McCarthy and Department of Family and Community Services [2002] AATA 61 (18 January 2002)

Last Updated: 13 February 2002

DECISION AND REASONS FOR DECISION [2002] AATA 61

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2000/1528

GENERAL ADMINISTRATIVE DIVISION )

Re KERRIE McCARTHY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date 18 January 2002

Place Melbourne

Decision The decision under review is affirmed.

............Sgd Mr J. Handley..............

Senior Member

CATCHWORDS

Social Security - Applicant paid carer payment after she no longer cared for another person - monies paid into her bank account - applicant not entitled to payment - whether sole administrative error - whether monies received in good faith - decision affirmed.

REASONS FOR DECISION

18 January 2002 Mr J. Handley, Senior Member

1. The applicant applies to review a decision made by the Social Security Appeals Tribunal on 9 November 2000. The SSAT then affirmed a decision previously made by an Authorised Review Officer (ARO) of Centrelink on 11 September 2000. The decision then made was to raise and recover a debt of $2,134.16 being overpayment of carer allowance paid during the period 1 July 1999 to 25 July 2000.

2. The hearing was convened in Geelong on 20 December 2001. Mrs McCarthy appeared with the assistance of her husband. Ms Cunningham appeared on behalf of the respondent.

3. The Tribunal received into evidence documents filed by the respondent pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 and a number of other documents completed by Mr McCarthy being submissions that he made in response to a Statement of Facts and Contentions lodged by the respondent.

4. The facts of this application may be briefly summarised as follows-

5. Prior to 16 April 1999 Mr McCarthy received a carer pension with respect to his mother Mrs Sarah McCarthy. Mrs Kerry McCarthy, the applicant in these proceedings, was then receiving domiciliary nursing care benefit which was paid by the Department of Health and Aged Care. That benefit was also paid with respect to the care provided by the applicant of her mother in law.

6. The applicant and her husband then resided with Mrs Sarah McCarthy. The applicant was then also receiving a parenting payment and family allowance with respect to a child, Justine.

7. On 16 April 1999 Mrs Sarah McCarthy was admitted to a nursing home. From that date she was no longer in the care of the applicant or her husband. From that date did the applicant have any entitlement to domiciliary nursing care benefit. Mr McCarthy notified Centrelink on 23 April 1999 that his mother had been admitted to a nursing home and his carer pension was cancelled. He was also subsequently advised in writing, that that pension would be cancelled.

8. In May 1999 the applicant received a letter from the Department of Health and Aged Care advising that from 1 July 1999 the domiciliary nursing care benefit was to be replaced by a carer allowance which was payable to eligible persons by Centrelink.

9. On or about 30 June 1999 Mr McCarthy said that he received a letter from the Department of Health and Aged Care notifying that Centrelink would become responsible from 1 July 1999 for payment of carer allowance. Mr McCarthy said that he telephoned an officer of the Department of Health and Aged Care and advised that from 16 April 1999 he had no entitlement to carer pension because his mother had been admitted to a nursing home.

10. On 9 July 1999 the applicant received a letter from Centrelink (T-documents, page 15) which omitting irrelevant parts reads as follows-

"Dear Mrs McCarthy

Please find enclosed your Special Carers Edition of the Disability Connections newsletter. This newsletter gives you details about changes that affect Carer Allowance from 1 July 1999.

Up to now this payment was called "Domiciliary Nursing Care Benefit" and was paid to you by the Department of Health and Aged Care. From 1 July 1999 your Carer Allowance is paid through Centrelink. Centrelink offers a "a one stop shop" for many services previously provided by the former Department of Social Security and some other Commonwealth Departments.

We need to know when your circumstances change, please read the back of this newsletter for more information ..."

11. The letter from Centrelink of 9 July also records that the monetary sum that would be payable as carer allowance was $75.60. Thereafter that sum was paid on a regular fortnightly basis.

12. Mr and Mrs McCarthy acknowledged that those monies were paid in that sum, however they were of the belief that it was a payment of Family Payment with respect to their daughter Justine. They formed this view because the bank passbook into which evidenced the transactions with respect to that account recorded the abbreviation "F-pay" against the sum of $75.60 on each fortnightly deposit. (It appears by reference to the passbook account that that sum was later increased to the sum of $76.40). Mr and Mrs McCarthy said that they had no reason not to believe that they had entitlement to a family payment of $75.60 despite never having received any formal notification of such an entitlement. Prior to 1 July 1999 Mrs McCarthy held two bank accounts, each of which received parenting payment for Justine and a Family Allowance respectively. Mrs McCarthy said that they had been in receipt of welfare benefits for many years with respect to themselves and their six children and despite never having applied for a family payment they believed they had an entitlement to it because from time to time the benefits had changed in both name and in rate. They submitted that they had no reason to doubt that they had an entitlement to this sum of $75.60 which they understood to be a family payment.

13. Additionally Mr and Mrs McCarthy said that they were of the belief that carer allowance would not have been paid beyond 30 June 1999 because of the telephone conversation Mr McCarthy had with an officer at the Department of Health and Aged Care. With respect to the letter of 9 July 1999 which advised that there would be a payment in the sum of $75.60 and that sum being a carer allowance, Mr McCarthy said that he and his wife "wouldn't have read this. We get these letters all the time".

Conclusion & Reasons For Decision

14. Beyond 16 April 1999 Mr and Mrs McCarthy respectively did not have any entitlement to a payment with respect to Mrs Sarah McCarthy. From that date Mrs Sarah McCarthy was admitted to a nursing home. Section 954 of the Social Security Act 1991 ('the Act') provides, that a carer allowance is only payable where a "care receiver" receives care and attention on a daily basis in a private home that is the residence of the person providing the care.

