Nehma and Department of Family and Community Services [1999] AATA 219 (9 April 1999)

Last Updated: 12 April 1999

DECISION AND REASONS FOR DECISION [1999] AATA 219

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1998/958

GENERAL ADMINISTRATIVE DIVISION )

Re ANTOANETA NEHMA

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms S M Bullock, Member

Date 9 April 1999

Place Sydney

Decision The Tribunal sets aside the decision under review and substitutes a new decision that the debt of $8,147.20 be waived in its entirety pursuant to section 1237AAD of the Social Security Act 1991.

..............................................

S M BULLOCK

Member

CATCHWORDS

SOCIAL SECURITY - Assurance of Support - debt - Departmental Guidelines - whether debt due and payable to the Commonwealth - whether special circumstances exist - waiver

Social Security Act 1991 - ss23, 517A, 1227, 1236, 1237A, 1237AAD

Re Secretary, Department of Social Security and Kratochvil (1995) 37 ALD 515

Beadle v Director-General of Social Security (1985) 7 ALD 670

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

Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690

Re Lamvohee and Secretary, Department of Social Security (AAT 12166, 28 August 1997)

Re Ebrahimi and Secretary, Department of Social Security (AAT 12872, 11 May 1998)

Secretary, Department of Social Security v Hales (1998) 153 ALR 259

Riddell v Secretary, Department of Social Security (1993) 30 ALD 31

Re Secretary, Department Social Security and Saracik (1993) 30 ALD 567

REASONS FOR DECISION

9 April 1999 Ms S M Bullock, Member

1. This is an application by Mrs Antoanetta Nehma (the Applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) of 18 May 1998, which affirmed a decision of an Authorised Review Officer (ARO) of the Department of Social Security (now known as the Department of Family and Community Services) (the Department) made on 18 July 1997, to raise and recover an Assurance of Support Debt of $8,147.20 (T11). That decision affirmed a decision of a Departmental delegate made on 6 June 1997 (T8).

2. Mrs Nehma was represented by Ms S Koller, solicitor from the Welfare Rights Centre, Sydney and the Department was represented by Mr P McDougall, Departmental Advocate. Evidence was provided to the Tribunal by Mrs Nehma and her mother, Mrs Mariyka Dimitrova Andreeva. Mrs Andreeva was assisted by an interpreter in the Bulgarian language.

3. The Tribunal received into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T documents - T1-T14). The Tribunal also admitted into evidence the following exhibits:

Exhibit A1 A2 A3 A4 A5 A6 A7 Description Letter to Mrs M Andreeva from Regional Manager, Sutherland Office of Department of Social Security Letter to Mr P Sanders, Department of Social Security, Wollongong East from Mrs Nehma Statement to the Administrative Appeals Tribunal from Slavica Krstevska Statement to the Administrative Appeals Tribunal from Ilia G Stoyanov Social Security Policy and Legislation extract Claim for Job Search/Newstart Allowance - Mrs M Andreeva Departmental New Claim Action Sheet re Mrs M Andreeva Date 16 April 1996 18 June 1997 20 January 1999 21 January 1999 28 October 1998 29 March 1996 9 April 1996

ISSUES

4. There is no dispute that a debt of $8,147.20 is owed to the Commonwealth by Mrs Nehma. The issue for the Tribunal is whether or not the debt should be recovered.

LESISLATION

5. The relevant legislation is contained in the Social Security Act 1991 (the Act).

6. Section 23(1) of the Act deals with Assurance of Support and provides:

" "assurance of support' means an assurance of support within the meaning of the Migration (1989) Regulations or the Migration (1993) Regulations;

'assurance of support debt' means a debt due and payable by a person to the Commonwealth, or a liability of a person to the Commonwealth, because of the operation of:

(a) subregulation 165(1) of the Migration (1989) Regulations as in force on or before 19 December 1991; or

(b) regulation 164C of the Migration (1989) Regulations as in force after 19 December 1991 and before 1 February 1993; or

(c) Part 5 of the Migration (1993) Regulations as in force on or after 1 February 1993;

(ca) Division 7 or Part 2 of the Migration (1994) Regulations as in force on or after 1 September 1994;

(cb) widow allowance under part 2.8A of this Act; or

in respect of the payment to another person of:

(d) job search allowance; or

(da) parenting payment under Part 2.10 of this Act; or

(e) newstart allowance under Part 2.12 of this Act; or

(ea) mature age allowance; or

(eb) mature age partner allowance under Part 2.12A of this Act; or

(f) special benefit under Part 2.15 of this Act; or

(fa) partner allowance under Part 2.15A of this Act; or

(fb) parenting allowance; or

(g) unemployment benefit under section 116 of the 1947 Act; or

(h) job search allowance under section 117A of the 1947 Act; or

(i) special benefit under section 129 of the 1947 Act;"

7. At the time an Assurance of Support was in existence, Mrs Andreeva, Mrs Nehma's mother, applied to the Department for a Job Search Allowance. At the time of Mrs Andreeva's application on or about 29 March 1996, section 517A of the Act applied and provided:

"517A. A person is not qualified for job search allowance in respect of a period if the Secretary is satisfied that throughout the period:

(a) an assurance of support was in force in respect of the person (in this section called the 'assuree'); and

(b) the person who gave the assurance of support was willing and able to provide an adequate level of support to the assuree; and

(c) it was reasonable for the assuree to accept that support."

8. Recovery of debts which arise out of assurances of support is dealt with under section 1227 of the Act which provides:

"If a person is liable to pay an assurance of support debt, the debt is a debt due to the Commonwealth."

