WTWF and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2010] AATA 961

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 961

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/2412

GENERAL ADMINISTRATIVE DIVISION		)
Re		WTWF

Applicant

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

Respondent

DECISION

Tribunal Mr R G Kenny, Senior Member

Date1 December 2010

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

.................[Sgd].............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Benefits and entitlements – Carer pension – Failure to give timely notification of income – Overpayment of carer payment a debt due to the Commonwealth – No basis for writing off debt – No special circumstances making it desirable to waive debt – Decision affirmed

Social Security Act 1991 (Cth), ss 8, 23, 1064, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth), ss 68, 100

Secretary, Department of Social Security and Hales (1998) 82 FCR 154
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 1 AAR 362
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729
Powell and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 816

REASONS FOR DECISION

1 December 2010 Mr R G Kenny, Senior Member    

BACKGROUND

1.      At various times from 2006 to 2009, the applicant received carer payment, a form of income support payable in accordance with the terms of the Social Security Act 1991 (“the Act”).  On 14 January 2010, a Centrelink officer determined that the applicant had been overpaid in the amount of $16,637.40 during the period from 9 October 2006 until 8 October 2008 (“the overpayment period”) and that this was a debt owed by her to the Commonwealth.  On 11 March 2010, an authorised review officer with Centrelink affirmed the decision.  The Social Security Appeals Tribunal (“the SSAT”) then affirmed the decision on 11 May 2010. 

CONTENTIONS and ISSUES

2.      Mr Hawker, for the respondent, submitted that the applicant’s carer payment was calculated on the amount of fortnightly income received by her and her husband and that these amounts had not been advised to Centrelink by the applicant in the required timely manner.  He submitted that formal notices, in the form of letters, were sent to her with information about her payments, the amounts on which her carer payment was based and a request for her to advise Centrelink, within 14 days, if any of the provided information was incorrect.  He accepted that the applicant advised Centrelink of income amounts but submitted that she did so outside of the 14 day periods and, accordingly, carer payments were sent to her in the incorrect amounts thereby leading to the overpayment.  He submitted that there was a consequential debt owed by her to the Commonwealth and that there were no grounds for the debt to be written off or waived. 

3.      The applicant conceded that she had received Centrelink letters detailing the amount of carer payment and had noted the reference to the 14 day period for providing corrected information about income levels.  She also conceded that she had not complied with that requirement and that she had been overpaid in the amount alleged by Centrelink.  She agreed that this was a debt owed by her to the Commonwealth.  However, she said that, when first granted the carer payment, she was advised by a Centrelink officer that her notification obligation was that she provide updates of income on a regular basis.  She said that she did this but agreed that it was not with the timeliness that the Centrelink letters requested.  The applicant submitted that the debt should be waived because of Commonwealth error or, alternatively, because of the special circumstances in which she and her family now find themselves. 

4.      The issues for determination are whether, in the overpayment period, the applicant was overpaid an amount of carer payment; what the amount of any such overpayment is; whether any such amount is a debt owed to the Commonwealth; and whether any such debt should be written off or waived.

EVIDENCE

5.      It is common ground that, at all material times, the applicant was qualified for the carer payment and that the rate of her payments was, in part, dependent on the combined income of herself and her husband.  Throughout the overpayment period, the applicant was not engaged in paid employment as she was responsible for the care of her brother-in-law.  The applicant’s husband was employed by a company (his company), of which he was the sole director and shareholder.  She said that her husband had worked for a roofing company in sales but was required to establish his company and then to become engaged on a sub-contract basis.  She said that, in October 2008 when the overpayment period ended, her husband returned to working as an employee of the roofing company and his company is now inactive.

6.      The applicant looked after the bookwork of the company and was aware at all material times of the fortnightly income allocated to her husband.  She said that this income was constant for each week of any month but that it varied significantly from month to month.  She believed that her obligation was that which was explained to her when carer payment was first granted: that she had to advise Centrelink regularly of income levels.  She did this on five or six occasions each year and believed, therefore, that Centrelink was always advised of income amounts although she conceded that she did not do this within 14 days of receiving letters from Centrelink detailing the basis on which carer payment was calculated. 

7.      The applicant advised that, before she received carer payment, she and her husband began to care for her mother-in-law, who suffered from dementia, and her brother-in-law, who suffered brain damage in a car accident at 16 years of age, some 40 years ago.  Her mother-in-law is now in respite care.  Her brother-in-law also was placed in a managed complex for a few months but returned to live with the applicant and her family in March 2007. 

8. The applicant and her husband have three daughters, aged 16, 18 and 19 years. The youngest two daughters live at home and receive youth allowance. The applicant receives the carer payment under the Act and this precludes her from undertaking remunerative work. The applicant’s husband is in part-time work and also receives newstart allowance. Her brother-in-law contributes $200 per week in rent. As at the date of the hearing, the applicant has not been requested to commence repayment of the debt in the usual way which is through withholdings from her Centrelink benefits. The applicant described the family as being in difficult financial circumstances with an inability to make ends meet on a fortnightly basis. Their house is subject to two mortgages. One of these is to a bank which is still owed $145,000 and another is to her brother. She was not aware of the level of the debt to her brother but is repaying the loan at a reduced rate.

