Chen; Secretary to the Department of Family and Community Services [2003] AATA 29 (15 January 2003)

Last Updated: 21 January 2003

DECISION AND REASONS FOR DECISION [2003] AATA 29

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/922

GENERAL ADMINISTRATIVE DIVISION

Re: SECRETARY TO THE

DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Applicant

And: XIAO ZHI CHEN

Respondent

DECISION

Tribunal: M.J. Carstairs, Member

Date: 15 January 2003

Place: Melbourne

Decision: The Tribunal sets aside the decision under review and substitutes the decision that parenting payment single, family allowance, and family tax benefit paid to the respondent during periods of her absence from Australia between March 1999 and July 2001, totalling $21,865.52, are debts recoverable by the Commonwealth.

(sgd) M.J. Carstairs

Member

1. SOCIAL SECURITY - parenting payment - family allowance - overpayment - recovery of debt - waiver - whether special circumstances exist

Social Security Act 1991 ss1224(1), 1236, 1237AAD

A New Tax System (Family Assistance) (Administration) Act 1999 s101

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

15 January 2003 M. J. Carstairs, Member

1. This is an application by the Secretary to the Department of Family and Community Services (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 15 July 2002. The SSAT set aside decisions of Centrelink authorised review officers dated 2 January 2002 and 25 February 2002 to raise and recover debts arising from overpayment of benefits to Xiao Zhi Chen (the respondent). The SSAT decided that there were special circumstances that justified the debts being waived.

2. At the hearing of this matter on 18 October 2002, Ms E. King, a Centrelink advocate, represented the applicant and the respondent had the assistance of her accountant, Mr T. Sam. An interpreter assisted in the Cantonese language.

3. The Tribunal received into evidence the documents (T1 to T68) lodged under s37 of the Administrative Appeals Tribunal Act 1975, together with two exhibits (Exhibit A1 and A2) tendered on behalf of the applicant.

BACKGROUND

4. On 13 April 1996 the respondent arrived in Australia as the holder of a permanent resident visa. On 22 April 1996 she was granted family allowance (FA), which became family tax benefit in 2001 (FTB), and parenting payment single (PPS) from 23 January 1997. Centrelink gave her numerous notices informing her of her obligation to notify Centrelink within 14 days of leaving and returning to Australia.

5. Between 1996 and March 1999, the respondent made several trips to China and informed Centrelink on each occasion. Centrelink has no record of being advised of the following trips: departed 4 March 1999, returned 28 January 2000; departed 29 February 2000, returned 28 May 2000; departed 31 July 2000, returned 29 July 2001. During her trips overseas the respondent continued to receive FA/FTB and PPS.

6. On 19 November 2001 Centrelink informed the respondent that debts had  been raised because she had not been living in Australia for the periods 4 March 1999 to 30 June 2001 (PPS debt of $13,382.54) and 11 March 1999 to 27 June 2000 (FA/FTB debt of $4409.90). On 2 January 2002 an authorised review officer of Centrelink increased the amount of the PPS debt to $13,656.85. On 25 February 2002 another authorised review officer increased the amount of the FA/FTB debt to $10,267.85. On 7 March 2002 the respondent applied to the SSAT for review of the decisions.

7. Following the decision of the SSAT, the applicant sought review by this Tribunal on 27 August 2002. The applicant did not dispute the SSAT's findings in regard to calculating the amounts of the debts, but did dispute the decision that recovery of the debts should be waived on the basis of special circumstances. The SSAT made findings that Centrelink had not correctly calculated the amounts of the debts. The Tribunal requested that the applicant recalculate the debts applying the findings of the SSAT. As a result, the amount of the PPS debt was reduced to $12,832, while the FA/FTB debt was reduced to $9033.52. This meant that the total debt was reduced, applying the SSAT's findings, from $23,924.70 to $21,865.52.

EVIDENCE

8. The respondent gave oral evidence confirming what she had told the SSAT. In summary, she had said that she had come from China in 1996 with her husband and daughter and later divorced. She received sole parent pension from 20 January 1997 (T5). She also was paid family payments in respect of her daughter. In late 1997 she had departed Australia for China and advised Centrelink of the departure. She went to China in 1997, as her father was ill. (At that time, sole parent pension was payable for a year while a person was overseas.)

