Simounds and Department of Family and Community Services [1999] AATA 299 (7 May 1999)

Last Updated: 28 May 1999

DECISION AND REASONS FOR DECISION [1999] AATA 299

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. S98/271

GENERAL ADMINISTRATIVE DIVISION )

Re Barbara June SIMOUNDS

Applicant

And Secretary, Department of Family & Community Services

Respondent

DECISION

Tribunal Senior Member J.A. Kiosoglous MBE

Date 7 May 1999

Place Adelaide

Decision The Tribunal, pursuant to s.43 of the Administrative Appeals Tribunal Act 1975, affirms the decision under review.

(signed)

J. A. KIOSOGLOUS

(Senior Member)

CATCHWORDS

SOCIAL SECURITY - disability support pension - notification notice - whether applicant complied with notification requirements - administrative error - special circumstances

Social Security Act 1991 ss. 132, 1224, 1237.

Re Vitalone and Secretary, Department of Social Security (1995) 38 ALD 169

REASONS FOR DECISION

Senior Member J.A Kiosoglous MBE

1. This is an application by Mrs Barbara Simounds (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 18 June 1998 (T2) which affirmed a decision of a delegate of the Secretary of the then Department of Social Security (the Department) dated 12 September 1997 (T13), as varied by an authorised review officer (ARO) on 28 January 1998 (T17), to raise and recover a debt of disability support pension (DSP) amounting to $5,765-50.

2. The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T21), together with 6 exhibits, 3 lodged by the applicant (Exhibits A1-A3) and 3 lodged by the respondent (Exhibits R1-R3). In addition, the Tribunal heard evidence from the applicant, Mrs B. Simounds, who also called as a witness her husband, Mr J. Simounds. The applicant was represented by her husband, Mr J. Simounds, and the respondent was represented by Mr R. Ford, a departmental advocate.

3. The issues before the Tribunal are whether or not there is a debt due to the Commonwealth and, if so, whether there are any circumstances such that a part or the whole of the debt should be written off or recovery waived.

4. The relevant legislation is contained in ss.132, 1224, 1236, 1237A and 1237AAD of the Social Security Act 1991 (the Act). Of these provisions, the Tribunal sets out the most relevant to the present matter below.

"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.

132.(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the payment of the pension.

132.(3) Subject to subsection (3A), 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.

132.(3A) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (3)(c) or (e).

132.(4) Subject to subsections (4A) and (4B), the period specified under paragraph (3)(d) must end at least 14 days after:

(a) the day on which the event or change of circumstances occurs; or

(b) the day on which the person becomes aware that the event or change of circumstances is likely to occur.

132.(4A) If a notice requires the person to inform the Department of any proposal by the person to leave Australia, subsection (4) does not apply to that requirement.

132.(4B) If the notice requires information about receipt of a compensation payment, the period specified under paragraph (3)(d) in relation to that information must end at least 7 days after the day on which the person becomes aware that he or she has received or is to receive a compensation payment.

132.(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 social security payment; and

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

(i) made a false statement or a false representation; 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.

...

Administrative error

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.

Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

...

Waiver in special circumstances

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 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.

Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

5. The following is a summary of facts agreed between the parties, and the Tribunal so finds them to be the case:

(a) The applicant has at all relevant times been qualified for DSP. On losing her employment due to the company entering into liquidation, her pension was restored from the pension payday 11 January 1996 .

(b) Mr Simounds received a sickness allowance (SA) from 24 January 1996 on the basis of medical certificates which stated that he was unfit for work from 23 January 1996 until 31 March 1996 (T5).

(c) The applicant received a letter dated 15 January 1996 (T4) advising her of the recommencement of DSP, the rate of payment, and requesting her to advise, amongst other things,

"if your combined income, not including maintenance, is more that $451-94 per week OR

...

if you or your partner start or recommence work;

..."

(d) The applicant received another letter dated 24 January 1996 (T6) which stated (inter alia):

"WHAT YOU MUST TELL US

...

Income

If your combined income, not including maintenance, is more than $82.00 per week OR

...

if you or your partner start work or recommence work

..."

(e) Mr Simounds resumed work on 11 March 1996 (T9). In the week 11 March to 15 March, his income exceeded $82.00.

(f) A delegate of the Secretary of the Department decided on 12 September 1997 (T12) that the applicant had been overpaid DSP in the amount of $6,050.00, representing payments between 11 January 1996 and 15 May 1997. The reason stated on the .........:

"her husband recommenced work in January 1996 and Social Security was not advised".