15. As a fact I am satisfied that the payments made by Centrelink after 9 July 1999 were a carer payment to which Mrs McCarthy did not have an entitlement. It follows that the payments made beyond that date were an overpayment and in the absence of an entitlement by Mrs McCarthy the total sum paid constitutes a debt.

16. I am satisfied that there was an administrative error made by the Commonwealth with respect to the payments made beyond 9 July 1999. It appears that there was inadequate communication between the Department of Health and Aged Care and Centrelink at or about 30 June 1999 evidenced at 9 July 1999 by Centrelink being of the belief that it was obliged to make a payment of carer allowance to the applicant, who previously was in receipt of domiciliary nursing care benefit. Mrs McCarthy did not have that entitlement at 9 July 1999 when that letter was sent to her. The issue remaining is whether the payments made beyond 9 July 1999 were "received' by Mrs McCarthy "in good faith".

17. Section 1223 of the Act provides that if an amount has been paid to a person as a social security payment after 1 October 1997 and the recipient does not qualify for that payment, the amount paid is a debt due to the Commonwealth (For the purposes of this section a "carer payment" is a "social security payment" within the meaning of the Act).

18. Section 1237A(1) Act-

"The Secretary must waive the right to recover the proportion of the 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".

19. Mr and Mrs McCarthy were of the belief that the notation in their passbook account of 'F/pay' was an abbreviation to describe the payment deposited as a 'family payment'. I accept that they held that belief but it obviously was erroneous. The bank was in error in making that recording and its basis for doing so is not known. The payment was never a family payment and it was at all relevant times a payment of carer allowance to which Mrs McCarthy had no entitlement. The monies therefore paid constitute a debt. The issue then is whether the debt was "attributable solely to an administrative error made by the Commonwealth".

20. Whilst there was clearly an administrative error made by the Commonwealth the enquiry then needs to focus on whether the error was "solely" made by the Commonwealth and then whether the monies which constituted the debt were "received in good faith".

21. I am not satisfied that the debt is attributable solely to an administrative error made by the Commonwealth. In Re Gerhardt and Department of Employment, Education and Training (Unreported; AAT 10941; 17 May 1996) the word "solely" was interpreted as "only" or "to the exclusion of all else". I acknowledge that Mr McCarthy did contact the Department of Health and Aged Care at or about 30 June 1999 and advised that his mother had been in a nursing home from 16 April 1999. Nonetheless on 9 July 1999 Mrs McCarthy received the letter from Centrelink (refer earlier) - another Commonwealth Agency. Mr McCarthy said that he had rung "the Department" 9 days earlier and "told them we had no entitlement, and therefore I presumed that this money would not be paid". I am not satisfied that there was any reasonable basis to make this assumption. The letter of 9 July was from a different Commonwealth Agency, it unambiguously stated that an amount of money would be paid. It was implicit by the letter that there was a belief held by Centrelink that Mrs McCarthy had an entitlement to be paid those monies.

22. Centrelink was not notified by Mrs McCarthy or her husband after the letter of 9 July was received that there was no entitlement to the benefit. Despite the errors made between the Department of Health and Aged Care and Centrelink, the payments made beyond July 1999 can not be said to be solely due to an administrative error made by the Commonwealth. Had Mr or Mrs McCarthy notified Centrelink after 9 July that there was no entitlement, in all likelihood the payments would not have been made. The experience of Mr McCarthy particularly in April 1999 would have reassured him that payments would not have been made because he then notified Centrelink that his mother had been admitted to a nursing home and from that date the carers payment that he was then receiving was stopped.

23. Additionally, the letter of 9 July notified Mrs McCarthy that if her circumstances "change" there were certain reporting conditions. Clearly she did not report her circumstances which had changed.

24. Mr and Mrs McCarthy said that they probably would not have read the letter of 9 July because "we get these letters all the time" nonetheless payments were made and s.1237 is concerned with payments "received". I am loath also to find as was submitted that the applicant and her husband believed that the payments made thereafter of $75.60 were in fact a family payment for Justine when no claim for such a payment had been made and no letter had ever been received indicating that a payment of that description, in that sum, would be paid.

25. The sum of $75.60 (as varied from time to time) was "received" by the applicant because it was paid in to a bank account held by her. She had access to those monies and they apparently were spent from time to time on ordinary domestic costs. S.1237A of the Act is concerned with whether the monies were 'received' in good faith, not whether a recipient 'acted' in good faith (refer Finn J in Secretary, Department of Education, Employment, Training & Youth Affairs v Prince 1998 50 ALD 186 at 188).

26. In Jazazievska v Department of Family & Community Services 2000 FCA 1484, Cooper J, at paragraph 40 said that the issue of good faith was to be determined when the debtor commences to exercise control over the payment by retaining it. The point of time therefore upon which His Honour was focused, was immediately after the monies were "received".

27. I am not satisfied that there was any fraudulent or dishonest intent on the part of the applicant but I am satisfied that these monies were not received in good faith. The applicant allowed the monies to be received and then retained and then used. Reasonable enquiries were not made and no reasonable explanation was given to account for the absence of reasonable enquiry. This was despite having been notified, in writing (by the letter of 9 July) that the payments would be made when it was known there was no entitlement.

28. In all of the circumstances I am not satisfied that the monies paid to the applicant as carer allowance were received in good faith. It follows that the monies paid do constitute a debt due to the Commonwealth and the respondent is entitled to recover those monies.

29. The decision under review must be affirmed.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member.

Signed: ......C. Irons ...............................................

Secretary

Date/s of Hearing 20 December 2001

Date of Decision 18 January 2002

Counsel for the Applicant self represented

Solicitor for the Applicant

Counsel for the Respondent Ms K. Cunningham

Solicitor for the Respondent