9. In relation to recovery of debts, the relevant provisions of the Act, as to "write-off" or "waiver" are found in the following sections:

"1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a) the debt is irrecoverable at law; or

(b) the debtor has no capacity to repay the debt; or

(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d) the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.

1237A(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.

"1237AAD 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 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."

BACKGROUND

10. The following information is provided by way of background and the facts contained are not in dispute:

* Mrs Nehma was born in Bulgaria on 2 April 1964. She migrated to Australia on 31 October 1991 (T3). Mrs Nehma is married with two young children, her first child was born on 22 April 1996 and her second child was born on 12 June 1998.

* In 1994, Mrs Nehma decided to support her mother's immigration to Australia and on 5 September 1994 signed an Assurance of Support in relation to Mrs Mariyka Dimitrova Andreeva. Mrs Andreeva arrived in Australia on 22 February 1995 and lived with her daughter and son-in-law in their town-house.

* Mrs Nehma was required to lodge a bond in relation to the abovementioned Assurance of Support of $3,500 (T4).

* On 29 March 1996, Mrs Andreeva signed a claim for Job Search/Newstart Allowance (Exhibit A6).

* Following decisions of a Departmental delegate and ARO that Mrs Nehma owed $8,147.20 to the Commonwealth, she sought a review of the ARO's decision, applying in writing to the SSAT on 7 August 1997 and submitted that:

"I believe the decision is incorrect because the interviewing officer should draw our attention about where the money will come from (e.g. there will be a debt against me) after I asked 2 times about this at the interview. I made wrong decision taking the payment because the officer said it will be O.K. even [if] my mother is under assurance of support(sic)." (T12)

* On 18 May 1998, the SSAT affirmed the Department's decision to raise and recover a debt arising out of the Assurance of Support taken out by Mrs Nehma in respect of her mother. The SSAT decided that:

"26. ... While it is unfortunate for Mrs Nehma that this situation arose, the tribunal notes that at the time she took her mother in to apply for any benefits she might be able to receive, Mrs Nehma knew there was assurance of support in existence and knew what that assurance of support entailed. Unfortunately there was some confusion about her position at the time she spoke with the interviewing officer, however the tribunal does not consider that this constitutes sole administrative error on the part of the department which is required if a debt is to be waived under section 1237A of the Act.

27. As there was no further evidence before the tribunal about any circumstances of Mrs Nehma that would be sufficiently special or unusual for waiver under section 1237AAD of the Act, the Tribunal decided that the debt in question should be recovered from Mrs Nehma." (T2)

* Subsequently Mrs Nehma appealed to the Administrative Appeals Tribunal on 17 July 1998, stating that:

"I do not agree with the reasons on which the Tribunal [SSAT] has made its decision. I do not dispute the fact that I have sign an Assurance of Support for my mother, but I do not agree that I knew that the Assurance of Support was in effect at the time my mother applied for social security benefit. I am aware that the rules and law for Social Security change very often therefore I've asked the interviewing officer about our situation and he said (sic) will be no problem. We agree to take the benefit on good faith what we have been told by the competent body - authorise (sic) officer.

I believe I have been mislead (sic) and I took wrong decision which created debt for me which I can not afford to pay." (T1)

EVIDENCE OF MRS NEHMA

11. Mrs Nehma informed the Tribunal that she migrated to Australia as a skilled migrant, having trained in Bulgaria as a chemical engineer.

12. In Australia, Mrs Nehma has been working as a technical officer for the same company, Grenadier Coating, since 9 March 1992.

13. Mrs Nehma told the Tribunal that she married in August 1993 and subsequently, she and her husband had two children.

14. Mrs Nehma told the Tribunal that she wished to arrange for her mother to come to Australia following the death of her father and the only way this could be arranged was for her to sign an Assurance of Support. Mrs Nehma stated that when she signed the Assurance of Support, she was aware of the condition that her mother would not be able to receive benefits from the Department without the possibility of Mrs Nehma incurring a debt.

15. At the time of signing the Assurance of Support, Mrs Nehma continued to be employed in her technical officer position and her husband had also been working. In about March 1993, Mrs Nehma recalled that her husband had lost his job as a production supervisor and that, at this point, he purchased a car and leased some taxi plates. Unfortunately, on one occasion, a driver retained by Mr Nehma to drive his taxi, had a motor vehicle accident and the car was "written off". Mr Nehma decided that he did not wish to obtain another taxi and, as a result, has been unemployed on and off ever since. Mrs Nehma described her husband's occasional employment as a taxi driver driving other people's taxis although he did not undertake such duties regularly and also suffered from varicose veins which prevented him obtaining many positions.

16. Mrs Nehma explained the nature of her employment. She told the Tribunal that she has had long term employment as a technical officer with Grenadier Coating for many years, taking maternity leave following the births of her first and second children. At the time of hearing, Mrs Nehma was still on maternity leave. She plans to return to full-time duties during March 1999.

17. Mrs Nehma informed the Tribunal that her husband had previously signed an Assurance of Support in respect of his mother to allow her to come to Australia from Egypt. This Assurance of Support was discharged without incident.

18. The Tribunal was informed that after Mrs Andreeva had been in Australia for some time, there had developed within the family, particularly between Mrs Andreeva and Mr Nehma, some discord and particularly difficulties arising out of Mr Nehma's and Mrs Andreeva's two very different cultural backgrounds and language problems. Mrs Nehma stated that when her mother first arrived, there had not been any problems and indeed, Mr Nehma had not been concerned to have Mrs Andreeva living with them because, as Mrs Nehma described, he was very much "in love" and was not really considering the consequences or reality of living with his mother-in-law.

