Xin and Secretary, Department of Social Services (Social services second review)

[2021] AATA 246

Xin and Secretary, Department of Social Services (Social services second review) [2021] AATA 246 (15 February 2021)

Division:GENERAL DIVISION

File Number(s):      2019/5412

2019/5413

Re:Liyan Xin

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak

Date:15 February 2021

Place:Sydney

The decisions under review are affirmed.

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

Senior Member A Poljak

CATCHWORDS

SOCIAL SECURITY – Austudy – Newstart Allowance – debt – overpayment of benefit – employment income under-declared – whether debt can be written off – whether debt can be waived – sole administrative error – special circumstances – decision under review affirmed

LEGISLATION

Social Security Act 1991 (Cth) ss 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) ss 68, 100

CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569

REASONS FOR DECISION

Senior Member A Poljak

15 February 2021

1. Ms Liyan Xin, the Applicant, has been in receipt of various social security payments from the Department of Social Services (the Department) since 2001. Between 7 March 2009 and 23 February 2012, the Applicant was in receipt of Austudy. On 4 December 2012, the Applicant was granted Newstart Allowance (NSA), and the Applicant currently receives Carer Payment of $944.30 and Carer Allowance of $263.80 per fortnight.

2. It was a requirement under subsection 68(2) of the Social Security (Administration) Act 1999 (Cth) (the Admin Act) for the Applicant to advise of any earnings from employment while receiving NSA.

3. On 9 August 2017, information was received from the Australian Taxation Office (ATO) suggesting that the Applicant had earned more income from employment than she had reported. The Department issued the Applicant a notice on 9 August 2017, setting out the discrepancy and requesting verification of earnings from employment by way of payslips/bank statements by 7 September 2017.

4. On 15 January 2018, having not received any further information about the Applicant’s earnings, the Department apportioned employment income information from the ATO and decided that the Applicant had an ‘estimated debt amount’ of $13,231.40 in ‘Newstart Allowance’ for the period 29 October 2011 to 30 June 2014, on the basis that she had not correctly declared her income.

5. On 5 December 2018, the Department reconsidered the matter and ‘grossed up’ the Applicant’s net income from available bank statements. Where no bank statements were available, the Department used the data match information from the ATO to apportion the income. The debt was recalculated to $9,574.22 for the period 1 October 2011 to 13 January 2014. On 26 April 2019 following a review by an Authorised Review Officer (ARO), the debt was recalculated to $9,332.24 using bank statements provided by the Applicant.

6. On 7 August 2019, the Social Services and Child Support Division of the Administrative Appeals Tribunal (SSCSD), decided to set aside the ARO decision and send the matter back to the Department for reconsideration in accordance with the following directions:

   (a)The Secretary is to exercise the relevant powers under the social security law to obtain bank statements from the Applicant or payroll information for the Applicant from her employers for the relevant financial years; and

   (b)The debt is to be recalculated by correctly apportioning the Applicant’s income in each instalment period according to law; and

   (c)Any debt is to be recovered from the Applicant.

7. On 21 August 2019, the Department issued notices to the following employers requesting pay records relating to the Applicant’s employment during the debt period:

   (a)NSW Health Services trading as HealthShare NSW;

   (b)NSW Health Services trading as HeathSupport Parramatta;

   (c)St Vincent’s Hospital Sydney Ltd; and

   (d)Network Nursing Agency Pty Ltd.

8. On 31 August 2019, the Applicant requested a review of the decision by the SSCSD. This is the decision under review in these proceedings.

9. On 11 October 2019, the Department issued a further notice to Heartbeat Homecare Nursing Pty Ltd requesting pay records relating to the Applicant’s employment during the relevant debt period.

10. The Department received all payslips requested from the employers which showed that the Applicant had under-declared her income to the Department.

11. On 24 February 2020, the Department implemented the SSCSD decision and determined that the Applicant had an Austudy debt of $826.88 for the period 23 July 2011 to 2 March 2012 and NSA debt of $6,071.35 for the period 4 December 2012 to 4 November 2013 (the Debt).

