Wright and Department of Family and Community Services - [2001] AATA 21

DECISION AND REASONS FOR DECISION [2001] AATA 21

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2000/124

GENERAL ADMINISTRATIVE   DIVISION     )
           Re      JOSIE WRIGHT
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Senior Member J.A. Kiosoglous MBE

Date18 January 2001
PlaceAdelaide

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal: (a) affirms the decision under review in respect of the period 8 October 1998 to 1 June 1999; and (b) remits the remainder of the debt to the respondent for recalculation of the amount after having obtained the correct income details relating to Mr and Mrs Wright for the remaining period.
  (Signed)
  J.A. KIOSOGLOUS
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – benefits, pensions & allowances – Parenting Payment – income higher than amount used as basis for payment – failure to notify considered – level of contact sufficient to constitute notice – "sole" administrative error – good faith – special circumstances
Social Security Act 1991 ss. 1223, 1237AAD
Acts Interpretation Act 1901 s. 29
Re Secretary, Department of Education, Employment, Training and Youth Affairs and Prince (1997) 152 ALR 127
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic and Director, Department of Social Security (1981) 3 ALN N61

REASONS FOR DECISION

18 January 2001 Senior Member J.A. Kiosoglous MBE

This is an application by Mrs Josie Wright (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 15 March 2000 (T2) which affirmed a decision of an Authorised Review Officer (ARO) of the respondent dated 23 November 1999 (T15) affirming the decision of a delegate of the respondent dated 1 September 1999 (T9) to raise and recover a debt of Parenting Payment for the period 8 October 1998 to 26 August 1999 in the amount of $4,825.60.
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T17), together with four exhibits lodged by the respondent (Exhibits R1-R4). In addition, the Tribunal heard evidence from the applicant, who also called her husband, Mr Lyndon Wright, as a witness. The applicant appeared in person with her husband, who acted as her representative. Mr James Underwood, a departmental advocate, represented the respondent.
history of the application
The applicant was in receipt of Parenting Payment throughout 1998 and up until 26 August 1999. She had one dependent child, Melissa, under 16 years of age during the relevant period. Her other child, Sam, is currently 18 years of age, and living at home. The applicant worked for Colton Court Nursing Home throughout 1998 and 1999 on a casual basis, with varying hours and rates of pay, depending upon which particular days of the week she worked (T8).
Mr Lyndon Wright was in receipt of Newstart Allowance at various times up until May 1998, at which time his earnings from casual employment increased such that he was no longer eligible. He continued to lodge fortnightly Newstart Allowance forms in which he declared the work he had obtained up until August 1998. Mr Wright commenced casual employment with McNamara Fencing Contractors on 14 September 1998, and worked a variety of hours per week up until 28 May 1999.
The respondent sent a letter to the applicant dated 22 September 1998 which stated (inter alia) (T3/14):
"…
Your entitlement has been worked out using your income of $2.29 per fortnight and your partner's income of $2.29 per fortnight.
…
You must tell is if any of these things happen or are likely to happen:
…
you or your partner make an investment, or withdraw, transfer or sell part, or all, of an investment or your investment matures (investments include … shares … )
…
your total personal income goes over $60.00 a fortnight;
your partner's total personal income goes over $500.00 a fortnight; or
your and your partner's combined assets goes over $178,500 (if you or your partner is a homeowner) or $268,500 (if neither you nor your partner is a home owner).
you or your partner receive a lump sum amount of money or one-off payment from any source.
…"
A letter in similar terms (and containing identical notification requirements) was sent to the applicant on 17 November 1998 (Exhibit R3).
The applicant returned a Parenting Payment review form on 10 May 1999 (T4) in which she declared a gross weekly wage of $159.50 for herself and "$371.25 (casual)" for her husband. The respective declared figures for total amount of gross wages received for the past 13 weeks were $2073.50 and $4084.25. She ticked the "no" box for both herself and her husband in response to the question "Has your gross weekly wage changed since you last told us about your income?".
At question 4 "Investments" of the review form the applicant detailed a number of share holdings, also noting that the applicant and her husband had borrowed $36,000 to purchase the shares, and that the indicated annual share income "is only an estimate as we have only had most shares for 4 mths".
The applicant was sent a letter dated 10 May 1999 (Exhibit R3) which stated (inter alia):
"Your entitlement has been worked out using your income of $334.84 per fortnight and your partner's income of $644.18 per fortnight.
…
You must tell us if any of these things happen or are likely to happen:
…
your total personal income goes over $334.84 a fortnight;
your partner's total personal income goes over $644.18 a fortnight; or
…"

