Damond and Department of Family and Community Services [2002] AATA 55 (1 February 2002)

Last Updated: 4 February 2002

DECISION AND REASONS FOR DECISION [2002] AATA 55

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/397

GENERAL ADMINISTRATIVE DIVISION )

Re BAIYOKE DAMOND

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr B J McCabe, Member

Date 1 February 2002

Place Brisbane

Decision The Tribunal affirms the decision under review.

..............................................

B J McCabe

Member

CATCHWORDS

SOCIAL SECURITY - newstart allowance - overpayment - waiver - whether payment received in good faith

Social Security Act 1991 ss 1223, 1236, 1237, 1237A, 1237AAD

REASONS FOR DECISION

1 February 2002 Mr B J McCabe, Member

1. Mr Baiyoke Damond seeks a review of a decision by the Department of Family and Community Services to recover a debt. The debt arose as a result of the overpayment of a Newstart allowance. The Tribunal must decide whether the debt should be written off or waived under the provisions of Part 5.4 of the Social Security Act 1991 (the Act).

The facts

2. Mr Damond came to Australia in 1995. He enrolled as a student at Griffith University in the Modern Asian Studies program and was in receipt of an Austudy allowance administered by Centrelink. He deferred his studies at the end of 1998 because of financial pressures. He began to look for work. He applied for a Newstart allowance on 18 February 1999.

3. Mr Damond has a partner. The application form that he filled out for the Newstart allowance required Mr Damond to state how much his partner earned. Mr Damond declared that his partner earned $400 in the relevant period. In fact, records from AAMI, Mrs Damond's employer, state that she earned $1115.38 per fortnight in the relevant period.

4. Mr Damond received the Newstart allowance. He was paid at the rate of $365 per fortnight, the maximum rate, until 24 June 1999. It turns out that he was not entitled to the maximum rate during this period; a computer error was to blame. His payments were reduced to $150 per fortnight until 15 September 1999. Mr Damond spoke with a Centrelink officer about the error and he received a "top up" payment of $110 for the fortnight ended 18 August 1999.

5. Mr Damond contacted Centrelink on 21 January 2000 to advise that he had commenced full-time work. His allowance was accordingly cancelled with effect from 20 January 2000.

6. While he was receiving Newstart, Mr Damond was required to complete regular applications that asked him whether he had undertaken any work, and the amount of his partner's income. The forms were completed each fortnight until September, when he was placed on a 12 week lodgement cycle. He was also sent notices requiring him to inform Centrelink if he undertook employment.

7. The respondent, in its written submissions, stated that it overpaid Mr Damond an amount of $6222.98 as a result of his failure to correctly advise the respondent of his partner's earnings. The respondent also said Mr Damond failed to declare part of the income he received from two employers, for whom he undertook paid work. In his oral submissions, Mr Letch for the respondent, said that further investigation of Mrs Damond's affairs showed that her income was higher than first thought. In fact, the amount of the overpayment was $7121.78.

8. Mr Damond declared in application forms lodged from 24 March 1999, that his wife's income was $860 per fortnight (There is at least one exception: in a form lodged on 21 July 1999, he declared his wife's income to be $810.). He also failed to declare that he had been employed with Edward's Restaurant between 1-11 September 1999. That information only came to light as a result of data-matching.

9. Mr Damond was informed that he was indebted to the respondent. Centrelink declined to waive the debt or write it off. Mr Damond does not dispute the debt, although he says that he misunderstood the forms he was required to complete. He says the misunderstanding was contributed to by a Centrelink officer on his first visit who told him how to fill out the application form.

10. Mr Damond appealed the respondent's decision to the Social Secutiy Appeal Tribunal (the SSAT). The SSAT affirmed the decision but found that Mr Damond had innocently misunderstood his obligations. In particular, the SSAT concluded that Mr Damond had misinterpreted the requirement that he report his partner's gross income. The SSAT formed the view that Mr Damond mistakenly assumed gross meant take home or nett pay.

11. Mr Letch disputed Mr Damond's explanation of events. In the course of his evidence, Mr Damond said it was his practice to ask his wife for the amount of her take home pay. He said in particular that he asked his wife: "How much have you got in packet after tax?" I asked him whether he was sure that was what he asked, and he said yes. It is doubtful that Mr Damond would ask his wife that question when the Centrelink form specifically asks: "What was the gross amount earned [by your partner] before tax or other deductions?"

12. Mr Letch demonstrated that the amounts inserted in the application forms, in any case, on several occasions did not match the amounts earned by Mr Damond's partner. For example, on 12 May 1999 Mr Damond declared his wife's income was $860, but employment records show that she was in fact paid more during that period. Mr Letch also showed that Mr Damond did not declare his employment at Cheys on Latrobe Restaurant, and did not properly declare his income from Edward's Restaurant.

13. I found Mr Damond's answers evasive. I considered whether the appearance of evasion might be attributed to a poor understanding of English. After observing him during the course of the hearing answering Mr Letch's questions, I am satisfied that Mr Damond understood and was capable of communicating clearly, albeit with an accent. He has also had some experience of tertiary study. I am not satisfied that he was being completely frank in his answers to the questions put by Mr Letch. I do not believe that he innocently misunderstood his obligations as explained to him by Centrelink.

The law applied in this case

14. Section 1223 of the Act provides for the recovery of debts arising as a result of overpayments. The debt is recoverable unless it is written off under s1236, or the right to recover payment is waived under s1237. Although Mr Damond is in some financial difficulty, there is insufficient evidence before me to conclude that the debt should be written off under s1236. That leaves the question of waiver.

15. Section 1237A of the Act provides that a debt may be waived under s1237 if the overpayment was attributable solely to an error by the Commonwealth and the payments were received in good faith. I am not satisfied that the payments were attributable solely to an error by the Commonwealth. It is true that there was a computer error, but, as Mr Letch pointed out, the error would never have occurred if Mr Damond had been properly declaring his income. The ultimate cause of the overpayment was Mr Damond's mis-statements in the application forms.

16. In any event I am not satisfied that Mr Damond received the overpayments in good faith. It was clear from the evidence that Mr Damond was quick to complain when he received an underpayment, yet he was silent when an overpayment occurred. In my view, Mr Damond knew what was occurring and simply decided to keep quiet about it. It follows that s1237A has no application.

17. Section 1237AAD of the Act provides for waiver because of a finding of special circumstances. I am unable to identify any circumstances that make this case special. Given the doubts I have expressed about the veracity of Mr Damond's statements in the application forms, I am satisfied that s1237AAD has no application in this case.

Conclusion

18. In those circumstances, I accept the respondent's contentions. I affirm the original decision to recover the debt from Mr Damond.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

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

Associate

Date of Hearing 8 November 2001

Date of Decision 1 February 2002

For the Applicant In Person

For the Respondent Mr S Letch, Departmental Advocate