19. After approximately six months of very difficult family relationships, Mrs Andreeva returned to Bulgaria. Mrs Nehma described her mother as being depressed and very upset over the strained relationships. Mrs Nehma stated that her mother returned to her country to allow things to "cool off". Mrs Andreeva stayed in Bulgaria for approximately six months and returned to Australia in February 1996 to once again live with Mr and Mrs Nehma.

20. Mrs Nehma stated that the family relationships once again became strained and very difficult. At this time, Mr Nehma was unemployed and Mrs Nehma was on maternity leave. There was therefore an added difficulty of the family's financial position being imposed upon the pre-existing difficulties in family relationships. Mrs Andreeva had been unable to obtain employment and in such circumstances, Mrs Nehma and her mother approached the Department to obtain advice as to the possibility of Social Security benefits. Mrs Nehma informed the Tribunal that she wanted to also find out what impact her mother's receipt of Social Security benefits might have on her, particularly in light of Mrs Nehma having signed an Assurance of Support.

21. Mrs Nehma described two visits to the Department, the first of which was to obtain advice and a claim form, if it was appropriate. The second occasion involved the return of a completed Job Search Application form and a formal interview with a Departmental officer and an interpreter in the Bulgarian language, arranged by the Department.

22. Mrs Nehma described the interview as taking place over approximately 30 minutes. Initially the Departmental officer looked over the claim form and said that it was "O.K.". Mrs Nehma told the Tribunal that because she knew that she had signed an Assurance of Support in relation to her mother and she was aware of the possible consequences of incurring a debt should her mother receive Departmental benefits, Mrs Nehma was anxious to ask the officer whether or not there would be any problems for her or her mother if Mrs Andreeva received Social Security benefits. Mrs Nehma informed the Tribunal that the Departmental officer stated that there would be no problem for her or her mother if Mrs Andreeva was successful in her application for a Job Search Allowance. Mrs Nehma further stated that the Departmental officer advised her that, because the Assurance of Support had been in existence at that point for a year, there would be "no problems". Mrs Nehma advised the Tribunal that the Departmental officer had noted on the claim form that there was an Assurance of Support in existence but Mrs Nehma stated that this did not seem to concern him. Mrs Nehma added that it was her impression that the Departmental officer did not consider the Assurance of Support as an important part of the interview.

23. Mrs Nehma informed the Tribunal that her mother also asked through the interpreter whether she would "get into trouble" if she were to receive Social Security benefits. The officer replied once again that there would be no problems arising out of Mrs Andreeva's receipt of Departmental benefits while there was an Assurance of Support in existence.

24. Mr McDougall questioned Mrs Nehma as to whether or not she thought it might have been prudent to confirm the Departmental officer's advice about the Assurance of Support, particularly when she knew from the time of her signing of the Assurance of Support that she was liable to incur a debt if her mother received Social Security benefits while an Assurance of Support was in existence. Mrs Nehma replied that she had checked with the Departmental officer as to any difficulties arising out of Mrs Andreeva receiving Departmental benefits at a time when there was an Assurance of Support in existence. She further stated that her mother had also questioned the officer and received the same answer confirming that there would be no problem for either Mrs Andreeva or Mrs Nehma as a result of Mrs Andreeva being successful in receiving Departmental benefits. Mrs Nehma posed the question, "how many times was it necessary to check advice when it had already been done on two occasions with a person charged with the authority and responsibility of advising the public as to the practices, procedures, responsibilities and obligations of beneficiaries in relation to Social Security matters?".

25. Some time after the interview with the Departmental officer, Mrs Nehma recalled that her mother was granted a Job Search Allowance. The allowance was initially sent to Mrs Andreeva, care of Mr and Mrs Nehma's home address where they were all still living. Unfortunately, family relationships continued to deteriorate to a point where, approximately two months after having received the Job Search Allowance, Mr Nehma threw Mrs Andreeva "out on the street". Subsequently, one week later, Mrs Nehma herself left the family home and she and her mother obtained rental accommodation for some time. During this period of absence from the family home, Mrs Nehma and Mrs Andreeva continued to receive their mail at the address of the rental accommodation. There was no problem with their mail as Mrs Nehma had formally arranged through the Post Office to have mail re-directed for both herself and her mother. It did not occur to Mrs Nehma that her husband may not have passed mail on to her which for some reason may not have been sent through the re-directed post. Mr and Mrs Nehma eventually reconciled as a result of counselling, but Mrs Andreeva continued to live separately from Mr and Mrs Nehma.

26. Mrs Nehma stated that she contacted the Commonwealth Bank to enquire about the release of the bond of $3,500, lodged at the time of the commencement of the Assurance of Support. Mrs Nehma was subsequently told by the Bank to contact the Department who informed her that the bond could not be released. This was the first occasion when Mrs Nehma became aware that there may have been a problem in relation to the Assurance of Support. On 16 May 1997, the Department wrote to Mrs Nehma advising that the bond could not be released. Mrs Nehma described to the Tribunal feeling astounded at the possibility of there being a debt owed by her to the Commonwealth and she then requested an investigation be made by the Department. On 18 June 1997, Mrs Nehma wrote to Mr P Sanders, Departmental officer at the Wollongong East office, explaining:

"I am aware of the fact that by signing the Assurance of support I am responsible for the person covered by this Assurance.

Four years ago I have signed an Assurance of support for my mother Mariyka Dimitrova Andreeva.

Since my circumstances have changed dramatically after I have signed the documents I couldn't support any more my mother Mariyka Andreeva and provide her with the required condition for living.

What I mean by changing in circumstances is: I had a baby at that time and I had to go on maternity leave; my husband was and is still unemployed since 1993; the pressure in the family had raised to an insupportable level and I had to let my mother move out of the house in one way or another.

Therefor me and my mother (Mariyka Andreeva) went to DSS to ask whether she will be able to get any assistance so she could survive on her own.

