Woolley and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 26 (16 January 2009)

Last Updated: 19 January 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 26

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. 2008/1920

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Dorothy Woolley

Applicant

And

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Respondent

DECISION

Tribunal

Mr G. L. McDonald, Deputy President

Date 16 January 2009

Place Melbourne

Decision

The Tribunal sets aside the decision of the Social Security Appeals Tribunal and substitutes a decision as follows: (a) For the period 28 September 2001 to 3 October 2001 the debt is waived due to Commonwealth error; and (b) For the period 4 October 2001 to 2 April 2007 the applicant owes a debt to the Commonwealth; and (c) For the period 3 April 2007 to 12 June 2007 the applicant concedes she owes a debt to the Commonwealth.

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

Deputy President

CATCHWORDS – SOCIAL SECURITY ACT – applicant did not inform Centrelink of changes to her financial investments – whether overpayment was attributable solely to an administrative error of the Commonwealth – whether the applicant knowingly made false representations – whether applicant knowingly failed to comply with legislation – whether there are special circumstances to waive the debt – decision under review set aside.
Administrative Appeals Tribunal Act 1975 s 37
Social Security Act 1991 ss 9, 11, 55, 1064, 1076, 1081, 1082, 1118, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 ss 68, 100
Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565; (1997) 152 ALR 127
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Haggerty v Department of Education, Training and Youth Affairs (2000) 21 AAR 529
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2002) 65 ALD 424
Pledger v Secretary, department of Family and Community Services [2002] FCA 1576
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security [1999] AATA 952; (1996) 57 ALD 495
Re Saunders and Secretary, Department of Family and Community Services [1999] AATA 952; (1999) 57 ALD 495
Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72; (2001) 65 ALD 553

REASONS FOR DECISION

16 January 2009

Mr G. L. McDonald, Deputy President

THE APPLICATION

1. Mrs Woolley is appealing against a decision which found she had been overpaid the age pension for the period 28 September 2001 to 12 June 2007. The overpayment for that period is calculated to be $40,521.75. The Social Security Appeals Tribunal (SSAT) varied the decision made by the authorised review officer and decided that the debt should be waived for the periods 28 September 2001 to 12 May 2002 (an amount of $3,904.16) and 12 March 2007 to 2 April 2007 (an amount of $411.73). The total amount waived was $4,315.89.
2. While no formal appeal was lodged by the respondent, it seeks to have the two amounts waived by the SSAT decision reinstated as part of the debt. The debt has already been recovered by the respondent.

THE HEARING

3. At the hearing Mrs Woolley was represented by Mr Zero Partos and gave sworn evidence. The Secretary was represented by Mr Andrew Carson. The Tribunal had before it the documents filed for purposes of satisfying s 37 of the Administrative Appeals Tribunal Act 1975 (T documents and ST documents).

