Smith and Secretary, Department of Family and Community Services [2002] AATA 1189 (19 November 2002)

Last Updated: 19 November 2002

DECISION AND REASONS FOR DECISION [2002] AATA 1189

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/375

GENERAL ADMINISTRATIVE DIVISION )

Re CRISTEN SMITH

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date 19 November 2002

Place Brisbane

Decision The Tribunal affirms the decision under review.

(Sgd) J Cowdroy

Member

CATCHWORDS

SOCIAL SECURITY - carer allowance - overpayment - whether debt properly raised - waiver of debt - administrative error - whether payments received in good faith - whether special circumstances exist

Social Security Act 1991

REASONS FOR DECISION

19 November 2002 Ms J Cowdroy, Member

1. This matter concerns review of a decision of the Social Security Appeals Tribunal of 10 April 2002 which affirmed a decision made by Centrelink on 16 January 2002 to raise and recover an overpayment of carer allowance in the sum of $2,075.30, in respect of the period 20 January 2001 to 8 January 2002.

2. The matter was heard on 23 September 2002. Ms Smith appeared in person and gave evidence. She was accompanied by her husband, Mr G Smith. Mr P Kanowski appeared for the respondent. The T documents were entered into evidence as exhibit 1, pursuant to section 37 of the Administrative Appeals Tribunal Act 1975. Also admitted into evidence were the following documents:

* Exhibit 2 Bundle of documents with letter from Mr P Kanowski dated 11 September 2002

* Exhibit 3 Statement of the applicant, with accompanying letter dated 15 July 2002

* Exhibit 4 Health Care Cards

* Exhibit 5 Medication

3. The matter was decided on the basis of the evidence of the applicant, the written and oral submissions of both parties and the exhibit material.

Applicant's Case

4. Ms Smith outlined the circumstances which led to the application before the Tribunal. Her daughter, Endree, born on 4 October 1983, was given the opportunity to participate in a Rotary exchange programme in Argentina, commencing in the year she undertook Year 12, namely 2001. The selection process had taken place in March of 2000.

5. On 4 December 2000 she and her daughter attended the Maroochydore office of Centrelink and advised a member of staff that Endree was leaving Australia on 20 January 2001 for Argentina. She was unsure whether to go to the counter dealing with Disability Services, Family Payment or Youth Allowance but because other parents had suggested that Endree may be entitled to Youth Allowance as she would be studying away from home, Ms Smith went to the Youth Allowance desk. She gave the Centrelink officer her access number and there was a discussion about eligibility for Youth Allowance. The officer informed Mrs Smith that it would not be worthwhile claiming for Youth Allowance. Mrs Smith also mentioned Family Allowance and she was told that this allowance may not be payable either. Ms Smith queried whether this was correct, given that Endree was still studying.

6. Ms Smith asked to take the Youth Allowance forms with her "to look at". Later she received a letter from Centrelink stating that as the Youth Allowance forms had not been returned, Endree was ineligible. The applicant took offence at this, given that she had already decided not to apply for Youth Allowance.

7. Later in the year she received a health care card for another daughter, Madeline, and she queried with Centrelink why she had not received a health care card for Endree. She was informed that Endree was not entitled to a card as she "wasn't in the country" and Ms Smith was informed to advise Centrelink when her daughter returned to Australia.

8. Later in the year, the applicant received a letter from Centrelink stating that computer matching had revealed that Endree had left Australia without advising Centrelink of the situation, which was untrue. She rang up "quite indignant" and shortly afterwards she was advised that there had been an overpayment.

9. Despite the fact that Endree was overseas, she believed that she was providing care for her daughter, by way of weekly phone calls, during which she advised her daughter of "how to go about to manage her health". On two occasions Endree was hospitalised for asthma, once overnight and the second time the applicant thought it was possibly for two nights.

10. Ms Smith referred to T9-46 of the T documents in which a record of contact made by her with Centrelink on 10 September 2001 is recorded. In that document it is noted that Endree was overseas until 1 January 2002 and that she received basic rate for her. The notation concluded "customer receives correct entitlement - no further action". She found it distressing to be told in January of 2002 that she owes $2,000 and she referred to a personal vendetta against her by Centrelink.

11. Under cross-examination, Ms Smith acknowledged that she was also in receipt of carer allowance for her other three children, and that she had been in receipt of payment since 1995. She acknowledged that the documents in connection with her claims and the review forms all specifically refer to providing care to the child "at home". However, she said that this had been pointed out to her only in the last nine months.

12. The representative for the respondent suggested to Ms Smith that she had been meticulous in providing the information required in those forms, to which the applicant, when pressed, acknowledged that was the case, adding that she did not detect that such allowance was for "at home" care at the time. She explained that when she filled in the forms relating to carer allowance for her children, they were always "at home". She acknowledged that she would have read information to the effect that the child must live at home but payment could be made for up to 42 days per year for respite care. She also recalled a reference in later correspondence from Centrelink to an increase in the number of respite days to 63.

