Jonathon Van Kleef v The Chief Executive of The Ministry of Social Development Hc Wn

JurisdictionNew Zealand
CourtHigh Court
JudgeWilliams J
Judgment Date01 Mar 2013
Neutral Citation[2013] NZHC 387
Docket NumberCIV-2012-485-2135

[2013] NZHC 387

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-2135

BETWEEN

In the matter of an appeal by way of case stated from the determination of the Social Security Appeal Authority at Wellington under's 12q of the Social Security Act 1964

Jonathon Van Kleef
Appellant
and
The Chief Executive of the Ministry of Social Development
Respondent
Counsel:

Mr Van Kleef in person

T I Hallett-Hook for Respondent

Appeal from Social Security Appeal Authority decision in relation to repayment of benefit amounts allegedly overpaid to applicant — ACC advised WINZ that applicant was entitled to backpayment of ACC weekly compensation for the period applicant was in receipt of WINZ benefits — review found that the applicant's combined income from benefits and ACC back-payment exceeded ceiling for entitlement and amount should be repaid — applicant complained of differential treatment of his ACC back payment by IRD and WINZ which increased his tax liability — Authority held applicant's circumstances were no different from every other beneficiary receiving lump sum for backdated payment of weekly earnings related compensation — because it was not a “rare and unusual” situation, Authority declined to direct Chief Executive under s86(1) Social Security Act 1964 (“SSA”) (recovery of payments in excess of authorised rates) to take no steps to recover over payments — whether s81 SSA (review of benefits) allowed for retrospective review — whether the Authority applied correct test when declining to direct Chief Executive not to recover the overpayments.

The issues were: whether s81 SSA allowed for retrospective review; whether ACC payments could be treated as income when assessing V's entitlement to the accommodation supplement; whether there was an evidential basis for the Authority to conclude that there had been an overpayment of the accommodation supplement; and whether the Authority “acted on a wrong principle when it determined that V's situation was not rare or unusual so that the CE should not be directed to take no steps to recover the overpayments.

Held: Section 81 SSA gave the CE the power to review any benefit in order to ascertain: (a) whether the beneficiary remained entitled to receive it; or (b) whether the beneficiary might not be, or might not have been, entitled to receive that benefit. The CE had the ability to look backwards to determine whether an overpayment had been made in the past ( Arbuthnot v Chief Executive of Department of Work and Income). Section 81 allowed for retrospective review.

The SSA defined income very broadly. Clearly under s3 SSA (interpretation), the ACC weekly payments were both money received which was not capital and periodical payments for income-related purposes in terms of paragraph (b) of the definition.

There was an evidential basis for the Authority to conclude that there had been an overpayment of the accommodation supplement. The CE's calculations could not be challenged by V. Since his backdated ACC payment was applied to the period during which it was properly payable, his entitlement to the accommodation supplement was necessarily reduced to zero. His combined income (including the backdated amounts) equalled $688 per week — $352 of that was sufficient to abate the sickness benefit to zero. If the remaining income — $330 — was applied at the statutory abatement rate of 25 cents per dollar earned, the accommodation supplement would also be reduced to zero. In fact, the $330 was sufficient to abate $80 of accommodation supplement but V's supplement was only $45.

Section 86(1) SSA had been interpreted as conferring a discretionary authority on the CE to decide whether, in any particular case, recovery should be undertaken at all. However case law had produced divergent views as to the nature and scope of the discretion. It was agreed that the discretion had to be exercised lawfully, reasonably, and in accordance with procedural fairness; each case had to be considered on its individual merits. In gauging the breadth of the discretion, the Authority cited several cases which considered that the circumstances in which the discretion should be exercised had to be “extraordinary”, “unusual”, or “rare and unusual.”

The Authority's conclusion that the CE should not be directed not to recover the overpayments, as V's circumstances were no different to other beneficiaries, proceeded on a wrong principle. The Authority's approach was to elevate “rare and unusual” to the status of a legal test when it could not be so described. Although relief under s86(1) was not a common occurrence, that was not the test. It was no more than the court's expectation of the practical result if s86(1) were properly applied. The Authority had to act within the purpose of the Act and s86; it had to consider relevant factors, and disregard irrelevant ones etc. It still had to exercise the discretion.

Considerations of fairness to the payee went to the individual merits of the case. If, through no fault of the payee, he or she had received less in a back dated payment than would have been received if the payments had been made at the time the entitlement had arisen, then that circumstance would be relevant to the individual merits of the case. It followed that the issue had to be properly explored.

The Authority's conclusion that V's circumstances were common appeared to be based on the contention that there were a number of appeals to the Authority where appellants had commented on the tax implications of receiving the ACC payment as a lump sum. However, there did not appear to be any case where a beneficiary had requested that the CE exercise the s86(1) discretion not to recover a debt arising from GST assistance and accommodation supplement payments because the lump sum payment received from ACC increased his tax liability and created a loss.

