Oudshoorn and Secretary, Department of Family and Community Services [2000] AATA 86 (10 February 2000)

Last Updated: 15 February 2000

DECISION AND REASONS FOR DECISION [2000] AATA 86

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S 99/120

General Administrative DIVISION )

Re GYSBERTHA OUDSHOORN

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member WJF Purcell

Date 10 February 2000

Place Adelaide

Decision The Tribunal sets aside the decision under review insofar as it decides that the debt due and payable to the Commonwealth by the applicant is $13,315.80 and substitutes a decision that the debt due and payable by the applicant is $6,657.90.

(Signed)

WJF PURCELL

(Senior Member)

CATCHWORDS

SOCIAL SECURITY - pensions, benefits and allowances - Disability Support Pension - failure to notify - separate obligation on husband and wife - history with Department of husband's information being transferred to wife's file - Departmental acceptance of that course of conduct - failure of applicant to make further enquiries - debt partly Department's fault - special circumstances

Social Security Act 1991 s.1237

REASONS FOR DECISION

10 February 2000 Senior Member WJF Purcell

1. This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 24 February 1999 which affirmed an authorised review officer's decision of 29 January 1999 to raise and recover $13,315.80, being Disability Support Pension paid to the applicant in the period 26 December 1996 to 26 November 1998.

2. The evidence before the Tribunal comprised the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (the T documents), together with exhibits tendered by the parties. The applicant appeared on her own behalf with the assistance of her husband (the husband); and she and the husband gave oral evidence. The respondent (the Department) was represented by Mr J. Underwood.

3. In mid 1996 the applicant and the husband had sold their home, and were living in rented premises whilst they built a new home. The proceeds of sale of their former home were invested in the applicant's name. Neither of them had been a recipient of Social Security benefits until the husband lost his employment in July 1996. He was granted Newstart Allowance, and initially, the applicant received the Partner's Allowance until she was granted Disability Support Pension on 10 September 1996, with effect from 22 August 1996.

4. On 21 October 1996 the applicant wrote to the Department in the following terms:

"This letter will act as your authority to supply my husband Nick Anton Oudshoorn with information as required re my pension entitlements etc.

Please ensure your records are marked accordingly." [Exhibit A1/8]

5. A perusal of the documentary evidence discloses that the rates of payments to the applicant were adjusted on several occasions when the husband advised the Department that moneys were withdrawn from the applicant's investments for progress payments on the new home.

6. On 18 November 1996 the husband advised the Department, by telephone, that he was now in full-time employment, and requested cancellation of Newstart Allowance. He completed a written form of notification on 24 November 1996 [T13/39], advising of the name of his new employer, that he would be paid $567 per week, and that he was scheduled to change his address on 30 November 1996. He ticked Question 8 on the form, and advised of a change of circumstances "cash mgmnt a/c changed balance now $34,515". He attached a handwritten note in the following terms:

"re 503 567 513A. 5.11 - 13/11

Original form for the above period was never received by me. Had to ask for a copy which is attached.

Please note the following changes.

Change of address: to 20 Linear Park Drive

Highbury SA 5089

Postal address unchanged.

Have started full time work on 6/11/96.

Change in our investment a/c balance.

Am I due to any entitlement?" [T13/41]

7. On 28 November 1996 the Department forwarded a letter to the applicant advising that her pension would be $362 per fortnight: "Your pension has increased because of a change in your circumstances" [T4/42]. On 13 December 1996 the Department forward a letter to the applicant in the following terms:

"I am writing to you about your pension.

Your pension will be $291.60 per fortnight starting from 26 December 1996.

Your pension has decreased because of a change in your circumstances.

You cannot be paid Rent Assistance. This is because you haven't given us proof of what you pay for rent or lodging. You may get Rent Assistance again if you give us this proof. Some things you can use are a recent rent receipt, current lease or signed letter from the person you pay.

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

If you want to know more please get in touch with us. Our address and phone number are at the top of this letter. Please have the letter with you if you call." [T17/46]

8. The applicant said in evidence that when she received the Department's letter of 13 December 1996, she was upset because she understood the letter to be stating that she had not advised the Department properly as to the amount of rent she and the husband were paying in their new premises. They were not paying rent, as they had moved into their new home. She rang the Department and informed the lady on the switchboard that her husband had advised of their change of address, and that he had a job. She says that she telephoned the Department again on 24 December 1996, and that she could not understand the switchboard lady when she gave her name, but that the lady said words to the effect, that nothing could be done until after Christmas, and the rate would be adjusted if that was necessary. There is no Departmental record of either of these telephone conversations.

9. The applicant did not receive any further correspondence from the Department until she received an account, some two years later, for $12,498.90 for Disability Support Pension for the period 14 November 1996 to 10 December 1998. The account stated that "The income your husband received from employment with Frome Services for the period 14.11.96 to 26.11.98 was not taken into account in your social security payments" [T26/75]. The applicant sought review of the decision on the basis that:

"Back in Nov 1996 we notified the Department of my husband's full time employment. Included in the notification was the weekly rate of pay. As pension was subsequently reduced we assumed that was the correct rate." [T27/76]

10. The Manager of the Centrelink Branch reviewed the decision on 11 January 1999, and reduced the debt to $12,330.20 to exclude an overpayment for the fortnight commencing 14 November 1996. The applicant requested reconsideration and an authorised review officer on 29 January 1999, varied the decision because of errors in the calculations and increased the amount of the overpayment to $13,315.80 for the period from 26 December 1996 until 26 November 1998. The authorised review officer stated that there were no grounds on which to waive recovery, as none of the waiver conditions set out in section 1237 of the Social Security Act 1991 (the Act) were present. Section 1237 as far as is relevant for the purposes of this review provides:

"Waiver of debt arising from error

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.

