Moir and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 48 (22 January 2010)

Last Updated: 27 January 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 48

ADMINISTRATIVE APPEALS TRIBUNAL )

) Nos 2008/4346-47

GENERAL ADMINISTRATIVE DIVISION		)
	Re		DAVID MOIR AND LILIA MOIR

Applicants

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

Senior Member L Hastwell

Date 22 January 2010

Place Adelaide

Decision

The Tribunal varies the decisions under review and decides that: (a) with respect to the overpayment to Mr Moir, on the basis of a finding that the overpayment that occurred between his application for age pension and 24 June 2002 should be waived and the matter should be remitted to the department to recalculate the overpayment; and (b) once that recalculation of Mr Moir’s debt is made, the tribunal directs that 75 percent of the total debt owed by Mr Moir and 75 percent of the total debt owed by Mrs Moir be waived due to the special circumstances in each case.

..............................................
L HASTWELL
(Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Age Pension – overpayment – administrative errors by Centrelink – notices sent to the applicant advising income and assets used for assessment – failure to read notices – special circumstances considered – significant and repeated administrative errors – applicants negligent in failing to consider notices, but honest in receipt of funds – age and status of health considered – stress and trauma caused to applicants by overpayment significant – balance between public interest and special circumstances of the individual considered – decision to waive a portion of the debt
Social Security Act 1991 ss 1223(1), 1236, 1237A(1), 1237AAD,

Social Security (Administration) Act 1999 ss 100
Re Secretary, Department of Families and Community Services and Natale (2003) AATA 717
Sekhon v Secretary, Department of Families and Community Services [2003] FCAFC 190
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541

Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 30 ALD 31

REASONS FOR DECISION

22 January 2010

Senior Member L Hastwell

1. David and Lilia Moir have each asked this Tribunal to review a decision of the Social Security Appeals Tribunal (the SSAT) of 19 August 2008 which affirmed a decision of a Centrelink Review Officer that they had been overpaid respectively the sums of $54,212.97 and $15,916.82 in Age Pension.
2. Mr and Mrs Moir acknowledged that the overpayment of Age Pension occurred, but they assert that it was solely due to an administrative error of Centrelink and so the overpayment should be waived. Alternatively, they say that there are special circumstances in their case that justify a waiver of the debts.
3. At the date of the hearing before this Tribunal, some of the debt had been repaid by withdrawal from pensions. Mr Moir’s debt had reduced to the sum of $51,030.00 and Mrs Moir’s debt to the sum of $12,744.00.

RELEVANT LEGISLATION

4. Section 100 of the Social Security (Administration) Act 1999 (the Administration Act) provides as follows:

“100 Automatic rate reduction—recipient not complying with subsection 68(2) notice
(1) Subject to subsection (2), if:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c) the event or change of circumstances occurs; and
(d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e) because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;
the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.
(2) If:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b) the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c) the event or change of circumstances occurs; and
(d) the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e) because of the event or change of circumstances, the person’s working credit balance or student income bank balance is reduced to nil in an instalment period of the person that is the same as, or later than, the instalment period in which the event or change of circumstances occurs; and
(f) either because of the reduction of the balance to nil or because of the balance having already been reduced to nil—the rate of the person’s social security payment is to be reduced;
the social security payment becomes payable to the person at the reduced rate on:
(g) if the rate reduction is attributable to the reduction of the balance to nil—the day on which the balance was so reduced; and
(h) if the rate reduction is attributable to the balance having already been reduced to nil—the first day on which the opening balance was nil.”

5. Section 1223(1) of the Social Security Act 1991 (the Act) states as follows:

“1223 Debts arising from lack of qualification, overpayment etc.
[see Note 6]
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

6. Section 1237A(1) of the Act provides as follows:

“1237A Waiver of debt arising from error
Administrative 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).”

7. Section 1237AAD of the Act provides that a debt can be either partially or fully waived if special circumstances can be established. It provides as follows:

“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, 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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.”