9.      After the hearing, the applicant provided the Tribunal with a statement and other documentation, the contents of which were not challenged by the respondent, in which the following matters were related. 

10.     An income/expenses statement recorded a family weekly income of $1,590 comprising the income of the applicant’s husband ($1,000) as well as the various social security payments received.  Expenditure of $1,596.35 was recorded and this did not take into account birthday and Christmas expenditure, medication costs and emergency outgoings such as car repairs.  Also provided at that time was an Income and Assets Update which declared that the income of the applicant’s husband was $1,156 per week with a total earned by him over the previous 12 weeks being $13,872.  The applicant also provided her husband’s Taxation Notice of Assessment for the year ending 30 June 2009 which listed his taxable income as $85,335. 

11.     The applicant described a series of events in 2009 in which her youngest daughter had been unwittingly involved in the paedophilic activities of the step-father of one of her daughter’s friends.  This involved the step-father filming her daughter with a hidden camera in her friend’s bathroom on occasions when she stayed there.  The applicant said that criminal proceedings had been commenced, that the man pleaded guilty and was on bail but living in the next street within five minutes of their home.  She expected the sentencing process to be completed in December 2010. 

12.     The applicant said that she has had some health concerns as a result of surgery in 2005 and suffers arthritis, which causes her to have constant pain.  She suffers tension headaches because of the incident with her daughter and concerns at the proximity of the man involved.  She also advised that, shortly after the incident with their daughter, her husband suffered from serious depression for which he refuses to seek treatment.  She said that he continues to work long hours in sales because he is paid, in the main, on a commission basis.  This involves high fuel costs and little financial return. 

13.     The applicant also referred to the difficulties that she and her family experience because of her brother-in-law’s presence in the home.  She described little, if any, support from other members of her and her husband’s family, none of whom live in Queensland.  Her evidence was that his attendance for five days per week at a care place was brought to an end because of the manager’s advice that he was too disruptive an influence on other persons who attended.  She said that her brother-in-law is disruptive of their home life and also of the people in her neighbourhood and has been responsible for the cessation of visitations to their home by others. 

CONSIDERATION

Overpayment and debt

14. As noted above, the applicant has conceded that she was overpaid carer payment in the amount of $16,637.40 in the overpayment period which is a debt due by her to the Commonwealth. The carer payment is calculated in accordance with the rate calculator at the end of s 1064 of the Act and this requires the income of the applicant and her husband to be taken into account. The term “income” as defined in s 8 of the Act clearly includes that received by the applicant’s husband during the overpayment period. It is not in dispute that Centrelink sent notices, which meet the requirements of s 68(2) of the Social Security Administration Act 1999 (the Administration Act), to the applicant advising her of the income level on which her carer payment was based and requiring her to notify Centrelink, within 14 days, of any variations in those amounts. The applicant conceded and I am satisfied that she did not notify Centrelink of income variations in that manner during the overpayment period.

15. Carer payment is a social security pension and a social security payment under s 23 of the Act. Where a person in receipt of a social security payment fails to comply with a s 68(2) notice, s 100(1) of the Administration Act provides for a retrospective rate reduction. Copies of the Centrelink calculations were in evidence and I am satisfied that the applicant’s concessions about the overpayment and the debt have been properly made. The applicant was overpaid $16,637.40 in the overpayment period and, in accordance with s 1223 of the Act, this overpayment is a debt due by her to the Commonwealth.

Writing off debt: s 1236 of the Act

16. Provision is made for a debt to be written off under s 1236 of the Act. This is the case if the debt is irrecoverable at law; or the debtor has no capacity to repay the debt; or the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or it is not cost effective for the Commonwealth to take action to recover the debt. The only component in that provision of potential relevance to this matter is that relating to lack of capacity to repay the debt. The applicant has not been repaying the debt to the respondent through deductions from her fortnightly payments. However, I am satisfied that there is capacity for that to be done on a continuing, albeit long term, basis. In that situation, the debt should not be written off.

Waiver of debt: s 1237A of the Act

17. A debt may be waived under s 1237A of the Act, which reads:

Administrative error

(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.

(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

(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

18. The first element to be satisfied under s 1237A(1) of the Act is that the debt must be attributable solely to administrative error made by the Commonwealth. The applicant’s debt arose through failure to comply with the notices under s 68(2) of the Administration Act. For reasons which may have been associated with misinformation provided to her by a Centrelink officer or with confusion about notification requirements in relation to some form of Centrelink payment apart from carer payment, the applicant understood that she needed to advise correct income details on a regular basis. I am satisfied that the applicant did this on a periodic basis, in the order of 5 or 6 times per year, and that she believed that, by so doing, she was complying with her obligations for receipt of correct amounts of carer payments. However, the periodic notices under the Administration Act, received and read by the applicant, clearly required such reporting to be within 14 days of income changes. The applicant failed to advise Centrelink of the correct income levels in that way and this contributed to the overpayment of carer payment. Therefore, the debt did not arise solely because of error on the part of the Commonwealth. The debt may not be waived under s 1237A of the Act.

