Iaquinto and Department of Family and Community Services [2002] AATA 20 (16 January 2002)

Last Updated: 17 January 2002

DECISION AND REASONS FOR DECISION [2002] AATA 20

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/602

GENERAL ADMINISTRATIVE DIVISION )

Re ALBERT IAQUINTO

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr IR Way, Member

Date 16 January 2002

Place Brisbane

Decision The Tribunal affirms the decision under review.

(Sgd) IR WAY

MEMBER

CATCHWORDS

SOCIAL SECURITY - disability support pension - overpayment - whether payment received in good faith

Social Security Act 1991 ss 1223(5), 1237A, 1237AAD

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186

Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287

Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484

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

REASONS FOR DECISION

16 January 2002 Mr IR Way, Member

1. This is an application by Albert Iaquinto for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 5 June 2001, affirming a decision of Centrelink dated 5 April 2001 to raise and recover an overpayment of disability support pension for the period 25 January 2001 to 27 March 2001.

2. The Tribunal had before it the documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (T1-T28), a Centrelink advice letter dated 2 October 2000 (Exhibit R1) and a Centrelink filenote dated 5 October 2000 (Exhibit R2). The applicant was self-represented and gave oral evidence.

3. There was no dispute between the parties and the Tribunal accepts that the applicant was paid disability support pension in error from 25 January 2001 to 27 March 2001, resulting from Centrelink not taking into account the income of the applicant's wife during this period, and that this in turn led to a recoverable debt pursuant to subsection 1223(5) of the Social Security Act 1991 (the Act).

4. The issue before the Tribunal is of narrow compass, namely, can any part or the whole of the recoverable debt be waived pursuant to Section 1237A or Section 1237AAD of the Act.

Legislative Framework

5. The Act relevantly provides as follows:

"1237A - Waiver of debt arising from error

(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).

1237AAD - Waiver in special circumstances

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.

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

6. The respondent concedes, and the Tribunal so finds, that Centrelink was in error in overpaying the applicant's disability support pension during the relevant period and that there was no action taken by the applicant in this matter that could be considered to be an intention to defraud or mislead the Commonwealth. However, it is the respondent's contention that even though the debt arose solely from an administrative error, the applicant did not receive the overpayments in good faith, that the debt did not arise wholly because of an innocent mistake, that there are no unusual, uncommon or exceptional circumstances in this matter and hence the debt cannot be waived.

7. The Tribunal notes the recoverable debt amounts to $754.07 of which approximately $200 is outstanding.

Applicant's evidence

8. The applicant told the Tribunal that the error was caused by Centrelink not taking into account his wife's income of which they had been notified. He said the matter was complicated by the fact that his wife was a teacher who was not employed during school holidays, but she was in receipt of some back-holiday pay and would be getting an increase in pay on return to work after the school holidays on 25 January 2001. He said that Centrelink had been informed of this on 17 January 2001 and that exact amounts would not be known until his wife received her pay slip in three weeks time. He said he knew that Centrelink would be in contact with Education Queensland regarding the quantum of his wife's pay and that as far as he was concerned there was no problem. He told the Tribunal that he believed Centrelink knew what his wife's payments were and that they knew what they were doing. He said he did not receive any notification of his payments from Centrelink from 3 January 2001 and 5 April 2001 and it was because of Centrelink's incompetence that he was before the Tribunal.

9. The Tribunal notes that the applicant told the SSAT (T2/5):

"....that in about June 2000, he and his wife moved from the Gold Coast to Toowoomba. He said that his payments had been 'at a high level' on the Gold Coast when his wife was working then the forms stopped and his payments changed to a lower level. Mr Iaquinto said that when he received the increased payments after his wife had returned to work on 25 January 2001, he thought his rate of payment had reverted to the previous 'high level'. Mr Iaquinto said he 'knew how much I was getting' and does not deny that he received the extra money. He added that he 'thought it was a bit unusual' but he assumed Centrelink knew what they were doing as they had all the information."

10. The Tribunal notes that:

(a) Mrs Iaquinto commenced work with Education Queensland in around June 2000. At that time, the applicant and Mrs Iaquinto were not being treated as "members of a couple" pursuant to a determination under Section 24 of the Act. The applicant continued to receive the maximum rate of payment.

(b) From October 2000, the applicant appropriately commenced to be treated as a member of a couple with his wife and his rate of disability support pension reduced from around $400 per fortnight to about $184 per fortnight.