8. The Secretary can also write off a debt in certain circumstances specified in the Act. It is not asserted that write-off as an appropriate remedy for the Tribunal to consider in this case. That could only result in a deferral of repayment. It is also acknowledged by the parties that the criterion required for a write-off are not present in this case.

ISSUES

9. The issues for the Tribunal to determine in this case are:
   • whether the acknowledged overpayments are debts due to the Commonwealth;
   • if so, whether they arose solely or partly as a result of Commonwealth administrative error; and
   • if not, whether there are special circumstances in this case which will justify waiver of some or all of the debts.

COMMON BACKGROUND FACTS

10. There was no dispute between the parties about a number of relevant facts.
11. Mr Moir was born in 1930 and reached Age Pension qualification age on 19 September 1995.
12. During his working life he was employed by the SA Government. He retired due to ill health in 1991 and thereafter he commenced to receive a Super SA pension.
13. He made his first application for Age Pension in 2001. He was initially refused the benefit by Centrelink on the basis of a finding that he was living in a marriage-like relationship. At the time he and his first wife were living separately and apart under the one roof. He sought review of that decision. In the context of applications for review to the SSAT and then the AAT, evidence of his superannuation entitlements was presented to the respondent (the Department).
14. When he made this first application he provided the information that he was receiving a Super SA pension. As part of that process, a letter from Super SA was given to Centrelink which set out full details of his Super SA periodic super payment and stated that it was subject to CPI increases (T26/197).
15. At the date that he made his second application for age pension on 16 May 2002, he was in receipt of a Super SA pension.
16. After successfully reviewing the SSAT decision at AAT level, he submitted the new claim form for pension (T25/176-196). He answered “Yes” to the question “Do you or will you get superannuation or other retirement payments?” (T25/187).
17. Shortly thereafter he completed the Module 1 Questionnaire regarding his income and investments (T24/165-175).
18. In that document he ticked “Yes” to the question as to whether he received income from an income stream. He identified the income stream as being a superannuation pension. He did not provide any further information (T25/170).
19. The Module 1 Questionnaire had a note to the same question about income stream which stated as follows “If you do not have a schedule of information about your income streams, Centrelink will send a form to your provider to complete and return to us”.
20. In September 2002, Mr Moir was sent an information notice under s 68(2) of the Administration Act. This notice stated, in part, that Centrelink was calculating his Age Pension payment based on an annual income of $779.35 (T46/310). This was the income received on investments by Mr Moir.
21. The electronic Centrelink file for Mr Moir records that he contacted Centrelink by phone on 2 October 2002 and advised that he had received a CPI increase to his super pension. The customer service officer noted that there was no listing of a super income showing on Mr Moir’s file. The file record states “have advised cus to bring into office to code” (T48/457).
22. There is no Centrelink record of Mr Moir bringing the requested information into a Centrelink office and there is no record of Centrelink following up that request.
23. On 20 January 2003, an Income and Assets Statement was sent to Mr Moir. The record on the Centrelink file states that this was sent as a result of a request from Mr Moir and that it was required for “a miscellaneous authority” (T48/456).
24. That letter showed that the income used in assessing Mr Moir’s rate of Age Pension payment was an annual income of $779.35 (T46/312).
25. Approximately one year later, Mr Moir again requested such a statement for “a housing authority” and again the letter generated by Centrelink showed that the annual income being used by Centrelink to ascertain his rate of payment was $779.35. It also showed his separate superannuation income as being “Nil” and asked that he phone the Department if any of these details were incorrect (T46/314). There is no evidence that he contacted the Department as a result of receipt of this letter.
26. Mr Moir advised the Department on 1 July 2005 that he had become a member of a couple and that he intended to marry in September 2005. He became partnered to Ms Lila Bachli on 1 July 2005.
27. Ms Bachli commenced to receive a linked Age Pension from 2 July 2005. She subsequently married Mr Moir and is now one of the two applicants for review before this Tribunal.
28. Notices were regularly sent to each of Mr and Mrs Moir thereafter advising of the assets and income rates that were being used by Centrelink in assessing their pension entitlements. The income figure set out in the notices did not include Mr Moir’s Super SA pension. The notices requested that if there was any change in income or assets to that shown in the notice, then the Department must be notified. It is common ground that neither Mr nor Mrs Moir responded to these notices to correct the incorrect income figure being used by the Department.
29. On 12 July 2005, Mrs Moir lodged a Module P (Parties’ Questionnaire) and a Module 1 (Income and Investment Questionnaire). These documents have been destroyed in the routine process of archiving and are no longer in existence.
30. On 5 October, 2005 Mr and Mrs Moir completed an Income and Assets Update Questionnaire (T231/153-164). In response to a question about whether either of them was in receipt of an income from any other source including a superannuation fund, Mr and Mrs Moir identified each of their pension entitlements and included the product reference number. Neither of them attached a schedule of their superannuation entitlements or a letter from the provider as requested in Question 18 of that form. Question 18 of that form also contained the following notation “If you have previously provided a Centrelink schedule ... or similar schedule, a new schedule is not required for this review”.
31. Other standard notices were sent to Mr and Mrs Moir after this date, each setting out the income and assets upon which their Social Security entitlements were being assessed. On each occasion the stated income was incorrect. Neither Mr nor Mrs Moir made any attempt to contact the Department and advise that the income details were not correct.
32. On 18 December 2006, Mr and Mrs Moir again completed an Income and Assets Questionnaire. They again responded to the question about superannuation income by identifying their respective pensions from Super SA and by including the relevant reference number.
33. On 13 July 2007, as a result of cross referencing records with the Australian Taxation Office, Centrelink discovered the overpayment to Mr and Mrs Moir and raised a debt.