Matter remitted to the Authority for reconsideration.

JUDGMENT OF Williams J

1

For most of the period from February 2010 to February 2011 Mr Van Kleef received a sickness benefit and an accommodation supplement. He also received temporary GST assistance — special assistance reflecting the then recent increase in GST from 12 1/2 per cent to 15 per cent — from the period October 2010 to February 2011.

2

In February 2011, ACC advised WINZ that Mr Van Kleef was entitled to backdated weekly compensation from ACC covering the period during which Mr Van Kleef was in receipt of his various WINZ benefits. I understand that the backdated ACC payments amounted to $17,501.50. For the same period $8,400.50 was paid to him by way of sickness benefit, $1,954.29 by way of accommodation supplement and $66 in GST assistance.

3

WINZ reviewed Mr Van Kleef's entitlements and found that all overpayments should be recovered. WINZ recovered directly from ACC the amount of the sickness benefit paid but there is no statutory basis upon which it can retrieve directly from ACC the accommodation supplement and GST assistance payments. The accommodation supplement and GST assistance could not be recovered under's 252 because, unlike the sickness benefit, they are not income tested benefits.

4

The Chief Executive then decided to review those two benefits pursuant to the general review power contained in s 81 of the Social Security Act 1964. The review was undertaken and because the Chief Executive took the view that Mr Van Kleef's combined income from benefits and ACC back-payment for the relevant period exceeded the ceiling for entitlement to accommodation supplement and GST assistance, the amounts paid over the relevant period should also be repaid dollar for dollar. Mr Van Kleef was asked to sign a form authorising ACC to repay this remaining money directly to WINZ but he declined to so sign.

5

Instead he took the matter to an internal review where the Chief Executive's decision was upheld, then a formal review before the Benefits Review Committee (BRC) which again upheld the Chief Executive's decision on 12 April 2012. The matter then went to the Social Security Appeal Authority (SSAA). The Authority also upheld the Chief Executive's decision. The Authority concluded that:

  • (a) section 81 of the Social Security Act entitled WINZ to review retrospectively the payments to Mr Van Kleef by way of accommodation supplement and GST assistance;

  • (b) the ACC payments made were income for the purpose of assessing his entitlements to the accommodation supplement;

  • (c) there had been overpayment as a matter of fact; and

  • (d) there were no facts upon which the Chief Executive should grant Mr Van Kleef relief from recovery.

6

Mr Van Kleef now appeals pursuant to s 12Q of the Social Security Act. The Authority has posed the following four questions of law:

  • (a) Did the Authority err in law in its interpretation of s 81 of the Social Security Act 1964 when it concluded that the Chief Executive was entitled to conduct a hindsight review of the appellant's benefit entitlements?

  • (b) Did the Authority err in law when it concluded that the appellant's ACC payments should be treated as income when assessing his entitlement to the Accommodation Supplement?

  • (c) Was there any evidence on which the Authority concluded that there had been an overpayment of Accommodation Supplement?

  • (d) Did the Authority err in law when it determined that it was inappropriate to direct the Ministry not to take steps to recover overpayments of Accommodation Supplement and Temporary GST Assistance under's 86(1) or s 86A of the Social Security Act 1964?

7

For completeness, I note that Mr Van Kleef resides in Canterbury and could not travel to Wellington for the appeal hearing. He asked that arguments be heard by way of teleconference — he was apparently too unwell even to travel to the nearest...

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14 cases
  • [2015] NZSSAA 84, 13 November 2015
    • New Zealand
    • Social Security Appeal Authority
    • 13 November 2015
    ...of the Ministry of Social Development [2010] 1 NZLR 559 (HC). Van Kleef v Chief Executive of the Ministry of Social Development [2013] NZHC 387. 24 [114] The appellant’s continued receipt of benefit was not just a case of making meet. She was apparently able to save money as a result of her......
  • [2016] NZSSAA 026, 11 April 2016
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    ...of the Ministry of Social Development [2010] 1 NZLR 559 (HC). 5 Van Kleef v Chief Executive of the Ministry of Social Development [2013] NZHC 387. 9 It is surprising that a person who was too unwell to work would plan to to Europe for 11 days. The information about whether or not the appell......
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    ...of the Ministry of Social Development [2010] 1 NZLR 559 (HC). Van Kleef v Chief Executive of the Ministry of Social Development [2013] NZHC 387. 14 DATED at WELLINGTON Ms M Wallace Chairperson ______________________________ Mr K Williams Member ______________________________ Lady Tureiti Mo......
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