THE BACKGROUND AND SUBMISSIONS

4. The contentions on behalf of the applicant are that the debt is attributable solely to an administrative error made by the Commonwealth in the calculation of the rate of the applicant’s age pension and that the applicant received the resulting benefit in good faith. In such circumstances the Social Security Act 1991 (the Act) requires the waiver of the debt or such part of it that is attributable solely to the administrative error. Alternatively, if the overpayment did not arise solely as the result of administrative error then it is put the debt should be waived because the preconditions in s 1237AAD of the Act are met and special circumstances exist.
5. The applicant concedes that that she was overpaid for the period 3 April 2007 to 12 June 2007 because she misinformed Centrelink of her financial position. Given that admission the period about which the Tribunal is concerned with is between 28 September 2001 and 2 April 2007 (the relevant period).
6. The facts are not in dispute and are as set out in paragraph 25 of the decision of the SSAT.[1] On behalf of the applicant it is said that the 6th dot point of paragraph 25 is incorrect in that it was more a movement of money rather than a new account being opened. The Tribunal will return to this later in these reasons.
7. The parties agree and the Tribunal is satisfied that on 20 September 2001 the applicant lodged with the respondent a completed Assets and Income Review Update form in which she stated that she had a cash asset of $184,000 which was invested in Bill of Exchange (the Bill) with the Commonwealth Bank of Australia (CBA). The $184,000 was in fact the matured value of the Bill as at 8 September 2000.[2] The applicant said that that was the latest advice she had to hand at the time she completed the Assets and Income Review Update on 20 September 2001. The true amount in September 2001 is not precisely known but appears likely to have been greater than the amount stated because it appears the applicant continued to roll the Bill over in the interim between September 2000 and September 2001. It is also apparent from her CBA pensioner security account statement that on 20 September 2001 she had a further amount of $10,297.40.[3] The latter account was in the name of the applicant and the estate of her late husband. Despite attempts by the applicant in June 2001 to have the account transferred into her name solely the bank had not managed to do so.[4] The bank continued to style the account in the names of the applicant and her late husband while addressing the statements to the applicant’s late husband’s estate.[5]
8. Also on 20 September 2001 the respondent sent a letter to the applicant advising her that she must notify Centrelink if her assets (other than financial investments) exceeded $47,592 and if her financial investments exceeded $101,658.[6] The applicant thought there had been a typographical error as she had already informed Centrelink of her savings of $184,000 (by completing the Assets and Income Review Update on 20 September 2001). She thus took no action to notify Centrelink of the mistake. The applicant stated that as far as she could see she was receiving what she thought was the correct amount by way of age pension. T document T10 page 51 shows the applicant’s pensioner security account as being credited with $190,000, being from the proceeds of the Bill, on 28 September 2001. The applicant made no notification to Centrelink of the change in the value of her financial investments after this occurred despite her financial investments now clearly exceeding the amount of $101,658 as quoted by Centrelink.
9. On 13 May 2002 the applicant’s pensioner security account statement records $207,798.19 as being withdrawn.[7] And on 23 April 2004 $222,000 was credited to her pension account.[8] In between those dates interest payments apparently resulting from the Bill are also recorded as being credited to the applicant’s pensioner security account (for example, on 2 January 2004 $2,502.71[9] was credited, and on 22 March 2004 $969.73[10] was credited, both invoiced as “Inv Rollove”). No notification was given to Centrelink concerning these amounts. The applicant explained to the Tribunal she felt having advised Centrelink of the initial $184,000 investment that she had complied with the notification requirements.
10. On 10 March 2004 a further letter was sent to the applicant pointing out the need to report changes in her financial investments if they exceeded the adjusted amount of $102,948.[11] The applicant said she did not read this letter. At that time the applicant’s pensioner security account statement is shown as having a credit of $8,096.03.[12] It appears, and the Tribunal accepts, that the applicant had approximately $220,000 in a Bill of Exchange, as that figure is recorded as being credited to her pensioner security account on 23 April 2004 (invoiced as “Inv Maturit”).[13] In her oral evidence the applicant confirmed the existence of that latter investment. It appears that the Bill was again credited to her pensioner security account on 20 June 2005[14] in the amount of $241,157.26 (again invoiced as “Inv Maturit”) and on 23 March 2007 $256,000 was invested in a term deposit account.[15] The applicant informed the Tribunal the only reason she invested in a term deposit account was because CBA stopped the practice of offering Bills of Exchange and she therefore had to find another way to earn interest.
11. On 23 February 2007 the applicant was sent an Income and Assets Update form to complete.[16] On 12 March the applicant filed a completed Income and Assets Update form which disclosed $240,000 as being in her CBA pensioner security account.[17] In fact, her CBA bank statement discloses $257,054.90 as being in her account on that day.[18] On 29 May 2007 Centrelink wrote to the applicant drawing attention to the amounts in her account and advising her of adjustments to be made to the rate of her pension as well as advising deemed adjustments may be made.[19] On 26 June 2007 Centrelink notified Mrs Woolley that it had calculated that she had been overpaid $40,507.29.[20]