Following receipt of the review form and employer verification reports for both the applicant and her husband (T7 & T8), a delegate of the respondent raised a debt for the period from 8 October 1998 onwards, on the basis that the income figures disclosed in the review form were higher than those figures which formed the basis of her entitlement. The delegate continued the debt beyond 10 May 1999 on the basis that the income figures disclosed in the employer verification reports for the period after 10 May 1999 were higher than the figures disclosed in the review form (T9).
The decision to raise and recover a debt was affirmed by an ARO on 23 November 1999 (T15) and further affirmed by the SSAT on 15 March 2000 (T2).
mr lyndon wright's evidence
Mr Wright gave evidence and made submissions on behalf of the applicant. He told the Tribunal that he stopped receiving Newstart Allowance in May 1998, and that he continued to submit fortnightly forms to the respondent because he wanted to make sure he was doing all that was required of him. He stated that by September 1998 he had been offered permanent part-time work on a casual basis and that he had made the respondent aware of this fact. He referred to a number of contacts he had with the Department, including two phone calls in late September 1998 regarding a $100 employment entry payment, and also two phone calls in early January 1999 which he said most likely either concerned whether he would be eligible for Sickness Allowance after an operation that was to occur in early February 1999 or about his son Sam's Youth Allowance. Mr Wright referred to diaries for 1998 and 1999 as proof of these contacts. The Tribunal did not receive the diaries as evidence. In fact, Mr Underwood did not challenge this and accepted that such contact did occur. Accordingly, the Tribunal accepts this to be the case. In relation to the calls in September 1998 Mr Wright told the Tribunal that he would have said to the Department that he and his wife were "both working", or that, at the very least, he never said that his wife was not working. He submitted that in the circumstances of the contacts he made with the Department, the operator on the other end of the line should have picked up the discrepancy between the figures on the operator's screen and the information that he and his wife were both working that he was providing over the phone.
Mr Wright told the Tribunal that in August 1998 he completed a Youth Allowance form for his son, Sam, and considered that the Department should have been aware, as a result, of his and his wife's earnings. He referred to a diary entry about an appointment on 31 August 1998 at Centrelink, and presumed that this related to Sam's Youth Allowance entitlement. In response to a question in cross-examination, he stated that he was not aware that information obtained in Youth Allowance forms could only be used for Youth Allowance purposes, and presumed that since the Department is always telling customers that they link records, that the Youth Allowance information would be used in respect of his and his wife's benefits.
Mr Wright told the Tribunal that Centrelink should have sent out the proper form (SC250) as at August 1998 after receipt of his Newstart forms, and that had such a form been sent, the Department could have recorded the proper income details.
In relation to the letters sent by the Department, he stated that he could not recall receiving those particular letters, as he has received an incredible number of letters from the Department. He told the Tribunal that he wouldn't say that he read every part of every Centrelink letter, but that he does read such letters through. He stated that the $2.29 income figure may simply not have 'clicked' with him upon reading it, since it is such a ludicrous amount, and considered that he may have thought it was a reference to bank interest. He considered that, in any event, he had already told the Department that he and his wife were working, and wouldn't know why he would need to inform it again. In relation to the letter of 10 May 1999 (Exhibit R3), he stated that he did not have any reason to think, at that stage, that the Department was not aware that he was currently working as a casual worker, earning a varying weekly income.
Mr Wright stated that in relation to the share purchase, he and his wife bought Telstra shares in the float in or about 1997, and obtained the remainder of the shares over a four month period in or about early 1999. He told the Tribunal that since he was not "on the dole" when he and his wife purchased the shares, he did not see the need to notify the Department, and considered that they must already have been aware of the purchase of Telstra shares. He gave evidence that the shares were funded after he and his wife had paid off their home loan and then extended that loan by $36,000 for the purposes of the share purchase. Mr Wright also settled a compensation claim in early 2000, and used the balance of the monies received to purchase shares, after paying off several debts. He estimated the current share value at approximately $145,000, and told the Tribunal that he considers that money to be for his and his wife's future ("like superannuation"), since he is not able to work in his trade as a result of the injury. The workers' compensation payment also represented a substantial amount for past lost earnings.
