Social Security Act 1991 ss.132(1), (3), (5), 1224(1), 1237(1), (2), (3)

Disability Services Act 1986 Part III

Acts Interpretation Act 1901 s.29

Solicitors for the Respondent: Departmental Advocate

The decision under review is set aside, and the matter remitted to the respondent with the direction that the Commonwealth's right to recover the whole of the debt from Mr Van Brummelen should be waived.

G.L McDONALD, T.E. BARNETT AND J.G. BILLINGS (Member) The applicant is applying for a review of a decision made 30 August 1994 (exh A, T31), as varied by a decision of the Social Security Appeals Tribunal ("SSAT") on 18 November 1994 (exh A, T2). The latter decision requires him, pursuant to power granted by section 1224 of the Social Security Act 1991 ("the Act"), to repay a recoverable debt arising out of the overpayment of a disability support pension ("DSP") to him for the period 23 September 1993 to 2 June 1994. At the hearing before the Administrative Appeals Tribunal ("the Tribunal"), the respondent conceded that the period for which recovery of the overpayment was being sought had been reduced to that time between 20 September to 9 December 1993.

2. At the hearing, Mr Van Brummelen was represented by Mr H. Christie, a barrister and solicitor with the West Australian Legal Aid Commission. Mr Van Brummelen's mother, Mrs Elizabeth Van Brummelen, and Mr Dewsbury, a senior case manager with the Commonwealth Employment Service ("CES"), gave oral evidence on behalf of the applicant. Mr Ellis, a departmental advocate, represented the respondent. Oral evidence was given by Ms A Eastment, a disability support officer employed by the respondent. At the request of the Tribunal, two further departmental officers, Ms C Walker, a pensions officer determining DSP applications, and Mr G Gledhill, a pensions policy officer for the Perth Area North, attended at the resumed hearing of the Tribunal to provide further information about the administrative arrangements surrounding the Department of Social Security's ("the Department") processing of DSP applications, particularly when the applicant, as in this case, suffers from an intellectual impairment. Documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and other documents associated with Mr Van Brummelen's dealings with the respondent and the CES formed part of the evidence.

THE BACKGROUND 3. The facts are largely uncontested. The applicant was employed continuously for approximately 17 years until 1992 when, owing to the closure of the factory where he then worked, he became retrenched. On 23 February 1993, he applied for a DSP (exh A, T8). He suffers from an intellectual impairment; this is confirmed by the report of the Commonwealth Medical Officer (exh A, T9) of 5 March 1993. The respondent was also aware of a report prepared by the CES psychologist which states that he is "Intellectually Disadvantaged; intellectually he falls into the bottom 3 per cent of the population" (exh A, T10). The psychologist's report is noted as received by the respondent on 18 March 1993 (exh A, T10) (see also the Department's file note of 23 March 1993 (exh A, T11)).

4. On 24 May 1993 Mr Van Brummelen commenced employment with the Dutch Brawn Smallgoods Company. Mrs Van Brummelen told the Tribunal that this employment was secured independently of any assistance from the CES. At much the same time as the applicant secured employment with the Dutch Brown Smallgoods Company, the CES determined that, given his disability, he may qualify for assistance to obtain employment under the disability reform package. The package was part of a rehabilitative programme funded by the Commonwealth under the provisions of Part III of the Disability Services Act 1986 and was designed to assist people with disabilities to find and retain employment. The applicant fulfilled the necessary pre-requisite for entry into the programme by virtue of being in receipt of a DSP. A panel consisting of a disability support officer of the respondent, the CES senior case manager and a representative from the Commonwealth Medical Office constituted a panel to determine how best to assist with work placement. It seems from the evidence of Mr Dewsbury and Ms Eastment that the disability reform panel meeting, at which the applicant's circumstances were considered, occurred on 27 May 1993. By that date, Mr Dewsbury was aware that Mr Van Brummelen had regained employment. Indeed, the CES had received the schedule of employment agreement lodged by the employer and processed and checked it by 24 May 1993 (Exh B). The activity plan - Part B 1(exh A, T-15) - was completed by Mr Dewsbury on 21 May 1993. Even though Mr Dewsbury knew Mr Van Brummelen had secured employment (although he did not commence working until 24 May 1993), this fact was not reflected anywhere on the face of the form. Further, at the panel meeting attended by Mr Dewsbury and Ms Eastment on 27 May 1993, no mention was apparently made to Ms Eastment by Mr Dewsbury that Mr Van Brummelen was employed. In circumstances where a person, who the panel was assisting, was placed in employment, it was the usual administrative practice of the CES to notify the Department by completion of a form ("form C"). In the instant case, no form C was completed and sent to Ms Eastment.