    Issues

12. The issues to be determined in these proceedings are whether:

    (a)the Applicant was overpaid Austudy of $826.88 for the period 23 July 2011 to 2 March 2012;

    (b)the Applicant was overpaid NSA debt of $6,071.35 for the period 4 December 2012 to 4 November 2013;

    (c)the overpayment constitutes a debt to the Commonwealth; and

    (d)all or part of the debt may be written-off or waived.

    Consideration

13. There is no allegation that the Applicant was dishonest or fraudulent in her dealings with the Department. At hearing, she explained that she had to estimate her fortnightly salary to Centrelink because the payment periods Centrelink and her employer formulated were different. In addition, she advised that she didn’t receive her payslip immediately when she was paid, instead she usually received it on the next occasion she attended work. I am satisfied that she did the best she could to declare her income accurately.

14. The discrepancy in the Applicant’s reported income has come to light as in calculating the Austudy and NSA debts, the Department applied the Applicant’s actual income, as recorded on her payslips, over the Centrelink fortnight periods relevant to the debt. Payslips provided by her employers represent the best evidence regarding the Applicant’s fortnightly income from employment. There is no further evidence or better particulars the Applicant can obtain to question the recalculated debt amount. This was acknowledged by the Applicant at hearing.

15. As the Applicant failed to correctly declare her income from employment to the Department as required by subsection 68(2) of the Admin Act, the Applicant’s rate of Austudy and then NSA were calculated on an incorrect basis during the debt period in question. In accordance with subsection 100(1) of the Admin Act, the Applicant’s Austudy and NSA can be retrospectively reduced from 23 July 2011. The Applicant was overpaid Austudy in the amount of $826.88 for the period 23 July 2011 to 2 March 2012 and was overpaid NSA in the amount of $6,071.35 for the period 4 December 2012 to 4 November 2013.

16. These overpayments constitute a debt to the Commonwealth.

    Can the Debt Be Waived or Written Off?

17. Section 1236 of the Social Security Act 1991 (Cth) (the Act) sets out the circumstances in which a debt may be written off. There is no evidence that the Applicant’s debt is irrecoverable at law or that she has no capacity to repay the debt, and her whereabouts are known. There is also no evidence that it is not cost effective for the debt to be recovered.

18. Subsection 1237A(1) of the Act provides:

    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.

19. For the debt to be waived under section 1237A of the Act, it must be found that the debt was caused solely by administrative error; see Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190 at [35]. There is no evidence of administrative error leading to the existence of the debt in this case. The Respondent acted upon the information given to it by the Applicant. Accordingly, the debt should not be written-off or waived pursuant to section 1237A of the Act.

20. Section 1237AAD of the Act provides:

    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, 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.

21. Special circumstances are not defined in the Act however the Tribunal is provided some guidance by several Federal Court and Administrative Appeals Tribunal cases. In the decision of Beadle and Director-General of Social Security (1984) 6 ALD 1 at [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 upon 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. 

22. There is nothing in the circumstances described by the Applicant, which are unusual or uncommon that would warrant the exercise of the discretion to waive all or part of the Applicant’s debt under section 1237AAD of the Act.

23. It is in the public interest that the Applicant’s debt is repaid. In Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569 the Tribunal said at [48]:

    It is important to recognise the need to ensure the integrity of the social security system and the public interest. This means that those recipients who have received monies to which they are not entitled, are generally expected to repay those monies unless the repayment is in the specific circumstances unjust, unreasonable or inappropriate.

24. There is no evidence of severe financial hardship. The Applicant has capacity to repay the debt; she currently receives Carer Payment of $944.30 and Carer Allowance of $263.80 per fortnight. In fact, the debt to the Commonwealth has already been partially repaid via deductions. At the date of hearing, the Applicant had repaid a total of $3,800.30 with $3,097.93 outstanding.

25. For these reasons, neither part nor all of the debt should be written off or waived.

    Decision

26. The decision under review is affirmed.

I certify that the preceding 26 (twenty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

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

Associate

Dated: 15 February 2021

Date of hearing:	27 August 2020
Applicant:	Self-represented
Solicitors for the Respondent:	Dr S Thompson, Services Australia