[2012] AATA 255
General information, not legal advice.
Administrative Appeals Tribunal of Australia
2012-05-01
Original judgment source is linked above.
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Social security - disability support pension - whether applicant overpaid disability support pension - whether overpayment a debt due to the Commonwealth - whether the Commonwealth's right to recover the whole or a part of the debt should be waived - whether debt arose solely due to administrative error made by the Commonwealth - good faith - waiver in special circumstances - decision under review affirmed
Re Gerhardt and Secretary Department of Employment, Education and Training (AAT 10941, 17 May 1986)
Pereira and Secretary Department of Employment and Workplace Relations [2007] AATA 1821 (2 October 2007)
Callaghan and Secretary, Department of Social Security [1996] AATA 413 (18 November 1996)
Beadle and Director- General of Social Security (1984) 6 ALD 1
Groth and Secretary Department of Social Security (1995) FCA 1708
Re Ivovic and Director General of Social Services [1981] AATA 57; (1981) 3 ALN N95
Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25
Timothy Davy and Secretary Department of Employment and Workplace Relations 2007 AATA 1,114
Duarte; Secretary, Department of Family and Community Services [2000] AATA 927 (25 October 2000)
Director-General of Social Services v Hales [1983] FCA 81; (1982-83) 47 ALR 281
Secretary, Department of Social Security v Riddell 15 September 1993 No A93/62
"The decision is wrong and a different decision should be made.
Solely as a result of an administrative error made by the Commonwealth, Centrelink overpaid the Applicant disability support pension because it had not taken his combined income fully into account when it calculated his rate of disability support pension, despite the Applicant providing all requested information. The Applicant did not contribute to the error. The Applicant believed that he was entitled to the payments received during the debt period, at the rate paid, and received the payments in good faith. The debt should be waived.
Moreover, the Applicant did not at any stage knowingly make any false statements or representations or knowingly omit to comply with the Social Security Act. In fact, the Applicant regularly/periodically provided evidence of his financial circumstances including his combined income. There are also special circumstances in this matter to make it desirable to waive the debt including the Applicant's poor medical condition (disability), financial circumstances, the Commonwealth's error that solely and directly caused the miscalculation and the sever financial hardship it would place upon the Applicant if the Commonwealth sought to recover the debt."
(ii) Is the overpayment is a debt due to the Commonwealth; and, if so
(iii) Should recovery of the whole or a part of the debt be waived?
IS THE OVERPAYMENT A DEBT DUE TO THE COMMONWEALTH?
SHOULD RECOVERY OF THE WHOLE OR A PART OF THE DEBT BE WAIVED?
Waiver under Section 1237A - Administrative Error
"........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." [Emphasis added]
"40. There is nothing in sub-section 289(1) which indicates that any meaning should be given to "solely" other than its ordinary meaning. Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error. It makes no difference that those other errors or factors are minor. If those other errors or factors follow as a result of the Commonwealth's administrative error (i.e. they are incidental to the Commonwealth's error), then it may be that the debt is attributable solely to the Commonwealth's administrative error. Whether it is or is not attributable in that situation to the Commonwealth's administrative error will be a question of fact."
"39. In the present case Mrs Chapman received a number of letters from the DSS which contained information which was obviously incorrect. The contents of the letters should have given her a sufficient clue or put her on notice that the administration of her benefits was fundamentally flawed. She acknowledged that the contents of the letters with respect to the rate of income of her husband was absurd but she did not telephone the respondent or write either by letter, email or facsimile. She did not attend a social security office personally. She was obliged under the recipient notification obligations to notify the DSS and she did not. I would have thought that Mrs Chapman would have been suspicious of her entitlement to receive a benefit at the same rate that was being paid before her husband commenced to earn a full time income."
"21. At all material times the Applicant provided Centrelink with accurate and correct information regarding his financial, social and medical condition. The applicant successfully discharged his obligation pursuant to s68 of the [Administration Act].
22. Centrelink incorrectly recorded the Applicant's financial circumstances.
Waiver under section 1237AAD - Special Circumstances
"(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 [the Act], the
(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."
"There is nothing in section 1237AAD which suggests that the word "knowingly" should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."
"...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..." [Emphasis added]
On appeal, the Full Federal Court agreed with the approach of the Tribunal and its conclusions: see [1984] AATA 176; (1985) 60 ALR 225 at 230.
"...The phrase "special circumstances", it has been said, although imprecise is sufficiently understood not to require judicial gloss...it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of Terziman 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied..." [Emphasis added]
"...The reference to special circumstances "by reason of which" a person liable "should be released" requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes...Thus whilst keeping the dominant principle of [recovery of debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise..." [Emphasis added]
"...There is less overstatement if the words "unusual" or "uncommon" are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case..." [Emphasis added]
"..."special circumstances" are not merely directed to the person's own circumstances. Rather, they are directed to those that are "special circumstances...that make it desirable to waive". That necessarily requires a consideration of the person's individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it...He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement...The system of administration of the Social Security Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act... " [Emphasis added]
"...while inferences of administrative tardiness have been alleged in the speed with which the overpayment issues have been dealt with since first knowledge of the overpayments by the Applicant, the Tribunal has difficulty in concluding that administrative error and/or tardiness are uncommon, unusual or exceptional by their very occurrence. In further delineation of the issue the Tribunal has looked to the effects that such actions may have had on upon the Respondents to see whether there were any effects which could be seen to be unusual, uncommon or exceptional. In this matter, at most it would have appeared to cause some stress, particularly for the first Respondent, but in terms of effect the stress does not appear to have prevented her from carrying on a normal and busy work schedule
...As a consequence of the examination of the particular circumstances, the Tribunal finds that such circumstances either alone or together do not constitute special circumstances." [Emphasis added]
"29.......the Applicant contends that if a debt is considered to exist and the Applicant is responsible to pay that debt, the debt should be waived by reason of special circumstances pursuant to section 1237AAD of the [Act]. The Applicant did not at any stage make any false statements or representations or knowingly omit to comply with the [Act]. At all times the Applicant was co-operative and openly informed Centrelink of his financial, social and medical situation. A combination of the Applicant's poor mental and physical health, financial circumstances, Centrelink's error that solely and directly caused the miscalculation and the severe hardship it would cause the Applicant are grounds for a waiver of the debt."
"...the Applicant had moved up the ranks to a supervisor role at a factory which was his sole employer since migrating to Western Australia. Once he was injured and certified unfit for work and disabled the Applicant was unable to return to that line of work. Since then the Applicant has had to find a new vocation and has dedicated himself to be educated in security. The Applicant has had to start afresh in a new line of work. The additional disability support pension was used to maintain his mortgage repayments, pay necessary bills and support his family."
I certify that the preceding 53 (fifty three) paragraphs are a true copy of the reasons for the decision herein of Senior Member C R Walsh.
Lohner
Secretary of Social Securi
(1985) 60 ALR 225