5. It was Ms Eastment's evidence that she notified the payments' division of the Department once she received the form C or otherwise learnt from the panel that an applicant had obtained employment. She said that she did this for two reasons:

(a) so that any payments being made by the Department could be

stopped; and

(b) other benefits such as an employment entry payment may be

considered (subject to a person otherwise fulfilling any additional

conditions).

6. Mrs Van Brummelen said that, as she would not be able forever to support Mr Van Brummelen, she had tried to assist him by establishing his independence. To this end, she had organised his own flat four years ago and, while she gave him as much support as she could, she had tried to encourage him to live independently. Mrs Van Brummelen said that Mr Van Brummelen usually did not throw out letters that he received, although he frequently misplaced them, and sometimes she had discovered them unopened in unusual places, e.g. at the top of his wardrobe.

7. In a letter, dated 20 September 1993, the Department wrote to Mr Van Brummelen. The letter was apparently addressed to Mr Van Brummela - notifying him of an increase in the rate of his DSP (exh A, T16). Among a number of matters mentioned in that letter, the Department required Mr Van Brummelen to notify it if his gross income exceeded $44 per week. It was this letter of notification that Mr Van Brummelen either did not receive or, if he received it, it became misplaced. It was only when Mrs Van Brummelen discovered some bank statements amongst other things in Mr Van Brummelen's wardrobe, in May or June 1994, that she realised he was still receiving DSP benefits as well as his salary from his employer. Despite searching his flat, Mrs Van Brummelen could not find any trace of the letter. She notified the respondent and, because she was also concerned as to Mr Van Brummelen's position if overpayments had been made, she instructed her solicitors to write to the Department (exh A, T19). It was Mrs Van Brummelen's evidence that Mr Van Brummelen lacks the capacity to understand and control his financial affairs without assistance, and that he would not be aware that he was receiving payment from two sources. The respondent does not dispute this. Clause 11 of the respondent's facts and contentions, filed with the Tribunal, states that Mr Van Brummelen is:

"(a) substantially intellectually disabled;

(b) unable to read or comprehend complex instructions;

(c) His abstract comprehension and event sequencing are severely

limited;

(d) unable to write;

(e) only able to read the most elementary of written texts and with

little or no comprehension;

(f) though reasonably socially competent requires constant

monitoring;

(g) that insofar as employment is concerned he would require

substantial supervision and the tasks involved have to be simple and

repetitive."

8. The Tribunal is satisfied that Mr Van Brummelen would not have realised what was occurring in his bank account and, in particular, he would not have realised that he was receiving payment of DSP in addition to the wages he was receiving, nor that he would have been receiving a gross income in excess of $44.00 per week. It seems he was taken advantage of by some unscrupulous acquaintances, who inveigled him into withdrawing and spending the money which came into his account as a result of the payment of the DSP.

9. It was not until 9 December 1993 that Ms Eastment was notified by the CES of Mr Van Brummelen's employment by receiving an Activity Plan B1 form signed by Mr Dewsbury, which showed that the applicant had "work experience placement 24/5/93 - 17/10/93" (exh A, T17). It appears, however, that the payments section of the Department was not notified by Ms Eastment or, if notified, that no action was taken to cancel payment of his DSP. Consequently, payments continued until 2 June 1994.

10. Initially, the Department sought, by letter dated 21 June 1994 (exh A, T21), repayment under section 1224 of the Act for DSP overpayments between 3 June 1993 to 16 June 1994 (an amount of $8,979.70). As at the date of hearing, the respondent sought repayment for amounts paid between 20 September 1993 (the date of the Department's notification to Mr Van Brummelen that he was required to inform them if his gross salary exceeded $44 per week (exh A, T16)) and 9 December 1993 (the date Ms Eastment was notified by Mr Dewsbury, of CES, that the applicant was working (exh A, T17)). The applicant claimed that:

(a) While he could not say whether or not the letter from the

Department to him, dated 20 September 1993, was sent or not, there

was no evidence that he had received it;

(b) pursuant to section 132(5) of the Act, because of his

impairment, he was "incapable" of complying with the request for

information made in the letter of 20 September 1993 and/or he had

a reasonable excuse for not complying; and

(c) alternatively, that if there is a debt, then it arose solely

because of administrative error on the part of the Commonwealth and

that, therefore, under the provisions of section 1237(2) of the Act,

the debt should be waived.

The respondent says that the amount outstanding is a debt arising under the provisions of section 1224(1) of the Act and is recoverable by the Commonwealth.