9. The applicant told the SSAT and confirmed at the hearing that, while she knew at the time of the 1997 trip that she had to advise Centrelink of her departure, she believed this was because it was a personal trip. She again went overseas in 1999, for work. A computer company, UniStar, was her employer. She said that she believed that, as the travel to China was for business, the company would advise Centrelink of her departure. Her employer made all her visa and travel arrangements. She said that she had told Centrelink about her employment and UniStar had advised Centrelink about the amount of income she was receiving. Document T22 and exhibits A1 and A2 confirmed that this was so. The applicant said that she knew that any travel abroad should be reported to Centrelink, however she believed that a data match up would occur between the relevant government agencies. She believed that this was the normal channel for the information to go from the Department of Immigration, Multicultural and Indigenous Affairs through to Centrelink.

10. The applicant said that she did not advise Centrelink of any address change when she was filling out review forms in regard to her payments as she did not consider that her home address had changed, since she was only absent on business. Her daughter and her mother continued to live at the home in her absence. The applicant said that while she was overseas her daughter was in the care of her mother, who had moved to Australia after the applicant's father died.

11. A file note dated 19 February 2002 (T57) recorded a telephone interview with the respondent in which she said that, during her absences in China, her daughter remained in Australia except that she would join her in China for six weeks during school holidays. The file note recorded that a person from their church cared for the daughter. The respondent's mother had been travelling back and forth from China.

CONSIDERATION OF THE ISSUES

12. The applicant accepted the findings of the SSAT in regard to the debts of parenting payment single, family payment and family tax benefit. The applicant contested only the SSAT's decision to waive the debts on the basis of special circumstances.

13. In considering the discretion to waive the debts on the basis of special circumstances, the relevant provision of the Social Security Act 1991 (the Act) is found at s1237AAD:

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.

14. An identically worded provision appears at s101 of the A New Tax System (Family Assistance) (Administration) Act 1999, in regard to the family tax benefit.

15. Ms King submitted that the SSAT decision was correct in regard to matters concerning the amount of, and calculation of, the debts of family payment and parenting payment single. The applicant submitted that the total debt was as set out at paragraph 7 above. The applicant submitted, however, that there was no proper basis for the SSAT to waive the debt as the applicant had knowingly made a false representation or failed or omitted to comply with a provision of the Act when she did not notify Centrelink of her absence overseas (s1237AAD(a)). Ms King submitted that the applicant should be taken to have knowingly failed to comply as on two previous occasions she had known to advise Centrelink of her departure. She submitted that it should be inferred from this and from other documentary material relating to her return to Australia from earlier trips to China (T17 and T18) that the applicant knew her obligations to advise of her departure from Australia. It was further submitted that the applicant knew from her earlier experience when she left for China during her father's illness that she could only be paid at the minimum rate of family payment when out of Australia. Ms King submitted that document T18 showed that the applicant had made an earlier inquiry directly on this point. It was submitted that the applicant's representations on payment review forms that she had not changed address, were false.

15. Ms King submitted that, even if the applicant did not knowingly fail or omit to comply, the applicant's circumstances were not sufficiently unusual or exceptional as to warrant the exercise of the discretion under s1237AAD of the Act. It was submitted that special circumstances would not be established on the basis of financial hardship only. It was submitted also that the basis for special circumstances adopted by the SSAT, namely that, had the applicant's work merely taken her to another State rather than overseas, she would have remained entitled to the payments, was not a proper basis for the exercise of the discretion.

16. Mr Sam submitted that the respondent was not relying on there being any special circumstances. He submitted also that there were two distinct periods: the first when the applicant was out of Australia on personal business and the second when she was out of Australia for work and relied on UniStar to report everything to Centrelink. He contended that the applicant left Australia through the normal channels and that data matching between government agencies should have picked up her absence. In his submission, if data matching had occurred, then the applicant would have provided the relevant information and her correct entitlement would have been established. Mr Sam contended further that the applicant had no motive to mislead the authorities. Mr Sam submitted, that throughout the period, the respondent remained a resident and her daughter remained in her care and under her guidance. He submitted that the respondent's mother would have been entitled to receive the family payment and family tax benefit.

