Editors --- "Fluctuating wages: underpayments & overpayments; debts but what about arrears?" [2009] SocSecRpr 48; (2009) 11(4) Social Security Reporter, Article 11

---

Fluctuating wages: underpayments & overpayments; debts but what about arrears?

PHILP and SECRETARY TO THE DEEWR

(2009/857)

Decided: 6th November 2009 by M. J. Carstairs

Background

Philp faced problems, over a number of years, reporting her husband’s income for her parenting payment partnered (PPP). Mr Philp had casual employment: the wages were highly variable and the wage cycle did not match the Centrelink reporting cycle. In September 2003 Centrelink introduced a system requiring claimants to estimate wages for the purposes of PPP and Philp advised that she was unable to estimate and that she wanted to report via old payslips. Mrs & Mr Philp attended Centrelink on separate occasions to discuss the payslip/reporting issue. In November 2003 the electronic record shows that Philp attempted to have a payslip recorded and the Centrelink staff member recorded that, although the payslip was stamped, PPP would not be based on the payslip.

Philp appealed a debt to the AAT in QX06/16 & Secretary, Department of Employment & Workplace Relations [2007] AATA 1761 for the period 23 September 2003 to 19 September 2005 (the debt period). The SSAT had remitted the matter for the debt to be recalculated and the debt, which had started at $449 was finally settled at $1046. The AAT in 2007 decided there were no grounds for waiver. Because there was an AAT decision about that period it could not be reconsidered.

Mr Philp had studied the Centrelink income calculation processes and noted that unconstrained time limits for Centrelink’s debt collection contrasted unfairly with the restrictions on the recipient’s ability to claim arrears pursuant to s.109 of the Social Security (Administration) Act 1999 (the Act).

Issues

Mr Philp contended that Philp might have been underpaid by $880 in the period between 22 January 2003 and 8 January 2007. Because of the previous decision this matter was confined to 22 January 2003 to 22 September 2003 (the first arrears period) and 20 September 2005 to 8 January 2007 (the second arrears period). Centrelink agreed that Philp was probably underpaid by $527.61 and $67.87 for the first and second arrears period respectively. However, Centrelink claimed that arrears were not payable, because Philp did not ask for a review at the relevant time.

Legislation

There are no time limitations on the making of request for a review but s.109 of the Act limits the payment of arrears if no request for a review of a decision is sought within 13 weeks of the person being notified of the decision.

The first arrears period

The AAT examined eight notices about PPP sent to Philp in the period and decided that each was adequate notice. The AAT then considered if there had been a request for review within the first period. Philp and her husband agitated their concerns about the reporting difficulties for some months: the first on record was 5 September 2003. The Tribunal held that a broad view should be taken to appreciate that these were requests for a review and taking this contact as a request for review, it was within 13 weeks of the notice of decision issued on 30 June 2003.

On 11 July 2003 Philp had to lodge a reclaim form for PPP and at that time she asked for a review of the decision to reject her PPP. Centrelink had been asking for details about the marital status but there had been no change. Centrelink documents indicate that there was an arrears calculation done for the period 16 April to 22 July 2003 but there was no proof that this was notified to Philp.

The AAT was satisfied that there were requests for review made on 11 July 2003 and 5 September 2003 with the effect that Philp could be granted arrears from April 2003, but no earlier, and from September 2003.

The second arrears period

There were eight notices sent to Mrs Philp in the second period and, again, each was adequate notice. The second period coincided with the previous application to the Tribunal. Mr & Mrs Philp were seeking to have payments outside of that review period addressed and they were advised by the ARO and the officer calculating the debt that underpayments either side of the debt could not be included in the recalculations. The AAT stated that Centrelinks decision that there was no request for a review for the second period was plainly wrong – Philp was making Centrelink aware that she wanted the arrears for that period examined.

On 19 December 2007, the ARO commented that there was potential for the operation of s.109 from the last relevant notice of decision dated 11 December 2006. The Tribunal agreed with that opinion. The Tribunal also noted that there had been a review of entitlement, conducted 12 January 2006, initiated by Centrelink. If Philp was not notified of a decision about that review she would be entitled to arrears from that date until the next adequate notice about her PPP.

Formal decision

The AAT set aside the SSAT decision to remit the matter back to Centrelink for recalculation as follows:

For the first period:

a) For Centrelink to recalculate the parenting payments made to Mrs Philp on the basis of her request for review first made on 5 September 2003; and

b) subject to whether Mrs Philp was duly notified of a decision made at or about August 2003 with respect to payment of arrears from 16 April 2003 to 22 July 2003, Centrelink was to recalculate arrears of parenting payment, if any, in that period.

For the second period:

a) subject to whether or not Mrs Philp was duly notified of a decision following a parenting payment review conducted in January 2006, Centrelink was to re-calculate her rate of parenting payment referable to that period; and

b) Centrelink was to re-examine Mrs Philp’s entitlements to arrears, if any, referable to a notice of decision dated 11 December 2006, she having requested a review within 13 weeks of the notice.

[M.R.]