At the interview was present a Bulgarian interpreter because my mother does not speak English very well. We have asked two times through the interpreter whether there will be any problem because Mariyka is under assurance of support ?; the answer was: "No, because one year have passed since she arrived in Australia".

I expected to be point out that if Mariyka get any financial assistance from DSS this will be my debt but nothing was said.

Since the law and the rules in DSS and Immigration are changing very often I trusted the Interviewing officer of the DSS as competent representative and accepted the payment.

...

I knew I can not pay her any money so she can live on her own because I don't have them. I wouldn't accept any assistance from DSS if I knew I am creating debt against myself because I can not repay it." (Exhibit A2)

27. The Tribunal was advised that Mrs Nehma was very worried about the debt and the possible accrual of interest. In these circumstances, she asked friends to loan her money which she would then repay. Statements from Slavica Krstevska and Ilia G Stoyanov provided to the Tribunal indicate that they did indeed loan Mrs Nehma $2,000 each on 2 October 1997 and 27 September 1997 respectively and that they expected to be repaid (Exhibits A3 and A4).

28. Mrs Nehma provided the following information about her finances:

Income

With husband working

Parenting payment 290- pfn

Newstart allowance 230- pfn

Family payment 190- pfn

Earnings 170- pfn approx (affects Newstart)

Total 880- pfn

Without husband working

Parenting payment 290- pfn

Newstart allowance 290- pfn

Family payment 190- pfn

Total 770- pfn

Estimated expenses

Mortgage 190- p/w

Council rates 118- p/q 9- p/w

Water rates 125- p/q 10- p/w

Strata fees 218- p/q 17- p/w

Electricity 225- p/q 17- p/w

Telephone 120- p/q 9- p/w

Groceries 40- p/w

Meat 20- pfn 10- p/w

Vegetables 35- pfn 18- p/w

Milk/bread 20- pfn 10- p/w

Clothes 20- pm 5- p/w

Shoes 10- pm 3- p/w

Car insurance 1,200- p/a 23- p/w

Petrol 25- pm 6- p/w

Public transport 3- pm 1- p/w

Chemist 3- p/w

Dentist 2- p/w

Health Fund 15- p/w

Newspapers 2- p/w

Other hairdresser etc. 5- p/w

Total weekly expenditure = 395-

fortnightly expenditure = 790-

Debts

Mortgage $85,000-

Friends $4,000-

29. The Tribunal was informed that Mr and Mrs Nehma require two cars because Mrs Nehma works approximately 25 kilometres from her home and it is very difficult to travel from her home to work by public transport. Further, Mr Nehma needs a car because he has the care of the children. The cars are quite old and are by no means a luxury but rather a necessity, Mrs Nehma stated.

30. Mrs Nehma concluded that she would not have put herself knowingly in a position of debt by allowing her mother to obtain a Job Search Allowance. Mrs Nehma stated that at the time she already had a debt in relation to her home mortgage, her husband was unemployed and she herself had little money. Mrs Nehma stated that the advice she had been given by the Department was that there would be no repercussions for her or her mother as a result of Mrs Nehma receiving Departmental benefits. Mrs Nehma told the Tribunal that her mother would have returned to Bulgaria had there been no Social Security benefits available to her and that this was a realistic option as she had returned to her homeland before and stayed with her son. There was no problem about Mrs Andreeva undertaking this journey once again if there had not been income security available or if they had been advised of the possibility of a debt arising as a result of her receiving social security.

EVIDENCE OF MRS MARIKYA ANDREEVA

31. Mrs Andreeva told the Tribunal that she arrived in Australia in February 1995. She had been recently widowed in Bulgaria and wanted to be closer to her daughter and be of some assistance to her daughter.

32. Mrs Andreeva recalled that at the time of her arrival in Australia, her daughter was working but that her son-in-law was not. In terms of Mrs Andreeva's relationship with her son-in-law, she stated that they did not have much to say to each other. Mrs Andreeva stated that her relationship with Mr Nehma was strained and was not helped by the differences in their language and culture. Because of these differences and the resultant strained family relationships, Mrs Andreeva returned to Bulgaria in September 1995 and stayed with her son, returning to Australia in February 1996. Upon her return, Mrs Andreeva had no money of her own and was unable to find any employment. Mrs Andreeva stated that these arrangements lasted for a short time but relationships within the family were deteriorating. At this point, Mrs Andreeva stated that she had two choices, that is, either to obtain help within Australia from the Department or to return to Bulgaria. Accordingly, in March 1996, Mrs Andreeva went with her daughter to the Department to enquire about possible Social Security benefits. Mrs Andreeva was given a claim form to complete in relation to Job Search/Newstart Allowance which she took away to complete at home. Accompanied by her daughter, Mrs Andreeva returned the form to the Department and this was handed over during an interview between Mrs Andreeva, Mrs Nehma, a Departmental officer and a Bulgarian interpreter arranged by the Department.

33. The interviewing officer looked at the completed claim form and stated that there were no problems with it. Mrs Andreeva stated that she recalled asking whether or not there would be any problems for her or her daughter if she received any money from the Department and was told that there would be no problem. Mrs Andreeva recalled this interview very well, because she remembered that the interviewing officer only had one hand. Mrs Andreeva also recalled that her daughter asked the Departmental officer about any difficulties she might have if her mother received Social Security benefits as she was concerned about the impact of this upon her having signed an Assurance of Support. Mrs Andreeva told the Tribunal that the Departmental officer told Mrs Nehma that everything was "OK". Mrs Andreeva recalled that the interview lasted for approximately 10 minutes.

34. When questioned as to what she would have done if the Department had not granted a Job Search Allowance, Mrs Andreeva stated that she would have returned to Bulgaria to live with her son. Mrs Andreeva stated that she had done this previously and could do it again.