THE LEGISLATION AND THE TRIBUNAL’S CONSIDERATION

12. Section 55(a) of the Act states that a person’s age pension rate is worked out by using Pension Rate Calculator A at the end of s 1064. There are 12 steps to work out the pension rate (the steps refer to the various Modules set out in s 1064). Included in those steps is an income test (Step 5 using Module E) and an asset test (Step 9 using Module G).
13. The first step of Module G is to work out the person’s assets. If the person is the member of a couple then the person’s assets are taken to be 50% of the sum of the value of the person’s assets and the value of the partner’s assets. In this case 100% of the value is to be taken into account. Section 1118 provides that certain assets are to be disregarded in calculating the value of a person’s assets.
14. The second step is to work out the person’s assets value limit using Table G-1. This involves working out the person’s home ownership.
15. Steps 4 and 5 address whether or not the value of the person’s asset exceeds the person’s assets value limit. If the person’s assets exceed the assets value limit, Step 6 uses the person’s assets excess to work out the person’s reduction of assets.
16. Section 11(1) of the Act defines the term ‘asset’:

asset means property or money (including property or money outside Australia).

17. Relevantly, s 9(1) provides the following additional definitions:

financial asset means:
(a) a financial investment; or
(b) a deprived asset.

financial investment means:
(a) available money; or
(b) deposit money; or
(c) a managed investment; or
(d) a listed security; or
(e) a loan that has not been repaid in full; or
(f) an unlisted public security; or
(g) gold, silver or platinum bullion; or
(h) an asset-tested income stream (short term);
but does not include an investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008).

18. Section 1076(2) provides that a person who has financial assets is taken to receive income on those assets.[21] The deemed income will then be taken into account in calculating a person’s ordinary income and consequently their rate of age pension.
19. Section 68(2) of the Social Security (Administration) Act 1999 (the Administration Act) gives the Secretary the power to provide notices to social security recipients requiring those persons to inform the Department if a special event or change of circumstances occurs or is likely to occur that may affect the payment of social security to that person. Section 100 of the Administration Act provides that where a person is given notice under s 68(2) and the person does not inform the Department of the occurrence of the event or change of circumstances the rate of social security payment is to be reduced from the day on which the event or change of circumstances occurs.
20. Section 1223 of the Act enables overpayments made to social security recipients to be raised as a debt to the Commonwealth. However, s 1237A of the Act provides that the debt must be waived if the debt is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payments that gave rise to that proportion of the debt. Section 1237AAD also provides the debt may be waived where there are special circumstances and the debt did not result from the debtor knowingly making a false representation or failing or omitting to comply with a provision of the Act or the Administration Act. Further, s 1236 provides the debt may be written off where the debt is irrecoverable at law, or where the debtor has no capacity to repay the debt, and on other special grounds.
21. The Tribunal will now consider how these provisions affect Mrs Woolley. As it is accepted that the calculation of Mrs Woolley’s pension rate, contained in the T documents, is accurate the Tribunal will focus on whether the debt should be waived or written off and whether Mrs Woolley failed to comply with the Act and the Administration Act.

A. WHETHER THE DEBT WAS ATTRIBUTABLE SOLELY TO ADMINISTRATIVE ERROR OF THE COMMONWEALTH

22. Section 1237A(1) of the Act provides that the Secretary must waive the right to recover a debt where the debt has arisen solely as the result of an administrative error on the part of the Commonwealth. Section 1237A relevantly provides as follows:

(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.
(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
...