1237A.(1A) Subsection (1) only applies if:

(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

Underestimating value of property

1237A.(2) If:

(a) a debt arose because the debtor or the debtor's ssapart2.htm - ssa-Section4%281%29-%27partner%27 partner underestimated the value of particular property of the debtor or partner; and

(b) the estimate was made in good faith; and

(c) the value of the property was not able to be easily determined when the estimate was made;

the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.

...

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 ssapart2.htm - ssa-Section23%281%29-%27thisAct%27this 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."

The applicant applied for further review. On 10 March 1999 the SSAT affirmed the decision, and she has applied to this Tribunal for review of that decision.

11. The husband gave evidence, which I accept, that he had at all times been in employment and never in receipt of Social Security benefits until be became unemployed in July 1996. He approached the Department then, and applied for Newstart Allowance and for Wife's Allowance. They were at the time building a new home, and the proceeds of sale were invested in the applicant's name. He had provided the applicant's authority on 21 October 1996, because the applicant was unable to attend the Department's offices [Exhibit A1/8] and he was the person who advised the Department regularly of the variations in the level of the applicant's investments, and the Department adjusted the applicant's rate of pension frequently, on the basis of the information the husband provided.

12. The husband said in evidence that he had no reason to think that there would be any change in the Department's approach when he advised on 18 November 1996 that he was now in employment. He assumed the applicant's rate of pension would be adjusted accordingly as it had been in the past. This telephone advice was followed up by completion of the written form on 24 November 1996, advising the Department of his expected salary details, and of a change in the balance of the applicant's cash management account. The husband said in evidence that he heard nothing from the Department, and as the amounts of the applicant's pension had varied they both assumed that the rate would be varied in the New Year if that was necessary. The applicant and the husband gave evidence that they were absolutely devastated when the applicant received the account for more than $12,000 some two years after the events which gave rise to the overpayment.

13. The applicant submits that the Department had acted on her letter of authority, and accepted and processed the information the husband provided regarding the investments in her name, and had adjusted her pension accordingly. She expected therefore, that when the husband informed the Department of his new employment, the information would automatically be transferred to her file, as it had in the past. In addition, she had made the two telephone calls to the Department. She maintains that she complied with the provisions of the Act. She notified the Department through her husband of the change in her circumstances; and she received the continuing rate of payments in good faith because she understood that the rate had been adjusted accordingly. It appears now that the Department failed to record the information provided by the husband, and it is appropriate she submits in the whole of the circumstances, that the debt be waived.

14. The Department argues that although the husband had advised of his income and change in circumstances, the Act imposes an entirely separate obligation on the applicant to advise of changes to her circumstances. The debt arose because of the applicant's failure to notify, and was not due to administrative error on the part of the Department. The applicant should have known that she was being paid at a higher rate than she was entitled to, and in addition, there were no special circumstances in this case, which would justify waiver of the debt, pursuant to section 1237AAD of the Act.

15. I have examined the whole of the evidence carefully and in detail and I have taken into account the parties' submissions. The legislation imposes upon the applicant a clear duty to notify of change of circumstance; but in this matter, the Department had accepted a course of conduct (as a result no doubt of the applicant's letter of authority) whereby the husband provided information regarding the applicant's financial circumstances, which were recorded on the applicant's file and acted upon by the Department to adjust the applicant's rate of pension accordingly. The important information, that the husband was now working, was not recorded however.

16. The notes by the authorised review officer [T33/88] provide a reason, perhaps, for a "glitch" in the system. The authorised review officer noted:

"Obviously the best outcome would have been for NSDA to advise pensions of the employment but at the time the SU19 for the period 55/11/96 to 18/11/96 was already cancelled with a date of effect of 13/11/96 (reason - did not reply to correspondence). This means that even if it is usual procedure that a liaison or activity to pensions is created when NSA is cancelled due to employment it wouldn't have happened in this case. By the time we knew he was working his NSA was already cancelled and the SU19 to 18/11/96 had no effect on his record."

17. The "SU19 for the period 5/11/96 to 18/11/96" referred to in the report appears at Exhibit A1/6, the form completed by the husband, and signed by him on 24 November 1996. It appears that by the time the Department received this form the husband's Newstart Allowance had been cancelled. The information provided by him had no effect on his record, and was not transferred therefore to the applicant's records. The applicant and the husband meanwhile were relaxed in the assumption that the Department had recorded the change in circumstances, and her pension would be adjusted accordingly.

18. It is my view that in the light of their brief history of dealings with the Department, it was appropriate for the applicant and her husband to expect that the information provided by the husband would be transferred to the applicant's file. In the light of the authorised review officer notes it would appear that it was a coincidence of timing, of the closing of the husband's file, which rendered the advice from him to be of no effect. I consider, however, that the applicant should, in all prudence, have made some further inquiries in the New Year when she received no further correspondence regarding a change in the rate of payment; but in any event I consider that the debt arose partly because of a "glitch" in the Department's system, rather than an administrative error on the part of an officer of the Department. It was an unfortunate coincidence of circumstances, and I am satisfied that the circumstances are so unusual and special that it is appropriate and desirable that the discretion provided under section 1237AAD of the Act be exercised in the applicant's favour to waive half of the debt due to the Commonwealth.

19. For these reasons the Tribunal sets aside the decision under review insofar as it decides that the debt due and payable to the Commonwealth by the applicant is $13,315.80; and substitutes a decision that the debt due and payable by the applicant is $6,657.90.

I certify that the 19 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 20 December 1999

Date of Decision 10 February 2000

Counsel for the Applicant In person

Solicitor for Applicant -

Counsel for the Respondent Mr J. Underwood

Solicitor for the Respondent Centrelink