35. At the conclusion of the interview with the Departmental officer, Mrs Andreeva was told that she would receive a letter from the Department informing her of whether or not her application had been successful. Mrs Andreeva received the letter at Mr and Mrs Nehma's home where she was still living at the time. Then in August 1996, Mr Nehma "threw me out on the street with my luggage", Mrs Andreeva explained, and she was forced to find rental accommodation. Mrs Andreeva continued to receive her fortnightly allowance and also the fortnightly review forms at her new address. Mrs Andreeva stated that the arrangements made to have her mail forwarded to her new address posed no problems and she was never concerned that her mail had not been received.

APPLICANT'S SUBMISSION

36. Ms Koller, for the Applicant, submitted that Mrs Nehma was seeking waiver of the recovery of the debt due to the Commonwealth of $8,147.20 pursuant to section 1237AAD of the Act. Ms Koller further submitted that waiver was more appropriate than write-off as Mrs Nehma had already repaid the debt by using borrowings from her friends and nothing would be gained by now writing off the debt.

37. In relation to section 1237AAD of the Act, Ms Koller submitted that this section should be applied to Mrs Nehma because the debt did not result from Mrs Nehma knowingly making a false statement or failing or omitting to comply with a provision of the Act. Further, Ms Koller stated that there were special circumstances which applied to Mrs Nehma's case and which the Tribunal should consider.

38. Ms Koller asked the Tribunal to first consider section 517A of the Act as it stood as at 21 March 1996 and that the Department did not follow the law as provided in section 517A of the Act, in that a person is not qualified for a Job Search Allowance if an Assurance of Support was in force in respect of the person claiming Social Security benefits. The Department also did not follow its own policy guidelines, Ms Koller submitted.

39. Ms Koller referred the Tribunal to an extract from the Department's own policy document, "Social Security Policy and Legislation - current as at 28 October 1998" in relation to "Part G: Assurance of Support" paragraph 1.9300 (Exhibit A5). This policy document requires an interview with an assurer and the claimant at the time of a claim for Departmental benefits and that both parties should be made aware of the assurer's obligations under the Assurance of Support and the consequent raising of a debt following any receipt of a Social Security benefit. After an initial interview at the time of a claim, three monthly reviews should be conducted according to the policy document. Paragraph 1.9602 requires that at the same time as three monthly reviews for the assurer are being undertaken, the balance of the Assurance of Support Debt should be up-dated and the assurer notified of the amount of debt outstanding.

40. If the requirements under section 517A of the Act had been carried out or the Department's own Policy Guidelines followed, Mrs Nehma would have been aware of the consequences of her mother receiving a Job Search Allowance, Ms Koller contended. In addition, Mrs Nehma would have had the opportunity of arranging her affairs differently and possibly of arranging for her mother to return to Bulgaria. There were real options therefore open to Mrs Nehma and her mother if Social Security benefits were contra-indicated and Mrs Nehma and her mother had been informed of this. The Department's actions in incorrectly advising Mrs Nehma and Mrs Andreeva denied Mrs Nehma in particular of the possibility of preventing or minimising her debt to the Commonwealth. Ms Koller submitted to the Tribunal that the Department's error in not following section 517A of the Act and their own Policy Guidelines in relation to Assurances of Support amounted to administrative error. Such administrative error, Ms Koller contended, amounted to a special circumstance and, in this regard, she referred the Tribunal to Re Secretary, Department Social Security and Saracik (1993) 30 ALD 567.

41. Ms Koller asked the Tribunal to consider the correct formulation of special circumstances as decided in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31. The reasoning in this decision was applied in a more recent case of Secretary, Department of Social Security v Hales (1998) 153 ALR 259. In Riddell v Secretary, Department of Social Security (supra) the Court determined at p38:

"Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other."

42. The scope of special circumstances was also discussed in Secretary, Department of Social Security v Hales (supra) in which the Court noted at p267:

"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."

The Court further found in Secretary, Department of Social Security v Hales (supra) that financial hardship was not an essential prerequisite for the exercise of the discretion in relation to special circumstances and waiver. Ms Koller urged the Tribunal to consider that the issue of special circumstances had to be decided according to the particular factual and contextual information available in relation to each individual matter.

43. Ms Koller submitted that when Mrs Nehma and Mrs Andreeva had the interview with the Departmental officer, they made appropriate enquiries about the Assurance of Support and the impact of receiving income support from Social Security on that Assurance of Support. Both Mrs Nehma and Mrs Andreeva should be believed in relation to their account of what they were told by the Departmental officer, in that there would be no problem for either of them if Mrs Andreeva were to receive a Job Search Allowance. Mrs Nehma and Mrs Andreeva were entitled to believe the Departmental officer who spoke with the authority of the Department, Ms Koller submitted. Ms Koller stated that Mrs Nehma had been consistent in her evidence about what was said at the interview over a considerable period of time, and that Mrs Andreeva's evidence corroborated Mrs Nehma's evidence.

44. Ms Koller referred the Tribunal to Exhibit A2 which is a letter sent by Mrs Nehma to Mr P Sanders in relation to her concerns about a debt being accrued against the Commonwealth. This letter was further contemporaneous evidence of what Mrs Nehma was told at the interview. Mrs Andreeva and Mrs Nehma have clear recall of events and they should be believed. This account of the events of the interview indicates further Departmental administrative error in that the incorrect advice was given to Mrs Nehma and her mother.

