Social Security Rights Review – Decisions of Interest July-December 2020

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Quiggin and Secretary, Department of Social Services (Social services second review) [2019] AATA 3324

This case concerns an Age Pension debt that was incurred after Centrelink processed and accepted an incomplete AP application and paid Mr Quiggin AP for 4 years before the mistake was realised by Centrelink and an overpayment calculated.

This case provides guidance on:

  • The meaning of sole administrative error in relation to application processing
  • The extent of Centrelink’s obligations in relation to incomplete or incorrectly filled out applications

In 2014 Mr Quiggin applied and was approved for part AP. In 2018 he was informed that his AP was cancelled due to his assets being above the threshold and was requested to repay an amount of $22,190. On his application form in 2014, Mr Quiggin ticked ‘yes’ to the question of whether him or his partner have made a loan to a private company. The form provided that the applicant needed to complete and attach various pieces of information about the private company. Mr Quiggin did not provide this information. Centrelink processed and accepted the incomplete claim and Mr Quiggin was paid AP on this basis. In paragraphs [54]-[60] the Tribunal considers authorities relating to the meaning of ‘sole’ administrative error. Despite Mr Quiggin having been careless in not providing all the necessary information, the Tribunal decided that it was the action by Centrelink in processing an incomplete application form that led to the administrative error. It stated at [71] that:

Centrelink had a positive obligation to stop processing what was in effect an incomplete application form, and it failed to do so. To be clear, Centrelink was not required to use its resources to track down, identify and value corporate assets thus identified. Its duty was to stop processing and call for the information mandated by Q 28 from the applicant. It did not do so and for this it is solely responsible.

Paragraph [77] provides a useful summary of the types of sole administrative error cases. 

The Tribunal also commented on instances where injustice has been done due to the operation of s1237A(1), citing the case of SAJ; Secretary, Department of Family and Community Services [2002] AATA 430 where the applicant was burdened by an abusive partner who falsely misstated his income resulting in an overpayment to her. In this case it was stated that Centrelink had no obligation to follow up on information given by SAJ that her partner had started work, and although she had complied with her obligations the debt was not due solely to administrative error as her partner had still provided fraudulent information.

Read the full decision here

The Tribunal has recently considered two cases relating to the shortening of compensation preclusion periods in circumstances where the applicant’s gambling has contributed to their financial hardship. The two cases demonstrate the reasoning used in assessing gambling as either a ‘lifestyle choice’ not relevant for the shortening of the preclusion period or a pathological addiction that may contribute to the preclusion period being shortened.

 

Burgess and Secretary, Department of Social Services (Social services second review) [2019] AATA 7 August 2019

Mr Burgess incurred a compensation preclusion period beginning on 7 January 2012 and ending on 10 December 2021. Mr Burgess sought to demonstrate that there were special circumstances that would allow the Tribunal to shorten the preclusion period. These circumstances consisted of Mr Burgess gambling away over $500,000 over a 5 year period and subsequently having to sell his house, having no income, being supported by his son, being unable to work, and having to care for his elderly father. Mr Burgess would gamble daily for 3 to 5 days in a row for 12 hours a day. Mr Burgess went to see a clinical psychologist at the suggestion of a solicitor. The psychologist stated that Mr Burgess fulfilled the diagnostic criteria for pathological gambling stemming from using gambling as a maladaptive coping mechanism for his injury-related PTSD.

The Tribunal concluded that Mr Burgess had established a pattern of behaviour consistent with problem gambling and that this mental health condition which meant his circumstances are ‘out of the ordinary’ and meet the threshold of special circumstances. The Tribunal rejected the respondent’s submission that the gambling was a ‘lifestyle choice’. The compensation preclusion period was shortened to 30 June 2020.

Read the full decision here

 

McKenzie and Secretary, Department of Social Services (Social Services second review) [2019] AATA 3271 4 September 2019

Mr McKenzie was injured in 2012 and subsequently received $129,034 in compensation in 2018. As he had received NSA through 2014, 2015 and 2016, the Secretary recovered the amount paid to him and his partner during this period. At the time of the hearing, Mr McKenzie was an undischarged bankrupt, had significant debts and was on the verge of losing his house to repossession. Much of his compensation payment was lost due to the fact that shortly after receiving the compensation payment, Mr McKenzie began gambling and lost his share of the money as well as part of his wife’s share. The Tribunal decided that Mr McKenzie’s circumstances did not amount to special circumstances. The member stated that there was no evidence of pathological gambling before the Tribunal, and as such, Mr McKenzie’s gambling significantly undermines any argument of financial hardship.

Read the full decision here

 

Fernandez and Secretary, Department of Social Services (Social Services second review) [2019] AATA 4206 27 September 2019

This case concerns what constitutes a valid claim in circumstances where the Department requests that the applicant re-submit information it already holds. Mr Fernandez made a claim for AP in May 2017, which was rejected due to his asset level being excessive. In October 2017 he lodged further information in writing to Centrelink demonstrating that he now satisfied the assets test. Centrelink told Mr Fernandez his claim was being processed. In January 2018 Mr Fernandez was told that his claim had been considered defective because he had not completed a new claim form. He filled out a new claim form and was granted AP, and now sought a backdating of his AP to October 2017.

The Centrelink representative argued that the May claim was ‘legally spent’ and could not be revived except through resubmission or the submission of a new form. The member rejected this contention, stating that there is no reason why a Centrelink officer could not have taken the May claim form as supplemented by the further information provided in October to constitute Mr Fernandez’ claim as required by section 16 of the Administration Act. Mr Fernandez was therefore backpaid.

The member also made comments about Centrelink compensation scheme. The member expressed disapproval of Centrelink’s practice of waiting until all review mechanisms had been exhausted to consider payment from the compensation scheme. The member considered that Mr Fernandez’ treatment by Centrelink would have warranted payment under the compensation scheme regardless of the legal position of his backpayment:

This matter could have been handled without a hearing, with the same practical result to Mr Fernandez by the making to him of a discretionary payment. It seems unfortunate that the Tribunal’s finite resources, as well as the Secretary’s resources, not to mention Mr Fernandez’ time, have been expended when this was a matter that could be fairly said to have required on any view of the facts a discretionary payment, even if the legal position had been as the respondent submitted it was. [22]

Read the full decision here