(g) On 28 January 1998 (T17/78), an ARO reduced the amount of the alleged overpayment to $5,765-50, representing DSP paid in the period 11 March 1996 to 15 May 1997, stating (inter alia):

"...I am satisfied that you were not legally under notice to notify of the above events until the notice of 24/1/96, and that there was no breach of those notification provisions until your husband's return to work on 11/3/96, and so the debt period is therefore reduced and the debt amount also reduced accordingly."

(h) On 6 February 1998, the SSAT decided that the alleged overpayment was a debt that should be recovered. In its decision (T2/9-10), the SSAT stated (inter alia) :

"Mr Simounds' evidence is that by a handwritten letter delivered along with a medical certificate, he advised the Department of Social Security that he was returning to work and that his wife was still in receipt of disability support pension.

The Department indicate that they have searched both Mr Simounds' file and that of Mrs Simounds and have been unable to locate any such letter, The Department also indicates that a computer search has failed to reveal any electronic record of notification of Mr Simounds return to work.

... The Tribunal must make findings of fact based on the balance of probability and in this case considers it more likely that Mr Simounds failed to provide the necessary advice.

The determination of this matter does not turn on the above mentioned finding. It is common ground that Mr Simounds did not advise in any way of the fact that their combined earnings from the time Mr Simounds returned to work exceeded $82 a week. In these circumstances, whether Mr Simounds advice concerning his return to work was provided, and whether that advice discharged Mrs Simounds' obligation to provide advice relevant to the level at which her disability support pension should be paid, is to some extent academic as it is clear that the advice Mr Simounds says he provided was not advice concerning a change in Mr and Mrs Simounds' combined weekly income.

...

In this case the Tribunal has found that Mrs Simounds did not provide relevant advice concerning an increase in her and Mr Simounds combined weekly income within 14 days of a change of that income occurring, that is subsequent to 11 March 1996."

applicant's evidence

6. The applicant gave evidence that the only notice she would take of letters sent to her by the Department would be to check the figure containing the amount of her benefit to make sure it covered her car payments. She would not read the rest of these letters. She stated that she had difficulty reading, and could only read the "headlines of things" such as the letter dated 24 January 1999 (T6).

7. She stated that she did not read the letter dated 24 January 1996, did not give it to her husband to read, and had no understanding that she had to inform the Department of the change in their combined income. She further stated that she had no understanding at all that she had to inform the Department if, as a couple, they were earning more than $82 per week. She told the Tribunal that she understood that if he returned to work, his income would go up, and her pension would reduce accordingly.

8. She stated that she used to inform the Department fortnightly of their income but ceased doing so after the Department contacted a former employer of her husband in a previous year, to check on his income for that year. She stated that since that time she assumed that the Department was keeping track of their income.

9. She told the Tribunal that she left it up to her husband to inform the Department of any changes, because he was the one who had applied for a benefit in January 1996. She stated that she did not contact the Department in March 1996, because she assumed that the provision of the medical certificates and note written by the husband and given to the Department had satisfied her notification requirement. She further stated that up until May 1997 she had no understanding that she was being overpaid. She also stated that she did not show any of the letters from March 1996 to May 1997 to her husband.

10. She told the Tribunal that the deductions presently being made from her wage to repay the overpayment were not causing her any difficulties.

mr simounds' evidence

11. Mr Simounds gave evidence that he approached the Department on 11 January 1996 about the possibility of receiving sickness benefits during the period in which he needed to have an operation. He stated that he began receiving the benefit based on the certificates of Dr R. Potter, his general practitioner (T5), and Dr D. Marshal, Orthopaedic Surgeon (Exhibit A2), the latter of which certified him eligible for time off work until 31 March 1996, and stated (inter alia):

"He was instructed to return to work (light duties) at his discretion, but certificate given up to + including 31.3.96."

12. He stated that he returned to work on 11 March 1996. This oral evidence is supported by his work records (T9/37). He further stated that before his return to work he visited the Enfield branch of the Department with a letter stating that he was fit to return to work at his discretion and that his wife was still on the pension. He further stated that he gave copies of the medical certificates of Drs Potter and Marshal to the Department at this time, but had no conversation with anyone at the counter of the Enfield branch office and had simply dropped off the documents.

13. He stated that it was his belief that the Enfield branch had lost or destroyed the documents, and pointed the Tribunal to the note by the ARO (T16/75) where he states (inter alia) :

"phoned Centrelink Enfield re med cert letter. All batch stored material prior 22/4/96 has been destroyed."

14. Mr Simounds stated that, following the receipt of the letter dated 22 March 1996 (T7), he again provided the Enfield branch of the Department with copies of the medical certificate and letter stating that he was fit to return to work at his discretion. He agreed under cross-examination that the certificate from Dr Marshall (Exhibit A2) did not specify a date at which he would be returning to work.