(c) That rate of payment continued until December 2000 when the applicant notified his wife had ceased work (T4/39) and his payments returned to the maximum rate of payment.

(d) On 25 January 2001 the applicant's wife recommenced full-time employment with Education Queensland.

(e) On 30 January 2001 Mrs Iaquinto declared on her fortnightly income statement that she had returned to work and as a consequence her special benefit was cancelled.

(f) Payments of disability support pension at the maximum rate continued to the applicant without taking into account Mrs Iaquinto's income.

(g) On 27 March 2001, when the error was identified (T9/46), the applicant's disability support pension was suspended.

11. In cross-examination the applicant said he remembered getting a letter from Centrelink (Exhibit R1) dated 2 October 2000 informing him that a combined income figure of $32,503.50 was used to determine his disability support pension. The Tribunal notes:

(a) that at T13/64 details of payments to the applicant are listed showing approximately $175 per fortnight being paid during November and December 2000, with payments increasing to approximately $413 per fortnight on 18 January 2001; and

(b) that at T4/39 on 11 December 2000 the applicant asked what would happen to his payment when his wife ceased work and he was told his payment would increase to the maximum rate.

12. When asked in cross-examination if he expected his disability support pension payments would be reduced when his wife went back to work on 25 January 2001, he said he expected this to happen when Centrelink knew what his wife's earnings were.

13. The Tribunal notes the Authorised Review Officer's filenote (T20/73 - May 01) which indicates that the applicant told the Authorised Review Officer that he knew he was not being paid the correct amount.

Consideration

14. The question of "good faith" has been considered by the Federal Court in several matters. The respondent referred the Tribunal to Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186, Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287 and Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484.

15. In Prince's case, the Federal Court held that if a person knew, or had reason to know, payments were in some way erroneous, payments cannot be said to have been received in "good faith".

16. In Haggerty's case, the Federal Court held that if a person had a suspicion or doubt payments were erroneous, and there was an objective basis for such doubt, payments could not have been received in "good faith".

17. In Zazazievska's case, it was held that payments are not received in good faith if the person acts without an honest belief he or she was entitled to it and that good faith could not be established where a person turns a blind eye to circumstances which raise doubts about entitlement or refuses to make reasonable enquiries where doubt exists.

18. With respect, the Tribunal adopts the approach taken by the Federal Court in considering "good faith" as outlined above.

19. After consideration of the material before it and the submissions of both parties, the Tribunal is satisfied that the applicant, at the relevant time, knew or had reason to know that he was not entitled to receive the maximum rate of pension, and that he did not have a positive belief that he was receiving the correct amount of disability support pension. In arriving at this conclusion, the Tribunal accepts that the circumstances of his wife's employment and remuneration during December 2000 and January 2001 did not allow for clear and early recognition of the exact amounts of her pay. However, this lack of clarity does not stand in the way of a conclusion that the applicant knew his wife was, at the relevant time, receiving a significant wage and that this would impact significantly on his disability support pension.

20. The Tribunal finds that the applicant did not receive excess payments of disability support pension during the period 25 January 2001 to 27 March 2001 in good faith and that the debt he owes to the Commonwealth cannot therefore be waived pursuant to subsection 1237A(1).

21. With respect to special circumstances, the Tribunal is satisfied that the applicant's circumstances are not straitened and that he has financial capacity to repay the balance of the debt. The Tribunal is mindful that Centrelink has made an administrative error in dealing with the applicant. However, the Tribunal accepts the respondent's submission (see Beadle v Director-General of Social Security (1985) 7 ALD 670) that there is nothing else in the applicant's circumstances sufficiently "unusual, uncommon or exceptional" to justify non-recovery of taxpayer funds to which the applicant is not entitled. The Tribunal therefore finds that it is not appropriate to waive the applicant's debt to the Commonwealth pursuant to Section 1237AAD.

22. At the hearing the applicant raised a number of matters which he claimed demonstrated the incompetence of Centrelink. The matters raised by the applicant were outside of the administrative processes directly related to the decision before the Tribunal. The Tribunal noted that should the applicant wish to pursue any of these matters he had available to him the avenues of further discussion of his complaints with the respondent and/or the Ombudsman.

23. The Tribunal affirms the decision under review.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Mr IR Way, Member

Signed: Robert Hayes

Associate

Date of Hearing 27 November 2001

Date of Decision 16 January 2002

For the Applicant Applicant appeared in person

For the Respondent Mr P Kanowski, Departmental Advocate