11. The following provisions of the Act are applicable:

" 132. (1) The Secretary may give a person to whom disability

support pension is being paid a notice that requires the person to

inform the Department if:

(a) a specified event or change of circumstances occurs; or

(b) the person becomes aware that a specified event or change of

circumstances is likely to occur.

. . .

(3) A notice under subsection (1):

(a) must be in writing; and

(b) may be given personally or by post; and

(c) must specify how the person is to give the information to the

Department; and

(d) must specify the period within which the person is to give the

information to the Department; and

(e) must specify that the notice is a recipient notification notice

given under this Act.

. . .

(5) A person must not, without reasonable excuse, refuse or fail to

comply with a notice under subsection (1) to the extent that the

person is capable of complying with the notice.

Penalty: Imprisonment for 6 months."

" 1224. (1) If:

(a) an amount has been paid to a recipient by way of pension,

benefit or allowance under this Act or the 1947 Act; and

(b) the amount was paid because the recipient or another person:

(i) . . .; or

(ii) failed or omitted to comply with a provision of this Act or the

1947 Act;

the amount so paid is a debt due by the recipient to the

Commonwealth."

" 1237. (1) The Secretary may, on behalf of the Commonwealth,

decide to waive the Commonwealth's right to recover the whole of a

debt from a person but only in accordance with this section.

(2) The Secretary must waive if:

(a) the debt arose solely because of an administrative error made by

the Commonwealth; and

(b) the person received in good faith the payment or payments that

gave rise to the debt.

12. Mr Christie raised, but did not vigorously pursue, the possibility that the letter addressed and sent to Mr Van Brummela went astray or did not constitute a "notice" under the provisions of section 132 of the Act because Mr Van Brummelen's surname was misspelt. There was no dispute as to the accuracy of the postal address, as evidenced in the computer generated copy kept by the Department. The Tribunal does not accept that the misspelling of the applicant's name to such a minimal extent constitutes a ground sufficient to say that the letter was not a "notice" to the applicant for the purposes of section 132(1) of the Act. Section 132(3)(b) requires the notice to be given personally or by post. Posting the notice would lead to it being deemed to be delivered in the ordinary course of the post (section 29 of the Acts Interpretation Act 1901).

13. Mr Christie submitted that, when dealing with a social security recipient with an intellectual impairment, the departmental manual of instructions to staff (the relevant extract of which forms exhibit C) emphasised the need to notify the cancellation of the benefit ". . . to carefully explain the reason for cancellation, and preferably, (it) should be personally delivered" (emphasis added). Other clauses also emphasise the need for officers to take care in processing DSP applications when the applicant is intellectually impaired. There is no suggestion that notification to a recipient should be personally delivered when the Department is notifying a recipient of an increase in the rate of pension. Indeed, it would be expecting too much of the Department, given that it has limited resources, for every notice to an applicant, who had a mental impairment, to be hand delivered.

14. Mr Ellis submitted that the Department's function was in the nature of a paymaster, i.e. to make payments at the rate determined to those who applied and met the qualifications set by Parliament. That, however, is altogether too bland a statement, because it ignores the administrative reality of how the function determined by Parliament is to be achieved: bearing in mind the reason for having such legislation in the first place is to make provision for those who cannot, for a variety of reasons, make provision for themselves. The instructions to officers of the Department, in the view of the Tribunal quite rightly, provide a more realistic approach compared to the suggestion of Mr Ellis as to the Department's responsibility, given the difficulties likely to be experienced by a DSP recipient suffering from a mental impairment condition. However, as earlier commented, the instructions do not provide for, and the Department would be unable to accommodate, personal notification to be made for every notice to a DSP recipient suffering from an intellectual impairment. The issue to determine is the realistic approach for assisting people in Mr Van Brummelen's situation. What is realistic is that some provision should be made in the DSP application form for notification of a third party to receive information on behalf of such a DSP recipient.

15. The starting point is to examine the DSP application form, which in this case was completed by the applicant's mother and signed by the applicant (exh A, T8). Question 12 of the application form, with the heading "If a friend of relative helped you with your claim", provides for that friend or relative to be contacted about the claim made by the applicant. Mr Ellis informed the Tribunal that completing question 12 did not mean the friend or relative would, on an ongoing basis, continue to receive correspondence from the Department relating to the claim. However, he said it ordinarily meant that the nominated friend or relative would be notified as to the outcome of the claim. It was Mrs Van Brummelen's evidence, which the Tribunal accepts, that she did not receive any notification with respect to her son's claim. The respondent did not assert that it had sent notification to her. Notification that he was to receive a DSP was sent to Mr Van Brummelen by letter dated 29 April 1993 (exh A, T14). Since he could neither read nor write (other than signing his name), the letter would have meant nothing to him.