15. He stated that he did not recall receiving sickness benefit after 11 March 1996.

16. He stated that he did not recall seeing any of the letters from the Department to his wife, and did not recall seeing the letter dated 24 January 1996 (T6).

17. He stated that both he and his wife were currently working and that he earned approximately $357.00 per week after tax. He gave details of their expenses and debts to the Tribunal. These totalled approximately $360.00 per week, plus basic food expenses.

18. In submissions, Mr Simounds stated that the debt was caused by administrative error that was solely attributable to the Department, and that he and his wife had satisfied the notification requirements by virtue of his provision of the medical certificates and letter before his return to work. He referred the Tribunal to the decision in Re Vitalone and Secretary, Department of Social Security (1995) 38 ALD 169 in support of his case.

respondent's submissions

19. Mr Ford submitted on behalf of the respondent that when Mr Simounds approached the Enfield branch in March 1996, he did not inform that office that he would be returning to work on 11 March 1996. Rather, Mr Simounds informed the Department only that he could return to work at his discretion, and that his wife was still in receipt of the pension, and provided the office with medical certificates which only supported the fact that he could return to work at his discretion and certified him sick until 31 March 1996.

20. He submitted that Mr Simounds continued to receive the benefit until the end of March 1996, when the certificate ran out. He further submitted that neither Mr Simounds nor Mrs Simounds complied with the requirements of the notice dated 24 January 1996 (T6).

21. He submitted that Centrelink relies on information received from claimants to calculate the amounts of benefits due, and that if notification requirements are not complied with is more likely than not that an overpayment will be made. He further submitted that the respondent accepted that there was no deliberate attempt by the applicant not to comply with the notice, but that she had failed to comply nevertheless.

22. He submitted that there was no formal arrangement for Mr Simounds to act on the applicant's behalf, and that in any event, Mr Simounds' actions fell far short of notification of return to work.

23. He submitted that there was no sole administrative error, and no special circumstances to justify a waiver under the relevant provisions.

discussion and findings

24. The Tribunal considers that two issues arise in this matter. In relation to whether or not there is a recoverable debt, the only issue put before the Tribunal is whether or not the applicant complied with the notification requirements of the Act. If it can be said that she did, then there cannot be a recoverable debt pursuant to s.1224 of the Act. If there is a recoverable debt pursuant to s.1224 of the Act, the second issue arises, namely, whether the circumstances are such that the debt must or should be waived under s.1237 or s.1237AAD of the Act, respectively. The Tribunal is satisfied that "write off" of the debt under s.1236 of the Act is not appropriate in the present case, as it does not satisfy any of the requirements therein, and so finds.

25. In relation to the first issue, the Tribunal notes the evidence of the applicant, and that of Mr Simounds, that Mr Simounds did not read the notice sent to the applicant dated 11 January 1996 (T6), and that the applicant did not explicitly seek his help in relation to gaining an understanding of what this notice required. As the Tribunal understands the matter, neither the applicant nor her husband was in a position where they understood the requirements of that notice.

26. Whilst the Tribunal sympathises with the position of the applicant in the difficulty she has in understanding and reading such notices, it finds that it is incumbent upon the claimant, under the present system for payment of pensions and benefits, to take the necessary steps to ensure that she understands the requirements spelled out in the notification notices. In the case of claimants in the applicant's position, it is incumbent upon them to seek out the help necessary from either the Department or a family member or friend, in order to make sure that they understand their notification obligations. The Tribunal must consider that the applicant's failure to do so in this case is to her detriment.

27. In coming to this conclusion, the Tribunal has once again found itself troubled at the manner in which the present system operates. The Tribunal has had before it a large number of cases which result from this same issue, namely, that recipients of the notification notices do not, or cannot comprehend or digest the information contained therein.

28. The Tribunal is of the opinion that, while it cannot consider such failure to comprehend a special circumstance in and of itself, it is clear that the present style of the notification notices is one which places an additional burden upon claimants, by virtue of its form, which is difficult to follow.

29. The Tribunal considers that the core of the problem is that the wording on the front page of such notices clearly does not make the point strongly enough that the reverse side must be read. Rather, recipients are advised:

"Please read the back of this letter. It tells you about your Social Security rights and what you have to tell us."

In the Tribunal's mind, this wording does not make the point strongly enough. It would be far clearer were the letter to be worded in such a way that claimants were left in no doubt that they must read the back of the letter, and that failure to comply with the notification requirements as set out on the back could result in incorrect payments and a need to recover an overpayment. The Tribunal considers that it would be to the advantage of the Department to change the wording such that a higher proportion of claimants understand the necessity to read the back of the letter and are left in no doubt as to the importance of complying with the notification requirements set out there.