THE HEARING

34. Mr and Mrs Moir attended the hearing. Ms Tsoundarou from the Welfare Rights Centre assisted them in presenting their case. The T documents relating to these applications for review were received as an exhibit. Mr and Mrs Moir handed up a number of other exhibits including medical reports and some information about their financial situation, and the T documents relating to Mr Moir’s earlier review to the AAT when it was ultimately accepted that he was not living in a marriage-like relationship with his previous wife. The Department called Mr Joe Garreffa who is a team leader at Centrelink to give some evidence about processes in the pension and carers claims department of Centrelink.
35. Mr Garreffa’s evidence was that when a person applies for an age pension a Module 1 issues and is sent to them. This form requests more detailed information about their financial situation. If the customer indicates in that module that they have a superannuation pension, but they do not provide a schedule, then Centrelink will request that schedule directly from the superannuation provider. Normally a customer would not receive a first payment until the information about the superannuation income stream is received by Centrelink.
36. He noted the information that had been provided by Mr Moir to Centrelink in 2001 in the context of his first pension application. He told the Tribunal that that information should have been coded into Mr Moir’s computer screen and available when he applied for his pension a second time in 2002. He acknowledged that there must have been an administrative error at some point and the superannuation figure on Mr Moir’s screen must have been accidentally “zeroed”.
37. Mr Garreffa said that, for example, when Mr Moir returned the Income and Assets Update to the Department in October 2005 (T23/153-163), the officer receiving that should have cross checked the information about superannuation provided in Question 18 to ensure the correct information was coded on Mr and Mrs Moir’s Centrelink screens. If the information was not coded, the officer should have realised and made contact with the customer to find out more information. A follow-up letter should have been sent to the customer. No such letter was sent.
38. He agreed that it is clear that on at least six occasions Centrelink were advised of the existence of the Super SA pension and on none of these occasions was the information coded into the Centrelink computer.
39. Mr Moir gave evidence at the hearing. He confirmed the content of a statement that he had prepared (Exhibit A1) and he supplemented the statement with his oral evidence.
40. Mr Moir had been involved in prior AAT proceedings in which he had challenged the Department’s decision that he was living in a marriage-like relationship with his then estranged wife. He was successful in that application. In the course of applying for his Age Pension the first time and in the first review process, he had provided a lot of financial information to the Department, the SSAT and then the AAT. This included the letter of August 2001 that provided full details of his Super SA pension and information about CPI increments to that pension (T26/197).
41. Mr Moir told the Tribunal that all overpayments received by him and his wife were received without them knowing that they were based on incorrect income figures. He understood that Centrelink held all of his relevant financial information. He regularly provided details in income update forms that would allow Centrelink to contact Super SA directly if they required further information. No further information was ever sought from him and he claims to have acted innocently and in good faith throughout. He assumed that Centrelink had access to his Super SA pension information. The income figure stated in the letter that he received was the income he was receiving on investments.
42. When asked whether he had read the numerous notices received from Centrelink that advised his current rate of Age Pension and which set out the income and assets upon which it was being assessed, Mr Moir responded by saying that he considered the letter to be like “a pay slip”. They told you what you were going to receive and in his view, “all the rest was superfluous”. He admitted that he took no particular notice of Centrelink’s recordings and calculations. He assumed they were correct.
43. His understanding was that Centrelink were able to directly access information about his superannuation income from Super SA. He was referred in cross-examination to the notice sent to him when an income statement was provided to him for the housing authority. That statement clearly stated his superannuation income to be nil. When asked whether he attempted to advise Centrelink that the income stated was incorrect, his response was that he was confident that he would have corrected the position with Centrelink.