23. In this case it is clear that the applicant notified Centrelink of the sum she thought she had invested in the Bill of Exchange when she completed the Assets and Income Review Update form on 20 September 2001. If this information had been processed then she may not have been paid the pension at the rate she was paid. It is unclear whether the applicant signed and returned the form prior to or post receipt of the letter advising her of the need to report any financial investments over $101,658 which was sent to her on 20 September 2001.[22] The applicant seems to think that she received the letter after completing the form. She says she recalled receiving the letter and thinking that a typographical error had been made on the form given she had recently notified Centrelink of her assets. She took no action to clarify the issue with Centrelink.
24. There are two matters which arise. First, it is clear that an administrative error occurred because the information forwarded by the applicant on 20 September 2001 was not processed by Centrelink. At the SSAT hearing, Centrelink conceded that when processing this form an error was made in that the value of financial investments was not updated correctly.[23] Second, the applicant did not inform Centrelink of the correct amount of financial investments (the applicant’s financial investments exceeded $184,000 at 20 September 2001) and failed to correct Centrelink’s misinformation (that she had financial investments over $101,658) and has as a result received money to which she was not entitled. A debt has been raised against her. Thus, the Tribunal must determine whether error of Centrelink is the sole responsibility of the Commonwealth (emphasis added). The applicant had no knowledge of what use Centrelink made of the information she gave. It is unreasonable to expect a 70 year old woman with no particular accounting or legal background to understand the operation of the statutory method used to calculate the rate of age pension payable.[24]
25. On 4 October 2001 the applicant is recorded as depositing $3,619 into her pensioner security account increasing her account balance to $204,166.13.[25] This is considerably more than the $184,000 that she advised as being the value of her assets as at 20 September 2001. By 4 October 2001 she had received the letter from Centrelink requiring her to notify it of any changes in the value of her financial investments above the stated figure of $101,658. She did not do so.
26. After receiving that letter the error in the calculation of the rate of her age pension could not be said to be the sole responsibility of the Commonwealth. The error was contributed to by the applicant’s non compliance with the notification requirements and by the applicant not reporting the change in the value of her financial investments (the first such change occurring on 4 October 2001).
27. There is accordingly no requirement that the Secretary waive the debt accruing from 4 October 2001 onwards. The debt from 28 September 2001 to 3 October 2001 is waived on the basis of sole Commonwealth error because Centrelink did not process the applicant’s form of 20 September 2001 informing the Department she had financial investments of $184,000. Although this figure was incorrect at the time, Centrelink was paying the applicant age pension on the misapprehension she had $101,658 or less in financial investments. Had Centrelink processed the applicant’s form of 20 September 2001 she would not have been overpaid as much. After receiving Centrelink’s letter of 20 September 2001 the applicant should from then on have been aware she had a responsibility to keep Centrelink informed of changes in her financial investments.
28. Of course, the debt from 28 September to 3 October 2001 can only be waived if Mrs Woolley received the overpayments in good faith. ‘Good faith’ is not defined by the Act but has been the subject of much discussion in cases. Finn J in Prince’s case stated the test should be what was in the person’s mind the time of receipt of the overpayment:

For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.[26]

29. Acting without good faith does not necessarily mean acting fraudulently. It means that at the time the person retains the money that they act without an honest belief that they were entitled to that money.[27] A person will not have an honest belief if they think the payment has been made by mistake or if they think they are not entitled to the payment.[28] Thus, it is a subjective test.[29]
30. The Tribunal accepts Mrs Woolley thought, at the time she received the payments and retained them, that she was entitled to those payments. Mrs Woolley gave evidence at the hearing that there was no reason for her to think she was being overpaid. The Tribunal is therefore satisfied Mrs Woolley accepted the payments in good faith.

B. WHETHER THE DEBT SHOULD BE WAIVED DUE TO SPECIAL CIRCUMSTANCES

31. That of course does not end the matter as the Tribunal must also consider s 1237AAD of the Act. That section provides a discretion to the Secretary, which extends to this Tribunal when exercising its functions, to waive recovery of all or part of the debt. The discretion can only be exercised if the three limbs are satisfied. Section 1237AAD provides as follows:

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, the Administration 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.

The Tribunal will now consider these sub-sections.

(I) WHETHER THE APPLICANT KNOWINGLY MADE FALSE STATEMENTS OR FALSE REPRESENTATIONS OR FAILED OR OMITTED TO COMPLY WITH THE ACT OR THE ADMINISTRATION ACT

32. Section 68(2) of the Administration Act gives the Secretary the power to provide notices requiring the applicant to inform Centrelink if a special event or change of circumstances occurs or likely to occur. Section 68 relevantly provides:

(1) Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or seniors concession allowance) is being paid.
(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
(c) give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.