Mr Wright submitted to the Tribunal that the debt arose as a result of sole administrative error, in that the Department failed to send out the appropriate forms, and should have been aware of income details and continuing work from all the various contacts he and his wife had with the Department. He referred in particular to the contacts in September 1998, January 1999 and May 1999 and to the contacts in relation to Youth Allowance, all of which he submitted should have sent Centrelink's "bells ringing".
mrs josie wright's evidence
Mrs Wright told the Tribunal that her husband was responsible at all times for filling in Centrelink forms and providing information to the Department. She could not recall having any direct contact with Centrelink herself during 1998 or 1999. In relation to the letter of 22 September 1998 (T3) she stated that if she received it she would have skim read the letter and left it for her husband to deal with. She agreed that the $2.29 figure was strange, but could not recall receiving the letter in the first place. She further stated that she never questioned changes in her rate of payment because her husband kept Centrelink informed as to their employment, and she considered that Centrelink knew what they were doing.
She stated that she currently earns about $425 per fortnight and that both children are now in receipt of Youth Allowance. She told the Tribunal that the Youth Allowance of her younger child, Melissa, goes into the parent's joint account, to use for food and clothing for Melissa, whilst that of Sam, the elder child, is paid into his account. She gave evidence that she and her husband do not want to charge Sam board, and want to continue supporting him whilst he stays in school, considering that it is preferable that he stay at home to complete high school.
respondent's submissions
Mr Underwood submitted, on behalf of the respondent, that whilst the respondent concedes that there was an administrative error prior to the debt period, in that the respondent should have sent the proper income review form to the applicant following the declarations made by Mr Wright up until August 1998, the letter of 22 September 1998 (T3) constituted an intervening act. He also submitted that regardless of whether or not the applicant received that letter, receipt can be deemed pursuant to section 29 of the Acts Interpretation Act 1901.
Mr Underwood submitted that the letter of 22 September 1998 (T3) was a notice pursuant to the Social Security Act 1991 (the Act) which created valid notification obligations on the applicant, and that those obligations fell personally to the applicant. He further submitted that as casual employees, both the applicant and Mr Wright had an ongoing obligation to notify the respondent.
Mr Underwood submitted that the debt continues beyond 10 May 1999 because whilst the review form declared accurate income details, the income subsequent to the review form is higher again. He referred to the letter dated 10 May 1999 (Exhibit R3) and submitted that the applicant had again failed to comply with the notification obligations arising from that letter.
Mr Underwood submitted that there is no sole administrative error in this case, and further submitted that the applicant did not receive the monies in good faith, as she did not consider the letters she received in sufficient detail. He also submitted that there are no special circumstances in this case, as both Mr and Mrs Wright are working and are not in financial hardship. He considered that there was an expectation that the Youth Allowance for both children should be used for household support.
discussion and findings
The Tribunal notes from the outset that it found both the applicant and her husband to be honest and highly credible witnesses. It accepts the entirety of both of their evidence as being the truth of what they said, did and believed to be the case. The Tribunal accepts that they have tried to do the right thing in so far as their social security obligations are concerned, and have not tried to deceive the Department at any stage.
