Bickerstaff and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 939 (24 November 2010)

Last Updated: 24 November 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 939

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/2108

GENERAL ADMINISTRATIVE DIVISION		)
	Re		PAUL BICKERSTAFF CELIA BICKERSTAFF

Applicants

And

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

Respondent

DECISION

Tribunal

Ms Regina Perton, Member

Date 24 November 2010

Place Melbourne

Decision

The Tribunal affirms the decisions under review.

.................[signed]........................
Member

SOCIAL SECURITY – disability pension – wife pension – age pension – overpayment - debt to Commonwealth - waiver – whether sole administrative error – whether special circumstances exist – decision affirmed

Social Security Act 1991 ss 8(1), 1223, 1236, 1237A, 1237AAD

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

REASONS FOR DECISION

24 November 2010

Ms Regina Perton, Member

1. Paul Bickerstaff was paid disability support pension from 8 February 1995. Celia Bickerstaff, his wife, received a wife pension from the same date. Mrs Bickerstaff transferred to the age pension on 9 January 1997. Mr Bickerstaff transferred to age pension on 27 December 2001. On 27 November 2009 Centrelink, which delivers services for the respondent, determined that Mr and Mrs Bickerstaff were overpaid their social security benefits. Centrelink calculated the overpayments at $7,652.32 each. Centrelink then raised debts to the Commonwealth in those amounts.
2. Centrelink allows a pension recipient a limited amount of income from other sources before it affects their rate of payment. Centrelink reduces the rates of pension once earnings from other sources exceed the specified limited amount.
3. From time to time, Centrelink informs pension recipients in writing that they are required to advise the agency within 14 days when there are specified changes of circumstances or if the figures Centrelink is using to calculate their entitlements are wrong. These specified changes include increases or decreases in income. Mr and Mrs Bickerstaff received such letters.
4. As a former local government officer, Mr Bickerstaff received disability payments from a superannuation fund during the period over which the debt was incurred. Mr and Mrs Bickerstaff failed to declare those payments due to a mistaken belief that they did not constitute income for the purposes of Centrelink payments. Mr and Mrs Bickerstaff believed that they had provided Centrelink with all pertinent information when they lodged the claims for their benefits. They believed that they had been receiving the correct amount of pension.
5. Mr and Mrs Bickerstaff believe that their debts are not due to their actions or inactions. They submit that the debts have arisen solely due to Centrelink’s administrative errors. Centrelink disagrees.
6. Mr and Mrs Bickerstaff sought internal review of the decisions to raise the debts by an authorised review officer (ARO) of Centrelink. The ARO affirmed the Centrelink delegate’s decisions. Mr and Mrs Bickerstaff sought review of the ARO’s decision by the Social Security Appeals Tribunal (SSAT). On 3 May 2010 the SSAT also affirmed the decisions. On 26 May 2010 Mr and Mrs Bickerstaff lodged applications for review of the SSAT decision with the Tribunal.
7. The issues before the Tribunal are:
   • Do Mr and Mrs Bickerstaff owe debts to the Commonwealth?
   • Should the Tribunal waive the debts because they arose as the result of Centrelink’s administrative error?
   • Should the Tribunal waive the debts due to special circumstances?

DO MR AND MRS BICKERSTAFF OWE DEBTS TO THE COMMONWEALTH?

8. Mr and Mrs Bickerstaff are now aware that Centrelink paid them a higher rate of pension than they were entitled to. However, they are of the view that the overpayment has not arisen because of any inaction or error on their part. They believed that they did not need to declare the amount Mr Bickerstaff received after retiring from his local government position due to ill health. Hence, they did not declare that income to Centrelink in any documents lodged during or after 1995.
9. Section 8(1) of the Social Security Act 1991 (the Act) defines income. The Tribunal is satisfied that the definition includes payments such as the disability payments Mr Bickerstaff received from the Local Authorities Superannuation Board (LASB). Regardless of the reason for Mr and Mrs Bickerstaff’s failure to declare that income, the Tribunal must consider that income when calculating the amount of pension to which they were entitled during the period of overpayment.
10. Section 1223(1) of the Act allows the Commonwealth to raise a debt against a person, if that person is paid a higher social security payment than that to which he or she is entitled. The Tribunal is satisfied that Mr Bickerstaff was overpaid disability support pension and age pension and Mrs Bickerstaff was overpaid wife pension and age pension between 18 April 1996 and 10 November 2009. There is no evidence before the Tribunal indicating that Centrelink’s calculations are flawed. The Tribunal is satisfied that Mr Bickerstaff incurred a debt of $7,652.32 and Mrs Bickerstaff a debt of $7,652.32, to the Commonwealth.

SHOULD THE DEBTS BE WAIVED DUE TO ADMINISTRATIVE ERROR?

11. Section 1237A(1) of the Act provides for waiver of a debt arising solely from administrative error:

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).