30. As to the back of the notice in its present form, the Tribunal considers that there is an astonishing array of information which claimants are expected to digest. What needs to be highlighted, in the Tribunal's opinion, are the sections relating to income and assets, as these appear to the Tribunal to be the two things which are likely to change most frequently. Again it would be helpful if the wording were clearer, and the format less difficult to read. The letter refers to "if any of these things happen, or may happen." The actual things referred to in this sentence are then separately set out below. Perhaps to someone accustomed to reading legal documents the connection between the "things" in that sentence and the factors set out in the categories below is reasonably easy to make, but the Tribunal is concerned that for most people in receipt of a benefit, and therefore a notice of this kind, such wording is not at all clear and the notice is not serving the purpose for which it is intended, namely, alerting recipients about their rights and obligations. The Tribunal makes these comments by way of observation and concern only.

31. Nevertheless, for the purposes of the present case, the Tribunal finds that the notice dated 24 January 1996 (T6) was a notification notice made in accordance with the Act, and that as a result of the receipt of the notice, the applicant was required to comply with the notification requirements therein.

32. The Tribunal has carefully considered the evidence put before it as to what notification was given by Mr Simounds, whom it found to be a truthful witness, and is satisfied that he informed the Department that he was fit to return to work at his discretion and that his wife was still in receipt of a pension, and provided it with the medical certificates, that of Dr Miller in particular, noted above.

33. Whilst being satisfied that Mr Simounds took such steps to notify the Department, the Tribunal is also satisfied that he failed to inform the Department of crucial facts, namely, of what date he was actually returning to work and that their combined income would be above the $82.00 threshold as a result. It would not have been reasonable for the Department to assume, on the basis of the documentation provided by Mr Simounds, that he had returned to work and that the rate of benefits should be reassessed accordingly, as all it was aware of was that he could return to work.

34. The onus was on the applicant to ensure that the Department was informed of the actual return to work of her husband, and in failing to provide such advice to the Department, the Tribunal finds that the applicant failed to comply with s.132 of the Act. In making this finding, the Tribunal agrees with Mr Ford for the respondent that there is no question of the applicant deliberately attempting to conceal the information.

35. The Tribunal has considered Re Vitalone, to which it was referred by the applicant, but distinguishes that case on its facts. In that case, Mr Vitalone engaged the officer at the counter of the Department in conversation about his wife's wage levels, and it was as a result of the Departmental officer's lack of attention and ability to communicate that the debt arose. In the present application, however, the evidence is clearly different. The only communication in evidence before the Tribunal is that of the letter and medical certificates which Mr Simounds "dropped off" at the counter. As the Tribunal has already found, these notices did not amount to a communication of a return to work or change in income, but rather only alerted the Department to the possibility of these things occurring, subject to the exercise of Mr Simounds' discretion. These circumstances are very different to those in Re Vitalone.

36. In finding that the applicant failed to comply with a section of the Act which resulted in an overpayment, the Tribunal also finds that there is a debt pursuant to s.1224 of the Act, and further finds the amount of the debt to have been correctly calculated.

37. The Tribunal therefore turns to consider whether the circumstances are such as to justify waiver of the debt. The relevant sections in the present matter are 1237A, "administrative error", and 1237AAD, "waiver in special circumstances".

38. In relation to s.1237A, the Tribunal considers that as it has found that the debt arose due to the failure of the applicant to comply with a section of the Act, it cannot consider that the debt arose solely because of administrative error on the part of the Department, and so finds. Thus, waiver under this provision cannot be given.

39. In relation to waiver due to "special circumstances", provided for by s.1237AAD of the Act, the Tribunal does not feel it necessary to consider the meaning of the phrase at great length here, and simply adopts the approach taken in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and adopted in subsequent Tribunal decisions. The Tribunal repeats its consideration above, that whilst it finds the form of the notice inadequate, it cannot consider this in and of itself to amount to special circumstances. The Tribunal has considered the financial circumstances of the applicant, but does not find them to be exceptional, and can find no other circumstances before it which would amount to "special circumstances". In fact, on her own evidence alone she could not succeed as she stated to the Tribunal that deductions currently being made from her pension were causing her no hardship. In the absence of such circumstances, the Tribunal is unable to exercise the discretion pursuant to s.1237AAD of the Act and waive the debt, and so finds.

decision

40. For the reasons above, and pursuant to s.43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A Kiosoglous MBE

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

Associate

Date of Hearing 30 April 1999

Date of Decision 7 May 1999

Counsel for the Applicant Mr John Simounds

Solicitor for Applicant

Counsel for the Respondent Mr R.M. Ford

Solicitor for the Respondent Administrative Law Section, Centrelink