Waiver of debt: s 1237AAD of the Act

19. A debt may also be waived under s 1237AAD of the Act which reads:

Waiver in special circumstances

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, the Administration 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.

20.     I am satisfied that the applicant believed she was complying with what she understood to be the notification requirements in relation to her carer payment and that, accordingly, she did not knowingly make a false statement or false representation in relation to the receipt of her carer payment.  I also accept her evidence in relation to the circumstances which she described in her home life.  As indicated above, none of the matters raised by her were challenged by the respondent.  Nevertheless, there appears to be a degree of inconsistency in the information provided to the Tribunal about the family’s income, particularly that of the applicant’s husband: $1,000 per week is given in the income/expenses statement; $1,156 per week in the Income and Assets Update; and $85,335 in the Taxation Notice of Assessment for the year ending 30 June 2009. 

21. The Act provides no guidance as to the meaning of the term “special circumstances” in s 1237AAD of the Act. In Secretary Department of Social Security and Hales[1], French J, in the context of special circumstances, said[2]: 

The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.

[1] (1998) 82 FCR 154 at 155.

[2] Ibid at 162.

22.     In Beadle v Director-General of Social Security[3], the Full Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term.  The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss".  There, the Court affirmed the decision of the Tribunal[4] which had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special".  In Groth v Secretary, Department of Social Security[5], Kiefel J observed that special circumstances:

would require something to distinguish ... [the] ... 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.

[3] (1985) 7 ALD 670 at 674.

[4] Re Beadle and Director-General of Social Security (1984) 1 AAR 362 at 364.

[5] (1995) 40 ALD 541 at 545.

23. One matter is clear from the terms of s 1237AAD. Special circumstances may not be found in financial hardship alone. The applicant contends that her family are experiencing financial difficulty. In part, this is because she is unable to work and because of her husband’s inability to generate sufficient income. The first of these she described as a consequence of her receiving the carer payment and, in that situation, she is in the same position as other such recipients. She described a substantial fall in her husband’s income after he became aware of the experience with his daughter and her opinion is that he is suffering from depression. The applicant’s evidence was that her husband still engages in commission-based sales of the product for which he is responsible but that, for whatever reason, he has limited success. While the applicant’s family may experience a degree of financial difficulty, I am satisfied that this is not to a level that would meet the description of financial hardship which has been interpreted to mean straitened financial circumstances, importing a need for financial suffering of a severe or extreme nature.[6]  Also, as noted above, the evidence is not consistent in relation to the earnings of the applicant’s husband.  However, even on the most pessimistic account of his income as stated in the income/expenses statement, I am satisfied that the applicant’s financial difficulties do not amount to financial hardship. 

[6] Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729 at para 20 and Powell and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 816 at para 20.

24.     Another matter referred to by the applicant was her brother-in-law’s disturbing influence in the family home and in the neighbourhood.  Even though many carers may not have to deal with such behavioural problems, it is, nonetheless, for the purpose of meeting obligations to her brother-in-law that the carer pension is paid to the applicant. 

25.     Additionally, the applicant has referred to the situation involving the man who faced criminal charges in respect of his dealings with her daughter.  As noted above, the sentencing procedure in relation to this matter is scheduled to be completed within a few weeks of the Tribunal hearing.  On the applicant’s evidence, the event and its aftermath including the proximity of his residence to that of the applicant have had a significant impact upon her and her husband.  She described her own consequential tension headache problems and her belief that her husband has developed a depressive condition.  However, on the evidence before me, the applicant’s husband has not consulted a medical professional and there is no medical evidence before me to confirm any psychiatric diagnosis.

26.     I have considered the impact of those non-financial matters taken together with the applicant’s financial situation.  I am satisfied that these do not take her circumstances out of the ordinary and do not have a particular quality of unusualness that permits them to be described as special such that it is desirable to waive the debt raised against her.  In Secretary Department of Social Security and Hales[7], French J noted that “the taxpayer is entitled to expect that, in the ordinary course, money paid to people which they are not entitled to receive will be recovered...”. I am satisfied that this is applicable in the applicant’s case. She was not entitled to the monies which she was overpaid in the overpayment period and I am satisfied that her circumstances are not special such that the discretion under s 1237AAD of the Act should be exercised in her favour.

[7] (1998) 82 FCR 154 at 155.

DECISION

27.     The Tribunal affirms the decision under review. 

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member

Signed: ...................[Sgd]..........................................................

Alex Seagar, Associate

Date of Hearing  2 and 22 November 2010
Date of Decision  1 December 2010
The applicant was not represented 

For the respondent  Mr Matthew Hawker, Sparke Helmore