12. Mr Bickerstaff lodged a claim for unemployment benefits with the Department of Social Security (DSS) (as it was then) in April 1987. He had been retrenched from his most recent short-term position as a quarry manager. At that time, his two children were in their early teens and they and his wife were his dependents. He provided details of his bank account and a credit union account in his name. Mr Bickerstaff stated in the claim form that he did not receive income from any other source.
13. Mr Bickerstaff had been receiving income from the LASB since 17 January 1987. He did not declare the LASB income in his 1987 claim or in later claims for pension. Mr Bickerstaff said that he did not declare the LASB pension was because he had relied on the advice of a DSS officer. Mr Bickerstaff stated that he told the DSS officer about the LASB income and provided relevant documents to him. He remains adamant that the officer had told him that he did not need to declare the LASB income as it would not affect his pension. He relied on his understanding of the officer’s advice in his later dealings with Centrelink.
14. Mr and Mrs Bickerstaff have lodged further documents with Centrelink over the years in which they have not declared the LASB income. They believed that the advice the DSS officer had given in 1987 remained applicable when they were applying for other pensions or completing updates of their financial affairs and thus did not disclose that source of income. Mr Bickerstaff, who manages the family finances, said he did not ask Centrelink officers about the LASB income when claiming disability pension or age pension because he did not think he needed to. He believed the LASB income was not income for Centrelink purposes.
15. In later years, Mr and Mrs Bickerstaff also received small pensions from the United Kingdom as they had worked there before migrating to Australia. Centrelink correspondence in 2006, 2007 and 2008 listed that pension, and the amount received, as part of their income for Centrelink purposes. Centrelink informed them of the need to advise it of any increases in income. They told the Tribunal that they had not notified Centrelink of minor increases as they believed that the UK authorities would have notified Centrelink of those changes.
16. Mr Bickerstaff cited a record of a call he made to Centrelink in 1999 seeking a group certificate as evidence that he notified Centrelink of his LASB income at that time. He stated that Centrelink was at fault for not following it up. However, Mr Bickerstaff did not follow it up either, when he was notified of the income on which Centrelink was basing his pension payments or those of his wife.
17. Mr and Mrs Bickerstaff were particularly concerned that previous decision makers had suggested that they might not have acted in good faith. Mr Bickerstaff provided several written character references, in which the authors commended him for his community activities over the years. Amongst other acknowledgements, Mr Bickerstaff has been honoured for his contribution to the scouting movement in the United Kingdom and in Australia. The Tribunal is satisfied that Mr and Mrs Bickerstaff’s failure to declare the LASB income was not due to a failure to act in good faith. The Tribunal accepts that Mr and Mrs Bickerstaff genuinely believed they were receiving the correct amount of pension.
18. The Tribunal accepts that when Mr and Mrs Bickerstaff signed the claim forms in 1995 and subsequent forms, they believed that they had provided the necessary information to Centrelink about their combined income. In retrospect, it would have been prudent for them to ask if their understanding of the DSS officer’s comments in 1987 were still applicable years later for a different benefit.
19. Centrelink sent out several letters to Mr and Mrs Bickerstaff over the period during which the debt accumulated, setting out the income on which their pension payments were based. Centrelink notified Mr and Mrs Bickerstaff of the requirement to let it know within 14 days if the income figures were incorrect or if there were changes in their income. They did not advise Centrelink that the figures were wrong. They did not pay much attention to the small print and presumed that Centrelink knew better than they did what their entitlements were. There may have been errors by Centrelink. However, there were also errors by Mr and Mrs Bickerstaff. Therefore, the Tribunal finds that the debts were not attributable solely to administrative error by the Commonwealth. The debts cannot be waived on this ground.

SHOULD THE DEBTS BE WRITTEN OFF?

20. Section 1236(1A) of the Act allows a debt to be written off. This may occur where the debt is irrecoverable at law, or the debtor has no capacity to pay, or their whereabouts are unknown, or if it would not be cost-effective to take action to recover a small debt. However, none of the provisions applies to the present circumstances.

SHOULD THE DEBT BE WAIVED DUE TO SPECIAL CIRCUMSTANCES?

21. Section 1237AAD of the Act provides for waiver of the debt 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.

22. As indicated earlier, the Tribunal is satisfied that Mr and Mrs Bickerstaff did not knowingly or deliberately fail to inform Centrelink of the actual amount of income they earned. Therefore, they meet the requirements of s 1237AAD(a) of the Act.
23. The term special circumstances is not defined in the legislation. For the Tribunal to exercise its discretion to determine that Mr and Mrs Bickerstaff’s situation constitutes special circumstances, it must be satisfied that there is something to make the case stand out from the usual or the ordinary (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25). In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases (at [26]). Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case (at [26]).
24. Mr and Mrs Bickerstaff currently receive income from their pensions, Mr Bickerstaff’s Vision Super payments, and an overseas pension. The Tribunal accepts that because of the long time it has taken to discover the overpayments, it is much more difficult to deal with the situation than if Centrelink had discovered the error in a more timely fashion. The Tribunal can appreciate their frustration and sense of being let down by the system. Particularly, when they believed they had provided all the necessary information and had relied on their understanding of the comments of a DSS officer many years earlier.
25. However, the Tribunal is not satisfied that the situation that they find themselves is vastly different from the situation of other social security recipients who have incurred debts due to overpayments. In the Tribunal’s experience, it is, unfortunately, not unusual for debts to arise in circumstances such as these. Mr and Mrs Bickerstaff remain on social security benefits and are able to repay their debts in instalments taken out of their fortnightly payments. The amount Centrelink is to withhold per fortnight is negotiable.
26. The Tribunal is not satisfied that the circumstances in these cases constitute special circumstances (other than financial hardship alone). Hence, the Tribunal decides that the waiver provisions of s 1237AAD of the Act should not be invoked.
27. The Tribunal finds that Mr Bickerstaff owes a debt of $7,652.32 to the Commonwealth and that Mrs Bickerstaff also owes the Commonwealth $7,652.32. The Tribunal notes that they have repaid part of the debts.

DECISION

28. The Tribunal affirms the decisions under review.

I certify that the twenty-eight [28] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

Signed:...........................[signed].................................

Associate Grace Horzitski

Date of hearing: 7 September 2010

Date of decision: 24 November 2010

Advocate for the applicants: Mr P. Bickerstaff

Advocate for the respondent: Ms S. Langford

DLA Phillips Fox