44. After his divorce in mid 2002, he found himself in a difficult financial and emotional situation. It was a bitter separation and divorce. He left the former matrimonial home and rented a property. At the time he still had obligations with respect to his teenage daughter’s school fees and he was facing some debts. It was a stressful time for him. He has suffered from a long-standing depressive illness and his mental health was not good at the time.
45. He told the Tribunal that had he realised he was being overpaid, he would have made very different financial decisions to the ones that he has made. He commented that it would have been “financial suicide” for him to have taken certain financial decisions if he thought he was being overpaid and faced the possibility of having to repay sums to Centrelink. He put this forward as evidence of his innocence and bona fides in receiving the relevant funds.
46. In cross-examination Mr Moir was referred to a letter sent to him by Centrelink on 24 June 2002 (T46/308-309) in which it states most specifically that Centrelink had no information about a whole range of payments, including superannuation and annuities. It was clearly wrong. Mr Moir’s response was that he could not explain why he had not responded.
47. Mr Moir went on to describe to the Tribunal the very serious health problems from which he is suffering. He has received long-term psychiatric assistance for depression and for a panic and stress disorder which dates back to his days in the work force. He provided the Tribunal with a report from his psychiatrist Dr Newcombe (Exhibit A4).
48. He suffers from diabetes and hypertension. He recently had a full knee replacement and he is still recovering from that surgery. He also sustained a very serious fall and fractured his skull, and some two to three years ago he was diagnosed with late onset epilepsy. The dispute with Centrelink has been a cause of significant stress and distress to him and has had an adverse effect on his marriage.
49. After marrying Mrs Moir, they made a decision to jointly purchase a home and their current mortgage amounts to approximately $235,000.00. He also purchased a second hand BMW motor vehicle and expended $10,000.00 repairing that vehicle. He would not have made these financial decisions if he knew that he was receiving incorrect Centrelink benefits and that he and his wife faced the risk of a reduction in benefits and an overpayment.
50. Apart from his Super SA pension, and his home and vehicle, he retains a small share portfolio which he estimates is worth around $13,000.00.
51. He said his wife also has health problems and she faces further surgery as does he. They are obliged to maintain private health cover because of their mutual health problems and the fact that they both face further surgery. They have a very limited social life. He no longer drives and he walks with the aid of a stick. Mrs Moir acts as his carer.
52. Mr Moir agreed that the current combined income of himself and his wife was approximately $60,000.00. He pointed out that with their mortgage and other commitments such as private health cover, they have little left over at the end of the week.
53. Mrs Moir gave evidence. She is clearly distressed by her current domestic circumstances and by the debt that she and her husband now face. She told the Tribunal that she had largely relied on her husband to manage the communications with Centrelink and she left him to fill out any required forms on most occasions. She confirmed that she also had significant medical problems and it became evident in the course of her evidence that the Centrelink dispute has caused a great deal of tension and unhappiness in her marriage to Mr Moir.
54. She said that the Centrelink letters that came to the home were “meaningless” to her and she relied on Mr Moir to deal with that aspect of their lives.
55. It became evident from the evidence that Mr Moir has psychologically deteriorated as a result of the dispute with Centrelink and to some degree has taken out his anger and frustration on Mrs Moir. It has had a very negative effect on what was initially a happy relationship.
56. She has her own serious health issues to contend with. She is the carer for Mr Moir who has chronic health problems. She also suffers a range of medical problems. She will need to have rotator cuff surgery at some stage in the future. She has asthma and a chronic bladder condition that requires management.
57. She has trouble sleeping and takes medication for osteoporosis.
58. She had no idea that she was being overpaid until the overpayment was raised against her.
59. Mr Moir presented the Tribunal with a number of medical reports all of which confirmed the evidence that he had given to the Tribunal about his very poor health. A mortgage statement showed total combined mortgage balances of $234,214.95 as at 30 April 2009.