13. Upon questioning by the respondent in relation to the visit to Centrelink on 4 December 2001, Ms Smith denied that the focus of her inquiry was to ascertain whether Endree may be able to get Youth Allowance, but rather that it was to "make necessary advice or adjustments if adjustments needed to be made". She could not recall if there was any mention of carer allowance, although later in her evidence she agreed that she did not specifically mention carer allowance. However, she pointed out that by giving her reference number, access to Endree's records would have been made, which would have put Centrelink staff on notice that she was in receipt of carer allowance.

14. At no time in subsequent conversations with officers of Centrelink was carer allowance discussed. Ms Smith believed during those conversations that the provision of a health care card and carer allowance were "one and the same", and "all part and parcel" and that she only subsequently became aware that you "can have a card without the money".

15. When it was put to the applicant that it must have occurred to her that she could not be entitled to carer allowance whilst Endree was overseas, the applicant responded that she was still caring for her daughter despite her absence and that she "still had some reins on her management".

16. In submissions, Ms Smith contended that she had no intention of hiding the fact that her daughter was going overseas, and that she relied on Centrelink to advise her correctly of her entitlements. Even when data matching made Centrelink aware that Endree was overseas, it still continued payments. She contended that she had received the money in good faith, that she was not trained "to question", and that the care that was provided to her daughter was the same irrespective of whether it was provided in her house or the house of another.

17. She stated that the family were in "extreme debt", and that she had been "led along by Centrelink". Mr Smith stated that two of their children had been removed from private educational institutions, that the family had a $200,000+ debt and credit card debts of $20,000. In relation to the family's circumstances, their fortnightly gross income was approximately $3,500 per fortnight. The debt raised by Centrelink is currently being repaid at the rate of $20 per fortnight and $1,400 remains outstanding.

Respondent's Case

18. Mr Kanowski submitted that a debt existed pursuant to section 1223 of the Social Security Act 1991 ("the Act"). That provision was effective up until 1 July 2001, at which time that sub-section was repealed and substituted by a further provision, which has substantially the same effect as the repealed subsection.

19. Section 953 of the Act sets out the qualification for carer allowance in respect to the care of "disabled children". Amongst other things, it requires that the care receiver ("the child"), receive care and attention on a daily basis from the care giver in a private home that is the residence of the care giver. Another qualification is that the care receiver be an Australian resident and it is questionable whether Endree meets this qualification, bearing in mind that she was absent from Australia for a period of eleven and a half months.

20. The applicant ceased to be qualified for carer payments from the date on which Endree left Australia. Although there are various provisions for carer allowance to continue to be paid during periods when there is an absence from Australia (sections 956 and 1213 of the Act), those provisions essentially contemplate the situation where the care giver and care receiver are absent from Australia together or where the person receiving the payment travels overseas for a period, which falls within the maximum portability period.

21. Additionally, section 957 of the Act contains a provision which permits the continuance of payment where there is "temporary cessation of care". It states that in assessing whether there is a "temporary cessation of care", the sum of the period which is applicable is 63 days in any calendar year or "another period that the Secretary, for any special reason in the particular case, decides to be appropriate". It was submitted that it would be difficult to classify an eleven and a half month absence as temporary.

22. In relation to the prospect of waiver, the applicant did not notify Centrelink staff that she was in receipt of carer allowance for Endree. If the applicant's evidence was examined carefully, essentially she presented at the Youth Allowance counter stating that her daughter was going overseas and made enquiries as to what payments she may be eligible for. That of itself, cannot constitute "notification". The fact that the applicant was told that she was best remaining on Family Allowance (rather than applying for Youth Allowance) is consistent with the applicant advising Centrelink staff that Endree was going overseas because Family Allowance can be paid in the child's absence for up to three years. The overall thrust of Ms Smith's conversation related to Endree's eligibility, rather than her own entitlements.

23. If the Tribunal was to find that the debt arose in whole or in part due to administrative error on the part of Centrelink, then the issue of "good faith" arises. In this context, the respondent adopts the comments made by the Social Security Appeals Tribunal at paragraph 19 of its decision (T2-7).

24. The various claim forms and review forms completed by the applicant and the very nature of the term "carer allowance" reinforce in various ways the need for a person qualified for carer allowance to be providing a high level of care on a daily basis to a child at home. Those forms make it abundantly clear that the allowance is provided for that purpose and could not have escaped the applicant's attention.

25. In respect to the issue of special circumstances, repayments are currently being made at a low rate. The applicant has the capacity to repay the debt over time. There is nothing special about her circumstances, in particular no unfairness in requiring repayment, particularly so when one has regard to the fact that the allowance is not designed in respect of care provided at a distance.

