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Wednesday, 29 November 2000
Page: 20074

Senator BARTLETT (9:51 AM) —I wish to speak to the amendments moved by Senator Evans and also to the ones I foreshadowed on 8 November. The running sheet provides a running commentary for us in relation to these amendments. I congratulate the clerks and staff on melding our amendments. Some of the amendments foreshadowed by the Democrats are identical and others are similar to the ones that Senator Evans has moved and obviously in that context we are quite happy to accept the ones that have been formally moved by Senator Evans. The sheet states that Democrat amendments (8), (9), (22) and (31) are in conflict with the opposition's (4), (5) and (18). I recall the minister saying that the government are willing to accept the amendment—I think it was amendment (4)—that extended the notice period to 28 days. Given that we have already done the 28 days and put in something else, in the spirit of reasonableness that I always try to bring to such debates, we are willing to accept that amendment and not proceed.

There is one area where there is some difference which I would like to explore further before we vote on the issue. I will speak slightly more broadly on the issue and respond to some of the remarks of the minister. I accept that this is a case that applies to people who are now no longer on benefits. That usually, although not always, means that they have got a job or a payment from somewhere. It does not mean they are necessarily swimming in money. It does not even necessarily mean they have a regular or adequate income stream. As I am sure all senators would be aware, many people who move off social security payments do so in a circumstance where they go into irregular work or low paid work or perhaps a permanent job but different hours and different amounts of work each week and different levels of money. That is a very common circumstance. We are still dealing with people who are not necessarily terribly well off. I acknowledge the point the minister made about the danger of one of these amendments providing an incentive for extra frivolous reviews and appeals through the appeals system. I think that is a reasonable point to make, but it needs to be balanced against the reality of what people face in these circumstances. I think to be able to charge interest on a debt that is being disputed is not desirable in principle, despite that risk of possibly providing incentives for people to delay paying interest because of having things reviewed.

Administrative errors do occur reasonably frequently and are unavoidable, particularly with the complexity of our system and particularly in areas like family payments. In those cases people can receive moneys in excess of their entitlement and often are not aware they have been overpaid; by definition, the department is not aware they are being overpaid. I have raised in this place, both in debate on previous social security legislation and in question time a month or so back, a recent Administrative Appeals Tribunal ruling that a family payment debt was incorrectly raised by the department. The AAT ruled the decision making process to decide that that was an overpayment to be in error. That ruling only applied to that particular appeal, but there are any number of other overpayments in the system, which have been raised and which people are probably paying back now, that were raised using that process the appeals tribunal has now decided was wrong. I am still awaiting further information from the minister on this. The department may not be legally obliged to review those cases but I think they are morally obliged to review them and see whether those incorrectly raised overpayments should be reconsidered. It would be useful to know how many people are in that circumstance. I know the minister committed at the time to seek more information on that and I realise these things can take a bit of time, but it is germane to the issue we are talking about now.

The minister frequently provides statistics in relation to debt recovery and overpayments, which are often presented in the context of stopping fraud. None of us here support fraud, of course, and we none of us here support people not being required to repay money they were not entitled to, whether through administrative error or innocent mistake or anything. But the figures that the minister tables are helpful in providing information of how many of those cases are in the area of family payments. Of those only a small percentage end up in the fraud basket. Many, many of the cases are people who have been overpaid either through their own mistake or their inability to correctly forecast their income—which is pretty hard for a lot of people to do, particularly these days with fluctuating levels of work. There are a lot of people who have an overpayment raised through those circumstances without any intent of their own, as well as through administrative error such as in the case of the AAT ruling that I have just referred to. As I have said, the department makes errors from time to time—and that is not a criticism, because we all make errors from time to time.

The point is that it is unfair to impose interest on this category of debts. People who did not contribute to the circumstance of the excess payments should not be further penalised by having to pay more than the amount of the original overpayment because they are unable to pay within the time frame set by the department. I acknowledge the minister said that this only applies where they have not been able to come to an arrangement or where the repayment regime has broken down, but there is still the basic principle of people being charged interest on a debt that they incurred through someone else's error. I am not saying they should not pay it back. All of us, if we get paid money we were not entitled to, through our salaries or whatever, have to pay it back as we should, regardless of whose fault it was, but I think paying interest on that is undesirable. I acknowledge the positives in the government's legislation—as I always try to do—of reducing the level of overpayments; that is a welcome move. But a key part of these amendments goes to the payment of interest on debts incurred through departmental error.

The other key point is when people are seeking a review of a decision through the authorised review officer or by external appeal to tribunals. In the Democrats' view, it is unfair that interest should be applied to a debt at that time. People are appealing against the debt being there in the first place. Surely the least that can be done is not have interest raised on it while that is happening. I think the minister would acknowledge that very few people appeal decisions just for a second bite of the cherry and rarely is the appeal frivolous. That does not mean that all appeals are successful; obviously many of them are not. But I am sure the minister would strongly defend people's right to appeal and have their decisions reviewed. It is a complex act. Errors can be made by everybody; full facts need to be involved and interpretations need to be made as correctly as possible. So appealing of decisions, including ones like overpayments, is very important.

To be paying interest on that overpayment while you are appealing it is, in the Democrats' view, also inappropriate. People cannot make the tribunals speed up their case. I am advised that at the moment appeals through the SSAT take about 10 weeks, and if cases are appealed on to the AAT the time frame is about nine months. People cannot speed that up. It can be quite a long time. If you have the initial review internally as well, which is usually very speedy, you can be looking at a period of about a year when you have some dispute, and you will be paying interest that whole time. We think that is inappropriate. About 30 per cent of decisions are set aside by tribunals, meaning that in at least one-third of the cases the customer is correct. People appeal all sorts of things; they are not all to do with overpayments, but some of them are, such as the AAT case I have referred to already.

The threat of financial penalty for exercising a right of appeal is, in the Democrats' view, contrary to natural justice and fairness. The amendments propose that, where a person has exercised and finalised their right of appeal, interest will not be added to the debt during that time. The key component of the opposition amendment that we do have concerns with—because we do not think it goes far enough—goes to the very point that I have been talking about. The ALP amendment, as I understand it, allows for interest to be applied three months after an authorised review officer decision, by which time the SSAT appeal may be under way but not completed. Our view is that interest should not be applied until the whole appeal process has been completed, assuming, obviously, that the matter is resolved in the department's favour. That is the key part, and I think that is in Democrat amendments (9), (22) and (31).

The Democrats are supportive of the opposition amendments, although we are concerned that (5), (18) and (25) do not go far enough. The principle is appropriate, but it should be applied more strongly. If, like the Democrats, you accept the principle—the principle that, if people are not required to pay interest on a debt that they are appealing, particularly if it arose through administrative error by the department, the appeal should apply to appeals through the whole process—it is appropriate to support these amendments and to support Democrat amendments (9), (22) and (31), which I have not moved yet, rather than ALP amendments (5), (18) and (25).

The TEMPORARY CHAIRMAN (Senator Knowles)—Minister, would you care to clarify for the committee the groupings that you identified before.