculated debt of $5096.52 and thus the outstanding balance, when considered against the revised debt of $4200.47 resulting from the decision by the SSAT, will be less).

18.      S1237(1) provides the authority for the Secretary to waive the Commonwealth’s right to recover the whole or part of a debt in a number of circumstances. In this matter, s1237A in respect of debt arising from error, and s1237AAD in respect of a waiver in special circumstances, must be considered. The former states relevantly:

“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. 

1237A(1A)       Subsection 1 only applies if:

(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

…”

19.      The overpayment commencing 29 June 2000 arose because Centrelink calculated Mr Winterich’s carer payment using an incorrect annual income amount.   There is no evidence that Mr Winterich contributed to that error, which arose within Centrelink for reasons that have not been ascertained. That error, solely caused by Centrelink, was perpetuated for the following 26 months until data matching with the Australian Tax Office revealed the true income.    However, the letter to Mr Winterich, the receipt of which is not recalled, but is accepted as having happened, placed the onus clearly on Mr Winterich to notify Centrelink that the annual income was incorrect.  Given that there was also a noticeable increase in carer payment which was not questioned by Mr Winterich, the Tribunal cannot accept that the payment was received in “good faith”. Mr Winterich stated in evidence that on one occasion he questioned the overpayment and “nothing came of it”.   It follows that he did not pursue this issue, and there is no documentary evidence before the Tribunal in support of this contention.

20 In the circumstances, the debt cannot be considered as being attributable solely due to an administrative error by the Commonwealth, and hence there is no provision for waiver under s1237A of the Act. The same conclusion must be drawn in respect of the overpayment in the fortnight ending 22 September 2002, there being no evidence that such overpayment arose from any administrative error by Centrelink.

21. S1237AAD provides an authority wherein a waiver may be considered in special circumstances. It states relevantly:

“1237AADThe 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.”

22. The debt did not arise as a result of Mr Winterich knowingly making a false statement. The term “special circumstances” is not defined in the Act, but the view of Toohey J in the Federal Court decision in Re Beadle and Director General of Social Security (1984) 6 ALD 1 has been widely followed. His Honour 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. That 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”

23.      The Respondent submitted that the circumstances leading to this debt were not “special”.  The SSAT reached the same conclusion, noting that whilst there had been some administrative errors, and Mr Winterich and his family have health problems, the circumstances were not of a sufficient nature to be considered exceptional or unusual, to the extent that recovery of this debt would be unjust or unfair. 

24.      The evidence before the Tribunal is that from 29 June 2000, whilst the error in defining the annual income arose within Centrelink, the letter of 28 June 2000 required Mr Winterich to report any differences from the actual situation.  This he did not do.  Further, whilst his evidence is that on one occasion he questioned carer payment which was in excess of that he had previously received; this issue was seemingly not pursued.   For the fortnight period ending 22 September 2002, details of the payment received by Mr Winterich were provided to the Respondent by Tempo Services, rather than Mr Winterich, and hence the debt for overpayment for this period occurred.

25.      Mr Winterich has, to date, paid off a significant proportion of the debt, without evidence of real financial hardship.  The Tribunal also takes account of Director-General of Social Services v Hales (1983) 47 ALR 281, in which Shephard J stated that notwithstanding hardship, the recovery of payments to which a person was not lawfully entitled must be of paramount consideration.

26.      The Tribunal takes due account of the health issues involved in this case.   However, eligibility for appropriate social security payments to allow the family to cope are of long standing, and the Tribunal finds that health and social issues, difficult thought they may be, do not meet the unusual and exceptional requirement as defined in Re Beadle (supra).

27. As noted, Mr Winterich submitted that the circumstances relating to a waiver of overpayment of DSP to his wife by the SSAT, equally applied in his case. The Tribunal considered it appropriate to refer to that decision. The SSAT in that matter considered special circumstances vide s1237AAD of the Act existed, in that the advice by Centrelink of 28 June 2000 was directed to her husband alone, he being the person employed, and it was incumbent on him to ensure the accuracy of detail being provided to Centrelink. That is, Mrs Winterich unwittingly entered an overpayment situation in respect of her social security payment. In the circumstances, the Tribunal does not accept that Mr Winterich can benefit from the same considerations, he being the principal responsible for ensuring that the correct details of his employment, which formed the basis of the annual income, were provided to Centrelink.

28. The Tribunal finds that in the absence of special circumstances, the recovery of the debts incurred in the periods 29 June 2000 to 27 August 2002, and in the fortnight ending 22 September 2002, cannot be waived under the provisions of s1237AAD of the Act.

29.      The decision under review, that being of the SSAT of 24 June 2003 in respect of the recovery of overpayments for the defined periods, is affirmed.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Rear Admiral A R Horton AO, Member

Signed:         A. Krilis         
  Associate

Date/s of Hearing  11 May 2004
Date of Decision  4 June 2004
Representative for the Applicant    Self 
Advocate for the Respondent        Ms Andrea Garcia