Liebich; Department of Family and Community Services [2000] AATA 64 (28 January 2000)

Last Updated: 4 February 2000

DECISION AND ORAL REASONS FOR DECISION [2000] AATA 64

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S98/206

General Administrative DIVISION )

Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And SUSANNE LIEBICH

Respondent

DECISION AND ORAL REASONS FOR DECISION

Tribunal Senior Member WJF Purcell

Date 28 January 2000

Place Adelaide

Decision For the reasons given orally at the Hearing of this matter, the Tribunal sets aside the decision under review insofar as it waived recovery of an overpayment of $2,010.95, and substitutes a decision that the balance of the debt owing by the respondent as at 28 January 2000, be waived.

(Signed)

WJF PURCELL

(Senior Member)CATCHWORDS

SOCIAL SECURITY - pensions, benefits and allowances - Family Payment - notification obligations - incorrect estimate of income - mental state at time of estimate - special circumstances

Social Security Act 1991 S1237AAD

ORAL REASONS FOR DECISION

28 January 2000 Senior Member WJF Purcell

1. This is an application by the Secretary, Department of Family and Community Services (the Department) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 15 April 1998 which set aside a decision of an authorised review officer dated 19 March 1998 to raise a debt of Family Payment for the period 4 July 1996 to 8 May 1997 due to an incorrect estimate of income. The amount of the overpayment is $2,010.95.

2. The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents) and the exhibits tendered by the respondent. The Department was represented by Miss Odgers and the respondent appeared on her own behalf and gave oral evidence.

3. The respondent, who was separated from her husband, was in receipt of Family Payment in 1996 in respect of her dependent child. Prior to 2 July 1996, the rate was calculated using her taxable income of $6,458 for the 1994/95 tax year.

4. On 2 July 1996, the respondent completed an "Income and Assets" questionnaire, advising that she had recommenced work on 31 July 1995 and was a "wage or salary earner - full time" (T4). She provided an estimate of $21,785.27 as her taxable income for the 1996/97 tax year. She and her husband were divorced on 10 July 1996, and the decree became absolute on 11 August 1996.

5. On 23 September 1996, the respondent advised the Department of a change of circumstances by completing a further questionnaire wherein she stated that she had become self-employed in August 1996, and also advised, in answer to question 4, by ticking boxes, that she was a "wage or salary earner/full-time", and was also "self-employed" (T6/34). She provided estimates of her 1995/96 taxable income from self-employment as $190; and the 1996/97 taxable income from self-employment as $400, her taxable income from her employer as $8,000, a combined taxable income of $8,400.

6. The estimate of $8,400 for the year 1996/97 was used to calculate the rate of Family Payment as from 10 October 1996, and the rate of Family Payment was increased from $53.25 per fortnight to $64.40 per fortnight.

7. On 8 May 1997, the respondent contacted the Department by telephone, to advise of an increase of $10 per week in her income. On 21 October 1997, she provided the Department with her tax assessment notice for the 1996/97 year, showing an income of $29,261. The debt was raised by the delegate in respect of the period 4 July 1996 to 29 August 1997, varied by the authorised review officer to the period 4 July 1996 to 8 May 1997.

8. The respondent applied for review of the decision and the SSAT set aside the decision and waived the entire debt due to what it regarded as special circumstances, stating in part in the reasons for decision (T2/11-12):

"...

Having considered all of the matters and evidence before it the Tribunal considers that there are special circumstances in existence which make it desirable to waive all of the debt incurred by Ms Liebich. The Tribunal bases this decision on its finding that Ms Liebich attempted to honestly inform Centrelink of her increased earnings. Enough information was contained on the form lodged by her on 23 September 1996 to alert Centrelink that the form was not intended to provide a new estimate in the sum of $8,400 for the financial year 1996/97.

The Tribunal also takes into account Ms Liebich's distressed state of mind at the time of completing the form and that she honestly believed that having disclosed the further income from her self-employment in addition to her full-time employment that Centrelink would take whatever action (if any) was appropriate in the circumstances. This view was further bolstered when Ms Liebich was advised on the telephone in May 1997 that no overpayment would occur.