...

33. The Tribunal is satisfied such notices were sent to the applicant. The Tribunal has referred to the letters requesting Mrs Woolley to inform Centrelink if her financial investments exceeded certain amounts earlier in these reasons. Mrs Woolley therefore failed to comply with the Administration Act. The question then is whether Mrs Woolley did so knowingly.
34. This Tribunal has previously considered the meaning of ‘knowingly’ in sub-section (a). Unfortunately, there is no one definitive definition. It is unclear whether acting ‘knowingly’ means acting with actual knowledge or acting recklessly or having constructive knowledge.
35. In Jonauskas[30] Deputy President Forgie reviewed previous cases that had considered the meaning of ‘knowingly’. The Deputy President stated Parliament had quite clearly distinguished ‘knowingly’ from ‘recklessly’ by omitting it from the section. Parliament had clearly included recklessness in previous sections of the Act that are now found in the Administration Act. Therefore, recklessness or constructive knowledge should not be read into s 1237AAD. Rather ‘knowingly’ refers to actual knowledge. Deputy President Forgie in Callaghan stated the actual knowledge is to be ascertained by looking at the events surrounding the false statement or acts or omissions and the statements of the person at the time of those events.[31]
36. In Deputy President Forgie’s examination of previous cases, she considered and disagreed with Senior Member Kiosoglous’ wider view in Saunders where the Senior Member stated:

It is a civil standard of proof where “knowingly” is a conscious and deliberate choice (Re Morgan) and also can include recklessness to the consequence of failing to comply with a provision of the Act.[32]

While the Senior Member examined ‘knowingly’ in relation to sub-section (a)(ii), this Tribunal is satisfied the same meaning is attached when ‘knowingly’ is used in respect to sub-section (a)(i).

37. To avoid meeting the definition of ‘knowingly’ by turning a blind eye and throwing Centrelink’s notices, unread, into a draw is in the view of the Tribunal to knowingly fail or omit to comply with an obligation with a provision of the Act where the recipient has a duty, under s 68 of the Administration Act, to respond to a notice to provide information requested by the Secretary. The currently accepted manner for the Secretary to give notice that he wants information is by way of corresponding to a recipient. A recipient who refuses to open such a letter sent by the Secretary is knowingly refusing to comply with the request.
38. Further social security recipients receive public moneys. It must be taken that the Australian population is aware the public moneys are distributed under the Act on the basis of need according to graduated scales to ensure the most needy receive the full benefit and those with correspondingly less need receive more limited support. Attached to the receipt of any public money is an ongoing responsibility for the recipient to ensure information in his/her control is provided to ensure he or she is qualified to receive the amount paid. An intentional disregard of that responsibility by not reading letters which remind recipients of their responsibilities and a failure to assess the level or income or assets is to knowingly disregard a recipient's responsibilities. If all people who commenced receiving benefits did not to read and take responsibility for complying with the requirements notified then there would be an unacceptably large increase in benefits being paid to those who did not qualify. If all such people ignored correspondence reminding them of their responsibilities and claimed that they had no knowledge of the requirements and claimed that they did not know of the requirements then it is not too cynical to conclude that the only likely notifications the department would receive would be from those seeking an increase in their benefits. That situation must be distinguished from other circumstances where age or incapacity or some other legitimate reason may result in a recipient forgetting or innocently overlooking fulfilling a requirement. That, however, is not the case here.
39. Mrs Woolley, on her own evidence, simply paid no heed to letters or bank statements. She did not claim not to have opened the letters because she was upset or depressed at the death of her husband or on this point proffer any reason for not even attempting to read the letters or bank statements and considering her position, other than she thought Centrelink would make its own enquiries of her bank account(s). That Centrelink may make its own enquiries is different from saying that it has an obligation to do so. The obligation rests with the recipient to notify and not with Centrelink to find out. The Tribunal additionally notes that the aim of Centrelink in writing to recipients is, among other things, to remind them of (as well as to require them to report) their responsibility to notify changes. The documents were put in a draw unopened. In those circumstances the recipient can hardly legitimately claim that the requirements were not fulfilled because she did not know of the requirement to notify changes.
40. Therefore, the applicant does not satisfy the first limb of s 1237AAD.