OTHER RELEVANT EVIDENCE

60. The Tribunal noted the medical evidence provided by Mr Moir. Dr Newcombe has been his treating psychiatrist for many years and his report (Exhibit A4) dated 1 December 2009 was before the Tribunal. It confirms Mr Moir’s longstanding condition of depression and anxiety. It also refers to the dispute with Centrelink as being “a major stressor” in his life which has significantly worsened some of his symptoms.
61. The Tribunal also had regard to the report from Dr Peter McKenzie (Exhibit A2) of 13 December 2009 which summarised some of Mr Moir’s medical history and which attached some other supporting medical information.

THE PARTIES’ CONTENTIONS

62. The Department acknowledges that there has been an administrative error, but submits that the overpayments were received by Mr and Mrs Moir either knowingly or because they were wilfully blind or reckless as to the receipt of the overpayment of pension entitlements.
63. The Department argues that there are no special circumstances in this case. The Department points to Mr and Mrs Moir having a combined income well in excess of the combined income of a couple that are solely reliant on Centrelink payments. They argue that there is no real financial hardship and that their failure to correct Centrelink’s ongoing administrative error was as significant as the original administrative error.
64. Mr and Mrs Moir’s contention is that they are the innocent victims of serious administrative errors by Centrelink and that at all times they believe they were entitled to the payments they were receiving from Centrelink and that they received those payments in good faith.
65. They provided what was required of them on forms and believed that Centrelink would follow up the information that they provided with Super SA. They did not hide the facts from Centrelink.
66. They also argue that there are special circumstances in this case that justify a waiver of some or all of the debt. In terms of special circumstances the applicants point to their ages, their health issues, their difficult financial circumstances, the level of distress and disruption that the overpayment recovery process has caused in their lives, and the clear administrative error made by Centrelink. Mr Moir pointed out that he will be 100 years of age before the debt is repaid and it will remain a blight on the remainder of his life.

CONSIDERATION AND APPLICATION OF THE LAW

67. If the Tribunal finds that some or all of the overpayment in this case was caused by sole administrative error, then it is obliged to waive that part of the payment to Mr and Mrs Moir that was received in good faith (s 1237A(1) of the Act).
68. This is not disputed by the Department, but they argue that the payments were not caused “solely” by administrative error in that Mr and Mrs Moir’s failure to correct that error when given many opportunities to do so (by responding to notices that clearly included incorrect financial information) also contributed to the error continuing.

WAS THERE AN ADMINISTRATIVE ERROR THAT LED TO THE OVERPAYMENT OF MR AND MRS MOIR?

69. The Department concedes administrative error in this case. Mr and Mrs Moir at all times answered “Yes” to any questions about their Super SA pension entitlements. The Department’s repeated failure to follow this up was clearly an administrative error.
70. The Tribunal finds as a matter of fact that there was a series of administrative errors by Departmental officers in this case that resulted in the overpayment, first to Mr Moir and then subsequently to Mrs Moir as well.

WAS THIS SOLELY ADMINISTRATIVE ERROR OR WAS THERE SOME CONTRIBUTION BY MR AND MRS MOIR TO THE ERROR?