45. Ms Koller further submitted that there could be no doubt that Mrs Nehma and Mrs Andreeva received all their mail during the period under review and therefore there could be no doubt that the Department did not send any Departmental review letters on a three monthly basis nor advise Mrs Nehma of the debt and its accruing nature. As the relevant Departmental file is missing, as advised by Mr McDougall, Departmental Advocate, there is no evidence to disprove the proposition that the Department did not undertake its own Policy Guidelines nor apply section 517A of the Act in relation to an Assurance of Support.

46. The Tribunal was referred to Re Ebrahimi and Secretary, Department of Social Security (AAT 12872, 11 May 1998) in which that Tribunal noted the failure of the Department to follow its own Departmental procedures which then significantly disadvantaged Mr Ebrahimi by preventing him from taking action to stop a debt continuing to accrue.

47. Ms Koller distinguished the facts of Mrs Nehma's circumstances to those present in Re Lamvohee and Secretary, Department of Social Security (AAT 12166, 28 August 1997), in which not only was there a question as to Mr Lamvohee's credit, but also this was a case in which the Tribunal determined that the Applicant was not unaware that a claim for benefit had been made by the person the subject of the Assurance of Support and was also aware of the warning in relation to debts.

48. In Mrs Nehma's case, there had been a change in family relationships and circumstances where Mrs Nehma's husband had become unemployed, Mr and Mrs Nehma had had a child and there were dysfunctional family relationships which finally resulted in Mrs Andreeva having to leave and either obtain social security or return to Bulgaria. In Mrs Nehma's case, she knew of the Assurance of Support and had Departmental advice in relation to it. Having obtained advice, and relied upon it, Mrs Nehma and her mother took a course of action which then resulted in Mrs Nehma incurring a debt owed to the Commonwealth. Mrs Nehma did not make any false statements or representations nor did she deliberately omit to comply with the law, she simply relied on Departmental advice which was wrong.

49. Ms Koller contended that the special circumstances in relation to Mrs Nehma are set out in the Applicant's statement of facts and contentions at page 5:

"· The incorrect advice that the assurance of support no longer mattered which resulted in Mrs Nehma concluding that her mother did not need to go to stay with family or friends in Bulgaria;

· The failure of the Department to review the case - Mrs Nehma returned to work between the birth of the children and might have assisted her mother at that time;

· The failure to send the three monthly letters which would have advised Mrs Nehma that the initial advice was incorrect; and

· The financial difficulties arising and embarrassment from being indebted to her friends."

50. In conclusion, Ms Koller contended that the circumstances of Mrs Nehma's case were that the debt had not arisen from any knowing failure to comply with the Act and there were special circumstances other than financial hardship alone which warranted the waiving of the overpayment. Ms Koller reiterated the point that waiver was more appropriate than write-off, as the debt had been already repaid and write-off would not adjust the consequences of unfairness arising from the failure of the Department to give Mrs Nehma the benefit of being treated in accordance with its own guidelines.

RESPONDENT'S SUBMISSIONS

51. Mr McDougall, for the Respondent, referred the Tribunal to the fact that on 5 September 1994, Mrs Nehma signed a valid Assurance of Support in relation to her mother, pursuant to section 23 of the Act. Because Mrs Andreeva claimed and subsequently received a Job Search Allowance during a period in which a valid Assurance of Support existed, then a debt arose and was recoverable pursuant to section 1227 of the Act.

52. Mr McDougall admitted that the Department did not strictly adhere to its own policy and procedures in relation to Assurances of Support, particularly in terms of providing Mrs Nehma with information about the debt. However, Mr McDougall submitted that this was not "fatal" to the issue of whether the debt should be recovered. In this regard, Mr McDougall referred the Tribunal to Re Lamvohee and Secretary, Department of Social Security (supra) in which that Tribunal found that there were some "strange delays" on the part of the Department, yet determined that even though there had been problems with the Department's handling of the matter, the events which followed this were not influenced to any great extent by the Department's actions or inaction in that matter. Mr McDougall submitted that the Tribunal should follow the reasoning in Re Lamvohee (supra), and hence Mrs Nehma knew of the existence of the Assurance of Support and that it existed for two years during which time her mother was not entitled to Social Security payments.

53. Mr McDougall further submitted that Mrs Nehma may well have been given incorrect advice from a Departmental officer, but she still had the responsibility of further clarifying this information, particularly as it was inconsistent with the advice given to her at the commencement of the Assurance of Support. Mr McDougall admitted that the Department was at some disadvantage because the relevant file or files had been lost, yet he still pressed the point that Mrs Nehma had the responsibility of further questioning and obtaining advice about the consequence of Mrs Andreeva receiving income support when an Assurance of Support was in existence.

54. In relation to the interview during which Mrs Andreeva and Mrs Nehma were given advice that there would be no penalties to either of them as a result of Mrs Andreeva receiving income support payments, when an Assurance of Support existed, Mr McDougall asked the Tribunal to consider that perhaps the right questions were not asked at the interview. In this regard, Mr McDougall indicated that an answer from the Departmental officer that there were "no problems" with the course of action proposed by Mrs Andreeva, was somewhat unclear and ambiguous and accordingly, it may well be that the questions asked by Mrs Nehma and her mother were not quite on the point. Therefore, Mr McDougall submitted that there may well be some doubt as to whether or not the answer to the questions put by Mrs Andreeva and Mrs Nehma were specifically in relation to Mrs Nehma's obligations under the Assurance of Support and the consequences of Mrs Andreeva receiving a Job Search Allowance.

55. In relation to Re Ebrahimi and Secretary, Department of Social Security (supra), Mr McDougall contended that that matter could be distinguished on the facts from Mrs Nehma's circumstances. In this regard, Mr McDougall submitted that Mrs Nehma was present when Mrs Andreeva's claim for Job Search Allowance was lodged and this clearly distinguished her from Mr Ebrahimi who was not present when a claim for income support was lodged. There was clearly error on both the Department's and Mrs Nehma's part, and accordingly, section 1237A(1) of the Act did not apply as the debt did not arise solely through administrative error.