(II) WHETHER THERE ARE SPECIAL CIRCUMSTANCES

41. The Tribunal is additionally unable to accept there are special circumstances that make it desirable to waive the debt.
42. Sub-section (b) states financial hardship alone is insufficient to satisfy the special circumstances limb. The Tribunal understands the debt has been repaid and Mrs Woolley’s evidence at the hearing indicates to the Tribunal she is financially secure.
43. The term ‘special circumstances’ is not defined by the Act but has been considered by this Tribunal and other courts time and time again. The following passage from Beadle’s case is often used in social security decisions:

An expression such as “special circumstances” is by its nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is context which allows one to say that the circumstances of one case are markedly different from the usual run of cases. That is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be regarded as special.[33]

Similarly, Groth’s case is also often cited:

The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss: Beadle’s case ... and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual ordinary case. That was, I consider, the only enquiry to be undertake in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out the ordinary. That enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.[34]

44. The Tribunal heard evidence of Mrs Woolley’s health conditions and the depression she suffered after her husband passed away. While the Tribunal has empathy for her health conditions, they cannot be described as unusual, special, or out of the ordinary.
45. Jonauskas allows the Tribunal to consider recklessness here to determine whether there are special circumstances.[35] In Jonauskas, while the applicant’s recklessness could not be considered in sub-section (a), it was taken into account when the Tribunal considered whether there were special circumstances:

Also relevant are the circumstances in which Mr Jonauskas came to fail or omit to comply with his obligation to notify the department that it had not correctly stated his combined income. Having heard his evidence, I am satisfied that he took no interest in the letter of 22 July 1997 other than to look at the amount he would be paid. He made no effort to read the rest of the information on the front of it. Had he done so, his attention would have been directed to the back of the letter. He did not turn the letter over. Mr Jonauskas did not ask anyone else to check the letter for him to make sure that he understood its contents. He did not respond to the invitation on the front of the letter to get in touch with the department if he wanted to know more. The telephone number and office hours were printed at the top of that front page. I am satisfied that he was careless as to whether the letter contained information as to matters he was required to deal with. Perhaps that was because he expected the department to put the correct information into the computer but, for all that, he was still careless as to whether it had.[36]

46. Like the applicant in that case, Mrs Woolley still had the capacity to manage her affairs but through carelessness and/or recklessness she chose not to. She had the capacity to understand the obligations associated with receiving social security payments but chose not to know them. She turned a blind eye to the letters she received from Centrelink and did not care whether those letters imposed any obligations on her or contained matters which she was required to address.
47. Mrs Woolley still had the capability to open the letters she received from Centrelink and her bank. There was not any evidence before the Tribunal that Mrs Woolley was incapable of or hindered in telephoning Centrelink. Mrs Woolley gave evidence that she did indeed telephone Centrelink once she received notice of the debt to find out what was going on.
48. The applicant also gave evidence that she continued to roll over her Bill of Exchange and/or take out new ones. The Tribunal assumes that if Mrs Woolley was able to manage her financial investments that she was also capable of opening and reading letters from Centrelink and the bank.
49. Mrs Woolley chose to deliberately ignore almost every letter from Centrelink by throwing them into a draw. If she had opened them she would have realised she had an ongoing obligation to inform Centrelink of her financial investments. If Centrelink could have informed itself of her financial investments, as Mrs Woolley thought, there would be no reason to continually request her to update her information. Mrs Woolley was not expected to know how Centrelink calculated her social security payments or whether the amounts she was being paid were correct. However, by Centrelink asking her about her assets it is reasonably expected that she would turn her mind to the fact that that was important information that Centrelink needed to know.
50. Therefore, the Tribunal is not satisfied there are special circumstances to waive the debt.