71. Was Mr and Mrs Moir’s failure to properly read the regular notices sent to them by the Department, that mis-stated their financial position, conduct that also contributed to the ongoing administrative error?
72. The Tribunal considered the case of Re Secretary, Department of Families and Community Services and Natale (2003) AATA 717. In that case the Tribunal made a finding that a debt was due solely to administrative error despite Mrs Natale not correctly responding to similar letters sent to her by Centrelink advising the basis on which she was being paid her benefit.
73. The Tribunal in that case determined that because in an initial interview with Centrelink Mrs Natale had been left with the incorrect impression that her husband’s DFRDB pension was “not relevant”, she did not realise that the income then referred to in subsequent Centrelink notices was meant to also encompass the DFRDB pension. In the circumstances the Tribunal made a finding of sole administrative error.
74. The Tribunal considers that there is a distinction between the facts in Natale’s case and in this case. Mr Moir was or certainly should have been aware that his Super SA pension was relevant income for the purpose of assessing his pension entitlements. He was not led to believe it was not relevant. He simply assumed that Centrelink had the information and was making the correct assessment at all times.
75. The Tribunal found both Mr and Mrs Moir to be credible and straightforward witnesses and is satisfied that they received the payments in good faith in the sense that they did not realise they were being overpaid at the time the payments were being received.
76. Nevertheless, Mr Moir is an educated man and, despite the significant administrative error by Centrelink, his failure to read the notices sent out by Centrelink compounded the problem in that the effects of the error continued in the system, and the debt grew. He was capable of reading those notices and he should have taken the time to read them.
77. The Tribunal notes that in the Full Federal Court decision of Sekhon v Secretary, Department of Families and Community Services [2003] FCAFC 190, Selway J commented on the meaning of the terms “attributed solely to” at paragraph 35 as follows:

“35. The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error. ...”

78. The Tribunal is satisfied that all payments of Age Pension received by Mr Moir between the date of his second application and 24 June 2002 when he was first sent a letter by Centrelink that incorrectly recorded that Centrelink had no details of any superannuation (T46/308-309) were received in good faith and were attributable solely to administrative error. Any overpayment relating to that period should be waived.
79. Once Mr Moir commenced receiving notices that contained incorrect information about his income, it is not possible to argue that the overpayment continued to be solely as a result of administrative error and at that point Mr Moir’s failure to take note of the letters that he was receiving from Centrelink amounted to a contribution to the administrative error. Any overpayment between the date of his application for Age Pension and 24 June 2002 must be waived.
80. The balance of the debt cannot be waived on the basis of it being solely due to administrative error as Mr Moir’s failure to read notices sent to him contributed to the overpayment and subsequent debt.
81. Mrs Moir commenced to receive her linked pension in July 2005. Within days of her application she received a Centrelink notice that stated an incorrect combined income for herself and Mr Moir. The Tribunal is satisfied that Mrs Moir was innocent in her continued receipt of the overpayments. However, again she has an obligation to check the accuracy of the information provided to her in Centrelink notices and she did not do so. On her own admission, she relied entirely on Mr Moir to deal with Centrelink issues.
82. For the same reasons as set out in paragraph 79, it is not possible to say that the overpayments to Mrs Moir were caused solely as a result of administrative error within the meaning of that term.

ARE THERE SPECIAL CIRCUMSTANCES THAT WOULD JUSTIFY THE WAIVER OF SOME OR ALL OF THE DEBTS IN THIS CASE?

83. Waiver can occur if the Secretary is satisfied inter alia that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.
84. Mr and Mrs Moir did not plead financial hardship alone as being the basis of special circumstances. They accept that they continue to be financially more comfortable than a couple whose sole source of income is a Centrelink benefit. Nevertheless, their finances are tight and they would have made very different financial decisions and would not have taken on the burden of such a large mortgage had they realised they were being overpaid.
85. There is considerable case law dealing with the concept of “special circumstances”.
86. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, Toohey J said:

“12. An expression such as ‘special circumstances’ is by its very 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 upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

87. This statement elaborating on the concept of special circumstances has been accepted since as being a good description of the sort of circumstances that will qualify under the relevant section.
88. In the case of Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed at 545 that special circumstances:

“ ... would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary 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 of the ordinary.”