56. In conclusion, Mr McDougall submitted that the decision of the SSAT should be affirmed as there are no special circumstances to warrant waiving any or all of the debt. In the alternative, Mr McDougall submitted that if the Tribunal were of the view that there were special circumstances warranting waiver of part or whole of the debt, then Mr McDougall contended that the bond paid to the Commonwealth Bank by Mrs Nehma should not be waived to reflect that there was not error solely on the part of the Department.

FINDINGS

57. In reaching a decision in this matter, the Tribunal has taken into account the available evidence, the legislation and relevant case law.

58. Mrs Nehma provided unembellished evidence, was forthright and the Tribunal was impressed with Mrs Nehma as a witness of credit.

59. Mrs Andreeva presented evidence in a straight forward manner and the Tribunal also considered her to be honest.

60. There has been no challenge by the Department to the credibility of the witnesses or their evidence. There is also no dispute that a debt to the Commonwealth exists, arising out of the payment of Job Search Allowance to Mrs Andreeva at a time when a valid Assurance of Support existed in relation to Mrs Andreeva and taken out by her daughter, Mrs Nehma.

61. In this case, the debt of $8,147.20 has been recovered in its entirety by way of money paid by Mrs Nehma from loans given to her by friends in addition to utilising a bond paid by Mrs Nehma to the Commonwealth Bank at the commencement of Assurance of Support. The evidence is, and the Tribunal accepts this evidence, that the money loaned to Mrs Nehma by friends is expected by these friends to be repaid.

62. The Tribunal considers that write-off is not a possibility in this case as the debt has been repaid and an application of that section would be meaningless in this situation and, indeed, unfair.

63. The Tribunal turned then to consider whether or not there were any circumstances which made it appropriate to waive the whole or part of the debt to the Commonwealth.

64. Section 1237A refers to debts occurring solely because of administrative error and, in such circumstances, the Secretary must waive the debt. This section has no application in the circumstances of Mrs Nehma's case as the debt arising out of an Assurance of Support does not allow for an application of this section because the receipt of a Social Security benefit by the debtor is an essential element. The facts of this case are that Mrs Andreeva received the payments of Job Search Allowance and not Mrs Nehma, who is the debtor.

65. The other possibility for waiver lies in the application of section 1237AAD of the Act. This section provides a broader power of waiver where there are "special circumstances".

66. The Tribunal finds that Mrs Nehma did not knowingly make a false statement and also did not knowingly fail or omit to comply with a provision of the Act. To the contrary, at the time of Mrs Andreeva's making a claim for Job Search Allowance, Mrs Nehma made direct enquiries as to the consequences of her mother making a successful claim for Job Search Allowance on Mrs Nehma's obligations under the Assurance of Support. Mrs Andreeva also made enquiries through the Bulgarian interpreter in relation to this very issue. Both Mrs Andreeva and Mrs Nehma were advised that there would be no problem with receiving income support from the Department in relation to the existence of an Assurance of Support as they were advised that because the Assurance of Support had been in existence for a year, then there would be no impact upon either party as a result of Mrs Andreeva obtaining a Job Search Allowance.

67. The Tribunal does not doubt Mrs Nehma's and Mrs Andreeva's account of the interview with the Departmental officer and Bulgarian interpreter. The Department has not challenged the evidence in relation to this interview, but has only questioned that perhaps the right questions were not asked and the reply given to Mrs Nehma and Mrs Andreeva may not have been strictly on point in relation to the obligations of Mrs Nehma and the consequences of receipt of a Job Search Allowance by Mrs Andreeva on the development of a debt to the Commonwealth.

68. Mr McDougall submitted that Mrs Nehma should not have accepted the advice given to her by the Departmental officer but rather she should have made further enquiries. Mr McDougall further submitted that the reply from the Departmental officer that everything was "OK" and there were no problems with the receipt of a Job Search Allowance was an unclear answer and, again, further enquiries should have been made. Mr McDougall has asked that the Tribunal consider that it did not know what questions were asked of the Departmental officer and therefore could not be certain of the reply to Mrs Nehma and Mrs Andreeva that there would be no problems as a result of their actions.

69. The Tribunal is not persuaded by this argument. Mrs Nehma and Mrs Andreeva were not experienced in their dealings with the Department. While they had some knowledge in relation to Assurance of Support matters, they were not fully aware of the legislation giving rise to the Department's policy, procedures and practices. Mrs Nehma did have some knowledge about the Assurance of Support and she was concerned that her mother's claim for a Job Search Allowance may have personally caused her some difficulty which is why she asked about these potential problems during the course of the interview with the Departmental officer.

70. The interview took place in a Departmental office in a special section of the office, set aside for the purpose of interviews with potential claimants and recipients. There was also an interpreter present as was appropriate for this particular case. The Tribunal considers that the context in which the interview took place lends weight to the view taken by Mrs Nehma, in particular, that the advice she was given was given with the full authority of the Department and that the advice was given properly, formally and by a Departmental delegate charged with the delivery of service to potential claimants and recipients. The Tribunal considers Mrs Nehma to be an intelligent person and cannot accept that the question asked by her would not have been very clearly on the point of her obligations under the Assurance of Support. Therefore, the Tribunal does not accept Mr McDougall's argument that the proper questions may not have been asked or the Tribunal may not be in a position to fully evaluate the answer to a question which may not have been on point. The Tribunal also considers that, while Mrs Andreeva was having to clarify her position by using an interpreter, the error of giving incorrect advice most probably did not rest on her interpretation of the answer given to her but rather with the information provided by the Departmental officer. That officer knew that there was an Assurance of Support in existence as he had been told this by Mrs Nehma. There was also clear formal information on the application form for Job Search Allowance by Mrs Andreeva that an Assurance of Support did exist. The officer therefore could have been under no misapprehension or misinformation that there was an Assurance of Support in existence. On the available evidence, the Tribunal finds that Mrs Andreeva and Mrs Nehma were provided with incorrect advice as to their position.