17. In reaching its decision, the Tribunal takes into account the written and oral evidence and the submissions made at the hearing. The Tribunal accepts the applicant's evidence that she thought that UniStar would advise Centrelink about the absence as the company had handled all other matters in regard to her departure. While this may have been a naïve view, given her experience of pre-departure interviews on earlier occasions, the applicant had only been in Australia since 1996, and has limited English skills. The Tribunal accepts the applicant's evidence that she did not understand the practices in notifying Centrelink and relied on UniStar to deal with all matters concerning her absence from Australia. The Tribunal, therefore, rejects the applicant's submission that consideration could not be given to the exercise of the discretion, under s1237AAD of the Act, because the applicant knowingly failed to comply with the Act.

18. With respect to waiver of all or part of the debts under s1237AAD of the Act, the respondent must satisfy s1237AAD(b) and (c). In relation to s1237AAD(b) concerning special circumstances, Court and Tribunal decisions establish that special circumstances are circumstances having a particular quality of unusualness that sets one case apart from the usual. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 this was described as circumstances that are unusual, uncommon or exceptional.

19. In this case the Tribunal finds that the respondent remained a resident of Australia and would have been qualified for the payments received had she been in Australia. However, for each of the payments she received (parenting payment, family allowance and family tax benefit), there is specific provision for what happens to entitlement when a person is absent from Australia. Many provisions in the legislation now allow only limited times in which a person can continue to receive payments when overseas. This has been comprehensively set out in the reasons of the SSAT in regard to the law applying to each of the payments and the SSAT correctly decided those matters and the basis on which the debts were to be calculated. There was no dispute at the hearing that the SSAT had correctly set out the law in regard to the debts.

20. On the available material, the Tribunal is not satisfied that the respondent would be placed in financial hardship in repaying the debts. The Tribunal was told that the respondent receives $439 per fortnight in parenting payment and $236 per fortnight in family tax benefit as well as receiving ordinary income of at least $165 per fortnight (T66). While it is clear that recovery of a debt of this amount, where the respondent is on a limited income and has a mortgage repayment (of some $105 per week - T65) will be a burden to her; recovery can be effected through moderate withholdings from her social security payments. The Tribunal is satisfied that the financial circumstances of the respondent, while difficult, are not such as, on their own, to justify any part of the total debt not being recovered.

21. No other circumstances were relied upon by the respondent as being special circumstances that should be taken into account in her case. The Tribunal considered the question of a notional entitlement that might have existed for family payments in respect of the respondent's daughter, when the child was in the care of her grandmother. However, it was not clear, on the evidence, what periods that this may have been the case. As the Tribunal considered that the circumstances overall were not sufficiently special or unusual to warrant the exercise of the discretion, the Tribunal declined to exercise the discretion in regard to any part of the debts.

22. Therefore, the respondent's circumstances do not constitute special circumstances making it desirable to waive the debts. The Tribunal finds that the respondent does not satisfy s1237AAD(b) of the Act. As a result of this finding, there is no need for the Tribunal to make a finding on whether it is more appropriate to waive than to write off the debts in whole or in part (s1237AAD(c)). The respondent is unable to satisfy s1237AAD, so the applicant's right to recover all or part of the debts may not be waived.

DECISION

27. The Tribunal sets aside the decision under review and substitutes the decision that parenting payment single, family payment, and family tax benefit paid to the respondent during periods of her absence from Australia between March 1999 and July 2001, totalling $21,865.52, are debts recoverable by the Commonwealth.

I certify that the twenty-seven [27] preceding paragraphs are a true copy of the reasons for the decision of:

M.J. Carstairs, Member

(sgd) Catherine Thomas

Clerk

Date of hearing: 18 October 2002

Date of decision: 15 January 2003

Advocate for applicant: Ms E. King, Centrelink

Advocate for respondent: Self-represented

Solicitor for respondents: Nil