89. That each case must be considered on its merits was confirmed by the Full Court in Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 30 ALD 31.
90. The Tribunal is satisfied that there are special circumstances in this case that justify waiver of some of the debt.
91. The Tribunal sets out its findings in that respect as follows.
    • Mr and Mrs Moir may have been reckless in their failure to properly read Centrelink notices sent to them. However, they acted innocently throughout and had no idea that they were receiving overpayments of their respective entitlements until such time as a debt was raised.
    • Mr Moir repeatedly provided sufficient information to Centrelink for them to be fully aware that he was receiving a Superannuation SA payment. He assumed that they were getting it right as it would be difficult for an individual to comprehend that a Government department could get it wrong so often.
    • Centrelink’s administrative error was not a singular event, but persisted over a period of years and involved a number of different departmental officers making errors which compounded the debt owed by first Mr Moir and then Mrs Moir.
    • Mr Moir is elderly and in very poor health. He is at an age where he is more adversely affected by such a debt because of the limited life span that lies ahead for him.
    • Mr and Mrs Moir made financial decisions based on their genuine belief as to their Centrelink entitlements, which has left them with a large mortgage and few spare resources.
    • Mr and Mrs Moir both have significant health problems. In particular, Mr Moir has a long-standing depressive illness and when he first commenced receiving his Age Pension, he was going through a particularly traumatic time in his life. The Tribunal finds that he did not bother to read Centrelink notices as there were many other things happening in his life at the time.
    • The fact of the overpayment has had a very significant adverse impact both on Mr and Mrs Moir’s individual mental and emotional wellbeing, but also on their relationship. Their relationship is strained to the point of possible separation and they can see no light at the end of the tunnel with the enormity of the debt hanging over them.
    • The extent of the errors made by Centrelink are in themselves a special circumstance in that there was not just one error, but numerous errors over a long period of time.
    • Mr Moir is elderly and the debt is such that he can see no prospect of paying it during his lifetime without selling his property.
    • Although Mr and Mrs Moir have an income such that it cannot be said that they are in financial hardship, they are not wealthy and have minimal excess assets to rely on.
92. The Tribunal is satisfied, based on all the above, that there are special circumstances in this case.
93. The cases also support the contention that if special circumstances are found to exist, then it is a matter for the Tribunal as to how those special circumstances should impact on the debt. It is a matter of finding a fair balance between the special circumstances which exist in this case and the need to recognise the underlying policy of the legislation.
94. Mr Moir is an intelligent man and should have taken responsibility for the notices. However, Centrelink have erred particularly badly in this case and because of Mr Moir’s age and state of health, the errors have had a very profound impact on the emotional wellbeing on him and his wife and their relationship. There are significant mitigating circumstances.
95. It is the Tribunal’s view that the fair and equitable outcome is to find that the special circumstances in this case justify disregarding 75 percent of the balance of the debt owed by both Mr and Mrs Moir once the adjustment with respect to the overpayment is brought to account.

DECISION

96. The decision is to vary the decisions under review with respect to the overpayment to Mr Moir, on the basis of a finding that the overpayment that occurred between his application for age pension and 24 June 2002 should be waived, and the matter should be remitted to the department to recalculate the overpayment.
97. Once that recalculation of Mr Moir’s debt is made, the Tribunal directs that 75 percent of the total debt owed by Mr Moir and 75 percent of the total debt owed by Mrs Moir be waived due to the special circumstances in each case.
    

I certify that the 97 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell

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

Associate

Date of Hearing 4 December 2009

Date of Decision 22 January 2010

Advocate for the Applicant Ms A Tsoundarou

Solicitor for the Applicant Welfare Rights Centre (SA) Inc

Advocate for the Respondent Mr C Visser

Centrelink Legal Services and Procurement Branch