It is not disputed by the applicant in this case that an overpayment has occurred. The Tribunal has given careful consideration to the income details disclosed in the employer verification reports (T7 & T8) and to the basis upon which Parenting Payment was paid. It is clear from the income figures that for all pay periods from 8 October 1998 through to 1 June 1999 either the applicant, her husband or both of them were in excess of the amount upon which the entitlement to Parenting Payment was calculated. For this period therefore, the Tribunal is satisfied that the applicant was overpaid, and accordingly, so finds that pursuant to section 1223 of the Act, there is a debt to the Commonwealth for this period. On the information before the Tribunal however, it cannot determine what were the actual incomes of the applicant after 1 June 1999 and her husband after 28 May 1999 were. It appears that the delegate of the respondent has simply taken the last available figures and created some form of estimated income for the subsequent period. The respondent has then proceeded to raise a debt on the basis of this assumed income. In the Tribunal's opinion, this was entirely inappropriate. When the respondent raises an overpayment against an individual, it can only be on the basis of actual and not estimated figures. Certainly by the time that such a matter reaches this Tribunal, the respondent should be in a position whereby it can justify the basis for the entire overpayment. To proceed to raise a debt on the basis of assumed income is very poor administrative practice indeed. The Tribunal will return to consider this latter portion of the alleged debt period in due course.
The Tribunal would also note that the respondent does not dispute that an administrative error occurred by virtue of the respondent disregarding the income figures disclosed by Mr Wright in his Newstart forms up until August 1998. This disclosure should have led to the provision by the respondent of the relevant income update form, which may have had the effect of alleviating part or all of the overpayment.
Nevertheless, in order to waive the debt due to administrative error, it must be solely attributable to administrative error and received in good faith. The applicant and Mr Wright both gave honest accounts of the contact between them and the Department, and argued that this contact was sufficient to put the Department on notice that they were working and earning income higher than the $2.29 amount specified in the letter dated 22 September 1998 (T3). The Tribunal accepts that both the applicant and her husband considered that they had done all they needed to do, and that they held a genuine belief that the Department was fully apprised of their situation. This is unfortunately a case however, in which such a belief does not mirror what was the reality of the situation.
There remains something of a problematic relationship between payments like Parenting Payment, which do not require fortnightly forms to be completed (as, for example Newstart Allowance requires) and casual workers, for the very nature of casual work means that it can be difficult to ascertain what one's income is or may be at any given time. Through the notices sent by the respondent (such as that dated 22 September 1998 (T3)) the Act implicitly creates an ongoing notification obligation to casual employees whose income varies from fortnight to fortnight. The rate of Parenting Payment can obviously vary greatly where one partner is not working in a particular fortnight, or when working on public holidays and the like are taken into account.
In the present case, the applicant and her husband would clearly have benefited from the respondent making plain the fact that people engaged in casual work need to keep in close and constant contact with the Department whilst in receipt of any sort of benefit. The Tribunal is aware of the steps the respondent is taking to make the notices simpler and plainer, and perhaps notices sent to casual workers is an area worthy of some particular attention. A simple paragraph directed to casual workers might help such workers to more readily fulfil their notification obligations.
The applicant and her husband considered that, because Mr Wright had disclosed that he was working in his Newstart forms up until August 1998, the respondent would take this factor into account when calculating their rate. Indeed it is conceded that there was administrative error in not triggering the sending out of an income review form. Subsequent to August 1998 however, the letter of 22 September 1998, detailing the income amount being used to calculate the applicant's rate of Parenting Payment, was sent by the respondent.
The applicant and her husband neither denied nor confirmed receiving this letter, for they simply could not recall receiving it. As Mr Wright put it, they received a large number of letters from the respondent. Bearing in mind the provisions of the Acts Interpretations Act 1901 governing deemed service, the history of receiving other correspondence sent by the respondent, the correct addressing of the letter, the lack of evidence as to postal difficulties and the fact that the applicant does not deny that she may have received the letter, the Tribunal finds that in the circumstances, it is more likely than not that the letter was received by the applicant. The Tribunal reaches the same conclusion in respect of the 10 May 1999 letter (Exhibit R3).

