Editors --- "Age pension overpayment: error by financial adviser; special circumstances" [2010] SocSecRpr 56; (2010) 12(4) Social Security Reporter, Article 11

• TZIPORI and SECRETARY TO THE DFHCSIA
• Background
• The issue
• Discussion

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Age pension overpayment: error by financial adviser; special circumstances

TZIPORI and SECRETARY TO THE DFHCSIA

(2010/661)

Decided: 28 July 2010 by M. Carstairs.

Background

Tzipori was in receipt of two allocated pensions, the details of which were cor-rectly advised to Centrelink, but during the period February 2006 to October 2007 only one was taken into account in calculating her age pension entitle-ment. In February 2006 Centrelink sent Tzipori a form requesting confirmation of her allocated pensions, but the form only referred to one such pension. Tzi-pori arranged for her financial adviser to complete and return the form, but in-advertently he did not note the error. It was not until October 2007 that Tzipori again provided details of both allocated pensions, at which point the error was noted by Centrelink and an overpay-ment of AP totalling $6758 was raised.

The issue

The issue in this matter was whether any or all of an overpayment of AP should be waived.

The law The basis on which waiver of a debt may occur is set out in s.1237AAD of the Social Security Act 1991 (the Act) which reads

- 1237AAD. 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.

Discussion

There was no dispute here that the debt was correctly calculated – the issue was whether any or all of it should be waived. The Tribunal accepted that Tzipori had dealt with Centrelink in good faith, but concluded that errors committed by her financial adviser (by not providing correct details to Centrelink) must be attributed to Tzipori, and that therefore the result-ant debt could not be said to have arisen solely through administrative error.

The Tribunal next considered whether special circumstances could be said to exist sufficient to warrant exercise of the discretion provided by s.1237AAD(b) of the Act. Whilst s.1237AAD(b) of the Act precludes consideration of financial circumstances alone, the Tribunal noted the circumstances leading to the occurrence of the debt and concluded that Tzipori’s financial circumstances were ‘straightened’. She was only just managing her expenses, and the value of her allocated pensions was in fact falling. Accepting that Tzipori had, through her financial adviser, contributed to the error, the Tribunal determined that ‘...the extent of the Centrelink error ought to be taken into account in considering the exercise of discretion for special circumstances’ (Reasons, para. 23).

In these circumstances the Tribunal determined that it would be unfair and unjust to recover the whole of the overpayment from Tzipori, and that 25% of the debt should be waived on the grounds of special circumstances.

Formal decision The Tribunal varied the decision and determined that 25% of the AP debt should be waived.

[P.A.S.]