Findings and Consideration

26. The legislation relevant to qualification for carer allowance is contained in section 953 of the Act. It states as follows:

"953(1) A person is qualified for carer allowance for a disabled child (the care receiver) if:

(a) the care receiver is a dependent child (disregarding subsection 5(3)) of the person; and

(b) the care receiver is an Australian resident; and

(c) either of the following applies:

(i) the disability from which the care receiver is suffering is declared, under subsection 38D(3), to be a recognised disability for the purposes of this section;

(ii) the care receiver has been assessed and rated, and been given a positive score of not less than 1, under the Child Disability Assessment Tool; and

(d) because of the disability from which the care receiver is suffering, the care receiver receives care and attention on a daily basis from:

(i) if the person is a member of a couple--the person, the person's partner or the person together with another person (whether or not the person's partner); or

(ii) if the person is not a member of a couple--the person or the person together with another person;

in a private home that is the residence of the person and the care receiver; and

(f) the person is an Australian resident."

27. Leaving aside other eligibility criteria, the respondent contended that Endree (the care receiver) was not receiving care and attention on a daily basis from the applicant (the care provider), and, more significantly, that such care that was provided was not in a home that is the residence of the care provider and the care receiver.

28. Whilst the applicant contended that such care was being provided by way of guidance and support through weekly telephone calls to Argentina, I find that during the period of Endree's absence, the applicant was neither providing care and attention on a daily basis, nor did such support and attention that was provided occur in the home of the care receiver and care provider.

29. I find that the applicant was not eligible to receive carer allowance whilst Endree was overseas, which commenced on 20 January 2001, and ended on 8 January 2002, and that the money she received during that period is a debt due to the Commonwealth.

30. Section 1237A of the Act relates to waiver of debts arising from 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."

31. I find that the applicant attended Centrelink on 4 December 2000 and had a conversation with an officer of Centrelink. During the course of that conversation, Ms Smith advised that her daughter was leaving Australia to study overseas. I find that Centrelink was in error when it failed to act on that advice. Whilst it may have been prudent for Ms Smith to advise that she was in receipt of carer allowance for Endree, I do not accept that her failure to do so means she contributed to the payment of carer allowance to which she was not entitled.

32. This leaves the issue of good faith. I noted that Ms Smith was repetitive in her assertions that she did not turn her mind to the fact that she needed to be providing care to Endree in her home in order for her to be entitled to carer allowance. Not infrequently she failed to answer directly the questions put to her and her responses in cross-examination consisted of expansive and gratuitous details about matters unrelated to the questions asked of her.

33. I note that when pressed, she acknowledged that she completed the various Centrelink forms meticulously. Further, her attendance at Centrelink on 4 December 2000 indicates she was aware of her obligations to notify Centrelink if her circumstances changed. Her written submissions indicate that she had kept detailed records of her contacts with Centrelink. This is inconsistent with her expressions of naivety as to her understanding of the basis of eligibility for carer allowance. This is particularly so, given that she has been in receipt of carer allowance for all her children and had been completing forms in connection with continuing entitlement since 1995.

34. I do not accept her evidence that she had no knowledge of, or at the very least, reason to know that she was not entitled to receive carer payment for Endree whilst she was overseas. Despite her denials to the contrary, I do not accept that she did not turn her mind to the likelihood that she was receiving monies to which she was not properly entitled. Even adopting a very liberal view of the term "care", I had great difficulty in accepting Ms Smith's assertion that she believed she had entitlement to carer allowance on the basis of weekly phone calls to her daughter. I also do not accept her evidence that she had overlooked the requirement that such care be provided in the family home, given that she was well informed in every other respect.

35. I considered it significant also that the applicant believed that the provision of a health care card and carer allowance went "hand in hand". When she was told by Centrelink that that she was not entitled to a health care card for Endree until she returned from overseas, then clearly the basis for her belief in continuing entitlement to carer allowance was negated. I find that in failing to make inquiry, she did not act in good faith.

36. I noted Ms Smith's contentions that, having given the requisite notice to Centrelink that her daughter was going overseas, she relied on Centrelink to pay her correctly. However, that does not resolve her from any further responsibility. I was also mindful of the fact that Centrelink was made aware on more than one occasion that Endree was overseas. However, the thrust of Ms Smith's evidence was to place considerable emphasis on Centrelink's errors despite the fact that her evidence revealed that she had an awareness that Centrelink had the capacity to make mistakes.

37. Based on the totality of the evidence, I find that the payments were not received in good faith.

38. The Tribunal then directed its attention to whether there were special circumstances which warranted waiver of the debt. The legislative authority is contained in section 1237AAD, which states:

"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."

39. In relation to the applicant's personal circumstances, I note that the household's gross yearly income is around $80,000 from earnings, in addition to carer allowance for three children. Whilst there are debts, they are not unmanageable. The debt is being recovered by means of very modest instalments. There is no evidence of financial hardship, and in any event, even if financial hardship was demonstrated, it cannot alone constitute special circumstances. I find that there is no evidence of any factors which would warrant waiver of all or part of the debt.

40. Accordingly, the decision under review is affirmed.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member

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

Associate

Date of Hearing 23 September 2002

Date of Decision 19 November 2002

The Applicant appeared in person, accompanied by her husband, Mr G Smith

For the Respondent Mr P Kanowski, Departmental Advocate