71. The Tribunal finds that Mrs Nehma and Mrs Andreeva were entitled to accept the advice given to them on two occasions during formal interviews with Departmental officers in the context of this occurring within the offices of the Department in a designated interview room. The advice was inconsistent with that provided initially to Mrs Nehma when she signed the Assurance of Support, however, the advice was being given to her some time later by a Departmental officer whose advice and authority Mrs Nehma had no reason to doubt. The Tribunal also finds, and the Respondent concedes, that the Departmental procedures were not followed in relation to the receipt of a claim for Job Search Allowance when there was an Assurance of Support in existence. Further, the Tribunal finds that the provisions of section 517A of the Act were also not complied with by the Department, to its detriment, and inadvertently to the detriment of Mrs Nehma.

72. In the above circumstances, the Tribunal finds that there are special circumstances in existence in relation to Mrs Nehma's case. First and foremost, there is a special circumstance arising out of the Department's failure to provide correct advice to Mrs Nehma and Mrs Andreeva. Secondly, there is Departmental error in its failure to follow the provisions of section 517A of the Act and, further, a failure to follow its own practices and procedures in relation to review of Assurance of Support and provision of three monthly advice to assurers of any debt accruing as a result of claims made by assurees for Departmental benefits. The consequence of these errors was that Mrs Andreeva received Job Search Allowance in good faith and this was supported, also in good faith, by Mrs Nehma. Had the advice been different or indeed Mrs Nehma been provided with three monthly reviews and statements of debt, then both parties would have had the opportunity to act differently and to make alternative arrangements. In this regard, the Tribunal accepts that, had no income support been available to Mrs Andreeva, she could then have returned to Bulgaria or Mrs Nehma may well have been able to organise her finances differently in order to either provide income support for her mother or to arrange for her to return to her homeland. Mrs Nehma was robbed of these opportunities, not by her own failures but as a result of the Department's actions and inaction.

73. Mrs Nehma also was subject, during some of the period under review, to the difficulties associated with the poor relationship between her and her husband and the extremely strained relationship between Mrs Andreeva and Mr Nehma. While not a special circumstance in itself, the familial disharmony and dynamics provided the backdrop against which income support was required by Mrs Andreeva.

74. The Tribunal does not consider that, in relation to the issue of special circumstances, Mrs Nehma's financial position could be characterised as special. While her finances are modest, she is in a much better position than most Social Security beneficiaries and, accordingly, financial hardship is not a special circumstance in this case. Further, while Mrs Nehma may well feel embarrassed at having to borrow money from her friends, this is not considered in the legislative context of special circumstances, to have been raised.

75. In all the circumstances and in the facts of this particular case, the Tribunal finds that there are special circumstances in this matter which arise as a result of Departmental administrative error. Mrs Nehma was given incorrect advice by the Department in relation to her mother's claim and subsequent receipt of Job Search Allowance. The Department also failed to apply section 517A of the Act. Further error occurred when the Department failed to apply its own policies and procedures in relation to review and statements of debt provided to assurers. Accordingly, the Tribunal finds that the debt owed by Mrs Nehma should be waived either as a whole or in part pursuant to section 1237AAD of the Act. The remaining issue for the Tribunal is the extent to which the debt should be waived.

76. The Tribunal is concerned at the significant Departmental error in this matter. Not only was the law not correctly applied, the Department's own policy, procedures and practices also were not applied. In addition, incorrect advice was provided to Mrs Nehma and Mrs Andreeva by an officer charged with the responsibility and delegation to impart the Department's functions and procedures to claimants and recipients. The Departmental administrative errors are compounded because the relevant file or files in this matter have also been lost by the Department. Such circumstances add considerable weight to the Tribunal's concern about how this matter has been mismanaged. Mrs Nehma was entitled to accept and rely upon the advice furnished to her by a Departmental delegate and, having accepted this advice, she took certain action which was to her detriment. The Tribunal considers that it is unacceptable, on the facts of this case and the context in which the advice was given, that Mrs Nehma should have gone further and sought additional advice. It was due to the Department's failure at the initial stages to correctly advise Mrs Nehma of her position in relation to her mother's claim for Job Search Allowance and their subsequent failure to advise Mrs Nehma of the existence of a debt to the Commonwealth as well as their failure to review this debt on a regular basis, that Mrs Nehma found herself in this position. Indeed, the Tribunal finds that almost certainly other steps would have been taken by Mrs Nehma and Mrs Andreeva to avoid the circumstances where a debt might arise. In these circumstances, the Tribunal considers it appropriate that the entire debt of $8,147.20 be waived in accordance with the special circumstances of this case pursuant to section 1237AAD of the Act.

77. Accordingly, for all the reasons set out above, pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal sets aside the decision under review and substitutes its decision that the debt of $8,147.20 should be waived in its entirety.

I certify that the 77 preceding paragraphs are a true copy of the reasons for the decision herein of:

Ms S M Bullock, Member

Signed: .....................................................................................

Associate

Date/s of Hearing 4 February 1999

Counsel for the Applicant 9 April 1999

Solicitor for Applicant Ms S Koller, Welfare Rights Centre, Sydney

Solicitor for the Respondent Mr P McDougall, Departmental Advocate,

Department of Family and Community Services