The Tribunal is satisfied that the letter dated 22 September 1998 (T3) is a 'notice' pursuant to the Act. The applicant said that she may have skim read the letter, and left it for her husband. Her husband considered that he would have read it, and may have thought the income figure of $2.29 to be bank interest. The Tribunal is mindful of the fact that he would have read the letter in a state of mind whereby he considered that he had already told the Department all that they needed to know and assumed that they correctly calculated the rate of Parenting Payment. Nevertheless, the notice created an obligation on the applicant, whether personally or through her husband as an agent, to notify the Department if the income amount of $2.29 was incorrect.
Mr Wright was very honest in his evidence as to what contact he did have with the respondent from September 1998 onwards. It concerned the employment entry payment, Sam's Youth Allowance and possible Sickness Allowance. Mr Wright considered that he would have informed officers of the respondent in these contacts that he and his wife were working. The question for the Tribunal is whether or not that in itself is sufficient to discharge the notification obligations created by the letter dated 22 September 1998 (T3).
Understandably, the applicant and her husband thought that the information given for the purposes of Sam's Youth Allowance would be matched with the Parenting Payment file. The respondent has to consider important confidentiality principles however, and such information is not shared. In relation to the other contacts, whilst it is not an entirely unreasonable expectation that a departmental officer might pick up on the fact that the income amount of $2.29 was low if Mr and Mrs Wright were both working, it cannot be said to be sufficient in respect of the notification obligations arising from the notice to rely upon this fact being picked up. The notice imposes specific notification obligations and however innocently it came to pass, the fact that the applicant did not comply with those obligations was partially responsible for the existence of that part of the debt prior to 10 May 1999. The letter of 10 May 1999 (Exhibit R3) also imposed notification obligations and on the basis of the actual income figures before the Tribunal (see T7 & T8) the applicant again failed to notify that the actual income was higher than the income amount used to calculate the rate of Parenting Payment. This factor is partially responsible for the debt after 10 May 1999. The Tribunal so finds that there is no "sole" administrative error in this case.
It is not necessary in that event to canvas the issue of good faith at any length. The Tribunal notes that in its estimation, it would be difficult to sustain Mr Underwood's submission that the applicant lacked good faith in this case. Whilst the applicant may have only skimmed the letters herself, she expressed her complete faith in her husband, who acted in effect as an agent. In this way, he was no different in dealing with the Department as having, for example, a tax agent assist with one's tax returns. Mr Wright gave evidence as to how he came to believe that he had complied with all of the couple's social security obligations. The Tribunal considers that it would be difficult to establish that either Mr Wright or the applicant had knowledge or reason to know that the applicant was not entitled to the benefit received (ReSecretary, Department of Education, Employment, Training and Youth Affairs and Prince (1997) 152 ALR 127). In the absence of "sole" administrative error however, nothing turns on the issue of good faith.
The Tribunal has also considered whether or not there are special circumstances so as to warrant exercising the discretion pursuant to section 1237AAD of the Act. The phrase "special circumstances" has been considered in many previous Tribunal cases, and the Tribunal finds it unnecessary to discuss its meaning at length in the present matter. The Tribunal adopts the meaning given to the phrase in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and followed in many subsequent cases.
In relation to the present matter, the Tribunal has considered the fact that, had the respondent sent out the appropriate form, the applicant's debt may have been avoided or at least somewhat reduced. It has also considered the fact that the Department acted inappropriately in calculating the debt beyond June 1999 without being in possession of sufficient facts with which to make such a calculation. Against these considerations is the fact that the applicant received public monies to which she was not entitled, and did not read the letters she received as carefully as she might have. The Tribunal appreciates that the savings the applicant and her husband have are intended to fund retirement. It cannot be said however that they are in financial hardship. They own their home outright, are both working, and have two children, both receiving Youth Allowance. On that topic, the Tribunal accepts that it is entirely reasonable to allow Sam to keep his Youth Allowance so long as he stays at school. Mr and Mrs Wright are clearly devoted and caring parents with a real concern for their children, further evidenced by the sacrifices they have made to send Melissa to a quality school at some expense. Any incentive to keep children at school until matriculation is to be encouraged, and would seem to be in furtherance of the goals of providing a Youth Allowance.
Weighing up all of the circumstances of this case, the Tribunal concludes, not without some hesitation, that they are not such that it would be "unjust, unreasonable or otherwise inappropriate" (Re Ivovic and Director, Department of Social Security (1981) 3 ALN N61 to enforce the liability and the Tribunal so finds. Accordingly, the Tribunal affirms the decision under review in respect of the period 8 September 1998 to 1 June 1999.
In respect of that part of the debt which arises after 1 June 1999, the Tribunal is not in a position to say whether or not a debt exists, or to what extent the applicant was or was not overpaid. It therefore remits that part of the alleged overpayment period from 1 June 1999 onwards to the respondent for the respondent to obtain the actual income figures for that period and recalculate the overpayment accordingly. The Tribunal would note however, that if an overpayment in fact exists for that period, it would reach the same conclusions as to the application of sections 1237A and 1237AAD as it has in relation to the remainder of the debt under review.
decision
For the reasons given, and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal:
(a)affirms the decision under review in respect of the period 8 October 1998 to 1 June 1999; and
(b)remits the remainder of the debt to the respondent for recalculation of the amount after having obtained the correct income details relating to Mr and Mrs Wright for the remaining period.
I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A. Kiosoglous MBE
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  8 January 2001
Date of Decision  18 January 2001
Counsel for the Applicant        In person with Mr L. Wright (husband)
Solicitor for the Applicant         -
Counsel for the Respondent    Mr J. Underwood
Solicitor for the Respondent    Centrelink