The Tribunal considers that the above circumstances are highly unusual and that they come within the ambit of section 1237AAD(b)."

9. The Department contends that the starting of work in July 1995, and self-employment in August 1996, were notifiable events which meant that the Department was required to have regard to the resultant income estimates provided by the respondent. Because the actual taxable income was higher than the estimates provided, a re-calculation was required, resulting in a debt being raised.

10. The Department contends further that there is nothing in the questionnaire dated 23 September 1996 which would alert the Department that the income figure of $8,400 was incorrect; and further, the Department does not have a duty of care to query the estimate of income provided by a customer.

11. The Department contends that none of the circumstances relied upon by the SSAT are special, particularly the respondent's honest attempts to notify. These were not special, neither is her distressed state of mind at the time of completion of the questionnaire. She was holding down a full-time job, and involved in self-employment, and she continued to conduct her affairs competently. The Department submits further that even if the respondent believed she was disclosing an increase in income, she did not query the Department when such disclosure resulted in an increase in her rate of Family Payment rather than a decrease.

12. The respondent submits that she was under considerable stress in 1996 requiring medical and psychiatric treatment, and continues to receive treatment due to the stress she continues to suffer. She contends that she fulfilled her notification obligations by informing the Department of a second income in September 1996. She concedes that she provided an incorrect estimate, but the Department should have detected her error and requested further information from her, and that failure to make such enquiries amounts to administrative error which, when combined with her health situation, amounts to special circumstances for the purposes of s.1237AAD of the Act which provides, as far as is relevant:

"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."

13. The respondent gave oral evidence, which I accept; and tendered three medical reports which support her evidence that she was diagnosed as suffering a depressive illness in July 1996, with depressed mood, poor sleep, poor concentration, poor appetite and nausea. Anti-depressant medication was prescribed which she continues to need, and she was referred to a psychiatrist for treatment.

14. The respondent said in evidence that during the months July to October/November 1996 she was under great stress as her former husband (with whom she has become reconciled now) refused to pay maintenance for their young daughter, and she had to approach the Child Support Agency. There were arguments between them on an almost daily basis, when he came to her home to see the child of the marriage. She said in evidence that she coped as best she could at work, because she enjoyed her job, it gave her an outlet and directed her from her own problems, but that when she got home she was a "mess".

15. The respondent said in evidence that she remembers filling in the questionnaire of 23 September 1996. She acknowledges that she did not include her salary in answer to question 8, but in answer to question 10, stated that she was in receipt of salary, and advised correctly of the gross amount earned in the preceding 4 weeks. The respondent says she has absolutely no explanation for her omission of this information, other than the depression she was suffering, and she says that she does not remember receiving the letter of advice from the Department of 25 September 1996 informing her that the Family Payment rate was based on an income of $8,400.

16. I have examined the evidence carefully and in detail and I have taken into account the parties' submissions. I do not consider that the details provided by the respondent in the questionnaire of 23 September 1996 were sufficient to alert Centrelink that it was not intended to provide a new estimate of $8,400. The respondent simply failed to complete that portion of the questionnaire which related to disclosure of the total of the "taxable income from your employer". The debt arose because of this failure on her part, and not, in my view, as a result of any administrative error of the Department.

17. I am satisfied on the evidence, however, that the respondent's state of mind over the relevant period, and in particular as at September 1996, was such that although she was functioning (it would appear adequately) in a work situation, this was not always so in her family situation. I accept her evidence that she has no recollection of why she completed the form incorrectly. I am satisfied that there was no intent on her part to deceive the Department in any way. I am satisfied that her depressed state of mind is a special circumstance for the purposes of the Act, and that in these circumstances it is appropriate the balance of the debt outstanding should be waived.

18. For these reasons the Tribunal sets aside the decision under review insofar as it waived recovery of an overpayment of $2,010.95, and substitutes a decision that the balance of the debt owing by the respondent as at 28 January 2000, be waived.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member WJF Purcell

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

Personal Assistant

Date/s of Hearing 28 January 2000

Date of Decision 28 January 2000

Counsel for the Applicant Miss L. Odgers

Solicitor for Applicant Centrelink

Counsel for the Respondent In person

Solicitor for the Respondent -