(III) WHETHER IT IS MORE APPROPRIATE TO WAIVE THAN TO WRITE OFF THE DEBT OR PART OF THE DEBT

51. Waiving the debt would mean that Mrs Woolley had had the benefit of part of her social security payments when she was not entitled to it. In the applicant’s circumstances, it would not be unjust or unfair in requiring her to repay the benefits to which she was not entitled.
52. Therefore, the Tribunal does not waive the debt under s 1237AAD.

C. WHETHER THE DEBT SHOULD BE WRITTEN OFF

53. Section 1236 provides a debt may be written off in certain circumstances. The section relevantly provides as follows:

(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
...

54. The Tribunal sees no reason why the debt should be written off. The debt is clearly recoverable at law. Mrs Woolley does have capacity to repay the debt and has done so. Mrs Woolley’s whereabouts are obviously known and the Commonwealth has taken action to recover the debt.

THE TRIBUNAL’S DETERMINATION

55. The Tribunal therefore, for the reasons above, sets aside the decision of the SSAT and substitutes a decision as follows:

(a) For the period 28 September 2001 to 3 October 2001 the debt is waived due to Commonwealth error; and
(b) For the period 4 October 2001 to 2 April 2007 the applicant owes a debt to the Commonwealth; and
(c) For the period 3 April 2007 to 12 June 2007 the applicant concedes she owes a debt to the Commonwealth.

I certify that the 55 preceding paragraphs are a true copy of the reasons for the decision herein of

Mr G. L. McDonald, Deputy President

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

Associate Grace Horzitski

Date/s of Hearing 9 December 2008

Date of Decision 16 January 2009

Counsel for the Applicant Mr Z Partos

Solicitor for the Applicant Victorian Law Co Pty Ltd

Solicitor for the Respondent Mr A Carson, Centrelink Legal Services

---

[1] T document, T2, page 13.
[2] Exhibit A2.
[3] T document, T10, page 51.
[4] Exhibit A1 shows another account was opened in the name of the applicant instead of a name change to the original bank account.
[5] See T document, T10, pages 48 to 116 where each bank statement states the account is in both the applicant’s name and that of her late husband’s estate. Each statement is addressed to the “Estate of the Late Mr N Woolley”.
[6] T document, T4, page 20.
[7] T document, T10, page 59.
[8] T document, T10, page 82.
[9] T document, T10, page 78.
[10] T document, T10, page 81.
[11] T document, T6, page 26.
[12] T document, T10, page 81.
[13] T document, T10, page 82.
[14] T document, T10, page 96.
[15] T document, T10, pages 47 and 117.
[16] T document, T7, page 28.
[17] T document, T8, page 32.
[18] T document, T10, page 117.
[19] ST documents, ST7, page 304.
[20] T document, T12, page 127.
[21] Sections 1076, 1081 and 1082 provide formulae to calculate deemed income on financial assets.
[22] T document, T4, page 20.
[23] T document, T2, page 9.
[24] See s 1064-A1 of the Act which sets out the steps to calculate the rate of age pension.
[25] T document, T10, page 52.
[26] Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565; (1997) 152 ALR 127 at 130.
[27] Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2002) 65 ALD 424 at [40] per Cooper J.
[28] Haggerty v Department of Education, Training and Youth Affairs (2000) 21 AAR 529 at 534 per French J.
[29] Pledger v Secretary, department of Family and Community Services [2002] FCA 1576 at [59] per Weinberg J.
[30] Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553.
[31] Re Callaghan and Secretary, Department of Social Security [1999] AATA 952; (1996) 57 ALD 495 at 445.
[32] Re Saunders and secretary, Department of Family and Community Services [1999] AATA 952; (1999) 57 ALD 495 at [22].
[33] Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 per Toohey J, Wilkins and Billings (Members).
[34] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 at 545 per Kiefel J.
[35] Re Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72; (2001) 65 ALD 553 at 572.
[36] Ibid 573 and 574.