16. Subsequently, the evidence of Ms Walker and Mr Gledhill clarified the departmental understanding surrounding the way in which departmental officers interpreted question 12. The question would be invoked by the departmental officer determining the DSP claim if he/she had any questions during the processing of the application. It was not the Department's practice to inform the nominated friend/relative of the outcome of the application. If an applicant wanted a friend/relative to receive ongoing correspondence, either generally or with respect to a limited category of information, then the applicant needed to sign a "nominee form". It was a discretionary decision as to whether an officer enquired of an applicant as to whether he or she may need a nominee form. Raising the issue of this form was sensitive: arising from personal affront which may occur should an applicant perceive that the offer suggests that the departmental officer does not think that he/she is capable of running his/her own affairs; and also relating to the security of personal information to be considered by an officer suggesting the use of such forms. It was the evidence of the officers that the completion of question 12 on an application form did not of itself prompt an officer to suggest the use of a nominee form. Seized of the information available about the applicant's impairment, both Ms Walker and Mr Gledhill said that they would have offered the use of a nominee form.

17. The Tribunal's reading of question 12 coincides with Mr Ellis's understanding of it (refer to paragraph 15, above). Since this understanding is at odds with that of the departmental officers, some consideration needs to be given to changing the wording of question 12 so that it better accords with what the Department wants to achieve by including it. The change may also lead to a lessening of confusion by members of the public as to what is its purpose. Also some consideration needs to be given to the inclusion of a question as to whether an applicant wants to nominate somebody else to receive information - even if for limited purposes - on his/her behalf may be worthwhile. This question may avoid the sensitivities experienced by officers having decided whether or not to raise the issue of nominees at the time they are dealing with somebody applying for a DSP benefit.

18. The point is, however, that question 12 in its current form is misleading and did, in fact, mislead Mrs Van Brummelen into thinking that she would be informed about the outcome of Mr Van Brummelen's DSP application. This coupled with there being no apparent offer for a nominee form to be completed when, according to the evidence of two experienced officers, Ms Walker and Mr Gledhill, the circumstances were such that in Mr Van Brummelen's case it was appropriate, at least, for an offer for a nominee form to be made, amounts, in the Tribunal's view, to an administrative error. A consequence of the administrative error is that payments continued to be made to Mr Van Brummelen in circumstances when, had the administrative error not occurred, action would have been taken by Mrs Van Brummelen, on Mr Van Brummelen's behalf, to stop those payments.

19. There is further evidence of administrative error. The CES did not notify the respondent that the applicant's employment circumstances had changed despite the following events occurring:

(a) Mr Dewsbury filled out the Activity Plan Part B 1 form (exh A,

T15) that Mr Van Brummelen had then arranged employment;

(b) no mention was made at the meeting of 27 May 1993 by Mr Dewsbury

that Mr Van Brummelen had commenced employment on 24 May 1993, when

that fact was clearly known to the CES; and

(c) the usual procedure of completing a form C by way of

notification from the CES to the respondent that a person being

considered under the disability reform package had obtained

employment did not occur.

Consequently, Ms Eastment could not take the necessary administrative action, which she normally took to notify the payments section of the Department, to cease making payments. This also amounts to an administrative error, even if it is not an error made by the respondent Department. The Tribunal rejects Mr Ellis's argument that the concept of administrative error, provided for in section 1237(2) of the Act, is limited to the administrative error of the respondent. In circumstances when the respondent is the Department making payments not only to those who qualify under the Social Security Act, but also on behalf of other departments, then it is appropriate that a power of waiver should be vested in the respondent. Consequently the administrative error is not limited to an error made by the Department, but is broad enough to encompass any administrative error made by the Commonwealth. If the Parliament had wanted to limit the power of the Secretary to waive overpayments where administrative error had occurred by action of the Department only it would have expressed that limitation in the section. That it did not do so lends support, if any be needed, to the conclusion reached by the Tribunal as to the ambit of the sub-section.

20. Given the concession made by this respondent as set out in paragraph 7 herein and having regard to Mrs Van Brummelen's evidence concerning his impairment the Tribunal is satisfied that Mr Van Brummelen received the payments in good faith.

21. In view of the decision reached by the Tribunal, it is not necessary to determine the argument of Mr Christie surrounding the interpretation of sub-section 132(5) of the Act. However, the Tribunal takes the view that this sub-section deals with the creation of a criminal offence, and that its terms provide for a defence to those criminal proceedings and have no bearing on the interpretation of the other sub-sections of section 132 of the Act.

22. For the reasons stated, the matter should be remitted to the respondent with a direction that the Commonwealth's right to recover the whole of the debt from Mr Van Brummelen should be waived.